[Pioneer Logo]
Pioneer
Growth Shares
ANNUAL REPORT 12/31/96
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 12
Notes to Financial Statements 18
Report of Independent Public Accountants 22
Tax Treatment of Distributions 23
Trustees' Fees and Share Ownership 24
Trustees, Officers and Service Providers 25
Programs and Services for Pioneer Shareowners 26
The Pioneer Family of Mutual Funds 28
<PAGE>
Pioneer Growth Shares
LETTER FROM THE CHAIRMAN 12/31/96
Dear Shareowner,
- --------------------------------------------------------------------------------
It is with pleasure that I introduce this report for Pioneer Growth Shares,
covering the year ended December 31, 1996. We wish to welcome new shareowners,
particularly those who joined the Fund through Class C Shares, which were
introduced on January 31. The Fund generated excellent investment results for
1996, and we think its long-term potential is promising.
This was an eventful year for Pioneer Growth Shares. In February, Jeffrey
Poppenhagen joined the Fund as portfolio manager. As part of the Fund's
management team, he shapes investment strategy and oversees stock selection. The
Fund now looks more like a typical "growth" fund, although it maintains an
underlying attention to fundamental research that is part and parcel of
investing at Pioneer. There can be significant risks for those who chase "hot"
stocks or who buy for no other reason than prices have risen; we still think a
stock should be purchased because it represents a good investment in a company
with strong prospects over time.
A final note. As you see, we've given your Fund's annual report a facelift. The
new, improved style reflects what shareowners told us they want to see in fund
reports. Our thanks to all of you who took the time to respond to our questions.
Now you'll find a Table of Contents and consistent, easy-to-read summaries of
portfolio information and performance. There's also a Portfolio Management
Discussion of the management team's insights into market conditions, portfolio
strategy and results. I encourage you to read on to learn more about your Fund.
Please contact your investment representative, or us at 1-800-225-6292, if
you have questions about your investment in Pioneer Growth Shares. Thank you
for your continued support.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Growth Shares
PORTFOLIO SUMMARY 12/31/96
P o r t f o l i o D i v e r s i f i c a t i o n
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
International Common Stocks 2%
U.S. Common Stocks 92%
Short-Term Cash Equivalents 3%
Depositary Receipts for International Stocks 3%
S e c t o r D i s t r i b u t i o n
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
Technology 38%
Financial 19%
Services 14%
Consumer Non-Durables 15%
Basic Industries 6%
Capital Goods 5%
Consumer Durables 3%
1 0 L a r g e s t H o l d i n g s
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Intel Corp. 7.40% 6. Schwab (Charles) Corp. 3.99%
2. Microsoft Corp. 5.50 7. Franklin Resources, Inc. 3.87
3. Dell Computer Corp. 4.42 8. United Healthcare Corp. 3.67
4. Duracell International, Inc. 4.42 9. Cisco Systems, Inc. 3.60
5. Columbia/HCA Healthcare Corp. 4.37 10. Briggs & Stratton Corp. 3.58
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Growth Shares
PERFORMANCE UPDATE 12/31/96 CLASS A SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/96 12/31/95
$11.71 $10.12
Distributions per Share Income Short-Term Long-Term
(12/31/95-12/31/96) Dividends Capital Gains Capital Gains
-- $0.455 $0.612
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Growth Shares at public offering price, compared to the growth of the
Standard & Poor's 500 Index.
Average Annual Total Returns
(As of December 31, 1996)
Period Net Asset Public Offering
Value Price*
10 Years 15.33% 14.66%
5 Years 12.01 10.69
1 Year 26.95 19.62
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
Mountain Chart
Growth of $10,000
Pioneer Standard &
Growth Poor's
Shares* 500 Index
12/86 9425 10000
12/87 9104 10525
12/88 11199 12267
12/89 14964 16148
12/90 13711 15648
12/91 22263 20406
12/92 22535 21959
12/93 24454 24169
12/94 23819 24488
12/95 30822 33681
12/95 39257 41411
The Standard & Poor's 500 Index is an unmanaged measure of 500 widely held
common stocks listed on the New York Stock Exchange, American Stock Exchange and
the Over-the-Counter market. Index returns assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the 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 Growth Shares
PERFORMANCE UPDATE 12/31/96 CLASS B SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/96 12/31/95
$11.55 $10.07
Distributions per Share Income Short-Term Long-Term
(12/31/95-12/31/96) Dividends Capital Gains Capital Gains
-- $0.455 $0.612
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Growth Shares, compared to the growth of the Standard & Poor's 500
Index.
Average Annual Total Returns
(As of December 31, 1996)
Period If If
Held Redeemed*
Life-of-Fund 26.78% 24.74%
(4/28/95)
1 Year 25.97 21.97
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
Mountain Chart
Growth of $10,000
Pioneer Standard &
Growth Poor's
Shares* 500 Index
4/95 10000 10000
5/95 10258 10363
10537 10654
11333 10992
8/31 11818 10989
12335 11498
11591 11440
11/95 11890 11910
11826 12188
11861 12585
2/96 12178 12672
12131 12841
12624 13013
5/96 13000 13311
12605 13416
11818 12802
8/96 12471 13043
13330 13838
13500 14189
14770 15230
12/96 14497 14979
The Standard & Poor's 500 Index is an unmanaged measure of 500 widely held
common stocks listed on the New York Stock Exchange, American Stock Exchange
and the Over-the-Counter market. Index returns assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in the 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 Growth Shares
PERFORMANCE UPDATE 12/31/96 CLASS C SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/96 1/31/96
$11.55 $10.10
Distributions per Share Income Short-Term Long-Term
(1/31/96-12/31/96) Dividends Capital Gains Capital Gains
-- $0.455 $0.612
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Growth Shares, compared to the growth of the Standard & Poor's 500
Index.
Cumulative Total Returns
(As of December 31, 1996)
Period If If
Held Redeemed*
Life-of-Fund 25.61% 24.61%
(1/31/96)
* Reflects deduction of the 1% contingent
deferred sales charge (CDSC) at the end
of the period and assumes reinvestment
of distributions.
Mountain Chart
Growth of $10,000
Pioneer Standard &
Growth Poor's
Shares* 500 Index
1/96 10000 10000
2/96 10267 10087
10228 10185
4/96 10644 10342
10950 10598
6/96 10627 10642
9964 10176
8/96 10515 10388
11239 10972
10/96 11372 11278
12442 12126
12/96 12461 11885
The Standard & Poor's 500 Index is an unmanaged measure of 500 widely held
common stocks listed on the New York Stock Exchange, American Stock Exchange and
the Over-the-Counter market. Index returns assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the 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 Growth Shares
PORTFOLIO MANAGEMENT DISCUSSION 12/31/96
D e a r S h a r e o w n e r,
- --------------------------------------------------------------------------------
As lead portfolio manager for Pioneer Growth Shares, I welcome this opportunity
to discuss the Fund's performance for its 29th fiscal year, which ended on
December 31, 1996. I joined your Fund's investment team on February 1, 1996,
and, after making some adjustments to give the portfolio more of a high-growth
focus, we are pleased with the Fund's current positioning.
It is also a pleasure to report that Pioneer Growth Shares performed especially
well for the year. The Fund's 26.95% total return for Class A Shares handily
outpaced the 19.24% average return posted by its peers, according to independent
research firm Lipper Analytical Services. Your Fund also outperformed the
overall stock market, as represented by the Standard & Poor's (S&P) 500 Index.
The unmanaged S&P returned 22.90% over the 12 months, assuming reinvestment of
all dividends. These strong figures, however, masked interim volatility, which
picked up as the year progressed as investors became more emotional about the
market's record levels and the prospects of various sectors, particularly
technology.
Another Strong Year
At the start of the fiscal year, U.S. financial markets enjoyed the same
favorable investing conditions that existed throughout 1995; namely, low
inflation, a slow-moving economy and lower-trending interest rates. The Federal
Reserve (the Fed) contributed to investor optimism when it cut short-term
interest rates in January, reflecting its belief that too-fast economic growth
and inflation were not concerns.
Investor enthusiasm waned temporarily, however, when February's employment
report showed the biggest job increase in 12 years. Worries about a fast-growing
economy prompted concerns the Fed would raise short-term rates. These fears
lingered throughout the year, contributing to short-term declines and
volatility, as did perceptions that prices of various stocks were too high.
However, prices kept rising for select, typically large-size, companies -
helping push the stock market to impressive overall results for the year.
6
<PAGE>
Pioneer Growth Shares
Identifying Long-Term Growth in a Fast-Moving Stock Market
Your Fund's one-year total return outpaced the S&P's, in part because we did not
get caught up in market nearsightedness and jump in and out of stocks. Instead,
we maintained a long-term outlook, holding stocks we had carefully analyzed
before adding them to the portfolio. We are very comfortable with the Fund's
current investments, which is why we have made few significant changes to the
portfolio since February.
Our research examines company basics such as cash flow, earnings growth and
quality of management. We also determine a company's longer-term prospects by
reviewing its competitive position. Instead of selecting small, unknown
organizations, we prefer proven, dominant players with a track record of strong
earnings and the ability to invest in research and development to maintain - and
enhance - its competitive standing.
Technology Remains the Driving Force Behind Businesses
Pioneer Growth Shares seeks to provide shareowners with long-term capital
growth. To meet that objective, we concentrate the portfolio in areas where we
believe high-growth potential exists; namely technology, financial services and,
to some extent, healthcare-related businesses. We then invest aggressively in
individual companies that, in our view, will remain the leaders within their
area of expertise.
The portfolio's largest sector weighting is, and will most likely remain,
technology. While volatile - as demonstrated over the past year - technology
should easily prevail as the driving force behind most growing businesses.
Dominant technology companies stand to realize long-term benefits as a result of
increasing demand for their products and services. We especially like Intel, the
leading computer-chip maker with an impressive international presence. The
company dedicates significant capital to research and development in order to
provide an ever-efficient product and to maintain its dominant position. We also
favor Etec Systems, a maker of semiconductor equipment. Its "mask-making"
product is likely to remain in high demand over the next five years, good news
since Etec Systems controls about 70% of this market.
7
<PAGE>
Pioneer Growth Shares
PORTFOLIO MANAGEMENT DISCUSSION 12/31/96 (continued)
Healthcare-related companies we like include Walgreen, which we added to the
portfolio over the course of the year. The company is benefiting from an
increasing volume of business from HMOs, which are using mainly chain stores to
fill prescriptions. While chain drug stores typically take three years to turn a
profit, Walgreen is seeing profits in roughly half that time.
We also uncovered opportunities outside of these areas of focus. Two companies -
Monsanto and Pioneer Hi-Bred International - are in the growing agriculture
biotechnology industry, implanting "characteristics" such as pesticide
resistance into seeds. We also added Central European Media Enterprises, an
owner of television stations in central Europe, including the largest in the
Czech Republic. With a massive audience, and the likelihood of increased
advertising by U.S. companies expanding overseas, Central European Media should
achieve significant growth.
Looking Ahead
Whether 1997 will be another stellar year for financial markets is anyone's
guess. At some point, however, logic tells us the market will have to slow or
reverse the course of the past two years. The S&P 500 returned an average of 30%
for 1996 and 1995, significantly higher than normal. Looking back over 70 years,
the overall stock market has averaged 11% a year - a solid number in its own
right, given the power compounding and time contribute to a long-term
investment. What's important is to take a long view rather than be swayed by
short-term results - whether they be favorable or lackluster.
We are optimistic about the growth prospects of the Fund's holdings, and we
believe your Fund is well-positioned to benefit from their dominant competitive
position, regardless of the direction the stock market takes. While the ride
over the short-term may be bumpy, we firmly believe it will prove to be a ride
worth taking. We will continue to do all we can to deliver strong results.
Respectfully,
/s/ Jeffrey B. Poppenhagen,
Jeffrey B. Poppenhagen,
Portfolio Manager
8
<PAGE>
Pioneer Growth Shares
SCHEDULE OF INVESTMENTS 12/31/96
Shares Value
COMMON STOCKS - 96.7%
Basic Industries - 5.5%
Chemicals - 3.4%
275,000 Monsanto Co. $ 10,690,625
------------
Metals & Mining - 2.1%
159,700 Minerals Technologies, Inc. $ 6,547,700
------------
Total Basic Industries $ 17,238,325
------------
Capital Goods - 4.8%
Producer Goods - 3.5%
245,000 Briggs & Stratton Corp. $ 10,780,000
------------
Telecommunications - 1.3%
165,000 Airtouch Communications* $ 4,166,250
------------
Total Capital Goods $ 14,946,250
------------
Consumer Durables - 3.3%
185,000 Magna International, Inc. $ 10,313,750
------------
Total Consumer Durables $ 10,313,750
------------
Consumer Non-Durables - 14.7%
Agriculture & Food - 3.4%
150,000 Pioneer Hi-Bred International, Inc. $ 10,500,000
------------
Retail Food - 3.0%
305,877 Smith's Food & Drug (Class B) $ 9,482,187
------------
Retail Non-Food - 8.3%
190,000 Barnes & Noble* $ 5,130,000
190,000 Duracell International, Inc. 13,276,250
185,000 Walgreen Co. 7,400,000
------------
$ 25,806,250
------------
Total Consumer Non-Durables $ 45,788,437
------------
Financial - 18.3%
Commercial Bank - 2.8%
32,000 Wells Fargo & Co. $ 8,632,000
------------
Insurance - 1.4%
255,000 20th Century Industries $ 4,303,125
------------
Investments - 7.1%
125,000 Merrill Lynch & Co. $ 10,187,500
375,000 Schwab (Charles) Corp. 12,000,000
------------
$ 22,187,500
------------
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Growth Shares
SCHEDULE OF INVESTMENTS 12/31/96 (continued)
Shares Value
Misc. Finance - 7.0%
350,000 Countrywide Credit Industries, Inc. $ 10,018,750
170,000 Franklin Resources, Inc. 11,623,750
------------
$ 21,642,500
------------
Total Financial $ 56,765,125
------------
Services - 13.5%
Broadcasting & Media - 4.0%
202,500 Central European Media* $ 6,429,375
85,000 The Walt Disney Co. 5,918,125
------------
$ 12,347,500
------------
Health Services & Personal Care - 9.0%
322,500 Columbia HCA Healthcare Corp. $ 13,141,875
245,000 United Healthcare Corp. 11,025,000
164,000 HSN, Inc.* 3,895,000
------------
$ 28,061,875
------------
Hotels/Restaurants - 0.5%
100,000 Host Marriott Corp.* $ 1,600,000
------------
Total Services $ 42,009,375
------------
Technology - 36.6%
Computer Software/Services - 14.3%
250,000 Dell Computer Corp.* $ 13,281,250
260,000 First Data Corp. 9,490,000
50,000 Intuit, Inc.* 1,575,000
200,000 Microsoft Corp.* 16,525,000
90,000 Seagate Technology, Inc.* 3,555,000
------------
$ 44,426,250
------------
Electronics - 22.3%
280,000 Applied Materials, Inc.* $ 10,062,500
170,000 Cisco System, Inc.* 10,816,250
75,000 Etec Systems, Inc.* 2,868,750
170,000 Intel Corp. 22,259,375
80,000 LM Ericsson Telephone Co.
(Class B) (A.D.R.) 2,415,000
180,000 Molex, Inc. 6,412,500
150,000 Motorola, Inc. 9,206,250
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
Pioneer Growth Shares
Shares Value
Electronics - (continued)
90,000 Nokia Corp. (A.D.R.) $ 5,175,000
-------------
$ 69,215,625
-------------
Total Technology $ 113,641,875
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TOTAL COMMON STOCKS
(Cost $246,419,210) $ 300,703,137
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Principal
Amount
TEMPORARY CASH INVESTMENT - 3.3%
Commercial Paper - 3.3%
$10,304,000 Household Finance Corp., 6.55%,
1/2/97 $ 10,304,000
-------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $10,304,000) $ 10,304,000
-------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $256,723,210)(a) $ 311,007,137
-------------
* Non-income producing security.
(a) At December 31, 1996, the net unrealized gain on investments, based on
cost for federal income tax purposes of $256,723,210, was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $61,516,692
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value $(7,232,765)
-----------
Net unrealized gain $54,283,927
-----------
Purchases and sales of securities (excluding temporary cash investments) for the
year ended December 31, 1996 aggregated $271,978,638 and $233,187,125,
respectively.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Pioneer Growth Shares
BALANCE SHEET 12/31/96
ASSETS:
Investment in securities, at value (including temporary
cash investments of $10,304,000) (cost $256,723,210) $311,007,137
Receivables -
Investment securities sold 792,038
Fund shares sold 919,899
Dividends and interest 171,411
Other 7,986
------------
Total assets $312,898,471
------------
LIABILITIES:
Payables -
Investment securities purchased $ 2,031,752
Fund shares repurchased 198,632
Dividends 297
Due to affiliates 388,313
Accrued expenses 41,506
------------
Total liabilities $ 2,660,500
------------
NET ASSETS:
Paid-in capital $251,611,147
Accumulated undistributed net realized gain on investments 4,342,897
Net unrealized gain on investments 54,283,927
------------
Total net assets $310,237,971
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $277,598,076/23,708,651 shares) $ 11.71
------------
Class B (based on $31,285,819/2,708,114 shares) $ 11.55
------------
Class C (based on $1,354,076/117,278 shares) $ 11.55
------------
MAXIMUM OFFERING PRICE:
Class A $ 12.42
------------
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
Pioneer Growth Shares
STATEMENT OF OPERATIONS
For the Year Ended 12/31/96
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $49,145) $1,815,776
Interest 936,012
----------
Total investment income $ 2,751,788
-----------
EXPENSES:
Management fees $1,284,948
Transfer agent fees
Class A 675,352
Class B 51,745
Class C 1,685
Distribution fees
Class A 585,644
Class B 208,358
Class C 5,319
Accounting 69,096
Custodian fees 48,585
Registration fees 98,005
Professional fees 30,325
Printing 21,075
Fees and expenses of nonaffiliated trustees 17,995
Miscellaneous 23,765
----------
Total expenses $ 3,121,897
Less fees paid indirectly (46,973)
-----------
Net expenses $ 3,074,924
-----------
Net investment loss $ (323,136)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $23,888,859
Change in net unrealized gain on investments 40,558,913
-----------
Net gain on investments $64,447,772
-----------
Net increase in net assets resulting from
operations $64,124,636
-----------
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
Pioneer Growth Shares
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended 12/31/96 and 12/31/95
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/96 12/31/95
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (323,136) $ 521,624
Net realized gain on investments 23,888,859 32,890,594
Change in net unrealized gain on investments 40,558,913 8,653,487
------------- -------------
Net increase in net assets resulting from operations $ 64,124,636 $ 42,065,705
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.00 and $0.03 per share, respectively) $ -- $ (471,206)
Class B ($0.00 and $0.03 per share, respectively) -- (39,034)
Class C ($0.00 per share) -- --
Net realized gain:
Class A ($1.07 and $1.31 per share, respectively) (23,357,095) (24,674,561)
Class B ($1.07 and $1.31 per share, respectively) (2,408,390) (1,564,089)
Class C ($1.07 per share) (107,390) --
------------- -------------
Total distributions to shareholders $ (25,872,875) $ (26,748,890)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 88,005,542 $ 234,292,684
Reinvestment of distributions 25,187,073 26,141,112
Cost of shares repurchased (70,788,997) (178,643,781)
------------- -------------
Net increase in net assets resulting from fund
share transactions $ 42,403,618 $ 81,790,015
------------- -------------
Net increase in net assets $ 80,655,379 $ 97,106,830
NET ASSETS:
Beginning of year 229,582,592 132,475,762
------------- -------------
End of year (including accumulated undistributed net
investment income of $0 and $11,384, respectively) $ 310,237,971 $ 229,582,592
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
'96 Shares '96 Amount '95 Shares '95 Amount
<S> <C> <C> <C> <C>
Class A
Shares sold 6,170,753 $ 65,424,973 21,037,128 $ 218,781,090
Reinvestment of
distributions 2,040,720 22,875,363 2,487,284 24,625,337
Less shares repurchased (5,796,578) (61,289,863) (17,195,620) (177,014,019)
---------- ------------ ---------- -------------
Net increase 2,414,895 $ 27,010,473 6,328,792 $ 66,392,408
---------- ------------ ---------- -------------
Class B
Shares sold 1,951,888 $ 20,692,598 1,382,346 $ 15,511,594
Reinvestment of
distributions 199,188 2,220,411 153,886 1,515,775
Less shares repurchased (834,440) (8,797,032) (144,754) (1,629,762)
---------- ------------ ---------- -------------
Net increase 1,316,636 $ 14,115,977 1,391,478 $ 15,397,607
---------- ------------ ---------- -------------
Class C*
Shares sold 169,294 $ 1,887,971
Reinvestment of
distributions 8,096 91,299
Less shares repurchased (60,112) (702,102)
---------- ------------
Net increase 117,278 $ 1,277,168
---------- ------------
</TABLE>
*Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Pioneer Growth Shares
FINANCIAL HIGHLIGHTS 12/31/96
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/96 12/31/95 12/31/94 12/31/93(a) 12/31/92
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of year $ 10.12 $ 8.85 $ 12.62 $ 12.42 $ 12.27
-------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.01) $ 0.03 $ (0.06) $ (0.07) $ 0.00
Net realized and unrealized gain (loss) on investments 2.67 2.58 (0.38) 1.10 0.15
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations $ 2.66 $ 2.61 $ (0.44) $ 1.03 $ 0.15
Distributions to shareholders:
Net investment income -- (0.03) -- -- --
Net realized gain (1.07) (1.31) (3.32) (0.83) --
From paid-in capital -- -- (0.01) -- --
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ 1.59 $ 1.27 $ (3.77) $ 0.20 $ 0.15
-------- -------- -------- -------- --------
Net asset value, end of year $ 11.71 $ 10.12 $ 8.85 $ 12.62 $ 12.42
-------- -------- -------- -------- --------
Total return* 26.95% 29.82% (2.60%) 8.52% 1.22%
Ratio of net expenses to average net assets 1.15%+ 1.23%+ 1.46% 1.20% 1.15%
Ratio of net investment income (loss) to average net assets (0.08%)+ 0.28%+ (0.53%) (0.60%) 0.00%
Portfolio turnover rate 96% 158% 161% 29% 25%
Average commission rate paid (1) $ 0.0568 -- -- -- --
Net assets, end of year (in thousands) $277,598 $215,564 $132,476 $134,546 $120,847
Ratios assuming no waiver of management fees and assumption of
expenses and no reduction for fees paid indirectly:
Net expenses -- -- -- 1.21% 1.25%
Net investment income (loss) -- -- -- (0.62%) 0.10%
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.13% 1.21% -- -- --
Net investment income (loss) (0.06%) 0.30% -- -- --
</TABLE>
(a) Prior to assumption of management agreement on December 1, 1993 by PMC, the
Fund was advised by Mutual of Omaha Management Company.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sale charges were taken into
account.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed securities transactions.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Pioneer Growth Shares
FINANCIAL HIGHLIGHTS 12/31/96
<TABLE>
<CAPTION>
Year Ended 4/28/95 to
12/31/96 12/31/95
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 10.07 $ 9.68
------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.05) $ --
Net realized and unrealized gain on investments 2.60 1.73
------- -------
Net increase from investment operations $ 2.55 $ 1.73
Distributions to shareholders:
Net investment income -- (0.03)
Net realized gain (1.07) (1.31)
------- ------
Net increase in net asset value $ 1.48 $ 0.39
------- -------
Net asset value, end of period $ 11.55 $ 10.07
------- -------
Total return* 25.97% 18.26%
Ratio of net expenses to average net assets 1.86%+ 1.90%**+
Ratio of net investment loss to average net
assets (0.83%)+ (0.25%)**+
Portfolio turnover rate 96% 158%
Average commission rate paid (1) $0.0568 --
Net assets, end of period (in thousands) $31,286 $14,019
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.84% 1.84%**
Net investment loss (0.81%) (0.19%)**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sale charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed securities transactions.
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
Pioneer Growth Shares
FINANCIAL HIGHLIGHTS 12/31/96
<TABLE>
<CAPTION>
1/31/96 to
12/31/96
<S> <C>
CLASS C (a)
Net asset value, beginning of period $ 10.10
-------
Increase (decrease) from investment operations:
Net investment loss $ (0.05)
Net realized and unrealized gain on investments and foreign
currency transactions 2.57
-------
Net increase from investment operations $ 2.52
Distributions to shareholders:
Net realized gain (1.07)
-------
Net increase in net asset value $ 1.45
-------
Net asset value, end of period $ 11.55
-------
Total return* 25.61%
Ratio of net expenses to average net assets 1.89%**+
Ratio of net investment loss to average net assets (1.01%)**+
Portfolio turnover rate 96%
Average commission rate paid (1) $0.0568
Net assets, end of period (in thousands) $ 1,354
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.87%**
Net investment loss (0.99%)**
</TABLE>
(a) Class C shares were first publicly offered on January 31, 1996.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sale charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed securities transactions.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
Pioneer Growth Shares
NOTES TO FINANCIAL STATEMENTS 12/31/96
1. Organization and Significant Accounting Policies
Pioneer Growth Shares (the Fund) is a Delaware business trust registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek appreciation
of capital through investments in common stocks, together with preferred stocks,
bonds, and convertible debentures.
The Fund offers three classes of shares - Class A, Class B, and Class C shares.
Class C shares were first publicly offered on January 31, 1996. Shares of Class
A, Class B, and Class C each represent an interest in the same portfolio of
investments of the Fund and have equal rights to voting, redemptions, dividends,
and liquidation, except that each class of shares can bear different transfer
agent and distribution fees and have exclusive voting rights with respect to the
distribution plans that have been adopted by Class A, Class B, and Class C
shareholders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to, among
other things, make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund, which are in conformity with those generally
accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Each day, securities are
valued at the last sale price on the principal exchange where they are
traded. Securities that have not traded on the date of valuation, or
securities for which sale prices are not generally reported, are valued at
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. Dividend
income is recorded on the ex-dividend date and interest income is recorded
on the accrual basis. Temporary cash investments are valued at amortized
cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities
18
<PAGE>
Pioneer Growth Shares
that have the highest cost and also qualify for long-term capital gain or
loss treatment for tax purposes.
B. Federal Icome Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
The Fund has reclassified $311,752 from accumulated undistributed net
realized gain on investments to accumulated net investment loss. The
reclassification has no impact on the net asset value of the Fund and is
designed to present the Fund's capital accounts on a tax basis.
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $142,688 in
underwriting commissions on the sale of fund shares during the year ended
December 31, 1996.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B, and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expenses (see Note 3).
Income, common expenses, and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning
of the day.
19
<PAGE>
Pioneer Growth Shares
NOTES TO FINANCIAL STATEMENTS 12/31/96 (continued)
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, and Class C shares can bear different transfer
agent and distribution fees.
2. Management Agreement
Pioneering Management Corporation (PMC), the Fund's investment adviser, manages
the Fund's portfolio and is a wholly owned subsidiary of PGI. Management fees
are calculated daily at the annual rate of 0.50% of the Fund's average daily net
assets up to $250 million; 0.48% of the next $50 million; and 0.45% of excess
over $300 million.
In addition, under the management agreement, certain other services and costs,
including accounting, regulatory reporting, and insurance premiums, are paid by
the Fund. At December 31, 1996, $138,395 was payable to PMC related to
management fees and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Fund at negotiated rates. Included in due to
affiliates is $57,299 in transfer agent fees payable to PSC at December 31,
1996.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each Class of 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 Class A Plan, the Fund pays PFD a service fee
of up to 0.25% of the Fund's average daily net assets in reimbursement of its
actual expenditures to finance activities primarily intended to result in the
sale of Class A shares. Pursuant to Class B Plan and 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 $192,619 in distribution fees payable to PFD at December 31,
1996.
20
<PAGE>
Pioneer Growth Shares
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 4.0%, based on the lower of cost or market
value of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSC are paid to PFD.
For the year ended December 31, 1996, CDSCs in the amount of $40,226 were paid
to PFD.
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, 1996,
the Fund's expenses were reduced by $46,973 under such arrangements.
21
<PAGE>
Pioneer Growth Shares
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Shareholders and the Board of Trustees of
Pioneer Growth Shares:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Growth Shares as of December 31, 1996, and the related
statement of operations, and statements of changes in net assets for the periods
presented and financial highlights for each of the three years ended December
31, 1996. 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. The financial highlights for each of the two years ended December 31,
1993, were audited by other auditors whose report dated February 22, 1994
expressed an unqualified opinion.
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, 1996 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 Growth Shares as of December 31, 1996, the results of its operations,
and the changes in its net assets for the periods presented and financial
highlights for each of the three years ended December 31, 1996, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 3, 1997
22
<PAGE>
Pioneer Growth Shares
TAX TREATMENT OF DISTRIBUTIONS
Made during the Year Ended 12/31/96
During the year ended December 31, 1996, Pioneer Growth Shares paid the
following distributions per share for Class A, Class B and Class C shares:
Net Realized Gain
Record Payment -----------------
Date Date Short-Term Long-Term
6/18/96 6/28/96 $0.2050 $0.1068
12/17/96 12/27/96 0.2498 0.5048
------- --------
Total $0.4548 $0.6116
------- --------
On a per share basis, distributions of $0.4548 from short-term capital gain
should be reported as ordinary income.
Corporate shareholders may deduct up to 70% of qualifying dividends received
during the year. For purposes of computing the exclusion, 25% of the
distributions from net investment income represents qualifying dividends.
Shareholders who elected to take the Capital Gain Distribution in additional
shares of the Fund should report the distribution as explained above. The tax
cost of the shares received on December 27, 1996 are $11.80, $11.64 and $11.64
per share for Class A, Class B and Class C shares, respectively.
The fund hereby designates $12,487,886 as a capital gain dividend for the
purposes of the dividend paid deduction.
23
<PAGE>
Pioneer Growth Shares
TRUSTEE'S FEES AND SHARE OWNERSHIP 12/31/96
Trustees' Fees, Principal Shareholders, and Share
Ownership of Trustees and Officers (unaudited)
The aggregate direct remuneration paid by the Fund to trustees and officers
during the year ended December 31, 1996 was $15,196, plus expenses incurred in
attending trustees meetings of $3,238. Fees of trustees who are affiliated with
or "interested persons" of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., investment adviser and underwriter, respectively, of the Fund
($1,000 in 1996), are reimbursed to the Fund by Pioneering Management
Corporation in accordance with the management contract with the Fund. At
December 31, 1996, the trustees and officers of the Fund owned beneficially
21,757 Class A shares of the Fund (0.1% of the outstanding Class A shares). The
Pioneer Group, Inc. is a publicly-held corporation of which Mr. Cogan
beneficially owned approximately 14% of the outstanding shares of capital stock
at December 31, 1996.
24
<PAGE>
Pioneer Growth Shares
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Richard H. Egdahl, M.D. President
Margaret B.W. Graham David D. Tripple, Executive Vice President
John W. Kendrick Jeffrey B. Poppenhagen, Vice President
Marguerite A. Piret William H. Keough, Treasurer
David D. Tripple Joseph P. Barri, Secretary
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareholder Services and Transfer Agent
Pioneering Services Corporation
25
<PAGE>
Programs and Services for Pioneer Shareowners
Your investment representative can give you additional information on
Pioneer's programs and services. If you want to order literature on any of
the following items directly, simply call Pioneer at 1-800-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
26
<PAGE>
Automatic Exchange Program
A simple way to move money from a money market or bond fund into a stock fund
over a period of time. Just invest a lump sum in a Pioneer money market fund or
bond fund. Then, select the Pioneer equity fund or funds you wish to invest in,
and choose the amounts and dates for Pioneer to sell shares of your money market
or bond fund and use the proceeds to buy shares of the Pioneer equity fund you
have chosen. Over time, your original investment will be shifted to your Pioneer
equity fund.
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 only for accounts with a value of $10,000 or
more.)
27
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
Global/International Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust*
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund Tax-Exempt
Pioneer Intermediate Tax-Free Fund
United States Pioneer Tax-Free Income Fund
Pioneer Capital Growth Fund
Pioneer Growth Shares Money Market Fund
Pioneer Mid-Cap Fund
Pioneer Small Company Fund Pioneer Cash Reserves Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
*Offers Class A and B Shares only
28
<PAGE>
This page for your notes.
29
<PAGE>
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Or write to us at:
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)
This report must be preceded or accompanied by a current Fund prospectus.
[Pioneer | Pioneer Funds Distributor, Inc. 0297-3932
Logo] | 60 State Street (c) Pioneer Funds Distributor, Inc.
| Boston, Massachusetts 02109 [Logo for recycled paper]
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