<PAGE><PAGE>
[PIONEER LOGO]
PIONEER
BALANCED
FUND
[ANNUAL REPORT 12/31/99]
<PAGE>
TABLE OF CONTENTS
-----------------------------------------------------------------------------
<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>
<PAGE>
PIONEER BALANCED FUND
LETTER FROM THE CHAIRMAN 12/31/99
DEAR SHAREOWNER,
- --------------------------------------------------------------------------------
In an ever-changing investment environment, it can be difficult to be
disciplined enough to adhere to your investment goals. We are bombarded
every day with information and advice from a variety of sources.
Magazine and newspaper headlines create a frenzy by shouting -- "Top 10
stocks for the year 2000" -- sending many investors scrambling to
adjust their holdings. But as history often shows us, yesterday's
winners are in no way tomorrow's sure thing.
No one can know with absolute certainty which stocks or bonds will have
good performance. It is important to keep sight of your own investment
goals and to stick to them. Jumping from one investment to another
based upon the latest hot trend is unlikely to help you reach your
financial goals. We think a well-reasoned investment plan will.
The first few months of the year are a practical time to revisit your
investment goals and make appropriate adjustments in your personal
portfolio. Scheduling a review session with your financial professional
is a good starting point. A professional acquainted with your
individual circumstances can help you to distill information, examine
your current strategy and make informed decisions that can effectively
satisfy your long-term investment needs.
Among the key topics to cover with your advisor is your retirement --
including the IRA options available to you. Now is the time to think
about making a 1999 contribution to an IRA, if you haven't already.
This year, you'll have until April 17 to make your prior-year IRA
contribution. And, to begin taking advantage of tax-deferred growth,
you might want to get a head start on your year 2000 contribution.
I encourage you to read on to learn more about Pioneer Balanced Fund.
If you have questions, please contact your investment professional.
Visit our web site at www.pioneerfunds.com for more information about
your fund or Pioneer.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
PIONEER BALANCED FUND
PORTFOLIO SUMMARY 12/31/99
PORTFOLIO DIVERSIFICATION
-----------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[PIE CHART]
<TABLE>
<S> <C>
U.S. Common Stocks.................... 56%
U.S. Corporate Bonds.................. 23%
U.S. Government Securities............ 18%
Depositary Receipts for
International Stocks................ 2%
Short-Term Cash Equivalents........... 1%
</TABLE>
SECTOR DISTRIBUTION
-----------------------------------------------------------------------------
(As a percentage of total investment in securities)
[PIE CHART]
<TABLE>
<S> <C>
U.S. Government Securities............ 18%
Technology............................ 14%
Financial............................. 13%
Consumer Staples...................... 9%
Basic Materials....................... 9%
Energy................................ 9%
Consumer Cyclicals.................... 7%
Communication Services................ 7%
Healthcare............................ 7%
Capital Goods......................... 4%
Other................................. 3%
</TABLE>
10 LARGEST HOLDINGS
-----------------------------------------------------------------------------
(As a percentage of long-term holdings)
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Intel Corp. 4.20% 6. Exxon Mobil Corp. 2.00%
2. Ford Motor Co. 3.12 7. Government National 1.90
Mortgage Association,
6.5%, 10/15/28
3. US West Communications Group, 2.57 8. USX Corp., 9.375%, 2/15/12 1.88
Inc.
4. Wal-Mart Stores, Inc. 2.21 9. EMC Corp. 1.86
5. Hewlett-Packard Co. 2.08 10. Texas Instruments, Inc. 1.85
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
PIONEER BALANCED FUND
--------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/99 CLASS A SHARES
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARE PRICES AND DISTRIBUTIONS
--------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE 12/31/99 12/31/98
$9.73 $9.74
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98 - 12/31/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
$0.310 -- --
</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.
Growth of $10,000
[CHART]
<TABLE>
<CAPTION>
Lehman Brothers
Pioneer Government/Corporate Standard & Poor's 500
Balanced Fund* Bond Index Index
------------- -------------------- ---------------------
<S> <C> <C> <C>
12/89 9550 10000 10000
9892 10827 9688
11734 12571 12628
12624 13523 13588
13916 15019 14951
13316 14491 15156
16246 17281 20832
17853 17780 25602
20339 19514 34134
20572 21363 43869
12/99 21219 20903 53079
AVERAGE ANNUAL TOTAL RETURNS (As of December 31, 1999)
PERIOD NET ASSET VALUE PUBLIC OFFERING PRICE*
------ --------------- ---------------------
10 Years 8.31% 7.81%
5 Years 9.77 8.76
1 Year 3.15 -1.51
</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.
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
--------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/99 CLASS B SHARES
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARE PRICES AND DISTRIBUTIONS
--------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE PER SHARE 12/31/99 12/31/98
$9.64 $9.65
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98 - 12/31/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
$0.222 -- --
</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.
Growth of $10,000
[CHART]
<TABLE>
<CAPTION>
Lehman Brothers
Pioneer Government/Corporate Standard & Poor's 500
Balanced Fund* Bond Index Index
------------- -------------------- ---------------------
<S> <C> <C> <C>
1/95 10000 10000 10000
10397 10502 10653
10813 10703 11497
11374 11202 12186
11330 10940 12839
11455 10990 13414
11672 11184 13826
12400 11525 14977
12235 11426 15381
13142 11841 18060
14232 12256 19412
14010 12650 19968
14871 12842 22747
14662 13177 23497
13635 13830 21164
14036 13848 25663
13940 13683 26938
14444 13534 28830
13713 13606 27033
12/99 14150 13550 31050
AVERAGE ANNUAL TOTAL RETURNS (As of December 31, 1999)
PERIOD IF HELD IF REDEEMED*
------ ------- -----------
Life-of-Fund (4/28/95) 8.02% 7.70%
1 Year 2.24 -1.76
</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.
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
--------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/99 CLASS C SHARES
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARE PRICES AND DISTRIBUTIONS
--------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE 12/31/99 12/31/98
$9.73 $9.75
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98 - 12/31/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
$0.213 -- --
</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.
Growth of $10,000
[CHART]
<TABLE>
<CAPTION>
Lehman Brothers
Pioneer Government/Corporate Standard & Poor's 500
Balanced Fund* Bond Index Index
------------- -------------------- ---------------------
<S> <C> <C> <C>
1/96 10000 10000 10000
9865 9706 10203
9974 9750 10660
10163 9922 10987
10812 10225 11902
10678 10137 12223
11487 10505 14352
12456 10873 15426
12269 11222 15868
13029 11393 18076
12859 11691 18673
11956 12269 16818
12302 12286 20393
12206 12139 21407
12643 12007 22910
12009 12071 21482
12/99 12550 12022 24675
AVERAGE ANNUAL TOTAL RETURNS (As of December 31, 1999)
PERIOD IF HELD IF REDEEMED*
------ ------- -----------
Life-of-Fund (1/31/96) 5.97% 5.97%
1 Year 2.02 2.02
</TABLE>
----------
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
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 12/31/99
In the following discussion, Theresa Hamacher, who supervises the
team of portfolio managers and analysts responsible for day-to-day
management of Pioneer Balanced Fund, and Tin Chan, who focuses on the
Fund's equity component, review the performance of your Fund and the
factors that affected it over the year.
Q: HOW DID PIONEER BALANCED FUND PERFORM FOR THE YEAR ENDED DECEMBER
31, 1999?
A: The Fund's Class A shares returned 3.15%, Class B shares 2.24%
and Class C shares 2.02%, all at net asset value. In comparison,
the 448 balanced funds tracked by Lipper returned an average of
8.73% at net asset value, for the same period. (Lipper is an
independent firm that tracks mutual fund performance.)
Q: WHY DID THE FUND UNDERPERFORM COMPARED TO OTHER BALANCED FUNDS?
A: There were several reasons. The Fund is value-oriented, and for
most of the year this investment style continued to be out of
favor. Instead, investors focused on technology and other growth
stocks. Over the year, no other sector matched the performance of
technology. We believe many technology stocks are currently
overpriced and do not offer much value to shareowners. Since the
Fund had limited exposure to technology investments, its results
suffered when compared to its balanced fund peer group. Also, it
has always been our strategy to strive to select stocks that we
believe will produce a higher than average dividend
yield - something most technology stocks don't offer. Lastly, the
Fund was more conservatively positioned than some competitor
funds because it had a heavier weighting in bonds. This, too,
worked against the Fund.
Q: WHAT EQUITY HOLDINGS HELPED THE FUND'S PERFORMANCE?
A: The few technology stocks that we did hold were strong
contributors to the Fund's performance. Motorola, which we owned
for the entire year, followed the wave of expansion experienced
by most other communica-
6
<PAGE>
PIONEER BALANCED FUND
tions equipment providers and was up over 142%. Hewlett-Packard
and Lucent Technologies also performed well. The technology
stocks in the portfolio were acquired only after we had conducted
careful research of their fundamentals. Basic material holdings,
including Dow Chemical and Reynolds Metals, an aluminum
manufacturer, were up between 49% and 52%, respectively, over the
year. Allergan, an eye care products company, saw its stock rise
55%, providing a boost to the Fund's performance.
Q: WHAT HOLDINGS HURT THE FUND?
A: Several of the holdings that turned in poor performance over the
year shared a common bond - their stock prices declined after
they had trouble integrating companies that were acquired in
1998. First Union merged with CoreStates Financial Corp. and, in
response, First Union's share price fell. Another holding, Banc
One, also saw its price decline when it acquired a credit card
company. Nevertheless, we continue to hold Banc One and First
Union. We believe in their long-term viability and they both
offer some of the highest dividend yields that we've seen in over
a decade.
Q: DID THE THREE INCREASES IN SHORT-TERM INTEREST RATES DURING 1999
AFFECT THE WAY THAT YOU MANAGED THE BOND PORTFOLIO?
A: Yes. The bond portion of Pioneer Balanced Fund's portfolio was
adjusted over the year in response to the changing economic
conditions, specifically rising interest rates. As the year
progressed, we purchased bonds that offered more attractive
yields, namely high yield issues and mortgage-backed securities.
(The prospectus restricts us to a maximum of 10% of the Fund's
assets in high yield investments. Investments in lower-rated
bonds may be more volatile and less liquid than more highly rated
bonds.) This proved to be a wise decision because these
securities outperformed Treasurys, which had a particularly bad
year.
7
<PAGE>
PIONEER BALANCED FUND
PORTFOLIO MANAGEMENT DISCUSSION 12/31/99 (CONTINUED)
Basically, the trend was the higher quality a bond, the worse it
performed. Although rates rose over the year, usually a negative factor
for bonds, the strength of the economy helped cushion the effects,
particularly for high yield bonds. High yield issues tend to perform
better in a strong economy partly because it's more likely that
companies will repay their debt in this environment.
Q: WHAT BOND HOLDINGS HELPED THE FUND'S PERFORMANCE?
A: One of our high yield credits, RBF Financial, an oil rig
engineering construction firm and a Fund holding since June, did
quite well. We felt that this issue would benefit from the
rebound in energy, and our analysis paid off. A new addition to
the portfolio was King Pharmaceutical. We bought this company's
bonds at face value early in the year, and they've since
appreciated in price as its business improved.
Q: GOING FORWARD HOW WILL YOU MANAGE THE FUND?
A: We will continue to apply a value approach. This means
maintaining a focus on stocks with low price-to-book and low
price-to-earnings ratios. An investment portfolio that contains a
blend of stocks and bonds can help to smooth out the ups and
downs that are inevitable in the stock market, as well as create
a comfortable balance between risk and reward. We believe that
over the long term the Fund can provide shareowners with the mix
of benefits that both stocks and bonds have to offer.
8
<PAGE>
PIONEER BALANCED FUND
SCHEDULE OF INVESTMENTS 12/31/99
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
INVESTMENT IN SECURITIES - 99.0%
COMMON STOCKS - 58.8%
BASIC MATERIALS - 2.8%
ALUMINUM - 0.6%
20,000 Reynolds Metals Co.
$ 1,532,500
-----------
CHEMICALS - 1.3%
14,000 Dow Chemical Co.
$ 1,870,750
26,000 Eastman Chemical Co.
1,239,875
-----------
$ 3,110,625
-----------
PAPER & FOREST PRODUCTS - 0.9%
28,000 Weyerhaeuser Co.
$ 2,010,750
-----------
TOTAL BASIC MATERIALS $ 6,653,875
-----------
CAPITAL GOODS - 3.8%
AEROSPACE/DEFENSE - 0.6%
28,000 General Dynamics Corp.
$ 1,477,000
-----------
ELECTRICAL EQUIPMENT - 0.7%
30,000 Honeywell, Inc.
$ 1,730,625
-----------
ENGINEERING & CONSTRUCTION - 0.5%
25,000 Fluor Corp.
$ 1,146,875
-----------
MACHINERY (DIVERSIFIED) - 0.8%
34,000 Ingersoll-Rand Co.
$ 1,872,125
-----------
MANUFACTURING (DIVERSIFIED) - 1.2%
40,000 Tyco International Ltd.
$ 1,555,000
20,000 United Technologies Corp.
1,300,000
-----------
$ 2,855,000
-----------
TOTAL CAPITAL GOODS $ 9,081,625
-----------
COMMUNICATION SERVICES - 6.4%
TELECOMMUNICATIONS (LONG DISTANCE) - 1.6%
73,000 AT&T Corp.
$ 3,704,750
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PIONEER BALANCED FUND
SCHEDULE OF INVESTMENTS 12/31/99 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
TELEPHONE - 4.8%
20,000 Bell Atlantic Corp.
$ 1,231,250
60,000 Bellsouth Corp.
2,808,750
26,320 SBC Communications, Inc.
1,283,100
84,000 US West Communications Group, Inc.
6,048,000
-----------
$11,371,100
-----------
TOTAL COMMUNICATION SERVICES $15,075,850
-----------
CONSUMER CYCLICALS - 6.7%
AUTOMOBILES - 3.1%
137,000 Ford Motor Co.
$ 7,320,938
-----------
HOMEBUILDING - 0.2%
25,000 Centex Corp.
$ 617,187
-----------
PUBLISHING - 1.2%
45,000 McGraw-Hill Co., Inc.
$ 2,773,125
-----------
RETAIL (GENERAL MERCHANDISE) - 2.2%
75,000 Wal-Mart Stores, Inc.
$ 5,184,375
-----------
TOTAL CONSUMER CYCLICALS $15,895,625
-----------
CONSUMER STAPLES - 6.7%
DISTRIBUTORS (FOOD & HEALTH) - 1.6%
45,000 SUPERVALU, Inc.
$ 900,000
70,000 Sysco Corp.
2,769,375
-----------
$ 3,669,375
-----------
ENTERTAINMENT - 0.5%
41,000 The Walt Disney Co.
$ 1,199,250
-----------
FOODS - 1.5%
19,000 H.J. Heinz Co.
$ 756,438
19,000 The Quaker Oats Co.
1,246,875
100,000 Tyson Foods, Inc.
1,625,000
-----------
$ 3,628,313
-----------
HOUSEHOLD PRODUCTS (NON-DURABLES) - 0.5%
18,000 Kimberly Clark Corp.
$ 1,174,500
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PIONEER BALANCED FUND
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
RESTAURANTS - 1.9%
127,000 Darden Restaurants
$ 2,301,875
54,000 McDonald's Corp.
2,176,875
-----------
$ 4,478,750
-----------
SPECIALTY PRINTING - 0.7%
31,000 Deluxe Corp.
$ 850,563
35,000 R.R. Donnelly & Sons Co.
868,437
-----------
$ 1,719,000
-----------
TOTAL CONSUMER STAPLES $15,869,188
-----------
ENERGY - 5.0%
OIL (DOMESTIC INTEGRATED) - 1.4%
55,000 Royal Dutch Petroleum Co. (A.D.R.)
$ 3,324,063
-----------
OIL (INTERNATIONAL INTEGRATED) - 3.0%
16,000 Chevron Corp.
$ 1,386,000
58,244 Exxon Mobil Corp.
4,692,282
20,000 Texaco, Inc.
1,086,250
-----------
$ 7,164,532
-----------
OIL & GAS (REFINING & MARKETING) - 0.6%
45,000 Ashland Oil, Inc.
$ 1,482,187
-----------
TOTAL ENERGY $11,970,782
-----------
FINANCIAL - 8.4%
BANKS (MAJOR REGIONAL) - 1.2%
58,000 Banc One Corp.
$ 1,859,625
30,500 Fleet Boston Financial Corp.
1,061,781
-----------
$ 2,921,406
-----------
BANKS (MONEY CENTER) - 2.1%
51,000 BankAmerica Corp.
$ 2,559,562
38,000 First Union Corp.
1,246,875
10,000 J.P. Morgan & Co., Inc.
1,266,250
-----------
$ 5,072,687
-----------
FINANCIAL (DIVERSIFIED) - 2.0%
40,000 American General Corp.
$ 3,035,000
26,000 Federal National Mortgage Association
1,623,375
-----------
$ 4,658,375
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PIONEER BALANCED FUND
SCHEDULE OF INVESTMENTS 12/31/99 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
INSURANCE (LIFE/HEALTH) - 1.6%
26,570 Aegon NV (A.D.R.)
$ 2,537,435
28,000 Lincoln National Corp.
1,120,000
-----------
$ 3,657,435
-----------
INSURANCE (MULTI-LINE) - 1.1%
33,000 Cigna Corp.
$ 2,658,563
-----------
INSURANCE (PROPERTY/CASUALTY) - 0.4%
37,000 Safeco Corp.
$ 920,375
-----------
TOTAL FINANCIAL $19,888,841
-----------
HEALTHCARE - 4.7%
HEALTHCARE (DIVERSIFIED) - 0.9%
22,000 Allergan, Inc.
$ 1,094,500
13,000 Warner-Lambert Co., Inc.
1,065,187
-----------
$ 2,159,687
-----------
HEALTHCARE (DRUGS/MAJOR PHARMACEUTICALS) - 1.2%
14,000 Eli Lilly & Co.
$ 931,000
40,000 Pharmacia & UpJohn, Inc.
1,800,000
-----------
$ 2,731,000
-----------
HEALTHCARE (HOSPITAL MANAGEMENT) - 1.4%
112,000 Columbia/HCA Healthcare Corp.
$ 3,283,000
-----------
HEALTHCARE (MANAGED CARE) - 1.2%
54,000 United Healthcare Corp.
$ 2,868,750
-----------
TOTAL HEALTHCARE $11,042,437
-----------
TECHNOLOGY - 13.5%
COMMUNICATIONS EQUIPMENT - 1.8%
24,000 Lucent Technologies, Inc.
$ 1,795,500
16,000 Motorola, Inc.
2,356,000
-----------
$ 4,151,500
-----------
COMPUTERS (HARDWARE) - 3.9%
56,000 Compaq Computer Corp.
$ 1,515,500
43,000 Hewlett-Packard Co.
4,899,313
27,000 IBM Corp.
2,916,000
-----------
$ 9,330,813
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
PIONEER BALANCED FUND
<TABLE>
<CAPTION>
S&P/MOODY'S
RATINGS
SHARES (UNAUDITED) VALUE
<C> <S> <C> <C>
COMPUTERS (PERIPHERALS) - 1.8%
40,000 EMC Corp.* $ 4,370,000
------------
ELECTRONICS (SEMICONDUCTORS) - 6.0%
120,000 Intel Corp. $ 9,877,500
45,000 Texas Instruments, Inc. 4,359,375
------------
$ 14,236,875
------------
TOTAL TECHNOLOGY $ 32,089,188
------------
UTILITIES - 0.8%
ELECTRIC COMPANIES - 0.8%
22,000 DTE Energy Co. $ 690,250
35,000 Public Service Enterprise Group, Inc. 1,218,438
------------
$ 1,908,688
------------
TOTAL UTILITIES $ 1,908,688
------------
TOTAL COMMON STOCKS
(Cost $114,702,633) $139,476,099
------------
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C> <C>
DEBT OBLIGATIONS - 40.0%
CORPORATE BONDS - 22.5%
BASIC MATERIALS - 6.3%
$ 500,000 CC/Ca AEI Resources, 11.5%, 12/15/06 (144A) $ 325,000
2,000,000 BB-/Ba3 Bethlehem Steel Corp., 10.375%, 9/1/03 2,025,000
2,000,000 BBB/Baa2 Bowater, Inc., 9.0%, 8/1/09 2,107,980
4,000,000 BBB-/Baa2 Georgia Pacific Co., 9.875%, 11/1/21 4,227,240
850,000 B+/B2 Huntsman ICI Chemicals, 10.125%, 7/1/09
(144A) 871,250
475,000 BB/Ba3 Lyondell Chemical Co., 9.875%, 5/1/07 (144A) 484,500
480,000 B+/B2 Royster Clark Inc., 10.25%, 4/1/09 (144A) 436,800
4,000,000 BBB-/Baa2 USX Corp., 9.375%, 2/15/12 4,422,880
------------
TOTAL BASIC MATERIALS $ 14,900,650
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
PIONEER BALANCED FUND
SCHEDULE OF INVESTMENTS 12/31/99 (CONTINUED)
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
CAPITAL GOODS - 0.6%
$ 1,000,000 B+/B2 Allied Waste North America, 10.0%, 8/1/09
(144A) $ 890,000
500,000 B+/B2 Metromedia Fiber Network, Inc., 10.0%,
11/15/08 512,500
------------
TOTAL CAPITAL GOODS $ 1,402,500
------------
COMMUNICATION SERVICES - 0.5%
325,000 B/B3 Crown Castle International Corp., 9.0%,
5/15/11 $ 316,875
740,000 B/B2 NEXTLINK Communications, Inc., 10.75%,
6/1/09 767,750
------------
TOTAL COMMUNICATION SERVICES $ 1,084,625
------------
CONSUMER CYCLICALS - 0.6%
700,000 BBB/Baa3 Laidlaw, Inc., 7.65%, 5/15/06 $ 648,585
1,000,000 BBB-/Ba1 Levi Strauss Co., 7.0%, 11/1/06
(144A) 744,900
------------
TOTAL CONSUMER CYCLICALS $ 1,393,485
------------
CONSUMER STAPLES - 2.2%
1,000,000 BBB-/Baa2 British Sky Broadcasting, 8.2%, 7/15/09
(144A) $ 960,280
825,000 B+/B2 Charter Communications Holdings LLC, 8.25%,
4/1/07 (144A) 763,125
1,700,000 B/B2 Echostar DBS Communications Corp., 9.25%,
2/1/06 (144A) 1,712,750
375,000 B-/B2 Emmis Communications Corp., 8.125%, 3/15/09
(144A) 359,063
750,000 B-/B3 Premier Parks, Inc., 9.75%, 6/15/07 750,937
685,000 B/B2 Wesco Distribution, Inc., 9.125%, 6/1/08 643,900
------------
TOTAL CONSUMER STAPLES $ 5,190,055
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
PIONEER BALANCED FUND
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
ENERGY - 3.3%
$ 2,500,000 BBB/Baa2 Ashland Oil Co., 8.8%, 11/15/12 $ 2,628,750
4,100,000 A-/A3 Phillips Petroleum Co., 8.86%, 5/15/22 4,145,510
820,000 B2/BB Pogo Producing, 5.5%, 6/15/06 (Convertible) 643,716
475,000 BB-/Ba3 RBF Financial Co., 11.0%, 3/15/06 509,438
700,000 BB+/Ba1 Santa Fe Snyder Corp., 8.05%, 6/15/04 677,453
------------
TOTAL ENERGY $ 8,604,867
------------
FINANCIAL - 4.8%
1,010,000 BB+/Baa3 Capital One Financial Corp., 7.125%, 8/1/08 $ 912,676
1,000,000 BBB-/Baa3 Colonial Realty LP, 7.0%, 7/14/07 890,100
575,000 B/B3 Delta Financial, 9.5%, 8/1/04 368,000
4,000,000 A+/A1 Ford Motor Credit Co., 9.14%, 12/30/14 4,217,400
1,000,000 BBB-/Ba2 Imperial Bank, 8.375%, 4/1/09 925,070
785,000 BBB/Baa3 Mack-Cali Realty Corp., 7.25%, 3/15/09 723,385
500,000 A+/A1 Newcourt Credit Group, 6.875%, 2/16/05 487,225
3,000,000 BBB-/A3 Washington Mutual Capital, Inc., 8.375%,
6/1/27 2,855,310
------------
TOTAL FINANCIAL $ 11,379,166
------------
HEALTHCARE - 1.8%
1,150,000 BBB-/Ba1 Beckman Instruments, Inc., 7.05%, 6/1/26 $ 1,054,539
250,000 B+/B2 Biovail International Corp., 10.875%,
11/15/05 262,500
675,000 B/B3 King Pharmaceutical, Inc., 10.75%, 2/15/09 715,500
2,375,000 B+/Ba3 Quorum Health Group, 8.75%, 11/1/05 2,256,250
------------
TOTAL HEALTHCARE $ 4,288,789
------------
TECHNOLOGY - 0.2%
500,000 BBB+/Baa1 Sun Microsystems, Inc., 7.65%, 8/15/09 $ 497,440
------------
TOTAL TECHNOLOGY $ 497,440
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
PIONEER BALANCED FUND
SCHEDULE OF INVESTMENTS 12/31/99 (CONTINUED)
<TABLE>
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
TRANSPORTATION - 1.6%
$ 3,000,000 BBB-/Baa2 Kansas City Southern Industries, Inc., 8.8%,
7/1/22 $ 3,139,080
750,000 BB/Ba2 Northwest Airlines, Inc., 8.52%, 4/7/04 708,495
------------
TOTAL TRANSPORTATION $ 3,847,575
------------
UTILITIES - 0.6%
400,000 BB/Ba3 CMS Energy Corp., 7.5%, 1/15/09 $ 368,180
1,000,000 BBB-/Baa3 Great Lakes Power, Inc., 8.3%, 3/1/05 977,280
------------
TOTAL UTILITIES $ 1,345,460
------------
TOTAL CORPORATE BONDS $ 53,934,612
------------
U.S. GOVERNMENT OBLIGATIONS - 17.5%
1,894,129 Federal National Mortgage Association, REMIC
Series 98-50EN, 6.5%, 9/25/28 $ 1,808,969
8,026,633 Government National Mortgage Association,
6.5%, 10/15/28 to 6/15/29 7,547,203
14,405,064 Government National Mortgage Association,
7.0%, 3/15/12 to 8/15/29 14,021,831
5,976,519 Government National Mortgage Association,
7.5%, 8/15/29 to 8/20/29 5,907,743
1,802,761 Government National Mortgage Association,
REMIC Series 1998-24A, 6.5%, 11/20/24 1,739,214
2,000,000 Government National Mortgage Association,
REMIC Series 1998-13B, 6.5%, 12/20/25 1,857,300
3,190,000 U.S. Treasury Bonds, 8.125%, 8/15/19 3,631,145
455,000 U.S. Treasury Bonds, 6.125%, 11/15/27 423,109
4,850,000 U.S. Treasury Bonds, 5.25%, 11/15/28 3,996,739
680,000 U.S. Treasury Notes, 5.5%, 7/31/01 672,819
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS $ 41,606,072
------------
TOTAL DEBT OBLIGATIONS
(Cost $100,084,529) $ 94,896,968
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $214,787,162) $235,016,783
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
PIONEER BALANCED FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C> <C>
TEMPORARY CASH INVESTMENT - 1.0%
COMMERCIAL PAPER - 1.0%
$ 2,316,000 American Express Credit Co., 4.25%, 1/3/00 $ 2,316,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $2,316,000) $ 2,316,000
------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY
CASH INVESTMENT - 100%
(Cost $217,103,162) (a)(b) $237,332,783
------------
------------
</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 December 31, 1999, the
value of these securities amounted to $7,547,668 or 3.2% of total net
assets.
* Non-income producing security.
(a) At December 31, 1999, the net unrealized gain on investments based on cost
for federal income tax purposes of $217,103,162 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 31,004,783
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (10,775,162)
------------
Net unrealized gain $ 20,229,621
------------
------------
</TABLE>
(b) At December 31, 1999, the Fund had a net capital loss carryforward of
$11,948,378 which will expire in 2006 if not utilized.
Purchases and sales of securities (excluding temporary cash investments)
for the year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- ------------
<S> <C> <C>
Long-term U.S. Government $57,384,900 $ 61,013,235
Other Long-term Securities 58,943,011 102,223,929
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
PIONEER BALANCED FUND
BALANCE SHEET 12/31/99
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary
cash investment of $2,316,000) (cost $217,103,162) $237,332,783
Cash 998
Receivables -
Fund shares sold 170,924
Dividends and interest 1,634,273
Other 6,654
------------
Total assets $239,145,632
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 215,793
Dividends 112,256
Due to affiliates 261,772
Accrued expenses 91,928
------------
Total liabilities $ 681,749
------------
NET ASSETS:
Paid-in capital $229,883,749
Accumulated undistributed net investment income 298,891
Accumulated net realized loss on investments (11,948,378)
Net unrealized gain on investments 20,229,621
------------
Total net assets $238,463,883
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $214,865,506/22,091,918 shares) $ 9.73
------------
Class B (based on $19,864,520/2,061,125 shares) $ 9.64
------------
Class C (based on $3,733,857/383,829 shares) $ 9.73
------------
MAXIMUM OFFERING PRICE:
Class A $ 10.19
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
PIONEER BALANCED FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 12/31/99
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $7,912) $2,796,986
Interest 8,700,176
----------
Total investment income $11,497,162
-----------
EXPENSES:
Management fees $1,684,569
Transfer agent fees
Class A 506,368
Class B 80,680
Class C 25,119
Distribution fees
Class A 583,934
Class B 214,782
Class C 40,956
Administrative fees 66,497
Custodian fees 50,224
Registration fees 51,313
Professional fees 45,494
Printing 38,259
Fees and expenses of nonaffiliated trustees 28,512
Miscellaneous 12,369
----------
Total expenses $ 3,429,076
Less fees paid indirectly (50,474)
-----------
Net expenses $ 3,378,602
-----------
Net investment income $ 8,118,560
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 2,747,527
Change in net unrealized gain on investments (3,396,381)
-----------
Net loss on investments $ (648,854)
-----------
Net increase in net assets resulting from operations $ 7,469,706
-----------
</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 YEARS ENDED 12/31/99 AND 12/31/98
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
FROM OPERATIONS: 12/31/99 12/31/98
<S> <C> <C>
Net investment income $ 8,118,560 $ 8,532,116
Net realized gain (loss) on investments 2,747,527 (14,852,123)
Change in net unrealized gain on investments (3,396,381) 9,078,125
------------ ------------
Net increase in net assets resulting from
operations $ 7,469,706 $ 2,758,118
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.31 and $0.30 per share, respectively) $ (7,418,676) $ (8,098,749)
Class B ($0.22 and $0.22 per share, respectively) (493,098) (445,932)
Class C ($0.21 and $0.22 per share, respectively) (91,525) (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 $ (8,003,299) $(14,962,959)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 29,686,061 $ 53,764,258
Reinvestment of distributions 7,090,271 13,428,978
Cost of shares repurchased (81,713,110) (61,437,995)
------------ ------------
Net increase (decrease) in net assets resulting from
fund share transactions $(44,936,778) $ 5,755,241
------------ ------------
Net decrease in net assets $(45,470,371) $ (6,449,600)
NET ASSETS:
Beginning of year 283,934,254 290,383,854
------------ ------------
End of year (including accumulated undistributed net
investment income of $298,891 and $183,630,
respectively) $238,463,883 $283,934,254
============ ============
</TABLE>
<TABLE>
<CAPTION>
CLASS A '99 SHARES '99 AMOUNT '98 SHARES '98 AMOUNT
<S> <C> <C> <C> <C>
Shares sold 1,899,937 $ 18,442,478 3,662,322 $ 37,731,555
Reinvestment of distributions 678,809 6,567,020 1,248,982 12,409,860
Less shares repurchased (6,916,596) (67,210,692) (5,532,673) (56,591,983)
---------- ------------ ---------- ------------
Net decrease (4,337,850) $(42,201,194) (621,369) $ (6,450,568)
========== ============ ========== ============
CLASS B
Shares sold 532,054 $ 5,134,426 1,232,938 $ 12,581,848
Reinvestment of distributions 46,210 442,559 90,776 885,232
Less shares repurchased (872,686) (8,394,734) (335,931) (3,367,944)
---------- ------------ ---------- ------------
Net increase (decrease) (294,422) $ (2,817,749) 987,783 $ 10,099,136
========== ============ ========== ============
CLASS C
Shares sold 629,719 $ 6,109,157 330,098 $ 3,450,855
Reinvestment of distributions 8,380 80,692 13,580 133,886
Less shares repurchased (641,571) (6,107,684) (146,232) (1,478,068)
---------- ------------ ---------- ------------
Net increase (decrease) (3,472) $ 82,165 200,446 $ 2,106,673
---------- ------------ ---------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/99
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CLASS A 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.74 $ 10.15 $ 10.65 $ 10.30 $ 9.11
-------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.31 $ 0.30 $ 0.41 $ 0.64 $ 0.66
Net realized and unrealized gain (loss) on investments (0.01) (0.18) 1.03 0.33 1.29
-------- -------- -------- -------- --------
Net increase from investment operations $ 0.30 $ 0.12 $ 1.44 $ 0.97 $ 1.95
Distributions to shareholders:
Net investment income (0.31) (0.30) (0.40) (0.62) (0.65)
Net realized gain - (0.23) (1.54) - (0.11)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ (0.01) $ (0.41) $ (0.50) $ 0.35 $ 1.19
-------- -------- -------- -------- --------
Net asset value, end of year $ 9.73 $ 9.74 $ 10.15 $ 10.65 $ 10.30
======== ======== ======== ======== ========
Total return* 3.15% 1.14% 13.92% 9.89% 22.00%
Ratio of net expenses to average net assets+ 1.23% 1.17% 1.19% 1.10% 1.13%
Ratio of net investment income to average net assets+ 3.21% 2.92% 3.55% 6.17% 6.58%
Portfolio turnover rate 46% 94% 122% 31% 25%
Net assets, end of year (in thousands) $214,866 $257,419 $274,695 $276,064 $281,639
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.21% 1.16% 1.17% 1.08% 1.11%
Net investment income 3.23% 2.93% 3.57% 6.19% 6.60%
</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 all sales charges were taken into account.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
PIONEER BALANCED FUND
FINANCIAL HIGHLIGHTS 12/31/99
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 4/28/95 TO
CLASS B 12/31/99 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 $ 0.22 $ 0.23 $ 0.32 $ 0.52 $ 0.39
Net realized and unrealized gain (loss) on
investments (0.01) (0.21) 1.02 0.37 0.90
------- ------- ------- ------ ------
Net increase from investment operations $ 0.21 $ 0.02 $ 1.34 $ 0.89 $ 1.29
Distributions to shareholders:
Net investment income (0.22) (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 $ (0.01) $ (0.43) $ (0.51) $ 0.32 $ 0.72
------- ------- ------- ------ ------
Net asset value, end of period $ 9.64 $ 9.65 $ 10.08 $10.59 $10.27
------- ------- ------- ------ ------
Total return* 2.24% 0.19% 12.98% 9.02% 13.74%
Ratio of net expenses to average net assets+ 2.14% 2.03% 2.01% 1.88% 1.88%**
Ratio of net investment income to average net
assets+ 2.30% 2.09% 2.65% 5.45% 5.83%**
Portfolio turnover rate 46% 94% 122% 31% 25%
Net assets, end of period (in thousands) $19,865 $22,737 $13,789 $6,940 $1,800
Ratios assuming reduction of fees paid indirectly:
Net expenses 2.12% 2.01% 1.99% 1.86% 1.78%**
Net investment income 2.32% 2.11% 2.67% 5.47% 5.93%**
</TABLE>
<TABLE>
<S> <C>
* Assumes initial investment at net asset value at the
beginning of each period, reinvestment of all distributions,
the complete redemption of the investment at net asset value
at the end of each period, and no sales charges. Total
return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
PIONEER BALANCED FUND
FINANCIAL HIGHLIGHTS 12/31/99
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED 1/31/96 TO
CLASS C 12/31/99 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 $ 0.21 $ 0.23 $ 0.33 $ 0.49
Net realized and unrealized gain (loss) on investments (0.02) (0.20) 1.07 0.31
------ ------ ------ ------
Net increase from investment operations $ 0.19 $ 0.03 $ 1.40 $ 0.80
Distributions to shareholders:
Net investment income (0.21) (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 $(0.02) $(0.42) $(0.45) $ 0.23
------ ------ ------ ------
Net asset value, end of period $ 9.73 $ 9.75 $10.17 $10.62
====== ====== ====== ======
Total return* 2.02% 0.27% 13.48% 8.12%
Ratio of net expenses to average net assets+ 2.38% 2.12% 2.03% 1.76%**
Ratio of net investment income to average net assets+ 2.09% 2.01% 2.68% 5.63%**
Portfolio turnover rate 46% 94% 122% 31%
Net assets, end of period (in thousands) $3,734 $3,778 $1,900 $1,059
Ratios assuming reduction of fees paid indirectly:
Net expenses 2.35% 2.09% 1.98% 1.73%**
Net investment income 2.12% 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 all distributions,
the complete redemption of the investment at net asset value
at the end of each period, and no sales charges. Total
return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios 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 12/31/99
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 Fund's investment objective
is to seek 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.
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 income is recorded on
the accrual basis. Temporary cash investments are valued at
amortized cost.
24
<PAGE>
PIONEER BALANCED FUND
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 $38,171 in underwriting commissions on the sale of
fund shares during the year ended December 31, 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 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
25
<PAGE>
PIONEER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS 12/31/99 (CONTINUED)
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 December 31,
1999, $136,954 was payable to PIM related to management fees,
administrative fees and certain other services.
3. TRANSFER AGENT
PSC, a wholly owned subsidiary of PGI, provides substantially all
transfer agent and shareholder services to the Fund at negotiated
rates. Included in due to affiliates is $64,858 in transfer agent fees
payable to PSC at December 31, 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 average daily net
assets attributable to Class A Shares in reimbursement of its actual
expenditures to finance activities primarily intended to result in the
sale of Class A shares. Pursuant to the Class B Plan and the Class C
Plan, the Fund pays PFD 1.00% of the average daily net assets
attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for
personal services and/or account maintenance services or distribution
services with regard to Class B and Class C shares. Included in
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PIONEER BALANCED FUND
due to affiliates is $59,960 in distribution fees payable to PFD at
December 31, 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 4.00%, based on the lower of cost or market value of
shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are
paid to PFD. For the year ended December 31, 1999, CDSCs in the amount
of $73,285 were paid to PFD.
5. EXPENSE OFFSETS
The Fund has entered into certain expense offset arrangements resulting
in a reduction in the Fund's total expenses. For the year ended
December 31, 1999, the Fund's expenses were reduced by $50,474 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 year ended December 31,
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
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 December 31, 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
December 31, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Balanced Fund as of December 31, 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
February 4, 2000
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PIONEER BALANCED FUND
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
<TABLE>
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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
</TABLE>
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
29
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HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to
contact us for assistance or information.
CALL US FOR:
ACCOUNT INFORMATION, including existing accounts,
new accounts, 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.
<TABLE>
<S> <C> <C>
[PIONEER LOGO] PIONEER INVESTMENT MANAGEMENT, INC. 7311-00-0200
60 STATE STREET G PIONEER FUNDS DISTRIBUTOR,
BOSTON, MASSACHUSETTS 02109 INC.
www.pioneerfunds.com [RECYCLE LOGO] PRINTED ON
RECYCLED PAPER
</TABLE>