[Pioneer logo]
Pioneer
Small Company
Fund
SEMIANNUAL REPORT 4/30/97
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 15
Notes to Financial Statements 21
Report of Independent Public Accountants 26
Trustees, Officers and Service Providers 27
Programs and Services for Pioneer Shareowners 28
</TABLE>
<PAGE>
Pioneer Small Company Fund
LETTER FROM THE CHAIRMAN 4/30/97
Dear Shareowner,
- ----------------------------------------------------------------------------
Welcome to Pioneer Small Company Fund's semiannual report, covering the six
months ended April 30, 1997. I thank you for your interest, and for the
opportunity to comment briefly on the Fund and today's investing environment.
This was a busy period for your Fund's investment team. Todd Grady shifted into
the role of portfolio manager on January 24 of this year, after serving as the
Fund's assistant portfolio manager since its inception. Mr. Grady now has
responsibility for the day-to-day management of the Fund, and remains one of
the 10 or so members of the special equities team that researches and selects
investments in our hallmark "aggressive value" style. I encourage you to read
the Portfolio Management Discussion that appears later in this report to learn
more about their continuing endeavors on your behalf.
As for the stock market, the trends that fueled a record year in 1996 continued
with only a few brief pauses. Money poured into financial markets; over the
past six months, over $250 billion entered the stock market through mutual
funds alone. The bulk of the assets, however, have been directed toward one
type of stock - that of large, familiar companies. As time passes, it seems
realistic to expect the stock market's unprecedented surge to slow or even
backtrack - at least for the relatively narrow group of stocks that have led
the charge. On the surface, this may not appear to be an encouraging outlook,
but it could actually be the best possible news for investors in funds, like
Pioneer Small Company Fund, that have not fully participated in the new
enthusiasm for stock investing.
Thank you for your support. Please contact your investment professional, or us
at 1-800-225-6292, if you have questions about Pioneer Small Company Fund.
Respectfully,
[Signature of John F. Cogan, Jr.]
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Small Company Fund
PORTFOLIO SUMMARY 4/30/97
P o r t f o l i o D i v e r s i f i c a t i o n
- ----------------------------------------------------------------------------
(As a percentage of total investment portfolio)
U.S. Common Stocks 90%
Short-Term Cash Equivalents 5%
International Common Stocks 3%
Depositary Receipts for International Stocks 1%
Convertible Securities 1%
S e c t o r D i s t r i b u t i o n
- ----------------------------------------------------------------------------
(As a percentage of equity holdings)
Consumer Non-Durables 28%
Technology 28%
Services 14%
Basic Industries 12%
Capital Goods 10%
Financial Services 6%
Consumer Durables 1%
Energy 1%
1 0 L a r g e s t H o l d i n g s
- ----------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<S> <C> <C> <C>
1. American Annuity Group, Inc. 3.02% 6. Maple Leaf Foods, Inc. 2.28%
2. Zapata Corp. 2.86 7. Ply-Gem Industries, Inc. 2.23
3. Catalytica, Inc. 2.71 8. Integrated Circuit Systems, Inc. 2.09
4. Viewlogic Systems, Inc. 2.56 9. Charming Shoppes, Inc. 2.07
5. Morrison Knudsen Corp. 2.49 10. Anacomp, Inc. 2.03
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Small Company Fund
PERFORMANCE UPDATE 4/30/97 CLASS A SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 4/30/97 10/31/96
$12.10 $12.66
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 4/30/97) Dividends Capital Gains Capital Gains
- $0.911 -
</TABLE>
I n v e s t m e n t R e t u r n s
- ----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Small Company Fund at public offering price, compared to the growth
of the Russell 2000 Index.
<TABLE>
<S> <C> <C>
Average Annual Total Returns
(As of April 30, 1997)
Net Public
Asset Offering
Period Value Price*
Life-of-Fund 19.40% 14.75%
(11/2/95)
1 Year 2.24 -3.67
</TABLE>
* Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset
value.
Growth of $10,000+
Pioneer Small
Company Fund* Russell 2000 Index
11/30/95 9425 10000
9592 10264
1/96 9860 10327
10129 10572
10505 10791
4/96 11383 11364
12046 11812
11598 11327
7/96 10908 10338
11222 10938
11490 11366
10/96 11338 11190
11777 11651
11908 11957
1/97 12600 12196
12677 11900
12110 11339
4/97 11638 11370
+ Index comparison begins 11/30/95. The Russell 2000 Index is an unmanaged
measure of the 2,000 smallest stocks, based on capitalization, in the Russell
3000 Index. Stocks in the Index trade on the New York Stock Exchange, American
Stock Exchange and NASDAQ. Index return are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
charges or expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost. 3
<PAGE>
Pioneer Small Company Fund
PERFORMANCE UPDATE 4/30/97 CLASS B SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 4/30/97 10/31/96
$11.97 $12.59
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 4/30/97) Dividends Capital Gains Capital Gains
- $0.911 -
</TABLE>
I n v e s t m e n t R e t u r n s
- ----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Small Company Fund, compared to the growth of the Russell 2000 Index.
<TABLE>
<S> <C> <C>
Average Annual Total Returns
(As of April 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 18.53% 16.04%
(11/2/95)
1 Year 1.44 -2.34
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
Growth of $10,000+
Pioneer Small
Company Fund* Russell 2000 Index
11/30/95 10000 10000
10158 10264
1/96 10442 10327
10717 10572
11106 10791
4/96 12026 11364
12728 11812
12244 11327
7/96 11504 10338
11827 10938
12111 11366
10/96 11941 11190
12387 11651
12515 11957
1/97 13238 12196
13310 11900
12708 11339
4/97 12199 11370
+ Index comparison begains 11/30/95. The Russell 2000 Index is an unmanaged
measure of the 2,000 smallest stocks, based on capitalization, in the Russell
300 Index. Stocks in the Index trade on the New York Stock Exchange, American
Stock Exchange and NASDAQ. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
charges or expenses. You cannot investment directly in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
4
<PAGE>
Pioneer Small Company Fund
PERFORMANCE UPDATE 4/30/97 CLASS C SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 4/30/97 10/31/96
$11.98 $12.59
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 4/30/97) Dividends Capital Gains Capital Gains
- $0.911 -
</TABLE>
I n v e s t m e n t R e t u r n s
- ----------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Small Company Fund, compared to the growth of the Russell 2000 Index.
<TABLE>
<S> <C> <C>
Average Annual Total Returns
(As of April 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 13.32% 13.32%
(1/31/96)
1 Year 1.44 1.44
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to investments sold within one year of purchase.
Growth of $10,000
Pioneer Small
Company Fund* Russell 2000 Index
1/31/96 10000 10000
10263 10238
10636 10449
4/96 11526 11005
12189 11438
11726 10969
7/96 11026 10010
11326 10592
11599 11006
10/96 11435 10836
11871 11282
11985 11578
1/97 12687 11810
12746 11523
12170 10979
4/97 11692 11010
The Russell 2000 Index is an unmanaged measure of the 2,000 smallest stocks,
based on capitalization, in the Russell 3000 Index. Stocks in the Index trade
on the New York Stock Exchange, American Stock Exchange and NASDAQ. Index
returns are calculated monthly, assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, charges or expenses. You cannot invest
directly in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
<PAGE>
Pioneer Small Company Fund
PORTFOLIO MANAGEMENT DISCUSSION 4/30/97
Dear Shareowner,
- ----------------------------------------------------------------------------
Pioneer Small Company Fund reached the midpoint of its fiscal year on April 30,
1997, a date that also marked the close of my first full fiscal quarter as your
Fund's lead portfolio manager. On behalf of the entire special equities team
that researches and selects investments for your Fund's portfolio, I'm pleased
to update you on our efforts.
Stocks of Large Companies Continued Strong Advance
Early in the semiannual period, stocks of small companies enjoyed a brief
resurgence in popularity. But that was not the case over the most recent three
months. Then, investors returned to the trend of directing their money to a
relatively small number of large, well-known "blue-chip" companies. This often
occurs when investors get nervous - they are willing to pay a premium for
liquidity (the ability to get in or out of a stock position quickly), and for
the comfort of a well-known brand-name, such as Coca-Cola.
Such periods of high prices among a relatively small number of stocks rarely
last long, however. We expect that either their prices will decline, or the
rest of the stock market will catch up. In the meantime, it has been
frustrating for those who invest in smaller, lesser-known companies. Even so,
we are pleased to note that the Fund outperformed the small-cap market overall,
as represented by the Russell 2000 Index. Class A Shares posted a six-month
return of 2.65%, Class B Shares 2.16% and Class C Shares 2.25%, all at net
asset value. The table below illustrates the difference in total returns of
stocks of varying size.
Stock Market Returns
<TABLE>
<CAPTION>
3 Months 3 Months 6 Months
10/31/96- 1/31/97- 10/31/96-
Index 1/31/97 4/30/97 4/30/97
- ------------------------------------ ----------- ---------- ----------
<S> <C> <C> <C>
Dow Jones Industrial Average 13.60% 3.40% 17.46%
(30 large-company stocks)
Standard & Poor's 500 Index 12.04% 2.42% 14.75%
(500 largest-capitalization stocks)
Russell 2000 Index 8.98% -6.77% 1.61%
(small-company stocks)
Nasdaq Composite Index 12.96% -8.63% 3.21%
(nearly 6,000 smaller, over-the-counter stocks)
</TABLE>
6
<PAGE>
Pioneer Small Company Fund
A Fully Invested Portfolio, an "Aggressive Value" Strategy
Realizing, as always, that the quirks of the stock market are beyond our
control, we devoted our time to the areas where we do have influence. One major
focus was to deploy the Fund's cash position so that the portfolio became, and
remains, fully invested. We accomplished this goal early in the period,
November to be precise. At the end of April, just 5% of the Fund's portfolio
was invested in short-term cash-equivalents, an amount we believe allows the
right mix of market participation and liquidity.
Companies we choose for the portfolio bear the hallmarks of our "aggressive
value" investment style - they're out of favor and selling at relatively low
prices, but have strong cash flows, strong market shares, solid balance sheets
and proactive management. Typically, their leadership has a significant
personal stake in the company's equity, and often either the company or
management has recently bought shares. We continue to look at stock investing
as if we were buying the entire business.
This approach means we typically avoid crowds. We prefer to find unique
opportunities offered by lesser-known, often complicated or misunderstood
enterprises. A variety of well-valued companies were added to the portfolio
over the past six months, including Massachusetts-based technology enterprises
ViewLogic Systems, Symantec, Segue and Banyan Systems.
Other additions spanned a range of industries. Zapata is an oil manufacturer;
Bally Fitness Holding is a spin-off from Bally Entertainment and offers the
same aggressive management team that brought the parent company success.
American Annuity Group provides an alternative to certificates of deposit (CDs)
for customers of small banks and credit unions. MagnaTek, a manufacturer of
industrial electronic components and fixtures, is a turnaround situation, with
new management focused on cutting costs and boosting profits. Stride Rite is
another turnaround scenario, and we think it is starting to look like a
potential takeover candidate. Even though its price fell, we added to holdings
in Transmedia Network (issuer of restaurant discount cards), because of its
leading position, lack of debt and strong management.
7
<PAGE>
Pioneer Small Company Fund
PORTFOLIO MANAGEMENT DISCUSSION 4/30/97 (continued)
We also sold stocks. We closed the position in Symantec and Segue when they
quickly reached our target prices. In the biotechnology sector, we reduced
holdings to reduce portfolio volatility. For example, the Fund now owns about
half as much ImClone as it did earlier in the period. As a group, "biotech" is
now about 5% of equity holdings.
Looking Ahead
Moving further into the fiscal year, we believe Pioneer Small Company Fund is
on the right track. As we saw early on, the Fund's holdings have the ability to
post nice gains when investors turn their attention to small stocks. And our
emphasis on value means we try to buy stocks near their "lows," meaning they're
likely to decline less than expensive stocks, even in a down market.
While it is too early to tell how recent investments will develop - and one can
never predict how the overall stock market will behave - we will continue to
work with diligence and discipline in the same aggressive value style we
believe will work in shareowners' long-term best interest. We are convinced
this approach has the potential for significant rewards, in exchange for taking
on some risk, and are excited about the Fund's prospects. On behalf of the
entire special equities team, thank you for your support.
Respectfully,
[Signature of Todd Grady]
Todd Grady,
Portfolio Manager
8
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 4/30/97
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INVESTMENT IN SECURITIES - 94.7%
Convertible Preferred Stock - 0.6%
383,922 Mesa Inc., 8.0%, Series A $ 2,447,503
-----------
Total Convertible Preferred Stock
(Cost $1,448,596) $ 2,447,503
-----------
Common Stocks - 94.1%
Basic Industries - 10.9%
Chemicals - 0.9%
387,000 Specialty Chemical Resources, Inc.*+ $ 653,063
1,314,000 Uniroyal Technology Corp.*+ 3,120,750
-----------
$ 3,773,813
-----------
Containers - 4.6%
284,000 BWay Corp.* $ 5,857,500
436,700 Interlake Corp.* 1,583,038
394,300 Sun Coast Industries, Inc.*+ 788,600
2,874,700 Zapata Corp.*+ 11,858,138
-----------
$20,087,276
-----------
Forest Products - 0.9%
700,200 Crown Vantage, Inc.*+ $ 4,113,675
-----------
Iron & Steel - 1.9%
166,000 Armco, Inc.* $ 581,000
505,600 Kentucky Electric Steel, Inc.*+ 2,401,600
320,547 Keystone Consolidated Industries, Inc.* 2,884,924
100,300 Quanex Corp. 2,532,575
-----------
$ 8,400,099
-----------
Pollution/Waste - 2.6%
1,601,000 Catalytica, Inc.*+ $11,207,000
-----------
Total Basic Industries $47,581,863
-----------
Capital Goods - 9.8%
Construction & Engineering - 5.8%
47,000 EMCOR Group, Inc.* $ 669,750
377,556 Gilbert Associates, Inc.+ 5,002,617
825,900 Morrison Knudsen Corp.* 10,323,750
726,000 Ply-Gem Industries, Inc.+ 9,256,500
-----------
$25,252,617
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 4/30/97 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Producer Goods - 4.0%
366,000 Ferrofluidics Corp.*+ $ 2,379,000
122,000 Gleason Corp. 3,949,750
87,500 Haskel International, Inc. 798,438
787,500 Tokheim Corp.*+ 6,693,750
210,500 Trikon Technologies, Inc.* 1,420,875
295,000 Unit Instruments, Inc.*+ 2,286,250
-----------
$17,528,063
-----------
Total Capital Goods $42,780,680
-----------
Consumer Durables - 1.1%
Durables - 1.0%
423,000 River Oaks Furniture, Inc.*+ $ 846,000
519,600 Royal Appliance Manufacturing Co.* 3,572,250
-----------
$ 4,418,250
-----------
Motor Vehicles - 0.1%
238,900 Dorsey Trailers, Inc.* $ 447,937
-----------
Total Consumer Durables $ 4,866,187
-----------
Consumer Non-Durables - 26.4%
Agriculture & Food - 0.4%
110,000 Alico, Inc. $ 2,007,500
-----------
Consumer Luxuries - 1.6%
1,146,900 Bally Total Fitness Holding Corp.*+ $ 6,809,719
-----------
Home Products - 1.2%
1,091,000 EKCO Group, Inc.+ $ 5,182,250
-------------
Retail Food - 3.9%
546,500 Buttrey Food & Drug Stores Co.*+ $ 4,303,688
1,087,600 Maple Leaf Foods, Inc. 9,459,084
150,000 Suprema Specialities, Inc.* 553,125
301,575 WLR Foods, Inc. 2,789,569
-----------
$17,105,466
-----------
Retail Non - Food - 11.1%
590,000 Catherines Stores Corp.*+ $ 2,802,500
1,451,500 Charming Shoppes, Inc.* 8,572,994
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Retail Non - Food - (continued)
1,107,300 Drug Emporium, Inc.*+ $ 4,567,612
969,000 Dylex Limited* 3,988,368
1,090,000 InterTAN, Inc.*+ 4,087,500
2,433,000 Jan Bell Marketing, Inc.*+ 5,474,250
576,500 Lechters, Inc.* 1,873,625
749,000 Levitz Furniture, Inc.* 1,872,500
1,199,200 Phar-Mor, Inc.*+ 5,996,000
481,800 The Stride Rite Corp. 6,624,750
657,400 Transmedia Network Inc.+ 2,547,425
------------
$ 48,407,524
------------
Soft Drinks - 1.0%
933,000 Pepsi-Cola Puerto Rico Bottling Co. (Class B)+ $ 4,548,375
------------
Textiles/Clothes - 7.2%
511,600 Angelica Corp.+ $ 8,057,700
920,000 Chic by H.I.S., Inc.*+ 5,980,000
690,000 Donnkenny, Inc.* 2,458,125
589,000 Marisa Christina, Inc.*+ 5,742,750
391,000 Norton McNaughton, Inc.*+ 2,150,500
1,066,500 Tultex Corp.* 6,932,250
------------
$ 31,321,325
------------
Total Consumer Non-Durables $115,382,159
------------
Energy - 1.2%
Oil Refining & Drilling - 1.2%
575,000 Arakis Energy Corp.* $ 2,156,250
600,000 Mesa, Inc.* 3,075,000
------------
Total Energy $ 5,231,250
------------
Financial - 5.2%
Insurance - 5.2%
747,400 American Annuity Group, Inc. $ 12,518,950
491,900 Life USA Holding, Inc.* 5,103,462
207,600 Western National Corp. 5,345,700
------------
Total Financial $ 22,968,112
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 4/30/97 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Services - 13.6%
Broadcasting & Media - 2.9%
680,620 Anacomp, Inc.*+ $ 8,422,672
532,000 National Media Corporation* 4,256,000
------------
$ 12,678,672
------------
Health & Personal Care - 4.2%
1,072,000 BioWhittaker, Inc.*+ $ 8,308,000
611,400 Summit Care Corporation Association*+ 8,253,900
120,000 Urologix, Inc.* 1,950,000
------------
$ 18,511,900
------------
Hotel & Restaurant - 1.1%
629,700 Darden Restaurants $ 4,880,175
------------
Pharmaceuticals - 5.4%
500,000 Alexion Pharmaceuticals, Inc.*+ $ 4,375,000
830,000 Anergen Inc.* 1,971,250
217,500 Aradigm Corp.* 1,522,500
571,500 Aronex Pharmaceuticals, Inc.* 2,857,500
429,000 ImClone Systems, Inc.* 2,198,625
168,200 Magellan Health Services, Inc.* 4,415,250
416,500 Molecular Biosystems, Inc.* 2,759,312
175,000 Neurobiological Technologies, Inc.* 284,375
87,500 Neurocrine Biosciences, Inc.* 645,312
870,000 Targeted Genetics Corp.* 2,392,500
------------
$ 23,421,624
------------
Total Services $ 59,492,371
------------
Technology - 25.8%
Business Machines - 2.6%
1,363,900 Amtech Corp.*+ $ 6,393,281
461,700 Nashua Corp.*+ 5,251,837
------------
$ 11,645,118
------------
Computer Services - 12.3%
1,100,000 Apertus Technologies, Inc.*+ $ 1,340,680
575,500 Banyan Systems, Inc.* 701,419
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Computer Services - (continued)
741,600 Broadway & Seymour, Inc.*+ $ 8,343,000
367,500 Creative Computers, Inc.* 1,929,375
224,100 Crosscom Corp.* 1,764,787
423,500 Dataflex Corp.*+ 1,349,906
574,500 INTERLINQ Software Corp.*+ 2,369,812
1,417,500 Learmonth & Burchett Management Systems Plc
(Sponsored A.D.R.)*+ 5,847,188
538,000 Mercury Interactive Corp.* 6,590,500
854,000 Meridian Data, Inc.*+ 3,095,750
400,000 Progress Software Corp.* 6,600,000
758,000 Viewlogic Systems, Inc.* 10,612,000
718,000 Work Group Technology Corp.*+ 3,186,125
------------
$ 53,730,542
------------
Electronics - 10.9%
500,500 Acme Electric Corp.*+ $ 3,315,813
49,100 Elsag Bailey Process Automation N.V.* 687,400
330,000 ESCO Electronics Corp. 3,258,750
895,000 Information Storage Devices, Inc.*+ 6,265,000
534,700 Instron Corp.+ 6,215,888
630,000 Integrated Circuit Systems, Inc.*+ 8,662,500
452,100 MagneTek, Inc.* 7,572,675
579,000 NAI Technologies, Inc.*+ 2,931,188
673,600 Signal Technology Corp.*+ 4,631,000
125,000 Teradyne, Inc.* 4,093,750
------------
$ 47,633,964
------------
Total Technology $113,009,624
------------
Transportation - 0.1%
Air Transport - 0.1%
49,000 First Aviation Services, Inc.* $ 416,500
------------
Total Transportation $ 416,500
------------
Total Common Stocks
(Cost $409,425,572) $411,728,746
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $410,874,168) $414,176,249
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 4/30/97 (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
TEMPORARY CASH INVESTMENTS - 5.3%
Commercial Paper - 5.3%
$10,313,000 American Express Co., 5.50%, 5/1/97 $ 10,313,000
13,213,000 Ford Motor Credit Co., 5.51%, 5/2/97 13,213,000
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $23,526,000) $ 23,526,000
------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS - 100%
(Cost $434,400,168) (a) $437,702,249
------------
</TABLE>
* Non-income producing security.
+ Investments held by the Fund representing 5% or more of the outstanding
voting stock of such company.
(a) At April 30, 1997, the net unrealized gain on investments based on cost for
federal income tax purposes of $434,400,168 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 60,426,250
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (57,124,169)
------------
Net unrealized gain $ 3,302,081
------------
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended April 30, 1997, aggregated $119,982,779 and $112,783,675,
respectively.
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
BALANCE SHEET 4/30/97
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investment in securities (including temporary cash investments of
$23,526,000) (cost $434,400,168) $437,702,249
Cash 669
Receivables -
Investment securities sold 6,322,976
Fund shares sold 542,136
Dividends and interest 30,363
Organizational costs - net 34,511
Other 3,311
------------
Total assets $444,636,215
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 661,373
Due to affiliates 686,631
Accrued expenses 38,057
------------
Total liabilities $ 1,386,061
------------
NET ASSETS:
Paid-in capital $430,993,968
Accumulated net investment loss (3,181,306)
Accumulated undistributed net realized gain 12,135,411
Net unrealized gain on investments 3,302,081
------------
Total net assets $443,250,154
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $211,082,365/17,448,650 shares) $ 12.10
------------
Class B (based on $216,960,783/18,118,277 shares) $ 11.97
------------
Class C (based on $15,207,006/1,269,603 shares) $ 11.98
------------
MAXIMUM OFFERING PRICE:
Class A $ 12.84
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Small Company Fund
STATEMENT OF OPERATIONS
For the Six Months Ended 4/30/97
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $9,504) $ 746,459
Interest 532,677
-----------
Total investment income $ 1,279,136
------------
EXPENSES:
Management fees $2,038,366
Transfer agent fees
Class A 374,658
Class B 308,055
Class C 22,082
Distribution fees
Class A 277,995
Class B 1,145,420
Class C 84,851
Accounting 52,695
Custodian fees 38,978
Registration fees 90,270
Professional fees 17,447
Printing 2,470
Organizational costs 4,856
Fees and expenses of nonaffiliated trustees 6,568
Miscellaneous 20,400
-----------
Total expenses $ 4,485,111
Less fees paid indirectly (17,001)
------------
Net expenses $ 4,468,110
------------
Net investment loss $ (3,188,974)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 12,150,183
Change in net unrealized gain on investments 4,068,646
------------
Net gain on investments $ 16,218,829
------------
Net increase in net assets resulting from operations $ 13,029,855
------------
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months ended 4/30/97 and the Period ended 10/31/96
<TABLE>
<CAPTION>
Six Months
Ended Period Ended
4/30/97 10/31/96
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (3,188,974) $ 6,664
Net realized gain on investments 12,150,183 32,601,127
Change in net unrealized gain (loss) on investments 4,068,646 (766,565)
------------- ------------
Net increase in net assets resulting from operations $ 13,029,855 $ 31,841,226
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A ($0.00 and $0.02 per share, respectively) $ - $ (100,661)
In excess of net investment income:
Class B ($0.00 and $0.02 per share, respectively) - (46,730)
Net realized gain:
Class A ($0.91 and $0.00 per share, respectively) (15,757,971) -
Class B ($0.91 and $0.00 per share, respectively) (15,659,376) -
Class C ($0.91 and $0.00 per share, respectively) (1,198,552) -
------------- ------------
Total distributions to shareholders $ (32,615,899) $ (147,391)
------------- ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 51,136,472 $477,488,754
Reinvestment of distributions 28,220,389 128,843
Cost of shares repurchased (72,277,905) (53,654,190)
------------- ------------
Net increase in net assets resulting from fund
share transactions $ 7,078,956 $423,963,407
------------- ------------
Net increase (decrease) in net assets $ (12,507,088) $455,657,242
NET ASSETS:
Beginning of period 455,757,242 100,000
------------- ------------
End of period (including accumulated net investment
income (loss) of $(3,181,306) and $7,668,
respectively) $ 443,250,154 $455,757,242
------------- ------------
</TABLE>
<TABLE>
<CAPTION>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
<S> <C> <C> <C> <C>
Shares sold 2,703,086 $ 34,294,604 20,658,247 $241,718,453
Reinvestment of distributions 1,162,084 14,305,252 8,422 89,948
Less shares repurchased (3,919,093) (50,705,875) (3,169,096) (39,772,964)
----------- ------------ ----------- ------------
Net increase (decrease) (53,923) $ (2,106,019) 17,497,573 $202,035,437
----------- ------------ ----------- ------------
CLASS B
Shares sold 1,241,306 $ 15,738,383 18,263,829 $217,591,111
Reinvestment of distributions 1,067,469 13,044,470 3,639 38,895
Less shares repurchased (1,456,462) (18,690,668) (1,006,504) (12,485,791)
----------- ------------ ----------- ------------
Net increase 852,313 $ 10,092,185 17,260,964 $205,144,215
----------- ------------ ----------- ------------
CLASS C*
Shares sold 86,893 $ 1,103,485 1,445,032 $ 18,179,190
Reinvestment of distributions 71,249 870,667 - -
Less shares repurchased (223,574) (2,881,362) (109,997) (1,395,435)
----------- ------------ ----------- ------------
Net increase (decrease) (65,432) $ (907,210) 1,335,035 $ 16,783,755
----------- ------------ ----------- ------------
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 4/30/97
For the Six Months ended 4/30/97 and the Period ended 10/31/96
<TABLE>
<CAPTION>
Six Months 11/2/95
Ended to
4/30/97 10/31/96
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 12.66 $ 10.00
-------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.06) 0.05
Net realized and unrealized gain on investments 0.41 2.63
-------- --------
Net increase from investment operations $ 0.35 $ 2.68
Distributions to shareholders:
Net investment income - (0.02)
Net realized gain (0.91) -
-------- --------
Net increase (decrease) in net asset value $ (0.56) $ 2.66
-------- --------
Net asset value, end of period $ 12.10 $ 12.66
-------- --------
Total return* 2.65% 26.87%
Ratio of net expenses to average net assets 1.51%**+ 1.54%**+
Ratio of net investment income (loss) to average net assets (0.97)%**+ 0.34%**+
Portfolio turnover rate 51%** 43%**
Average commission rate paid (1) $ 0.0479 $ 0.0471
Net assets, end of period (in thousands) $211,082 $221,601
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for fees
paid indirectly:
Net expenses - 1.55%**
Net investment income - 0.33%**
Ratios assuming waiver of management fees and assumption
of expenses by PMC and reduction for fees paid indirectly:
Net expenses 1.50%** 1.51%**
Net investment income (loss) (0.96)%** 0.37%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed security transactions.
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 4/30/97
<TABLE>
<CAPTION>
Six Months 11/2/95
Ended to
4/30/97 10/31/96
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 12.59 $ 10.00
-------- --------
Increase (decrease) from investment operations:
Net investment loss $ (0.11) (0.01)
Net realized and unrealized gain on investments 0.40 2.62
-------- --------
Net increase from investment operations $ 0.29 $ 2.61
Distributions to shareholders:
In excess of net investment income - (0.02)
Net realized gain (0.91) -
-------- --------
Net increase (decrease) in net asset value $ (0.62) $ 2.59
-------- --------
Net asset value, end of period $ 11.97 $ 12.59
-------- --------
Total return* 2.16% 26.09%
Ratio of net expenses to average net assets 2.22%**+ 2.26%**+
Ratio of net investment loss to average net assets (1.68)%**+ (0.42)%**+
Portfolio turnover rate 51%** 43%**
Average commission rate paid (1) $ 0.0479 $ 0.0471
Net assets, end of period (in thousands) $216,961 $217,346
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for fees
paid indirectly:
Net expenses - 2.27%**
Net investment loss - (0.43)%**
Ratios assuming waiver of management fees and assumption
of expenses by PMC and reduction for fees paid indirectly:
Net expenses 2.21%** 2.23%**
Net investment loss (1.67)%** (0.39)%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed security transactions.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 4/30/97
<TABLE>
<CAPTION>
Six Months 1/31/96
Ended to
4/30/97 10/31/96
<S> <C> <C>
CLASS C
Net asset value, beginning of period $ 12.59 $ 11.01
------- --------
Increase (decrease) from investment operations:
Net investment loss $ (0.11) $ (0.03)
Net realized and unrealized gain on investments 0.41 1.61
------- --------
Net increase from investment operations $ 0.30 $ 1.58
Distributions to shareholders:
Net realized gain (0.91) -
------- --------
Net increase (decrease) in net asset value $ (0.61) $ 1.58
------- --------
Net asset value, end of period $ 11.98 $ 12.59
------- --------
Total return* 2.25% 14.35%
Ratio of net expenses to average net assets 2.21%**+ 2.25%**+
Ratio of net investment loss to average net assets (1.67)%**+ (0.45)%**+
Portfolio turnover rate 51%** 43%**
Average commission rate paid (1) $0.0479 $ 0.0471
Net assets, end of period (in thousands) $15,207 $ 16,811
Ratios assuming reduction for fees paid indirectly:
Net expenses 2.20%** 2.21%**
Net investment loss (1.66)%** (0.41)%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share on the Fund's
exchange listed security transactions.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 4/30/97
1. Organization and Significant Accounting Policies
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. 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.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Shares of Class A, Class B and Class C each represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class
A, Class B and Class C shareholders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Each day, securities are
valued at the last sale price on the principal exchange where they are
traded. Securities that have not traded on the date of valuation, or
securities for which sale prices are not generally reported, are valued at
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. Dividend
income is recorded on the ex-dividend date and interest income is recorded
on the accrual basis. Temporary cash investments are valued at amortized
cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities
21
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 4/30/97 (continued)
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.
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 subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $65,940 in
underwriting commissions on the sale of fund shares during the six months
ended April 30, 1997.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expense (see Note 3).
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning
of the day.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different transfer
agent and distribution fees.
E. Deferred 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 Pioneering Management Corporation (PMC) 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. The pro rata share
22
<PAGE>
Pioneer Small Company Fund
is derived by dividing the number of original shares redeemed by the total
number of original shares outstanding at the time of redemption.
2. Management Agreement
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.
In addition, under the management agreement, certain other services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. At April 30, 1997, $325,716 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 $120,682 in transfer agent fees payable to PSC at April 30,
1997.
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. 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 $240,233 in distribution fees payable to PFD at April 30,
1997.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of
purchase. Class B shares that are redeemed within six years of purchase are
subject to a CDSC at declining rates beginning at 4.0%, based on the lower of
cost or market value of shares being redeemed. Redemptions of Class C shares
within one year of purchase are subject to a CDSC of 1.00%. Proceeds from the
CDSC are paid to PFD. For
23
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 4/30/97 (continued)
the six months ended April 30, 1997, CDSCs in the amount of $358,534 were paid
to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended April 30,
1997, the Fund's expenses were reduced by $17,001 under such arrangements.
6. Affiliated Companies
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, 1997:
<TABLE>
<CAPTION>
Dividend
Affiliates Purchases Sales Income Value
- ----------------------------------- ----------- ----------- --------- -------------
<S> <C> <C> <C> <C>
Acme Electric Corp. $ -- $ -- $ -- $ 3,315,813
Alexion Pharmaceuticals, Inc. 836,253 -- -- 4,375,000
Amtech Corp. 8,012,913 -- -- 6,393,281
Angelica Corp. 5,769,718 55,044 247,200 8,057,700
Apertus Technologies, Inc. -- 402,799 -- 1,340,680
Bally Total Fitness Holding Corp. -- -- -- 6,809,719
BioWhittaker, Inc. 7,638,000 -- -- 8,308,000
Broadway & Seymour, Inc. -- -- -- 8,343,000
Buttrey Food & Drug Stores Co. -- -- -- 4,303,688
Catalytica, Inc. 7,143,563 2,458,355 -- 11,207,000
Catherines Stores Corp. -- -- -- 2,802,500
Chic by H.I.S., Inc. -- 310,231 -- 5,980,000
Crown Vantage, Inc. -- -- -- 4,113,675
Dataflex Corp. -- -- -- 1,349,906
Drug Emporium, Inc. -- 149,045 -- 4,567,613
EKCO Group, Inc. 2,580,382 -- -- 5,182,250
Ferrofluidics Corp. 3,294,000 -- -- 2,379,000
Gilbert Associates, Inc. 313,926 -- 72,031 5,002,617
Information Storage Devices, Inc. -- -- -- 6,265,000
Instron Corp. 6,646,438 286,240 44,776 6,215,888
Integrated Circuit Systems, Inc. -- -- -- 8,662,500
</TABLE>
24
<PAGE>
Pioneer Small Company Fund
<TABLE>
<CAPTION>
Dividend
Affiliates Purchases Sales Income Value
- ------------------------------------ ------------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Inter-TAN, Inc. $ -- $ -- $ -- $ 4,087,500
INTERLINQ Software Corp. -- -- -- 2,369,813
Jan Bell Marketing, Inc. 2,240,051 -- -- 5,474,250
Kentucky Electric Steel, Inc. -- -- -- 2,401,600
Learmonth & Burchett
Management Systems Plc
(Sponsored A.D.R.) -- -- -- 5,847,188
Marisa Christina, Inc. 1,436,624 -- -- 5,742,750
Meridian Data, Inc. 1,476,312 -- -- 3,095,750
NAI Technologies, Inc. -- -- -- 2,931,188
Nashua Corp. 1,682,835 -- -- 5,251,837
Norton McNaughton, Inc. 448,000 -- -- 2,150,500
Pepsi-Cola Puerto Rico Bottling
Co. (Class B) 876,000 -- -- 4,548,375
Phar-Mor, Inc. 1,561,406 -- -- 5,996,000
Ply-Gem Industries, Inc. 240,960 64,123 43,284 9,256,500
River Oaks Furniture, Inc. 398,720 -- -- 846,000
Signal Technology Corp. -- 76,119 -- 4,631,000
Specialty Chemical Resources, Inc. -- -- -- 653,063
Summit Care Corporation
Association 8,318,799 -- -- 8,253,900
Sun Coast Industries, Inc. -- -- -- 788,600
Tokheim Corp. -- -- -- 6,693,750
Transmedia Network, Inc. 3,363,127 -- 11,088 2,547,425
Uniroyal Technology Corp. 510,625 -- -- 3,120,750
Unit Instruments, Inc. -- -- -- 2,286,250
Work Group Technology Corp. 462,360 -- -- 3,186,125
Zapata Corp. 6,631,938 -- -- 11,858,138
------------ ----------- --------- -------------
$71,882,950 $3,801,956 $418,379 $218,993,082
------------ ----------- --------- -------------
</TABLE>
25
<PAGE>
Pioneer Small Company Fund
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, including the schedule of
investments, of Pioneer Small Company Fund as of April 30, 1997, and the
related statement of operations, the statements of changes in net assets, and
the financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
April 30, 1997 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 Small Company Fund as of April 30, 1997, 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
June 2, 1997
26
<PAGE>
Pioneer Small Company Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Richard H. Egdahl, M.D. President
Margaret B.W. Graham David D. Tripple, Executive Vice President
John W. Kendrick Todd Grady, Vice President
Marguerite A. Piret William H. Keough, Treasurer
David D. Tripple Joseph P. Barri, Secretary
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
27
<PAGE>
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-800-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as
you meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employee's paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
28
<PAGE>
Automatic Exchange Program
A simple way to move money from a money market or bond fund into a stock fund
over a period of time. Just invest a lump sum in a Pioneer money market fund or
bond fund. Then, select the Pioneer equity fund or funds you wish to invest in,
and choose the amounts and dates for Pioneer to sell shares of your money
market or bond fund and use the proceeds to buy shares of the Pioneer equity
fund you have chosen. Over time, your original investment will be shifted to
your Pioneer equity fund.
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month you want. Pioneer will send
the proceeds by check to the address you designate, or electronically to your
bank account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available only for accounts with a value of $10,000 or
more.)
29
<PAGE>
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Or write to us at:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Or visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[Pioneer logo]
Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
0697-4217
(c) Pioneer Funds Distributor, Inc.
[recycle logo] Printed on Recycled Paper
