<PAGE>
TO THE SHAREHOLDERS:
Pioneer Fund closed its 68th fiscal year on December 31, a year that was the
best in the U.S. equity markets since 1958. As measured by the Standard &
Poor's 500 Index, there have been five other years since the 1950s when the
market posted a total return of 30% or more: 1991, 1989, 1985, 1980 and 1975.
But to find a year when the market exceeded the 37.45% return we saw for
1995, one must go all the way back to 1958, when the S&P rose 43.15%. As
usual, the exceedingly strong market of the past year got underway at a time
when commentators were almost universally gloomy, and its upward march
continued against a steady drumbeat of worried "forecasts" and
"observations." This year's market was unusual, however, in that technology
stocks led the boom, accounting for much of the year's gains in the S&P 500.
How Your Fund Performed
The results for Pioneer Fund over the quarter and 12 months ended December
31, 1995, were positive although not as stellar as those of the overall stock
market.
(bullet) The Fund's net asset value closed the year at $24.36 per share, up
from $21.32 on December 31, 1994.
(bullet) The Fund continued to make regular, quarterly dividend payments; it
has paid income dividends to shareholders every year since its
inception in 1928. Shareholders received a quarterly dividend of
$0.1561 per share in December 1995, bringing the total quarterly
dividends for the year to $0.4861 per share. Also in December,
shareholders received a $2.0891 per share capital gains
distribution.
(bullet) The Fund generated a 26.64% total return for the year, based on net
asset value and assuming reinvestment of the quarterly dividends
and annual capital gains distribution. For shareholders who paid
the maximum 5.75% sales charge at the beginning of the year, total
return was 19.37%. In the fourth quarter, the Fund posted a 3.31%
total return at net asset value; based on maximum public offering
price, total return for the quarter was -2.62%.
By comparison, the unmanaged Standard & Poor's 500 Index returned
37.45% over the 12 months and 6.00% in the fourth quarter,
reflecting the strength of technology stocks early in the year, and
their drop-off in the fourth quarter.
For more information about the Fund's performance, please turn to page 3.
How Pioneer Managed Your Investment
Over the course of the year, we worked to add stocks we liked when their
prices were low, and to sell appreciated stocks when their prices rose to
what our research indicated was their full value. The fourth quarter was an
especially active trading period for Pioneer Fund. We worked especially hard
at reducing the total number of positions in the portfolio. In fact, we
eliminated 52 positions during the fourth quarter alone, while adding only
11. At the end of the year, 144 companies were represented in the Fund's
portfolio.
Throughout most of the year, the Fund had relatively little exposure to
technology stocks, since few companies in that industry pay the steady
dividends we look for to satisfy the Fund's goal of providing quarterly
income. Late in the year, however, technology stock prices fell and we seized
the opportunity to build positions in a number of companies, including
several that were new to the portfolio. Silicon Graphics, Autodesk, Teradyne
and Texas Instruments had all been hammered hard in the stock-market sell-off
of the group. In the short term, the re-weighting has had at best a neutral
effect; longer term, we believe it will be in the Fund's best interest to
have exposure to the dynamic technology sector. As of December 31, 1995,
technology stocks accounted for 11% of the portfolio, versus 3% at the end of
1994.
Falling interest rates propelled the financial sector to rewarding gains in
1995. Your Fund had a greater exposure here, 14% of the portfolio at the
close of the fiscal year, since the dividends we look for are more common in
this group. In the financial services arena, we added Charles Schwab, a
discount securities broker offering more and more services to both the
individual and professional investor, and Chubb, a premier underwriter of
property-and-casualty insurance with one of the most consistent records in
its industry. Shareholders will also note that NBD Bancorp was exchanged for
shares of First Chicago NBD in a merger, reflecting the financial industry's
continued trend toward consolidation.
Looking to other areas, we increased holdings in pharmaceuticals by adding
industry leaders Bristol-Myers Squibb and Pfizer.
Another new holding, Minnesota Mining and Manufacturing (3M) is, like many
large, diversified companies today, in the midst of reconfiguring its
business into separately constituted and managed units. We expect a closer
focus on growth by each of the new units to produce better returns for 3M
shareholders. Other companies in the port-
<PAGE>
folio embarked on similar missions, including AT&T and Dun & Bradstreet. In a
corporate reorganization, the Fund received shares of US West Media Group and
US West Communications Group in place of the former holding in US West.
Positions were likewise initiated in Schlumberger, a formidable, worldwide
presence in oil services and drilling, and Wal-Mart Stores, a commanding
presence in the United States retail business, currently much out of favor on
"Wall Street." Throughout the year, we continually adjusted the portfolio,
which remains diversified across a variety of industries. The accompanying
chart shows the Fund's sector distribution at the close of the fiscal year.
Sector Distribution
(Percentage of equity holdings as of December 31, 1995)
[typeset representation of pie chart]
Consumer Durables 7%
Capital Goods 7%
Basic Industries 8%
Technology 11%
Utilities 14%
Financial 14%
Non-Durables 15%
Services 20%
Transportation 2%
Energy 2%
[end pie chart]
Looking Ahead
If anything, investors remain just as worried as they were a year ago. Will
their concerns again be a contrary indicator? We cannot say; we make a
practice, in fact, of never predicting what the market might do. Our approach
is to keep the Fund fully invested in a diversified portfolio of good-quality
stocks that offer the opportunity for growth and income. Active markets like
those of 1995 do provide many buying and selling opportunities. While we
think very carefully before making changes in the portfolio (in an effort to
avoid unnecessary turnover), we are committed to using the opportunities we
see.
Throughout the history of Pioneer Fund, we have taken a long-term, optimistic
view of the U.S. economy. There is no other country in the world that so
favorably combines our advantages: a democratic political system, guaranteed
personal liberties, ample raw materials, a highly skilled and educated
workforce, a cultural tradition of entrepreneurial activity, and national
security. While other areas of the world may offer faster growth rates at
times, we believe that the stability in the United States should insure
impressive levels of domestic investment as far out as anyone would care to
look. We would also note that many of the U.S.-based companies in Pioneer
Fund's portfolio have overseas operations and so provide Fund shareholders
with the opportunity to benefit indirectly from the growth that can be seen
elsewhere in the world. To date, this strategy has proven effective, and we
have every reason to believe that will continue to be the case as we move
into, and beyond, 1996.
On the following pages, please find the audited list of portfolio holdings
and financial statements as of December 31, 1995. If you have questions about
your investment in Pioneer Fund, please get in touch with your investment
representative, or call us directly at 1-800-225-6292. Thank you for your
interest and continued support.
Respectfully submitted,
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Fund
2
<PAGE>
Growth of a $10,000 Investment*
The following chart shows the growth of a $10,000 investment made in Pioneer
Fund at its public offering price on December 31, 1985, compared to the
growth of the Standard & Poor's 500 Index.
[typeset representation of line chart]
PIONEER FUND:
Average Annual Total Returns
(as of December 31, 1995)
1 Year 5 Years 10 Years
-------- -------- ---------
Net Asset Value 26.64% 14.93% 11.91%
Public Offering Price* 19.37 13.58 11.25
Pioneer Standard & Poor's
Fund 500 Index
12/85 9425 10000
12/86 10509 11862
12/87 11080 12476
12/88 13111 14534
12/89 16178 19125
12/90 14476 18530
12/91 17770 24151
12/92 20186 25988
12/93 23058 28596
12/94 22925 28984
12/95 29033 39837
[end line chart]
The Standard & Poor's (S&P) 500 Index is an unmanaged,
capitalization-weighted 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 sales charges, fees or expenses. You cannot
invest directly in the Index.
* Reflects deduction of the maximum 5.75% sales charge and reinvestment of
distributions at net asset value.
Past performance does not guarantee future results. Return and principal
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
3
<PAGE>
- -------------------------------------------------------------------------------
PIONEER FUND
SCHEDULE OF INVESTMENTS--December 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ---------- -------------
<S> <C> <C>
INVESTMENT IN SECURITIES--99.5%
PREFERRED STOCKS--3.0%
212,300 Delta Air Lines, Inc. (Convertible, Series C) $ 12,605,312
428,300 General Motors Corp. (Class H) 21,040,238
1,200,000 Greif Bros. Corp. (Non-voting, Class A) 32,250,000
141,800 Rouse Co. (Convertible, Series A) 7,320,425
-------------
TOTAL PREFERRED STOCKS (COST $36,233,973) $ 73,215,975
-------------
COMMON STOCKS--96.5%
BASIC INDUSTRIES--8.4%
Chemicals--3.7%
268,600 Bush Boake Allen, Inc.* $ 7,352,925
479,000 E.I. du Pont de Nemours and Co. 33,470,125
659,451 Lilly Industrial, Inc. (Class A) 8,408,000
265,400 Pratt & Lambert United, Inc. 9,255,825
425,525 Quaker Chemical Corp. 5,744,587
1,005,158 A. Schulman, Inc. 22,616,055
80,000 Sigma-Aldrich Corp. 3,960,000
-------------
$ 90,807,517
-------------
Cosmetics--0.2%
8,000 Beiersdorf AG $ 5,505,869
-------------
Forest Products--0.5%
204,000 Consolidated Papers Inc. $ 11,449,500
-------------
Iron & Steel--0.5%
676,200 Allegheny Ludlum Corp. $ 12,509,700
-------------
Metals & Mining--2.1%
89,600 Aluminum Co. of America $ 4,737,600
440,300 Cyprus Amax Minerals Co. 11,502,838
586,900 Phelps Dodge Corp. 36,534,525
-------------
$ 52,774,963
-------------
Paper Products--1.4%
224,500 St. Joe Paper Co. $ 12,347,500
379,300 Union Camp Corp. 18,064,162
129,100 Westvaco Corp. 3,582,525
-------------
$ 33,994,187
-------------
TOTAL BASIC INDUSTRIES $207,041,736
-------------
CAPITAL GOODS--6.6%
Construction & Engineering--0.8%
240,700 Armstrong World Industries, Inc. $ 14,923,400
261,300 Martin Marietta Materials, Inc. 5,389,312
-------------
$ 20,312,712
-------------
Producer Goods--5.8%
76,500 AlliedSignal, Inc. $ 3,633,750
187,200 Caterpillar, Inc. 10,998,000
60,000 Dover Corp. 2,212,500
491,907 Gorman-Rupp Co.+ 7,624,559
143,128 Hubbell Inc., (Class B) 9,410,666
90,400 Illinois Tool Works 5,333,600
172,200 Ingersoll-Rand Co. 6,048,525
102,100 Johnson Controls, Inc. 7,019,375
241,200 Minnesota Mining and Manufacturing Co. 15,979,500
249,600 Tecumseh Products Co. (Class A) 12,916,800
83,200 Tecumseh Products Co. (Class B) 4,347,200
243,000 Tennant Co. 5,801,625
2,860,000 Westinghouse Electric Corp. 47,190,000
55,000 York International Corp. 2,585,000
-------------
$141,101,100
-------------
TOTAL CAPITAL GOODS $161,413,812
-------------
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
- -------------------------------------------------------------------------------
Shares Value
- ---------- -------------
CONSUMER DURABLES--5.8%
Motor Vehicles--5.8%
664,300 Chrysler Corp. $ 36,785,612
2,155,000 Ford Motor Co. 62,495,000
482,000 General Motors Corp. 25,485,750
263,000 Genuine Parts Co. 10,783,000
60,125 PACCAR, Inc. 2,532,766
307,750 Standard Products Co. 5,424,094
-------------
TOTAL CONSUMER DURABLES $143,506,222
-------------
NON-DURABLES--15.3%
Agriculture & Food--7.2%
258,600 Campbell Soups Co. $ 15,516,000
213,800 CPC International, Inc. 14,672,025
309,900 General Mills, Inc. 17,896,725
855,150 H.J. Heinz & Co. 28,326,844
235,600 Hershey Foods Corp. 15,314,000
77,900 Kellogg Co. 6,017,775
95,000 Nash-Finch Co. 1,733,750
330,000 Pepsico, Inc. 18,438,750
707,800 Quaker Oats Co. 24,419,100
888,100 Sara Lee Corp. 28,308,188
217,600 Sysco Corp. 7,072,000
-------------
$177,715,157
-------------
Home Products--0.2%
140,998 Lancaster Colony Corp. $ 5,252,175
-------------
Retail Food--1.5%
500,000 Albertson's, Inc. $ 16,437,500
172,200 Hannaford Bros. Co. 4,240,425
597,700 Weis Markets, Inc. 16,885,025
-------------
$ 37,562,950
-------------
Retail Non-Food--6.1%
516,900 Circuit City Stores, Inc. $ 14,279,363
230,000 Dayton-Hudson Corp. 17,250,000
149,100 Kohl's Corp.* 7,827,750
560,800 The May Department Stores Co. 23,693,800
398,900 Mercantile Stores Co., Inc. 18,449,125
424,800 J.C. Penney Co., Inc. 20,231,100
274,400 Sears Roebuck & Co. 10,701,600
656,000 Wal-Mart Stores, Inc. 14,678,000
712,800 Walgreen Co. 21,294,900
-------------
$148,405,638
-------------
Textiles/Clothes--0.3%
286,200 Russell Corp. $ 7,942,050
43,500 Superior Surgical Manufacturing Co., Inc. 413,250
-------------
$ 8,355,300
-------------
TOTAL NON-DURABLES $377,291,220
-------------
ENERGY--2.5%
Oil & Gas Extraction--2.0%
326,500 Amoco Corp. $ 23,467,187
480,500 Chevron Corp. 25,226,250
-------------
$ 48,693,437
-------------
Oil Services--0.5%
169,000 Schlumberger, Ltd. $ 11,703,250
-------------
TOTAL ENERGY $ 60,396,687
-------------
FINANCIAL--13.3%
Commercial Bank--9.7%
327,100 AmSouth Bancorporation $ 13,206,663
1,014,200 Bank of New York Co., Inc. 49,442,250
180,000 BayBanks, Inc. 17,685,000
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
- -------------------------------------------------------------------------------
Shares Value
- ---------- -------------
569,800 Boatmen's Bancshares, Inc. $ 23,290,575
700,000 CoreStates Financial Corp. 26,512,500
60,000 First American Corp.--Tennessee 2,842,500
559,132 First Chicago NBD Corp. 22,085,714
95,000 First Tennessee National Corp. 5,747,500
1,048,178 Huntington Bancshares, Inc. 25,156,272
1,297,324 National City Corp. 42,973,857
252,900 State Street Boston Corp. 11,380,500
-------------
$240,323,331
-------------
Insurance--General--1.8%
191,100 Chubb Corp. $ 18,488,925
760,400 Safeco Corp. 26,233,800
-------------
$ 44,722,725
-------------
Investments--1.8%
950,100 Charles Schwab Corp. $ 19,120,763
500,000 T. Rowe Price Associates, Inc. 24,625,000
-------------
$ 43,745,763
-------------
TOTAL FINANCIAL $328,791,819
-------------
SERVICES--18.6%
Broadcasting & Media--1.8%
515,874 Cox Communications, Inc. (Class A)* $ 10,059,543
659,820 Gaylord Entertainment Co. (Class A) 18,310,005
789,351 US West Media Group* 14,997,669
-------------
$ 43,367,217
-------------
Health Services & Personal Care--2.0%
258,200 Becton Dickinson & Co. $ 19,365,000
464,800 U.S. Healthcare, Inc. 21,613,200
339,800 The West Co., Inc. 7,985,300
-------------
$ 48,963,500
-------------
Pharmaceuticals--8.8%
200,236 Block Drug Company, Inc. (Class A) $ 6,958,198
332,000 Bristol-Myers Squibb Co. 28,510,500
870,000 Ciba-Geigy Ltd. (A.D.R.) 38,371,698
12,000 Gehe AG* 6,120,738
350,000 Johnson & Johnson 29,968,750
335,000 Pfizer, Inc. 21,105,000
3,898 Roche Holdings AG--Genusschein 30,913,654
968,200 Schering-Plough Corp. 53,008,950
-------------
$214,957,488
-------------
Publishing--5.3%
320,300 Central Newspapers, Inc. (Class A) $ 10,049,412
134,500 Dow Jones & Co., Inc. 5,363,187
200,000 The Dun & Bradstreet Corp. 12,950,000
555,200 Harcourt General, Inc. 23,249,000
392,300 Houghton Mifflin Co. 16,868,900
241,000 McGraw-Hill Companies, Inc. 20,997,125
355,500 New York Times Co. (Class A) 10,531,687
130,000 Thomas Nelson, Inc. 1,690,000
873,600 John Wiley & Sons, Inc. (Class A)+ 28,610,400
-------------
$130,309,711
-------------
Restaurants & Food Services--0.1%
309,900 Darden Restaurants, Inc. $ 3,680,062
-------------
Services--0.6%
393,600 R. R. Donnelley & Sons Co. $ 15,498,000
-------------
TOTAL SERVICES $456,775,978
-------------
TECHNOLOGY--10.7%
Business Machines--7.9%
590,000 Apple Computer, Inc. $ 18,806,250
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
- ------------------------------------------------------------------------------
Shares Value
- ---------- -------------
480,000 Compaq Computer Corp.* $ 23,040,000
450,000 Hewlett Packard Co. 37,687,500
610,000 Intel Corp. 34,617,500
448,500 IBM Corp. 41,149,875
339,800 Silicon Graphics, Inc.* 9,344,500
660,000 Sun Microsystems, Inc.* 30,112,500
-------------
$ 194,758,125
-------------
Computer Software--0.9%
411,000 Aspen Technology, Inc.*+ $ 13,871,250
227,500 Autodesk, Inc. 7,791,875
-------------
$ 21,663,125
-------------
Electronics--1.9%
505,000 Motorola Corp. $ 28,785,000
100,000 Teradyne, Inc.* 2,500,000
291,000 Texas Instruments, Inc. 15,059,250
-------------
$ 46,344,250
-------------
TOTAL TECHNOLOGY $ 262,765,500
-------------
TRANSPORTATION--1.5%
Railroad & Bus--1.5%
85,000 Burlington Northern Santa Fe $ 6,630,000
120,000 Conrail, Inc. 8,400,000
237,900 Norfolk Southern Corp. 18,883,313
160,700 Union Pacific Resources Group 4,077,763
-------------
TOTAL TRANSPORTATION $ 37,991,076
-------------
UTILITIES--13.8%
Electric Utility--1.3%
975,200 Allegheny Power System, Inc. $ 27,915,100
222,400 Empire District Electric Co. 3,975,400
67,500 Upper Peninsula Energy Co. 1,248,750
-------------
$ 33,139,250
-------------
Gas Utility--0.8%
574,650 Indiana Energy, Inc. $ 13,719,769
329,700 Public Service Company of North Carolina, Inc. 5,893,388
-------------
$ 19,613,157
-------------
Telecommunications--11.1%
231,000 AirTouch Communications, Inc.* $ 6,525,750
476,300 AT&T Corp. 30,840,425
505,000 Ameritech Corp. 29,795,000
580,000 Bell Atlantic Corp. 38,787,500
1,129,800 BellSouth Corp. 49,146,300
383,200 GTE Corp. 16,860,800
754,400 Lincoln Telecommunications Co. 15,936,700
1,045,000 Pacific Telesis Group 35,138,125
557,490 Royal PTT Nederland NV (A.D.R.)* 20,209,013
789,351 US West Communications, Inc. 28,219,298
-------------
$ 271,458,911
-------------
Utility/Other--0.6%
276,300 American Water Works Company, Inc. $ 10,741,163
125,550 E'Town Corp. 3,782,194
-------------
$ 14,523,357
-------------
TOTAL UTILITIES $ 338,734,675
-------------
TOTAL COMMON STOCKS (COST $1,591,052,740) $2,374,708,725
-------------
TOTAL INVESTMENT IN SECURITIES
(COST $1,627,286,713) (a) $2,447,924,700
-------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
7
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ------------ -------------
<S> <C> <C>
TEMPORARY CASH INVESTMENT--0.5%
$12,316,000 Household Finance Corp., 5.7%, 1/2/96 $ 12,321,854
-------------
TOTAL TEMPORARY CASH INVESTMENT (COST
$12,316,000) $ 12,321,854
-------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY
CASH INVESTMENT--100% (COST $1,639,602,713) $2,460,246,554
=============
* Non-income producing security.
+ Investment held by Fund representing 5% or more of the outstanding
voting stock of such company (see Note 6).
(a) At December 31, 1995, the net unrealized gain on investments based
on cost for federal income tax purposes of $1,627,286,713 was
as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 845,049,079
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (24,411,092)
-------------
Net unrealized gain $ 820,637,987
=============
Purchases and sales of securities (excluding temporary cash
investments) for the year ended December 31, 1995 aggregated
approximately $698,661,000 and $703,483,000, respectively.
The accompanying notes are an integral part of these financial statements.
</TABLE>
8
<PAGE>
- ------------------------------------------------------------------------------
PIONEER FUND
BALANCE SHEET--December 31, 1995
(Dollars in Thousands
Except Per Share Amounts)
- -------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including
temporary cash investment of $12,322)
(cost $1,639,603; see Schedule of Investments
and Notes 1 and 6) $2,460,247
Cash 607
Receivables--
Dividends and interest 5,350
Trust shares sold 2,741
Other 72
---------
Total assets $2,469,017
---------
LIABILITIES:
Payables--
Trust shares repurchased $ 863
Dividends 218
Due to affiliates (Notes 2, 3 and 4) 1,710
Accrued expenses 128
---------
Total liabilities $ 2,919
---------
NET ASSETS:
Paid-in capital (Note 1) $1,644,509
Accumulated undistributed net investment income 951
Net unrealized gain on investments 820,638
---------
Total net assets (equivalent to $24.36
per share based on 101,253,492 shares
outstanding--unlimited number of shares
authorized) $2,466,098
=========
- -------------------------------------------------------------------------------
PIONEER FUND
STATEMENT OF OPERATIONS--For The Year
Ended December 31, 1995
(Dollars in Thousands)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1):
Dividends (net of foreign taxes withheld of $454) $ 66,095
Interest 955
-------
Total investment income $ 67,050
-------
EXPENSES:
Management fees (Note 2) $ 10,330
Distribution fees (Note 4) 3,776
Transfer agent fees (Note 3) 6,469
Registration fees 98
Professional fees 134
Accounting (Note 2) 120
Custodian fees 249
Printing 120
Fees and expenses of nonaffiliated trustees 51
Miscellaneous 106
-------
Total expenses $ 21,453
Less fees paid indirectly (Note 5) (244)
-------
Net expenses $ 21,209
-------
Net investment income $ 45,841
-------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments $194,768
Change in net unrealized gain on investments 287,048
-------
Net gain on investments $481,816
-------
Net Increase in net assets resulting from
operations $527,657
=======
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
- ------------------------------------------------------------------------------
PIONEER FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1995 and 1994
(Dollars in Thousands Except Per Share Amounts)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
--------- -----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 45,841 $ 43,905
Net realized gain on investments 194,768 115,130
Change in net unrealized gain on investments 287,048 (170,391)
------- ---------
Net increase (decrease) in net assets resulting from operations $ 527,657 $ (11,356)
------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ($0.49 and $0.49 per share, respectively) $ (45,343) $ (43,571)
Net realized gain on investments ($2.09 and $1.30 per share, respectively) (194,671) (115,221)
------- ---------
Decrease in net assets resulting from distributions to shareholders $ (240,014) $ (158,792)
------- ---------
FROM TRUST SHARE TRANSACTIONS: Shares
-----------------------
Net proceeds from sale of shares 9,316,854 9,205,021 $ 223,191 $ 211,010
Net asset value of shares issued to shareholders in
reinvestment of dividend distributions 9,060,518 6,668,270 217,987 143,387
Cost of shares repurchased (11,449,340) (9,405,264) (273,774) (216,143)
--------- -------- ------- ---------
Net increase in net assets resulting from trust
share transactions 6,928,032 6,468,027 $ 167,404 $ 138,254
========= ======== ------- ---------
Net increase (decrease) in net assets $ 455,047 $ (31,894)
NET ASSETS:
Beginning of year 2,011,051 2,042,945
------- ---------
End of year (including accumulated undistributed net investment income of $951
and $457, respectively) $2,466,098 $2,011,051
======= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
- -------------------------------------------------------------------------------
PIONEER FUND
FINANCIAL HIGHLIGHTS
Selected Data For a Share Outstanding For The Years Presented
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $ 21.32 $ 23.25 $ 21.51 $ 20.24 $ 18.79
---------- ---------- ---------- ---------- ------------
Increase (decrease) from
investment operations:
Net investment
income $ 0.49 $ 0.49 $ 0.47 $ 0.50 $ 0.61
Net realized and
unrealized gain (loss)
on investments 5.13 (0.63) 2.57 2.22 3.49
---------- ---------- ---------- ---------- ------------
Total increase
(decrease) from
investment operations $ 5.62 $ (0.14) $ 3.04 $ 2.72 $ 4.10
Distribution to
shareholders from:
Net investment income (0.49) (0.49) (0.47) (0.50) (0.61)
Net realized gain (2.09) (1.30) (0.83) (0.95) (2.04)
---------- ---------- ---------- ---------- ------------
Net increase (decrease) in
net asset value $ 3.04 $ (1.93) $ 1.74 $ 1.27 $ 1.45
---------- ---------- ---------- ---------- ------------
Net asset value, end of
year $ 24.36 $ 21.32 $ 23.25 $ 21.51 $ 20.24
========== ========== ========== ========== ============
Total return* 26.64% (0.57%) 14.23% 13.60% 22.76%
Ratio of net operating
expenses to average net
assets 0.95%+ 0.94% 0.95% 0.98% 0.87%
Ratio of net investment
income to average net
assets 2.01%+ 2.13% 2.04% 2.33% 2.87%
Portfolio turnover rate 31% 20% 12% 13% 22%
Net assets, end of year (in
thousands) $2,466,098 $2,011,051 $2,042,945 $1,786,031 $1,614,567
Ratios assuming reduction
for fees paid indirectly:
Net operating expenses 0.94% -- -- -- --
Net investment income 2.02% -- -- -- --
<CAPTION>
For the Years Ended December 31,
------------------------------------------------------------------------------
1990 1989 1988 1987 1986
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $ 23.28 $ 20.34 $ 18.48 $ 19.72 $ 23.13
---------- ---------- ---------- ---------- ------------
Increase (decrease) from
investment operations:
Net investment
income $ 0.67 $ 0.61 $ 0.63 $ 0.62 $ 0.56
Net realized and
unrealized gain (loss)
on investments (3.10) 4.09 2.72 0.41 1.95
---------- ---------- ---------- ---------- ------------
Total increase
(decrease) from
investment operations $ (2.43) $ 4.70 $ 3.35 $ 1.03 $ 2.51
Distribution to
shareholders from:
Net investment income (0.67) (0.68) (0.62) (0.61) (0.67)
Net realized gain (1.39) (1.08) (0.87) (1.66) (5.25)
---------- ---------- ---------- ---------- ------------
Net increase (decrease) in
net asset value $ (4.49) $ 2.94 $ 1.86 $ (1.24) $ (3.41)
---------- ---------- ---------- ---------- ------------
Net asset value, end of
year $ 18.79 $ 23.28 $ 20.34 $ 18.48 $ 19.72
========== ========== ========== ========== ============
Total return* (10.52%) 23.39% 18.33% 5.44% 11.49%
Ratio of net operating
expenses to average net
assets 0.78% 0.75% 0.76% 0.70% 0.70%
Ratio of net investment
income to average net
assets 3.15% 2.60% 3.03% 2.75% 2.44%
Portfolio turnover rate 17 % 6 % 11 % 14 % 31 %
Net assets, end of year (in
thousands) $1,395,520 $1,618,320 $1,409,755 $1,272,118 $1,302,120
Ratios assuming reduction
for fees paid indirectly:
Net operating expenses -- -- -- -- --
Net investment income -- -- -- -- --
+Ratios assuming no reduction for fees paid indirectly.
*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.
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS--December 31, 1995
- -------------------------------------------------------------------------------
1. Pioneer Fund (the Fund) is a Massachusetts business trust registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The investment objectives of the Fund are
reasonable income and growth of capital.
The Fund's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the
Fund to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies consistently
followed by the Fund, which are in conformity with those generally accepted
in the investment company industry.
A. Security Valuation--Security transactions are recorded on trade date.
Each day, securities are valued at the last sale price on the principal
exchange where they are traded. Securities that have not traded on the
date of valuation, or securities for which sale prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available are
valued at their fair values as determined by, or under the direction of,
the Board of Trustees. Temporary cash investments are valued at amortized
cost plus accrued interest, which approximates value. Dividend income is
recorded on the ex-dividend date and interest income is recorded on the
accrual basis.
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 first to 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. These settlements
are included in other income to the extent that they are not identifiable
with realized or unrealized losses. Included in net realized gain from
investments is approximately $127,000 of class action settlements received
by the Fund during the year ended December 31, 1995.
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 income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
The Fund has reclassified to paid-in capital approximately $160,000 and
$4,000 from accumulated net realized gain and accumulated undistributed
net investment income, respectively. The reclasssification has no impact
on the net asset value of the Fund and is designed to present the Fund's
capital accounts on a tax basis.
C. Trust Shares--The Fund records sales and repurchases of its trust
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 approximately $924,000 in underwriting commissions
on the sale of trust shares of the Fund during the year ended December 31,
1995. Distributions to shareholders are recorded as of the ex-dividend
date.
D. Foreign Currency Translation--The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars using the current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between
the amount of income accrued and the U.S. dollar actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the statement of operations from the
effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS--
(Continued)
- -------------------------------------------------------------------------------
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 0.50% of the
Fund's average daily net assets up to $250 million, 0.48% of the next $50
million and 0.45% of such assets in excess of $300 million.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in due to affiliates is approximately $153,000 and
$16,000 in management fees and accounting fees, respectively, payable to PMC
at December 31, 1995.
3. Pioneering Services Corporation (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 approximately
$573,000 in transfer agent fees payable to PSC at December 31, 1995.
4. The Fund adopted a Plan of Distribution (the Plan) that allows for the
Fund to reimburse Pioneer Funds Distributor, Inc. (PFD) for expenditures to
finance any activities primarily intended to result in the sale of trust
shares.
The Plan provides for reimbursement of such expenditures in an amount not to
exceed 0.15% on qualifying investments in the Fund made prior to August 19,
1991 and 0.25% on qualifying investments made on or subsequent to that date.
Included in due to affiliates is approximately $968,000 in distribution fees
payable to PFD at December 31, 1995.
5. 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,
1995, the Fund's expenses were reduced by approximately $244,000 under such
arrangements.
6. The Fund's investment in certain companies may exceed 5% of the
outstanding voting stock. Such companies are deemed affiliates of the Fund
for financial reporting purposes. The following summarizes transactions with
affiliates of the Fund as of December 31, 1995:
Purchases Sales Dividend
Affiliates Cost Cost Income Value
- -------------------------- --------- ------ ------- ------------
Aspen Technology, Inc. $8,685,250 $-- $ -- $13,871,250
Gorman-Rupp Co. -- -- 255,792 7,624,559
John Wiley & Sons, Inc.
(Class A) -- -- 144,144 28,610,400
------- ---- ----- ----------
$8,685,250 $-- $399,936 $50,106,209
======= ==== ===== ==========
13
<PAGE>
- -------------------------------------------------------------------------------
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND
SHARE OWNERSHIP OF TRUSTEES AND OFFICERS (unaudited)
- -------------------------------------------------------------------------------
The aggregate direct remuneration paid by the Fund to nonaffiliated
trustees and officers during the year ended December 31, 1995 was
approximately $46,500, plus expenses incurred in attending trustees meetings
of approximately $3,300. Fees of trustees who are affiliated with or
"interested persons" of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., investment adviser and principal underwriter,
respectively, of the Fund ($1,000 in 1995), are reimbursed to the Fund by
Pioneering Management Corporation in accordance with the management contract
with the Fund. At December 31, 1995, the trustees and officers of the Fund
owned beneficially 227,300 shares of the Fund (approximately 0.22% of the
outstanding shares). The Pioneer Group, Inc., the parent company of
Pioneering Management Corporation and Pioneer Funds Distributor, Inc., is a
publicly held corporation of which Mr. Cogan, Chairman and President of the
Fund, owned approximately 15% of the outstanding shares of capital stock at
December 31, 1995.
- -------------------------------------------------------------------------------
TAX TREATMENT OF DISTRIBUTIONS MADE
During the Year Ended December 31, 1995
- -------------------------------------------------------------------------------
During the year ended December 31, 1995, the Fund paid the following
distributions:
Distributions Per Share
-------------------------------------
To From Net
Shareholders Payment Investment From Net
of Record Date Income Realized Gain
- ------------ ----------- ---------- -----------------------
Short-term Long-term
--------- ----------
03/17/95 03/29/95 $0.1100 $ -- $ --
06/20/95 06/30/95 0.1100 -- --
09/21/95 09/29/95 0.1100 -- --
12/19/95 12/28/95 0.1561 0.2477 1.8414
-------- ------- --------
TOTAL $0.4861 $ 0.2477 $ 1.8414
======== ======= ========
On a per share basis, the distributions from net realized gain include
$1.8414, which should be reported as long-term capital gains. The remaining
$0.2477 should be combined with the $0.4861 distributions from net investment
income for a total of $0.7338, which represents ordinary income.
Corporate shareholders may deduct up to 70% of qualifying dividends received
during the year. For purposes of computing the exclusion, 91.33% of
distributions from net investment income represents qualifying dividends.
Shareholders who elected to take the Capital Gain Distribution in additional
shares of the Fund should report the distribution as explained above. The tax
cost of the shares received is $24.06 per share.
14
<PAGE>
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER FUND:
We have audited the accompanying balance sheet of Pioneer Fund, including
the schedule of investments, as of December 31, 1995, and the related
statement of operations, statements of changes in net assets and financial
highlights for the years 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 31,1995 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 Fund as of December 31, 1995, the results of its
operations, the changes in its net assets and financial highlights for the
years presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 2, 1996
15
<PAGE>
PIONEER FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
JOHN A. CAREY, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B.W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SERVICES AND SHAREHOLDER TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Please call Pioneer for information on:
Existing accounts, new accounts,
prospectuses, applications and
service forms 1-800-225-6292
Fund yields and prices 1-800-225-4321
Toll-free fax 1-800-225-4240
Retirement plans 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
When distributed to persons who are not shareholders of the Fund, this report
must be accompanied by an official prospectus, which discusses objectives,
policies, sales charges and other information about the Fund.
0296-2999
((c))Pioneer Funds Distributor, Inc.
Pioneer
Fund
ANNUAL REPORT
DECEMBER 31, 1995
