<PAGE>
[LOGO PIONEER]
PIONEER
FUND
ANNUAL REPORT 12/31/96
<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 16
Notes to Financial Statements 22
Report of Independent Public Accountants 27
Tax Treatment of Distributions 28
Trustees, Officers and Service Providers 29
</TABLE>
<PAGE>
PIONEER FUND
----------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 12/31/96
----------------------------------------------------------------------------
DEAR SHAREOWNER,
----------------------------------------------------------------------------
I am pleased to introduce this report for Pioneer Fund, covering the
year ended December 31, 1996. We wish to welcome new shareowners,
particularly those who joined the Fund through Class B and C Shares,
which were introduced on July 1, 1996.
This was Pioneer Fund's 69th fiscal year, and I am pleased to say
that your Fund remains true to the investment style set in place in
1928. The investment team emphasizes independent research and
fundamental analysis, has a penchant for finding value and is
disciplined in selling stocks that have proved rewarding or offer
evidence of deterioration. As many investors will undoubtedly learn,
there can be significant risks in chasing "hot" stocks or buying for
no other reason than prices have risen. We still think a stock should
be purchased because it represents a good investment in a company
with strong prospects over time. It is this focus on the basics that
has helped your Fund achieve its distinguished reputation as a
long-term investment.
A final note. As you see, we've given your Fund's report a facelift.
The new, improved style reflects what shareowners told us they want
to see in fund reports. Now you'll find a Table of Contents and
easy-to-read summaries of portfolio information and performance.
There's also a Portfolio Management Discussion offering insights into
market conditions, portfolio strategy and results. I encourage you to
read on to learn more about your Fund.
Please contact your investment representative, or us at 1-800-225-6292,
if you have questions about your investment in Pioneer Fund. Thank
you for your continued support.
Respectfully,
/s/ John F. Cogan, Jr.
----------------------------
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
PIONEER FUND
-----------------------------------------------------------------------------
PORTFOLIO SUMMARY 12/31/96
-----------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
-----------------------------------------------------------------------------
(As a percentage of total investment portfolio)
U.S. Common Stocks 94%
International Common Stocks 1% [PIE CHART]
U.S. Preferred Stocks 1%
Depositary Receipts
for International Stocks 2%
Short-Term Cash Equivalents 2%
SECTOR DISTRIBUTION
-----------------------------------------------------------------------------
(As a percentage of equity holdings)
Transportation 1%
Financial 19%
Energy 3%
Consumer Durables 5% Services 17%
[PIE CHART]
Capital Goods 7%
Basic Industries 7%
Technology 15%
Consumer Non-Durables 12% Utilities 14%
10 LARGEST HOLDINGS
-----------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Schering-Plough Corp. 2.95% 6. IBM Corp. 1.88%
2. Bank of New York Co., Inc. 2.48 7. Novartis AG (Sponsored A.D.R.) 1.86
3. Compaq Computer Corp. 2.10 8. Westinghouse Electric Corp. 1.72
4. National City Corp. 2.04 9. GTE Corp. 1.68
5. Ford Motor Co. 1.99 10. Hewlett Packard Co. 1.66
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
PIONEER FUND
-----------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/96 CLASS A SHARES
-----------------------------------------------------------------------------
SHARE PRICES AND DISTRIBUTIONS
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 12/31/96 12/31/95
<S> <C> <C>
$26.89 $24.36
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/95-12/31/96) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.374 $0.015 $1.801
</TABLE>
INVESTMENT RETURNS
-----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000
investment made in Pioneer Fund at public offering price, compared to
the growth of the Standard & Poor's 500 Index.
AVERAGE ANNUAL TOTAL RETURNS
(As of December 31, 1996)
Net Asset Public Offering
Period Value Price*
10 Years 12.70% 12.04%
5 Years 14.36 13.02
1 Year 19.70 12.80
GROWTH OF $10,000
Pioneer Standard & Poor's
Fund* 500 Index
12/31/86 9,425 10,000
12/31/87 9,939 10,525
12/31/88 11,761 12,267
12/31/89 14,512 16,148
12/31/90 12,986 15,648
12/31/91 15,940 20,406
12/31/92 18,107 21,959
12/31/93 20,683 24,169
12/31/94 20,564 24,488
12/31/95 26,043 33,681
12/31/96 31,174 41,411
/ / Pioneer Fund*
- - Standard & Poor's 500 Index
* Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500
widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the Over-the-Counter market. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly
in 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 FUND
-----------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/96 CLASS B SHARES
-----------------------------------------------------------------------------
SHARE PRICES AND DISTRIBUTIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 12/31/96 7/1/96
<S> <C> <C>
$27.02 $26.40
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(7/1/96-12/31/96) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.128 $0.015 $1.801
</TABLE>
INVESTMENT RETURNS
-----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000
investment made in Pioneer Fund, compared to the growth of the Standard
& Poor's 500 Index.
CUMULATIVE TOTAL RETURNS
(As of December 31, 1996)
Period If Held If Redeemed*
Life-of-Fund 9.92% 5.92%
(7/1/96)
GROWTH OF $10,000
Pioneer Standard & Poor's
Fund* 500 Index
7/1/96 10,000 10,000
7/31/96 9,504 9,468
8/31/96 9,761 9,647
9/30/96 10,212 10,227
10/31/96 10,391 10,494
11/30/96 11,199 11,264
12/31/96 10,591 11,078
/ / Pioneer Fund*
- - Standard & Poor's 500 Index
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of
distributions. The maximum CDSC of 4% declines over six years.
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500
widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the Over-the-Counter market. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly
in 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 FUND
-----------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/96 CLASS C SHARES
-----------------------------------------------------------------------------
SHARE PRICES AND DISTRIBUTIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 12/31/96 7/1/96
<S> <C> <C>
$26.74 $26.40
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(7/1/96-12/31/96) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.102 $0.015 $1.801
</TABLE>
INVESTMENT RETURNS
-----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000
investment made in Pioneer Fund, compared to the growth of the Standard
& Poor's 500 Index.
CUMULATIVE TOTAL RETURNS
(As of December 31, 1996)
Period If Held If Redeemed*
Life-of-Fund 8.74% 7.74%
(7/1/96)
GROWTH OF $10,000
Pioneer Standard & Poor's
Fund* 500 Index
7/1/96 10,000 10,000
7/31/96 9,466 9,468
8/31/96 9,689 9,647
9/30/96 10,117 10,227
10/31/96 10,292 10,494
11/30/96 11,085 11,264
12/31/96 10,774 11,078
/ / Pioneer Fund*
- - Standard & Poor's 500 Index
* Reflects deduction of the 1% contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of
distributions.
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500
widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the Over-the-Counter market. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly
in 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 FUND
----------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 12/31/96
----------------------------------------------------------------------------
DEAR SHAREOWNER,
----------------------------------------------------------------------------
I am pleased to have this opportunity to bring you up to date on
Pioneer Fund. In general, 1996 was another excellent year for
investors in U.S. stocks. There were some anxious days, particularly
during the summer, and there also were some sectors - utilities and
certain cyclicals, for instance - that did not match the overall
market's strong returns. However, when the final tally was in, the
year was nearly as impressive as 1995.
FINDING VALUE IN A FAST-MOVING STOCK MARKET
The strength of the market confounded many of the "experts." After the
amazing 37% market advance of 1995, some thought that a "correction,"
or worse, was virtually assured for 1996. But stocks continued to draw
investors' money, even those that became more and more expensive. We
take a broader, value-oriented approach for your Fund. The results
this year were solid, a 19.70% total return for Class A Shares at net
asset value, not far behind the 22.90% posted by the Standard & Poor's
500 Index. These gains are striking, considering the stock market's
average return over the past 70 years is about 10%.
As always, we at Pioneer did not make any attempt to guess which way
the market would go. Instead we kept your Fund fully invested, and
focused on the underlying, basic value of the companies in the
portfolio. As the year progressed, we boosted our efforts to position
the portfolio in areas of the economy with above-average, longer-term
growth potential. Market volatility during the year provided us with
ample opportunities to build up investments - in technology,
pharmaceuticals, telecommunications and financial services companies,
for instance - at prices we thought were quite attractive.
6
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
It is our general approach to find the best companies we can, selling
at valuations we judge to be reasonable relative to their prospects.
Recent portfolio transactions are typical of the opportunities we
pursued over the course of the year. We sold stocks we thought had
reached their value or that no longer had the potential we originally
saw for them. In a couple of cases, Boatmen's Bancshares and
Foundation Health, the companies received and accepted merger
proposals. Over the course of the year, we succeeded in consolidating
the portfolio somewhat, and ended the year with holdings in 133
companies, versus 144 when 1996 began.
Recent new entries to the portfolio included Warner-Lambert, a
pharmaceutical and consumer healthcare company with new products and
the potential for improved profit margins; Pall, one of the leading
manufacturers of filters for specialized applications; and Lockheed
Martin, the product of a business combination between two leading
aerospace and defense companies. In technology, we bought shares of
Cisco System, premier supplier of equipment for large computer
networks, and Applied Materials, worldwide supplier of equipment to
manufacturers of semiconductors.
LOOKING AHEAD
As I write to you, 1997 is underway, and already it is proving to be a
very active year on Wall Street. Trading volume is high, and share
prices are lively. There is also quite a bit of merger-and-acquisition
activity, probably reflecting the high prices of so many stocks.
Companies often use their stock as "currency" to buy other companies,
and when their stocks are high-priced they do not have to issue as
many shares to make such a purchase. Of course the "target" companies
may also have enjoyed an increase in their share price. However, there
appear to be few areas of human endeavor where optimism reigns quite
so supreme as in the area of corporate takeovers. No matter how much
others over-pay for their acquisitions, there always seem to be
companies that convince themselves they are getting a good deal.
7
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 12/31/96 (Continued)
-------------------------------------------------------------------------------
One of the concerns we have as we look out at the market is the
emphasis currently being placed on "concept" stocks. Those are the
stocks of companies that do not have much in the way of revenues or
earnings now, but that are "expected" to do very well in the
indeterminate future because they are somehow ideally situated where
business prospects are brightest. We understand that some stocks are
even being promoted on the Internet in a kind of wild frenzy of
cyberspatial speculation. (We remember what happened during the 1960s'
epidemic of "concept" investing - it ended rather badly for most of
the "players.") At Pioneer we always like to know that there is
substance behind the stock symbol, and we devote considerable effort
to researching companies before buying their stocks.
The months ahead will undoubtedly present many challenges and
opportunities. We shall work hard to keep the portfolio positioned to
benefit from market activity, but of course we can make no guarantees
at all about likely investment returns. The year may well see a
significant downturn at some point. However, we expect the long-term
relationship between corporate earnings, economic growth and share
prices will continue. We are confident that shareowners will be best
served in the long-term by our attending to the fundamentals of
investing, rather than getting caught up in the fads that sweep
through financial markets.
Thank you for your interest in Pioneer Fund. Please let us know if you
have any questions or comments about your investment.
Respectfully,
/s/ John A. Carey
-----------------------
John A. Carey,
Portfolio Manager
8
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/96
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
INVESTMENT IN SECURITIES - 98.3%
PREFERRED STOCK - 1.1%
1,117,000 Greif Brothers Corp. (Non-voting) $ 31,555,250
----------------
TOTAL PREFERRED STOCK (Cost $379,215) $ 31,555,250
----------------
COMMON STOCKS - 97.2%
BASIC INDUSTRIES - 7.0%
CHEMICALS - 3.3%
263,300 Bush Boake Allen, Inc.* $ 7,010,362
429,000 E.I. du Pont de Nemours and Co. 40,486,875
195,000 Eastman Chemical Co. 10,773,750
659,451 Lilly Industries, Inc. 12,034,981
104,825 Quaker Chemical Corp. 1,716,509
950,158 A. Schulman, Inc. 23,278,871
----------------
$ 95,301,348
----------------
FOREST PRODUCTS - 0.7%
184,000 Consolidated Papers, Inc. $ 9,039,000
204,000 Mead Corp. 11,857,500
----------------
$ 20,896,500
----------------
METALS & MINING - 2.3%
94,600 Aluminum Co. of America $ 6,030,750
387,500 Barrick Gold Corp. 11,140,625
586,900 Phelps Dodge Corp. 39,615,750
535,200 Santa Fe Pacific Gold Corp. 8,228,700
----------------
$ 65,015,825
----------------
PAPER PRODUCTS - 0.7%
309,300 Union Camp Corp. $ 14,769,075
229,600 Westvaco Corp. 6,601,000
----------------
$ 21,370,075
----------------
TOTAL BASIC INDUSTRIES $ 202,583,748
----------------
CAPITAL GOODS - 6.9%
AEROSPACE - 0.5%
142,500 Lockheed Martin Corp. $ 13,038,750
----------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/96 (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
PRODUCER GOODS - 6.4%
276,500 AlliedSignal, Inc. $ 18,525,500
211,600 Caterpillar, Inc. 15,922,900
158,500 Deere & Co. 6,439,063
60,000 Dover Corp. 3,015,000
90,000 General Electric Co. 8,898,750
286,256 Hubbell, Inc. (Class B) 12,380,572
140,400 Illinois Tool Works, Inc. 11,214,450
172,200 Ingersoll-Rand Co. 7,662,900
102,100 Johnson Controls, Inc. 8,461,537
304,242 Lucent Technologies, Inc. 14,071,193
261,200 Minnesota Mining and Manufacturing Co. 21,646,950
100,000 Pall Corp. 2,550,000
142,100 The Timken Co. 6,518,837
2,473,000 Westinghouse Electric Co. 49,150,875
----------------
$ 186,458,527
----------------
TOTAL CAPITAL GOODS $ 199,497,277
----------------
CONSUMER DURABLES - 4.5%
MOTOR VEHICLES - 4.5%
1,128,600 Chrysler Corp. $ 37,243,800
96,000 Cummins Engine Co., Inc. 4,416,000
1,785,000 Ford Motor Co. 56,896,875
263,000 Genuine Parts Co. 11,703,500
391,400 TRW Inc. 19,374,300
----------------
TOTAL CONSUMER DURABLES $ 129,634,475
----------------
CONSUMER NON-DURABLES - 11.5%
AGRICULTURE & FOOD - 4.6%
213,800 CPC International, Inc. $ 16,569,500
460,300 General Mills, Inc. 29,171,512
955,150 H.J. Heinz Co. 34,146,613
560,000 PepsiCo, Inc. 16,380,000
801,000 Sara Lee Corp. 29,837,250
186,400 Sysco Corp. 6,081,300
----------------
$ 132,186,175
----------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
RETAIL FOOD - 0.9%
480,000 Albertson's, Inc. $ 17,100,000
307,000 Weis Markets, Inc. 9,785,625
----------------
$ 26,885,625
----------------
RETAIL NON-FOOD - 6.0%
496,900 Circuit City Stores, Inc $ 14,969,112
690,000 Dayton Hudson Corp. 27,082,500
298,200 Kohl's Corp.* 11,704,350
560,800 May Department Stores Co. 26,217,400
223,500 Mercantile Stores Co., Inc. 11,035,313
424,800 J.C. Penney Co., Inc. 20,709,000
339,400 Sears, Roebuck and Co. 15,654,825
806,000 Wal-Mart Stores, Inc. 18,437,250
712,800 Walgreen Co. 28,512,000
----------------
$ 174,321,750
----------------
TOTAL CONSUMER NON-DURABLES $ 333,393,550
----------------
ENERGY - 2.5%
OIL & GAS EXTRACTION - 2.1%
326,500 Amoco Corp. $ 26,283,250
480,500 Chevron Corp. 31,232,500
160,700 Union Pacific Resources Group Inc. 4,700,475
----------------
$ 62,216,225
----------------
OIL SERVICES - 0.4%
119,000 Schlumberger Ltd. $ 11,885,125
----------------
TOTAL ENERGY $ 74,101,350
----------------
FINANCIAL - 19.0%
COMMERCIAL BANKS - 9.2%
317,100 AmSouth Bancorp. $ 15,339,712
95,000 BankAmerica Corp. 9,476,250
2,098,400 The Bank of New York Co., Inc. 70,821,000
700,000 CoreStates Financial Corp. 36,312,500
509,132 First Chicago NBD Corp. 27,365,845
190,000 First Tennessee National Corp. 7,125,000
1,042,995 Huntington Bancshares, Inc. 27,508,993
1,297,324 National City Corp. 58,217,415
252,900 State Street Boston Corp. 16,312,050
----------------
$ 268,478,765
----------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/96 (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
MISC. FINANCE - 1.0%
110,300 Associates First Capital Corp.* $ 4,866,987
279,700 Countrywide Credit Industries, Inc. 8,006,413
440,000 Federal National Mortgage Association 16,390,000
----------------
$ 29,263,400
----------------
INSURANCE - 4.1%
186,600 American International Group, Inc. $ 20,199,450
746,000 Chubb Corp. 40,097,500
930,400 Safeco Corp. 36,692,650
386,600 St. Paul Companies, Inc. 22,664,425
----------------
$ 119,654,025
----------------
REAL ESTATE - 0.4%
333,641 The Rouse Co. $ 10,593,102
----------------
INVESTMENTS - 4.0%
338,000 Merrill Lynch & Co., Inc. $ 27,547,000
950,100 Charles Schwab Corp. 30,403,200
195,000 Morgan Stanley Group, Inc. 11,139,375
1,050,000 T. Rowe Price Associates, Inc. 45,675,000
----------------
$ 114,764,575
----------------
SAVINGS & LOAN - 0.3%
304,500 H.F. Ahmanson & Co. $ 9,896,250
----------------
TOTAL FINANCIAL $ 552,650,117
----------------
SERVICES - 17.0%
HEALTH & PERSONAL CARE - 1.6%
516,400 Becton, Dickinson & Co. $ 22,398,850
525,000 United Healthcare Corp. 23,625,000
----------------
$ 46,023,850
----------------
BROADCASTING & MEDIA - 0.9%
515,874 Cox Communication, Inc.* $ 11,929,586
559,811 Gaylord Entertainment Co. 12,805,677
----------------
$ 24,735,263
----------------
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
PHARMACEUTICALS - 11.1%
293,600 Abbott Laboratories $ 14,900,200
357,000 Bristol-Myers Squibb Co. 38,823,750
800,000 Johnson & Johnson 39,800,000
205,000 Eli Lilly & Co. 14,965,000
927,994 Novartis AG (Sponsored A.D.R.)* 53,136,936
335,000 Pfizer, Inc. 27,763,125
3,898 Roche Holdings AG 30,330,721
1,298,200 Schering-Plough Corp. 84,058,450
235,000 Warner-Lambert Co. 17,625,000
----------------
$ 321,403,182
----------------
PUBLISHING - 3.1%
320,300 Central Newspapers, Inc. $ 14,093,200
555,200 Harcourt General, Inc. 25,608,600
478,000 McGraw-Hill Co., Inc. 22,047,750
873,600 John Wiley & Sons, Inc.+ 28,173,600
----------------
$ 89,923,150
----------------
SERVICES - OTHER - 0.3%
317,500 R.R. Donnelly & Sons Co. $ 9,961,562
----------------
TOTAL SERVICES $ 492,047,007
----------------
TECHNOLOGY - 14.5%
BUSINESS MACHINES - 2.7%
940,000 Hewlett-Packard Co. $ 47,235,000
1,200,000 Sun Microsystems, Inc.* 30,825,000
----------------
$ 78,060,000
----------------
COMPUTER SERVICES - 7.1%
348,500 Aspen Technology, Inc.* $ 27,967,125
197,500 Autodesk, Inc. 5,530,000
215,000 Automatic Data Processing, Inc. 9,218,125
808,000 Compaq Computer Corp.* 59,994,000
91,300 Computer Associates International, Inc. 4,542,175
220,000 DST Systems, Inc.* 6,902,500
305,000 Electronic Data Systems Corp. 13,191,250
157,400 Indus Group, Inc.* 4,053,050
356,000 IBM, Corp. 53,756,000
515,000 Seagate Technology, Inc.* 20,342,500
----------------
$ 205,496,725
----------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/96 (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
ELECTRONICS - 3.9%
100,000 Applied Materials, Inc.* $ 3,593,750
159,000 Cisco System, Inc.* 10,116,375
464,000 General Motors Corp. (Class H) 26,100,000
662,500 Motorola, Inc. 40,660,938
274,000 Teradyne, Inc.* 6,678,750
406,000 Texas Instruments, Inc. 25,882,500
----------------
$ 113,032,313
----------------
PHOTO/INSTRUMENTATION - 0.8%
289,100 Eastman Kodak Co. $ 23,200,275
----------------
TOTAL TECHNOLOGY $ 419,789,313
----------------
TRANSPORTATION - 0.8%
AIR TRANSPORT - 0.4%
161,454 Delta Air Lines, Inc. $ 11,443,052
----------------
RAILROAD & BUS - 0.4%
137,900 Norfolk Southern Corp. $ 12,066,250
----------------
TOTAL TRANSPORTATION $ 23,509,302
----------------
UTILITIES - 13.5%
ELECTRIC UTILITY - 1.0%
975,200 Allegheny Power Systems, Inc. $ 29,621,700
----------------
GAS UTILITY - 0.4%
574,650 Indiana Energy, Inc. $ 14,007,094
----------------
UTILITY/OTHER - 0.4%
552,600 American Water Works Co., Inc. $ 11,397,375
----------------
TELECOMMUNICATIONS - 11.7%
331,000 AirTouch Communications, Inc.* $ 8,357,750
754,400 Aliant Communications, Inc. 12,824,800
733,000 Ameritech Corp. 44,438,125
251,300 AT&T Corp. 10,931,550
575,700 Bell Atlantic Corp. 37,276,575
1,129,800 BellSouth Corp. 45,615,675
1,056,200 GTE Corp. 48,057,100
455,000 MCI Communications Corp. 14,872,813
530,800 NYNEX Corp. 25,544,750
884,000 Pacific Telesis Group 32,487,000
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
TELECOMMUNICATIONS (Continued)
370,000 SBC Communications, Inc. $ 19,147,500
359,600 Sprint Corp. 14,339,050
789,351 U.S. West Communication Group 25,456,570
----------------
$ 339,349,258
----------------
TOTAL UTILITIES $ 394,375,427
----------------
TOTAL COMMON STOCKS
(Cost $1,771,531,385) $ 2,821,581,566
----------------
TOTAL INVESTMENT IN SECURITIES
(Cost $1,771,910,600) $ 2,853,136,816
----------------
PRINCIPAL
AMOUNT
TEMPORARY CASH INVESTMENTS - 1.7%
COMMERCIAL PAPER - 1.7%
$12,172,000 American Express Co., 6.30%, 01/03/97 $ 12,172,000
37,266,000 Household Finance Corp., 6.15%, 01/02/97 37,266,000
----------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $49,438,000) $ 49,438,000
----------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS - 100%
(Cost $1,821,348,600)(a) $ 2,902,574,816
================
</TABLE>
* Non-income producing security.
+ Investment held by Fund representing 5% or more of the outstanding
voting stock of such company.
(a) At December 31, 1996, the net unrealized gain on investments based
on cost for federal income tax purposes of $1,821,348,600 was as
follows:
<TABLE>
<C> <S> <C>
Aggregate gross unrealized gain for all
investments in which there is an excess
of value over tax cost $ 1,093,603,440
Aggregate gross unrealized loss for all
investments in which there is an excess
of tax cost over value (12,377,224)
----------------
Net unrealized gain $ 1,081,226,216
================
</TABLE>
Purchases and sales of securities (excluding temporary cash
investments) for the year ended December 31, 1996 aggregated
approximately $652,390,000 and $691,840,000, respectively.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
BALANCE SHEET 12/31/96
- --------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $49,438) (cost $1,821,349) $2,902,575
Receivables -
Fund shares sold 2,958
Dividends and interest 5,945
Other 72
----------
Total assets $2,911,550
----------
LIABILITIES:
Payables -
Fund shares repurchased $ 510
Due to affiliates 3,494
Accrued expenses 104
----------
Total liabilities $ 4,108
----------
NET ASSETS:
Paid-in capital $1,825,327
Accumulated undistributed net investment income 893
Net unrealized gain on investments 1,081,226
Net unrealized loss on other assets and liabilities denominated
in foreign currencies (4)
----------
Total net assets $2,907,442
==========
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $2,896,670/107,715,495 shares) $ 26.89
==========
Class B (based on $8,941/330,856 shares) $ 27.02
==========
Class C (based on $1,831/68,470 shares) $ 26.74
==========
MAXIMUM OFFERING PRICE:
Class A $ 28.53
==========
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED 12/31/96
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $241) $ 63,238
Interest 921
--------
Total investment income $ 64,159
--------
EXPENSES:
Management fees
Basic fee $ 14,730
Performance adjustment (932)
Transfer agent fees
Class A 6,909
Class B 5
Class C 2
Distribution fees
Class A 5,192
Class B 18
Class C 3
Accounting 143
Custodian fees 152
Registration fees 157
Professional fees 132
Printing 162
Fees and expenses of nonaffiliated trustees 36
Miscellaneous 98
--------
Total expenses $ 26,807
Less fees paid indirectly (369)
--------
Net expenses $ 26,438
--------
Net investment income $ 37,721
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $184,074
Change in net unrealized gain or loss on:
Investments $260,588
Other assets and liabilities denominated in foreign
currencies (4) $260,584
--------
Net gain on investments $444,658
--------
Net increase in net assets resulting from operations $482,379
========
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEARS ENDED 12/31/96 AND 12/31/95
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
FROM OPERATIONS: 12/31/96 12/31/95
<S> <C> <C>
Net investment income $ 37,721 $ 45,841
Net realized gain on investments 184,074 194,768
Change in net unrealized gain on investments and foreign
currency transactions 260,584 287,048
---------- ----------
Net increase in net assets resulting from
operations $ 482,379 $ 527,657
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ($0.37 and $0.49 per share, respectively) $ (37,742) $ (45,343)
Class B ($0.07 per share) (9) --
Class C ($0.03 per share) (1) --
In excess of net investment income
Class B ($0.06 per share) (17) --
Class C ($0.07 per share) (3) --
Net realized gain
Class A ($1.82 and $2.09 per share, respectively) (183,429) (194,671)
Class B ($1.82 per share) (538) --
Class C ($1.82 per share) (114) --
---------- ----------
Total distributions to shareholders $ (221,853) $ (240,014)
---------- ----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 238,716 $ 223,191
Reinvestment of distributions 201,514 217,987
Cost of shares repurchased (259,412) (273,774)
---------- ----------
Net increase in net assets resulting from fund
share transactions $ 180,818 $ 167,404
---------- ----------
Net increase in net assets $ 441,344 $ 455,047
NET ASSETS:
Beginning of year 2,466,098 2,011,051
---------- ----------
End of year (including accumulated undistributed net
investment income of $893 and $951, respectively) $2,907,442 $2,466,098
========== ==========
</TABLE>
<TABLE>
<CAPTION>
CLASS A '96 SHARES '96 AMOUNT '95 SHARES '95 AMOUNT
<S> <C> <C> <C> <C>
Shares sold 8,683,155 $ 227,808 9,316,854 $ 223,191
Reinvestment of distributions 7,663,593 200,891 9,060,518 217,987
Less shares repurchased (9,884,745) (258,910) (11,449,340) (273,774)
--------- --------- ---------- ---------
Net increase 6,462,003 $ 169,789 6,928,032 $ 167,404
========= ========= ========= =========
CLASS B*
Shares sold 325,224 $ 8,988
Reinvestment of distributions 19,805 522
Less shares repurchased (14,173) (386)
--------- ---------
Net increase 330,856 9,124
========= =========
CLASS C*
Shares sold 68,824 $ 1,920
Reinvestment of distributions 3,873 101
Less shares repurchased (4,227) (116)
--------- ---------
Net increase 68,470 $ 1,905
========= =========
</TABLE>
* Class B and Class C shares were first publicly offered on July 1, 1996
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CLASS A 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 24.36 $ 21.32 $ 23.25 $ 21.51 $ 20.24
---------- ---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.37 $ 0.49 $ 0.49 $ 0.47 $ 0.50
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 4.35 5.13 (0.63) 2.57 2.22
---------- ---------- ---------- ---------- ----------
Total increase (decrease) from investment
operations $ 4.72 $ 5.62 $ (0.14) $ 3.04 $ 2.72
Distribution to shareholders from:
Net investment income (0.37) (0.49) (0.49) (0.47) (0.50)
Net realized gain (1.82) (2.09) (1.30) (0.83) (0.95)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 2.53 $ 3.04 $ (1.93) $ 1.74 $ 1.27
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 26.89 $ 24.36 $ 21.32 $ 23.25 $ 21.51
========== ========== ========== ========== ==========
Total return* 19.70% 26.64% (0.57)% 14.23% 13.60%
Ratio of net expenses to average net assets 1.01%+ 0.95%+ 0.94% 0.95% 0.98%
Ratio of net investment income to average net assets 1.40%+ 2.01%+ 2.13% 2.04% 2.33%
Portfolio turnover rate 25% 31% 20% 12% 13%
Average commission rate paid(1) $ 0.0599 -- -- -- --
Net assets, end of year (in thousands) $2,896,670 $2,466,098 $2,011,051 $2,042,945 $1,786,031
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.99% 0.94% -- -- --
Net investment income 1.42% 2.02% -- -- --
</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.
+ Ratios assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid on the Fund's exchange listed
transactions.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
PIONEER FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/96
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7/1/96 TO
CLASS B (a) 12/31/96[Dagger]
<S> <C>
Net asset value, beginning of period $ 26.40
---------
Increase from investment operations:
Net investment income $ 0.07
Net realized and unrealized gain on investments
and foreign currency transactions 2.50
---------
Total increase from investment operations $ 2.57
Distribution to shareholders:
Net investment income (0.07)
In excess of net investment income (0.06)
From net realized gain (1.82)
---------
Net increase in net asset value $ 0.62
---------
Net asset value, end of period $ 27.02
=========
Total return* 9.92%
Ratio of net expenses to average net assets 1.82%**+
Ratio of net investment income to average net assets 0.46%**+
Portfolio turnover rate 25%
Average commission rate paid(1) $0.0599
Net assets, end of period (in thousands) $ 8,940
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.80%**
Net investment income 0.48%**
(a) Class B shares were first publicly offered on July 1, 1996.
[Dagger] The per share data presented above is based upon the average shares outstanding for
the period presented.
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of all distributions, the complete redemption of the investment at net
asset value at the end of each period and no sales charges. Total return would be
reduced if sales charges were taken into account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid on the Fund's exchange listed
transactions.
</TABLE>
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7/1/96 TO
CLASS C (a) 12/31/96[Dagger]
<S> <C>
Net asset value, beginning of period $ 26.40
-------
Increase from investment operations:
Net investment income $ 0.03
Net realized and unrealized gain on investments and foreign
currency transactions 2.23
-------
Total increase from investment operations $ 2.26
Distribution to shareholders:
Net investment income (0.03)
In excess of net investment income (0.07)
From net realized gain (1.82)
-------
Net increase in net asset value $ 0.34
-------
Net asset value, end of period $ 26.74
-------
Total return* 8.74%
Ratio of net expenses to average net assets 2.11%**+
Ratio of net investment income to average net assets 0.20%**+
Portfolio turnover rate 25%
Average commission rate paid(1) $0.0599
Net assets, end of period (in thousands) $ 1,831
Ratios assuming reduction for fees paid indirectly:
Net expenses 2.08%**
Net investment income 0.23%**
(a) Class C shares were first publicly offered on July 1, 1996.
[Dagger] The per share data presented above is based upon the average shares outstanding for
the period presented.
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of all distributions, the complete redemption of the investment at net
asset value at the end of each period and no sales charges. Total return would be
reduced if sales charges were taken into account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid on the Fund's exchange listed
transactions.
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/96
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
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 offers three classes of shares - Class A, Class B and Class C
shares. Class B and C shares were first publicly offered on July 1,
1996. 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. 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. Dividend income
is recorded on the ex-dividend date and interest income is recorded
on the accrual basis. Temporary cash investments are valued at
amortized cost.
Gains and losses on sales of investments are calculated on the
identified cost method for both financial reporting and federal
income tax purposes. It is the Fund's practice to first select for
sale those
22
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
securities that have the highest cost and also qualify for long-term
capital gain or loss treatment for tax purposes.
B. 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 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.
C. 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 December 31, 1996, the Fund reclassified approximately $7,000
from accumulated undistributed net investment income to accumulated
net realized loss on investments. 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.
D. FUND SHARES
The Fund records sales and repurchases of its shares on trade date.
Net losses, if any, as a result of cancellations are absorbed by
23
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/96 (CONTINUED)
- --------------------------------------------------------------------------------
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for
the Fund and an indirect subsidiary of The Pioneer Group, Inc.
(PGI). PFD earned approximately $1,176,000 in underwriting
commissions on the sale of fund shares during the year ended
December 31, 1996.
E. 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 0.60% of the Fund's average daily net assets. The basic fee is
subject to a performance adjustment up to a maximum of [plus/minus] 0.10%
based on the Fund's investment performance as compared with the Lipper
Growth & Income Funds index. For the year ended December 31, 1996, the
aggregate performance adjustment resulted in a reduction in management
fees of approximately $932,000.
Prior to May 1, 1996, management fees were calculated daily at the
annual rate of 0.50% of the Fund's average daily net assets up to $250
million, 0.48% of the next $50 million and 0.45% of such assets in
excess of $300 million. For the year ended December 31, 1996, the
management fee was equivalent to 0.52% of average daily net assets.
In addition, under the management agreement, certain other services
and costs, including accounting, regulatory reporting and insurance
pre-
24
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
miums, are paid by the Fund. At December 31, 1996, approximately
$1,392,000 was payable to PMC related to management fees and certain
other services.
3. TRANSFER AGENT
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 $728,000 in transfer agent fees payable to
PSC at December 31, 1996.
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
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 $1,374,000 in distribution fees payable to PFD at
December 31, 1996.
In addition, redemptions of each class of shares may be subject to a
contingent deferred sales charge (CDSC). A CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A
shares within one year of purchase. Class B shares that are redeemed
within six years of purchase are subject to a CDSC at declining rates
beginning at 4.0%, based on the lower of cost or market value of
shares being redeemed. Redemptions of Class C shares within one year
of purchase are subject to a CDSC of 1.00%. Proceeds from the CDSC are
paid to PFD. For the year ended December 31, 1996, CDSCs in the amount
of approximately $5,000 were paid to PFD.
5. EXPENSE OFFSETS
The Fund has entered into certain expense offset arrangements
resulting in a reduction in the Fund's total expenses. For the year
ended
25
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/96 (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1996, the Fund's expenses were reduced by approximately
$369,000 under such arrangements.
6. AFFILIATED COMPANIES
The Fund's investments 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, 1996:
<TABLE>
<CAPTION>
DIVIDEND
AFFILIATES PURCHASES SALES INCOME VALUE
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
John Wiley
& Sons,
Inc. - - $338,520 $28,173,600
--------- ---------- -------- -----------
</TABLE>
26
<PAGE>
PIONEER FUND
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF
PIONEER FUND:
We have audited the accompanying balance sheet, including the
schedule of investments, of Pioneer Fund as of December 31, 1996, and
the related statement of operations, the statements of changes in net
assets, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of
December 31, 1996, 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, 1996, 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
February 3, 1997
27
<PAGE>
PIONEER FUND
- -------------------------------------------------------------------------------
TAX TREATMENT OF DISTRIBUTIONS
- -------------------------------------------------------------------------------
MADE DURING THE YEAR ENDED 12/31/96
During the year ended December 31, 1996, Pioneer Fund paid the
following distributions per share:
<TABLE>
<CAPTION>
NET
NET REALIZED GAIN
INVESTMENT ------------------------
RECORD DATE PAYMENT DATE INCOME SHORT-TERM LONG-TERM
<S> <C> <C> <C> <C>
CLASS A:
3/20/96 3/29/96 $0.100 - -
6/19/96 6/28/96 $0.100 - -
9/20/96 9/30/96 0.090 - -
12/17/96 12/27/96 0.180 $0.015 $ 1.801
------ ------ -------
Total $0.374 $0.015 $ 1.801
====== ====== =======
CLASS B:
9/20/96 9/30/96 $0.060 - -
12/17/96 12/27/96 0.068 $0.015 $ 1.801
------ ------ -------
Total $0.128 $0.015 $ 1.801
====== ====== =======
CLASS C:
9/20/96 9/30/96 $0.050 - -
12/17/96 12/27/96 0.052 $0.015 $ 1.801
------ ------ -------
Total $0.102 $0.015 $ 1.801
====== ====== =======
- ------------------------------------------------------------------------------
</TABLE>
On a per share basis, distributions of $0.015 from short-term capital
gain should be reported as ordinary income.
Corporate shareholders may deduct up to 70% of qualifying dividends
received during the year. For purposes of computing the exclusion,
100% of the 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 on December 17,
1996 is $26.23 for Class A.
The Fund hereby designates $182,542,203 as a capital gain dividend for
purposes of the dividend paid deduction.
28
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
TRUSTEES OFFICERS
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Richard H. Egdahl, M.D. President
Margaret B.W. Graham David D. Tripple, Executive
John W. Kendrick Vice President
Marguerite A. Piret John A. Carey, Vice President
David D. Tripple William H. Keough, Treasurer
Stephen K. West Joseph P. Barri, Secretary
John Winthrop
</TABLE>
INVESTMENT ADVISER
Pioneering Management Corporation
CUSTODIAN
Brown Brothers Harriman & Co.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
PRINCIPAL UNDERWRITER
Pioneer Funds Distributor, Inc.
LEGAL COUNSEL
Hale and Dorr LLP
SHAREOWNER SERVICES AND TRANSFER AGENT
Pioneering Services Corporation
29
<PAGE>
- -------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- -------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance of information.
YOU CAN 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
OR WRITE TO US:
Pioneering Service 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)
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT
FUND PROSPECTUS.
<TABLE>
<S> <C>
[PIONEER LOGO] PIONEER FUNDS DISTRIBUTOR, INC. 0297-3837
60 STATE STREET (C) PIONEER FUNDS DISTRIBUTOR, INC.
BOSTON, MASSACHUSETTS 02109 [LOGO] PRINTED ON RECYCLED PAPER
</TABLE>
