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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07525
Pioneer Mid Cap Growth Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: September 30
Date of reporting period: October 1, 2004 through March 31, 2005
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
PIONEER
-----------------------
MID CAP
GROWTH
FUND
Semiannual
Report
3/31/05
[LOGO] PIONEER
Investments(R)
Table of Contents
- -------------------------------------------------------
Letter to Shareowners 1
Portfolio Summary 2
Prices and Distributions 3
Performance Update 4
Comparing Ongoing Fund Expenses 8
Portfolio Management Discussion 10
Schedule of Investments 14
Financial Statements 20
Notes to Financial Statements 27
Trustees, Officers and Service Providers 34
Factors Considered by the Independent Trustees
in Approving the Management Contract 35
Programs and Services for Pioneer Shareholders 41
Retirement Plans from Pioneer 43
Pioneer Mid Cap Growth Fund
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LETTER TO SHAREOWNERS 3/31/05
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Dear Shareowners,
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U.S. stocks moved higher for much of the first quarter, with the Standard &
Poor's 500 Stock Index and the Dow Jones Industrial Average advancing to
three-year highs in early March. But from that point on, soaring oil prices and
the steady ratcheting up of interest rates overwhelmed sentiment and caused
stocks to retrace their gains. The Dow Industrials and the S&P 500 each lost
about two-and-a-half percent for the period, while the tech-heavy NASDAQ
composite fell over eight percent.
With investors less welcoming of risk, large-capitalization stocks, viewed as
more stable, held up better than small- and mid-sized issues. And value stocks
were more resilient than growth stocks across all capitalization ranges.
Determined to prevent damaging inflation, the Federal Reserve Board has
repeatedly raised short-term interest rates. As a result, bond returns were
modestly negative in most sectors. Fixed-income investors also became more risk
averse; high-yield and other corporate sectors retrenched after a run of stellar
performance, while Treasuries and mortgage-backed securities showed small
declines. Municipal revenue bonds trended higher against a backdrop of heavy new
issuance by states and localities.
Higher U.S. interest rates enhanced the dollar's appeal and brought at least a
pause in its long, sharp drop. But the stronger dollar meant muted returns for
U.S. investors in overseas markets. Globally, economies rich in metals and other
industrial commodities continued to thrive on heavy demand from China and
elsewhere. Meanwhile, growth in Japan may have stalled, and Europe's expansion
moved ahead slowly.
We believe that the U.S. economy and corporate earnings will continue to grow at
a comfortable pace. And although oil prices and interest rates remain real
concerns, Pioneer's global investment experts continue to find what we believe
are attractive stocks and bonds for our domestic and international funds.
Expanding your opportunities
The quarter was like all others; different classes of investments delivered
different returns. That's why allocating your portfolio across several
investment categories is one way to seek wider opportunities. Pioneer's
disciplined approach and growing range of products are designed to help you
achieve that important objective. For thoughtful guidance on how to align your
portfolio with your goals, contact your financial professional.
Please consider a fund's investment objective, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about each fund and should be read carefully before you invest. To obtain a
prospectus and for other information on any Pioneer fund, contact your financial
advisor, call 1-800-225-6292 or visit our web site at www.pioneerfunds.com.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood
President
Pioneer Investment Management, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1
Pioneer Mid Cap Growth Fund
PORTFOLIO SUMMARY 3/31/05
Portfolio Diversification
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(As a percentage of total investment portfolio)
[DATA BELOW IS REPRESENTED BY A PIE CHART IN THE ORIGINAL REPORT]
U.S. Common Stocks 93.0%
Temporary Cash Investments 5.4%
Depositary Receipts for International Stocks 1.6%
Sector Distribution
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(As a percentage of equity holdings)
[DATA BELOW IS REPRESENTED BY A PIE CHART IN THE ORIGINAL REPORT]
Information Technology 32.7%
Health Care 22.3%
Consumer Discretionary 18.2%
Industrials 12.7%
Financials 6.3%
Consumer Staples 3.8%
Materials 2.2%
Energy 1.8%
10 Largest Holdings
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(As a percentage of total investment in securities)*
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1. Sandisk Corp. 3.12% 6. Biomet, Inc. 2.33%
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2. IVAX Corp. 3.07 7. Veritas Software Corp. 2.28
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3. Avaya, Inc. 3.04 8. Wendy's International, Inc. 2.12
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4. Macrovision Corp. 2.96 9. ITT Industries, Inc. 2.08
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5. American Standard Co., Inc. 2.41 10. Ask Jeeves, Inc. 2.06
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*This list excludes temporary cash and derivative instruments. The portfolio is
actively managed, and current holdings may be different.
2
Pioneer Mid Cap Growth Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
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3/31/05 9/30/04
Class ------- -------
A $14.74 $13.69
B $12.82 $11.99
C $13.26 $12.39
Y $14.75 $14.72
Distributions Per Share - 10/1/04 - 3/31/05
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Net
Investment Short-Term Long-Term
Income Capital Gains Capital Gains
Class ---------- ------------- -------------
A $ - $ - $ -
B $ - $ - $ -
C $ - $ - $ -
Y $ - $ - $ -
3
Pioneer Mid Cap Growth Fund
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PERFORMANCE UPDATE 3/31/05 CLASS A SHARES
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Investment Returns
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The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Mid Cap Growth Fund at public offering price, compared to that of
the Russell Midcap Growth Index.
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Average Annual Total Returns
(as of March 31, 2005)
Net Asset Public Offering
Period Value Price (POP)
10 Years 5.44% 4.82%
5 Years -5.81 -6.91
1 Year 0.61 -5.15
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[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Russell
Mid Cap Midcap
Growth Fund Growth Index
3/31/1995 $9,427 $10,000
$10,994 $12,870
3/31/1997 $10,770 $13,686
$15,399 $19,481
3/31/1999 $14,009 $21,215
$21,592 $37,594
3/31/2001 $14,523 $20,521
$15,305 $21,484
3/31/2003 $11,025 $15,876
$15,913 $23,757
3/31/2005 $16,011 $25,731
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Russell Midcap Growth Index measures the performance of U.S. mid-cap growth
stocks. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in an Index.
4
Pioneer Mid Cap Growth Fund
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PERFORMANCE UPDATE 3/31/05 CLASS B SHARES
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Investment Returns
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The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Mid Cap Growth Fund, compared to that of the Russell Midcap Growth
Index.
- ---------------------------------
Average Annual Total Returns
(as of March 31, 2005)
If If
Period Held Redeemed
10 Years 3.47% 3.47%
5 Years -7.03 -7.03
1 Year -0.70 -4.67
- ---------------------------------
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Russell
Mid Cap Midcap
Growth Fund Growth Index
2/29/1996 $10,000 $10,000
$10,254 $10,079
3/31/1997 $9,956 $10,719
$14,043 $15,257
3/31/1999 $12,641 $16,615
$19,282 $29,443
3/31/2001 $12,811 $16,071
$13,322 $16,826
3/31/2003 $9,466 $12,433
$13,490 $18,606
3/31/2005 $13,396 $20,151
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If redeemed" returns reflect the deduction of applicable contingent deferred
sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC
is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Index comparison begins 2/29/96. The Russell Midcap Growth Index measures the
performance of U.S. mid-cap growth stocks. Index returns are calculated monthly,
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, expenses or sales charges. You cannot invest directly in an Index.
5
Pioneer Mid Cap Growth Fund
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PERFORMANCE UPDATE 3/31/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
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The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Mid Cap Growth Fund, compared to that of the Russell Midcap Growth
Index.
- ----------------------------------------
Average Annual Total Returns
(As of March 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(2/1/96) 3.66% 3.66%
5 Years -7.06 -7.06
1 Year -0.60 -0.60
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[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Russell
Mid Cap Midcap
Growth Fund Growth Index
2/29/1996 $10,000 $10,000
$10,254 $10,079
3/31/1997 $9,982 $10,719
$14,240 $15,257
3/31/1999 $12,848 $16,615
$19,632 $29,443
3/31/2001 $13,059 $16,071
$13,531 $16,826
3/31/2003 $9,609 $12,433
$13,696 $18,606
3/31/2005 $13,613 $20,151
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Index comparison begins 2/29/96. The Russell Midcap Growth Index measures the
performance of U.S. mid-cap growth stocks. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in an
Index.
6
Pioneer Mid Cap Growth Fund
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PERFORMANCE UPDATE 3/31/05 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Mid Cap Growth Fund, compared to that of the Russell Midcap Growth
Index.
- ----------------------------------
Average Annual Total Returns
(As of March 31, 2005)
If If
Period Held Redeemed
10 Years 5.45% 5.45%
5 Years -5.79 -5.79
1 Year 0.68 0.68
- ----------------------------------
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Russell
Mid Cap Midcap
Growth Fund Growth Index
3/31/1995 $10,000 $10,000
$11,662 $12,870
3/31/1997 $11,425 $13,686
$16,334 $19,481
3/31/1999 $14,861 $21,215
$22,904 $37,594
3/31/2001 $15,405 $20,521
$16,235 $21,484
3/31/2003 $11,695 $15,876
$16,880 $23,757
3/31/2005 $16,995 $25,731
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect
differences in expenses, including the Rule 12b-1 fees applicable to A shares.
Since fees for A shares are generally higher than those of Y shares, the
performance shown for Y shares prior to their inception (2/1/05) would have
been higher. Class Y shares are not subject to sales charges and are available
for limited groups of eligible investors, including institutional investors.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Russell Midcap Growth Index measures the performance of U.S. mid-cap growth
stocks. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in an Index.
7
Pioneer Mid Cap Growth Fund
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COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value - $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Mid Cap Growth Fund
Based on actual returns from October 1, 2004 through March 31, 2005
Actual Share Class A B C Y
- --------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 10/1/04
(2/1/05 for Class Y)
Ending Account Value $1,076.70 $1,069.20 $1,070.20 $1,011.70
On 3/31/05
Expenses Paid $ 4.76 $ 11.45 $ 10.79 $ 0.86
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 0.92%, 2.22%,
2.09% and 0.53%, for Class A, Class B, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period), 59/365 for
Class Y.
8
Pioneer Mid Cap Growth Fund
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Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Mid Cap Growth Fund
Based on a hypothetical 5% return per year before expenses, reflecting the
period from October 1, 2004 through March 31, 2005
Hypothetical Share Class A B C Y
- -----------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 10/1/04
(2/1/05 for Class Y)
Ending Account Value $1,020.34 $1,013.86 $1,014.51 $1,025.07
On 3/31/05
Expenses Paid During Period* $ 4.63 $ 11.15 $ 10.50 $ 0.86
* Expenses are equal to the Fund's annualized expense ratio of 0.92%, 2.22%,
2.09% and 0.53%, for Class A, Class B, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 183/366 (to reflect the one-half year period), 59/365 for
Class Y.
9
Pioneer Mid Cap Growth Fund
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PORTFOLIO MANAGEMENT DISCUSSION 3/31/05
- --------------------------------------------------------------------------------
Midcap growth stocks, as measured by the Fund's benchmark, the Russell Midcap
Growth Index, outperformed large-cap growth issues, represented by the Russell
1000 Growth Index, over the past six months. In the pages that follow,
co-managers Christopher M. Galizio and Stephen A. Balter describe the market
background as well as the steps they have taken since assuming responsibility
for the Fund in October of last year.
Q. Please describe market conditions and how they affected midcap stocks.
A. The market rose in the fourth quarter of last year, responding to
continuing economic expansion and growing corporate profits. But stocks
have since encountered powerful headwinds in the form of record oil prices
and several interest rate hikes. Midcap companies generally weathered the
lackluster first quarter successfully. Midcap securities tend to be more
narrowly focused, while larger companies often experience more direct
impact from top-down economic forces, such as energy costs and interest
rates.
Q. How did the Fund perform against that background?
A. Pioneer Mid Cap Growth Fund's Class A shares had a total return of 7.67%,
at net asset value, for the six months ended March 31, 2005. The Russell
Midcap Growth Index, the Fund's benchmark, had a return of 10.48% for the
same period. During the period, the average return of the 541 funds in
Lipper's Mid Cap Growth category was 9.81%.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q. What strategies did you pursue, and how did they affect results?
A. Our bottom-up stock selection process determines which sectors receive
greater or lesser representation in the portfolio. We seek to purchase
companies that are expanding their cash flow at an above-average rate,
provided they are available at lower valuations
10
Pioneer Mid Cap Growth Fund
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- --------------------------------------------------------------------------------
than their peers. Several stocks that were in the Fund at the onset of the
period did not meet those criteria and have been sold.
Much of the Fund's sub-par performance relative to the benchmark came last
fall, the result of industry weightings as well as stock choices. An
example is semiconductor manufacturer Lexar, which underperformed
dramatically early in the period and has since been eliminated along with
other chip makers. The Fund was heavily overweighted in materials, and we
have reduced exposure as valuations became excessive, a decision that has
favored performance over this short time period. The portfolio was also
underweighted in some better-performing areas, including consumer
discretionary, health care and industrial issues. Following a period of
restructuring, the Fund has been tracking its benchmark more closely in
recent weeks.
The shift in process that we have implemented led us to additional
opportunities in technology, and the portfolio is now overweighted in that
sector. We are also finding attractive potential among healthcare stocks;
the Fund has swung from under- to overweight, relative to its benchmark,
in that market segment.
Q. What are some examples of stocks that meet your selection criteria?
A. Recent acquisitions include: Endo Pharmaceutical, which has promising
products under development; Avaya, a voice-over-internet (VOIP) phone
company that may benefit if more businesses adopt this new telephone mode;
and Veritas, whose proposed takeover by Symantec will create the world's
fourth largest software company.
Q. Which of your decisions aided or hurt results?
A. Our valuation-oriented process sometimes leads us to sectors early in their
growth cycles, and so stock selection has been the Fund's primary driver
recently. For example, increased exposure to technology hurt results as
the sector lagged. But solid gains in two tech holdings partially offset
that shortfall. Take Two Interactive extended its streak of best-selling
video game offerings with new versions of its Grand Theft Auto series.
Sungard Data, a major provider of software to the financial services
industry, was the object of a buyout by a leveraged buyout firm, one that
uses a
11
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 3/31/05 (continued)
- --------------------------------------------------------------------------------
company's assets as the primary source of capital in a takeover. The
absence of Apple Computer, which weighs heavily in the benchmark, hurt
results in technology.
Among consumer discretionary issues, both our heavy focus and individual
selections helped lift performance. Teen retailers American Eagle,
Aeropostale and Pacific Sunwear were standouts, as teenagers scooped up
multiple pairs of high-priced jeans to be worn on a variety of occasions.
American Eagle is also capitalizing on underutilized space by offering
footwear.
On the negative side of technology, shares of slot machine maker
International Game Technology slumped under intense competition and delays
in regulatory approvals. On-line broker E-Trade fell as larger competitors
cut trading fees; shares now appear undervalued, and we are retaining our
position. The same is true of John Deere, whose shares have declined more
than farm industry conditions appear to warrant.
We added to the Fund's position in drug manufacturer IVAX when valuations
reached levels that seemed to ignore the company's strong current pipeline
as well as a promising new asthma formulation. Since then, the company's
optimistic earnings forecasts have sparked a recovery in the shares.
The Fund's worst performer was Doral Financial, a mortgage lender in
Puerto Rico. Doral stunned investors when it reported losses on certain
mortgage transactions and when questions were raised on the way it valued
some assets while interest rates were rising. We think the market has
overreacted to these disclosures, but we are concerned about management's
lack of candor.
Q. What is your outlook for the economy and for midcap stocks?
A. After a period of superior performance, midcap growth issues may more
closely mirror results in the overall market in the months ahead.
Investors still appear biased in favor of value stocks, and so the switch
to growth is not yet at hand. In the meantime, we are finding good growth
prospects in energy, basic materials and industrials, areas not generally
viewed as growth sectors.
12
Pioneer Mid Cap Growth Fund
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- --------------------------------------------------------------------------------
We think the U.S. economy will grow at a moderate pace this year, perhaps
on the order of 3-3.5%. That kind of measured expansion represents a
potentially favorable environment for the kinds of growth companies we
have been finding and adding to the portfolio.
Investing in mid-sized companies may offer the potential for higher returns, but
these companies are also subject to greater short-term price fluctuations than
larger, more established companies.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
13
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/05 (unaudited)
- --------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 99.9%
Energy - 1.8%
Integrated Oil & Gas - 1.8%
136,500 Occidental Petroleum Corp. $ 9,714,705
------------
Total Energy $ 9,714,705
------------
Materials - 2.2%
Diversified Metals & Mining - 2.2%
202,300 Freeport-McMoRan Copper & Gold, Inc. (Class B) $ 8,013,103
87,200 Peabody Energy Corp. 4,042,592
------------
$ 12,055,695
------------
Total Materials $ 12,055,695
------------
Capital Goods - 8.5%
Aerospace & Defense - 1.5%
121,200 L-3 Communications Holdings, Inc. $ 8,607,624
------------
Industrial Conglomerates - 4.5%
287,800 American Standard Co., Inc. $ 13,376,944
127,700 ITT Industries, Inc. 11,523,648
------------
$ 24,900,592
------------
Industrial Machinery - 2.5%
131,200 Deere & Co. $ 8,807,456
126,900 Dover Corp. 4,795,551
------------
$ 13,603,007
------------
Total Capital Goods $ 47,111,223
------------
Commercial Services & Supplies - 4.2%
Diversified Commercial Services - 3.2%
159,700 The Dun & Bradstreet Corp.* $ 9,813,565
161,100 H & R Block, Inc. 8,148,438
------------
$ 17,962,003
------------
Employment Services - 1.0%
166,400 Career Education Corp.* $ 5,700,864
------------
Total Commercial Services & Supplies $ 23,662,867
------------
Consumer Durables & Apparel - 5.0%
Apparel, Accessories & Luxury Goods - 3.4%
271,800 American Eagle Outfitters, Inc. $ 8,031,690
431,800 TJX Co., Inc. 10,635,234
------------
$ 18,666,924
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Footwear - 1.6%
129,600 The Timberland Co.* $ 9,192,528
------------
Total Consumer Durables & Apparel $ 27,859,452
------------
Hotels, Restaurants & Leisure - 4.6%
Casinos & Gaming - 1.5%
318,200 International Game Technology $ 8,483,212
------------
Restaurants - 3.1%
227,100 Ruby Tuesday, Inc. $ 5,516,259
300,900 Wendy's International, Inc. 11,747,136
------------
$ 17,263,395
------------
Total Hotels, Restaurants & Leisure $ 25,746,607
------------
Media - 2.2%
Advertising - 2.2%
100,400 Getty Images, Inc.* $ 7,139,444
56,800 Omnicom Group 5,027,936
------------
$ 12,167,380
------------
Total Media $ 12,167,380
------------
Retailing - 6.3%
Apparel Retail - 3.0%
174,500 Aeropostale, Inc.* $ 5,714,875
135,700 Liz Claiborne, Inc. 5,445,641
207,600 Pacific Sunwear of California, Inc.* 5,808,648
------------
$ 16,969,164
------------
General Merchandise Stores - 1.7%
357,500 Fossil, Inc.* $ 9,268,188
------------
Specialty Stores - 1.6%
378,700 Claire's Stores, Inc. $ 8,725,248
------------
Total Retailing $ 34,962,600
------------
Food, Beverage & Tobacco - 2.7%
Soft Drinks - 2.7%
229,100 Cott Corp.* $ 5,551,093
180,000 Fomento Economico Mexicano SA de CV 9,639,000
------------
$ 15,190,093
------------
Total Food, Beverage & Tobacco $ 15,190,093
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Household & Personal Products - 1.0%
Household Products - 1.0%
127,500 Estee Lauder Co. $ 5,734,950
------------
Total Household & Personal Products $ 5,734,950
------------
Health Care Equipment & Services - 13.3%
Health Care Distributors - 1.6%
266,000 Par Pharmaceutical Co., Inc.* $ 8,895,040
------------
Health Care Equipment - 4.0%
356,700 Biomet, Inc. $ 12,948,210
159,100 Respironics, Inc.* 9,270,757
------------
$ 22,218,967
------------
Health Care Facilities - 1.5%
190,900 DaVita, Inc.* $ 7,989,165
------------
Health Care Services - 2.7%
354,900 IMS Health, Inc. $ 8,656,011
61,000 Quest Diagnostics, Inc. 6,412,930
------------
$ 15,068,941
------------
Health Care Supplies - 1.9%
149,400 Charles River Laboratories International, Inc.* $ 7,027,776
79,200 Smith & Nephew Plc (A.D.R.) (b) 3,723,984
------------
$ 10,751,760
------------
Managed Health Care - 1.6%
132,300 Coventry Health Care, Inc.* $ 9,014,922
------------
Total Health Care Equipment & Services $ 73,938,795
------------
Pharmaceuticals & Biotechnology - 9.0%
Biotechnology - 4.2%
180,200 Biogen Idec, Inc.* $ 6,218,702
288,500 Connetics Corp.* (b) 7,296,165
389,300 Cubist Pharmaceuticals, Inc.* 4,134,366
161,400 Gilead Sciences, Inc.* 5,778,120
------------
$ 23,427,353
------------
Pharmaceuticals - 4.8%
416,600 Endo Pharmaceuticals Holdings, Inc.* $ 9,394,330
860,037 IVAX Corp.* 17,002,931
------------
$ 26,397,261
------------
Total Pharmaceuticals & Biotechnology $ 49,824,614
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Banks - 1.7%
Diversified Banks - 0.7%
175,100 Doral Financial Corp. $ 3,832,939
------------
Thrifts & Mortgage Finance - 1.0%
264,100 Sovereign Bancorp, Inc. $ 5,852,456
------------
Total Banks $ 9,685,395
------------
Diversified Financials - 2.0%
Consumer Finance - 1.1%
339,700 Providian Financial Corp.* $ 5,829,252
------------
Investment Banking & Brokerage - 0.9%
423,900 E*TRADE Group, Inc.* $ 5,086,800
------------
Total Diversified Financials $ 10,916,052
------------
Insurance - 2.6%
Property & Casualty Insurance - 2.6%
171,200 Axis Capital Holdings, Ltd. $ 4,629,248
82,600 Montpelier RE Holdings, Ltd. 2,903,390
178,000 The PMI Group, Inc. 6,765,780
------------
$ 14,298,418
------------
Total Insurance $ 14,298,418
------------
Software & Services - 16.6%
Application Software - 7.7%
505,700 eResearch Technology, Inc.* $ 5,957,146
720,000 Macrovision Corp.* 16,408,800
361,800 Symantec Corp.* 7,717,194
544,350 Veritas Software Corp.* 12,639,807
------------
$ 42,722,947
------------
Data Processing & Outsourced Services - 3.1%
212,100 Hewitt Associates, Inc.* (b) $ 5,641,860
327,800 SunGard Data Systems, Inc.* 11,309,100
------------
$ 16,950,960
------------
Home Entertainment Software - 1.4%
196,832 Take-Two Interactive Software, Inc.* (b) $ 7,696,131
------------
Internet Software & Services - 3.5%
406,800 Ask Jeeves, Inc.* (b) $ 11,422,944
381,400 WebEx Communications, Inc.* (b) 8,234,426
------------
$ 19,657,370
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
IT Consulting & Other Services - 0.9%
127,500 Anteon International Corp.* $ 4,963,575
------------
Total Software & Services $ 91,990,983
------------
Technology Hardware & Equipment - 12.4%
Communications Equipment - 4.7%
1,445,900 Avaya, Inc.* $ 16,888,112
244,200 Plantronics, Inc. 9,299,136
------------
$ 26,187,248
------------
Computer Hardware - 1.3%
133,000 Diebold, Inc. $ 7,295,050
------------
Computer Storage & Peripherals - 5.7%
114,900 Lexmark International Group, Inc.* $ 9,188,553
87,700 Logitech International SA (A.D.R.)* 5,339,176
621,600 Sandisk Corp.* 17,280,480
------------
$ 31,808,209
------------
Electronic Equipment & Instruments - 0.7%
101,200 Waters Corp.* $ 3,621,948
------------
Total Technology Hardware & Equipment $ 68,912,455
------------
Semiconductors - 3.8%
Semiconductors - 3.8%
259,300 ATI Technologies, Inc.* $ 4,475,518
294,800 Linear Technology Corp. 11,293,788
196,600 Microchip Technology 5,113,566
------------
$ 20,882,872
------------
Total Semiconductors $ 20,882,872
------------
TOTAL COMMON STOCKS
(Cost $513,130,372) $554,655,156
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
TEMPORARY CASH INVESTMENTS - 5.7%
Security Lending Collateral - 5.75%
31,379,184 Securities Lending Investment Fund, 2.74% $ 31,379,184
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $31,379,184) $ 31,379,184
------------
TOTAL INVESTMENTS IN SECURITIES - 105.6%
(Cost $544,509,556) (a) $586,034,340
------------
OTHER ASSETS AND LIABILITIES - (5.6)% $(31,109,539)
------------
TOTAL NET ASSETS - 100.0% $554,924,801
============
(A.D.R.) American Depositary Receipt
* Non-Income producing security
(a) At March 31, 2005, the net unrealized gain on investments based on costfor federal income tax
purposes of $546,681,039 was as follows:
Aggregate gross unrealized gain for all investments in which there
is an excess of value over tax cost $58,645,854
Aggregate gross unrealized loss for all investments in which there
is an excess of tax cost over value (19,292,553)
-----------
Net unrealized gain $39,353,301
===========
(b) At March 31, 2005, the following securities were out on loan:
Shares Security Market Value
183,600 Ask Jeeves, Inc.* $ 5,155,488
274,047 Connetics Corp.* 6,930,649
157,000 Hewitt Associates, Inc.* 4,176,200
106,780 Smith & Nephew Plc (A.D.R.) 5,020,796
186,000 Take-Two Interactive Software, Inc.* 7,272,600
65,110 WebEx Communications, Inc.* 1,405,725
-----------
Total $29,961,457
===========
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended March 31, 2005 aggregated $515,488,596 and $544,234,318,
respectively.
The accompanying notes are an integral part of these financial statements. 19
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 3/31/05 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including securities
loaned of $29,961,457) (cost $544,509,556) $586,034,340
Cash 1,855,079
Receivables -
Investment securities sold 1,562,696
Fund shares sold 90,621
Dividends, interest and foreign taxes withheld 231,211
Other 23,644
------------
Total assets $589,797,591
------------
LIABILITIES:
Payables -
Investment securities purchased $ 2,349,119
Fund shares repurchased 539,861
Upon return of securities loaned 31,379,184
Due to affiliates 556,936
Accrued expenses 47,690
------------
Total liabilities $ 34,872,790
------------
NET ASSETS:
Paid-in capital $526,738,395
Accumulated net investment loss (319,536)
Accumulated net realized loss on investments (13,018,842)
Net unrealized gain on investments 41,524,784
------------
Total net assets $554,924,801
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $515,330,400/34,957,333 shares) $ 14.74
============
Class B (based on $27,702,158/2,161,021 shares) $ 12.82
============
Class C (based on $11,882,126/895,858 shares) $ 13.26
============
Class Y (based on $10,117/686 shares) $ 14.75
============
MAXIMUM OFFERING PRICE:
Class A ($14.74 [divided by] 94.25%) $ 15.64
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 3/31/05
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $8,682) $2,481,040
Interest 45,170
Income from securities loaned, net 17,261
----------
Total investment income $ 2,543,471
-----------
EXPENSES:
Management fees
Basic Fee $1,772,611
Performance Adjustment (546,005)
Transfer agent fees and expenses
Class A 532,104
Class B 105,716
Class C 37,839
Distribution fees
Class A 578,204
Class B 145,046
Class C 62,917
Administrative reimbursements 60,817
Custodian fees 10,832
Registration fees 42,604
Professional fees 25,190
Printing expense 22,341
Fees and expenses of nonaffiliated trustees 7,314
Miscellaneous 12,934
----------
Total expenses $ 2,870,464
Less fees paid indirectly (7,457)
-----------
Net expenses $ 2,863,007
-----------
Net investment loss $ (319,536)
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments $79,522,148
Change in net unrealized gain on investments (37,508,638)
-----------
Net gain on investments $42,013,510
-----------
Net increase in net assets resulting from operations $41,693,974
===========
The accompanying notes are an integral part of these financial statements. 21
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 3/31/05 and the Year Ended 9/30/04, respectively
Six Months
Ended
3/31/05 Year Ended
(unaudited) 9/30/04
FROM OPERATIONS:
Net investment loss $ (319,536) $ (3,301,176)
Net realized gain on investments 79,522,148 64,684,826
Change in net unrealized gain on investments (37,508,638) (16,245,791)
------------- --------------
Net increase in net assets resulting from operations $ 41,693,974 $ 45,137,859
------------- --------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 14,393,965 $ 49,529,921
Cost of shares repurchased (59,748,934) (107,897,229)
------------- --------------
Net decrease in net assets resulting from
Fund share transactions $ (45,354,969) $ (58,367,308)
------------- --------------
Net decrease in net assets $ (3,660,995) $ (13,229,449)
------------- --------------
NET ASSETS:
Beginning of period $ 558,585,796 $ 571,815,245
------------- --------------
End of period (including net investment loss of
($319,536) and $0, respectively) $ 554,924,801 $ 558,585,796
============= ==============
'05 Shares '05 Amount '04 Shares '04 Amount
(unaudited) (unaudited)
CLASS A
Shares sold 684,622 $ 9,929,991 2,276,275 $ 31,970,813
Less shares repurchased (3,474,639) (50,373,749) (5,718,483) (79,526,709)
---------- ------------ ---------- ------------
Net decrease (2,790,017) $(40,443,758) (3,442,208) $(47,555,896)
========== ============ ========== ============
CLASS B
Shares sold 205,500 $ 2,583,016 882,761 $ 10,847,251
Less shares repurchased (484,754) (6,116,151) (1,235,544) (15,123,819)
---------- ------------ ---------- ------------
Net decrease (279,254) $ (3,533,135) (352,783) $ (4,276,568)
========== ============ ========== ============
CLASS C
Shares sold 143,392 $ 1,870,958 528,037 $ 6,711,857
Less shares repurchased (248,329) (3,259,034) (1,092,632) (13,246,701)
---------- ------------ ---------- ------------
Net decrease (104,937) $ (1,388,076) (564,595) $ (6,534,844)
========== ============ ========== ============
CLASS Y (a)
Shares sold 686 $ 10,000
Less shares repurchased - -
---------- ------------
Net increase 686 $ 10,000
========== ============
(a) Class Y shares were first publicly offered on February 1, 2005.
The accompanying notes are an integral part of these financial statements. 22
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
3/31/05 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A (unaudited) 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
Net asset value, beginning of period $ 13.69 $ 12.68 $ 9.65 $ 11.61 $ 23.15 $ 18.08
--------- ------- ------- -------- -------- ---------
Increase (decrease) from investment operations:
Net investment loss $ - $ (0.06) $ (0.05) $ (0.06) $ (0.03) $ (0.06)
Net realized and unrealized gain (loss) on investments 1.05 1.07 3.08 (1.90) (8.39) 8.22
--------- ------- ------- -------- -------- ---------
Net increase (decrease) from investment operations $ 1.05 $ 1.01 $ 3.03 $ (1.96) $ (8.42) $ 8.16
Distributions to shareowners:
Net realized gain - - - - (3.12) (3.09)
--------- ------- ------- -------- -------- ---------
Net increase (decrease) in net asset value $ 1.05 $ 1.01 $ 3.03 $ (1.96) $ (11.54) $ 5.07
--------- ------- ------- -------- -------- ---------
Net asset value, end of period $ 14.74 $ 13.69 $ 12.68 $ 9.65 $ 11.61 $ 23.15
========= ======= ======= ======== ======== =========
Total return* 7.67% 7.97% 31.40% (16.88)% (40.26)% 49.93%
Ratio of net expenses to average net assets+ 0.92%** 0.90% 0.97% 0.94% 0.87% 0.86%
Ratio of net investment loss to average net assets+ (0.02)%** (0.44)% (0.46)% (0.45)% (0.23)% (0.30)%
Portfolio turnover rate 183%** 98% 52% 48% 65% 81%
Net assets, end of period (in thousands) $ 515,330 $516,935 $522,269 $424,613 $569,070 $1,054,081
Ratios with reduction for fees paid indirectly:
Net expenses 0.92%** 0.90% 0.96% 0.93% 0.85% 0.84%
Net investment loss (0.02)%** (0.44)% (0.45)% (0.44)% (0.21)% (0.28)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
23
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
3/31/05 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS B (unaudited) 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
Net asset value, beginning of period $ 11.99 $ 11.24 $ 8.66 $ 10.58 $ 21.68 $ 17.24
--------- ------- ------- --------- -------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.09) $ (0.24) $ (0.16) $ (0.25) $ (0.22) $ (0.26)
Net realized and unrealized gain (loss) on investments 0.92 0.99 2.74 (1.67) (7.76) 7.79
--------- ------- ------- --------- -------- -------
Net increase (decrease) from investment operations $ 0.83 $ 0.75 $ 2.58 $ (1.92) $ (7.98) $ 7.53
Distributions to shareowners:
Net realized gain - - - - (3.12) (3.09)
--------- ------- ------- --------- -------- -------
Net increase (decrease) in net asset value $ 0.83 $ 0.75 $ 2.58 $ (1.92) $ (11.10) $ 4.44
--------- ------- ------- --------- -------- -------
Net asset value, end of period $ 12.82 $ 11.99 $ 11.24 $ 8.66 $ 10.58 $ 21.68
========= ======= ======= ========= ======== =======
Total return* 6.92% 6.67% 29.79% (18.15)% (41.08)% 48.51%
Ratio of net expenses to average net assets+ 2.22%** 2.17% 2.30% 2.31% 2.01% 1.85%
Ratio of net investment loss to average net assets+ (1.32)%** (1.71)% (1.79)% (1.83)% (1.35)% (1.28)%
Portfolio turnover rate 183%** 98% 52% 48% 65% 81%
Net assets, end of period (in thousands) $ 27,702 $29,247 $31,392 $ 20,970 $ 30,143 $73,968
Ratios with reduction for fees paid indirectly:
Net expenses 2.23%** 2.18% 2.29% 2.29% 1.99% 1.83%
Net investment loss (1.33)%** (1.72)% (1.78)% (1.81)% (1.33)% (1.26)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the
complete redemption of the investment at net asset value at the end of each
period and no sales charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
24
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
3/31/05 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS C (unaudited) 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
Net asset value, beginning of period $ 12.39 $ 11.60 $ 8.96 $ 10.96 $ 22.32 $ 17.66
--------- ------- ------- --------- -------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.08) $ (0.29) $ (0.10) $ (0.16) $ (0.22) $ (0.01)
Net realized and unrealized gain (loss) on investments 0.95 1.08 2.74 (1.84) (8.02) 7.76
--------- ------- ------- --------- -------- -------
Net increase (decrease) from investment operations $ 0.87 $ 0.79 $ 2.64 $ (2.00) $ (8.24) $ 7.75
Distributions to shareowners:
Net realized gain - - - - (3.12) (3.09)
--------- ------- ------- --------- -------- -------
Net increase (decrease) in net asset value $ 0.87 $ 0.79 $ 2.64 $ (2.00) $ (11.36) $ 4.66
--------- ------- ------- --------- -------- -------
Net asset value, end of period $ 13.26 $ 12.39 $ 11.60 $ 8.96 $ 10.96 $ 22.32
========= ======= ======= ========= ======== =======
Total return* 7.02% 6.81% 29.46% (18.25)% (41.07)% 48.61%
Ratio of net expenses to average net assets+ 2.09%** 1.95% 2.26% 2.56% 2.18% 1.88%
Ratio of net investment loss to average net assets+ (1.20)%** (1.48)% (1.75)% (2.08)% (1.53)% (1.32)%
Portfolio turnover rate 183%** 98% 52% 48% 65% 81%
Net assets, end of period (in thousands) $ 11,882 $12,405 $18,155 $ 7,762 $ 5,641 $11,414
Ratios with reduction for fees paid indirectly:
Net expenses 2.10%** 1.95% 2.25% 2.50% 2.13% 1.86%
Net investment loss (1.21)%** (1.48)% (1.74)% (2.02)% (1.48)% (1.30)%
* 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.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
25
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
2/1/05 (a)
to
3/31/05
CLASS Y (unaudited)
Net asset value, beginning of period $ 14.72
-------
Increase from investment operations:
Net investment gain $ 0.02
Net realized and unrealized gain on investments 0.01
-------
Net increase from investment operations $ 0.03
-------
Net increase in net asset value $ 0.03
-------
Net asset value, end of period $ 14.75
=======
Total return* 1.17%
Ratio of net expenses to average net assets+ 0.53%**
Ratio of net investment income to average net assets+ 0.75%**
Portfolio turnover rate 183%**
Net assets, end of period (in thousands) $ 10
Ratios with reduction for fees paid indirectly:
Net expenses 0.53%**
Net investment income 0.75%**
(a) Class Y shares were first publicly offered on February 1, 2005.
* 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.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
26
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/05 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Mid Cap Growth Fund (the Fund) is a Delaware statutory 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
growth.
The Fund offers four classes of shares - Class A, Class B, Class C and Class Y
shares. Class Y shares were first publicly offered on February 1, 2005. Shares
of Class A, Class B, Class C and Class Y 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 shareowners, respectively. There is no distribution plan for
Class Y shares.
The Fund's financial statements have been prepared in conformity with U.S.
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 income, expenses and gains and losses on investments during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements, which are consistent with those
policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value of
the Fund is computed once daily, on each day the New York Stock Exchange
(NYSE) is open, as of the close of regular trading on the NYSE. 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 Board
of Trustees. Trading in foreign securities is substantially completed each
day at various times prior to the close of the
27
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
NYSE. The values of such securities used in computing the net asset value of
the Fund's shares are determined as of such times. The Fund also may use the
fair value of a security including a non U.S. security when the closing
market price on the principal exchange where the security is traded no longer
reflects the value of the security. At March 31, 2005 there were no
securities fair valued. Temporary cash investments are valued at amortized
cost.
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Fund becomes aware of the ex-dividend data in the
exercise of reasonable diligence. Interest income is recorded on the accrual
basis. Dividend and interest income are reported net of unrecoverable foreign
taxes withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollars actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investment.
C. Futures Contracts
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices, and currency rates or to seek to increase
total return. Upon entering into a futures contract, the Fund is required to
deposit with a broker an amount of cash or securities equal to the minimum
"initial margin" requirements of the associated futures exchange. Subsequent
payments for futures contracts ("variation margin") are received or paid by
the Fund, depending
28
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
on the daily fluctuation in the value of the contracts, and are recorded by
the Fund as unrealized gains or losses, respectively. When the contract is
closed, the Fund realizes a gain or loss equal to the difference between the
opening and closing value of the contract. The use of futures contracts
involves, to varying degrees, elements of market and counterparty risks,
which may exceed the amounts recognized by the Fund. Changes in value of the
contracts may not directly correlate to the changes in value of the
underlying securities. These risks may decrease the effectiveness of the
Fund's hedging strategies and potentially result in a loss.
At March 31, 2005, there were no open futures contracts.
D. 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
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal income
tax rules. Therefore, the sources 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 tax character of current year distributions will be determined at the end
of the current fiscal year. There were no distributions paid during the year
ended September 30, 2004.
The following shows the components of accumulated losses on a federal income
tax basis at September 30, 2004.
- --------------------------------------------------------------------------------
2004
- --------------------------------------------------------------------------------
Undistributed ordinary income $ -
Capital loss carryforward (90,369,507)
Unrealized appreciation 76,861,939
------------
Total $(13,507,568)
============
- --------------------------------------------------------------------------------
29
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appre ciation is
attributable to the tax deferral of losses on wash sales.
At September 30, 2004, the Fund had a net capital loss carryforward of
$90,369,507, which will expire in 2011, if not utilized.
E. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund
and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A., Inc.
(UniCredito Italiano), earned $25,644 in underwriting commissions on the sale
of Class A shares during the six months ended March 31, 2005.
F. 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
(see Note 4). Class Y shares are not subject to a distribution plan.
Shareowners of each class share all expenses and fees paid to the transfer
agent, Pioneer Investment Management Shareholder Services, Inc. (PIMSS), for
its services, which are allocated based on the number of accounts in each
class and the ratable allocation of related out-of-pocket expenses (see Note
3). Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning of
the day.
Distributions to shareowners 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.
G. Securities Lending
The Fund lends securities in its portfolio to certain broker-dealers or other
institutional investors, with the Fund's custodian acting as the lending
agent. When entering into a loan, the Fund receives collateral, which is
maintained by the custodian and earns income in the form of negotiated
lenders' fees. The Fund also continues to receive interest or payments in
lieu of dividends on the securities loaned. Gain or loss on the fair value of
the loaned securities that
30
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
may occur during the term of the loan will be for the account of the Fund.
The loans are secured by collateral of at least 102% at all times, of the
fair value of the securities loaned. The amount of collateral will be
adjusted daily to reflect any price fluctuation in the value of loaned
securities. The Fund has the right under the lending agreements to recover
the securities on loan from the borrower on demand. The Fund invests cash
collateral in the Securities Lending Investment Fund, which is managed by
Brown Brothers Harriman & Co., the Fund's custodian.
H. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest received
from counterparties, is required to be at least equal to or in excess of the
value of the repurchase agreement at the time of purchase. The collateral for
all repurchase agreements is held in safekeeping in the customer-only account
of the Fund's custodian, or subcustodians. The Fund's investment adviser,
Pioneer Investment Management, Inc. (PIM), is responsible for determining
that the value of the collateral remains at least equal to the repurchase
price.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredito Italiano, manages the
Fund's portfolio. PIM receives a basic fee that is calculated at the annual rate
of 0.625% of the Fund's average daily net assets. The basic fee is subject to a
performance adjustment (limited to a maximum of -0.20% applied to average assets
during the measurement period) based on the Fund's investment performance as
compared with the Russell Midcap Growth Index over a rolling 36-month period. In
addition, the fee is further limited to a maximum annualized rate adjustment of
- -0.10% (a "ceiling" and a "floor") applied to average assets during the current
month. Effective August 1, 2004 PIM commenced a voluntary waiver of the minimum
fee provision (the "floor"), but may reimpose it in the future. Pursuant to a
shareowner vote on April 17, 2003 the benchmark was changed from the Standard &
Poor's (S&P) MidCap 400 Index effective May 1, 2003; however the S&P MidCap 400
Index will be used for monthly periods prior to May 1, 2003 until it is
eventually phased out. For the six months ended March 31, 2005, the aggregate
performance adjustment resulted in a reduction to the basic fee of $546,005. For
the six months ended March 31, 2005, the management fee was equivalent to a rate
of 0.43% of average daily net assets.
31
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
In addition, under the management and administrative agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At March 31, 2005, $256,130 was payable to PIM
related to management fees, administrative costs and certain other services, and
is included in due to affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due to affiliates is $155,068 in transfer agent
fees payable to PIMSS at March 31, 2005.
4. Distribution Plan
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 attributable to Class
A shares 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 $145,738
in distribution fees payable to PFD at March 31, 2005.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). Effective February 1, 2004, a CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A shares
within 18 months of purchase (12 months for shares purchased prior to February
1, 2004). Effective December 1, 2004, Class B shares that are redeemed within
five years of purchase are subject to a CDSC at declining rates beginning at
4.00%, based on the lower of cost or market value of shares being redeemed.
Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect
at the time those shares were purchased. Redemptions of Class C shares within
one year of purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are
paid to PFD. For the six months ended March 31, 2005, CDSCs in the amount of
$37,839 were paid to PFD.
32
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the six months ended March 31, 2005, the Fund's expenses
were reduced by $7,457 under such arrangements.
6. Line of Credit
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 is payable
at the Federal Funds Rate plus 1/2% on an annualized basis. 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 six months ended
March 31, 2005, the Fund had no borrowings under this agreement.
33
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Osbert M. Hood, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood Dorothy E. Bourassa, Secretary
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during
the most recent 6-month period ended August 31, 2004 is publicly available to
shareowners at www.pioneerfunds.com. This information is also available on the
Securities and Exchange Commission's web site at http://www.sec.gov.
34
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES
IN APPROVING THE MANAGEMENT CONTRACT
- --------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees") voting
separately annually approve the Fund's management contract (the "Management
Contract"). The Trustees have determined that the terms of the Management
Contract are fair and reasonable and that renewal of the contract will enable
the Fund to receive quality investment advisory services at a cost deemed
reasonable and is in the best interests of the Fund and its shareholders. In
making such determinations, the Independent Trustees relied upon the assistance
of counsel to the Independent Trustees and counsel to the Fund.
Throughout the year, the Independent Trustees regularly met in executive session
separately from the Interested Trustees of the Fund and any officer of Pioneer
Investment Management, Inc., the Fund's adviser (the "Investment Adviser"), or
its affiliates. While the Trustees, including the Independent Trustees, act on
all major matters relating to the Fund, a significant portion of the activities
of the Board of Trustees (including certain of those described herein) is
conducted through committees, the members of which are comprised exclusively of
Independent Trustees. Such committee meetings are attended by officers of the
Fund or the Investment Adviser to the extent requested by the members of the
committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract, and relied
upon their knowledge, resulting from their meetings throughout the year, of the
Investment Adviser, its services and the Fund. Both in meetings specifically
dedicated to renewal of the Management Contract and at other meetings during the
course of the year, the Trustees, including the Independent Trustees, received
materials relating to the Investment Adviser's investment and management
services under the Management Contract. These materials included (i) information
on the investment performance of the Fund, a peer group of funds and two
indices, in each case selected by the Independent Trustees for this purpose,
(ii) sales and redemption data in respect of the Fund, (iii) the general
investment outlook in the markets in which the Fund invests, (iv) arrangements
in respect of the distribution of the Fund's shares, (v) the procedures employed
to determine the value of each of the Fund's assets, (vi) the Investment
Adviser's management of the relationships with the Fund's unaffiliated service
providers, (vii) the record of compliance with the Fund's investment policies
and restrictions and with the Fund's Code of Ethics and
35
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES
IN APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
the structure and responsibilities of the Investment Adviser's compliance
department, (viii) the nature, cost and character of non-investment management
services provided by the Investment Adviser and its affiliates and (ix) the
disclosures included in the Fund's prospectuses and reports to shareholders.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested and the Investment
Adviser provided additional information in order to evaluate the quality of the
Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one, three and five year periods for
the Fund and a peer group selected by the Independent Trustees for this purpose,
(2) management fees incurred by a peer group of funds selected by the
Independent Trustees for this purpose, (3) the advisory fees of comparable
portfolios of other clients of the Investment Adviser, (4) expense ratios for
the Fund and a peer group of funds selected by the Independent Trustees for this
purpose, (5) the overall organization of the Investment Adviser, (6) the
Investment Adviser's financial results and condition, including its and certain
of its affiliates profitability from services performed for the Fund, (7)
transfer agency fees and administrative reimbursements paid to the Investment
Adviser or affiliates, (8) investment management staffing, and (9) operating
expenses paid to third parties. The Trustees also reviewed information regarding
the potential for each of the Fund and the Investment Adviser to benefit from
further economies of scale in the management of the Fund in light of reasonable
growth expectations for the Fund, the break points in the Fund's management fee
and of a peer group of funds selected by the Independent Trustees for this
purpose, and certain of the Fund's expenses that are not incurred as fees based
on a percentage of net assets.
The following summarizes matters considered by the Trustees in connection with
their renewal of the Fund's Management Contract. The Trustees did not identify
any single factor as all-important or controlling, and the summary does not
detail all the matters that were considered.
A. Ancillary Benefits to Shareholders. The Trustees considered the benefits to
shareholders of investing in a Fund that is part of a large number of
investment companies offering a variety of
36
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
investment disciplines and providing for a large variety of Fund and
shareholder services.
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Fund's investment objective and regulatory requirements.
The Trustees also reviewed the Fund's investment performance, as well as the
Fund's performance based upon total return compared to both the performance
of a peer group and the results of two indices, in each case selected by the
Independent Trustees for this purpose. The Fund's performance based upon
total return was in the third quintile of the peer group for the 12 months
ended June 30, 2004, the third quintile of the peer group for the three years
ended June 30, 2004, and was in the fourth quintile for the five years ended
June 30, 2004. (In all quintile rankings referred to throughout this
discussion first quintile is most favorable to the Fund's shareholders. Thus,
highest relative performance would be first quintile and lowest relative
expenses also would be first quintile.) The Trustees concluded that the
performance of the Fund supported the continuation of the Management
Contract.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of the
Fund and the Fund's investment objective and discipline. The Independent
Trustees also have had discussions with senior management of the Investment
Adviser responsible for investment operations and the senior management of
the Investment Adviser's equities group. Among other things, the Trustees
considered the number, education and experience of the Investment Adviser's
investment staff and their use of technology and emphasis on analytics in
view of the risk profile of securities in which the Fund invests. The
Trustees concluded that the Investment Adviser had the quality and depth of
personnel and the well-developed methods essential to performing its duties
under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality, cost and extent of other services provided to shareholders of the
Fund, including administrative and shareholder services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness
37
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES
IN APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
of the arrangements for reimbursement of the Investment Adviser's
out-of-pocket costs and expenses, including overhead, for certain
administrative services that the Investment Adviser is not required to
provide under the Management Contract. The Trustees also considered the
nature and extent of the other services provided by the Investment Adviser's
affiliates under other contracts and its supervision of third party service
providers. Based on these considerations, the Trustees concluded that the
nature, quality, cost and extent of such services are satisfactory and
reliable and serve the shareholders of the Fund well.
E. Management Fee and Expenses. The Trustees considered the Investment Adviser's
fee under the Management Contract relative to the management fees charged by
a peer group of funds selected by the Independent Trustees for this purpose
using data provided by an independent third party. The Fund's management fee
for the 12 months ended June 30, 2004 was in the first quintile relative to
the management fees paid by the other funds in that peer group for the
comparable period. The Trustees also considered that the performance fee
structure aligned the interests of shareholders and the Investment Adviser.
The Trustee noted that the Investment Adviser was waiving the floor on the
management fee but did not take that into consideration in evaluating the
contract. The Trustees determined that the fee under the Management Contract
was reasonable and fair in light of both the overall nature and quality of
services provided by the Investment Adviser and the fees charged by the funds
in the peer group. The Trustees also considered the Fund's expense ratio and
expense ratios of a peer group of funds selected by the Independent Trustees
for this purpose. The Fund's expense ratio (before giving effect to any
expense limitation) for the 12 months ended June 30, 2004 was in the first
quintile of the applicable peer group for the most recent fiscal year of the
peer group for the comparable period. The Trustees concluded that the Fund's
overall expense ratio (before giving effect to any expense limitation) was
lower than that of comparable funds.
F. Profitability. The Trustees considered the level of the Investment Adviser's
profits with respect to the management of the Pioneer Funds, including
details with respect to the Fund. This consideration included a review of the
Investment Adviser's methodology in allocating certain of its costs to the
management of each Fund.
38
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Trustees also considered the financial results realized by the Investment
Adviser in connection with the operation of the Fund. They further considered
the profits realized by the Investment Adviser and its affiliates from
non-fund businesses that may benefit from or be related to the Fund's
business. The Trustees considered the Investment Adviser's profit margins in
comparison with the limited available industry data. The Trustees concluded
that the Investment Adviser's profits from management of the Pioneer Funds,
including the financial results derived from the Fund, bear a reasonable
relationship to the services rendered and are fair for the management of the
Fund.
G. Economies of Scale. The Trustees considered the economies of scale with
respect to the management of the Fund, whether the Fund had appropriately
benefited from any economies of scale, and whether there was potential for
realization of any further economies of scale. The Trustees considered the
economies of scale with respect to the management of the Fund, whether the
Fund had appropriately benefited from any economies of scale, and whether
there was potential for realization of any further economies of scale.
Because of the break points in the management fee, the Trustees concluded
that any perceived or potential economies of scale would be shared at future
asset levels in a reasonable manner as the Fund grows in size between Fund's
shareholders and the Investment Adviser.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Fund, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates, including fees for services such as shareholder services. The
Trustees also considered the receipt of sales loads and payments under Rule
12b-1 plans in respect of the Pioneer Funds (including the Fund), and
benefits to the Investment Adviser from the use of "soft" commission dollars
to pay for research and brokerage services. The Trustees further considered
the revenues and profitability of the Investment Adviser's businesses other
than the fund business, including the Investment Adviser's institutional
investment advisory business. The Trustees considered the intangible benefits
that accrue to the Investment Adviser and its affiliates by virtue of its
relationship with the Fund and the Pioneer Funds as a group. The Trustees
concluded that all these types of benefits accruing to the Investment Adviser
were
39
Pioneer Mid Cap Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES
IN APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
reasonable in the context of the overall relationship between the Investment
Adviser and the Fund.
Conclusion. The Trustees, in light of the Investment Adviser's overall
performance, considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their evaluation of all material
factors deemed relevant and the advice of independent counsel, the Trustees
concluded that the Management Contract with the Fund is fair and reasonable and
voted to approve the continuation of the Management Contract for another year.
40
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PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-800-225-6292.
FactFone(SM)
This is our automated account information service, available to you 24 hours a
day, seven days a week. FactFone gives you a quick and easy way to check fund
share prices, yields, dividends and distributions, as well as information about
your own account. Simply call 1-800-225-4321. For specific account information,
have your account number, fund number and our personal identification number
(PIN) in hand. If this is your first time using FactFone, you will need to
establish a PIN.
Visit www.pioneerfunds.com for the most recent month-end performance results.
Current performance may be lower or higher than the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers may
not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
90-Day Reinstatement Privilege (for Class A and Class B Shares) Enables you to
reinvest all or a portion of the money you redeemed from your Pioneer account -
without paying a sales charge - within 90 days from your redemption. Upon your
request, the shares will be reinvested into your choice of any Class A fund with
the same registration as the originating account. Please note that you will need
to meet fund minimum requirements.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. With this
feature, Pioneer will automatically draft a predetermined dollar amount,
specified by you, from your bank account and purchase shares into your
investments to grow using the dollar-cost averaging approach.
The use of a systematic investing program does not guarantee a profit or
protect against a loss in declining markets. You should consider your financial
ability to continue to invest through periods of low prices.
41
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(continued)
- --------------------------------------------------------------------------------
Payroll Investment Program (PIP)
This service enables you to fund your Pioneer investment directly through a
payroll deduction. After completing Pioneer's authorization form, your employer
will deduct a predetermined dollar amount from your paycheck to be invested at
Pioneer. When you invest through payroll, you're putting yourself at the top of
the list of those you pay. Many people find that "paying yourself first" is the
most sensible way to build a nest egg.
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just choose the amounts and dates for Pioneer to sell shares from your
original fund and use the proceeds to buy shares of the other funds you have
chosen. To establish this service, simply complete a Pioneer Account Options
form. (Automatic Exchange is available for originating accounts with a balance
of $5,000 or more.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
This service allows you to establish automatic withdrawals from your account at
set intervals. You decide the frequency and the day of the month. Pioneer will
send the proceeds by check to a designated address or electronically to your
bank account. You can also authorize Pioneer to make the redemptions payable to
someone else. Simply complete a Pioneer Account Options form to begin this
service.
Investing in mutual funds involves significant risks, for complete information
on the specific risks associated with each fund, please see the appropriate
fund's prospectus.
Please consider a fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about a fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, contact your
adviser, call 800-225-62952 or visit www.pioneerfunds.com.
42
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RETIREMENT PLANS FROM PIONEER
- --------------------------------------------------------------------------------
Pioneer has a long history of helping people work toward their retirement goals,
offering plans suited to the individual investor and businesses of all sizes.
For more information on Pioneer retirement plans, contact your investment
professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Accounts (IRAs)
Traditional IRA*
For anyone under age 70 1/2 earning income. Individuals can contribute up to
$4,000, or $4,500 if age 50 or older, annually. Earnings are tax-deferred, and
contributions may be tax-deductible.
Roth IRA*
Available to single individuals earning less than $110,000 in income annually,
and married couples with joint income less than $160,000. Contributions of up
to $4,000, or $4,500 if age 50 or older, a year are not tax-deductible, but all
earnings are tax-free for qualified withdrawals. Distributions are tax and
penalty-free if certain conditions are met.
Employer-Sponsored Plans
Uni-K Plan*
A 401(k) plan designed specifically for any business that employs only owners
and their spouses. Participants can make salary deferral contributions up to
$14,000 per year, or $18,000 if age 50 or older. In addition, each year the
business may contribute up to 25% of pay.
Uni-DB Plan
A full service defined benefit plan for small business owners over age 45 with
up to five employees. Annual Employer contributions are required. The plan
allows for the maximum deductible contribution up to $170,000 or more.
401(k) Plan*
Allows employees to make pre-tax contributions through payroll deduction, up to
$14,000, or $18,000 if age 50 or older, per year. Employers' contributions are
discretionary. The 401(k) offers companies maximum flexibility.
SIMPLE IRA Plan*
The Savings Incentive Match PLan for Employees (SIMPLE) is designed for
employers with 100 or fewer eligible employees. Employees can defer up to
$9,000, or $10,500 if age 50 or older. Employer makes additional required
contributions.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
43
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(continued)
- --------------------------------------------------------------------------------
403(b) Plan*
Also known as a Tax-Sheltered Account (TSA), this plan lets employees of public
schools, non-profit hospitals and other tax-exempt organizations make pre-tax
contributions through payroll deduction. Individuals can generally defer up to
$14,000 per year, or $18,000 if age 50 or older.
SEP-IRA
The Simplified Employee Pension (SEP) plan lets self-employed people and
small-business owners make tax-deductible contributions of up to 25% of income,
while maintaining complete contribution flexibility each year.
Profit Sharing Plan
Companies can decide each year whether - and how much - to contribute to
participants, up to 25% of each participant's pay. Can include vesting
schedules that are not available with a SEP-IRA.
Age-Based Profit Sharing Plan
Employer contributions are flexible, but are based on a formula using age and
salary. Each year, a business can contribute up to 25% of the total eligible
payroll.
* Special Catch-Up Provisions are available to individuals age 50 and older to
contribute additional amounts to their retirement accounts. For more
information, call our Retirement Plans Information line at 1-800-622-0176.
Withdrawals of earnings or other taxable amounts are subject to income tax and,
if made prior to age 591/2, may be subject to an additional 10% federal tax
penalty.
Investing in mutual funds involves significant risks, for complete information
on the specific risks associated with each fund, please see the appropriate
fund's prospectus.
Please consider a fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about a fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, contact your
adviser, call 800-225-6292 or visit www.pioneerfunds.com.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
44
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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:
PIMSS
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@pioneerinvest.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
Please consider the Fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about the Fund and should be read carefully before you invest. To obtain a
prospectus and for other information on any Pioneer fund, call 1-800-225-6292 or
visit our web site www.pioneerfunds.com.
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognizes the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognizes that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The Fund's independent auditor, Ernst & Young
LLP ("E&Y"), recently has advised the Securities
and Exchange Commission, the Public Company
Accounting Oversight Board, and the Audit
Committee of the Fund's Board of Trustees that
certain non-audit work performed by E&Y's China
affiliate has raised questions regarding E&Y's
independence with respect to its performance of
audit services for the Fund. In July 2004, E&Y
became aware that member firms in China ("E&Y
China") provided certain tax services to offices of
UniCredito Italiano, S.p.A. ("UCI"), a member of
the Fund's Investment Company Complex. The
services included receipt and disbursement of
monies transferred to E&Y China by UCI in
payment of individual expatriate income taxes due
on returns prepared by E&Y China for certain UCI
employees located in China from October 1998 to
May 2003. E&Y became auditors of the Fund in
May 2002. These expatriate tax services were
discontinued in May 2003. The fees received by
E&Y China for all such services totaled $3,685.
The Fund's Audit Committee and E&Y have
discussed the matter, including the nature of the
services provided, the personnel involved in
providing the services and the fees received by
E&Y for performing the services. The Committee
continues to review the facts and circumstances
surrounding the matter, including the issue of
whether the monies transferred for employees' taxes
were de facto monies due the employees for tax
payments rather than monies belonging to UCI.
E&Y has informed the Audit Committee that based
on its internal reviews and the de minimis nature of
the services provided and fees received, it does not
believe its independence with respect to the Fund
has been impaired.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
N/A
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer and principal financial
officer have concluded, that the registrant's disclosure controls and
procedures are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Mid Cap Growth Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date May 27, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date May 27, 2005
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date May 27, 2005
* Print the name and title of each signing officer under his or her signature.