[PIONEER LOGO]
Pioneer
Small Company
Fund
ANNUAL REPORT 10/31/97
<PAGE>
Table of Contents
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Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 10
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 27
Trustees, Officers and Service Providers 28
The Pioneer Family of Mutual Funds 29
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Pioneer Small Company Fund
LETTER FROM THE CHAIRMAN 10/31/97
Dear Shareowner,
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I am pleased to introduce this annual report for Pioneer Small Company Fund. On
behalf of your investment team, I thank you for your interest and this
opportunity to comment on today's investing environment.
Your Fund's fiscal year ended with the world's stock markets in a whirl of
unprecedented volatility. Asian markets plunged after languishing for several
months as they digested currency and economic changes. In the United States,
the Dow Jones Industrial Average of large-company stocks took a break from its
historic upward climb to experience - in the space of two days - both its
biggest one-day point drop and its biggest one-day point gain. Small-company
stocks also sold off, but rebounded to march forward at a faster pace than
large issues. Elsewhere, European and Latin American markets bounced around in
a chain reaction.
October's wildness offered a clear example of how difficult, if not impossible,
it is to "time the market" - to buy only when prices are lowest and sell only
when prices are highest. We have always advocated buying a stock because you
want to invest in a business at a price that makes sense given a realistic
outlook for the company's prospects. We also believe in holding a stock until
it rises to its full value, or we have reason to believe it won't meet our
expectations. Market swings are always unnerving but they don't distract us,
and shouldn't distract you, from long-term strategies designed to meet
long-term goals.
I encourage you to read on to learn more about your Fund. The Portfolio
Management Discussion offers a review of the year's activity by Todd Grady, who
assumed responsibility for day-to-day portfolio management in January after
having worked on the Fund since its inception in 1995. Please contact your
investment professional, or Pioneer at 1-800-225-6292, if you have questions
about your Fund.
Respectfully,
/s/ John F. Cogan, Jr.
- ----------------------
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Small Company Fund
PORTFOLIO SUMMARY 10/31/97
Portfolio Diversification
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(As a percentage of total investment portfolio)
[PIE CHART]
Domestic Common Stocks 89%
Short-Term Cash Equivalents 7%
International Common Stocks 3%
Depositary Receipts for International Stocks 1%
Sector Distribution
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(As a percentage of equity holdings)
[PIE CHART]
Consumer Non-Durables 36%
Services 21%
Technology 17%
Basic Industries 10%
Capital Goods 7%
Financial Services 7%
Consumer Durables 1%
Energy 1%
10 Largest Holdings
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(As a percentage of equity holdings)
1. Bally Total Fitness 4.77% 6. Morrison Knudsen Corp. 2.38%
Holding Corp.
2. Zapata Corp. 3.81 7. Maple Leaf Foods, Inc. 2.09
3. American Annuity 3.02 8. Summit Care Corp. 2.05
Group, Inc. Association
4. John H. Harland Co. 2.95 9. Anacomp, Inc. 1.91
5. First Brands Corp. 2.91 10. MagneTek, Inc. 1.84
Fund holdings will vary for other periods.
2
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Pioneer Small Company Fund
PERFORMANCE UPDATE 10/31/97 CLASS A SHARES
Share Prices and Distributions
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Net Asset Value
per Share 10/31/97 10/31/96
$15.31 $12.66
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 10/31/97) Dividends Capital Gains Capital Gains
- $0.911 -
Investment Returns
- ----------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of October 31, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 28.37% 24.62%
(11/02/95)
1 Year 29.88 22.43
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvest-ment of distributions at net asset value.
[graph]
Growth of $10,000+
Pioneer Small Russell 2000
Company Fund* Index
11/30/95 9,425 10,000
12/31/95 9,592 10,264
1/31/96 9,860 10,253
2/29/96 10,129 10,572
3/31/96 10,505 10,788
4/30/96 11,383 11,364
5/31/96 12,046 11,812
6/30/96 11,598 11,327
7/31/96 10,908 10,338
8/31/96 11,222 10,938
9/30/96 11,490 11,366
10/31/96 11,338 11,190
11/30/96 11,777 11,651
12/31/96 11,908 11,957
1/31/97 12,600 12,196
2/28/97 12,677 11,900
3/31/97 12,110 11,339
4/30/97 11,638 11,370
5/31/97 12,658 12,635
6/30/97 13,196 13,177
7/31/97 13,966 13,790
8/31/97 14,351 14,105
9/30/97 15,389 15,138
10/31/97 14,726 14,473
+ 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 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.
3
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Pioneer Small Company Fund
PERFORMANCE UPDATE 10/31/97 CLASS B SHARES
Share Prices and Distributions
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Net Asset Value
per Share 10/31/97 10/31/96
$15.10 $12.59
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 10/31/97) Dividends Capital Gains Capital Gains
- $0.911 -
Investment Returns
- ----------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of October 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 27.48% 25.90%
(11/02/95)
1 Year 28.88 24.88
* 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.
[graph]
Growth of $10,000+
Pioneer Small Russell 2000
Company Fund* Index
11/30/95 10,000 10,000
12/31/95 10,158 10,264
1/31/96 10,442 10,253
2/29/96 10,717 10,572
3/31/96 11,106 10,788
4/30/96 12,026 11,364
5/31/96 12,728 11,812
6/30/96 12,244 11,327
7/31/96 11,504 10,338
8/31/96 11,827 10,938
9/30/96 12,111 11,366
10/31/96 11,941 11,190
11/30/96 12,387 11,651
12/31/96 12,515 11,957
1/31/97 13,238 12,196
2/28/97 13,310 11,900
3/31/97 12,708 11,339
4/30/97 12,209 11,370
5/31/97 13,269 12,635
6/30/97 13,829 13,177
7/31/97 14,624 13,790
8/31/97 15,012 14,105
9/30/97 16,092 15,138
10/31/97 14,989 14,473
+ 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 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.
4
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Pioneer Small Company Fund
PERFORMANCE UPDATE 10/31/97 CLASS C SHARES
Share Prices and Distributions
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Net Asset Value
per Share 10/31/97 10/31/96
$15.11 $12.59
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 10/31/97) Dividends Capital Gains Capital Gains
- $0.911 -
Investment Returns
- ----------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of October 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 24.85% 24.85%
(1/31/96)
1 Year 28.96 28.96
* Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to redemptions made within one year of purchase.
[graph]
Growth of $10,000
Pioneer Small Russell 2000
Company Fund* Index
1/31/96 10,000 10,000
2/29/96 10,263 10,312
3/31/96 10,636 10,522
4/30/96 11,526 11,084
5/31/96 12,189 11,521
6/30/96 11,726 11,048
7/31/96 11,026 10,083
8/31/96 11,326 11,668
9/30/96 11,599 11,085
10/31/96 11,435 10,914
11/30/96 11,871 11,364
12/31/96 11,985 11,662
1/31/97 12,687 11,895
2/28/97 12,746 11,607
3/31/97 12,170 11,059
4/30/97 11,692 11,090
5/31/97 12,707 12,323
6/30/97 13,244 12,852
7/31/97 14,005 13,450
8/31/97 14,386 13,757
9/30/97 15,410 14,764
10/31/97 14,747 14,116
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
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Pioneer Small Company Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/97
Dear Shareowner,
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Pioneer Small Company Fund completed its fiscal year on October 31, 1997 in the
midst of nearly unprecedented volatility in global stock markets. All but one
major U.S. stock market index declined over the last fiscal quarter, although
they all closed the year with positive results. Importantly for your Fund, the
one exception was the Russell 2000 Index of small company stocks, which closed
the year strong. It advanced 4.95% over the quarter, and posted a gain of
29.33% for the year.
Your Fund also turned in good results, even though small company stocks shifted
gears many times over the course of the year. For the 12 months ended October
31, Class A Shares produced a 29.88% total return at net asset value. The Fund
outpaced the Russell 2000 Index and the 26.45% average return for the 442 small
cap funds tracked by Lipper Analytical Services.
A Strong Year for U.S. Stocks
When the fiscal year began, returns on small stocks were trailing the
spectacular gains posted by the large stocks in the Dow Jones Industrial
Average. Investors had turned conservative in the wake of the previous summer's
sell-off in smaller growth stocks, particularly technology issues. Instead of
branching out to smaller, less familiar companies, they gravitated toward big,
well-known companies presumed to offer stability and predictable earnings
growth. This attitude continued through the end of 1996, and prices of small
company stocks generally languished.
In the first calendar quarter of 1997, the U.S. economy grew at nearly double
the expected rate. Large company stocks continued to roar ahead as investors
expected them to benefit the most from strong economic growth. However, the
pace of expansion was too torrid for the Federal Reserve, and it raised
short-term interest rates by one-quarter of a percentage point on March 25. The
overall stock market declined briefly, but prospects for a slower economy
prompted investors to look at small and mid-size stocks, which went on to
perform well through most of the summer.
6
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Pioneer Small Company Fund
Concerns about accelerating economic growth and a possible rise in inflation
persisted through the autumn, spurring investor uncertainty and wide swings in
stock prices. The Fed's decision not to raise rates in September sent a signal
that economic growth was proceeding at a slower, more sustainable pace. With
renewed confidence, investors moved away from large companies and toward
smaller stocks. In October, turmoil in Asian economies and currencies sparked a
global sell-off of stocks of all kinds. When the smoke cleared, however, stocks
of smaller companies - especially those with little business exposure to Asia
and its currencies - snapped back to outpace many bigger stocks.
An Aggressive Value Strategy
A clear trend re-emerged this year - prices of smaller stocks declined when the
economy accelerated and rose when it slowed. While this made for some periods
of disappointing short-term performance, it also created opportunities to buy
stocks of good companies inexpensively. The final days of the fiscal year, in
particular, proved to be a bargain hunter's delight, as had other periods of
widespread selling.
This played right into our "aggressive value" style of investing. Over the
course of the year, we added 55 new positions to the portfolio, spanning 25
industries. We look for stocks trading at prices substantially below what we
see as the business's true worth. Our search focuses on finding companies ready
for turnaround, ripe for takeover or whose stock price has been extremely, and
undeservedly, beaten down. We evaluate financial fundamentals, such as cash
flow, debt and earnings growth. Other factors are also important, such as
product innovation and viability, market share and the quality of management,
including their ownership stake in the business. We like to buy early, so our
approach means it often takes time for tangible improvement to catch other
investors' attention. While we wait, these low-priced stocks often provide
price protection in a market downturn.
7
<PAGE>
Pioneer Small Company Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/97 (continued)
Picking Stocks from the Bottom Up
We pick stocks for the portfolio one at a time - looking "bottom up" at a
company's individual merits. As of October 31, the portfolio contained 115
stocks representing 32 industries. The 20 largest positions accounted for 43.9%
of equity holdings, for an average position of about 2%. Among these, the most
successful this year were health-club operator Bally Total Fitness Holding and
diversified consumer-products maker First Brands; when the market dipped, we
bought more shares. Another company we like quite a bit is John H. Harland, a
check and label maker. We think it is primed for a turnaround, downsizing from
40 to eight manufacturing plants under the direction of new, ambitious
management.
We added a number of technology companies to the portfolio when their stock
prices fell. Generally, we prefer enterprises that make or sell finished
products rather than components. Examples include computer distributor Micro
Warehouse and Picturetel, the industry leader in video-conferencing with a 60%
market share in this growing business. Both have posted gains since we added
them to the portfolio.
Of course, there are always some disappointments. Mid-priced furniture retailer
Levitz, despite installing new management and making significant business
changes, could not overcome slow sales and declared bankruptcy in September.
Some apparel stocks also were down, including Marisa Christina, which lost
preferred retail shelf space, and sales, to larger brand names with more clout.
A Look Ahead
Moving into 1998, we see several encouraging signs for small, value-oriented
stocks. Investors' mania for large companies at any price seems to have given
way to a broader view. Worries that a slowing economy will cut into earnings
growth and profits have been compounded by fears that the unsettled Far East
could have dire consequences for large, multi-national companies.
8
<PAGE>
Pioneer Small Company Fund
We like the mix of stocks in the Fund currently. Even though many turned in
good results this year, we think most still have more to offer. While we can't
predict exactly when, or even if, a company will turn the corner, we think the
portfolio presents a blend of opportunities for near-term gains, investments
poised to work over the course of the next year and others we expect to bear
fruit some time in the next two or three years.
We will continue to actively manage the portfolio - adding stocks that meet our
aggressive value criteria, taking profits when stocks reach our price targets
and weeding out disappointing holdings. While there will inevitably be times
when small company stocks are out of favor, we think the Fund is on track to
provide strong results for shareowners with a long-term outlook.
Respectfully,
/s/ Todd Grady
- --------------
Todd Grady,
Portfolio Manager
9
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Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/97
Shares Value
COMMON STOCKS - 92.6%
Basic Industries - 9.5%
Chemicals - 1.1%
387,000 Specialty Chemical Resources, Inc.*+ $ 483,750
1,314,000 Uniroyal Technology Corp. *+ 5,502,375
-----------
$ 5,986,125
-----------
Containers - 5.5%
426,000 BWay Corp.* $ 8,173,875
193,200 Interlake Corp.* 1,014,300
240,000 Sun Coast Industries, Inc.*+ 1,230,000
2,556,300 Zapata Corp.+ 19,012,481
-----------
$29,430,656
-----------
Forest Products - 1.6%
760,200 Crown Vantage, Inc.*+ $ 8,457,225
-----------
Gold & Precious Metals - 0.0%
50,000 Royal Oaks Mines, Inc.* $ 121,250
-----------
Iron & Steel - 1.0%
505,600 Kentucky Electric Steel, Inc.*+ $ 3,539,200
145,447 Keystone Consolidated Industries, Inc.* 1,890,812
36,000 Russel Metals, Inc.* 134,104
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$ 5,564,116
-----------
Metals & Mining - 0.3%
55,000 Cambior Inc. $ 433,125
36,000 Inco, Ltd. 625,820
30,000 TVX Gold Inc.* 129,000
111,500 Uranium Resources, Inc.* 627,187
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$ 1,815,132
-----------
Total Basic Industries $51,374,504
-----------
Capital Goods - 6.3%
Aerospace/Defense - 0.2%
68,600 Talley Industries, Inc.* $ 810,338
-----------
Construction & Engineering - 2.6%
25,800 Coastcast Corp.* $ 377,325
131,500 Dames & Moore Group 1,635,531
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
Shares Value
Construction & Engineering - (continued)
1,008,600 Morrison Knudsen Corp.* $11,851,050
-----------
$13,863,906
-----------
Producer Goods - 2.2%
366,000 Ferrofluidics Corp.*+ $ 2,562,000
524,500 Nashua Corp.*+ 7,146,312
160,500 Trikon Technologies, Inc.* 621,938
137,300 Unit Instruments, Inc.* 1,544,625
-----------
$11,874,875
-----------
Telecommunications - 1.3%
285,000 Picturetel Corp.* $ 2,636,250
394,556 Salient 3 Communications, Inc.+ 4,586,713
-----------
$ 7,222,963
-----------
Total Capital Goods $33,772,082
-----------
Consumer Durables - 1.2%
Durables - 1.2%
58,800 National Presto Inds. Inc. $ 2,274,825
423,000 River Oaks Furniture, Inc.*+ 0
519,600 Royal Appliance Manufacturing Co.* 4,091,850
-----------
Total Consumer Durables $ 6,366,675
-----------
Consumer Non-Durables - 33.4%
Misc. Consumer Non-Durables - 0.9%
314,700 Johnson Worldwide Associates Inc.* $ 4,877,850
-----------
Agriculture & Food - 0.5%
110,000 Alico, Inc. $ 2,667,500
-----------
Consumer Luxuries - 4.4%
1,338,900 Bally Total Fitness Holding Corp.*+ $23,765,475
-----------
Home Products - 5.7%
1,091,000 EKCO Group, Inc.+ $ 7,568,812
568,700 First Brands Corp. 14,501,850
314,700 Stanhome Inc. 8,791,931
-----------
$30,862,593
-----------
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/97 (continued)
Shares Value
Retail Food - 3.9%
546,500 Buttrey Food & Drug Stores Co.*+ $ 6,148,125
965,800 Maple Leaf Foods, Inc. 10,416,263
25,000 Ralcorp Holdings, Inc.* 464,062
32,500 Suprema Specialities, Inc.* 97,500
440,686 WLR Foods, Inc. 3,966,174
------------
$ 21,092,124
------------
Retail Non-Food - 11.7%
137,900 Blair Corp. $ 2,482,200
200,000 Brown Group Inc. 3,025,000
590,000 Catherines Stores Corp.*+ 3,392,500
1,498,000 CML Group 4,774,875
524,000 Charming Shoppes, Inc.* 2,718,250
641,100 Drug Emporium, Inc.* 2,724,675
801,500 Dylex Limited* 4,634,920
10,300 Harold's Stores, Inc.* 84,975
1,090,000 InterTAN, Inc.*+ 5,586,250
2,534,600 Jan Bell Marketing, Inc.*+ 7,445,387
576,500 Lechters, Inc.* 3,134,719
360,000 Micro Warehouse, Inc. 5,400,000
1,199,200 Phar-Mor, Inc.*+ 8,581,775
481,800 The Stride Rite Corp. 5,661,150
763,400 Transmedia Network Inc.+ 3,101,313
------------
$ 62,747,989
------------
Soft Drinks - 1.1%
840,000 Pepsi-Cola Puerto Rico Bottling Co. (Class B)*+ $ 5,932,500
------------
Textiles/Clothes - 5.2%
332,100 Angelica Corp. $ 6,475,950
879,500 Chic by H.I.S., Inc.*+ 6,761,156
25,000 Cone Mills Corp.* 217,187
690,000 Donnkenny, Inc.* 2,501,250
153,000 Johnston Industries, Inc. 889,312
646,500 Marisa Christina, Inc.*+ 3,636,562
326,000 Norton McNaughton, Inc.* 1,996,750
1,066,500 Tultex Corp.* 5,332,500
------------
$ 27,810,667
------------
Total Consumer Non-Durables $179,756,698
------------
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
Shares Value
Energy - 1.3%
Oil Refining & Drilling - 1.3%
390,000 Abacan Resources* $ 1,218,750
1,780,000 Arakis Energy Corp.* 5,896,250
-----------
Total Energy $ 7,115,000
-----------
Financial - 6.3%
Misc. Finance - 0.9%
665,800 Phoenix Duff & Phelps Corp. $ 4,702,213
-----------
Insurance - 5.4%
747,400 American Annuity Group, Inc. $15,041,425
40,000 Financial Security Assurance Hldgs Ltd. 1,740,000
401,900 Life USA Holding, Inc.* 6,631,350
207,600 Western National Corp. 5,981,475
-----------
$29,394,250
-----------
Total Financial $34,096,463
-----------
Services - 19.3%
Broadcasting & Media - 2.7%
680,620 Anacomp, Inc. * $ 9,528,680
862,000 National Media Corporation* 5,010,375
-----------
$14,539,055
-----------
Health & Personal Care - 2.9%
33,100 Allou Health & Beauty Care Inc.* $ 258,594
293,000 Apria Healthcare Group Inc.* 4,449,938
124,100 Jenny Craig Inc.* 930,750
611,400 Summit Care Corp. Association*+ 10,202,738
-----------
$15,842,020
-----------
Hotel & Restaurant - 3.3%
629,700 Darden Restaurants $ 7,162,838
18,400 Shoney's Inc.* 86,250
403,400 Triarc Company, Inc.* 9,126,925
172,300 Uno Restaurant Corp.* 1,141,488
-----------
$17,517,501
-----------
Pharmaceuticals - 5.3%
330,000 Alexion Pharmaceuticals, Inc.* $ 3,877,500
780,000 Anergen Inc.* 2,340,000
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/97 (continued)
Shares Value
Pharmaceuticals - (continued)
496,500 Aronex Pharmaceuticals, Inc.* $ 2,730,750
399,000 ImClone Systems, Inc. 2,593,500
230,800 Magellan Health Services, Inc.* 6,649,925
410,800 Molecular Biosystems, Inc.* 4,108,000
215,000 Perrigo Co.* 3,305,625
690,000 Targeted Genetics Corp.* 2,760,000
------------
$ 28,365,300
------------
Publishing - 2.7%
656,000 John H. Harland Co. $ 14,719,000
------------
Services - 2.4%
448,200 Cross Continent Auto Retailers Inc.* $ 4,425,975
27,500 First Aviation Services, Inc.* 213,125
361,500 National Processing Inc.* 3,682,781
223,700 United Auto Group* 4,557,888
1,700 Whitman Education Group Inc.* 9,775
------------
$ 12,889,544
------------
Total Services $103,872,420
------------
Technology - 15.3%
Technology - 0.9%
255,700 Learning Company Inc.* $ 4,826,338
------------
Business Machines - 1.0%
1,302,400 Amtech Corp.*+ $ 5,209,600
------------
Computer Services - 8.0%
410,000 Apertus Technologies, Inc.* $ 820,000
812,500 Boca Research Inc.*+ 6,195,313
716,600 Broadway & Seymour, Inc.*+ 6,986,850
367,500 Creative Computers, Inc.* 5,558,438
423,500 Dataflex Corp.*+ 1,826,344
574,500 INTERLINQ Software Corp.*+ 2,333,906
1,417,500 Learmonth & Burchett Management Systems
Plc (Sponsored A.D.R.)*+ 4,075,313
854,000 Meridian Data, Inc.*+ 3,896,375
380,000 Progress Software Corp.* 8,122,500
718,000 Work Group Technology Corp.*+ 3,096,375
------------
$ 42,911,414
------------
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
Shares Value
Electronics - 5.4%
500,500 Acme Electric Corp.*+ $ 3,253,250
10,000 Checkpoint Systems Inc.* 160,000
35,500 Espey Manufacturing & Electronics Corp. 616,813
3,000 Franklin Electronic Publishers Inc.* 42,000
795,000 Information Storage Devices, Inc.*+ 6,161,250
262,000 Leslie Fay Co.* 4,224,750
452,100 MagneTek, Inc.* 9,183,281
579,000 NAI Technologies, Inc.*+ 1,664,625
663,100 Signal Technology Corp.*+ 3,893,740
------------
$ 29,199,709
------------
Total Technology $ 82,147,061
------------
TOTAL COMMON STOCKS
(Cost $434,156,250) $498,500,903
------------
Principal
Amount
TEMPORARY CASH INVESTMENTS - 7.4%
Commercial Paper - 7.4%
$ 5,516,000 AGFC, 5.64%, 11/07/97 $ 5,516,000
10,000,000 American Express Co. 5.55%, 11/3/97 10,000,000
7,955,000 Ford Motor Credit Co., 5.57%, 11/05/97 7,955,000
9,843,000 G.E. Capital Corp., 5.60%, 11/06/97 9,843,000
6,467,000 Prudential, 5.54%, 11/04/97 6,467,000
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $39,781,000) $ 39,781,000
------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $473,937,250) (a) $538,281,903
============
* Non-income producing security.
+ Investments held by the Fund representing 5% or more of the outstanding
voting stock of such company.
(a) At October 31, 1997, the net unrealized gain on investments based on cost
for federal income tax purposes of $473,937,250 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 98,811,941
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (34,467,288)
-------------
Net unrealized gain $ 64,344,653
=============
Purchases and sales of securities (excluding temporary cash investments) for
the year ended October 31, 1997, aggregated $265,279,119 and $292,460,377,
respectively.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Small Company Fund
BALANCE SHEET 10/31/97
<TABLE>
<S> <C>
ASSETS:
Investment in securities (including temporary cash investments of
$39,781,000) (cost $473,937,250) $538,281,903
Cash 113,940
Receivables -
Investment securities sold 6,476,466
Fund shares sold 456,005
Dividends and interest 338,296
Organizational costs - net 29,574
Other 8,273
------------
Total assets $545,704,457
------------
LIABILITIES:
Payables -
Investment securities purchased $ 6,422,989
Fund shares repurchased 691,788
Due to affiliates 850,134
Accrued expenses 147,569
------------
Total liabilities $ 8,112,480
------------
NET ASSETS:
Paid-in capital $409,016,642
Accumulated undistributed net realized gain on investments 64,230,682
Net unrealized gain on investments 64,344,653
------------
Total net assets $537,591,977
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $252,176,736/16,472,656 shares) $ 15.31
============
Class B (based on $267,488,687/17,715,296 shares) $ 15.10
============
Class C (based on $17,926,554/1,186,611 shares) $ 15.11
============
MAXIMUM OFFERING PRICE:
Class A $ 16.24
============
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
STATEMENT OF OPERATIONS
For the Year Ended 10/31/97
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $18,491) $2,053,143
Interest 1,629,092
----------
Total investment income $ 3,682,235
------------
EXPENSES:
Management fees $4,269,069
Transfer agent fees
Class A 696,138
Class B 571,136
Class C 36,449
Distribution fees
Class A 584,306
Class B 2,430,759
Class C 172,569
Accounting 95,394
Custodian fees 76,772
Registration fees 167,355
Professional fees 83,239
Printing 41,355
Organizational costs 9,793
Fees and expenses of nonaffiliated trustees 15,712
Miscellaneous 50,328
----------
Total expenses $ 9,300,374
Less fees paid indirectly (33,467)
------------
Net expenses $ 9,266,907
------------
Net investment loss $ (5,584,672)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 69,812,627
Change in net unrealized gain or loss on investments 65,111,218
------------
Net gain on investments $134,923,845
------------
Net increase in net assets resulting from operations $129,339,173
============
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Small Company Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Year ended 10/31/97 and for the Period from 11/2/95 to 10/31/96
<TABLE>
<CAPTION>
Year Ended Period Ended
10/31/97 10/31/96
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (5,584,672) $ 6,664
Net realized gain on investments 69,812,627 32,601,127
Change in net unrealized gain or loss on investments 65,111,218 (766,565)
------------- -------------
Net increase in net assets resulting from operations $ 129,339,173 $ 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) (15,757,933) -
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 $ (32,615,861) $ (147,391)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 81,888,958 $ 477,488,754
Reinvestment of distributions 28,220,336 128,843
Cost of shares repurchased (124,997,871) (53,654,190)
------------- -------------
Net increase (decrease) in net assets resulting from
fund share transactions $ (14,888,577) $ 423,963,407
------------- -------------
Net increase in net assets $ 81,834,735 $ 455,657,242
NET ASSETS:
Beginning of period 455,757,242 100,000
------------- -------------
End of period (including accumulated undistributed net
investment income of $0 and $7,668, respectively) $ 537,591,977 $ 455,757,242
============= =============
</TABLE>
<TABLE>
<CAPTION>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
<S> <C> <C> <C> <C>
Shares sold 4,220,016 $ 55,164,381 20,658,247 $ 241,718,453
Reinvestment of distributions 1,162,079 14,305,198 8,422 89,948
Less shares repurchased (6,412,012) (86,801,534) (3,169,096) (39,772,964)
---------- ------------- ---------- -------------
Net increase (decrease) (1,029,917) $ (17,331,955) 17,497,573 $ 202,035,437
---------- ------------- ---------- -------------
CLASS B
Shares sold 1,871,189 $ 24,706,488 18,263,829 $ 217,591,111
Reinvestment of distributions 1,067,469 13,044,471 3,639 38,895
Less shares repurchased (2,489,326) (33,236,413) (1,006,504) (12,485,791)
---------- ------------- ---------- -------------
Net increase 449,332 $ 4,514,546 17,260,964 $ 205,144,215
---------- ------------- ---------- -------------
CLASS C*
Shares sold 152,724 $ 2,018,089 1,445,032 $ 18,179,190
Reinvestment of distributions 71,249 870,667 - -
Less shares repurchased (372,397) (4,959,924) (109,997) (1,395,435)
---------- ------------- ---------- -------------
Net increase (decrease) (148,424) $ (2,071,168) 1,335,035 $ 16,783,755
========== ============= ========== =============
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 10/31/97
<TABLE>
<CAPTION>
11/2/95
Year Ended to
10/31/97 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) $ (0.11) $ 0.05
Net realized and unrealized gain on investments 3.67 2.63
--------- ---------
Net increase from investment operations $ 3.56 $ 2.68
Distributions to shareholders:
Net investment income - (0.02)
Net realized gain (0.91) -
--------- ----------
Net increase in net asset value $ 2.65 $ 2.66
--------- ----------
Net asset value, end of period $ 15.31 $ 12.66
========= ==========
Total return* 29.88% 26.87%
Ratio of net expenses to average net assets 1.49%+ 1.54%**+
Ratio of net investment income (loss) to average net assets ( 0.76)%+ 0.34%**+
Portfolio turnover rate 57% 43%**
Average commission rate paid (1) $ 0.0497 $ 0.0471
Net assets, end of period (in thousands) $ 252,177 $ 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 1.48% 1.51%**
Net investment income (loss) ( 0.75)% 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.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 10/31/97
<TABLE>
<CAPTION>
11/2/95
Year Ended to
10/31/97 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 $ (0.20) $ (0.01)
Net realized and unrealized gain on investments 3.62 2.62
--------- ----------
Net increase from investment operations $ 3.42 $ 2.61
Distributions to shareholders:
In excess of net investment income - ( 0.02)
Net realized gain (0.91) -
--------- ----------
Net increase in net asset value $ 2.51 $ 2.59
--------- ----------
Net asset value, end of period $ 15.10 $ 12.59
========= ==========
Total return* 28.88% 26.09%
Ratio of net expenses to average net assets 2.19%+ 2.26**+
Ratio of net investment loss to average net assets (1.46)%+ (0.42)%**+
Portfolio turnover rate 57% 43%**
Average commission rate paid (1) $ 0.0497 $ 0.0471
Net assets, end of period (in thousands) $ 267,489 $ 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 2.18% 2.23%**
Net investment loss (1.45)% (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.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 10/31/97
<TABLE>
<CAPTION>
1/31/96
Year Ended to
10/31/97 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 $ (0.21) $ (0.03)
Net realized and unrealized gain on investments 3.64 1.61
--------- --------
Net increase from investment operations $ 3.43 $ 1.58
Distributions to shareholders:
Net realized gain (0.91) -
--------- --------
Net increase in net asset value $ 2.52 $ 1.58
--------- --------
Net asset value, end of period $ 15.11 $ 12.59
========== ========
Total return* 28.96% 14.35%
Ratio of net expenses to average net assets 2.17%+ 2.25%**+
Ratio of net investment loss to average net assets (1.44)%+ (0.45)%**+
Portfolio turnover rate 57% 43%**
Average commission rate paid (1) $0.0497 $ 0.0471
Net assets, end of period (in thousands) $17,927 $ 16,811
Ratios assuming reduction for fees paid indirectly:
Net expenses 2.16% 2.21%**
Net investment loss (1.43)% (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.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 10/31/97
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
22
<PAGE>
Pioneer Small Company Fund
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.
At October 31, 1997, the Fund reclassified $5,567,211 and $9,793 from
accumulated undistributed net realized gain on investments and paid-in
capital, respectively, to accumulated net investment loss. The
reclassification has no impact on the net asset value of the Fund and is
designed to present the Fund's capital accounts on a tax basis.
In order to comply with federal income tax regulations, the Fund has
designated $17,810,635 as a capital gain dividend for the purposes of the
dividend paid deduction.
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 $110,220 in
underwriting commissions on the sale of fund shares during the year ended
October 31, 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
23
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 10/31/97 (continued)
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 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 October 31, 1997, $416,578 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 $126,494 in transfer agent fees payable to PSC at October 31,
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
24
<PAGE>
Pioneer Small Company Fund
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 $307,062
in distribution fees payable to PFD at October 31, 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 the year ended October 31, 1997, CDSCs in the amount
of $644,751 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended October 31, 1997,
the Fund's expenses were reduced by $33,467 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 October 31, 1997:
25
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 10/31/97 (continued)
<TABLE>
<CAPTION>
Dividend
Affiliates Purchases Sales Income Value
- ------------------------------------ ------------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Acme Electric Corp. $ -- $ -- $ -- $ 3,253,250
Amtech Corp. 8,012,913 269,960 -- 5,209,600
Bally Total Fitness Holding Corp. 3,504,000 1,317,456 -- 23,765,475
Boca Research Inc. 6,867,219 -- -- 6,195,313
Broadway & Seymour, Inc. -- 293,740 -- 6,986,850
Buttrey Food & Drug Stores Co. -- -- -- 6,148,125
Catherines Stores Corp. -- -- -- 3,392,500
Chic by H.I.S., Inc. -- 571,072 -- 6,761,156
Crown Vantage, Inc. 435,000 -- -- 8,457,225
Dataflex Corp. -- -- -- 1,826,344
EKCO Group, Inc. 2,580,382 -- -- 7,568,812
Ferrofluidics Corp. 3,294,000 -- -- 2,562,000
Information Storage Devices, Inc. -- 679,915 -- 6,161,250
INTERLINQ Software Corp. -- -- -- 2,333,906
InterTAN, Inc. -- -- -- 5,586,250
Jan Bell Marketing, Inc. 2,485,415 -- -- 7,445,387
Kentucky Electric Steel, Inc. -- -- -- 3,539,200
Learmonth & Burchett Management
Systems Plc (Sponsored A.D.R.) -- -- -- 4,075,313
Marisa Christina, Inc. 1,983,624 -- -- 3,636,562
Meridian Data, Inc. 1,476,312 -- -- 3,896,375
NAI Technologies, Inc. -- -- -- 1,664,625
Nashua Corp. 2,368,925 -- -- 7,146,312
Pepsi-Cola Puerto Rico
Bottling Co. (Class B) 876,000 734,625 -- 5,932,500
Phar-Mor, Inc. 1,561,406 -- -- 8,581,775
River Oaks Furniture, Inc. 398,720 -- -- 0
Salient 3 Communications, Inc. 252,875 -- 78,911 4,586,713
Signal Technology Corp. -- 145,311 -- 3,893,740
Specialty Chemical Resources, Inc. -- -- -- 483,750
Summit Care Corp. Association 8,318,799 -- -- 10,202,738
Sun Coast Industries, Inc. -- 649,935 -- 1,230,000
Transmedia Network Inc. 3,790,302 -- 26,356 3,101,313
Uniroyal Technology Corp. 510,625 -- -- 5,502,375
Work Group Technology Corp. 462,360 -- -- 3,096,375
Zapata Corp. 6,631,938 2,024,336 380,170 19,012,481
----------- ---------- -------- ------------
$55,810,815 $6,686,350 $485,437 $193,235,590
=========== ========== ======== ============
</TABLE>
26
<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 October 31, 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
October 31, 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 October 31, 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
December 3, 1997
27
<PAGE>
Pioneer Small Company Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Todd Grady, Vice President
John W. Kendrick William H. Keough, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
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
28
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
Global/International Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust*
Pioneer India Fund
Pioneer International Growth Fund Tax-Exempt
Pioneer World Equity Fund Pioneer Intermediate Tax-Free Fund
Pioneer Tax-Free Income Fund
United States
Pioneer Capital Growth Fund Money Market Fund
Pioneer Growth Shares Pioneer Cash Reserves Fund
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
*Offers Class A and B Shares only
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.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State 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)
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
www.pioneerfunds.com
1297 - 4644
(C) Pioneer Funds Distributor, Inc.
(Recycled Logo) Printed on Recycled Paper
