<PAGE>
[Pioneer logo]
Pioneer
Small Company
Fund
SEMIANNUAL REPORT
APRIL 30, 1996
<PAGE>
Dear Fellow Shareowner,
Welcome to this first report for Pioneer Small Company Fund, covering the
period from the Fund's inception on November 2, 1995, through April 30, 1996,
the mid-point of its first fiscal year. We introduced the Fund as a way for
investors to participate in the growth of small companies -- a segment of the
market we believe offers the potential for significant long-term
appreciation. Judging by the interest the Fund has already generated, it
appears many investors are as excited as we are about the opportunities
present in the small-capitalization market.
When we introduced Pioneer Small Company Fund, we decided to limit its size
by closing the Fund to new accounts after it reached approximately $300
million in assets. This reasonable size enables your management to most
effectively research and purchase stocks for the portfolio. As of April 30,
the Fund's assets were $328 million, in part reflecting the Fund's strong
performance and surpassing even our high expectations. As a result, we set
May 24, 1996, as the last day for investors to open new accounts in the Fund,
until further notice. (The closing has no effect on existing shareowners and
their accounts.) Once the Fund is fully invested, we may consider accepting
new accounts again for some limited period.
How Your Fund Performed
For the abbreviated period ended April 30, 1996, we are pleased to report the
following results for Pioneer Small Company Fund:
(bullet) Class A shares -- Net asset value rose to $12.71 per share on April
30, versus the opening net asset value of $10.00 on November 2,
1995. Your Fund achieved a total return of 27.37% based on net asset
value, and 20.05% based on public offering price, which reflects the
deduction of the maximum 5.75% sales charge. These figures assume
reinvestment at net asset value of the $0.023 per share dividend
paid in December 1995.
(bullet) Class B shares -- Net asset value rose to $12.69 per share on April
30, versus the opening net asset value of $10.00. Your Fund's
six-month total return was 27.10% assuming shares were held
throughout, 23.10% assuming shares were redeemed and the maximum 4%
contingent deferred sales charge was deducted at the end of the
period. These figures assume reinvestment of the $0.0165 per share
dividend paid in December 1995.
Pioneer Small Company Fund introduced Class C shares to investors on January
31, 1996. Since then, Class C shares achieved the following results:
(bullet) Net asset value was $12.69 per share on April 30, versus the opening
net asset value of $11.01 on January 31. Your Fund's total return
for the abbreviated period was 15.26% assuming shares were held
throughout, 14.26% assuming shares were redeemed on April 30 and the
1% contingent deferred sales charge deducted at the end of the
period.
Pioneer's Value Approach to Small-Cap Stocks
Pioneer Small Company Fund invests for long-term growth primarily through
companies with market capitalizations of less than $1 billion at the time
they're purchased for the portfolio. Your management employs a strict "value"
strategy for the Fund; we research companies on an individual basis and
invest only when we consider a stock's price to be low, or "undervalued,"
compared to the assets of the company. Specifically, we focus on key
financial attributes such as cash flows, quality of management, balance
sheets and earnings growth, as well as any major change or restructuring a
company may be undergoing.
Another aspect to our research is determining a target price and value for
each stock in the portfolio. When we buy a security, we set a specific price
that we believe reflects the company's true worth. The actual time it takes a
stock to reach our target is of little significance as long as it occurs
within our investment horizon. What is important is that once the stock
reaches our set price, we'll sell it unless there is a significant reason for
us to change our target. In our view, money management involves more than
research; it also requires the patience to hold -- and discipline to sell --
stocks. While not every stock in the portfolio will perform exactly the way
we expect, we think our methodology makes the most sense and will lead to
strong results over the long term.
- -----------------------
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.
<PAGE>
Investing in a Record-Setting Stock Market
When Pioneer Small Company Fund began on November 2, financial markets --
particularly the segments relating to large, popular companies -- were
hitting record levels. The impressive climb continued through April 30,
although volatility picked up as concerns about inflation, the stronger
economy and interest rates triggered significant price swings. Nonetheless,
by the end of the period companies of all sizes had joined in the march
upward. The Standard & Poor's 500 Index, an unmanaged measure of the overall
stock market, gained 13.75% for the period from November 2, 1995, through
April 30. Small companies as a group performed even better; the Russell 2000
Index, an unmanaged measure of small company stocks, closed the period with a
total return of 18.42%.
The figures recorded by the market indices only skim the surface of
performance. Your management does not get bogged down with how the overall
market, or even one segment, is faring. Instead, we focus on companies
one-by-one, pursuing individual opportunities within the smaller-
capitalization market. We are optimistic about the long-term prospects for
small company stocks since less public information is available about
emerging companies, and therefore many remain undiscovered or ignored by
"Wall Street." Your management's goal is to identify and invest in these
companies early on, to take advantage of the growth we think they ultimately
will realize. While small companies may be less liquid and subject to greater
short-term price fluctuations than large ones, over the long term we think
this particular segment of the market can offer impressive results.
As of April 30, your Fund's portfolio contained 87 securities, representing a
variety of industries. Of course, the huge inflow of assets into the Fund
during the short time frame created a high position in short-term cash
equivalents, totaling 31% at the period's end. We intend, of course, for the
Fund to be as fully invested as is practicable; however, we will not add an
issue to the portfolio until we have researched it thoroughly and believe it
offers real value. The Fund's cash level will decline as we continue our
analysis of small-sized companies.
Most of the stocks we selected during the period are emerging companies with
a new product or service, while some are companies that have undergone a
restructuring or transition to improve their competitive position. Some
examples include: Imclone Systems, a producer of anti-cancer materials;
Neose Technologies, a leader in carbohydrate chemistry; American Annuity
Group, which sells annuities to institutional investors such as school
employees; Crown Vantage, a maker of printer and package paper; and Tultex, a
producer of T-shirts and fleece goods. This broad assortment of companies
reflects the makeup of the overall portfolio. While the Fund's holdings may
not be popular or easily recognizable companies, our research shows them to
be valuable investments.
The following chart shows the Fund's portfolio, based on industry, at the
period's end.
[pie chart]
Sector Distribution
(Percentage of equity holdings as of April 30, 1996)
Consumer Non-Durables 31%
Technology 25%
Basic Industries 15%
Capital Goods 14%
Services 7%
Financial 5%
Consumer Durables 2%
Energy 1%
Looking Ahead
As we move forward in your Fund's first fiscal year, we will continue to
build the portfolio, taking care to secure good value in a period of
fast-moving stock prices. While the strong market has propelled stocks to new
heights, we think many companies don't justify their lofty prices. Our goal
is to uncover opportunities that will add value to the Fund, as well as give
shareowners a diversified way to take part in the intriguing small-cap
sector.
2
<PAGE>
In closing, we want to thank you again for your enthusiasm for Pioneer Small
Company Fund. We look forward to the opportunity to build a lasting and
rewarding investment with you. The following pages provide your Fund's
audited Schedule of Investments and financial statements as of April 30,
1996. If you have any questions about your investment in Pioneer Small
Company Fund, please contact your investment representative, or call Pioneer
at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Small Company Fund
3
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER SMALL COMPANY FUND--April 30, 1996
Shares Value
- ---------- ------------
COMMON STOCKS--68.6%
BASIC INDUSTRIES--10.2%
Chemicals--3.5%
459,400 DeSoto, Inc.*+ $ 2,469,275
168,000 Neose Technologies, Inc.* 3,675,000
134,100 Rexene Corp. 1,726,538
387,000 Specialty Chemical Resources, Inc.*+ 701,438
741,000 Uniroyal Technology Corp.*+ 2,593,500
----------
$11,165,751
----------
Containers--2.1%
57,500 Bway Corp.* $ 991,875
394,300 Sun Coast Industries, Inc.*+ 1,971,500
1,045,200 Zapata Corp.* 3,788,850
----------
$ 6,752,225
----------
Forest Products--1.7%
320,200 Crown Vantage, Inc.* $ 5,363,350
----------
Iron & Steel--2.9%
505,600 Kentucky Electric Steel, Inc.*+ $ 3,476,000
468,000 Proler International Corp.*+ 3,685,500
100,300 Quanex Corp. 2,206,600
----------
$ 9,368,100
----------
TOTAL BASIC INDUSTRIES $32,649,426
----------
CAPITAL GOODS--9.8%
Construction & Engineering--6.3%
112,000 EMCOR Group, Inc.* $ 1,596,000
217,156 Gilbert Associates, Inc. 2,714,450
840,100 Morgan Products, Ltd.*+ 4,620,550
53,400 Perini Corp.* 473,925
118,600 Ply-Gem Industries, Inc. 1,526,975
781,300 Tokheim Corp.*+ 8,105,988
117,900 Washington Construction Group, Inc.* 972,675
----------
$20,010,563
----------
Producer Goods--3.5%
60,000 Gleason Corp. $ 2,362,500
319,000 Lindberg Corp.+ 3,110,250
135,500 Samsonite Corp.* 2,506,750
235,000 Unit Instruments, Inc.+ 3,319,375
----------
$11,298,875
----------
TOTAL CAPITAL GOODS $31,309,438
----------
CONSUMER DURABLES--1.1%
Motor Vehicles--1.1%
130,000 APS Holding Corp. (Class A)* $ 2,372,500
163,900 TBC Corp.* 1,270,225
----------
TOTAL CONSUMER DURABLES $ 3,642,725
----------
CONSUMER NON-DURABLES--21.6%
Consumer Luxuries--1.2%
357,500 Bally Total Fitness Holding Corp.* $ 1,943,906
140,600 Sunbeam Corp., Inc. 1,950,825
----------
$ 3,894,731
----------
Home Products--1.0%
350,000 EKCO Group, Inc. $ 2,143,750
150,000 Royal Appliance Manufacturing Co.* 918,750
----------
$ 3,062,500
----------
Retail Food--0.8%
192,000 Buttrey Food & Drug Stores Co.* $ 1,416,000
98,200 Marsh Supermarkets, Inc. (Class B) 1,215,225
----------
$ 2,631,225
----------
Retail Non-Food--12.7%
390,000 Catherines Stores Corp.*+ $ 3,461,250
675,000 Charming Shoppes, Inc. 4,345,312
268,300 CML Group, Inc. 1,207,350
10,000 Damark International, Inc. (Class A)* 113,750
1,084,400 Drug Emporium, Inc.*+ 4,337,600
840,000 Grossman's Inc.* 1,312,500
215,000 Intelligent Electronics, Inc. 1,370,625
1,020,000 Inter-TAN, Inc.*+ 6,120,000
607,000 Jan Bell Marketing, Inc.* 2,086,562
749,000 Levitz Furniture, Inc.* 3,651,375
454,500 Phar-Mor, Inc.* 3,437,156
250,000 The Stride Rite Corp. 2,406,250
458,900 Wet Seal, Inc. (Class A)*+ 6,826,138
----------
$40,675,868
----------
Textiles/Clothes--5.9%
970,000 Chic by H.I.S., Inc.*+ $ 6,668,750
1,005,000 Farah, Inc.*+ 5,778,750
470,000 Hartmarx Corp.* 2,585,000
366,600 Oneita Industries, Inc.*+ 1,466,400
433,300 Tultex Corp.* 2,328,988
----------
$18,827,888
----------
TOTAL CONSUMER
NON-DURABLES $69,092,212
----------
ENERGY--0.5%
Oil Refining & Drilling--0.5%
400,000 Mesa, Inc.* $ 1,550,000
----------
TOTAL ENERGY $ 1,550,000
----------
FINANCIAL--3.4%
Insurance--3.4%
356,200 American Annuity Group, Inc. $ 4,452,500
300,000 Life USA Holding, Inc.* 2,737,500
207,600 Western National Corp. 3,762,750
----------
TOTAL FINANCIAL $10,952,750
----------
SERVICES--4.8%
Health & Personal Care--1.2%
145,000 Aequitron Medical, Inc.* $ 996,875
97,500 Impath, Inc.* 1,706,250
100,000 Physiometrix, Inc.* 1,225,000
----------
$ 3,928,125
----------
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER SMALL COMPANY FUND--April 30, 1996--Continued
Shares Value
- ---------- ------------
Hotel & Restaurant--0.2%
43,000 Vicorp Restaurants, Inc.* $ 602,000
----------
Pharmaceuticals--3.4%
60,000 Alexion Pharmaceuticals, Inc.* $ 532,500
445,000 Aronex Pharmaceuticals, Inc.* 2,670,000
399,000 ImClone Systems, Inc.* 5,336,625
200,000 La Jolla Pharmaceutical Co.* 1,700,000
130,000 Neurobiological Technologies, Inc.* 682,500
----------
$ 10,921,625
----------
TOTAL SERVICES $ 15,451,750
----------
TECHNOLOGY--17.2%
Business Machines--1.1%
136,800 Duplex Products Inc.* $ 1,641,600
140,000 Nashua Corp. 1,942,500
----------
$ 3,584,100
----------
Computer Services--5.7%
680,000 Apertus Technologies, Inc.* $ 3,272,500
22,500 Banctec, Inc.* 458,437
468,500 Dataflex Corp.*+ 1,581,188
125,000 Learmonth & Burchett Management Systems
Plc (Sponsored A.D.R.)* 734,375
696,500 NAI Technologies, Inc.*+ 2,263,625
15,500 Planning Sciences International Plc
(Sponsored A.D.R.)* 373,937
695,000 Southern Electronics Corp.*+ 3,561,875
30,000 Sykes Enterprises, Inc.* 1,065,000
200,000 Symantec Corp.* 3,225,000
295,000 Triad Systems Corp.* 1,733,125
----------
$ 18,269,062
----------
Electronics--8.7%
360,500 Acme Electric Corp.*+ $ 3,695,125
460,000 Ampex Corp. (Class A)* 3,852,500
150,000 Elsag Bailey Process Automation N.V.* 3,375,000
205,000 ESCO Electronics Corp.* 2,690,625
367,500 Information Storage Devices, Inc.* 3,904,687
196,000 MagneTek, Inc.* 2,058,000
135,000 Plasma & Materials Technologies, Inc.* 1,923,750
690,000 Signal Technology Corp.*+ 5,692,500
30,000 Sipex Corp.* 615,000
----------
$ 27,807,187
----------
Technology--1.7%
5,000 Broadway & Seymour, Inc.* $ 70,000
574,500 INTERLINQ Software Corp.*+ 2,369,812
174,400 Viewlogic Systems, Inc.* 2,398,000
41,400 Westinghouse Air Brake Co. 584,775
----------
$ 5,422,587
----------
TOTAL TECHNOLOGY $ 55,082,936
----------
TOTAL COMMON STOCKS
(Cost $184,825,006) $219,731,237
----------
Principal
Amount Value
- ---------- ------------
TEMPORARY CASH INVESTMENTS--31.4%
Commercial Paper--31.4%
$10,029,000 American Express Co., 5.27%, 5/8/96 $ 10,029,000
4,894,000 American General Co., 5.20%, 5/3/96 4,894,000
11,495,000 Chevron Credit Corp., 5.25%, 5/13/96 11,495,000
10,970,000 Commercial Credit Corp., 5.25%, 5/7/96 10,970,000
13,546,000 Exxon Asset Management Co., 5.24%,
5/10/96 13,546,000
12,184,000 Ford Motor Credit Co., 5.24%, 5/2/96 12,184,000
8,604,000 General Electric Capital Corp., 5.29%,
5/14/96 8,604,000
11,971,000 Household Finance Corp., 5.23%,
5/9/96 11,971,000
8,000,000 Norwest Financial Inc., 5.22%, 5/1/96 8,000,000
8,565,000 Prudential Funding Corp., 5.24%, 5/6/96 8,565,000
----------
TOTAL TEMPORARY
CASH INVESTMENTS
(Cost $100,258,000) $100,258,000
----------
TOTAL INVESTMENT IN
SECURITIES--100%
(Cost $285,083,006) (a) $319,989,237
==========
* Non-income producing security.
+ Investment held by the Fund representing 5% or more of the outstanding
voting stock of such company (see Note 6).
(a) At April 30, 1996, the net unrealized gain on investments based on cost
for federal income tax purposes of $285,083,006 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $38,595,539
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (3,689,308)
------------
Net unrealized gain $34,906,231
============
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended April 30, 1996 aggregated $201,427,649 and $21,328,450,
respectively.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PIONEER SMALL COMPANY FUND
BALANCE SHEET--April 30, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash investments of $100,258,000)
(cost $285,083,006; see Schedule of Investments and Notes 1 and 6) $319,989,237
Cash 156,818
Receivables--
Investment securities sold 1,105,712
Fund shares sold 16,613,448
Dividends and interest 116,079
Organizational costs--net (Note 1) 62,887
Other 19,885
------------
Total assets $338,064,066
------------
LIABILITIES:
Payables--
Investment securities purchased $ 9,794,074
Fund shares repurchased 132,918
Due to affiliates (Notes 2, 3 and 4) 406,787
Accrued expenses 172,821
------------
Total liabilities $ 10,506,600
------------
NET ASSETS:
Paid-in capital (Note 1) $288,106,468
Accumulated net investment loss (Note 1) (181,040)
Accumulated undistributed net realized gain on investments (Note 1) 4,725,807
Net unrealized gain on investments (Note 1) 34,906,231
------------
Total net assets $327,557,466
============
NET ASSET VALUE PER SHARE:
Class A--(based on $175,697,553/13,818,507 shares of beneficial interest outstanding--unlimited
number of shares authorized) $ 12.71
============
Class B--(based on $144,338,070/11,375,530 shares of beneficial interest outstanding--unlimited
number of shares authorized) $ 12.69
============
Class C--(based on $7,521,843/592,677 shares of beneficial interest outstanding--unlimited
number of shares authorized) $ 12.69
============
MAXIMUM OFFERING PRICE:
Class A $ 13.49
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER SMALL COMPANY FUND
STATEMENT OF OPERATIONS
For the Period from November 2, 1995
(Commencement of Operations) to April 30, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME (Note 1):
Dividends $ 126,012
Interest 1,282,804
-----------
Total investment income $ 1,408,816
-----------
EXPENSES:
Management fees (Note 2) $ 598,659
Distribution fees (Note 4)
Class A 102,953
Class B 288,986
Class C 5,768
Transfer agent fees (Note 3)
Class A 127,354
Class B 79,976
Class C 2,116
Registration fees 169,411
Custodian fees 24,608
Professional fees 21,268
Accounting (Note 2) 22,931
Printing 17,376
Organizational costs (Note 1) 31,027
Fees and expenses of nonaffiliated trustees 6,526
Miscellaneous 10,434
-----------
Total expenses $ 1,509,393
Less fees paid indirectly (Note 5) (42,020)
Less management fees waived by Pioneering Management Corporation (Note 2) (25,015)
-----------
Net expenses $ 1,442,358
-----------
Net investment loss $ (33,542)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments (Note 1) $ 4,725,807
Change in net unrealized gain on investments 34,906,231
Net gain on investments $39,632,038
-----------
Net increase in net assets resulting from operations $39,598,496
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PIONEER SMALL COMPANY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Period from November 2, 1995
(Commencement of Operations) to April 30, 1996
<TABLE>
<S> <C> <C>
From Operations:
Net investment loss $ (33,542)
Net realized gain on investments 4,725,807
Change in net unrealized gain on investments 34,906,231
-----------
Net increase in net assets resulting from operations $ 39,598,496
-----------
Distributions to Shareholders:
From net investment income
Class A ($0.02 per share) $ (100,653)
In excess of net investment income
Class B ($0.02 per share) (46,845)
-----------
Decrease in net assets resulting from distributions to shareholders $ (147,498)
-----------
From Fund Share Transactions:
Net proceeds from sale of shares $293,856,760
Net asset value of shares issued to shareholders in reinvestment of
distributions 128,846
Cost of shares repurchased (5,979,138)
-----------
Net increase in net assets resulting from fund share transactions $288,006,468
-----------
Net increase in net assets $327,457,466
Net Assets:
Beginning of period (initial capitalization--10,000 shares) $ 100,000
-----------
End of period (including accumulated net investment loss of $181,040) $327,557,466
===========
SHARES AMOUNT
--------- -----------
CLASS A
Shares sold 14,182,533 $157,326,721
Shares issued to shareholders in reinvestment of
distributions 8,423 89,951
Less shares repurchased (377,449) (4,287,346)
--------- -----------
Net increase 13,813,507 $153,129,326
========= ===========
CLASS B
Shares sold 11,517,358 $129,477,050
Shares issued to shareholders in reinvestment of
distributions 3,638 38,895
Less shares repurchased (150,466) (1,673,868)
--------- -----------
Net increase 11,370,530 $127,842,077
========= ===========
CLASS C*
Shares sold 594,175 $ 7,052,989
Shares issued to shareholders in reinvestment of
distributions -- --
Less shares repurchased (1,498) (17,924)
--------- -----------
Net increase 592,677 $ 7,035,065
========= ===========
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PIONEER SMALL COMPANY FUND
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Period Presented
<TABLE>
<CAPTION>
November 2,
1995
(Commencement
of Operations)
to
Class A April 30, 1996
--------------
<S> <C>
Net asset value, beginning of period $ 10.00
------------
Increase from investment operations:
Net investment income $ 0.02
Net realized and unrealized gain on investments 2.71
------------
Total increase from investment operations $ 2.73
Distribution to shareholders from:
Net investment income (0.02)
------------
Net increase in net asset value $ 2.71
------------
Net asset value, end of period $ 12.71
============
Total return* 27.37%
Ratio of net expenses to average net assets 1.79%**+
Ratio of net investment income to average net assets 0.22%**+
Portfolio turnover rate 39.37%**
Average commission rate paid per exchange listed transaction $ 0.0462
Net assets, end of period (in thousands) $175,698
Ratios assuming no waiver of management fees by PMC and no reduction for fees paid
indirectly:
Net expenses 1.82%**
Net investment income 0.19%**
Ratios assuming waiver of management fees by PMC and reduction for fees paid indirectly:
Net expenses 1.73%**
Net investment income 0.28%**
</TABLE>
+Ratios assuming no reduction for fees paid indirectly.
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PIONEER SMALL COMPANY FUND
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Period Presented (continued)
<TABLE>
<CAPTION>
November 2, 1995
(Commencement
of Operations) to
CLASS B April 30, 1996
------------------
<S> <C>
Net asset value, beginning of period $ 10.00
----------------
Increase from investment operations:
Net investment income $ --
Net realized and unrealized gain on investments 2.71
----------------
Total increase from investment operations $ 2.71
Distribution to shareholders:
In excess of net investment income $ (0.02)
----------------
Net increase in net asset value $ 2.69
----------------
Net asset value, end of period $ 12.69
================
Total return* 27.00%
Ratio of net expenses to average net assets 2.51%**+
Ratio of net investment loss to average net assets (0.55%)**+
Portfolio turnover rate 39.37%**
Average commission rate paid per exchange listed transaction $ 0.0462
Net assets, end of period (in thousands) $144,338
Ratios assuming no waiver of management fees expenses by PMC and no reduction for fees paid
indirectly:
Net expenses 2.54%**
Net investment loss (0.58%)**
Ratios assuming waiver of management fees by PMC and reduction for fees paid indirectly:
Net expenses 2.44%**
Net investment loss (0.48%)**
January 31,
1996 to
CLASS C*** April 30, 1996
----------------
Net asset value, beginning of period $ 11.01
----------------
Increase (decrease) from investment operations:
Net investment loss $ (0.01)
Net realized and unrealized gain on investments 1.69
----------------
Total increase from investment operations $ 1.68
----------------
Net asset value, end of period $ 12.69
================
Total return* 15.26%
Ratio of net expenses to average net assets 2.79%**+
Ratio of net investment loss to average net assets (1.19%)**+
Portfolio turnover rate 39.37%**
Average commission rate paid per exchange listed transaction $ 0.0462
Net assets, end of period (in thousands) $ 7,522
Ratios assuming reduction for fees paid indirectly:
Net expenses 2.70%**
Net investment loss (1.10%)**
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
*** Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS--April 30, 1996
1. Pioneer Small Company Fund (the Fund) is a Delaware business trust
registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The Fund was organized on August 8,
1995 and commenced operations on November 2, 1995. Prior to November 2, 1995,
the Fund had no operations other than those relating to organizational
matters and the initial capitalization of the Fund by The Pioneer Group, Inc.
(PGI). Effective May 24, 1996, and until further notice, the Fund was closed
to new investors. The investment objective of the Fund is to seek capital
appreciation by investing in a diversified portfolio of securities consisting
primarily of common stocks.
The Board of Trustees (the Trustees) has authorized the issuance of three
share classes of the Fund, designated as Class A, Class B and Class C shares.
Class A and B shares were first publicly offered on November 2, 1995. Class C
shares were first publicly offered on January 31, 1996. The shares of Class
A, Class B and Class C 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
Trustees. Temporary cash investments are valued at amortized cost. Dividend
income is recorded on the ex-dividend date and interest income is recorded
on the accrual basis.
Gains and losses from sales of investments are calculated on the
"identified cost" method for both financial reporting and federal income tax
purposes. It is the Fund's practice to first select for sale those
securities that have the highest cost and also qualify for long-term capital
gain or loss treatment for tax purposes.
B. Federal Income Taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and net realized
capital gains, if any, to its shareholders. Therefore, no federal income tax
provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
C. Fund Shares--The Fund records sales and repurchases of its shares on
trade date. Net losses, if any, as a result of cancellations, are absorbed
by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and an indirect wholly owned subsidiary of PGI. PFD earned $364,755 in
underwriting commissions on the sale of fund shares during the period ended
April 30, 1996. Distributions to shareholders are recorded as of the
ex-dividend date. Distributions paid by the Fund, if any, with respect to
each class of shares are calculated in the same manner, at the same time, on
the same day and in the same amount, except that Class A, Class B and Class
C shares bear different transfer agent and distribution fees.
D. Class Allocations--Distribution fees are calculated based on the average
daily net asset value attributable to Class A, Class B and Class C shares of
the Fund, respectively. Shareholders of each class share all expenses and
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
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.
E. Organization Costs--The costs incurred by the Fund in connection with
its organization have been deferred and are amortized on a straight-line
basis over a period of up to five years. If PGI redeems any of its initial
investment prior to the end of the amortization period, the redemption
proceeds will be decreased by the pro rata share of the unamortized expenses
as of the date of redemption.
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 0.85% of the
Fund's average daily net assets.
Until January 3, 1996, PMC had agreed not to impose a portion of its
management fee and to assume other operating expenses of the Fund to the
extent necessary to limit the Fund's expenses to 1.75% of average daily net
assets attributable to Class A shares; the portion of the Fund-wide expenses
attributable to Class B shares were reduced only to the extent that such
expenses were reduced for Class A shares.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in due to affiliates is $201,869 and $5,155 in
management fees and accounting fees, respectively, payable to PMC at April
30, 1996.
3. 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 $60,818 in transfer agent fees payable to PSC at April
30, 1996.
4. 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. 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
$138,945 in distribution fees payable to PFD at April 30, 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
certain net asset value purchases of Class A shares that are redeemed 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 period ended April 30, 1996,
CDSC in the amount of $18,258 was paid to PFD.
5. The Fund has entered into certain expense offset arrangements resulting in
a reduction in the Fund's total expenses. For the period ended April 30,
1996, the Fund's expenses were reduced by $42,020 under such arrangements.
6. The Fund primarily invests in smaller capitalized company securities that
tend to be more sensitive to changes in earnings expectations and have lower
trading volumes than mid- to large-capitalized company securities, and as a
result, they may experience more abrupt and erratic price movements. The
Fund's investment in these smaller capitalized 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 April 30, 1996:
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
Purchases Sales Dividend
Affiliates Cost Cost Income Value
- --------------------------------- ---------- ----- ------ -----------
<S> <C> <C> <C> <C>
Acme Electric Corp. $ 2,944,167 $ -- $ -- $ 3,695,125
Catherines Stores Corp. 3,461,250 -- -- 3,461,250
Chic by H.I.S., Inc. 4,607,500 -- -- 6,668,750
Dataflex Corp. 1,607,275 -- -- 1,581,188
DeSoto, Inc. 1,607,900 -- -- 2,469,275
Drug Emporium, Inc. 4,337,600 -- -- 4,337,600
Farah, Inc. 5,025,150 -- -- 5,778,750
Inter-TAN, Inc. 6,361,000 -- -- 6,120,000
INTERLINQ Software Corp. 1,795,313 -- -- 2,369,812
Kentucky Electric Steel, Inc. 4,124,950 -- -- 3,476,000
Lindberg Corp. 2,153,250 -- 22,330 3,110,250
Morgan Products, Ltd. 4,931,875 -- -- 4,620,550
NAI Technologies, Inc. 1,044,750 -- -- 2,263,625
Oneita Industries, Inc. 2,435,300 -- -- 1,466,400
Proler International Corp. 3,510,000 -- -- 3,685,500
Signal Technology Corp. 3,609,375 -- -- 5,692,500
Southern Electronics Corp. 3,313,750 -- -- 3,561,875
Specialty Chemical Resources,
Inc. 840,653 -- -- 701,438
Sun Coast Industries, Inc. 2,661,525 -- -- 1,971,500
Tokheim Corp. 5,585,755 -- -- 8,105,988
Uniroyal Technology Corp. 2,596,941 -- -- 2,593,500
Unit Instruments, Inc. 3,143,125 -- -- 3,319,375
Wet Seal, Inc. (Class A) 3,361,725 -- -- 6,826,138
-------- --- ---- ---------
$75,060,129 $ -- $22,330 $87,876,389
-------- --- ---- ---------
</TABLE>
13
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER SMALL COMPANY FUND:
We have audited the accompanying balance sheet of Pioneer Small Company
Fund, including the schedule of investments, as of April 30, 1996, and the
related statement of operations, the statement of changes in net assets and
the financial highlights for the period 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 audit.
We conducted our audit 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 April 30, 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 audit provides 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 Small Company Fund as of April 30, 1996, and the results of its
operations, the changes in its net assets and the financial highlights for
the period presented, in conformity with generally accepted accounting
principles.
Boston, Massachusetts ARTHUR ANDERSEN LLP
May 31, 1996
14
<PAGE>
PIONEER SMALL COMPANY FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WARREN J. ISABELLE, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B.W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
INVESTMENT ADVISER
PIONEERING MANAGEMENT
CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS
DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Please call Pioneer for information on:
Existing accounts, new accounts,
prospectuses, applications,
and service forms 1-800-225-6292
Fund yields and prices 1-800-225-4321
Toll-free fax 1-800-225-4240
Retirement plans 1-800-622-0176
Telecommunications Device for the
Deaf (TDD) 1-800-225-1997
When distributed to persons who are not shareowners of the Fund, this report
must be accompanied by an official prospectus, which discusses the
objectives, policies and other information about the Fund.
0696-3470
(c)Pioneer Funds Distributor, Inc.
