<PAGE>
[PIONEER LOGO]
PIONEER
BALANCED
FUND
SEMIANNUAL REPORT 6/30/99
<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 18
Notes to Financial Statements 24
Report of Independent Public Accountants 28
Trustees, Officers and Service Providers 29
</TABLE>
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PIONEER BALANCED FUND
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LETTER FROM THE CHAIRMAN 6/30/99
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DEAR SHAREOWNER,
-----------------------------------------------------------------------------
I am pleased to present this report for Pioneer Balanced Fund covering
the six months from December 31, 1998 through June 30, 1999. I thank
you for your interest in the Fund and your confidence in Pioneer.
After turning in record-high returns for quite some time, growth
stocks are no longer the dominant force they once were. As is the
nature of the market, the tide has turned yet again. Patience finally
rewarded investors in value, small-company and mid-cap stocks when the
market started to broaden in April and these stocks began to spark
some interest. As this recent shift proves, the market moves in cycles
and it is impossible to predict what style of investing will be best
at any given moment. This is why we do not advocate market timing, but
instead focus on the solid fundamentals of businesses and the relative
value of their issued securities.
When selecting stocks, some of the timeless business fundamentals your
investment team focuses on are solid management and niche products or
services that can give companies a competitive edge going forward. We
feel confident that before we put our investors' money into companies,
we have thoroughly researched them. We encourage investors to stay the
course because we believe this long-term approach provides the
potential for significant rewards.
I encourage you to read on to learn more about your Fund, including
the question and answer session with Eric Weigel and Tin Chan and
fixed-income commentary from Ken Taubes. If you have questions, please
contact your investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Gogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
PIONEER BALANCED FUND
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PORTFOLIO SUMMARY 6/30/99
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PORTFOLIO DIVERSIFICATION
-----------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[PIE CHART]
International Common Stocks 1%
Short-Term Cash Equivalents 3%
U.S. Common Stocks 53%
Corporate Bonds 26%
U.S. Government Securities 17%
SECTOR DISTRIBUTION
-----------------------------------------------------------------------------
(As a percentage of total investment in securities)
[PIE CHART]
Other 7% U.S. Government Securities 18%
Technology 6% Financial 16%
Capital Goods 7% Consumer Cyclicals 11%
Communication Services 7% Energy 10%
Basic Materials 9% Consumer Staples 9%
10 LARGEST HOLDINGS
-----------------------------------------------------------------------------
(As a percentage of total investment in securities)
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Ford Motor Co. 3.02% 6. Riggs National Corp., 2.04%
8.5%, 2/1/06
2. AT&T Corp. 2.85 7. News America Holdings Inc., 2.01
8.25%, 8/10/18
3. Intel Corp. 2.79 8. US West Communications Group, 1.93
Inc.
4. U.S. Treasury Notes, 5.625%, 2.30 9. Wal-Mart Stores, Inc. 1.92
5/15/08
5. Southdown, Inc., 10.0%, 2.14 10. McGraw-Hill Co., Inc. 1.90
3/1/06
</TABLE>
Fund holdings will vary for other periods.
2
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PIONEER BALANCED FUND
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PERFORMANCE UPDATE 6/30/99 CLASS A SHARES
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SHARE PRICES AND DISTRIBUTIONS
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<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C>
$9.92 $9.74
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98 - 6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.144 - -
</TABLE>
INVESTMENT RETURNS
-----------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
<S> <C> <C>
10 Years 8.89% 8.49%
5 Years 9.85 8.86
1 Year -0.55 -5.06
</TABLE>
* Reflects deduction of the maximum 4.5% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<CAPTION>
Growth of $10,000
Lehman Brothers Government/
Pioneer Balanced Fund* Standard & Poor's Index Corporate Bond Index
--------------------- ----------------------- ---------------------------
<S> <C> <C> <C>
6/30/89 9,550 10,000 10,000
10,382 11,646 10,710
6/30/91 11,221 12,503 11,803
12,613 14,177 13,473
6/30/93 14,285 16,107 15,247
14,115 16,334 15,025
6/30/95 15,708 20,584 16,944
17,426 25,928 17,731
6/30/97 20,159 34,916 19,103
22,703 45,445 21,259
6/30/99 22,579 56,407 21,834
</TABLE>
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
<PAGE>
PIONEER BALANCED FUND
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PERFORMANCE UPDATE 6/30/99 CLASS B SHARES
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SHARE PRICES AND DISTRIBUTIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C>
$9.82 $9.65
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98 - 6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.108 - -
</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.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
PERIOD IF HELD IF REDEEMED*
<S> <C> <C>
Life-of Fund
(4/28/95) 9.19% 8.83%
1 Year -1.49 -5.25
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of
distributions. The maximum CDSC of 4% declines over six years.
<TABLE>
<CAPTION>
Growth of $10,000
Lehman Brothers Government/
Pioneer Balanced Fund* Standard and Poor's 500 Index Corporate Bond Index
--------------------- ----------------------------- ---------------------------
<S> <C> <C> <C>
4/30/95 10,000 10,000 10,000
6/30/95 10,397 10,640 10,502
10,813 11,485 10,703
11,374 12,175 11,202
11,330 12,828 10,940
6/30/96 11,455 13,402 10,990
11,672 13,815 11,184
12,400 14,966 11,525
12,235 15,369 11,426
6/30/97 13,142 18,048 11,841
14,232 19,398 12,256
14,010 19,956 12,650
14,871 22,738 12,842
6/30/98 14,662 23,491 13,177
13,635 21,158 13,830
14,036 25,660 13,848
13,940 27,238 13,683
6/30/99 14,244 29,157 13,534
</TABLE>
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
<PAGE>
PIONEER BALANCED FUND
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PERFORMANCE UPDATE 6/30/99 CLASS C SHARES
------------------------------------------------------------------------------
SHARE PRICES AND DISTRIBUTIONS
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C>
$9.91 $9.75
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98 - 6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.108 - -
</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.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
PERIOD IF HELD IF REDEEMED*
<S> <C> <C>
Life-of Fund
(1/31/96) 7.12% 7.12%
1 Year -1.68 -1.68
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) apples to redemptions made withing one year of purchase.
<TABLE>
<CAPTION>
Growth of $10,000
Lehman Brother's Government/
Pioneer Balanced Fund Standard & Poor's 500 Index Coporate Bond Index
--------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
1/31/96 10,000 10,000 10,000
9,865 10,190 9,706
6/30/96 9,974 10,646 9,750
10,163 10,974 9,922
10,812 11,888 10,225
10,678 12,208 10,137
6/30/97 11,487 14,336 10,505
12,456 15,408 10,873
12,269 15,851 11,222
13,029 18,061 11,393
6/30/98 12,859 18,659 11,691
11,956 16,806 12,269
12,302 20,382 12,286
12,206 21,635 12,139
6/30/99 12,643 23,160 12,007
</TABLE>
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.
5
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99
-----------------------------------------------------------------------------
As investors showed renewed signs of interest in small-company and
other neglected stocks, Pioneer Balanced Fund continued to rely on
the time-tested method of value investing for a balanced outcome of
growth and income. In the following discussion, the Fund's management
team - Eric Weigel and Tin Chan, with Ken Taubes speaking for the
fixed-income team - review the performance of your Fund and the
factors that affected it over the past six months. Mr. Weigel focuses
on asset allocation decisions for the portfolio, while Mr. Chan is
responsible for stock selection.
Q: HOW DID PIONEER BALANCED FUND PERFORM FOR THE SIX MONTHS ENDED
JUNE 30?
A: The Fund's performance has improved since our last report,
although it still trailed the average balanced fund. Class A
shares returned 3.36%, Class B 2.90% and Class C 2.77%, all at
net asset value. In comparison, for the same period, the 456
balanced funds tracked by Lipper, Inc. returned an average of
5.56%. (Lipper is an independent firm that tracks mutual fund
performance.)
Q: ERIC, WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE IN
COMPARISON TO OTHER FUNDS?
A: The Fund's focus on dividend paying stocks worked against it
because investors were more interested in growth stocks than in
these more conservative choices. In addition, the Fund's assets
were conservatively allocated - with a higher allotment to bonds
than our peers. Finally, your Fund is a value-oriented fund, and
value stocks have been out of favor for some time. It was only in
the most recent quarter that value and dividend-paying stocks
came back and helped boost Fund returns.
Q: TIN, WHAT EQUITY HOLDINGS HELPED THE FUND'S PERFORMANCE?
A: There were several contributors, but two companies, AT&T and
Wal-Mart Stores, stand out. Both are among the Fund's largest
holdings. Other department stores simply cannot compete with
Wal-Mart and the reputation it has established with consumers.
Interestingly, the company re-
6
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
cently entered the financial services arena with its purchase of
Federal BankCentre, a bank based in Broken Arrow, Oklahoma. AT&T
has already carved out a name as a dominant force in the
telephone industry. The corporation is now positioning itself for
tremendous growth with its goal of becoming a "one-stop shop" for
cable, internet and telephone access. Smaller companies simply do
not have the resources and brand recognition to pose a threat to
either of these giants. Lesser-known Ingersoll-Rand, a
manufacturer of construction and industrial equipment, was a
stock we added to the portfolio when it was trading at a
discount. When value stocks surged in April, its stock price took
off.
Q: DID THE DOWNTURN IN TECHNOLOGY STOCKS HURT THE FUND?
A: Yes, since there were few names in this group that maintained
exceptional growth and escaped the April sell-off. Computer chip
manufacturer Intel had to slash prices to compete with smaller
companies that produce cheaper personal computer chips. However,
the company has indicated that its earnings for the second half
of the year will show improvement. Telephone service provider US
West Communications Group spent more than was expected on new
technology and equipment and this ate into its earnings. Both
holdings hurt the Fund's price performance this period.
Q: KEN, HAVE THERE BEEN MANY CHANGES IN THE BOND PORTFOLIO DURING
THE LAST SIX MONTHS?
A: Not really. We've continued to invest in mortgage-backed and
corporate bond issuers as we look to maximize the Fund's income.
We added chemical company Huntsman ICI Chemicals, a high-yield
issuer we think is well positioned against its competitors. New
holding RBF Finance, an oil rig engineering construction firm,
also did quite well over the six months. Through extensive
research we've found value in several high-yielding issues and,
as a result, that sector's weighting in the portfolio has
increased. (The prospectus allows a maximum of 10% of the Fund's
assets in high-yield investments. These investments carry more
risk than lower-yielding issues.)
7
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99 (CONTINUED)
-----------------------------------------------------------------------------
Toward the end of the period, we added some longer-maturity
Treasurys when interest rates rose and prices dropped. We believe
that the economy will slow as we near the end of the year, and
we're acting now to lock in the attractive yields these Treasurys
offer.
Q: KEN, DO YOU ALSO USE A VALUE APPROACH TO BONDS FOR THE PORTFOLIO?
A: Yes. Our research team carefully analyzes potential holdings, in
pursuit of securities we believe can provide stable high-yield
results at attractive prices. At the same time, we strive to
maintain an investment-grade credit rating for the bond portfolio
as a whole. Ratings apply to underlying securities, not Fund.
Over time, compounding the income from these types of holdings
should, we believe, provide shareowners with good dividends and a
strong total return.
Q: ERIC AND TIN, GOING FORWARD HOW WILL YOU MANAGE THE FUND?
A: The Fund is designed to appeal to investors who are seeking
regular income and also want to maintain a relatively stable
portfolio, one without a lot of volatility. Going forward, we'll
strive to keep the portfolio's investment allocation at 55%
stocks and 45% bonds. We believe this mix of stocks and bonds
will help us take advantage of equities, benefiting from positive
earnings results, while also taking into consideration the
potential for the return of inflation to the economy. Our focus
will remain on value stocks with low price-to-earnings and low
price-to-book ratios, and Ken will continue to include
value-based fixed-income instruments in the bond portion of the
portfolio.
8
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99
-----------------------------------------------------------------------------
SHARES VALUE
INVESTMENT IN SECURITIES - 97.1%
COMMON STOCKS - 54.2%
BASIC MATERIALS - 2.4%
ALUMINUM - 0.5%
20,000 Reynolds Metals Co. $ 1,180,000
------------
CHEMICALS - 1.2%
14,000 Dow Chemical Co. $ 1,776,250
26,000 Eastman Chemical Co. 1,345,500
------------
$ 3,121,750
------------
PAPER & FOREST PRODUCTS - 0.7%
28,000 Weyerhaeuser Co. $ 1,925,000
------------
TOTAL BASIC MATERIALS $ 6,226,750
------------
CAPITAL GOODS - 4.1%
AEROSPACE/DEFENSE - 0.7%
28,000 General Dynamics Corp. $ 1,918,000
------------
ELECTRICAL EQUIPMENT - 0.9%
5,000 General Electric Co. $ 565,000
16,000 Honeywell, Inc. 1,854,000
------------
$ 2,419,000
------------
ENGINEERING & CONSTRUCTION - 0.4%
25,000 Fluor Corp. $ 1,012,500
------------
MACHINERY (DIVERSIFIED) - 0.8%
34,000 Ingersoll-Rand Co. $ 2,197,250
------------
MANUFACTURING (DIVERSIFIED) - 1.3%
20,000 Tyco International Ltd. $ 1,895,000
20,000 United Technologies Corp. 1,433,750
------------
$ 3,328,750
------------
TOTAL CAPITAL GOODS $ 10,875,500
------------
COMMUNICATION SERVICES - 6.8%
TELECOMMUNICATIONS (LONG DISTANCE) - 2.8%
130,500 AT&T Corp. $ 7,283,531
------------
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
-----------------------------------------------------------------------------
SHARES VALUE
TELEPHONE - 4.0%
20,000 Ameritech Corp. $ 1,470,000
20,000 Bell Atlantic Corp. 1,307,500
60,000 BellSouth Corp. 2,812,500
84,000 US West Communications Group, Inc. 4,935,000
------------
$ 10,525,000
------------
TOTAL COMMUNICATION SERVICES $ 17,808,531
------------
CONSUMER CYCLICALS - 7.9%
AUTOMOBILES - 2.9%
137,000 Ford Motor Co. $ 7,731,938
------------
HOMEBUILDING - 0.4%
25,000 Centex Corp. $ 939,063
------------
HOUSEHOLD FURNISHINGS & APPLIANCES - 0.5%
18,000 Maytag Corp. $ 1,254,375
------------
PUBLISHING - 1.8%
90,000 McGraw-Hill Co., Inc. $ 4,854,375
------------
RETAIL (GENERAL MERCHANDISE) - 1.9%
102,000 Wal-Mart Stores, Inc. $ 4,921,500
------------
SERVICES (ADVERTISING/MARKETING) - 0.4%
13,000 Omnicom Group $ 1,040,000
------------
TOTAL CONSUMER CYCLICALS $ 20,741,251
------------
CONSUMER STAPLES - 7.0%
DISTRIBUTORS (FOOD & HEALTH) - 0.4%
45,000 SUPERVALU, Inc. $ 1,155,938
------------
ENTERTAINMENT - 0.5%
41,000 The Walt Disney Co. $ 1,263,312
------------
FOODS - 2.9%
19,000 H.J. Heinz Co. $ 952,375
96,000 Kellogg Co. 3,168,000
19,000 The Quaker Oats Co. 1,261,125
100,000 Tyson Foods, Inc. 2,250,000
------------
$ 7,631,500
------------
HOUSEHOLD PRODUCTS (NON-DURABLES) - 0.4%
18,000 Kimberly Clark Corp. $ 1,026,000
------------
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
SHARES VALUE
RESTAURANTS - 1.9%
127,000 Darden Restaurants $ 2,770,187
54,000 McDonald's Corp. 2,230,875
------------
$ 5,001,062
------------
SPECIALITY PRINTING - 0.9%
31,000 Deluxe Corp. $ 1,207,063
35,000 R.R. Donnelly & Sons Co. 1,297,187
------------
$ 2,504,250
------------
TOTAL CONSUMER STAPLES $ 18,582,062
------------
ENERGY - 6.7%
OIL (DOMESTIC INTEGRATED) - 1.3%
55,000 Royal Dutch Petroleum Co. (A.D.R.) $ 3,313,750
------------
OIL (INTERNATIONAL INTEGRATED) - 4.7%
44,000 Chevron Corp. $ 4,188,250
50,000 Exxon Corp. 3,856,250
32,000 Mobil Corp. 3,168,000
20,000 Texaco, Inc. 1,250,000
------------
$ 12,462,500
------------
OIL & GAS (REFINING & MARKETING) - 0.7%
45,000 Ashland Oil, Inc. $ 1,805,625
------------
TOTAL ENERGY $ 17,581,875
------------
FINANCIAL - 9.6%
BANKS (MAJOR REGIONAL) - 1.8%
58,000 Banc One Corp. $ 3,454,625
30,500 Fleet Financial Group, Inc. 1,353,438
------------
$ 4,808,063
------------
BANKS (MONEY CENTER) - 2.7%
51,000 BankAmerica Corp. $ 3,738,937
38,000 First Union Corp. 1,786,000
10,000 J.P. Morgan & Co., Inc. 1,405,000
------------
$ 6,929,937
------------
FINANCIAL (DIVERSIFIED) - 1.8%
40,000 American General Corp. $ 3,015,000
26,000 Federal National Mortgage Association 1,777,750
------------
$ 4,792,750
------------
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
-----------------------------------------------------------------------------
SHARES VALUE
INSURANCE (LIFE/HEALTH) - 1.6%
28,000 Lincoln National Corp. $ 1,464,750
37,000 Trans America Corp. 2,775,000
------------
$ 4,239,750
------------
INSURANCE (MULTI-LINE) - 1.1%
33,000 Cigna Corp. $ 2,937,000
------------
INSURANCE (PROPERTY/CASUALTY) - 0.6%
37,000 Safeco Corp. $ 1,632,625
------------
TOTAL FINANCIAL $ 25,340,125
------------
HEALTHCARE - 2.0%
HEALTHCARE (DIVERSIFIED) - 0.8%
11,000 Allergan, Inc. $ 1,221,000
13,000 Warner-Lambert Co., Inc. 901,875
------------
$ 2,122,875
------------
HEALTHCARE (DRUGS/MAJOR PHARMACEUTICALS) - 1.2%
14,000 Eli Lilly & Co. $ 1,002,750
40,000 Pharmacia & UpJohn, Inc. 2,272,500
------------
$ 3,275,250
------------
TOTAL HEALTHCARE $ 5,398,125
------------
TECHNOLOGY - 6.0%
COMMUNICATIONS EQUIPMENT - 1.2%
24,000 Lucent Technologies, Inc. $ 1,618,500
16,000 Motorola, Inc. 1,516,000
------------
$ 3,134,500
------------
COMPUTERS (HARDWARE) - 2.1%
56,000 Compaq Computer Corp. $ 1,326,500
43,000 Hewlett-Packard Co. 4,321,500
------------
$ 5,648,000
------------
ELECTRONICS (SEMICONDUCTORS) - 2.7%
120,000 Intel Corp. $ 7,140,000
------------
TOTAL TECHNOLOGY $ 15,922,500
------------
TRANSPORTATION - 0.8%
AIRLINES - 0.8%
65,000 Southwest Airlines Co. $ 2,023,125
------------
TOTAL TRANSPORTATION $ 2,023,125
------------
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/MOODY'S
RATINGS
SHARES (UNAUDITED) VALUE
<C> <S> <C> <C>
UTILITIES - 0.9%
ELECTRIC COMPANIES - 0.9%
22,000 DTE Energy Co. $ 880,000
35,000 Public Service Enterprise Group, Inc. 1,430,625
------------
TOTAL UTILITIES $ 2,310,625
------------
TOTAL COMMON STOCKS
(Cost $113,598,685) $142,810,469
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C> <C>
DEBT OBLIGATIONS - 42.9%
CORPORATE BONDS - 25.5%
BASIC MATERIALS - 5.9%
$ 500,000 B-/Caa1 AEI Resources, 11.5%, 12/15/06 (144A) $ 491,250
2,000,000 BB-/Ba3 Bethlehem Steel Corp., 10.375%, 9/1/03 2,070,000
2,000,000 BBB/Baa2 Bowater Inc., 9.0%, 8/1/09 2,241,980
4,000,000 BBB-/Baa2 Georgia Pacific Co., 9.875%, 11/1/21 4,373,920
850,000 B+/B2 Huntsman ICI Chemicals, 10.625%, 7/1/09
(144A) 857,437
475,000 BB/Ba3 Lyondell Chemical Co., 9.875%, 5/1/07
(144A) 486,875
480,000 B+/B2 Royster-Clark Inc., 10.25%, 4/1/09 (144A) 475,200
4,000,000 BBB-/Baa2 USX Corp., 9.375%, 2/15/12 4,512,280
------------
TOTAL BASIC MATERIALS $ 15,508,942
------------
CAPITAL GOODS - 2.6%
1,000,000 BB/Ba2 Allied Waste North America, 7.625%, 1/1/06 $ 932,500
500,000 B/B2 Metromedia Fiber Network, Inc., 10.0%,
11/15/08 513,750
5,000,000 BBB-/Baa3 Southdown, Inc., 10.0%, 3/1/06 5,488,300
------------
TOTAL CAPITAL GOODS $ 6,934,550
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
COMMUNICATION SERVICES - 0.2%
$ 325,000 B/B3 Crown Castle International Corp., 9.0%,
5/15/11 $ 316,875
275,000 B/B3 NEXTLINK Communication, Inc., 10.75%,
6/1/09 282,562
------------
TOTAL COMMUNICATION SERVICES $ 599,437
------------
CONSUMER CYCLICALS - 2.8%
700,000 BBB/Baa3 Laidlaw, Inc., 7.65%, 5/15/06 $ 682,773
1,000,000 BBB-/Baa3 Levi Strauss Co., 7.0%, 11/1/06 (144A) 892,680
5,000,000 BBB-/Baa3 News America Holdings Inc., 8.25%, 8/10/18 5,136,550
750,000 BB+/Baa3 Saks Inc., 8.25%, 11/15/08 784,388
------------
TOTAL CONSUMER CYCLICALS $ 7,496,391
------------
CONSUMER STAPLES - 1.9%
500,000 B/B3 Agrilink Foods, Inc., 11.875%, 11/1/08 $ 516,250
1,150,000 B-/Caa1 Ameriserve Food Distribution, Inc.,
10.125%, 7/15/07 977,500
825,000 B+/B2 Charter Communications Holdings LLC, 8.25%,
4/1/07 (144A) 785,812
1,700,000 B/B2 Echostar DBS Communications Corp., 9.25%,
2/1/06 (144A) 1,734,000
375,000 B-/B2 Emmis Communications Corp., 8.125%, 3/15/09
(144A) 353,438
750,000 B-/B3 Premier Parks, Inc., 9.75%, 6/15/07 757,500
------------
TOTAL CONSUMER STAPLES $ 5,124,500
------------
ENERGY - 3.1%
2,500,000 BBB/Baa2 Ashland Oil Co., 8.8%, 11/15/12 $ 2,768,100
4,100,000 A-/A3 Phillips Petroleum Co., 8.86%, 5/15/22 4,338,046
475,000 BB-/Ba3 RBF Finance Co., 11.0%, 3/15/06 (144A) 484,500
700,000 BB+/Ba1 Santa Fe Snyder Corp., 8.05%, 6/15/04 698,817
------------
TOTAL ENERGY $ 8,289,463
------------
</TABLE>
14 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>
FINANCIAL - 6.0%
$ 1,010,000 BB+/Baa3 Capital One Financial Corp., 7.125%, 8/1/08 $ 956,026
4,000,000 A/A1 Ford Motor Credit Co., 9.14%, 12/30/14 4,358,520
1,000,000 BBB-/Ba2 Imperial Bank, 8.375%, 4/1/99 965,940
700,000 BBB/Baa3 Mack-Cali Realty Corp., 7.25%, 3/15/09 664,391
500,000 BBB/Baa3 Newcourt Credit Group, 6.875%, 2/16/05
(144A) 473,615
5,000,000 BB-/Ba1 Riggs National Corp., 8.5%, 2/1/06 5,212,500
3,000,000 BBB+/A3 Washington Mutual Capital, Inc., 8.375%,
6/1/27 3,044,280
------------
TOTAL FINANCIAL $ 15,675,272
------------
HEALTHCARE - 1.6%
1,150,000 BBB-/Ba1 Beckman Instruments, Inc., 7.05%, 6/1/26 $ 1,093,098
250,000 B+/B2 Biovail International Corp., 10.875%,
11/15/05 260,000
375,000 B/B3 King Pharmaceutical, Inc., 10.75%, 2/15/09 386,250
2,375,000 BB-/Ba3 Quorum Health Group, 8.75%, 11/1/05 2,303,750
------------
TOTAL HEALTHCARE $ 4,043,098
------------
TRANSPORTATION - 1.2%
3,000,000 BBB-/Baa2 Kansas City Southern Industries, Inc.,
8.8%, 7/1/22 $ 3,136,530
------------
TOTAL TRANSPORTATION $ 3,136,530
------------
UTILITIES - 0.2%
400,000 BB/Ba3 CMS Energy Corp., 7.5%, 1/15/09 $ 375,156
------------
TOTAL UTILITIES $ 375,156
------------
TOTAL CORPORATE BONDS $ 67,183,339
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 17.4%
$ 2,425,838 Federal National Mortgage Association,
REMIC Series 98-50EN, 6.5%, 9/25/28 $ 2,396,922
18,501,919 Government National Mortgage Association,
6.0%, 4/15/14 to 10/15/28 17,434,951
8,197,052 Government National Mortgage Association,
6.5%, 11/20/24 to 6/15/29 7,893,925
5,128,675 Government National Mortgage Association,
7.0%, 3/15/12 to 6/15/29 5,150,609
1,896,413 Government National Mortgage Association,
REMIC Series 1998-24A, 6.5%, 11/20/24 1,866,848
2,000,000 Government National Mortgage Association,
REMIC Series 1998-13B, 6.5%, 12/20/25 1,932,220
2,390,000 U.S. Treasury Bonds, 8.125%, 8/15/19 2,885,184
455,000 U.S. Treasury Bonds, 6.125%, 11/15/27 451,255
6,005,000 U.S. Treasury Notes, 5.625%, 5/15/08 5,884,540
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS $ 45,896,454
------------
TOTAL DEBT OBLIGATIONS
(Cost $115,663,285) $113,079,793
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $229,261,970) $255,890,262
------------
TEMPORARY CASH INVESTMENT - 2.9%
COMMERCIAL PAPER - 2.9%
7,748,000 American Express Credit Corp., 5.5%, 7/1/99 $ 7,748,000
------------
</TABLE>
16 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>
TOTAL TEMPORARY CASH INVESTMENT
(Cost $7,748,000) $ 7,748,000
------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH
INVESTMENT - 100%
(Cost $237,009,970) (a)(b) $263,638,262
============
</TABLE>
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At June 30, 1999, the
value of these securities amounted to $7,034,807 or 2.7% of total net
assets.
(a) At June 30, 1999, the net unrealized gain on investments based on cost for
federal income tax purposes of $237,047,218 was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $31,329,660
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (4,738,616)
-----------
Net unrealized gain $26,591,044
===========
(b) At December 31, 1998, the Fund had a net capital loss carryforward of
$14,695,906 which will expire in 2006 if not utilized.
Note: The Fund's investments in mortgage-backed securities of the Government
National Mortgage Association (GNMA) are interests in separate pools of
mortgages. All separate investments in this issuer which have the same
coupon rate have been aggregated for the purpose of presentation in this
schedule of investments.
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended June 30, 1999 were as follows:
PURCHASES SALES
----------- -----------
Long-term U.S. Government $30,102,113 $31,147,623
Other Long-term Securities 31,634,819 61,963,598
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
BALANCE SHEET 6/30/99
-----------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including temporary
cash
investment of $7,748,000) (cost $237,009,970) $263,638,262
Cash 310
Receivables -
Investment securities sold 1,416,282
Fund shares sold 177,945
Dividends and interest 2,009,692
Other 1,032
------------
Total assets $267,243,523
------------
LIABILITIES:
Payables -
Investment securities purchased $ 2,375,505
Fund shares repurchased 472,683
Dividends 70,775
Due to affiliates 269,693
Accrued expenses 57,106
------------
Total liabilities $ 3,245,762
------------
NET ASSETS:
Paid-in capital $250,094,420
Accumulated undistributed net investment income 498,201
Accumulated net realized loss on investments (13,223,152)
Net unrealized gain on investments 26,628,292
------------
Total net assets $263,997,761
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $238,079,938/24,008,406 shares) $ 9.92
============
Class B (based on $22,040,567/2,245,004 shares) $ 9.82
============
Class C (based on $3,877,256/391,292 shares) $ 9.91
============
MAXIMUM OFFERING PRICE:
Class A $ 10.39
============
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED 6/30/99
-----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (Net of foreign taxes withheld of $15) $1,532,600
Interest 4,396,780
----------
Total investment income $5,929,380
----------
EXPENSES:
Management fees $ 873,736
Transfer agent fees
Class A 239,928
Class B 41,089
Class C 11,719
Distribution fees
Class A 303,717
Class B 111,519
Class C 17,650
Administrative fees 36,510
Custodian fees 25,553
Registration fees 24,081
Professional fees 22,282
Printing 13,305
Fees and expenses of nonaffiliated trustees 12,688
Miscellaneous 4,819
----------
Total expenses $1,738,596
Less fees paid indirectly (25,682)
----------
Net expenses $1,712,914
----------
Net investment income $4,216,466
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $1,472,753
Change in net unrealized gain on investments 3,002,290
----------
Net gain on investments $4,475,043
----------
Net increase in net assets resulting from operations $8,691,509
==========
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED 6/30/99 AND THE YEAR ENDED 12/31/98
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FROM OPERATIONS: 6/30/99 12/31/98
<S> <C> <C>
Net investment income $ 4,216,466 $ 8,532,116
Net realized gain (loss) on investments 1,472,753 (14,852,123)
Change in net unrealized gain on investments 3,002,290 9,078,125
------------ ------------
Net increase in net assets resulting from
operations $ 8,691,509 $ 2,758,118
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.14 and $0.30 per share,
respectively) $ (3,610,697) $ (8,098,749)
Class B ($0.11 and $0.22 per share,
respectively) (251,178) (445,932)
Class C ($0.11 and $0.22 per share,
respectively) (40,020) (73,667)
Net realized gain:
Class A ($0.00 and $0.23 per share,
respectively) - (5,730,953)
Class B ($0.00 and $0.23 per share,
respectively) - (527,666)
Class C ($0.00 and $0.23 per share,
respectively) - (85,992)
------------ ------------
Total distributions to shareholders $ (3,901,895) $(14,962,959)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 16,567,481 $ 53,764,258
Reinvestment of distributions 3,441,614 13,428,978
Cost of shares repurchased (44,735,202) (61,437,995)
------------ ------------
Net increase (decrease) in net assets resulting
from fund share transactions $(24,726,107) $ 5,755,241
------------ ------------
Net decrease in net assets $(19,936,493) $ (6,449,600)
NET ASSETS:
Beginning of period 283,934,254 290,383,854
------------ ------------
End of period (including accumulated undistributed net
investment income of $498,201 and $183,630,
respectively) $263,997,761 $283,934,254
============ ============
</TABLE>
<TABLE>
<CAPTION>
CLASS A '99 SHARES '99 AMOUNT '98 SHARES '98 AMOUNT
<S> <C> <C> <C> <C>
Shares sold 1,233,871 $ 12,032,300 3,662,322 $ 37,731,555
Reinvestment of distributions 326,503 3,185,355 1,248,982 12,409,860
Less shares repurchased (3,981,736) (38,921,929) (5,532,673) (56,591,983)
---------- ------------ ---------- ------------
Net decrease (2,421,362) $(23,704,274) (621,369) $ (6,450,568)
========== ============ ========= ============
CLASS B
Shares sold 323,384 $ 3,135,784 1,232,938 $ 12,581,848
Reinvestment of distributions 23,084 223,046 90,776 885,232
Less shares repurchased (457,011) (4,424,193) (335,931) (3,367,944)
---------- ------------ ---------- ------------
Net increase (decrease) (110,543) $ (1,065,363) 987,783 $ 10,099,136
========== ============ ========= ============
CLASS C
Shares sold 142,963 $ 1,399,397 333,098 $ 3,450,855
Reinvestment of distributions 3,401 33,213 13,580 133,886
Less shares repurchased (142,373) (1,389,080) (146,232) (1,478,068)
--------- ------------ --------- ------------
Net increase 3,991 $ 43,530 200,446 $ 2,106,673
========= ============ ========= ============
</TABLE>
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CLASS A 6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.74 $ 10.15 $ 10.65 $ 10.30 $ 9.11 $ 10.21
-------- -------- -------- -------- -------- --------
Increase (decrease) from investment
operations:
Net investment income $ 0.16 $ 0.30 $ 0.41 $ 0.64 $ 0.66 $ 0.66
Net realized and unrealized gain (loss)
on investments 0.16 (0.18) 1.03 0.33 1.29 (1.09)
-------- -------- -------- -------- -------- --------
Net increase (decrease) from
investment operations $ 0.32 $ 0.12 $ 1.44 $ 0.97 $ 1.95 $ (0.43)
Distributions to shareholders:
Net investment income (0.14) (0.30) (0.40) (0.62) (0.65) (0.67)
Net realized gain - (0.23) (1.54) - (0.11) -
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset
value $ 0.18 $ (0.41) $ (0.50) $ 0.35 $ 1.19 $ (1.10)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.92 $ 9.74 $ 10.15 $ 10.65 $ 10.30 $ 9.11
======== ======== ======== ======== ======== ========
Total return* 3.36% 1.14% 13.92% 9.89% 22.00% (4.31)%
Ratio of net expenses to average net
assets 1.20%**+ 1.17%+ 1.19%+ 1.10%+ 1.13%+ 1.11%
Ratio of net investment income to average
net assets 3.21%**+ 2.92%+ 3.55%+ 6.17%+ 6.58%+ 7.07%
Portfolio turnover rate 47%** 94% 122% 31% 25% 50%
Net assets, end of period (in thousands) $238,080 $257,419 $274,695 $276,064 $281,639 $259,970
Ratios assuming reduction for fees paid
indirectly:
Net expenses 1.18%** 1.16% 1.17% 1.08% 1.11% -
Net investment income 3.23%** 2.93% 3.57% 6.19% 6.60% -
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED 4/28/95 TO
CLASS B 6/30/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.65 $ 10.08 $ 10.59 $10.27 $ 9.55
------- ------- ------- ------ ------
Increase (decrease) from investment
operations:
Net investment income $ 0.11 $ 0.23 $ 0.32 $ 0.52 $ 0.39
Net realized and unrealized gain (loss) on
investments 0.17 (0.21) 1.02 0.37 0.90
------- ------- ------- ------ ------
Net increase from investment operations $ 0.28 $ 0.02 $ 1.34 $ 0.89 $ 1.29
Distributions to shareholders:
Net investment income (0.11) (0.22) (0.31) (0.52) (0.46)
In excess of net investment income - - - (0.05) -
Net realized gain - (0.23) (1.54) - (0.11)
------- ------- ------- ------ ------
Net increase (decrease) in net asset value $ 0.17 $ (0.43) $ (0.51) $ 0.32 $ 0.72
------- ------- ------- ------ ------
Net asset value, end of period $ 9.82 $ 9.65 $ 10.08 $10.59 $10.27
======= ======= ======= ====== ======
Total return* 2.90% 0.19% 12.98% 9.02% 13.74%
Ratio of net expenses to average net assets 2.12%**+ 2.03%+ 2.01%+ 1.88%+ 1.88%**+
Ratio of net investment income to average
net assets 2.29%**+ 2.09%+ 2.65%+ 5.45%+ 5.83%**+
Portfolio turnover rate 47%** 94% 122% 31% 25%
Net assets, end of period (in thousands) $22,041 $22,737 $13,789 $6,940 $1,800
Ratios assuming reduction for fees paid
indirectly:
Net expenses 2.10%** 2.01% 1.99% 1.86% 1.78%**
Net investment income 2.31%** 2.11% 2.67% 5.47% 5.93%**
</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 sales charges were taken into account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED 1/31/96 TO
CLASS C 6/30/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.75 $10.17 $10.62 $10.39
------ ------ ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.10 $ 0.23 $ 0.33 $ 0.49
Net realized and unrealized gain (loss) on investments 0.17 (0.20) 1.07 0.31
------ ------ ------ ------
Net increase from investment operations $ 0.27 $ 0.03 $ 1.40 $ 0.80
Distributions to shareholders:
Net investment income (0.11) (0.22) (0.31) (0.49)
In excess of net investment income - - - (0.08)
Net realized gain - (0.23) (1.54) -
------ ------ ------ ------
Net increase (decrease) in net asset value $ 0.16 $(0.42) $(0.45) $ 0.23
------ ------ ------ ------
Net asset value, end of period $ 9.91 $ 9.75 $10.17 $10.62
====== ====== ====== ======
Total return* 2.77% 0.27% 13.48% 8.12%
Ratio of net expenses to average net assets 2.42%**+ 2.12%+ 2.03%+ 1.76%**+
Ratio of net investment income to average net assets 1.98%**+ 2.01%+ 2.68%+ 5.63%**+
Portfolio turnover rate 47%** 94% 122% 31%
Net assets, end of period (in thousands) $3,877 $3,778 $1,900 $1,059
Ratios assuming reduction for fees paid indirectly:
Net expenses 2.39%** 2.09% 1.98% 1.73%**
Net investment income 2.01%** 2.04% 2.73% 5.66%**
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99
-----------------------------------------------------------------------------
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. The investment objectives of
the Fund are capital growth and current income.
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. The net asset value
is computed once daily, on each day the New York Stock Exchange is
open, as of the close of regular trading on the Exchange. In
computing the net asset value, debt securities are valued at prices
supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings, and
valuations may be supplemented by dealers and other sources, as
required. Equity 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
24
<PAGE>
PIONEER BALANCED FUND
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
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 $26,280 in underwriting commissions on the sale of
fund shares during the six months ended June 30, 1999.
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
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PIONEER BALANCED FUND
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NOTES TO FINANCIAL STATEMENTS 6/30/99 (CONTINUED)
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each class of shares based on the respective percentage of adjusted
net assets at the beginning of the day.
The Fund declares as daily dividends substantially all of its net
investment income. All dividends are paid on a monthly basis.
Short-term capital gain distributions, if any, may be declared with
the daily dividends. Distributions to 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
Pioneer Investment Management, Inc. (PIM), 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.
In addition, under the management and administration agreements,
certain other services and costs, including accounting, regulatory
reporting and insurance premiums, are paid by the Fund. At June 30,
1999, $160,331 was payable to PIM related to management fees,
administrative 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 $38,963 in transfer agent fees
payable to PSC at June 30, 1999.
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
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PIONEER BALANCED FUND
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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 $70,399 in distribution fees payable
to PFD at June 30, 1999.
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 CDSCs are
paid to PFD. For the six months ended June 30, 1999, CDSCs in the
amount of $37,342 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 six months ended
June 30, 1999, the Fund's expenses were reduced by $25,682 under such
arrangements.
6. LINE OF CREDIT FACILITY
The Fund, along with certain other funds in the Pioneer Family of Funds
(the Funds), collectively participate in a $50 million committed,
unsecured revolving line of credit facility. Borrowings are used solely
for temporary or emergency purposes. The Fund may borrow up to the
lesser of $50 million or the limits set by its prospectus for
borrowings. Interest on collective borrowings of up to $25 million is
payable at the Federal Funds Rate plus 3/8% on an annualized basis, or
at the Federal Funds Rate plus 1/2% if the borrowing exceeds $25
million at any one time. The Funds pay an annual commitment fee for
this facility. The commitment fee is allocated among such Funds based
on their respective borrowing limits. For the six months ended June 30,
1999, the Fund had no borrowings under this agreement.
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PIONEER BALANCED FUND
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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TO THE SHAREOWNERS AND THE BOARD OF TRUSTEES OF
PIONEER BALANCED FUND:
We have audited the accompanying balance sheet, including the schedule
of investments, of Pioneer Balanced Fund as of June 30, 1999, and the
related statement of operations, the statements of changes in net
assets, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 1999, by
correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Pioneer Balanced Fund as of June 30, 1999, the
results of its operations, the changes in its net assets and the
financial highlights for periods presented, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 6, 1999
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PIONEER BALANCED FUND
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
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TRUSTEES OFFICERS
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice
Margaret B.W. Graham President
John W. Kendrick Eric W. Reckard, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
INVESTMENT ADVISER
Pioneer Investment Management, Inc.
CUSTODIAN
Brown Brothers Harriman & Co.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
PRINCIPAL UNDERWRITER
Pioneer Funds Distributor, Inc.
LEGAL COUNSEL
Hale and Dorr LLP
SHAREOWNER SERVICES AND TRANSFER AGENT
Pioneering Services Corporation
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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:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
OUR TOLL-FREE FAX 1-800-225-4240
OUR INTERNET E-MAIL ADDRESS [email protected]
(for general questions about Pioneer only)
VISIT OUR WEBSITE: WWW.PIONEERFUNDS.COM
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT
FUND PROSPECTUS.
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<S> <C> <C>
[Pioneer Logo] PIONEER INVESTMENT MANAGEMENT, INC. 0899-6906
60 STATE STREET COPYWRIGHT PIONEER FUNDS DISTRIBUTOR, INC.
BOSTON, MASSACHUSETTS 02109 [PRINTED ON RECYCLED PAPER LOGO]
WWW.PIONEERFUNDS.COM
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