<PAGE>
[PIONEER LOGO]
PIONEER
MID-CAP
FUND
-----------------------
ANNUAL REPORT 9/30/98
-----------------------
<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 13
Notes to Financial Statements 19
Report of Independent Public Accountants 24
Trustees, Officers and Service Providers 25
The Pioneer Family of Mutual Funds 27
Retirement Plans from Pioneer 28
</TABLE>
<PAGE>
PIONEER MID-CAP FUND
-----------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 9/30/98
-----------------------------------------------------------------------------
DEAR SHAREOWNER,
-----------------------------------------------------------------------------
The U.S. stock market has endured increased volatility as 1998 has
progressed. The first quarter saw the market produce substantial
gains, as major economic indicators remained positive. Large company
stocks continued to advance into the summer, with the Dow Jones
Industrial Average reaching an all time high on July 17. But soon
thereafter, investor concerns over the worldwide financial situation
and its effect on corporate earnings sent stocks down significantly.
The Dow has continued to fluctuate in recent weeks, resulting in
uncertainty and concern for investors. Throughout most of the period,
stocks of small and mid-sized companies lagged considerably behind
the large stocks that have been driving the market for some time. But
recently, investors seem to be paying more attention to these smaller
companies' attractive valuations, and performance of this group has
improved.
As tumultuous as the stock markets have been, the events of the past
few months further reinforce the benefits of diversification. We
stress to our investors the importance of including not just stocks,
but other securities in your portfolio such as bonds. This process of
"asset allocation" allows you to reduce and more easily tolerate
risks when volatility is so prevalent in the market. In addition,
investors who take a long-term perspective often find that their
vulnerability to short-term declines is reduced.
I encourage you to read on to learn more about your Fund, including
the Portfolio Management Discussion with Steven Carhart, your Fund's
portfolio manager. If you have questions, please contact your
investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
PIONEER MID-CAP FUND
-----------------------------------------------------------------------------
PORTFOLIO SUMMARY 9/30/98
-----------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
-----------------------------------------------------------------------------
(As a percentage of total investment portfolio)
U.S. Common Stocks 88%
Short-Term Cash Equivalents 8%
International Common Stocks 4%
SECTOR DISTRIBUTION
-----------------------------------------------------------------------------
(As a percentage of equity holdings)
Technology 23%
Consumer Cyclicals 20%
Healthcare 16%
Financial 11%
Utilities 10%
Capital Goods 6%
Consumer Staples 6%
Communication Services 4%
Energy 3%
Other 1%
10 LARGEST HOLDINGS
-----------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Wind River Systems 2.98% 6. Waste Management Inc. 2.69%
2. Enron Corp. 2.96 7. Bed Bath & Beyond, Inc. 2.62
3. Fiserv, Inc. 2.90 8. Qwest Communications 2.56
International Inc.
4. Watson Pharmaceuticals, 2.84 9. Pediatrix Medical Group, 2.51
Inc. Inc.
5. Duke Energy Corp. 2.78 10. CVS Corp. 2.45
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
PIONEER MID-CAP FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 9/30/98 CLASS A SHARES
- --------------------------------------------------------------------------------
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 9/30/98 9/30/97
<S> <C> <C>
$16.53 $23.39
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(9/30/97 - 9/30/98) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
- - $3.354
</TABLE>
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Mid-Cap Fund at public offering price, compared to the growth of
the Standard & Poor's MidCap 400 Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of September 30, 1998)
<TABLE>
<CAPTION>
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
<S> <C> <C>
10 Years 9.96% 9.31%
5 Years 5.74 4.50
1 Year -15.90 -20.74
</TABLE>
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
GROWTH OF $10,000
<TABLE>
<CAPTION>
Pioneer Mid-Cap Standard &
DATE Fund Poor's MidCap
A Shares 400 Index
<S> <C> <C>
9/30/88 9,425 10,000
11,906 13,721
9/30/90 9,598 11,739
13,033 17,629
9/30/92 14,995 19,819
18,416 24,564
9/30/94 18,900 24,962
21,968 31,378
9/30/96 23,859 35,754
28,955 49,722
9/30/98 24,351 46,586
</TABLE>
The Fund adopted its current name and investment objective on February 1, 1996.
Prior to that date, the Fund's name was Pioneer Three and its objective was
growth and income from a portfolio primarily of small-capitalization stocks.
The Standard & Poor's MidCap 400 Index is an unmanaged measure of 400 domestic
stocks chosen for market size (average capitalization is $2.5 billion),
liquidity and group representation. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
<PAGE>
PIONEER MID-CAP FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 9/30/98 CLASS B SHARES
- --------------------------------------------------------------------------------
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 9/30/98 9/30/97
<S> <C> <C>
$15.99 $22.98
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(9/30/97 - 9/30/98) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
- - $3.354
</TABLE>
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Mid-Cap Fund, compared to the growth of the Standard & Poor's
MidCap 400 Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of September 30, 1998)
<TABLE>
<CAPTION>
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund 3.47% 2.58%
(2/1/96)
1 Year -16.86 -19.64
</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.
GROWTH OF $10,000+
<TABLE>
<CAPTION>
Pioneer Mid-Cap Standard &
DATE Fund Poor's MidCap
B Shares 400 Index
<S> <C> <C>
2/29/96 10,000 10,000
10,254 10,147
10,355 10,440
9/30/96 10,765 10,741
11,174 11,391
3/31/97 9,956 11,224
11,079 12,871
9/30/97 12,904 14,938
11,809 15,061
3/31/98 14,050 16,716
13,761 16,359
9/30/98 10,484 13,995
</TABLE>
+ Index comparison begins 2/29/96. The Standard & Poor's MidCap 400 Index is an
unmanaged measure of 400 domestic stocks chosen for market size (average
capitalization is $2.5 billion), liquidity and group representation. Index
returns are calculated monthly, assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, expenses or sales charges. You cannot
invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
4
<PAGE>
PIONEER MID-CAP FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 9/30/98 CLASS C SHARES
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 9/30/98 9/30/97
<S> <C> <C>
$16.30 $23.33
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(9/30/97 - 9/30/98) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
- - $3.354
</TABLE>
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Mid-Cap Fund, compared to the growth of the Standard & Poor's
MidCap 400 Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of September 30, 1998)
<TABLE>
<CAPTION>
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund 4.01% 4.01%
(2/1/96)
1 Year -16.77 -16.77
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) is deducted at the end of the period for redemptions made within one
year of purchase.
GROWTH OF $10,000+
<TABLE>
<CAPTION>
Pioneer Mid-Cap Standard &
DATE Fund Poor's MidCap
C Shares 400 Index
<S> <C> <C>
2/29/96 10,000 10,000
10,254 10,147
10,381 10,440
9/30/96 10,795 10,741
11,198 11,391
3/31/97 9,982 11,224
11,215 12,871
9/30/97 13,069 14,938
11,971 15,061
3/31/98 14,240 16,716
13,953 16,359
9/30/98 10,877 13,995
</TABLE>
+ Index comparison begins 2/29/96. The Standard & Poor's MidCap 400 Index is an
unmanaged measure of 400 domestic stocks chosen for market size (average
capitalization is $2.5 billion), liquidity and group representation. Index
returns are calculated monthly, assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, expenses or sales charges. You cannot
invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
5
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 9/30/98
----------------------------------------------------------------------------
Pioneer Mid-Cap Fund's fiscal year ended on September 30, 1998. The
following discussion with Steven C. Carhart provides a detailed
account of the investment environment and the strategies that
affected your Fund's performance during the year. An investment
professional for more than 12 years, Mr. Carhart oversees the team
responsible for the daily management of Pioneer Mid-Cap Fund.
Q: HOW DID THE FUND PERFORM?
A: The year was not kind to investors of mid-sized growth-oriented
companies, with the Fund returning -15.90% (Class A Shares at net
asset value). By comparison, the Standard & Poor's Midcap 400
Index posted a -6.07% return for the same period while the
Standard & Poor's 500 Index, a benchmark of large company stocks,
returned 9.02%.
Q: WHAT WERE SOME OF THE "DRIVERS" IN THE STOCK MARKET DURING THE
PAST 12 MONTHS?
A: The main themes of 1997 continued into the beginning of 1998 -
that is, the overall stock market continued to advance, mainly
driven by an increasingly narrow group of large, blue-chip
companies. The valuation gap between those and mid-sized companies
continued to widen throughout the year - meaning prices of large
company stocks were higher than mid-sized companies, when using
common measurement ratios such as projected earnings growth rates.
In July and August stock markets around the world tumbled. Among
the reasons for the correction were the Russian economic crisis
and political distractions in the U.S., in addition to a slowdown
in corporate earnings. This led to a collapse in prices of what
investors perceived to be "risky" assets, including smaller
stocks. Since then, the performance of small and mid-sized
companies has improved, and over the last month the 9.62% return
of the S&P Midcap 400 outperformed both the S&P 500 Index (6.68%)
and Dow Jones Industrial Average (4.54%).
6
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Q: WHAT IS YOUR INVESTMENT APPROACH?
A: Our strategy is to focus on U.S. emerging growth companies. By this
we mean companies that are growing their earnings at a rapid rate.
We try to find businesses that are on their way to being future
market leaders in their respective industries. Since these
companies tend to be smaller - typically market capitalizations of
$1 to $10 billion - they can be riskier than larger, more
established companies. We think the potential for attractive
long-term results is worth the additional risks.
Q: WHAT AFFECTED THE FUND'S PERFORMANCE FOR THE PAST YEAR?
A: The Fund did quite well in the first half of 1998, led by consumer
service and retail stocks. Unfortunately, many of these stocks fell
in the third quarter.
Recently, we've seen strong results from Wind River Systems, a
computer software developer, and Duke Energy, an energy service
provider in North Carolina. Meanwhile, we remain optimistic about
the longer-term outlook for three companies that recently have
underperformed: Bed Bath & Beyond, the home furnishing retailer,
Masco, a manufacturer of building and home improvement products,
and Omnicare, a provider of data management services for nursing
homes.
Q: HOW DO YOU DETERMINE WHEN TO SELL A PARTICULAR SECURITY?
A: Generally we will continue to hold a stock as long as fundamentals
are consistent with our expectations, though we will often trim
winners to avoid excessive concentrations. Most often, stocks are
sold to make room for more attractive opportunities.
In addition to our in-house resources, we also employ quantitative
tools to help us in the stock review process. Through the use of
historical data, computer models help us gauge the growth
potential of a company.
7
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 9/30/98 (CONTINUED)
----------------------------------------------------------------------------
Q: WHAT PORTFOLIO CHANGES DID YOU MAKE RECENTLY?
A: Over the last few months we rotated toward more
"non-discretionary" consumer companies. By non-discretionary I
mean companies whose primary business focuses on products that
consumers must purchase - like electricity and prescriptions. We
think their earnings should hold up the best since they are not
dependent on exports or susceptible to import pressures. Examples
include Enron, an electric and natural gas company, and CVS, the
drug store operator. We also continue to emphasize companies that
provide services to U.S. consumers and businesses. Examples
include Intuit, the personal finance software company, and
Paychex, a payroll service company.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND OVER THE NEXT SIX MONTHS?
A: As recent market volatility has shown, domestic stocks remain
vulnerable to outside forces. We believe two conditions must be
met before mid-cap stocks can outperform large-caps on a
consistent basis. First, the global financial situations must be
dealt with - especially with respect to Asia. We are beginning to
see progress in Japan, and we are hopeful of future improvements
in the region. In addition, we think low interest rates are the
key to U.S. corporate earnings momentum. So far, the Federal
Reserve has agreed, and further rate reductions may be in store if
the economy slows.
Mid-cap stocks, in our opinion, are attractively valued relative
to large company stocks. We believe the continued strong growth in
the earnings of mid-cap companies should attract more investor
attention, especially if large company earnings continue to slow.
In order to participate in the potential long-term gains mid-sized
stocks can offer, shareowners should be prepared to ride through
the ups and downs that are fundamental to stock investing.
8
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/98
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON STOCKS - 91.6%
BASIC MATERIALS - 1.3%
PAPER AND FOREST PRODUCTS - 1.3%
500,000 Louisiana-Pacific Corp. $ 10,187,500
------------
TOTAL BASIC MATERIALS $ 10,187,500
------------
CAPITAL GOODS - 5.2%
MANUFACTURING (DIVERSIFIED) - 1.4%
380,000 Harsco Corp. $ 11,447,500
------------
OFFICE EQUIPMENT & SUPPLIES - 1.3%
500,000 Miller (Herman), Inc. $ 9,875,000
------------
WASTE MANAGEMENT - 2.5%
400,000 Waste Management Inc. $ 19,225,000
------------
TOTAL CAPITAL GOODS $ 40,547,500
------------
COMMUNICATION SERVICES - 4.1%
TELEPHONE - 4.1%
583,000 Qwest Communications International Inc.* $ 18,255,188
750,000 Skytel Communications, Inc.* 13,593,750
------------
TOTAL COMMUNICATION SERVICES $ 31,848,938
------------
CONSUMER CYCLICALS - 17.9%
BUILDING MATERIALS - 2.2%
700,000 Masco Corp. $ 17,237,500
------------
HOMEBUILDING - 2.0%
900,000 Clayton Homes, Inc. $ 15,244,200
------------
RETAIL (COMPUTERS & ELECTRONICS) - 1.1%
200,000 Best Buy Co., Inc.* $ 8,300,000
------------
RETAIL (DISCOUNTERS) - 1.0%
400,000 Consolidated Stores Corp.* $ 7,850,000
------------
RETAIL (GENERAL MERCHANDISE) - 1.5%
300,000 Fred Meyer, Inc.* $ 11,662,500
------------
RETAIL (SPECIALTY) - 6.5%
800,000 Bed Bath & Beyond, Inc.* $ 18,700,000
700,000 Office Depot, Inc.* 15,706,250
767,000 Williams-Sonoma, Inc.* 16,346,687
------------
$ 50,752,937
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/98 (CONTINUED)
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
SERVICES (COMMERCIAL & CONSUMER) - 3.6%
350,000 Quintiles Transnational Corp.* $ 15,312,500
800,000 Stewart Enterprises, Inc. 13,400,000
------------
$ 28,712,500
------------
TOTAL CONSUMER CYCLICALS $139,759,637
------------
CONSUMER STAPLES - 5.4%
DISTRIBUTORS (FOOD & HEALTH) - 2.0%
150,000 Cardinal Health, Inc. $ 15,487,500
------------
RETAIL (DRUG STORES) - 2.3%
400,000 CVS Corp. $ 17,525,000
------------
SERVICES (EMPLOYMENT) - 1.1%
200,000 Robert Half International Inc.* $ 8,637,500
------------
TOTAL CONSUMER STAPLES $ 41,650,000
------------
ENERGY - 3.1%
OIL & GAS (DRILLING & EQUIPMENT) - 1.5%
1,000,000 Global Industries, Ltd.* $ 11,562,500
------------
OIL & GAS (REFINING & MARKETING) - 1.6%
400,000 Sun Company, Inc. $ 12,800,000
------------
TOTAL ENERGY $ 24,362,500
------------
FINANCIAL - 9.6%
FINANCIAL (DIVERSIFIED) - 1.2%
230,000 Equitable Companies, Inc. $ 9,516,250
------------
INSURANCE (PROPERTY-CASUALTY) - 5.5%
200,200 Allmerica Financial Corp. $ 11,936,925
200,000 Chubb Corp. 12,600,000
150,000 Exel Ltd. 9,450,000
220,000 PartnerRe Ltd. 8,813,750
------------
$ 42,800,675
------------
SAVINGS & LOAN COMPANIES - 2.9%
500,000 Charter One Financial, Inc. $ 12,437,500
300,000 Washington Mutual, Inc. 10,125,000
------------
$ 22,562,500
------------
TOTAL FINANCIAL $ 74,879,425
------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
HEALTHCARE - 14.8%
BIOTECHNOLOGY - 1.4%
615,000 BioChem Pharma Inc.* $ 11,300,625
------------
HEALTHCARE (DRUGS-GENERIC & OTHER) - 2.6%
400,000 Watson Pharmaceuticals, Inc.* $ 20,300,000
------------
HEALTHCARE (HOSPITAL MANAGEMENT) - 1.9%
800,000 Health Management Associates, Inc.* $ 14,600,000
------------
HEALTHCARE (LONG-TERM CARE) - 2.4%
400,000 HCR Manor Care* $ 11,725,000
200,000 Sunrise Assisted Living Inc.* 6,862,500
------------
$ 18,587,500
------------
HEALTHCARE (SPECIALIZED SERVICES) - 6.5%
400,000 Lincare Holdings Inc.* $ 15,500,000
500,000 Omnicare Inc. 17,062,500
400,000 Pediatrix Medical Group, Inc.* 17,950,000
------------
$ 50,512,500
------------
TOTAL HEALTHCARE $115,300,625
------------
TECHNOLOGY - 21.3%
COMPUTERS (PERIPHERALS) - 2.1%
290,000 EMC Corp.* $ 16,584,375
------------
COMPUTERS (SOFTWARE & SERVICES) - 13.6%
200,000 BMC Software, Inc.* $ 12,012,500
200,000 Computer Sciences Corp. 10,700,000
280,000 Compuware Corp.* 16,485,000
600,000 HBO & Co. 17,325,000
300,000 Intuit Inc.* 13,968,750
400,000 Sterling Commerce, Inc.* 13,850,000
450,000 Wind River Systems* 21,262,500
------------
$105,603,750
------------
ELECTRONICS (COMPONENT DISTRIBUTORS) - 1.0%
915,300 DSP Communications, Inc.* $ 7,551,225
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/98 (CONTINUED)
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
SERVICES (DATA PROCESSING) - 4.6%
450,000 Fiserv, Inc.* $ 20,728,125
300,000 Paychex Inc. 15,468,750
------------
$ 36,196,875
------------
TOTAL TECHNOLOGY $165,936,225
------------
UTILITIES - 8.9%
ELECTRIC COMPANIES - 6.2%
300,000 Duke Energy Corp. $ 19,856,250
200,000 FPL Group Inc. 13,937,500
400,000 Peco Energy Co. 14,625,000
------------
$ 48,418,750
------------
NATURAL GAS - 2.7%
400,000 Enron Corp. $ 21,125,000
------------
TOTAL UTILITIES $ 69,543,750
------------
TOTAL COMMON STOCKS
(Cost $611,730,179) $714,016,100
------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
TEMPORARY CASH INVESTMENTS - 8.4%
COMMERCIAL PAPER - 8.4%
$35,191,000 American Express Credit Corp., 5.5%, 10/2/98 $ 35,191,000
30,000,000 Chevron Oil Finance Corp., 5.7%, 10/1/98 30,000,000
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $65,191,000) $ 65,191,000
------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $676,921,179)(a) $779,207,100
------------
</TABLE>
* Non-income producing security.
(a) At September 30, 1998, the net unrealized gain on investments based
on cost for federal income tax purposes of $676,921,179 was as
follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $139,407,455
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (37,121,534)
------------
Net unrealized gain $102,285,921
------------
</TABLE>
Purchases and sales of securities (excluding temporary cash
investments) for the year ended September 30, 1998, aggregated
$1,027,704,777 and $1,202,017,110, respectively.
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
BALANCE SHEET 9/30/98
----------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary
cash investments of $65,191,000) (cost $676,921,179) $779,207,100
Cash 102
Receivables -
Investment securities sold 11,040,090
Fund shares sold 587,886
Dividends and interest 238,628
Other 16,686
------------
Total assets $791,090,492
------------
LIABILITIES:
Payables -
Investment securities purchased $ 14,753,427
Fund shares repurchased 1,012,766
Due to affiliates 554,974
Accrued expenses 83,249
------------
Total liabilities $ 16,404,416
------------
NET ASSETS:
Paid-in capital $609,398,079
Accumulated undistributed net realized gain on
investments 63,002,076
Net unrealized gain on investments 102,285,921
------------
Total net assets $774,686,076
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $767,256,605/46,411,713 shares) $ 16.53
------------
Class B (based on $5,968,976/373,214 shares) $ 15.99
------------
Class C (based on $1,460,495/89,580 shares) $ 16.30
------------
MAXIMUM OFFERING PRICE:
Class A $ 17.54
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
----------------------------------------------------------------------------
FOR THE YEAR ENDED 9/30/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $12,797) $ 3,222,175
Interest 1,072,250
----------
Total investment income $ 4,294,425
-------------
EXPENSES:
Management fees
Basic fee $ 6,106,034
Performance adjustment (1,957,184)
Transfer agent fees
Class A 1,161,691
Class B 21,608
Class C 4,925
Distribution fees
Class A 1,911,488
Class B 63,914
Class C 18,079
Accounting 95,666
Custodian fees 145,796
Professional 72,032
Registration fees 63,050
Printing 46,601
Fees and expenses of nonaffiliated trustees 27,618
Miscellaneous 40,381
----------
Total expenses $ 7,821,699
Less fees paid indirectly (56,650)
-------------
Net expenses $ 7,765,049
-------------
Net investment loss $ (3,470,624)
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 65,727,490
Change in net unrealized gain on investments (211,409,204)
-------------
Net loss on investments $(145,681,714)
-------------
Net decrease in net assets resulting from operations $(149,152,338)
-------------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
----------------------------------------------------------------------------
FOR THE YEARS ENDED 9/30/98 AND 9/30/97
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
9/30/98 9/30/97
<S> <C> <C>
FROM OPERATIONS:
Net investment loss $ (3,470,624) $ (3,467,940)
Net realized gain on investments 65,727,490 145,154,691
Change in net unrealized gain on investments (211,409,204) 50,131,527
-------------- --------------
Net increase (decrease) in net assets resulting
from operations $ (149,152,338) $ 191,818,278
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain:
Class A ($3.35 and $1.88 per share, respectively) $ (147,104,651) $ (87,842,235)
Class B ($3.35 and $1.88 per share, respectively) (627,640) (268,625)
Class C ($3.35 and $1.88 per share, respectively) (146,941) (30,516)
-------------- --------------
Total distributions to shareholders $ (147,879,232) $ (88,141,376)
-------------- --------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 127,986,868 $ 59,240,966
Reinvestment of distributions 139,942,525 83,823,606
Cost of shares repurchased (250,656,429) (205,791,720)
-------------- --------------
Net increase (decrease) in net assets resulting
from fund share transactions $ 17,272,964 $ (62,727,148)
-------------- --------------
Net increase (decrease) in net assets $ (279,758,606) $ 40,949,754
NET ASSETS:
Beginning of year 1,054,444,682 1,013,494,928
-------------- --------------
End of year (including accumulated net investment loss
of $0 and $0, respectively) $ 774,686,076 $1,054,444,682
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
'98 SHARES '98 AMOUNT '97 SHARES '97 AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold 5,427,159 $ 109,799,300 2,537,678 $ 52,927,652
Reinvestment of distributions 7,889,359 139,247,192 4,247,313 83,544,664
Less shares repurchased (11,736,227) (236,392,082) (9,688,258) (199,441,074)
---------- ------------- ---------- -------------
Net increase (decrease) 1,580,291 $ 12,654,410 (2,903,267) $ (62,968,758)
---------- ------------- ---------- -------------
CLASS B
Shares sold 589,015 $ 12,051,832 274,224 $ 5,805,282
Reinvestment of distributions 33,678 579,591 13,072 255,304
Less shares repurchased (468,996) (9,319,826) (302,811) (6,113,758)
---------- ------------- ---------- -------------
Net increase (decrease) 153,697 $ 3,311,597 (15,515) $ (53,172)
---------- ------------- ---------- -------------
CLASS C
Shares sold 312,091 $ 6,135,736 24,401 $ 508,032
Reinvestment of distributions 6,599 115,742 1,204 23,638
Less shares repurchased (261,350) (4,944,521) (11,303) (236,888)
---------- ------------- ---------- -------------
Net increase 57,340 $ 1,306,957 14,302 $ 294,782
---------- ------------- ---------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER MID-CAP FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 9/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of year $ 23.39 $ 21.12 $ 21.48 $ 19.92 $ 21.12
-------- ---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.07) $ (0.08) 0.18 $ 0.24 $ 0.24
Net realized and unrealized gain (loss) on investments (3.44) 4.23 1.47 2.70 0.32
-------- ---------- ---------- ---------- ----------
Net increase (decrease) from investment operations $ (3.51) $ 4.15 $ 1.65 $ 2.94 $ 0.56
Distributions to shareholders:
Net investment income - - (0.30) (0.23) (0.25)
Net realized gain (3.35) (1.88) (1.71) (1.15) (1.51)
-------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (6.86) $ 2.27 $ (0.36) $ 1.56 $ (1.20)
-------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 16.53 $ 23.39 $ 21.12 $ 21.48 $ 19.92
-------- ---------- ---------- ---------- ----------
Total return* (15.90)% 21.36% 8.61% 16.24% 2.62%
Ratio of net expenses to average net assets 0.79%+ 0.87%+ 0.90%+ 0.85%+ 0.86%
Ratio of net investment income (loss) to average net assets (0.35)%+ (0.37)%+ 0.85%+ 1.18%+ 1.19%
Portfolio turnover rate 110% 63% 75% 19% 15%
Net assets, end of year (in thousands) $767,257 $1,048,648 $1,008,177 $1,082,154 $1,017,233
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.79% 0.85% 0.88% - -
Net investment income (loss) (0.35)% (0.35)% 0.87% - -
</TABLE>
* Assumes initial investment at net asset value at the beginning of each year,
reinvestment of distributions, the complete redemption of the investment at
net asset value at the end of each year and no sale charges. Total return
would be reduced if sales charges were taken into account.
+ Ratio assuming no reduction for fees paid indirectly.
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 9/30/98
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED 2/1/96 TO
CLASS B 9/30/98 9/30/97 9/30/96
<S> <C> <C> <C>
Net asset value, beginning of period $ 22.98 $ 21.02 $ 19.28
------- ------- -------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.18) $ (0.22) $ 0.12
Net realized and unrealized
gain (loss) on investments (3.46) 4.06 1.78
------- ------- -------
Net increase (decrease) from
investment operations $ (3.64) $ 3.84 $ 1.90
Distributions to shareholders:
Net investment income - - (0.16)
Net realized gain (3.35) (1.88) -
------- ------- -------
Net increase (decrease) in net asset
value $ (6.99) $ 1.96 $ 1.74
------- ------- -------
Net asset value, end of period $ 15.99 $ 22.98 $ 21.02
------- ------- -------
Total return* (16.86)% 19.87% 9.88%
Ratio of net expenses to average net
assets 1.81%+ 2.00%+ 1.68%**+
Ratio of net investment loss to
average net assets (1.38)%+ (1.51)%+ (0.26)%**+
Portfolio turnover rate 110% 63% 75%
Net assets, end of period (in
thousands) $ 5,969 $ 5,045 $ 4,939
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.80% 1.96% 1.66%**
Net investment loss (1.37)% (1.47)% (0.24)%**
</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.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
PIONEER MID-CAP FUND
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 9/30/98
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED 2/1/96 TO
CLASS C 9/30/98 9/30/97 9/30/96
<S> <C> <C> <C>
Net asset value, beginning of period $ 23.33 $ 21.12 $ 19.28
------- ------- -------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.18) $ (0.20) $ 0.03
Net realized and unrealized
gain (loss) on investments (3.50) 4.29 1.93
------- ------- -------
Net increase (decrease) from
investment operations $(3.68) $ 4.09 $ 1.96
Distributions to shareholders:
Net investment income - - (0.12)
Net realized gain (3.35) (1.88) -
------- ------- -------
Net increase (decrease) in net asset
value $ (7.03) $ 2.21 $ 1.84
------- ------- -------
Net asset value, end of period $ 16.30 $ 23.33 $ 21.12
------- ------- -------
Total return* (16.77)% 21.07% 10.18%
Ratio of net expenses to
average net assets 1.75%+ 1.91%+ 1.96%**+
Ratio of net investment loss to
average net assets (1.31)%+ (1.43)%+ (0.29)%**+
Portfolio turnover rate 110% 63% 75%
Net assets, end of period (in
thousands) $ 1,460 $ 752 $ 379
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.74% 1.87% 1.93%**
Net investment loss (1.30)% (1.39)% (0.26)%**
</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>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER MID-CAP FUND
------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/98
------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Mid-Cap 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 objective of the Fund is
to seek capital growth.
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, securities are valued at the last
sale price on the principal exchange where they are traded.
Securities that have not traded on the date of valuation, or
securities for which sale prices are not generally reported, are
valued at the mean between the last bid and asked prices. Securities
for which market quotations are not readily available are valued at
their fair values as determined by, or under the direction of, the
Board of Trustees. Dividend income is recorded on the ex-dividend
date and interest income is recorded on the accrual basis. Temporary
cash investments are valued at amortized cost. Gains and losses on sales
of investments are calculated on the identified cost method for both
financial reporting and federal income tax
19
<PAGE>
PIONEER MID-CAP FUND
------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/98 (CONTINUED)
------------------------------------------------------------------------
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.
Settlements from litigation and class action suits are recognized when
the Fund acquires an enforceable right to such awards. Included in
net realized gain from investments is $313,703 of class action
settlements received by the Fund during the year ended September 30,
1998.
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.
At September 30, 1998 the Fund has reclassified $3,470,624 and $311
from accumulated net investment loss and accumulated undistributed
net realized gain on investments, respectively, to paid-in capital.
The reclassification has no impact on the net asset value of the
Fund and is designed to present the Fund's capital accounts on a tax
basis.
In order to comply with federal income tax regulations, the Fund has
designated $65,727,490 as a capital gain dividend for purposes of
the dividend paid deduction.
C. FUND SHARES
The Fund records sales and repurchases of its shares on trade date.
Net losses, if any, incurred 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 $101,878 in underwriting commissions
on the sale of fund shares during the year ended September 30, 1998.
20
<PAGE>
PIONEER MID-CAP FUND
-------------------------------------------------------------------------
-------------------------------------------------------------------------
D. CLASS ALLOCATIONS
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B and Class C shares of the
Fund, respectively. Shareholders of each class share all expenses
and fees paid to the transfer agent, Pioneering Services Corporation
(PSC), for their services, which are allocated based on the number
of accounts in each class and the ratable allocation of related
out-of-pocket expense (see Note 3). Income, common expenses and
realized and unrealized gains and losses are calculated at the Fund
level and allocated daily to each class of shares based on the
respective percentage of adjusted net assets at the beginning of the
day.
Distributions to shareholders are recorded as of the ex-dividend
date. Distributions paid by the Fund with respect to each class of
shares are calculated in the same manner, at the same time, and in
the same amount, except that Class A, Class B and Class C shares can
bear different transfer agent and distribution fees.
2. MANAGEMENT AGREEMENT
Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI.
PMC receives a basic fee that is calculated at the annual rate of
0.625% of the Fund's average daily net assets. The basic fee is subject
to a performance adjustment up to a maximum of +/-0.20% based on the
Fund's investment performance as compared with the Standard & Poor's
Mid-Cap 400 Index. For the year ended September 30, 1998, the aggregate
performance adjustment resulted in a reduction to the basic fee of
$1,957,184. The management fee was equivalent to a rate of 0.425% of
average daily net assets for the year.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At September 30, 1998, $283,845 was
payable to PMC related to management fees and certain other services.
3. TRANSFER AGENT
PSC, a wholly owned subsidiary of PGI, provides substantially all
transfer agent and shareholder services to the Fund at negotiated
rates. Included in due to affiliates is $117,842 in transfer agent fees
payable to PSC at September 30, 1998.
21
<PAGE>
PIONEER MID-CAP FUND
-------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/98 (CONTINUED)
-------------------------------------------------------------------------
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.
On qualifying investments made prior to August 19, 1991, the Class A
Plan provides for reimbursement of such expenditures in an amount not
to exceed 0.15%. Pursuant to the Class B Plan and the Class C Plan, the
Fund pays PFD 1.00% of the average daily net assets attributable to
each class of shares. The fee consists of a 0.25% service fee and a
0.75% distribution fee paid as compensation for personal services
and/or account maintenance services or distribution services with
regard to Class B and Class C shares. Included in due to affiliates is
$153,287 in distribution fees payable to PFD at September 30, 1998.
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 year ended September 30, 1998, CDSCs in the amount
of $13,321 were paid to PFD.
5. EXPENSE OFFSETS
The Fund has entered into certain directed brokerage and expense offset
arrangements resulting in a reduction in the Fund's total expenses. For
the year ended September 30, 1998, the Fund's expenses were reduced by
$56,650 under such arrangements.
22
<PAGE>
PIONEER MID-CAP FUND
-------------------------------------------------------------------------
-------------------------------------------------------------------------
6. LINE OF CREDIT FACILITY
Effective April 14, 1998, 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.
The average daily amount of borrowings outstanding during the period
from April 14, 1998 through September 30, 1998 was $17,059. The average
daily shares outstanding during the period were 48,273,556, resulting
in an average borrowing per share of less than one cent. The related
weighted average annualized interest rate for the period was 5.9%, and
the total interest expense on such borrowings was $477.
23
<PAGE>
PIONEER MID-CAP FUND
-------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
-------------------------------------------------------------------------
TO THE SHAREOWNERS AND THE BOARD OF TRUSTEES OF PIONEER MID-CAP FUND:
We have audited the accompanying balance sheet, including the schedule
of investments, of Pioneer Mid-Cap Fund as of September 30, 1998, 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 the 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 September 30, 1998 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 Mid-Cap Fund as of September 30, 1998,
the results of its operations, the changes in its net assets, and the
financial highlights for the periods presented, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 6, 1998
24
<PAGE>
PIONEER MID-CAP FUND
-------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
-------------------------------------------------------------------------
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 William H. Keough, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
INVESTMENT ADVISER
Pioneering Management Corporation
CUSTODIAN
Brown Brothers Harriman & Co.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
PRINCIPAL UNDERWRITER
Pioneer Funds Distributor, Inc.
LEGAL COUNSEL
Hale and Dorr LLP
SHAREOWNER SERVICES AND TRANSFER AGENT
Pioneering Services Corporation
25
<PAGE>
-----------------------------------------------------------------------------
PIONEER FUND STORY
-----------------------------------------------------------------------------
[PIONEER 70th BIRTHDAY LOGO]
This year, 1998, marks a special anniversary for the Pioneer family of mutual
funds and an important milestone for the entire mutual fund industry. In the
mid 1920s, a group of forward thinking financial professionals started the
first "open-end" investment companies, known today as mutual funds. They
provided a way for small investors to benefit from professional financial
management.
In 1928, Pioneer Fund became the fourth mutual fund created.
Since then, Pioneer Fund has gone to work for its shareowners everyday for 70
years. Through 15 bear markets, 16 bull markets and even the Great
Depression, Pioneer Fund has stayed true to an investment ethic that relies
on the rewards of hard work.
Rather than follow trends, the financial professionals at Pioneer roll-up
their sleeves and research. We look for value in an investment: companies
that might not be the current rage on Wall Street, but that we believe have
the business smarts on Main Street to keep their earnings strong. The Fund's
investment objective continues to be growth and income.
For 70 years, Pioneer Fund has made investments based on experience, our own
investment ethic, and the needs of our shareowners.
Everyday, the financial professionals at Pioneer Fund come to work, aware of
the job at hand. We know shareowners are investing their hard-earned money to
provide for the future.
In 1928 there were four mutual funds. Today there are 11,000. Only one can
tell the Pioneer Fund story.
For the complete Pioneer Fund story call your investment professional, or
Pioneer at 1-800-225-6292, for a prospectus. Please read it carefully before
you invest or send money.
Past performance does not guarantee future results.
*Class B and C Shares have been available since 7/1/96.
26
<PAGE>
------------------------------------------------------------------------------
THE PIONEER FAMILY OF MUTUAL FUNDS
------------------------------------------------------------------------------
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
GROWTH FUNDS INCOME FUNDS
GLOBAL/INTERNATIONAL TAXABLE
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust
Pioneer Indo-Asia Fund
Pioneer International Growth Fund TAX-EXEMPT
Pioneer World Equity Fund Pioneer Intermediate Tax-Free Fund
Pioneer Tax-Free Income Fund
UNITED STATES
Pioneer Capital Growth Fund MONEY MARKET FUND
Pioneer Growth Shares Pioneer Cash Reserves Fund
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
GROWTH AND INCOME FUNDS
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
27
<PAGE>
------------------------------------------------------------------------
RETIREMENT PLANS FROM PIONEER
------------------------------------------------------------------------
Pioneer has a long history of helping people work toward their
retirement goals, offering plans suited to the individual investor and
businesses of all sizes. For more information on Pioneer retirement
plans, contact your investment professional, or call Pioneer at
1-800-622-0176
INDIVIDUAL RETIREMENT ACCOUNT (IRA)
An IRA is a tax-favored account that allows anyone under age 70 1/2
with earned income to contribute up to $2,000 annually. Spouses may
contribute up to $2,000 annually into a separate IRA, for a total of
$4,000 per year for a married couple. Earnings are tax-deferred, and
contributions may be tax-deductible.
ROTH IRA
The Roth IRA lets investors contribute up to $2,000 a year.
Contributions are not tax-deductible, but earnings are tax-free for
qualified withdrawals.
401(k) PLAN
The traditional 401(k) plan allows employees to make pre-tax
contributions through payroll deduction, up to $9,500 per year or 25%
of pay, whichever is less. Employers may contribute.
SIMPLE (SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES)
401(k) OR IRA PLAN
Businesses with 100 or fewer eligible employees can establish either
plan; both resemble the traditional 401(k), but with less testing and
lower administration costs. Employees can make pre-tax contributions
of up to $6,000 per year, and an employer contribution is required.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
28
<PAGE>
------------------------------------------------------------------------
------------------------------------------------------------------------
403(b) PLAN
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is
available only to employees of public schools, not-for-profit
hospitals and other tax-exempt organizations. A 403(b) plan lets
employees set aside a portion of their salary, before taxes, through
payroll deduction.
SIMPLIFIED EMPLOYEE PENSION PLAN (SEP)
SEPs let self-employed people and small-business owners make tax-
deductible contributions of up to 15% of their income. Generally,
employers must contribute the same percentage of pay for themselves
and any eligible employees; contributions are made directly to
employees' IRAs. SEPs are easy to administer and can be an especially
good choice for firms with few or no employees.
PROFIT SHARING PLAN
Profit sharing plans offer companies considerable flexibility,
allowing them to decide each year whether a contribution will be made
and how much, up to 15% of each participant's pay. These plans can
include provisions for loans and vesting schedules.
AGE-WEIGHTED PROFIT SHARING PLAN
Like traditional profit sharing plans, employer contributions are
flexible, but age-weighted plans allocate contributions based on both
age and salary. Age-weighted plans are designed for employers who want
to maximize their own contributions while keeping contributions to
employees affordable.
MONEY PURCHASE PENSION PLAN (MPP)
Money purchase plans are similar to profit-sharing plans, but allow
for higher annual contributions -- up to 25% of pay. MPPs aren't as
flexible as profit sharing plans; a fixed percentage of pay must be
contributed each year, determined when the plan is established.
Businesses often set up both MPPs and profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
29
<PAGE>
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us
for assistance or information.
CALL US FOR:
ACCOUNT INFORMATION, including existing accounts, new
accounts, prospectuses, applications and service forms 1-800-225-6292
FACTFONE(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
RETIREMENT PLANS INFORMATION 1-800-622-0176
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) 1-800-225-1997
WRITE TO US:
Pioneer Services Corporation
60 State Street
Boston, Massachusetts 02109
OUR TOLL-FREE FAX 1-800-225-4240
OUR INTERNET E-MAIL ADDRESS [email protected]
(for general questions about Pioneer only)
VISIT OUR WEBSITE: WWW.PIONEERFUNDS.COM
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT FUND PROSPECTUS.
Pioneer Funds Distributor, Inc.
[PIONEER 60 State Street 1198 - 5694
LOGO] Boston, Massachusetts 02109 (C)PIONEER FUNDS DISTRIBUTOR, INC.
www.pioneerfunds.com [LOGO] Printed on Recycled Paper
