[PIONEER LOGO]
[PICTURE OF FALLING STAR]
HAPPY 70th BIRTHDAY
PIONEER FUND
SINCE 1928
---------------------------
SEMIANNUAL REPORT 6/30/98
<PAGE>
[PICTURE OF FALLING STAR]
HAPPY 70th BIRTHDAY
PIONEER FUND
SINCE 1928
TARGETING CLASSICS TODAY AND TOMORROW
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Letter from the Fund's Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 10
Financial Statements 18
Notes to Financial Statements 25
Report of Independent Public Accountants 30
Trustees, Officers and Service Providers 31
Retirement Plans From Pioneer 32
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 6/30/98
DEAR SHAREOWNER,
-----------------------------------------------------------------------------
Welcome to our report on Pioneer Fund's progress for the six months
ended June 30, 1998. On behalf of your investment team, I thank you
for your interest and the opportunity to comment on the happenings of
the Fund's 70th year.
The United States' economic news continued to be positive, propelling
domestic stock market indices to yet another series of record highs.
Large-company stocks - like those held by your Fund - were the big
winners as concerns about Asia's financial crisis drew investors
toward U.S. "blue chips." The fast-paced market was exhilarating and
rewarding. Even so, your portfolio management team has not lost sight
of the value style and precepts that have guided your Fund for 70
years. They still purchase a stock at a reasonable price, then give
it time to attain the full value careful research indicates. Their
goal is to provide a diversified portfolio and a long-term
perspective to help investors weather the short-term risks the market
may pose.
In the midst of our good fortune, it is with great sadness that I
report the death of Philip Carret at the age of 101. Mr. Carret, who
founded Pioneer Fund, was widely recognized as a founder of the value
style of investing used today at Pioneer and around the world. He
served for more than 50 years as portfolio manager of Pioneer Fund
and was Trustee Emeritus of Pioneer's family of mutual funds until
1996, when he retired at age 100. He was an uncommon man and an
inspiration we already miss.
I encourage you to read on to learn more about the most recent
chapter in Pioneer Fund's long and fruitful history. Please contact
your investment professional, or Pioneer at 1-800-225-6292, with
questions about the Fund.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 6/30/98
PORTFOLIO DIVERSIFICATION
-----------------------------------------------------------------------------
(As a percentage of total investment portfolio)
U.S. Common Stocks 92.0% [PIE CHART]
Depositary Receipts for
International Stocks 4.5%
International Common Stocks 2.4%
U.S. Preferred Stocks 0.8%
Short-Term Cash Equivalents 0.3%
SECTOR DISTRIBUTION
-----------------------------------------------------------------------------
(As a percentage of equity holdings)
Financial 23% [PIE CHART]
Healthcare 15%
Technology 14%
Consumer Cyclicals 13%
Communication Services 11%
Consumer Staples 8%
Basic Materials 5%
Capital Goods 5%
Energy 3%
Other 3%
10 LARGEST HOLDINGS
-----------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Schering-Plough Corp. 4.90% 6. Bristol-Myers Squibb Co. 1.69%
2. The Bank of New York Co., Inc. 2.28 7. SBC Communications, Inc. 1.67
3. Ford Motor Co. 2.17 8. T. Rowe Price Associates, Inc. 1.62
4. IBM Corp. 1.92 9. Novartis AG (A.D.R.) 1.59
5. National City Corp. 1.73 10. Bell Atlantic Corp. 1.57
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/98 CLASS A SHARES
SHARE PRICES AND DISTRIBUTIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/98 12/31/97
<S> <C> <C> <C>
$40.20 $34.95
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/97 - 6/30/98) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.120 - -
</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.
[CHART]
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1998)
<TABLE>
<CAPTION>
PUBLIC OFFERING
PERIOD VALUE PRICE
------ ----- ---------------
<S> <C> <C>
10 Years 15.67% 14.99%
5 Years 20.79 19.36
1 Year 31.88 24.28
</TABLE>
<TABLE>
<CAPTION>
PIONEER FUND* STAND & POOR'S 500 INDEX
------------- ------------------------
<S> <C>
9425 10000
10841 12044
11565 14018
12002 15054
13643 17065
15716 19381
16348 19658
19178 24768
22882 31191
30635 41993
40402 54628
</TABLE>
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 6/30/98 CLASS B SHARES
SHARE PRICES AND DISTRIBUTIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/98 12/31/97
<S> <C> <C> <C>
$40.21 $35.01
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/97 - 6/30/98) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
- - -
</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.
[CHART]
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1998)
<TABLE>
<CAPTION>
Period If Held If Redeemed*
------ ------- ------------
<S> <C> <C>
Life-of-Fund 31.60% 30.08%
(7/1/98)
1 Year 30.69 26.69
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of he period and assumes reinvestment of
distributions. The maximum CDSC of 4% declines over six years.
<TABLE>
<CAPTION>
Pioneer Fund Standard & Poor's 500 Index
------------ ---------------------------
<S> <C>
10000 10000
9504 9543
9761 9722
10212 10307
10391 10576
11199 11352
10991 11165
11602 11849
11744 11920
11235 11466
11826 12316
12625 12847
13253 13463
14302 14515
13595 13681
14473 14470
14057 13971
14853 14594
15079 14884
15329 15035
16229 16095
17056 16956
17082 17110
16794 16788
16919 17514
</TABLE>
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 6/30/98 CLASS C SHARES
SHARE PRICES AND DISTRIBUTIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/98 12/31/97
<S> <C> <C> <C>
$39.80 $34.66
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/97 - 6/30/98) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
- - -
</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.
[chart]
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1998)
<TABLE>
<CAPTION>
IF IF
PERIOD HELD REDEEMED*
------ ---- --------
<S> <C> <C>
Life-of-Fund 30.91% 30.91%
(7/1/98)
1 Year 30.68 30.68
</TABLE>
--------
* Assumes reinvestment of distributions, The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
<TABLE>
<CAPTION>
STANDARD & POORS
PIONEER FUND 500 INDEX
------------ ----------------
<S> <C>
10000 10000
9466 9543
9689 9722
10117 10307
10292 10576
11085 11352
11480 11849
11622 11920
11117 11466
11704 12136
12491 12847
13114 13463
14150 14515
13453 13681
14326 14470
13914 13971
14701 14594
14925 14884
15175 15035
16062 16095
16880 16956
16906 17110
16622 16788
17139 17514
</TABLE>
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 6/30/98
The first half of Pioneer Fund's fiscal year ended on June 30, 1998.
The U.S. economy marched ahead, even as financial chaos erupted in
other corners of the world. Stock market indexes rose in the U.S.,
reflecting investors' preference for the perceived stability of large
U.S. corporations. Pioneer Fund prospered in this environment.
The following discussion with John A. Carey, your Fund's portfolio
manager, provides a detailed account of the investment environment and
the strategies that affected your Fund's performance during the
reporting period. An investment professional for more than 20 years,
Mr. Carey oversees the team responsible for the daily management of
Pioneer Fund.
Q: WHAT WERE SOME OF THE THEMES, TRENDS AND DRIVERS IN THE STOCK
MARKET DURING THE FIRST SIX MONTHS OF 1998?
A: The stock market continued its advance, although the pace slowed
during the second quarter. Economic fundamentals in the United
States remained strong, which encouraged investors, but a
generally lower rate of earnings growth also generated caution.
Mergers and acquisitions continued at a brisk pace and involved
companies of all sizes. "Momentum investing" fueled volatility as
speculators reacted to companies' shifting near-term fortunes.
There was marked disparity in the performance and valuation of
large "blue-chip" company stocks and the stocks of small and
mid-sized businesses. The price-to-earnings multiples on a number
of Wall Street favorites rose to unusual heights. They became hard
to justify strictly in terms of the corporate outlooks. In the
background were financial rumbles from Japan, other Asian
countries and Russia. Quick resolution of those and other problems
appears unlikely, and that, too, sounded a cautionary note.
Q: DID PIONEER FUND'S POSITIONING HELP IT BENEFIT FROM THESE TRENDS?
A: Yes. We maintain a diversified portfolio of high-quality stocks
selling at valuations our research shows to be reasonable.
Generally, we focus on large U.S. companies, so the current
environment really worked in the Fund's favor.
6
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
Take mergers and acquisitions, for instance. Our value approach
frequently leads us to the same companies as bargain-hunting
corporate acquirers. Chrysler is combining with Germany's
Daimler-Benz; First Union has purchased Corestates Financial;
Mercantile Stores is to be bought by Dillard's Department Stores;
Washington Mutual is buying out H.F. Ahmanson; SBC Communications
and Ameritech have proposed a merger; and First Chicago NBD will
be folded into BancOne. As we write, Bell Atlantic and GTE are
looking toward yet another merger in the telecommunications
industry. It's not yet clear how these deals will work out, but we
believe the merger-and-acquisition trend will continue to work in
the Fund's favor.
Volatility also had an impact, especially when there were
unexpected earnings shortfalls, as in the case of some technology
stocks, including Hewlett-Packard and Compaq Computer. Even so,
we've been pleased that careful research has limited the number of
"blow ups" in the portfolio. Of course, we've also seen
exceptionally good appreciation when companies have exceeded
predicted results. Equitable, in the insurance industry, was just
one example. However, we watch carefully and sell when we believe
price-to-earnings ratios have moved to extreme highs.
Q: WHAT PORTFOLIO CHANGES DID YOU MAKE RECENTLY?
A: We added nine new positions and moved out of eight holdings in the
second quarter. The Fund also received shares of First Union in
exchange for Corestates Financial, which First Union bought, and
shares of Associates First Capital as a spin-off from Ford Motor.
New entries represent consumer electronics, pharmaceuticals,
banking and investment management, oil services, newspapers and
television broadcasting. In a contrarian move, we added two
Japanese consumer electronics companies - Sony and Canon - we
think are trading at extremely low prices given their market
leadership. In both cases the stocks were weak, we thought, more
as a result of the troubled Japanese market than because of the
fundamental prospects for the companies.
Smith Kline Beecham is an important name in pharmaceuticals,
trading at a relatively low price given its broad array of current
7
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/98 (CONTINUED)
drugs and other drugs in the pipeline. Zions Bancorporation, Mellon
Bank and Federated Investors expanded holdings in financial
services. In the advertising-based publishing and broadcasting
industries we added A.H. Belo and Hearst Argyle Television.
Television stocks have been driven down by concerns over
competition from cable, videotapes and the internet. In the
recently depressed field of oil services, we think Smith
International, a leader in drilling-related products, has a
promising longer-term outlook.
We sold Pfizer. It had registered big gains since it entered the
portfolio, but it became one of those "market darlings" whose
price seemed to reflect all the good news but few of the potential
risks. Other sales ran the gamut, from stocks that had made money
but that we thought could offer few additional gains (Dover and
Raytheon) to stocks with quite disappointing performance (Union
Pacific Resources, Seagate Technology and Sonat).
Q: DO YOU STILL MANAGE THE FUND FOR INCOME, AS WELL AS GROWTH?
A: Yes, absolutely, though it has been hard to grow income in recent
quarters. For some time, corporations have been directing earnings
to share buybacks rather than dividend increases, on the grounds
that the after-tax benefit to stockholders is greater. Dividends
are taxed at ordinary income-tax rates, and in some states may
even be taxed at a higher "unearned income" rate. We are not
altogether swayed by this argument and still think that paying
regular dividends is both a useful discipline for company
management and a source of regular cash flow for stockholders to
reinvest. Dividend income has also provided a buffer against price
volatility during choppy markets. In any event, we remain
committed to managing Pioneer Fund as a growth and income fund,
and are very proud to have paid a dividend to owners of Class A
Shares every year since 1928.
Q: ON MAY 28 THE FOUNDER OF PIONEER FUND, PHILIP L. CARRET, DIED AT
THE AGE OF 101. WHAT IS HIS LEGACY TO SHAREOWNERS?
A: Mr. Carret was a blessing and source of inspiration for us. As one
of the founders of the mutual fund industry, Mr. Carret was a true
pioneer in allowing the small investor, the average American, to
take part in our country's great economic success.
8
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
Mr. Carret's watchwords as an investor were optimism, caution and
patience. We believe that his simple precepts are as pertinent
today as they were in 1928. Even investing as he did through
depression, war, the nuclear arms race and many, many ups and
downs of the business cycle, Mr. Carret always looked beyond
temporary setbacks, invested positively and stayed invested for
long periods. Nevertheless, his "New England caution" demanded
proof of his theories and evidence for his conjectures. He placed
a high degree of importance on meeting management, and wanted to
know they were committed to improving value for stockholders. Once
he had convinced himself a stock was worth buying, his third
principle kicked in - patience. In all of these ways, Mr. Carret
laid the foundation of the "basic value" approach we still employ
today, on the brink of a new millennium.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND OVER THE REST OF THE YEAR?
A: I think corporate earnings will tell the tale. Much of the run in
stock prices has been due to the high profits across corporate
America. We see many economic studies, and most counsel investors
to expect lower profits over the next 12 months. If profits do
come down among the narrow collection of companies currently in
vogue with investors, it should create opportunities for a wide
range of very fine but obscure companies investors are generally
overlooking today. While some portfolio holdings are among the
current market darlings, there are many that fall into the second
group, giving the Fund good potential going forward, even after
its strong recent returns.
It would be well to keep in mind, we think, that fortune is a wheel
that turns. In investing, as in any pursuit, the momentum of
success sometimes produces the causes of failure. Like military
conquerors, investors can win so many battles and advance over so
much territory that they become overextended. With stocks, too,
weaknesses appear when prices are far above historical levels with
no clear and understandable link to the age-old measures of
value - earnings, book value or dividends. There is always the
possibility, of course, that we are in a new age, complete with
new rules. Even so, this era in the market probably still does,
and should, incorporate many familiar aspects of previous times.
We should be careful not to abandon experience.
9
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/98
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
INVESTMENT IN SECURITIES - 99.7%
PREFERRED STOCKS - 0.8%
916,600 Greif Brothers Corp. $ 34,257,925
60,000 The Rouse Co., $3.00 (Series B) (Convertible) 2,985,000
--------------
TOTAL PREFERRED STOCKS
(Cost $3,255,577) $ 37,242,925
--------------
COMMON STOCKS - 98.9%
BASIC MATERIALS - 5.1%
CHEMICALS - 3.2%
360,700 Bayer AG (A.D.R.) $ 18,576,050
105,898 Ciba Specialty Chemicals AG (A.D.R.) 6,777,472
255,000 The Dow Chemical Co. 24,655,312
958,000 E.I. du Pont de Nemours and Co. 71,490,750
195,000 Eastman Chemical Co. 12,138,750
659,451 Lilly Industries, Inc. 14,260,628
543,158 A. Schulman, Inc. 10,625,528
--------------
$ 158,524,490
--------------
IRON & STEEL - 0.5%
396,900 Nucor Corp. $ 18,257,400
452,400 Steel Dynamics, Inc.* 6,277,050
--------------
$ 24,534,450
--------------
METALS & MINING - 1.4%
369,000 Aluminum Company of America $ 24,330,938
300,000 Newmont Mining Corp. 7,087,500
647,900 Phelps Dodge Corp. 37,051,781
--------------
$ 68,470,219
--------------
TOTAL BASIC MATERIALS $ 251,529,159
--------------
CAPITAL GOODS - 5.1%
AEROSPACE/DEFENSE - 0.8%
362,500 Lockheed Martin Corp. $ 38,379,687
--------------
ELECTRICAL EQUIPMENT - 1.1%
445,800 Emerson Electric Co. $ 26,887,312
180,000 General Electric Co. 16,380,000
286,256 Hubbell, Inc. (Class B) 11,915,406
--------------
$ 55,182,718
--------------
</TABLE>
10
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
MACHINERY (DIVERSIFIED) - 1.7%
653,200 Caterpillar, Inc. $ 34,537,950
421,600 Deere & Co. 22,292,100
504,450 Ingersoll-Rand Co. 22,227,328
174,200 The Timken Co. 5,367,538
--------------
$ 84,424,916
--------------
MANUFACTURING (DIVERSIFIED) - 1.2%
416,100 Diebold, Inc. $ 12,014,888
355,800 Illinois Tool Works, Inc. 23,727,412
344,200 Johnson Controls, Inc. 19,640,913
--------------
$ 55,383,213
--------------
OFFICE EQUIPMENT & SUPPLIES - 0.3%
691,400 Canon Inc. (A.D.R.) $ 15,815,775
--------------
TOTAL CAPITAL GOODS $ 249,186,309
--------------
COMMUNICATIONS SERVICES - 10.6%
TELECOMMUNICATIONS - 1.5%
1,034,000 Sprint Corp. $ 72,897,000
--------------
TELEPHONE - 9.1%
754,400 Aliant Communications Co. $ 20,698,850
1,567,200 Ameritech Corp. 70,328,100
1,666,708 Bell Atlantic Corp. 76,043,552
1,129,800 BellSouth Corp. 75,837,825
1,360,900 GTE Corp. 75,700,063
2,033,202 SBC Communications, Inc. 81,328,080
939,351 U.S. West Inc. 44,149,497
--------------
$ 444,085,967
--------------
TOTAL COMMUNICATIONS SERVICES $ 516,982,967
--------------
CONSUMER CYCLICALS - 12.9%
AUTOMOBILES - 3.6%
1,203,600 Chrysler Corp. $ 67,852,950
1,785,000 Ford Motor Co. 105,315,000
--------------
$ 173,167,950
--------------
HOUSEHOLD FURN. & APPLIANCES - 0.6%
352,200 Sony Corp. (A.D.R.) $ 30,311,213
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/98 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
PUBLISHING - 2.5%
320,300 Central Newspapers, Inc. $ 22,340,925
873,600 John Wiley & Sons, Inc.+ 53,180,400
553,000 The McGraw-Hill Companies, Inc. 45,104,063
--------------
$ 120,625,388
--------------
RETAIL - 6.2%
1,380,000 Dayton Hudson Corp. $ 66,930,000
568,500 Harcourt General, Inc. 33,825,750
596,400 Kohl's Corp.* 30,938,250
723,100 The May Department Stores Co. 47,363,050
183,500 Mercantile Stores Co., Inc. 14,485,031
1,425,600 Walgreen Co. 58,895,100
826,000 Wal-Mart Stores, Inc. 50,179,500
--------------
$ 302,616,681
--------------
TOTAL CONSUMER CYCLICALS $ 626,721,232
--------------
CONSUMER STAPLES - 7.8%
BROADCASTING - 1.1%
381,900 Belo (A.H.) Corp. $ 9,308,813
1,403,000 CBS Corp. 44,545,250
14,900 Hearst-Argyle Television, Inc.* 596,000
--------------
$ 54,450,063
--------------
FOOD - 5.3%
429,600 BestFoods $ 24,943,650
263,300 Bush Boake Allen, Inc.* 7,717,981
1,204,000 ConAgra, Inc. 38,151,750
470,300 General Mills, Inc. 32,156,763
955,150 Heinz (H.J.) Co. 53,607,794
89,000 Nestle SA (A.D.R.) 9,523,000
765,000 PepsiCo, Inc. 31,508,438
665,000 Sara Lee Corp. 37,198,437
866,200 Sysco Corp. 22,196,375
--------------
$ 257,004,188
--------------
HOUSEHOLD PRODUCTS - 0.9%
509,300 Colgate-Palmolive Co. $ 44,818,400
--------------
</TABLE>
12
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
RESTAURANTS - 0.5%
320,000 McDonald's Corp. $ 22,080,000
--------------
TOTAL CONSUMER STAPLES $ 378,352,651
--------------
ENERGY - 3.1%
OIL & GAS - 2.3%
981,000 Amoco Corp. $ 40,834,125
480,500 Chevron Corp. 39,911,531
445,000 Exxon Corp. 31,734,063
--------------
$ 112,479,719
--------------
OIL & GAS (DRILLING & EQUIPMENT) - 0.8%
323,000 Schlumberger Ltd. $ 22,064,938
555,000 Smith International, Inc.* 19,320,938
--------------
$ 41,385,876
--------------
TOTAL ENERGY $ 153,865,595
--------------
FINANCIAL - 23.2%
BANKS - 7.3%
1,823,400 The Bank of New York Co., Inc. $ 110,657,587
267,100 Comerica, Inc. 17,695,375
335,132 First Chicago NBD Corp. 29,701,073
380,000 First Tennessee National Corp. 11,993,750
275,800 First Union Corp. 16,065,350
610,000 Huntington Bancshares, Inc. 20,435,000
143,300 Mellon Bank Corp. 9,977,262
1,182,324 National City Corp. 83,945,004
756,800 State Street Boston Corp. 52,597,600
--------------
$ 353,068,001
--------------
CONSUMER FINANCE - 0.3%
241,700 Countrywide Credit Industries, Inc. $ 12,266,275
--------------
FINANCIAL (DIVERSIFIED) - 3.6%
467,821 Associates First Capital Corp. $ 35,963,739
1,005,700 The Equitable Companies, Inc. 75,364,644
420,000 Federal National Mortgage Association 25,515,000
321,750 Morgan Stanley, Dean Witter, Discover & Co. 29,399,906
333,641 The Rouse Co. 10,488,839
--------------
$ 176,732,128
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/98 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
INSURANCE (LIFE/HEALTH) - 0.4%
396,400 ReliaStar Financial Corp. $ 19,027,200
--------------
INSURANCE (MULTI-LINE) - 0.8%
279,900 American International Group, Inc. $ 40,865,400
--------------
INSURANCE (PROPERTY-CASUAL) - 4.4%
746,000 Chubb Corp. $ 59,959,750
707,300 Exel Ltd. 55,036,781
483,400 Partnerre Ltd. 24,653,400
930,400 Safeco Corp. 42,275,050
773,200 The St. Paul Companies, Inc. 32,522,725
--------------
$ 214,447,706
--------------
INSURANCE BROKERS - 0.9%
729,000 Marsh & McLennan Co., Inc. $ 44,058,938
--------------
INVESTMENT BANKING/BROKERAGE - 3.0%
1,425,150 The Charles Schwab Corp. $ 46,317,375
676,000 Merrill Lynch & Co., Inc. 62,361,000
565,400 Paine Webber Group, Inc. 24,241,525
263,000 Zions Bancorporation 13,971,875
--------------
$ 146,891,775
--------------
INVESTMENT MANAGEMENT - 1.9%
775,000 Federated Investors, Inc.* $ 14,337,500
2,100,000 T. Rowe Price Associates, Inc. 78,881,250
--------------
$ 93,218,750
--------------
SAVINGS & LOAN COMPANIES - 0.6%
413,000 H.F. Ahmanson & Co. $ 29,323,000
--------------
TOTAL FINANCIAL $1,129,899,173
--------------
</TABLE>
14
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
HEALTHCARE - 15.2%
687,200 Abbott Laboratories $ 28,089,300
516,400 Becton, Dickinson & Co. 40,085,550
714,000 Bristol-Myers Squibb Co. 82,065,375
410,000 Eli Lilly & Co. 27,085,625
750,000 Johnson & Johnson 55,312,500
175,000 Merck & Co., Inc. 23,406,250
927,994 Novartis AG (A.D.R.) 77,255,500
3,898 Roche Holdings AG 38,341,617
2,596,400 Schering-Plough Corp. 237,895,150
908,000 Smithkline Beecham Plc (A.D.R.) 54,934,000
425,000 United Healthcare Corp. 26,987,500
712,500 Warner-Lambert Co. 49,429,687
--------------
TOTAL HEALTHCARE $ 740,888,054
--------------
TECHNOLOGY - 13.3%
COMMUNICATIONS EQUIPMENT - 2.6%
556,400 Harris Corp. $ 24,864,125
608,484 Lucent Technologies, Inc. 50,618,263
937,900 Motorola, Inc. 49,298,369
--------------
$ 124,780,757
--------------
COMPUTERS (HARDWARE) - 5.1%
1,790,000 Compaq Computer Corp. $ 50,791,250
940,000 Hewlett-Packard Co. 56,282,500
812,000 IBM Corp. 93,227,750
1,085,000 Sun Microsystems, Inc.* 47,129,687
--------------
$ 247,431,187
--------------
COMPUTERS (NETWORKING) - 0.0%
55,700 Teligent, Inc.* $ 1,639,669
--------------
COMPUTERS (SOFTWARE & SERVICES) - 1.7%
687,000 Aspen Technology, Inc.* $ 34,693,500
616,600 Computer Sciences Corp. 39,462,400
573,200 Indus International, Inc.* 6,878,400
--------------
$ 81,034,300
--------------
ELECTRONICS (DEFENSE) - 0.4%
444,000 General Motors Corp. (Class H) $ 20,923,500
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/98 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
ELECTRONICS (SEMICONDUCTORS) - 1.9%
170,000 Applied Materials, Inc.* $ 5,015,000
545,000 Intel Corp. 40,398,125
347,500 Taiwan Semiconductor Manufacturing Co., Ltd.
(A.D.R.)* 5,864,062
692,000 Texas Instruments, Inc. 40,352,250
--------------
$ 91,629,437
--------------
SERVICES (DATA PROCESSING) - 1.3%
408,600 Automatic Data Processing, Inc. $ 29,776,725
276,400 DST Systems, Inc.* 15,478,400
205,000 Electronic Data Systems Corp. 8,200,000
245,000 Fiserv, Inc.* 10,404,844
--------------
$ 63,859,969
--------------
PHOTOGRAPHY/IMAGING - 0.3%
229,100 Eastman Kodak Co. $ 16,738,619
--------------
TOTAL TECHNOLOGY $ 648,037,438
--------------
TRANSPORTATION - 1.0%
AIRLINES - 0.4%
161,454 Delta Air Lines, Inc. $ 20,867,929
--------------
RAILROAD - 0.6%
1,009,500 Norfolk Southern Corp. $ 30,095,719
--------------
TOTAL TRANSPORTATION $ 50,963,648
--------------
UTILITIES - 1.6%
ELECTRIC COMPANIES - 0.8%
1,125,100 Allegheny Power Systems, Inc. $ 33,893,637
418,900 DPL Inc. 7,592,562
--------------
$ 41,486,199
--------------
NATURAL GAS - 0.4%
575,650 Indiana Energy, Inc. $ 17,197,544
--------------
WATER UTILITY - 0.4%
552,600 American Water Works Co., Inc. $ 17,130,600
--------------
TOTAL UTILITIES $ 75,814,343
--------------
TOTAL COMMON STOCKS
(Cost $2,380,159,044) $4,822,240,569
--------------
TOTAL INVESTMENT IN SECURITIES
(Cost $2,383,414,621) $4,859,483,494
--------------
</TABLE>
16
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
TEMPORARY CASH INVESTMENT - 0.3%
COMMERCIAL PAPER - 0.3%
$16,420,000 Household Finance Corp., 6.05%, 7/01/98 $ 16,420,000
--------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $16,420,000) $ 16,420,000
--------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $2,399,834,621)(a) $4,875,903,494
--------------
</TABLE>
* Non-income producing security.
+ Investment held by the Fund representing 5% or more of the
outstanding voting stock of such company.
(a) At June 30, 1998, the net unrealized gain on investments based on
cost for federal income tax purposes of $2,399,834,621 was as
follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all
investments in which there is an excess of value
over tax cost $2,512,547,111
Aggregate gross unrealized loss for all
investments in which there is an excess of tax
cost over value (36,478,238)
--------------
Net unrealized gain $2,476,068,873
--------------
</TABLE>
Purchases and sales of securities (excluding temporary cash
investments) for the six months ended June 30, 1998 aggregated
$453,775,793 and $218,447,049, respectively.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
BALANCE SHEET 6/30/98
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary
cash investment of $16,420,000) (cost $2,399,834,621) $4,875,903,494
Cash 827
Receivables -
Investment securities sold 314,771
Fund shares sold 10,251,321
Dividends and interest 5,395,678
Other 50,502
--------------
Total assets $4,891,916,593
--------------
LIABILITIES:
Payables -
Investment securities purchased $ 3,800,472
Fund shares repurchased 2,991,555
Due to affiliates 6,089,718
Accrued expenses 256,297
--------------
Total liabilities $ 13,138,042
--------------
NET ASSETS:
Paid-in capital $2,304,223,176
Distributions in excess of net investment income (349,666)
Accumulated undistributed net realized gain on
investments 98,837,476
Net unrealized gain on investments 2,476,068,873
Net unrealized loss on other assets and liabilities
denominated in foreign currencies (1,308)
--------------
Total net assets $4,878,778,551
==============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $4,705,782,229/117,069,238 shares) $ 40.20
==============
Class B (based on $147,420,783/3,666,646 shares) $ 40.21
==============
Class C (based on $25,575,539/642,565 shares) $ 39.80
==============
MAXIMUM OFFERING PRICE:
Class A $ 42.65
==============
</TABLE>
18
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED 6/30/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld
of $257,081) $ 37,051,792
Interest 593,724
------------
Total investment income $ 37,645,516
------------
EXPENSES:
Management fees
Basic fee $ 13,458,386
Performance adjustment 1,502,391
Transfer agent fees
Class A 3,867,186
Class B 123,301
Class C 18,498
Distribution fees
Class A 4,428,301
Class B 481,024
Class C 76,449
Accounting 80,533
Custodian fees 108,434
Registration fees 96,462
Professional fees 48,905
Printing 55,275
Fees and expenses of nonaffiliated trustees 24,432
Miscellaneous 51,661
------------
Total expenses $ 24,421,238
Less fees paid indirectly (68,558)
------------
Net expenses $ 24,352,680
------------
Net investment income $ 13,292,836
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments $ 98,838,511
Other assets and liabilities denominated
in foreign currencies (1,035) $ 98,837,476
------------ ------------
Change in net unrealized gain from:
Investments $517,407,807
Other assets and liabilities denominated
in foreign currencies (1,308) $517,406,499
------------ ------------
Net gain on investments $616,243,975
------------
Net increase in net assets resulting
from operations $629,536,811
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED 6/30/98 AND THE YEAR ENDED 12/31/97
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
FROM OPERATIONS: 6/30/98 12/31/97
<S> <C> <C>
Net investment income $ 13,292,836 $ 32,704,339
Net realized gain on investments 98,837,476 208,300,236
Change in net unrealized gain on investments 517,406,499 877,438,631
-------------- --------------
Net increase in net assets resulting
from operations $ 629,536,811 $1,118,443,206
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ($0.12 and $0.31 per share, respectively) $ (13,906,932) $ (33,233,565)
Class B ($0.00 and $0.11 per share, respectively) - (71,137)
Class C ($0.00 and $0.09 per share, respectively) - (8,434)
Net realized gain:
Class A ($0.00 and $1.90 per share, respectively) - (205,353,843)
Class B ($0.00 and $1.90 per share, respectively) - (2,591,421)
Class C ($0.00 and $1.90 per share, respectively) - (374,276)
-------------- --------------
Total distributions to shareholders $ (13,906,932) $ (241,632,676)
-------------- --------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 483,225,248 $ 416,679,617
Reinvestment of distributions 12,439,287 219,460,826
Cost of shares repurchased (285,512,370) (367,396,230)
-------------- --------------
Net increase in net assets resulting from
fund share transactions $ 210,152,165 $ 268,744,213
-------------- --------------
Net increase in net assets $ 825,782,044 $1,145,554,743
NET ASSETS:
Beginning of period 4,052,996,507 2,907,441,764
-------------- --------------
End of period (including (distributions in excess of)/
accumulated undistributed net investment income of
$(349,666) and $264,430, respectively) $4,878,778,551 $4,052,996,507
============== ==============
</TABLE>
20
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
'98 SHARES '98 AMOUNT '97 SHARES '97 AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold 9,698,459 $ 372,467,461 11,315,545 $ 364,028,984
Reinvestment of distributions 316,506 12,439,287 6,379,337 216,673,889
Less shares repurchased (7,152,190) (273,109,600) (11,203,914) (356,282,237)
---------- ------------- ----------- -------------
Net increase 2,862,775 $ 111,797,148 6,490,968 $ 224,420,636
========== ============= =========== =============
CLASS B
Shares sold 2,403,067 $ 92,491,147 1,335,573 $ 43,838,902
Reinvestment of distributions - - 73,049 2,502,926
Less shares repurchased (250,637) (9,677,035) (225,262) (7,543,016)
---------- ------------- ----------- -------------
Net increase 2,152,430 $ 82,814,112 1,183,360 $ 38,798,812
========== ============= =========== =============
CLASS C
Shares sold 476,231 $ 18,266,640 271,638 $ 8,811,731
Reinvestment of distributions - - 8,373 284,011
Less shares repurchased (72,020) (2,725,735) (110,127) (3,570,977)
---------- ------------- ----------- -------------
Net increase 404,211 $ 15,540,905 169,884 $ 5,524,765
========== ============= =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/98
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CLASS A 6/30/98 12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.95 $ 26.89 $ 24.36 $ 21.32 $ 23.25 $ 21.51
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) from investment
operations:
Net investment income $ 0.12 $ 0.30 $ 0.37 $ 0.49 $ 0.49 $ 0.47
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 5.25 9.97 4.35 5.13 (0.63) 2.57
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) from investment
operations $ 5.37 $ 10.27 $ 4.72 $ 5.62 $ (0.14) $ 3.04
Distributions to shareholders:
Net investment income (0.12) (0.31) (0.37) (0.49) (0.49) (0.47)
Net realized gain - (1.90) (1.82) (2.09) (1.30) (0.83)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 5.25 $ 8.06 $ 2.53 $ 3.04 $ (1.93) $ 1.74
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 40.20 $ 34.95 $ 26.89 $ 24.36 $ 21.32 $ 23.25
========== ========== ========== ========== ========== ==========
Total return* 15.37% 38.47% 19.70% 26.64% (0.57)% 14.23%
Ratio of net expenses to average net assets 1.07%**+ 1.03%+ 1.01%+ 0.95%+ 0.94% 0.95%
Ratio of net investment income to average net
assets 0.61%**+ 0.93%+ 1.40%+ 2.01%+ 2.13% 2.04%
Portfolio turnover rate 10%** 17% 25% 31% 20% 12%
Net assets, end of period (in thousands) $4,705,782 $3,991,726 $2,896,670 $2,466,098 $2,011,051 $2,042,945
Ratios assuming reduction for fees paid
indirectly:
Net expenses 1.06%** 1.02% 0.99% 0.94% - -
Net investment income 0.62%** 0.94% 1.42% 2.02% - -
</TABLE>
* 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/98
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED 7/1/96 TO
CLASS B 6/30/98(a) 12/31/97(a) 12/31/96(a)
<S> <C> <C> <C>
Net asset value, beginning of
period $ 35.01 $ 27.02 $26.40
-------- ------- ------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.05) $ 0.01 $ 0.07
Net realized and unrealized gain
on investments and foreign
currency transactions 5.25 9.99 2.50
-------- ------- ------
Net increase from investment
operations $ 5.20 $ 10.00 $ 2.57
Distributions to shareholders:
Net investment income - (0.11) (0.07)
In excess of net investment
income - - (0.06)
Net realized gain - (1.90) (1.82)
-------- ------- ------
Net increase in net asset value $ 5.20 $ 7.99 $ 0.62
-------- ------- ------
Net asset value, end of period $ 40.21 $ 35.01 $27.02
-------- ------- ------
Total return* 14.85% 37.19% 9.92%
Ratio of net expenses to average
net assets 1.94%**+ 1.92%+ 1.82%**+
Ratio of net investment income
(loss) to average net assets (0.28)%**+ (0.02)%+ 0.46%**+
Portfolio turnover rate 10%** 17% 25%
Net assets, end of period (in
thousands) $147,421 $53,010 $8,940
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.94%** 1.88% 1.80%**
Net investment income (loss) (0.28)%** 0.02% 0.48%**
</TABLE>
<TABLE>
<S> <C>
(a) 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.
+ Ratio assuming no reduction for fees paid indirectly.
</TABLE>
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/98
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED 7/1/96 TO
CLASS C 6/30/98(a) 12/31/97(a) 12/31/96(a)
<S> <C> <C> <C>
Net asset value, beginning of period $ 34.66 $ 26.74 $ 26.40
------- ------- -------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.05) $ 0.02 $ 0.03
Net realized and unrealized gain
on investments and foreign
currency transactions 5.19 9.89 2.23
------- ------- -------
Net increase from investment
operations $ 5.14 $ 9.91 $ 2.26
Distributions to shareholders:
Net investment income - (0.09) (0.03)
In excess of net investment income - - (0.07)
Net realized gain - (1.90) (1.82)
------- ------- -------
Net increase in net asset value $ 5.14 $ 7.92 $ 0.34
------- ------- -------
Net asset value, end of period $ 39.80 $ 34.66 $ 26.74
------- ------- -------
Total return* 14.83% 37.25% 8.74%
Ratio of net expenses to average net
assets 1.93%**+ 1.87%+ 2.11%**+
Ratio of net investment income (loss)
to average net assets (0.27)%**+ 0.02%+ 0.20%**+
Portfolio turnover rate 10%** 17% 25%
Net assets, end of period (in
thousands) $25,576 $ 8,261 $ 1,831
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.92%** 1.83% 2.08%**
Net investment income (loss) (0.26)%** 0.06% 0.23%**
</TABLE>
<TABLE>
<S> <C>
(a) 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.
+ Ratio assuming no reduction for fees paid indirectly.
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/98
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Fund (the Fund) is a Delaware business trust registered under
the Investment Company Act of 1940 as a diversified, open-end
management investment company. The investment objectives of the Fund
are reasonable income and growth of capital.
The Fund offers three classes of shares - Class A, Class B and Class C
shares. Shares of Class A, Class B and Class C each represent an
interest in the same portfolio of investments of the Fund and have
equal rights to voting, redemptions, dividends and liquidation, except
that each class of shares can bear different transfer agent and
distribution fees and has 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.
25
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/98 (CONTINUED)
Gains and losses on sales of investments are calculated on the
identified cost method for both financial reporting and federal
income tax purposes. It is the Fund's practice to first select for
sale those securities that have the highest cost and also qualify
for long-term capital gain or loss treatment for tax purposes.
B. 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.
26
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
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
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter
for the Fund and an indirect subsidiary of The Pioneer Group, Inc.
(PGI). PFD earned $1,429,067 in underwriting commissions on the
sale of fund shares during the six months ended June 30, 1998.
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 P0.10% based on
the Fund's investment performance as compared with the Lipper Growth &
Income Funds index. For the six months ended June 30, 1998, the
aggregate performance adjustment resulted in an increase to management
fees of $1,502,391. For the six months ended June 30, 1998, the
management fee was equivalent to 0.67% of average daily net assets.
27
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/98 (CONTINUED)
In addition, under the management agreement, certain other services
and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At June 30, 1998, $2,802,480 was
payable to PMC related to management fees and certain other services.
3. TRANSFER AGENT
PSC, a wholly owned subsidiary of PGI, provides substantially all
transfer agent and shareholder services to the Fund at negotiated
rates. Included in due to affiliates is $827,300 in transfer agent
fees payable to PSC at June 30, 1998.
4. DISTRIBUTION PLANS
The Fund adopted a Plan of Distribution for each class of shares
(Class A Plan, Class B Plan and Class C Plan) in accordance with Rule
12b-1 of the Investment Company Act of 1940. Pursuant to the Class A
Plan, the Fund pays PFD a service fee of up to 0.25% of the Fund's
average daily net assets in reimbursement of its actual expenditures
to finance activities primarily intended to result in the sale of
Class A shares. On qualifying investments made prior to August 19,
1991, the Class A Plan provides for reimbursement of such expenditures
in an amount not to exceed 0.15%. Pursuant to the Class B Plan and the
Class C Plan, the Fund pays PFD 1.00% of the average daily net assets
attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for
personal services and/or account maintenance services or distribution
services with regard to Class B and Class C shares. Included in due to
affiliates is $2,459,938 in distribution fees payable to PFD at June
30, 1998.
In addition, redemptions of each class of shares may be subject to a
contingent deferred sales charge (CDSC). A CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A
shares within one year of purchase. Class B shares that are redeemed
within six years of purchase are subject to a CDSC at declining rates
beginning at 4.0%, based on the lower of cost or market value of
shares being redeemed. Redemptions of Class C shares within one year
of purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs
are paid to PFD. For the six months ended June 30, 1998, CDSCs in the
amount of $61,319 were paid to PFD.
28
<PAGE>
PIONEER FUND
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5. EXPENSE OFFSETS
The Fund has entered into certain directed brokerage and expense
offset arrangements resulting in a reduction in the Fund's total
expenses. For the six months ended June 30, 1998, the Fund's expenses
were reduced by $68,558 under such arrangements.
6. LINE OF CREDIT FACILITY
Effective April 14, 1998, the Fund along with certain other funds in
the Pioneer Family of Funds (the "Funds"), collectively participate in
a $50 million committed, unsecured revolving line of credit facility.
Borrowings are used solely for temporary or emergency purposes. The
Fund may borrow up to the lesser of $50 million or the limits set by
its prospectus for borrowings. Interest on collective borrowings of up
to $25 million is payable at the Federal Funds Rate plus 3/8% on an
annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowing exceeds $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated
among such Funds based on their respective borrowing limits. For the
period ended June 30, 1998, the Fund had no borrowings under this
agreement.
7. AFFILIATED COMPANIES
The Fund's investments in certain companies 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 June 30, 1998:
[CHART]
<TABLE>
<CAPTION>
Dividend
Affiliates Purchase Sales Income Value
---------- -------- ----- -------- -----
<S> <C> <C> <C> <C>
John Willey & Sons, Inc. -- -- $98,280 $53,180,400
</TABLE>
29
<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 of Pioneer Fund,
including the schedule of investments, as of June 30, 1998, and the
related statement of operations, the statements of changes in net
assets, and the financial highlights for the periods presented. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of June
30, 1998, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Pioneer Fund as of June 30, 1998, the results
of its operations, the changes in its net assets, and the financial
highlights for the periods presented, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 7, 1998
30
<PAGE>
PIONEER FUND
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
<TABLE>
<S> <C>
TRUSTEES OFFICERS
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice
Margaret B.W. Graham President
John W. Kendrick John A. Carey, Vice President
Marguerite A. Piret William H. Keough, Treasurer
David D. Tripple Joseph P. Barri, Secretary
Stephen K. West
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
31
<PAGE>
- --------------------------------------------------------------------------------
RETIREMENT PLANS FROM PIONEER
Pioneer offers retirement plans suited to the individual investor and
businesses of all sizes. For information, contact your investment
professional, or call Pioneer at 1-800-622-0176.
INDIVIDUAL PLANS
INDIVIDUAL RETIREMENT ACCOUNT (IRA) The $2,000 maximum annual
contribution may be tax-deductible; earnings are tax-deferred.
ROTH IRA
ROTH IRA New in 1998, $2,000 maximum annual contribution are not
tax-deductible. Earnings are tax-free for qualified withdrawals.
PLANS FOR SMALL BUSINESSES OR THE SELF-EMPLOYED
SIMPLE (SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES)
IRA OR 401(k) PLAN For firms with 100 or fewer employees.
Employees can make pre-tax contributions of up to $6,000 annually,
and an employer contribution is required.
SIMPLIFIED EMPLOYEE PENSION PLAN (SEP) Self-employed people and
small-business owners can make tax-deductible contributions of up to
15% of their income.
EMPLOYER-SPONSORED PLANS
401(k) PLAN Allows employees to make pre-tax contributions. Also
allows for employer contributions.
403(b) PLAN Lets employees of tax-exempt organizations set aside part
of their salary, before taxes, through payroll deduction.
PROFIT SHARING PLAN Employers contribute on a discretionary basis,
usually based on profits.
AGE-WEIGHTED PROFIT SHARING PLAN Employer makes discretionary
contributions based on employees' age and salary.
MONEY PURCHASE PENSION PLAN (MPP) Employers contribute based on a
fixed formula.
Most retirement plan withdrawals must meet specific conditions to
avoid penalties.
32
<PAGE>
[GRAPHIC DEPICTING STARS]
<PAGE>
[PICTURE OF FALLING STAR]
HAPPY 70th BIRTHDAY
PIONEER FUND
SINCE 1928
TARGETING CLASSICS TODAY AND TOMORROW
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us
for assistance or information.
CALL US FOR:
ACCOUNT INFORMATION, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FACTFONE(SM) for Automated fund yields, prices,
account information and transactions 1-800-225-4321
RETIREMENT PLANS INFORMATION 1-800-622-0176
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) 1-800-225-1997
WRITE TO US:
Pioneering Services Corporation
60 State Steet
Boston, Massachusetts 02109
TOLL-FREE FAX 1-800-225-4240
OUR INTERNET E-MAIL ADDRESS [email protected]
(for general questions about Pioneer only)
VISIT OUR WEB SITE WWW.PIONEERFUNDS.COM:
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT FUND PROSPECTUS.
Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
[PIONEER LOGO] PIONEER FUNDS DISTRIBUTOR, INC.
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
WWW. PIONEERFUNDS.COM
0898-5433
(C) PIONEER FUNDS DISTRIBUTOR, INC.
[RECYCLE SYMBOL] PRINTED ON RECYCLED PAPER
