[Pioneer Logo]
PIONEER BALANCED
FUND
SEMIANNUAL REPORT 6/30/97
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 26
Trustees, Officers and Service Providers 27
Programs and Services for Pioneer Shareowners 28
</TABLE>
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PIONEER BALANCED FUND
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LETTER FROM THE CHAIRMAN 6/30/97
DEAR SHAREOWNER,
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It is with pleasure that I introduce this report for Pioneer Balanced
Fund, covering the six months ended June 30, 1997. I thank you for
your interest, and for this opportunity to comment briefly on the
Fund and today's investing environment.
The past six months included the beginning of a new era for your
Fund. Shareowners approved a series of proposals on January 14, and
set in motion a number of important changes we believe will be in
your long-term best interest. Beginning on February 3, your Fund
became Pioneer Balanced Fund, and your investment team began working
to bring the Fund in line with its new investment objective of growth
and income.
The Fund still invests in both stocks and bonds, although each
security no longer is expected to provide income. Instead, the team
uses a proprietary model to determine the appropriate mix of growth-
oriented stocks, dividend-paying stocks and a variety of bonds.
Portfolio manager William Field, a member of our core equities
investment team, had a busy and productive period leading this effort
since he assumed responsibility for the Fund's day-to-day management
on January 27. I encourage you to read this report to learn about the
Fund's progress.
If you have questions about Pioneer Balanced Fund, please contact
your investment representative, or Pioneer at 1-800-225-6292. Thank
you for your support.
Respectfully,
/s/ John F. Gogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
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PIONEER BALANCED FUND
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PORTFOLIO SUMMARY 6/30/97
PORTFOLIO DIVERSIFICATION
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(As a percentage of total investment portfolio)
U.S. Convertible U.S. Common Stocks 52.1%
Securities 0.3%
U.S. Preferred
Stock 1.6%
[PIE CHART]
Short-Term Cash U.S. Corporate Bonds 30.0%
Equivalents 3.7%
U.S. Government Securities 12.3%
SECTOR DISTRIBUTION
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(As a percentage of long-term holdings)
Financial 22%
Other 6%
Technology 16%
Utilities 5% [PIE CHART]
Energy 5% Government Securities
13%
Capital Goods 6% Services 13%
Consumer Non-Durables 7% Basic Industries 7%
10 LARGEST HOLDINGS
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(As a percentage of long-term holdings)
<TABLE>
<S> <C> <C> <C>
1. U.S. Treasury Notes, 5.875%, 3.66% 6. The Chase Manhattan Corp. 2.49%
1/31/99
2. U.S. Treasury Bond, 6.5%, 3.65 7. General Motors Corp., 9.4%, 2.20
10/15/06 7/15/21
3. U.S. Treasury Notes, 6.25%, 3.65 8. Compaq Computer Corp. 2.18
1/31/02
4. Avnet, Inc. 2.81 9. Columbia/HCA Healthcare 2.16
Corp.
5. Washington Mutual, Inc. 2.63 10. Integrated Health Services, 2.11
Inc.
</TABLE>
Fund holdings will vary for other periods.
2
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PIONEER BALANCED FUND
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PERFORMANCE UPDATE 6/30/97 CLASS A SHARES
SHARE PRICES AND DISTRIBUTIONS
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<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/97 12/31/96
<S> <C> <C>
$11.14 $10.65
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/96 - 6/30/97) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.18 - -
</TABLE>
INVESTMENT RETURNS
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The mountain chart on the right shows the growth of a $10,000
investment made in Pioneer Balanced Fund at public offering price,
compared to the growth of the Standard & Poor's 500 Index and the
Lehman Brothers Government/Corporate Bond Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1997)
Lehman Bros.
Pioneer Govt/Corp.
Balanced S&P 500 Bonds
Fund* Index Index
9550 10000 10000
NET ASSET PUBLIC OFFERING 10063 9310 10748
PERIOD VALUE PRICE 11420 11221 12076
10 Years 9.70% 9.20% 12415 13061 12935
5 Years 9.83 8.82 13419 14026 14257
1 Year 15.57 10.32 15083 15915 16278
17082 18077 18419
* Reflects deduction of the maximum 16878 18319 18150
4.50% sales charge at the beginning 18784 23087 20467
of the period and assumes reinvest- 20858 29101 21420
ment of distributions at net asset 24106 39164 23080
value.
== Pioneer Balanced Fund*
-- Lehman Brothers Government/
Corporate Bonds Index
__ Standard & Poor's 500 Index
The Fund adopted its current name and investment objective on February
3, 1997. Prior to that date, the Fund's name was Pioneer Income Fund and
its objective was income from a portfolio of income-producing bonds and
stocks.
The Lehman Brothers Government/Corporate Bond Index is an unmanaged,
composite index of the U.S. bond market. It contains 5,353 issues,
including Treasury and government agency securities, investment-grade
corporate bonds and Yankee bonds. The Standard & Poor's (S&P) 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 an 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
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PIONEER BALANCED FUND
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PERFORMANCE UPDATE 6/30/97 CLASS B SHARES
SHARE PRICES AND DISTRIBUTIONS
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<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/97 12/31/96
<S> <C> <C>
$11.08 $10.59
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/96 - 6/30/97) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.14 - -
</TABLE>
INVESTMENT RETURNS
-----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000
investment made in Pioneer Balanced Fund, compared to the growth of the
Standard & Poor's 500 Index and the Lehman Brothers
Government/Corporate Bond Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1997)
Lehman Bros.
Pioneer Govt/Corp.
Balanced S&P 500 Bonds
Fund* Index Index
10000 10000 10000
IF IF 10397 10639 10502
PERIOD HELD REDEEMED* 10813 11485 10703
Life-of-Fund 13.35% 12.16% 11374 12170 11202
(4/28/95) 11330 12831 10940
1 Year 14.73 10.73 11455 13410 10991
11672 13821 11186
* Reflects deduction of the maximum 12400 14978 11528
applicable contingent deferred sales 12235 15369 11428
charge (CDSC) at the end of the 12842 18048 11843
period and assumes reinvestment
of distributions. The maximum CDSC
of 4% declines over six years.
== Pioneer Balanced Fund*
-- Lehman Brothers Government/
Corporate Bonds Index
__ Standard & Poor's 500 Index
The Fund adopted its current name and investment objective on February
3, 1997. Prior to that date, the Fund's name was Pioneer Income Fund and
its objective was income from a portfolio of income-producing bonds and
stocks.
The Lehman Brothers Government/Corporate Bond Index is an unmanaged,
composite index of the U.S. bond market. It contains 5,353 issues,
including Treasury and government agency securities, investment-grade
corporate bonds and Yankee bonds. The Standard & Poor's (S&P) 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 an 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
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PIONEER BALANCED FUND
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PERFORMANCE UPDATE 6/30/97 CLASS C SHARES
SHARE PRICES AND DISTRIBUTIONS
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<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/97 12/31/96
<S> <C> <C>
$11.14 $10.62
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/96 - 6/30/97) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.14 - -
</TABLE>
INVESTMENT RETURNS
-----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000
investment made in Pioneer Balanced Fund compared to the growth
of the Standard & Poor's 500 Index and the Lehman Brothers
Government/Corporate Bond Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1997)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund 10.25% 10.25%
(11/2/95)
1 Year 15.17 15.17
* Assumes reinvestment of distributions.
The 1% contingent deferred sales
charge (CDSC) applies to redemptions
made within one year of purchase.
Date Pioneer S&P 500 Lehman Bros.
Balanced Fund Index Govt/Corp Bond
1/31/96 10,000 10,000 10,000
2/29/96 9,856 10,096 9,788
3/31/96 9,865 10,193 9,706
4/30/96 9,904 10,343 9,639
5/31/96 9,904 10,610 9,622
6/30/96 9,974 10,653 9,751
7/31/96 9,925 10,179 9,774
8/31/96 9,954 10,395 9,750
9/30/96 10,163 10,979 9,924
10/31/96 10,443 11,280 10,155
11/30/96 10,753 12,136 10,342
12/31/96 10,812 11,898 10,227
1/31/97 11,035 12,637 10,239
2/28/97 11,127 12,739 10,261
3/31/97 10,678 12,209 10,139
4/30/97 10,811 12,938 10,287
5/31/97 11,385 13,733 10,383
6/30/97 11,487 14,337 10,507
== Pioneer Balanced Fund*
-- Lehman Brothers Government/
Corporate Bonds Index
__ Standard & Poor's 500 Index
The Fund adopted its current name and investment objective on February
3, 1997. Prior to that date, the Fund's name was Pioneer Income Fund and
its objective was income from a portfolio of income-producing bonds and
stocks.
The Lehman Brothers Government/Corporate Bond Index is an unmanaged,
composite index of the U.S. bond market. It contains 5,353 issues,
including Treasury and government agency securities, investment-grade
corporate bonds and Yankee bonds. The Standard & Poor's (S&P) 500 Index
is an unmanaged measure of 500 widely held common stock 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 an 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
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PIONEER BALANCED FUND
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/97
DEAR SHAREOWNER,
-----------------------------------------------------------------------------
Welcome to the first semiannual report on Pioneer Balanced Fund,
covering the six months ended June 30, 1997. It was a busy and
challenging period as we brought the portfolio in line with the
Fund's new objective of growth and income. (Until February 3, the
Fund was Pioneer Income Fund and its primary objective was income.)
Over the past six months, the Dow Jones Industrial Average of 30
large, familiar companies moved at a record pace - returning 20.11%
- with a brief pause in March near the Federal Reserve's slight
increase in short-term interest rates. Small and mid-sized stocks
posted more modest gains, with the Nasdaq Composite Index rising
11.70%. The Lehman Brothers Government/Corporate Bond Index was up
2.74%, even though concerns about the pace of economic growth,
inflation, changes in interest rates and stock market volatility kept
bond investors on their toes.
PORTFOLIO TRANSITION: BUILDING FOR THE FUTURE
We spent February and March restructuring the portfolio, with the
goal of making the Fund a conservative "core" holding for a variety
of investors. At the end of December, 58% of the portfolio was
invested in bonds, 39% in dividend-paying stocks and 3% in short-term
cash equivalents. To determine a new, broader mix, we developed a
proprietary model that examines a number of variables, including
economic and market conditions. The model indicates the appropriate
blend of securities, given the Fund's conservative nature. By the end
of the first quarter, the Fund had 8% in growth-oriented stocks, 45%
in dividend-paying stocks, 43% in bonds and 4% in cash equivalents.
The March dividend of $0.09 per share (Class A) reflects the changes;
we expect to maintain approximately the same rate going forward,
unless we see a significant move in interest rates.
We are encouraged by recent results. For the three months ended June
30, roughly the life of the Fund's revamped portfolio, Class A Shares
generated a total return of 7.56%, 7.41% for Class B Shares and 7.58%
for Class C Shares. For the full six-month period, the Fund returned
6.33% for Class A Shares, 5.98% for Class B Shares and 6.25% for
Class C Shares. (Returns do not include sales charges.)
6
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PIONEER BALANCED FUND
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Going forward, given the blend of stocks and bonds in the portfolio,
you should expect the Fund's returns to be somewhere between those of
the Standard & Poor's 500 Index and the Lehman Brothers
Government/Corporate Bond Index.
STOCKS: LOOKING FOR VALUE, COMPANY BY COMPANY
The Fund's dual emphasis on growth and income gives us flexibility to
choose from a variety of stocks, those that pursue growth and those
that pay dividends. (Previously, each stock had to contribute income,
eliminating most growth-oriented companies.) Portfolio holdings
represent firms of many sizes, in many stages of growth.
We select stocks using a "value" approach, looking for stocks trading
at prices lower than what we think a company is really worth. This
strategy requires in-depth research, patience and discipline. We take
a "bottom-up" look at individual companies, paying close attention to
product and market position, cash flow, debt, management strength and
the amount of stock owned by company officers. When we buy, we also
set target prices for selling, reflecting what we consider to be
"full" value. We are prepared to wait for a stock to hit our target.
However, we monitor holdings so we can revise our target, or sell, if
fundamental characteristics change.
LARGER STOCKS BEST PERFORMERS
The Fund's holdings in large companies turned in top results.
Financial and technology stocks were particularly strong. Notable
were Compaq, up 30.6% over the past three months, and Washington
Mutual, up 24.5%. Telephone companies NYNEX and Bell South both hit
their target prices, and we sold them to lock-in profits.
Demand was weak for stocks of smaller companies, and we took
advantage of opportunities to buy good-quality stocks at relatively
low prices. New holdings in this category include Clayton Homes, a
manufacturer of prefabricated housing, and consumer products maker
First Brands. Even though smaller stocks currently are not in vogue,
we believe the Fund's acquisitions have good long-term prospects.
We generally don't look for companies based on industry. An exception
has been real estate investment trusts (REITs), 5.4% of the portfolio
as of June 30. REITs provide a generous amount of income, and their
7
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PIONEER BALANCED FUND
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/97 (CONTINUED)
prices tend to move independently of the overall stock market.
Recently, that has meant lagging other stocks, but we are confident
REITs will show renewed life as the year progresses.
BONDS ADVANCE IN TENUOUS MARKET
Quality is important for this Fund, and the average quality of bonds
in the portfolio was A on June 30. Treasury and corporate securities
both make important contributions to the income stream. Because they
are "liquid" - have a ready market of buyers and sellers - we also
use Treasurys to manage the bond portfolio's duration. (Duration
measures sensitivity to interest rates, with the bond portion of the
portfolio likely to change in value by one percentage point for every
percentage point change in interest rates, up or down. The greater
the duration, the greater the risk.) Overall, bond holdings had a
conservative duration of 5.5 years on June 30.
We added some new corporate bond holdings. Quorum Health Group, the
third-largest hospital management company in the country, has shown
good earnings growth and strong cash flow. Riggs National Corp. is
the last remaining independent bank in Washington, D.C.
LOOKING FORWARD
Pioneer Balanced Fund offers shareowners important advantages: the
potential for both growth and regular income, along with instant
diversification among stocks and bonds. We will continue to keep the
needs of the conservative investor in mind while seeking to provide
competitive returns. Because we use a value strategy for stocks and
focus on quality for bonds, the Fund isn't likely to move as quickly
as more aggressive investments - either up or down. For patient
investors, we think this is a recipe for long-term success. Thank you
for your support.
Respectfully,
/s/ William C. Field
William C. Field,
Portfolio Manager
8
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PIONEER BALANCED FUND
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SCHEDULE OF INVESTMENTS 6/30/97
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
INVESTMENT IN SECURITIES - 96.3%
CONVERTIBLE CORPORATE BONDS - 0.3%
$ 40,000 Atlantic Richfield, Exchangeable Note, 9.0%,
9/15/97 $ 855,000
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TOTAL CONVERTIBLE CORPORATE BONDS
(Cost $990,000) $ 855,000
------------
<CAPTION>
SHARES
<C> <S> <C>
PREFERRED STOCKS - 1.6%
117,000 Elf Overseas, (Non-voting) $ 3,071,250
38,150 Sprint Corp., Conv., 8.25%, 3/31/00 1,368,631
------------
TOTAL PREFERRED STOCKS
(Cost $4,273,401) $ 4,439,881
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COMMON STOCKS - 52.1%
BASIC INDUSTRIES - 0.7%
METALS & MINING - 0.7%
50,000 Newmont Mining Corp. $ 1,950,000
25,000 Vaal Reefs Exploration & Mining Co., Ltd.
(A.D.R.) 120,313
------------
TOTAL BASIC INDUSTRIES $ 2,070,313
------------
CAPITAL GOODS - 3.7%
CONSTRUCTION & ENGINEERING - 1.4%
31,000 AGCO Corp. $ 1,112,125
200,000 Clayton Homes, Inc. 2,850,000
------------
$ 3,962,125
------------
PRODUCER GOODS - 2.3%
110,000 Durco International, Inc. $ 3,217,500
83,300 Helix Technology Corp. 3,373,650
------------
$ 6,591,150
------------
TOTAL CAPITAL GOODS $ 10,553,275
------------
CONSUMER DURABLES - 0.6%
MOTOR VEHICLES - 0.6%
50,000 Chrysler Corp. $ 1,640,625
------------
TOTAL CONSUMER DURABLES $ 1,640,625
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
PIONEER BALANCED FUND
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SCHEDULE OF INVESTMENTS 6/30/97 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
CONSUMER NON-DURABLES - 4.7%
AGRICULTURE & FOOD - 1.5%
20,000 CPC International, Inc. $ 1,846,250
50,000 H.J. Heinz Co. 2,306,250
------------
$ 4,152,500
------------
HOME PRODUCTS - 1.1%
135,000 First Brands Corp. $ 3,096,562
------------
RETAIL NON-FOOD - 2.1%
70,000 J.C. Penney Co., Inc. $ 3,653,125
40,000 Nike, Inc. 2,335,000
------------
$ 5,988,125
------------
TOTAL CONSUMER NON-DURABLES $ 13,237,187
------------
ENERGY - 2.1%
OIL & GAS EXTRACTION - 1.6%
29,000 Amoco Corp. $ 2,521,188
30,000 Mobil Corp. 2,096,250
------------
$ 4,617,438
------------
OIL REFINING & DRILLING - 0.5%
20,000 Atlantic Richfield Co. $ 1,410,000
------------
TOTAL ENERGY $ 6,027,438
------------
FINANCIAL - 15.0%
COMMERCIAL BANK - 0.5%
15,000 First Union Corp. $ 1,400,625
------------
MISC. FINANCE - 3.8%
70,000 The Chase Manhattan Corp. $ 6,794,375
30,000 GreenPoint Financial Corp. 1,996,875
100,000 Ocwen Asset Investment Corp.* 2,025,000
------------
$ 10,816,250
------------
REAL ESTATE INVESTMENT TRUSTS - 5.4%
110,000 Arden Realty Group, Inc. $ 2,860,000
125,000 Cali Reality Corp. 4,250,000
115,100 Carramerica Realty Corp. 3,309,125
45,000 Franchise Finance Corp. of America 1,172,813
144,200 Gables Residential Trust 3,641,050
------------
$ 15,232,988
------------
</TABLE>
10
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
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<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
SAVINGS & LOAN - 5.3%
150,000 Bank Plus Corp.* $ 1,631,250
90,300 Charter One Financial, Inc. 4,864,912
52,500 Washington Federal, Inc. 1,348,594
120,000 Washington Mutual, Inc. 7,170,000
------------
$ 15,014,756
------------
TOTAL FINANCIAL $ 42,464,619
------------
SERVICES - 5.3%
HEALTH & PERSONAL CARE - 4.6%
72,000 Apria Healthcare Group, Inc.* $ 1,273,500
150,000 Columbia/HCA Healthcare Corp. 5,896,875
150,000 Integrated Health Services, Inc. 5,775,000
------------
$ 12,945,375
------------
PHARMACEUTICALS - 0.7%
25,000 American Home Products Corp. $ 1,912,500
------------
TOTAL SERVICES $ 14,857,875
------------
TECHNOLOGY - 14.7%
COMPUTER SERVICES - 5.9%
60,000 Compaq Computer Corp.* $ 5,955,000
198,000 FileNet Corp.* 2,871,000
100,000 First Data Corp. 4,393,750
80,000 Mercury Interactive Corp.* 1,190,000
60,000 Seagate Technology, Inc.* 2,111,250
------------
$ 16,521,000
------------
ELECTRONICS - 8.3%
80,000 Adaptec, Inc.* $ 2,780,000
70,000 Arrow Electronics, Inc.* 3,731,875
130,000 Avnet, Inc. 7,661,875
5,000 Cisco Systems, Inc.* 335,625
30,000 Intel Corp. 4,254,375
130,000 Lam Research Corp.* 4,818,125
------------
$ 23,581,875
------------
PHOTO/INSTRUMENTATION - 0.5%
20,000 Eastman Kodak Co. $ 1,535,000
------------
TOTAL TECHNOLOGY $ 41,637,875
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER BALANCED FUND
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SCHEDULE OF INVESTMENTS 6/30/97 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
UTILITIES - 5.3%
ELECTRIC UTILITY - 3.0%
125,000 Allegheny Power Systems, Inc. $ 3,335,937
140,000 Dominion Resources, Inc. 5,110,000
------------
$ 8,445,937
------------
TELECOMMUNICATIONS - 2.0%
40,000 Bellsouth Corp. $ 1,847,500
85,000 GTE Corp. 3,729,375
------------
$ 5,576,875
------------
WATER UTILITY - 0.3%
28,700 E'Town Corp. $ 886,113
------------
TOTAL UTILITIES $ 14,908,925
------------
TOTAL COMMON STOCKS
(Cost $134,081,582) $147,398,132
------------
</TABLE>
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED)
<C> <S> <C> <C>
DEBT OBLIGATIONS - 42.3%
CORPORATE BONDS - 30.0%
BASIC INDUSTRIES - 4.8%
$ 2,000,000 B+/B1 Bethlehem Steel Corp., 10.375%,
9/1/03 $ 2,102,500
2,000,000 BBB/Baa1 Bowater, Inc., 9.0%, 8/1/09 2,272,380
4,000,000 BBB-/Baa2 Georgia Pacific Co., 9.875%,
11/1/21 4,412,120
4,000,000 BBB-/Baa3 USX Corp., 9.375%, 2/15/12 4,772,360
------------
TOTAL BASIC INDUSTRIES $ 13,559,360
------------
CAPITAL GOODS - 2.2%
3,000,000 BBB/Baa2 Joy Technologies, Inc., 10.25%,
9/1/03 $ 3,266,280
3,000,000 BB+/A3 Washington Mutual Capital,
8.375%, 6/1/27 3,056,190
------------
TOTAL CAPITAL GOODS $ 6,322,470
------------
CONSUMER DURABLES - 2.1%
5,000,000 A-/A3 General Motors Corp., 9.4%,
7/15/21 $ 5,989,800
------------
TOTAL CONSUMER DURABLES $ 5,989,800
------------
</TABLE>
12
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
CONSUMER NON-DURABLES - 1.8%
$ 3,300,000 BB+/Ba3 Freeport-McMoRan Resource
Partners, L.P., 8.75%, 2/15/04 $ 3,374,250
1,500,000 A/A2 May Department Stores Co.,
9.875%, 6/15/00 1,626,000
------------
TOTAL CONSUMER NON-DURABLES $ 5,000,250
------------
ENERGY - 2.5%
2,500,000 BBB/Baa1 Ashland Oil Co., 8.8%, 11/15/12 $ 2,782,150
4,100,000 A-/A3 Phillips Petroleum Co., 8.86%,
5/15/22 4,290,814
------------
TOTAL ENERGY $ 7,072,964
------------
FINANCIAL - 6.1%
4,000,000 A+/A1 Ford Motor Credit Co., 9.14%,
12/30/14 $ 4,416,760
2,000,000 A-/A3 General Motors Acceptance
Corp., 8.5%, 1/1/03 2,147,620
5,000,000 AAA/Aaa General Electric Capital Corp.,
8.85%, 4/1/05 5,573,650
5,000,000 BB-/Ba1 Riggs National Corp., 8.5%,
2/1/06 5,151,250
------------
TOTAL FINANCIAL $ 17,289,280
------------
SERVICES - 7.0%
5,000,000 BBB/Baa3 News America Holdings, Inc.,
8.25%, 8/10/18 $ 5,046,700
5,000,000 BB-/B1 Quorum Health Group, 8.75%,
11/1/05 5,131,250
5,000,000 B+/Ba3 Tenet Healthcare Corp., 9.625%,
9/1/02 5,425,000
2,000,000 BBB-/Ba1 Time Warner, Inc., 9.15%,
2/1/23 2,205,200
2,000,000 BB-/B1 Viacom International, Inc.,
10.25%, 9/15/01 2,180,000
------------
TOTAL SERVICES $ 19,988,150
------------
TECHNOLOGY - 0.4%
1,000,000 B+/B1 Unisys Corp., 15.0%, 7/1/97 $ 1,000,000
------------
TOTAL TECHNOLOGY $ 1,000,000
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/97 (CONTINUED)
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
TRANSPORTATION - 3.1%
$ 5,000,000 BBB/Baa1 Delta Air Lines, Inc., 9.2%,
9/23/14 $ 5,634,350
3,000,000 BBB+/Baa2 Kansas City Southern
Industries, Inc., 8.8%, 7/1/22 3,141,090
------------
TOTAL TRANSPORTATION $ 8,775,440
------------
TOTAL CORPORATE BONDS $ 84,997,714
------------
U.S. GOVERNMENT OBLIGATIONS - 12.3%
10,000,000 U.S. Treasury Bond, 6.5%,
10/15/06 $ 9,958,500
5,000,000 U.S. Treasury Notes, 5.875%,
11/15/99 4,969,000
10,000,000 U.S. Treasury Notes, 6.25%,
1/31/02 9,945,000
10,000,000 U.S. Treasury Notes, 5.875%,
1/31/99 9,981,400
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS $ 34,853,900
------------
TOTAL DEBT OBLIGATIONS
(Cost $119,176,642) $119,851,614
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $258,521,625) $272,544,627
------------
</TABLE>
14
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
TEMPORARY CASH INVESTMENT - 3.7%
COMMERCIAL PAPER - 3.7%
$10,557,000 Ford Motor Credit Co., 6.11%, 7/1/97
$ 10,557,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $10,557,000) $ 10,557,000
------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY
CASH INVESTMENT - 100%
(Cost $269,078,625) (a) $283,101,627
============
</TABLE>
* Non-incoming producing security.
(a) At June 30, 1997, the net unrealized gain on investments based on cost for
federal income tax purposes of $269,094,376 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $18,573,756
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (4,566,505)
-----------
Net unrealized gain $14,007,251
===========
</TABLE>
Purchases and sales of securities (excluding temporary cash investments)
for the six months ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Long-Term U.S. Government $ 39,793,750 $ 5,995,781
Other Long-Term Securities $170,644,822 $214,215,758
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
BALANCE SHEET 6/30/97
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investments of $10,557,000) (cost $269,078,625) $283,101,627
Cash 25,066
Receivables -
Investment securities sold 934,219
Fund shares sold 242,119
Dividends and interest 3,027,702
Other 928
------------
Total assets $287,331,661
------------
LIABILITIES:
Payables -
Investment securities purchased $ 2,598,809
Fund shares repurchased 263,851
Due to affiliates 391,113
Accrued expenses 23,747
------------
Total liabilities $ 3,277,520
------------
NET ASSETS:
Paid-in capital $238,817,885
Accumulated undistributed net investment income 1,135,370
Accumulated undistributed net realized gain 30,077,884
Net unrealized gain on investments 14,023,002
------------
Total net assets $284,054,141
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $273,875,727/24,574,032 shares) $ 11.14
============
Class B (based on $9,041,421/816,038 shares) $ 11.08
============
Class C (based on $1,136,993/102,019 shares) $ 11.14
============
MAXIMUM OFFERING PRICE:
Class A $ 11.66
============
</TABLE>
16
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED 6/30/97
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $1,891,490
Interest 5,242,989
----------
Total investment income $ 7,134,479
------------
EXPENSES:
Management fees $ 862,324
Transfer agent fees
Class A 282,848
Class B 10,380
Class C 1,221
Distribution fees
Class A 330,471
Class B 38,438
Class C 6,229
Accounting 34,590
Custodian fees 26,843
Registration fees 27,494
Professional fees 32,458
Printing 24,300
Fees and expenses of nonaffiliated trustees 9,568
Miscellaneous 13,966
----------
Total expenses $ 1,701,130
Less fees paid indirectly (32,306)
------------
Net expenses $ 1,668,824
------------
Net investment income $ 5,465,655
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 28,014,087
Change in net unrealized gain on investments (16,169,704)
------------
Net gain on investments $ 11,844,383
------------
Net increase in net assets resulting from operations $ 17,310,038
============
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED 6/30/97 AND THE YEAR ENDED 12/31/96
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
6/30/97 12/31/96
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 5,465,655 $ 17,199,660
Net realized gain on investments 28,014,087 2,594,045
Change in net unrealized gain on investments (16,169,704) 6,288,804
------------ ------------
Net increase in net assets resulting from operations $ 17,310,038 $ 26,082,509
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A ($0.18 and $0.62 per share, respectively) $ (4,471,618) $(16,361,461)
Class B ($0.14 and $0.52 per share, respectively) (105,078) (242,093)
Class C ($0.14 and $0.49 per share, respectively) (16,757) (31,699)
In excess of net investment income:
Class B ($0.00 and $0.05 per share, respectively) - (33,567)
Class C ($0.00 and $0.08 per share, respectively) - (7,943)
From net realized gain:
Class A ($0.00 and $0.00 per share, respectively) - (31,088)
Class B ($0.00 and $0.00 per share, respectively) - (1,181)
Class C ($0.00 and $0.00 per share, respectively) - (116)
------------ ------------
Total distributions to shareholders $ (4,593,453) $(16,709,148)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 16,145,723 $ 30,741,958
Reinvestment of distributions 3,929,865 14,065,908
Cost of shares repurchased (32,801,245) (53,556,419)
------------ ------------
Net decrease in net assets resulting from
fund share transactions $(12,725,657) $ (8,748,553)
------------ ------------
Net increase (decrease) in net assets $ (9,072) $ 624,808
NET ASSETS:
Beginning of period 284,063,213 283,438,405
------------ ------------
End of period (including accumulated undistributed net
investment income of $1,135,370 and $263,168,
respectively) $284,054,141 $284,063,213
============ ============
</TABLE>
<TABLE>
<CAPTION>
'97 SHARES '97 AMOUNT '96 SHARES '96 AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,226,746 $ 13,256,362 2,362,021 $ 24,241,197
Reinvestment of distributions 350,111 3,825,228 1,360,560 13,797,072
Less shares repurchased (2,931,075) (31,561,820) (5,136,994) (52,728,595)
---------- ------------ ---------- ------------
Net decrease (1,354,218) $(14,480,230) (1,414,413) $(14,690,326)
========== ============ ========== ============
CLASS B
Shares sold 230,219 $ 2,476,576 535,117 $ 5,482,009
Reinvestment of distributions 8,432 91,719 23,415 237,783
Less shares repurchased (77,916) (828,791) (78,441) (799,735)
---------- ------------ ---------- ------------
Net increase 160,735 $ 1,739,504 480,091 $ 4,920,057
========== ============ ========== ============
CLASS C
Shares sold 38,065 $ 412,785 99,372 $ 1,018,752
Reinvestment of distributions 1,186 12,918 3,040 31,053
Less shares repurchased (36,942) (410,634) (2,702) (28,089)
---------- ------------ ---------- ------------
Net increase 2,309 $ 15,069 99,710 $ 1,021,716
========== ============ ========== ============
</TABLE>
18
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/97
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/97(a) 12/31/96 12/31/95 12/31/94 12/31/93(B) 12/31/92
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 10.65 $ 10.30 $ 9.11 $ 10.21 $ 10.13 $ 10.14
-------- -------- -------- -------- -------- --------
Increase (decrease) from investment
operations:
Net investment income $ 0.22 $ 0.64 $ 0.66 $ 0.66 $ 0.65 $ 0.65
Net realized and unrealized gain (loss) on
investments 0.45 0.33 1.29 (1.09) 0.37 0.09
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment
operations $ 0.67 $ 0.97 $ 1.95 $ (0.43) $ 1.02 $ 0.74
Distributions to shareholders from:
Net investment income (0.18) (0.62) (0.65) (0.67) (0.64) (0.66)
Net realized gain - - (0.11) - (0.30) (0.09)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ 0.49 $ 0.35 $ 1.19 $ (1.10) $ 0.08 $ (0.01)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 11.14 $ 10.65 $ 10.30 $ 9.11 $ 10.21 $ 10.13
======== ======== ======== ======== ======== ========
Total return* 6.33% 9.89% 22.00% (4.31)% 10.24% 7.59%
Ratio of net expenses to average net assets 1.19%**+ 1.10%+ 1.13%+ 1.11% 1.06% 0.99%
Ratio of net investment income to average net
assets 3.92%**+ 6.17%+ 6.58%+ 7.07% 6.52% 6.47%
Portfolio turnover rate 161%** 31% 25% 50% 69% 54%
Average commission rate paid (1) $ 0.0560 $ 0.0587 - - - -
Net assets, end of period (in thousands) $273,876 $276,064 $281,639 $259,970 $296,699 $250,033
Ratios assuming reduction for fees paid
indirectly:
Net expenses 1.17%** 1.08% 1.11% - - -
Net investment income 3.94%** 6.19% 6.60% - - -
</TABLE>
(a) The Fund changed its investment objective on February 3, 1997.
(b) Prior to the assumption of the management agreement on December 1, 1993 by
PMC, the Fund was advised by Mutual of Omaha Fund 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 sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed security transactions.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/97
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED 4/28/95 TO
6/30/97(a) 12/31/96 12/31/95
<S> <C> <C> <C>
CLASS B
Net asset value, beginning
of period $ 10.59 $ 10.27 $ 9.55
-------- -------- ------
Increase from investment
operations:
Net investment income $ 0.17 $ 0.52 $ 0.39
Net realized and unrealized
gain on investments 0.46 0.37 0.90
-------- -------- ------
Net increase from
investment operations $ 0.63 $ 0.89 $ 1.29
Distributions to shareholders:
Net investment income (0.14) (0.52) (0.46)
In excess of net investment
income - (0.05) -
Net realized gain - - (0.11)
-------- -------- ------
Net increase in net asset value $ 0.49 $ 0.32 $ 0.72
-------- -------- ------
Net asset value, end of period $ 11.08 $ 10.59 $10.27
======== ======== ======
Total return* 5.98% 9.02% 13.74%
Ratio of net expenses to
average net assets 2.02%**+ 1.88%+ 1.88%**+
Ratio of net investment income
to average net assets 3.09%**+ 5.45%+ 5.83%**+
Portfolio turnover rate 161%** 31% 25%
Average commission rate paid (1) $ 0.0560 $ 0.0587 -
Net assets, end of period
(in thousands) $ 9,041 $ 6,940 $1,800
Ratios assuming reduction of
fees paid indirectly:
Net expenses 2.00%** 1.86% 1.78%**
Net investment income 3.11%** 5.47% 5.93%**
(a) The Fund changed its investment objective on February 3, 1997.
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of distributions, the complete redemption of the investment at net
asset value at the end of each period, and no sales charges. Total return would be
reduced if sales charges were taken into account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's exchange
listed security transactions.
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/97
<TABLE>
<CAPTION>
SIX MONTHS
ENDED 1/31/96 TO
6/30/97(a) 12/31/96
<S> <C> <C>
CLASS C
Net asset value, beginning of period $ 10.62 $ 10.39
-------- --------
Increase from investment operations:
Net investment income $ 0.17 $ 0.49
Net realized and unrealized gain on
investments 0.49 0.31
-------- --------
Net increase from investment
operations $ 0.66 $ 0.80
Distributions to shareholders:
Net investment income (0.14) (0.49)
In excess of net investment income - (0.08)
-------- --------
Net increase in net asset value $ 0.52 $ 0.23
-------- --------
Net asset value, end of period $ 11.14 $ 10.62
======== ========
Total return* 6.25% 8.12%
Ratio of net expenses to average net assets 1.94%**+ 1.76%**+
Ratio of net investment income to average net
assets 3.19%**+ 5.63%**+
Portfolio turnover rate 161%** 31%
Average commission rate paid(1) $ 0.0560 $ 0.0587
Net assets, end of period (in thousands) $ 1,137 $ 1,059
Ratios assuming reduction of fees paid
indirectly:
Net expenses 1.92%** 1.73%**
Net investment income 3.21%** 5.66%**
(a) The Fund changed its investment objective on February 3, 1997.
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of distributions, the complete redemption of the investment at net asset
value at the end of each period, and no sales charges. Total return would be reduced
if sales charges were taken into account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's exchange listed
security transactions.
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/97
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Balanced Fund (the Fund) is a Delaware business trust
registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. Effective February 3, 1997,
certain changes were made to the Fund's operations including, among
other things, a new management contract and a change in the Fund's
investment objective from current income consistent with preservation
and conservation of capital to capital growth and current income. In
connection with this policy change, the Fund changed its name from
Pioneer Income Fund.
The Fund offers three classes of shares -- Class A, Class B and Class
C shares. 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. Debt securities
are valued based on valuations furnished by independent pricing
services that utilize matrix systems. These matrix systems reflect
such factors as security prices, yields, maturities and ratings and
are supplemented by dealer and exchange quotations and fair market
value information from other sources, as required. Market discount
and premium are accreted or amortized daily on a straight-line
basis. Equity securities are valued at the last sale price on the
principal exchange where they are traded. Securities
22
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
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 that have the highest cost and also qualify
for long-term capital gain or loss treatment for tax purposes.
B. FEDERAL INCOME TAXES
It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income and net realized
capital gains, if any, to its shareholders. Therefore, no federal
income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income
tax rules. Therefore, the source of the Fund's distributions may be
shown in the accompanying financial statements as either from or in
excess of net investment income or net realized gain on investment
transactions, or from paid-in capital, depending on the type of
book/tax differences that may exist.
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 $33,619 in underwriting commissions on the sale
of fund shares during the six months ended June 30, 1997.
23
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/97 (CONTINUED)
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 expense (see Note 3). Income, common expenses
and realized and unrealized gains and losses are calculated at the
Fund level and allocated daily to each class of shares based on the
respective percentage of adjusted net assets at the beginning of
the day.
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
0.65% of the Fund's average daily net assets up to $1 billion; 0.60%
of the next $4 billion; and 0.55% of the excess over $5 billion.
Prior to February 3, 1997, management fees were 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 the 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 June 30, 1997, $164,073 was payable
to PMC related to management fees and certain other services.
24
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
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 $52,961 in transfer agent fees
payable to PSC at June 30, 1997.
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 the Class A
Plan, the Fund pays PFD a service fee of up to 0.25% of the Fund's
average daily net assets in reimbursement of its actual expenditures
to finance activities primarily intended to result in the sale of
Class A shares. Pursuant to the Class B Plan 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
$174,079 in distribution fees payable to PFD at June 30, 1997.
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 six months ended June 30, 1997, CDSCs in the
amount of $7,255 were paid to PFD.
5. EXPENSE REDUCTIONS
The Fund has entered into certain expense offset arrangements
resulting in a reduction in the Fund's total expenses. For the six
months ended June 30, 1997, the Fund's expenses were reduced by
$32,306 under such arrangements.
25
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF
PIONEER BALANCED FUND:
We have audited the accompanying balance sheet of Pioneer Balanced
Fund (formerly Pioneer Income Fund), including the schedule of
investments, as of June 30, 1997, and the related statement of
operations, and the statements of changes in net assets for the
periods presented and financial highlights for the six months ended
June 30, 1997 and 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 June
30, 1997 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 Balanced Fund as of June 30, 1997, the
results of its operations, and the changes in its net assets for the
periods presented and financial highlights for the six months ended
June 30, 1997, and the three years ended December 31, 1996, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 1, 1997
26
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
<TABLE>
<S> <C>
TRUSTEES OFFICERS
Mary K. Bush John F. Cogan, Jr., Chairman and
John F. Cogan, Jr. President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice
Margaret B.W. Graham President
John W. Kendrick William C. Field, Vice President
Marguerite A. Piret William H. Keough, Treasurer
David D. Tripple Joseph P. Barri, Secretary
Stephen K. West
John Winthrop
</TABLE>
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
SHAREOWNER SERVICES AND TRANSFER AGENT
Pioneering Services Corporation
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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.
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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 for accounts with a value of $10,000 or more.)
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HOW TO CONTACT PIONEER
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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, prospectuses, applications
and service forms 1-800-225-6292
FACTFONE[SM] for automated fund yields, prices,
account information and transactions 1-800-225-4321
RETIREMENT PLANS INFORMATION 1-800-622-0176
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) 1-800-225-1997
WRITE TO US:
Pioneer 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.
Pioneer Funds Distributor, Inc. 0897 - 4368
[Logo 60 State Street (C) PIONEER FUNDS DISTRIBUTOR, INC.
PIONEER] Boston, Massachusetts 02109 PRINTED ON RECYCLED PAPER
