<PAGE>
[Pioneer Logo]
Pioneer
Small Company
Fund
ANNUAL REPORT 10/31/98
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 27
Trustees, Officers and Service Providers 28
The Pioneer Family of Mutual Funds 29
</TABLE>
<PAGE>
Pioneer Small Company Fund
LETTER FROM THE CHAIRMAN 10/31/98
Dear Shareowner,
- --------------------------------------------------------------------------------
The end of October marked the close of Pioneer Small Company Fund's third
fiscal year. I appreciate this opportunity to comment on the challenges and
progress of a fast-paced period that investors will not soon forget.
The past 12 months were volatile for financial markets in the United States and
around the globe. Investors reacted to plunging world markets by investing in
the safest securities they could find, mostly stocks of the largest companies
and U.S. Treasury bonds. Stocks of small companies - even those with solid
fundamentals - were punished. Even so, volatility is, and always will be, part
of investing. We think it is important to point out that the current
fluctuations in stock prices are relatively normal, compared to historical
market movements.
The past few months have taught investors that having long-term financial goals
is one of the most important investment decisions they can make. There is no
doubt that the recent performance of small companies has been disappointing.
But we believe that over the long term investors can be well served by holding
a portion of their portfolio in small companies that are attractively priced.
I encourage you to read the pages that follow, including the Portfolio
Management Discussion with Todd E. Grady, your Fund's portfolio manager, where
he discusses how your Fund performed during the past year. We hope you find the
report informative. If you have any questions about the Fund, please contact
your investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Small Company Fund
PORTFOLIO SUMMARY 10/31/98
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 84%
Short-Term Cash Equivalents 11%
International Common Stocks 5%
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 Cyclicals 29%
Consumer Staples 22%
Capital Goods 15%
Basic Materials 11%
Technology 10%
Energy 6%
Financial 4%
Communication Services 1%
Healthcare 1%
Transportation 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. Anacomp, Inc. 4.40% 6. Morrison Knudsen Corp. 3.18%
2. First Brands Corp. 4.38 7. Plains Resources, Inc. 2.69
3. Jan Bell Marketing, Inc. 3.87 8. Phar-Mor, Inc. 2.65
4. Uniroyal Technology Corp. 3.55 9. Nashua Corp. 2.55
5. Micro Warehouse, Inc. 3.48 10. Chiquita Brands 2.36
International, Inc.
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Small Company Fund
PERFORMANCE UPDATE 10/31/98 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 10/31/98 10/31/97
$ 10.68 $ 15.31
Distributions per Share Income Short-Term Long-Term
(10/31/97-10/31/98) Dividends Capital Gains Capital Gains
- $1.325 $0.508
</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>
<CAPTION>
Average Annual Total Returns
(As of October 31, 1998)
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
Life-of-Fund 9.56% 7.42%
(11/2/95)
1 Year -20.19 -24.76
</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[dagger]
Pioneer
Small Russell
Company 2000
Fund* Index
11/95 9,425 10,000
9,860 10,253
4/96 11,383 11,364
10,908 10,338
10/96 11,338 11,190
12,600 12,196
4/97 11,638 11,370
13,966 13,790
10/97 14,726 14,473
13,921 14,400
4/98 15,868 16,191
14,020 14,109
10/98 11,753 12,759
+ 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 over-the-counter market. 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
<PAGE>
Pioneer Small Company Fund
PERFORMANCE UPDATE 10/31/98 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 10/31/98 10/31/97
$ 10.44 $ 15.10
Distributions per Share Income Short-Term Long-Term
(10/31/97-10/31/98) Dividends Capital Gains Capital Gains
- $ 1.325 $ 0.508
</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>
<CAPTION>
Average Annual Total Returns
(As of October 31, 1998)
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund 8.81% 7.96%
(11/2/95)
1 Year -20.73 -23.50
</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.
<TABLE>
Growth of $10,000[dagger]
Pioneer
Small Russell
Company 2000
Fund* Index
<S> <C> <C>
11/95 10,000 10,000
10,442 10,253
4/96 12,026 11,364
11,504 10,338
10/96 11,941 11,190
13,238 12,196
4/97 12,209 11,370
14,624 13,790
10/97 15,389 14,473
14,524 14,400
4/98 16,522 16,191
14,750 14,109
10/98 11,902 12,759
</TABLE>
+ 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 over-the-counter market. 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
<PAGE>
Pioneer Small Company Fund
PERFORMANCE UPDATE 10/31/98 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 10/31/98 10/31/97
$ 10.44 $ 15.11
Distributions per Share Income Short-Term Long-Term
(10/31/97-10/31/98) Dividends Capital Gains Capital Gains
- $ 1.325 $ 0.508
</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>
<CAPTION>
Average Annual Total Returns
As of October 31, 1998)
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund 5.81% 5.81%
(1/31/96)
1 Year -20.79 -20.79
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
<TABLE>
Growth of $10,000[dagger]
Pioneer
Small Russell
Company 2000
Fund* Index
<S> <C> <C>
1/96 10,000 10,000
4/96 11,526 11,084
11,026 10,083
10/96 11,435 10,915
12,687 11,895
4/97 11,692 11,090
14,005 13,450
10/97 14,747 14,116
13,918 14,045
4/98 15,832 15,792
13,952 13,791
10/98 11,681 12,444
</TABLE>
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 over-the-counter
market. 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 10/31/98
Pioneer Small Company Fund's fiscal year ended on October 31, 1998. The
following discussion with Todd Grady provides a detailed account of the
investment environment and the strategies that affected your Fund's performance
during the year. An investment professional for over eight years, Mr. Grady
oversees the team responsible for the Fund's daily management.
Q: How did the Fund perform?
A: It was a particularly rough period for small stocks. The Russell 2000 Index,
an unmanaged measure of small-capitalization stocks, posted a -11.84%
return. Small stocks suffered when economic troubles in emerging markets
spread, causing investors to turn to safe havens such as large company
stocks and U.S. Treasury bonds. Even small stocks with positive
fundamentals were caught up in the malaise.
The Fund generated a total return of around -20% at net asset value. The
Fund's value orientation, and its emphasis on smaller-than-average stocks
hurt performance.
Q: What were the major market themes during the past year?
A: First of all, volatility. Compared to the relatively steady rise of the past
few years, world stock markets were increasingly volatile in a negative
way. Remember, the markets have been volatile for some time now, but most
of it has been in the form of extraordinary positive results.
A second theme was "the larger the better." It's no secret that large-cap
stocks have dominated the market for the last three years, although it
became much more obvious to observers in the last 12 months. Currency and
economic problems in Asia caused investors to gravitate toward securities
they expect to hold up best in difficult markets - mostly large, well-known
companies. Large company stocks can be less susceptible to short-term
declines because their trading volumes make them easier to buy and sell and
their earnings tend to be more stable and predictable.
6
<PAGE>
Pioneer Small Company Fund
Q: What specific sectors or stocks affected Fund performance?
A: Disappointments were not limited to any one industry or sector. The sharp
drop in energy prices throughout the year affected energy-related stocks
such as Forest Oil Corp. and Louis Dreyfus Natural Gas. Although we own
fewer technology stocks than many of our competitors, the entire sector
suffered because of its exposure to Asian economies. Examples include In
Focus Systems, a manufacturer of projection devices for computers, and
Boca Research, a producer of data communications products.
On a more positive note, many sizable positions performed well including,
Jan Bell Marketing, a company that markets jewelry and accessories in Sam's
Club, First Brands, a producer of household products, and Nashua Corp., a
marketer of various photofinshing products used in copiers and printers.
All are long-time holdings and were positive contributors to performance.
Q: What types of stocks do you look for?
A: We focus on small companies whose stocks are selling at attractively low
prices relative to the strength of their business and to stocks of similar
companies. We examine a variety of factors as part of determining the
"value" of a stock, including analyzing standard valuation measures such
as price-to-earnings, price-to-sales and price-to-book ratios. These
ratios give us an indication of whether a stock is undervalued, reasonably
valued or overvalued. It is also important for us to understand the
business of a company that we invest in. By understanding a company's
business, we think we can gauge their potential for long-term success,
which is often unrelated to short-term earnings results.
We also consider whether there's a catalyst to boost a stock. For instance,
our interest might be piqued if management is buying a large equity stake,
if the company is introducing a new product or it is a player in a
burgeoning industry. However, being part of a growing industry is not
enough. We take a "bottom up" approach to evaluate each company's
potential, rather than focusing on wider trends.
7
<PAGE>
Pioneer Small Company Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/98 (continued)
Q: How do you determine when to sell a stock?
A: Part of our process of selecting stocks for the portfolio is setting target
prices. Over the last few months we sold two portfolio holdings after they
met our target price. We booked gains on both Creative Computers, a
company that sells mail order computers, and INTERLINQ Software Corp., a
producer of mortgage software. On the other hand, sometimes our ongoing
analysis brings to light a company's change for the worse. One example is
MagneTek, Inc., a manufacturer of electrical equipment products. We sold
the stock after concluding that its exposure to the Asian markets could
hurt its ability to produce positive earnings for some time.
Q: Can you talk about the percentage of the portfolio that is invested
internationally?
A: Right now, about 5% of the portfolio is invested in international stocks,
but the majority are Canadian companies. Fundamentally, Canada is very
similar to the United States. Besides being the United States' largest
trading partner, it shares a similar language and culture. From a business
standpoint, their accounting system is very much like that used by U.S.
companies. This means our team can use our familiar methods to analyze a
Canadian company. So, although Canadian companies are considered
international investments, we do not think the Fund is being exposed to
some of the risks inherent in investing in other global markets.
Q: What is your outlook for the Fund over the next six months?
A: We remain optimistic about the prospects for small stocks, despite the
turbulent times of the past year. Small company valuations remain
attractive compared to their pricey large cousins. And while there is
significant concern regarding the ability of large companies to meet
earnings expectations, overall, small company earnings-growth patterns
remain strong. To date, the market has been slow to recognize this
disparity. But we are confident that if we continue to be disciplined and
stick with our value-based approach, the performance cycle will eventually
turn in favor of small companies.
8
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/98
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 89.4%
Basic Materials - 9.9%
Agricultural Products - 0.6%
110,000 Alico, Inc. $ 1,883,750
-----------
Chemicals (Specialty) - 3.2%
387,000 Specialty Chemical Resources, Inc.*+ $ 217,688
1,117,500 Uniroyal Technology Corp.*+ 11,175,000
-----------
$11,392,688
-----------
Containers & Packaging (Paper) - 1.6%
335,200 BWay Corp.* $ 5,740,300
-----------
Gold & Precious Metals Mining - 2.3%
696,000 Cambior, Inc. $ 3,480,000
190,000 Getchell Gold Corp* 3,325,000
635,000 TVX Gold, Inc.* 1,190,625
-----------
$ 7,995,625
-----------
Iron & Steel - 0.9%
209,500 Schnitzer Steel Industries, Inc. $ 3,247,250
-----------
Metals & Mining - 0.7%
504,900 Inco, Ltd. (VBN Shares) $ 2,512,955
-----------
Paper & Forest Products - 0.6%
62,000 Chesapeake Corp. $ 2,170,000
-----------
Total Basic Materials $34,942,568
-----------
Capital Goods - 12.9%
Aerospace/Defense - 0.1%
27,500 First Aviation Services, Inc.* $ 115,156
-----------
Electrical Equipment - 0.7%
500,500 Acme Electric Corp.*+ $ 2,596,344
-----------
Engineering & Construction - 2.9%
1,008,600 Morrison Knudsen Corp.* $10,022,963
-----------
Machinery (Diversified) - 0.1%
193,200 Interlake Corp.* $ 507,150
-----------
Manufacturing (Specialized) - 1.6%
529,200 The York Group, Inc.+ $ 5,622,750
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Metal Fabricators - 0.3%
145,447 Keystone Consolidated Industries, Inc.* $ 1,018,130
61,000 Russel Metals, Inc.* 118,600
-----------
$ 1,136,730
-----------
Office Equipment & Supplies - 7.2%
1,045,620 Anacomp, Inc.*+ $13,854,465
307,700 Nam Tai Electronics Inc. 3,538,550
524,500 Nashua Corp.*+ 8,031,406
-----------
$25,424,421
-----------
Total Capital Goods $45,425,514
-----------
Communication Services - 0.9%
Telecommunications - 0.9%
434,556 Salient 3 Communications Inc.+ $ 3,041,892
-----------
Total Communication Services $ 3,041,892
-----------
Consumer Cyclicals - 26.0%
Auto Parts & Equipment - 0.5%
265,000 TBC Corp.* $ 1,838,437
-----------
Consumer (Jewelry, Novelties & Gifts) - 4.8%
188,700 Enesco Group, Inc. $ 4,788,262
2,534,600 Jan Bell Marketing, Inc.*+ 12,197,763
-----------
$16,986,025
-----------
Hardware & Tools - 0.1%
13,000 WD-40 Co. $ 344,500
-----------
Leisure Time (Products) - 0.9%
146,000 Huffy Corp. $ 1,852,375
164,700 Johnson Worldwide Associates, Inc.* 1,399,950
-----------
$ 3,252,325
-----------
Retail (Computers & Electronics) - 1.6%
1,090,000 InterTAN, Inc.*+ $ 5,790,625
-----------
Retail (Home Shopping) - 5.7%
175,900 Blair Corp. $ 4,078,681
300,000 Damark International, Inc.* 1,762,500
502,500 Micro Warehouse, Inc.* 10,960,781
580,000 National Media Corp.* 3,081,250
-----------
$19,883,212
-----------
</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 (Specialty-Apparel) - 1.9%
430,000 Catherines Stores Corp.*+ $ 3,655,000
98,000 CML Group, Inc.* 15,312
60,115 Harold's Stores, Inc.* 420,805
801,500 Dylex Limited* 2,727,074
-----------
$ 6,818,191
-----------
Retail (Specialty) - 4.6%
360,000 Cross-Continent Auto Retailers, Inc.* $ 3,442,500
791,200 Jenny Craig Inc.* 4,549,400
576,500 Lechters, Inc.* 1,873,625
463,800 United Auto Group, Inc.* 6,377,250
-----------
$16,242,775
-----------
Services (Commercial & Consumer) - 1.2%
242,100 Angelica Corp. $ 4,221,619
-----------
Textiles (Apparel) - 3.3%
498,000 Chic by H.I.S., Inc.*+ $ 1,836,375
90,000 Donnkenny, Inc.* 135,000
624,000 The Leslie Fay Company, Inc.*+ 4,056,000
45,500 O'Sullivan Industries Holdings, Inc.* 497,656
381,800 The Stride Rite Corp. 3,483,925
1,066,500 Tultex Corp.* 1,399,781
-----------
$11,408,737
-----------
Textiles (Home Furnishings) - 1.2%
885,800 EKCO Group, Inc.* $ 3,211,025
120,000 Polymer Group, Inc.* 1,057,500
-----------
$ 4,268,525
-----------
Textiles (Specialty) - 0.2%
205,000 Johnston Industries, Inc. $ 704,687
-----------
Total Consumer Cyclicals $91,759,658
-----------
Consumer Staples - 20.1%
Beverages (Non-Alcoholic) - 0.0%
11,237 Buenos Aires Embotelladora S.A. (A.D.R.)* $ 0
-----------
Foods - 5.0%
700,000 Chiquita Brands International, Inc. $ 7,437,500
484,700 Maple Leaf Foods, Inc. 4,083,668
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Foods - (continued)
706,686 WLR Foods, Inc. $ 6,095,167
-----------
$17,616,335
-----------
Household Products (Non-Durables) - 5.2%
20,000 American Safety Razor Co.* $ 223,750
365,200 First Brands Corp. 13,786,300
58,800 National Presto Industries, Inc. 2,267,475
523,000 Royal Appliance Manufacturing Co.* 2,092,000
-----------
$18,369,525
-----------
Restaurants - 2.8%
10,000 Advantica Restaurant Group, Inc.* $ 63,750
720,000 Chart House Enterprises, Inc.*+ 3,060,000
275,000 Luby's Cafeterias, Inc. 4,090,625
398,100 Uno Restaurant Corp.* 2,637,413
-----------
$ 9,851,788
-----------
Retail Stores (Drug Stores) - 3.1%
600,100 Drug Emporium, Inc.* $ 2,625,438
1,011,700 Phar-Mor, Inc.*+ 8,346,525
-----------
$10,971,963
-----------
Services (Employment) - 1.2%
1,006,000 Transmedia Network Inc.*+ $ 4,212,625
-----------
Services (Facilities & Environment) - 0.7%
190,600 Dames & Moore Group $ 2,287,200
-----------
Specialty Printing - 2.1%
500,000 John H. Harland Co. $ 7,250,000
-----------
Total Consumer Staples $70,559,436
-----------
Energy - 5.0%
Oil & Gas (Exploration/Production) - 5.0%
352,300 Forest Oil Corp.* $ 3,589,056
295,500 Louis Dreyfus Natural Gas Corp.* 4,303,219
497,500 Plains Resources, Inc.* 8,457,500
100,000 Vintage Petroleum, Inc. 1,300,000
-----------
Total Energy $17,649,775
-----------
</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>
Financial - 3.6%
Insurance (Life/Health) - 1.3%
200,700 American Annuity Group, Inc. $ 4,616,100
-----------
Insurance (Property/Casualty) - 2.1%
40,000 Financial Security Assurance Holdings Ltd. $ 1,992,500
390,000 TIG Holdings, Inc. 5,435,625
-----------
$ 7,428,125
-----------
Investment Management - 0.2%
95,800 Phoenix Investment Partners, Ltd. $ 772,387
-----------
Total Financial $12,816,612
-----------
Healthcare - 0.8%
Healthcare (Hospital Management) - 0.5%
172,400 Magellan Health Services, Inc.* $ 1,562,375
-----------
Healthcare (Specialized Services) - 0.3%
371,900 Cohr, Inc.*+ $ 1,115,700
-----------
Total Healthcare $ 2,678,075
-----------
Technology - 9.1%
Communications Equipment - 2.4%
340,000 Glenayre Technologies, Inc.* $ 2,040,000
874,500 PictureTel Corp.* 6,449,438
-----------
$ 8,489,438
-----------
Computers (Peripherals) - 1.8%
702,500 Boca Research, Inc.*+ $ 1,185,469
810,000 In Focus Systems, Inc.* 5,062,500
-----------
$ 6,247,969
-----------
Computers (Software & Services) - 1.9%
205,700 The Learning Company, Inc.* $ 5,309,631
712,000 WorkGroup Technology Corp.*+ 1,335,000
-----------
$ 6,644,631
-----------
Electronics (Component Distributors) - 0.8%
35,500 Espey Manufacturing & Electronics Corp.* $ 457,063
631,700 Signal Technology Corp.*+ 2,210,950
-----------
$ 2,668,013
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Small Company Fund
SCHEDULE OF INVESTMENTS 10/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Electronics (Defense) - 0.4%
915,000 NAI Technologies, Inc.*+ $ 1,486,875
------------
Equipment (Semiconductor) - 0.7%
150,000 BMC Industries, Inc. $ 1,078,125
371,000 Ferrofluidics Corp.*+ 1,275,312
20,000 Lam Research Corp.* 288,750
------------
$ 2,642,187
------------
Services (Data Processing) - 1.1%
470,000 Broadway & Seymour, Inc.*+ $ 1,645,000
377,200 National Processing, Inc.* 2,216,050
------------
$ 3,861,050
------------
Total Technology $ 32,040,163
------------
Transportation - 1.1%
Air Freight - 0.8%
500,000 Pittston BAX Group $ 2,906,250
------------
Railways - 0.3%
60,000 Yellow Corp.* $ 963,750
------------
Total Transportation $ 3,870,000
------------
TOTAL COMMON STOCKS
(Cost $354,487,467) $314,783,693
------------
Principal
Amount
TEMPORARY CASH INVESTMENTS - 10.6%
Commercial Paper - 10.6%
$13,725,000 American Express Credit Corp., 5.18%, 11/2/98 $ 13,725,000
12,856,000 Citigroup Inc., 5.25%, 11/3/98 12,856,000
10,894,000 Household Finance Corp., 5.5%, 11/4/98 10,894,000
------------
TOTAL TEMPORARY CASH INVESTMENTS $ 37,475,000
(Cost $37,475,000 ------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $391,962,467) (a) $352,258,693
============
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
* Non-income producing security.
+ Investment held by the Fund representing 5% or more of the outstanding
voting stock of such company.
(a) At October 31, 1998, the net unrealized loss on investments based on cost
for federal income tax purposes of $391,962,467 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 40,966,525
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (80,670,299)
------------
Net unrealized loss $(39,703,774)
============
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the year ended October 31, 1998, aggregated $198,313,676 and $290,619,802,
respectively.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Small Company Fund
BALANCE SHEET 10/31/98
<TABLE>
<S> <C>
ASSETS:
Investment in securities (including temporary cash
investments of $37,475,000)(cost $391,962,467) $352,258,693
Cash 105
Receivables -
Investment securities sold 1,030,949
Fund shares sold 1,203,004
Dividends and interest 129,585
Organizational costs - net 19,291
Other 7,572
------------
Total assets $354,649,199
------------
LIABILITIES:
Payables -
Investment securities purchased $ 5,066,290
Fund shares repurchased 647,118
Due to affiliates 487,665
Accrued expenses 117,593
------------
Total liabilities $ 6,318,666
------------
NET ASSETS:
Paid-in capital $375,392,946
Accumulated undistributed net realized gain on investments 12,641,361
Net unrealized loss on investments (39,703,774)
------------
Total net assets $348,330,533
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $162,536,029/15,219,762 shares) $ 10.68
============
Class B (based on $174,097,145/16,677,007 shares) $ 10.44
============
Class C (based on $11,697,359/1,120,733 shares) $ 10.44
============
MAXIMUM OFFERING PRICE:
Class A $ 11.33
============
</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 10/31/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $17,102) $2,493,280
Interest 1,852,950
----------
Total investment income $ 4,346,230
------------
EXPENSES:
Management fees $4,017,826
Transfer agent fees
Class A 614,003
Class B 522,126
Class C 37,215
Distribution fees
Class A 529,484
Class B 2,394,395
Class C 164,632
Accounting 150,692
Custodian fees 75,807
Registration fees 42,922
Professional fees 56,196
Printing 39,051
Organizational costs 10,283
Fees and expenses of nonaffiliated trustees 24,609
Miscellaneous 9,490
----------
Total expenses $ 8,688,731
Less fees paid indirectly (61,306)
------------
Net expenses $ 8,627,425
------------
Net investment loss $ (4,281,195)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments (including net loss of
$4,343,567 from affiliated companies) $ 12,637,156
Change in net unrealized gain on investments (104,048,427)
------------
Net loss on investments $(91,411,271)
------------
Net decrease in net assets resulting from operations $(95,692,466)
============
</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 Years Ended 10/31/98 and 10/31/97
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
<S> <C> <C>
FROM OPERATIONS:
Net investment loss $ (4,281,195) $ (5,584,672)
Net realized gain on investments 12,637,156 69,812,627
Change in net unrealized gain or loss on investments (104,048,427) 65,111,218
------------- ------------
Net increase (decrease) in net assets resulting from
operations $ (95,692,466) $129,339,173
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain:
Class A ($1.83 and $0.91 per share, respectively) $ (29,848,737) $(15,757,933)
Class B ($1.83 and $0.91 per share, respectively) (32,228,495) (15,659,376)
Class C ($1.83 and $0.91 per share, respectively) (2,149,245) (1,198,552)
------------- ------------
Total distributions to shareholders $ (64,226,477) $(32,615,861)
------------- ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 79,726,950 $ 81,888,958
Reinvestment of distributions 55,328,290 28,220,336
Cost of shares repurchased (164,397,741) (124,997,871)
------------- ------------
Net decrease in net assets resulting from
fund share transactions $ (29,342,501) $(14,888,577)
------------- ------------
Net increase (decrease) in net assets $(189,261,444) $ 81,834,735
NET ASSETS:
Beginning of year 537,591,977 455,757,242
------------- ------------
End of year (including accumulated undistributed net
investment income of $0 and $0, respectively) $ 348,330,533 $537,591,977
============= ============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '98 Shares '98 Amount '97 Shares '97 Amount
Shares sold 3,506,941 $ 43,713,957 4,220,016 $ 55,164,381
Reinvestment of distributions 2,150,568 27,355,224 1,162,079 14,305,198
Less shares repurchased (6,910,403) (87,677,518) (6,412,012) (86,801,534)
---------- ------------- ---------- -------------
Net decrease (1,252,894) $ (16,608,337) (1,029,917) $ (17,331,955)
========== ============= ========== =============
CLASS B
Shares sold 2,374,376 $ 29,821,612 1,871,189 $ 24,706,488
Reinvestment of distributions 2,107,745 26,367,892 1,067,469 13,044,471
Less shares repurchased (5,520,410) (68,017,968) (2,489,326) (33,236,413)
---------- ------------- ---------- -------------
Net increase (decrease) (1,038,289) $ (11,828,464) 449,332 $ 4,514,546
========== ============= ========== =============
CLASS C
Shares sold 481,456 $ 6,191,381 152,724 $ 2,018,089
Reinvestment of distributions 128,209 1,605,174 71,249 870,667
Less shares repurchased (675,543) (8,702,255) (372,397) (4,959,924)
---------- ------------- ---------- -------------
Net decrease (65,878) $ (905,700) (148,424) $ (2,071,168)
========== ============= ========== =============
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 10/31/98
<TABLE>
<CAPTION>
11/2/95
Year Ended Year Ended to
10/31/98 10/31/97 10/31/96
<S> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 15.31 $ 12.66 $ 10.00
--------- -------- -------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.07) $ (0.11) $ 0.05
Net realized and unrealized gain (loss) on
investments (2.73) 3.67 2.63
--------- -------- -------
Net increase (decrease) from
investment operations $ (2.80) $ 3.56 $ 2.68
Distributions to shareholders:
Net investment income - - (0.02)
Net realized gain (1.83) (0.91) -
--------- -------- -------
Net increase (decrease) in net asset value $ (4.63) $ 2.65 $ 2.66
--------- -------- -------
Net asset value, end of period $ 10.68 $ 15.31 $ 12.66
========== ======== =======
Total return* (20.19)% 29.88% 26.87%
Ratio of net expenses to average net assets 1.45%+ 1.49%+ 1.54%**+
Ratio of net investment income (loss) to
average net assets (0.54)%+ (0.76)%+ 0.34%**+
Portfolio turnover rate 45% 57% 43%**
Net assets, end of period (in thousands) $ 162,536 $252,177 $221,601
Ratios assuming no waiver of management
fees and assumption of expenses by PIM and
no reduction for fees paid indirectly:
Net expenses 1.45% - 1.55%**
Net investment income (loss) (0.54)% - 0.33%**
Ratios assuming waiver of management fees
and assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 1.44% 1.48% 1.51%**
Net investment income (loss) (0.53)% (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.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 10/31/98
<TABLE>
<CAPTION>
11/2/95
Year Ended Year Ended to
10/31/98 10/31/97 10/31/96
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 15.10 $ 12.59 $ 10.00
--------- -------- -------
Increase (decrease) from investment
operations:
Net investment loss $ (0.18) $ (0.20) $ (0.01)
Net realized and unrealized gain (loss) on
investments (2.65) 3.62 2.62
--------- -------- -------
Net increase (decrease) from
investment operations $ (2.83) $ 3.42 $ 2.61
Distributions to shareholders:
In excess of net investment income - - (0.02)
Net realized gain (1.83) (0.91) -
--------- -------- -------
Net increase (decrease) in net asset value $ (4.66) $ 2.51 $ 2.59
--------- -------- --------
Net asset value, end of period $ 10.44 $ 15.10 $ 12.59
========== ======== =======
Total return* (20.73)% 28.88% 26.09%
Ratio of net expenses to average net assets 2.15%+ 2.19%+ 2.26%**+
Ratio of net investment loss to average net
assets (1.24)%+ (1.46)%+ (0.42)%**+
Portfolio turnover rate 45% 57% 43%**
Net assets, end of period (in thousands) $ 174,097 $267,489 $217,346
Ratios assuming no waiver of management
fees and assumption of expenses by PIM and
no reduction for fees paid indirectly:
Net expenses 2.15% - 2.27%**
Net investment loss (1.24)% - (0.43)%**
Ratios assuming waiver of management fees
and assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 2.14% 2.18% 2.23%**
Net investment loss (1.23)% (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.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Small Company Fund
FINANCIAL HIGHLIGHTS 10/31/98
<TABLE>
<CAPTION>
1/31/96
Year Ended Year Ended to
10/31/98 10/31/97 10/31/96
<S> <C> <C> <C>
CLASS C
Net asset value, beginning of period $ 15.11 $ 12.59 $ 11.01
--------- -------- -------
Increase (decrease) from investment
operations:
Net investment loss $ (0.18) $ (0.21) $ (0.03)
Net realized and unrealized gain (loss) on
investments (2.66) 3.64 1.61
--------- -------- -------
Net increase (decrease) from
investment operations $ (2.84) $ 3.43 $ 1.58
Distributions to shareholders:
Net realized gain (1.83) (0.91) -
--------- -------- -------
Net increase (decrease) in net asset value $ (4.67) $ 2.52 $ 1.58
--------- -------- -------
Net asset value, end of period $ 10.44 $ 15.11 $ 12.59
========= ======== =======
Total return* (20.79)% 28.96% 14.35%
Ratio of net expenses to average net assets 2.16%+ 2.17%+ 2.25%**+
Ratio of net investment loss to average net
assets (1.24)%+ (1.44)%+ (0.45)%**+
Portfolio turnover rate 45% 57% 43%**
Net assets, end of period (in thousands) $ 11,697 $ 17,927 $16,811
Ratios assuming reduction for fees paid
indirectly:
Net expenses 2.14% 2.16% 2.21%**
Net investment loss (1.22)% (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.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 10/31/98
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. 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. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the Exchange. In computing the net asset
value, securities are valued at the last sale price on the principal exchange
where they are traded. Securities that have not traded on the date of
valuation, or securities for which sale prices are not generally reported,
are valued at the mean between the last bid and asked prices. Securities for
which market quotations are not readily available are valued at their fair
values as determined by, or under the direction of, the Trustees. 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.
The Fund has reclassified $4,281,195 from accumulated net investment loss to
paid-in capital. The reclassification has no impact on the net asset value of
the Fund and is designed to present the Fund's capital on a tax basis.
In order to comply with the federal income tax regulations, the Fund has
designated $12,637,156 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., the principal underwriter for the Fund and an indirect
subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $98,527 in
underwriting commissions on the sale of fund shares during the year ended
October 31, 1998.
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 10/31/98 (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 Pioneer Investment Management, Inc. (PIM) 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
PIM, 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 and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At October 31, 1998, $244,955 was payable to PIM
related to management fees and administrative 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 $66,405 in transfer agent fees payable to PSC at October 31,
1998.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net
24
<PAGE>
Pioneer Small Company Fund
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 the Class C Plan, the Fund pays PFD 1.00% of the average daily
net assets attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for personal
services and/or account maintenance services or distribution services with
regard to Class B and Class C shares. Included in due to affiliates is $176,305
in distribution fees payable to PFD at October 31, 1998.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of
purchase. Class B shares that are redeemed within six years of purchase are
subject to a CDSC at declining rates beginning at 4.0%, based on the lower of
cost or market value of shares being redeemed. Redemptions of Class C shares
within one year of purchase are subject to a CDSC of 1.00%. Proceeds from the
CDSCs are paid to PFD. For the year ended October 31, 1998, CDSCs in the amount
of $ 720,303 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain directed brokerage and expense offset
arrangements resulting in a reduction in the Fund's total expenses. For the
year ended October 31, 1998, the Fund's expenses were reduced by $61,306 under
such arrangements.
6. Line Of Credit Facility
Effective April 14, 1998, the Fund, along with certain other funds in the
Pioneer Family of Funds (the Funds), collectively participate in a $50 million
committed, unsecured revolving line of credit facility. Borrowings are used
solely for temporary or emergency purposes. The Fund may borrow up to the
lesser of $50 million or the limits set by its prospectus for borrowings.
Interest on collective borrowings of up to $25 million is payable at the
Federal Funds Rate plus 3/8% on an annualized basis, or at the Federal Funds
Rate plus 1/2% if the borrowing exceeds $25 million at any one time. The Funds
pay an annual commitment fee for this facility. The commitment fee is allocated
among such Funds based on their respective borrowing limits. For the period
ended October 31, 1998, there were no borrowings under this agreement.
25
<PAGE>
Pioneer Small Company Fund
NOTES TO FINANCIAL STATEMENTS 10/31/98 (continued)
7. Affiliated Companie
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, 1998:
<TABLE>
<CAPTION>
Dividend
Affiliates Purchases Sales Income Value
- ---------------------------------- -------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Acme Electric Corp. $ - $ - $ - $ 2,596,344
Anacomp, Inc. 6,029,919 - - 13,854,465
Boca Research, Inc. 542,813 385,863 - 1,185,469
Broadway & Seymour, Inc. 606,397 914,114 - 164,500
Catherines Stores Corp. - 1,245,583 - 3,655,000
Chart House Enterprises, Inc. 4,961,103 - - 3,060,000
Chic by H.I.S., Inc. - 2,703,109 4,980 1,836,375
Cohr, Inc. 5,827,846 552,459 - 1,115,700
Ferrofluidics Corp. 175,000 71,248 - 1,275,312
InterTAN, Inc. - - - 5,790,625
Jan Bell Marketing, Inc. - - - 12,197,763
NAI Technologies, Inc. 4,880,580 - - 1,486,875
Nashua Corp. - - - 8,031,406
Phar-Mor, Inc. - 1,967,122 - 8,346,525
Salient 3 Communication Inc. 455,000 - 82,911 3,041,892
Signal Technology Corp. 1,044,750 210,748 - 2,210,950
The Leslie Fay Company, Inc. 750,000 - - 4,056,000
Specialty Chem Resources, Inc. - - - 217,988
The York Group, Inc. 8,830,687 - 32,496 5,622,750
Transmedia Network, Inc. 1,295,789 - 42,000 4,212,625
Uniroyal Technology Corp. 44,313 1,549,528 - 11,175,000
Work Group Technology Corp. - 11,500 - 1,335,000
------------- ------------ ---------- -----------
$35,444,197 $9,611,274 $162,387 $96,468,564
============= ============ ========== ===========
</TABLE>
- -------------------------------------------------------------------------------
26
<PAGE>
Pioneer Small Company Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners 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, 1998, and the
related statement of operations, the statements of changes in net assets, and
the financial highlights for the periods presented. These financial statements
and 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, 1998 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Small Company Fund as of October 31, 1998, the results of its
operations, the changes in its net assets, and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 4, 1998
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 E. Grady, Vice President
John W. Kendrick John A. Boynton, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
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
United States Taxable
Pioneer Capital Growth Fund Pioneer America Income Trust
Pioneer Growth Shares Pioneer Bond Fund
Pioneer Micro-Cap Fund Pioneer Short-Term Income Trust
Pioneer Mid-Cap Fund
Pioneer Small Company Fund Tax-Free
Pioneer Intermediate Tax-Free Fund
Pioneer Tax-Free Income Fund
International/Global
Pioneer Emerging Markets Fund
Pioneer Europe Fund Money Market Fund
Pioneer Gold Shares Pioneer Cash Reserves Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
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.
<TABLE>
<CAPTION>
Call us for:
<S> <C>
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
</TABLE>
This report must be preceded or accompanied by a current
Fund prospectus.
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
1298-5779
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