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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 811-01605
Pioneer Balanced Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Joseph P. Barri, Hale and Dorr LLP, 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: June 30
Date of reporting period: January 1, 2003 through June 30, 2003
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.
PIONEER
-----------------------
BALANCED
FUND
Semiannual
Report
6/30/03
[LOGO] PIONEER Investments(R)
Table of Contents
- --------------------------------------------------------------------------------
Letter from the President 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 10
Financial Statements 21
Notes to Financial Statements 28
Trustees, Officers and Service Providers 34
The Pioneer Family of Mutual Funds 35
Retirement Plans from Pioneer 36
Pioneer Balanced Fund
LETTER FROM THE PRESIDENT 6/30/03
Dear Shareowners,
- --------------------------------------------------------------------------------
With the fading of concerns over the Iraq war, investors whose attention had
been focused overseas were buoyed by hints of increased economic activity at
home. The nation's stock markets began a broad-based rally in early March, and
prices continued to climb. From April through June, the major stock market
averages recorded one of the biggest quarterly jumps in years. Increasing
investor confidence also led to strong returns on corporate bonds. However,
returns on government bonds, which rose sharply earlier, have slowed.
Encouraging factors aren't hard for investors to find. The lowest interest rates
many of us have ever seen and the administration's tax cuts mean higher incomes
for many consumers. The tax reductions on dividends and capital gains are of
special interest to investors. Corporations can also borrow at the lowest rates
in years. Many companies are realizing substantial savings by replacing old,
high-cost debt with new issues that carry lower interest. The Federal Reserve
Board cut rates once again in June in an effort to inject further stimulus into
the economy. And the weak U.S. dollar helps exporters and multinational
companies operating in countries with stronger currencies.
One possible lesson to be learned from the market's decline and recovery is the
importance of staying invested. Those who stayed with their commitments
participated in the recent rally, while those who remained on the sidelines had
to play catch-up. If the protracted slump caused your investment discipline to
slip, this may be an ideal time to contact your financial advisor for guidance
on resuming your investment program.
Our style focuses on companies, not on forecasts
There are always risks, of course, and the direction of the economy is
something of a puzzle at the moment. If it continues to struggle for very long,
investors may once again seek shelter in short-term commitments. However,
Pioneer's portfolio managers and analysts do not base investment decisions on
economic assumptions. Instead, as it has since our founding in 1928, our
value-focused investment style requires complete understanding of a company and
its potential. That means intensive analysis of financial reports, visits to
companies and detailed discussions with corporate managers. When we discover
potential that appears to exceed the market's valuation, that company becomes a
candidate for investment. Our research efforts are aided in no small measure by
the global resources of our parent organization, UniCredito Italiano S.p.A.
Like everyone at Pioneer, I appreciate your continued confidence in our
products and services.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood
Pioneer Investment Management, Inc.
The preceding information is the opinion of fund management. Past performance
is no guarantee of future results, and there is no guarantee that market
forecasts discussed will be realized.
- --------------------------------------------------------------------------------
Pioneer's new president
Osbert Hood was recently named Chief Executive Officer and President of Pioneer
Investments USA. Mr. Hood, formerly Pioneer's Chief Operating Officer and a key
member of the senior management committee, joined Pioneer in 2000 from John
Hancock Financial Services, where he had held senior financial positions. "I am
excited and honored to have the opportunity to lead Pioneer as it continues to
grow," Mr. Hood said. "As CEO I look forward to furthering Pioneer's strategic
goals, including developing new products that can meet the wider needs of
investors and the advisers who serve them."
- --------------------------------------------------------------------------------
1
Pioneer Balanced Fund
PORTFOLIO SUMMARY 6/30/03
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
U.S. Common Stocks 60.0%
U.S. Corporate Bonds 19.9%
U.S. Government Securities 17.5%
Temporary Cash Investment 2.2%
Foreign Government Bond 0.4%
Sector Distribution
- --------------------------------------------------------------------------------
(As a percentage of total long-term securities)
Government Obligations 18.3%
Consumer Staples 17.7%
Financials 12.2%
Consumer Discretionary 11.0%
Information Technology 10.6%
Health Care 9.4%
Energy 7.4%
Industrials 6.1%
Materials 4.8%
Utilities 2.3%
Telecommunication Services 0.2%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of total long-term securities)
1. Pfizer, Inc. 3.84% 6. Wyeth, Inc. 2.91%
2. Family Dollar Stores, Inc. 3.20 7. Gillette Co. 2.83
3. Berkshire Hathaway Inc. (Class B) 3.10 8. Newmont Mining Corp. 2.81
4. Progressive Corp. 3.00 9. William Wrigley, Jr., Co. 2.71
5. Anheuser-Busch Companies, Inc. 2.97 10. Northtrop Grumman Corp. 2.57
This list excludes money market instruments. Portfolio holdings will vary for
other periods.
2
Pioneer Balanced Fund
PERFORMANCE UPDATE 6/30/03 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/03 12/31/02
$8.94 $8.29
Distributions per Share Income Short-Term Long-Term
(1/1/03 - 6/30/03) Dividends Capital Gains Capital Gains
$0.060 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Balanced Fund at public offering price, compared to
that of the Standard & Poor's 500 Index, the Lehman Brothers Aggregate Bond
Index and the Russell 3000 Index.
Average Annual Total Returns
(as of June 30, 2003)
Net Asset Public Offering
Period Value Price*
10 Years 4.53% 4.05%
5 Years -0.41 -1.33
1 Year 4.40 -0.31
* Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[THE FOLLOWING WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Lehman Brothers Standard & Poor's Russell 3000
Balanced Fund* Aggregate Bond Index 500 Index Index
6/93 9550 10000 10000 10000
9882 10266 10496 10558
6/94 9456 9967 10633 10579
11537 11808 14623 14472
6/96 12678 12235 17975 17629
14443 13418 23968 23233
6/98 14608 14582 30823 28851
15068 14460 37305 34869
6/00 15879 16141 33915 32268
15422 17505 29895 28571
6/02 13695 19300 23290 22416
6/03 14872 20064 26022 25264
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely held
common stocks listed on the New York Stock Exchange, American Stock Exchange and
the over-the-counter market. The Lehman Brothers Aggregate Bond Index is a
widely recognized market value-weighted index composed of the Lehman Brothers
Government/Credit, Mortgage-Backed, Asset-Backed and Commercial Mortgage-Based
Securities indices. The Russell 3000 Index measures the performance of the 3,000
largest U.S. companies based on total market capitalization, which represents
approximately 98% of the investable U.S. equity market. Pioneer believes the S&P
500 Index is more representative of the issues in the Fund's portfolio than the
Russell 3000 Index and will not provide the Russell 3000 Index in the future.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in any
Index.
Past performance does not guarantee future results. Returns and principal
values fluctuate, and your shares, when redeemed, may be worth more or less
than their original cost. The performance table and graph do not reflect the
deduction of taxes that a shareowner would pay on Fund distributions or the
redemption of Fund shares.
3
Pioneer Balanced Fund
PERFORMANCE UPDATE 6/30/03 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/03 12/31/02
$8.85 $8.21
Distributions per Share Income Short-Term Long-Term
(1/1/03 - 6/30/03) Dividends Capital Gains Capital Gains
$0.020 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Balanced Fund, compared to that of the Standard &
Poor's 500 Index, the Lehman Brothers Aggregate Bond Index and the Russell 3000
Index.
Average Annual Total Returns
(as of June 30, 2003)
If If
Period Held Redeemed*
Life-of-Class
(4/28/95) 3.95% 3.95%
5 Years -1.31 -1.48
1 Year 3.50 -0.50
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions.
The maximum CDSC of 4% declines over six years.
[THE FOLLOWING WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Lehman Brothers Standard & Poor's Russell 3000
Balanced Fund* Aggregate Bond Index 500 Index Index
4/9 10000 10000 10000 10000
11374 11123 12175 12230
6/96 12400 11525 14966 14899
14010 12640 19956 19634
6/98 14036 13736 25663 24373
14350 13261 31060 29468
6/00 14981 15205 28238 27270
14423 16489 24891 24145
6/02 12707 18181 19391 18944
6/03 13729 18899 21697 21351
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely
held common stocks listed on the New York Stock Exchange, American Stock
Exchange and the over-the-counter market. The Lehman Brothers Aggregate Bond
Index is a widely recognized market value-weighted index composed of the Lehman
Brothers Government/Credit, Mortgage-Backed, Asset-Backed and Commercial
Mortgage-Based Securities indices. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Pioneer believes the S&P 500 Index is more representative of the
issues in the Fund's portfolio than the Russell 3000 Index and will not provide
the Russell 3000 Index in the future. Index returns assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in any Index.
Past performance does not guarantee future results. Returns and principal
values fluctuate, and your shares, when redeemed, may be worth more or less
than their original cost. The performance table and graph do not reflect the
deduction of taxes that a shareowner would pay on Fund distributions or the
redemption of Fund shares.
4
Pioneer Balanced Fund
PERFORMANCE UPDATE 6/30/03 CLASS C SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/03 12/31/02
$8.92 $8.27
Distributions per Share Income Short-Term Long-Term
(1/1/03 - 6/30/03) Dividends Capital Gains Capital Gains
$0.020 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Balanced Fund at public offering price, compared to
that of the Standard & Poor's 500 Index, the Lehman Brothers Aggregate Bond
Index and the Russell 3000 Index.
Average Annual Total Returns
(as of June 30, 2003)
Net Asset Public Offering
Period Value Price/CDSC*
Life-of-Class
(1/31/96) 2.37% 2.24%
5 Years -1.54 -1.75
1 Year 3.45 2.39
* Reflects deduction of the 1% sales charge at the beginning of the period and
assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
[THE FOLLOWING WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Lehman Brothers Standard & Poor's Russell 3000
Balanced Fund* Aggregate Bond Index 500 Index Index
1/96 9900 10000 10000 10000
10708 10294 11888 11838
6/97 12152 11289 15852 15601
12185 12268 20385 19366
6/99 12431 12165 24672 23414
12922 13580 22430 21668
6/01 12390 14727 19771 19185
10900 16238 15403 15052
6/03 11784 16878 17209 16965
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely
held common stocks listed on the New York Stock Exchange, American Stock
Exchange and the over-the-counter market. The Lehman Brothers Aggregate Bond
Index is a widely recognized market value-weighted index composed of the Lehman
Brothers Government/Credit, Mortgage-Backed, Asset-Backed and Commercial
Mortgage-Based Securities indices. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Pioneer believes the S&P 500 Index is more representative of the
issues in the Fund's portfolio than the Russell 3000 Index and will not provide
the Russell 3000 Index in the future. Index returns assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in any Index.
Past performance does not guarantee future results. Returns and principal
values fluctuate, and your shares, when redeemed, may be worth more or less
than their original cost. The performance table and graph do not reflect the
deduction of taxes that a shareowner would pay on Fund distributions or the
redemption of Fund shares.
5
Pioneer Balanced Fund
PORTFOLIO MANAGEMENT DISCUSSION 6/30/03
Investor optimism rose quickly during the first six months of 2003, buoyed by
the quick ending to major armed conflict in Iraq and by rising expectations
that federal monetary policy and fiscal stimulus would combine to lift the
economy from its slump. In this improving environment, both the equity and
fixed-income portions of Pioneer Balanced Fund's portfolio delivered strong
results. In the following interview, Timothy Mulrenan, who is responsible for
the Fund's equity portfolio, and Richard Schlanger, who oversees the
fixed-income portfolio, discuss the markets and their investment strategies
during the past six months.
Q: How did the Fund perform during the six-month period?
A: The Fund performed very well. For the six months ended June 30, 2003,
Pioneer Balanced Fund's Class A shares had a total return of 8.59%. During
the same period, Class B and Class C shares had returns of 8.05% and
8.11%, respectively. All returns are at net asset value.
Q: How would you describe the investment environment?
A: After it became apparent in early March that the significant fighting in
Iraq would end quickly, market sentiment improved rapidly and investors
became willing to allocate funds to riskier sectors in virtually all asset
classes in pursuit of greater returns. Optimism rose because of military
success in Iraq and the anticipation that the economy would begin to
rebound because of the effects of both new tax cuts and the Federal
Reserve Board's policies to cut short-term interest rates to stimulate
growth.
In the equity markets, performance was led by stocks from those industries
that had been in the most disfavor during the previous three years,
including technology, biotechnology and Internet stocks, as well as
small-cap stocks in general.
In the fixed-income markets, interest rates fell across the spectrum of
maturities, with longer-maturity securities posting the strongest total
returns. Corporate bonds, especially lower-rated bonds, outperformed
government securities as investors anticipated improving credit quality in
an economic revival.
6
Pioneer Balanced Fund
Q: Did you make any changes to your asset allocation during the period?
A: Yes. We increased our stock weighting. We began the period with a target
allocation of 55% equities, 45% fixed income. However, in March we
increased the target allocation for stocks to 60% and lowered the
fixed-income allocation to 40%. On a relative value basis, equities looked
much more attractive to us. This proved to be a timely decision during a
period of rapidly rising stock prices.
Q: What were your principal fixed-income strategies?
A: We pared back our smaller positions and added to our positions of those
securities in which we had the greatest confidence. During a period when
many new corporate bonds were issued, we took advantage of this supply and
sold some of our shorter-term corporate securities while selectively
adding longer-maturity corporates, especially when we saw strong relative
values. Within our corporate holdings, we lightened our exposure to banks
because we were concerned that the profit margins from their traditional
lending business were likely to shrink as the difference between long-term
and short-term rates narrowed. We continued to underweight government
securities due to supply considerations and an expanding deficit. We
reduced our holdings of mortgage-backed securities because of our concerns
about prepayment risk, as homeowners refinanced their mortgages.
On June 30, 30.8% of the Fund's fixed-income assets were invested in
mortgage securities, compared with 50.4% on December 31, 2002. Overall,
industrial and utility bonds accounted for 36.8% of fixed-income assets,
including 7.8% in high-yield bonds. Bank and finance comprised 13.5%,
while government and agencies accounted for 13.9%. About 5% of
fixed-income assets were invested in temporary cash investments.
The average credit quality of the Fund's portfolio was rated A and the
effective duration of the portfolio was 4.26 years, compared with 3.42
years on December 31, 2002. (Ratings apply to underlying securities, not
Fund shares.)
Our corporate bond holdings were the best performing investments, with our
high yield positions turning in particularly impressive results.
7
Pioneer Balanced Fund
PORTFOLIO MANAGEMENT DISCUSSION 6/30/03 (continued)
Q: What were your principal equity strategies?
A: In general, we focused on large-cap, better quality, stable-growth
companies, while reducing our exposure to financial stocks and technology
stocks because of our concern about the risks in those sectors.
Progressive Corp., the well-known automobile-insurance company, was the
single best-performing stock during the six months. Progressive has
increased its market share by competing successfully in all three
distribution channels for automobile insurance - agents, direct sales and
the Internet. In addition, it was one of the earliest companies to
perceive a change in the industry's pricing power. As a result, it raised
its premiums before many of its competitors. Now, the company is enjoying
the benefits of higher premiums while competitors are raising their
premiums to their customers' displeasure.
After we added pharmaceutical company Wyeth to the portfolio in April, the
company's stock rallied based on strong drug sales and its decision to use
proceeds from its sale of Amgen stock to buy down its debt and improve its
balance sheet. Family Dollar, a well managed national discount retail
chain, continued to post strong results from sales both in existing and
new store locations. Progressive, Wyeth and Family Dollar together make up
more than 14% of the equity portfolio, and their strong performances had a
major influence on Fund results.
Defense contractor Northrop Grumman was the portfolio's weakest performer
over the six months with a decline of 10%. The rising federal deficit is
causing some concern that future defense spending may be curtailed.
However, as long as the threat of domestic terrorism continues and global
geopolitical risks remain high we believe that public support for defense
spending will also remain high. Berkshire Hathaway was flat in the period.
Most stocks in the insurance sector were weak due to heightened concerns
about pricing and profitability in the property and casualty insurance
market. We believe Berkshire is the premier underwriter in the insurance
sector and we think it will continue to capture market share from weaker
competitors.
8
Pioneer Balanced Fund
Q: What is your outlook for fixed-income investments?
A: We think the economy will grow, but at a slower pace than in many past
recoveries, in part because energy prices remain high. We estimate the
national gross domestic product (GDP) will grow at an annualized rate of
less than 4% during the second half of 2003. Because of high unemployment
and unused industrial capacity, it is possible that the Federal Reserve
may lower rates again. However, we believe the Fed is unlikely to raise
rates before the second half of 2004.
With this outlook, we think corporate bonds and mortgages are likely to
outperform government securities in the coming months. Longer term, we are
concerned about the effects of rising federal deficits and the corporate
profit outlook, particularly if revenue-strapped states start raising
corporate taxes, which could limit business investment.
Q: What is your outlook for equity investments?
A: After the strong rally of the first six months of 2003, we think the
market may pause and stock prices may remain within a trading range. Many
stock prices currently are priced based on very optimistic expectations
for corporate profit growth. Thus far, much of the gains in corporate
profitability have been derived from cost cuts rather than revenue gains.
We believe that in order for stock prices to go higher, we will need more
evidence of a sustained economic recovery than we have seen. The preceding
information is the opinion of fund management. Past performance is no
guarantee of future results, and there is no guarantee that market
forecasts discussed will be realized.
9
Pioneer Balanced Fund
SCHEDULE OF INVESTMENTS 6/30/03 (unaudited)
Shares Value
COMMON STOCKS - 60.0%
Energy - 6.0%
Integrated Oil & Gas - 0.6%
23,100 Exxon Mobil Corp. $ 829,521
------------
Oil & Gas Drilling - 3.9%
26,000 Encana Corp. $ 997,620
87,100 ENSCO International, Inc. 2,342,990
81,400 Varco International, Inc. * 1,595,440
------------
$ 4,936,050
------------
Oil & Gas Exploration & Production - 1.5%
36,376 Devon Energy Corp. $ 1,942,478
------------
Total Energy $ 7,708,049
------------
Materials - 2.8%
Precious Metals & Minerals - 2.8%
108,400 Newmont Mining Corp. $ 3,518,664
------------
Total Materials $ 3,518,664
------------
Capital Goods - 3.2%
Aerospace & Defense - 2.5%
37,300 Northrop Grumman Corp. $ 3,218,617
------------
Electrical Components & Equipment - 0.7%
38,500 Molex, Inc. $ 892,392
------------
Total Capital Goods $ 4,111,009
------------
Commercial Services & Supplies - 0.5%
Diversified Commercial Services - 0.5%
18,700 Cintas Corp. $ 662,728
------------
Total Commercial Services & Supplies $ 662,728
------------
Transportation - 1.1%
Trucking - 1.1%
21,200 United Parcel Service $ 1,350,440
------------
Total Transportation $ 1,350,440
------------
Consumer Durables & Apparel - 0.5%
Leisure Products - 0.5%
15,300 Harley-Davidson, Inc. $ 609,858
------------
Total Consumer Durables & Apparel $ 609,858
------------
10 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
Shares Value
Media - 1.5%
Broadcasting & Cable TV - 0.5%
22,000 Comcast Corp. (Special) * $ 634,260
------------
Movies & Entertainment - 0.8%
23,900 Viacom, Inc. (Class B Non-voting) * $ 1,043,474
------------
Publishing - 0.2%
4,500 McGraw-Hill Co., Inc. $ 279,000
------------
Total Media $ 1,956,734
------------
Retailing - 3.1%
General Merchandise Stores - 3.1%
105,000 Family Dollar Stores, Inc. $ 4,005,750
------------
Total Retailing $ 4,005,750
------------
Food & Drug Retailing - 5.9%
Drug Retail - 0.6%
25,000 CVS Corp. $ 700,750
------------
Food Distributors - 1.8%
36,700 Cardinal Health, Inc. $ 2,359,810
------------
Food Retail - 2.7%
60,300 William Wrigley, Jr., Co. $ 3,390,669
------------
Hypermarkets & Supercenters - 0.8%
20,000 Wal-Mart Stores, Inc. $ 1,073,400
------------
Total Food & Drug Retailing $ 7,524,629
------------
Food, Beverage & Tobacco - 4.9%
Distillers & Vintners - 2.9%
72,900 Anheuser-Busch Companies, Inc. $ 3,721,545
------------
Soft Drinks - 2.0%
37,800 The Coca-Cola Co. $ 1,754,298
19,000 PepsiCo, Inc. 845,500
------------
$ 2,599,798
------------
Total Food, Beverage & Tobacco $ 6,321,343
------------
Household & Personal Products - 6.4%
Household Products - 1.6%
61,800 Estee Lauder Co. $ 2,072,154
------------
The accompanying notes are an integral part of these financial statements. 11
Pioneer Balanced Fund
SCHEDULE OF INVESTMENTS 6/30/03 (unaudited) (continued)
Shares Value
Personal Products - 4.8%
111,300 Gillette Co. $ 3,546,018
48,400 Kimberly-Clark Corp. 2,523,576
------------
$ 6,069,594
------------
Total Household & Personal Products $ 8,141,748
------------
Health Care Equipment & Supplies - 2.8%
Health Care Distributors - 2.8%
80,000 Wyeth, Inc. $ 3,644,000
------------
Total Health Care Equipment & Supplies $ 3,644,000
------------
Pharmaceuticals & Biotechnology - 5.1%
Biotechnology - 0.4%
8,568 Amgen, Inc. * $ 573,885
------------
Pharmaceuticals - 4.7%
18,900 Merck & Co., Inc. $ 1,144,395
141,041 Pfizer, Inc. 4,816,550
------------
$ 5,960,945
------------
Total Pharmaceuticals & Biotechnology $ 6,534,830
------------
Diversified Financials - 1.1%
Consumer Finance - 1.1%
35,000 American Express Co. $ 1,463,350
------------
Total Diversified Financials $ 1,463,350
------------
Insurance - 6.0%
Property & Casualty Insurance - 6.0%
1,600 Berkshire Hathaway Inc. (Class B) * $ 3,888,000
51,400 Progressive Corp. * 3,757,340
------------
$ 7,645,340
------------
Total Insurance $ 7,645,340
------------
Software & Services - 6.2%
Application Software - 3.8%
82,300 Microsoft Corp. $ 2,107,703
62,800 Symantec Corp. * 2,754,408
------------
$ 4,862,111
------------
12 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
Shares Value
Data Processing & Outsourced Services - 2.4%
73,900 First Data Corp. $ 3,062,416
------------
Total Software & Services $ 7,924,527
------------
Technology Hardware & Development - 2.4%
Computer Hardware - 2.4%
145,700 Hewlett-Packard Co. $ 3,103,410
------------
Total Technology Hardware & Development $ 3,103,410
------------
Semiconductors - 0.5%
31,600 Intel Corp. $ 656,774
------------
Total Semiconductors $ 656,774
------------
TOTAL COMMON STOCKS
(cost $70,594,459) $ 76,883,183
------------
Principal S&P/Moody's
Amount Ratings Value
ASSET BACKED SECURITIES - 0.0%
Transportation - 0.0%
Airlines - 0.0%
$ 13,072 Baa1/AA- Continental Airlines, 6.65%, 9/15/17 $ 12,609
------------
Total Transportation $ 12,609
------------
TOTAL ASSET BACKED SECURITIES
(Cost $10,428) $ 12,609
------------
CORPORATE BONDS - 19.9%
Energy - 1.2%
Integrated Oil & Gas - 0.5%
325,000 Baa1/BBB- Marathon Oil Corp., 6.125%, 3/15/12 $ 364,397
120,000 Baa2/BBB Occidental Petroleum, 6.75%, 1/15/12 142,701
150,000 Philips Petroleum Co., 8.75%, 5/25/10 195,232
------------
$ 702,330
------------
Oil & Gas Equipment & Services - 0.3%
300,000 Baa3/BBB Seacor Smit, Inc., 5.875%, 10/1/12 $ 321,733
------------
Oil & Gas Refining, Marketing &
Transportation - 0.4%
500,000 Baa2/BBB Valero Energy Corp., 6.875%, 4/15/12 $ 566,787
------------
Total Energy $ 1,590,850
------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Balanced Fund
SCHEDULE OF INVESTMENTS 6/30/03 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings Value
Materials - 2.0%
Aluminum - 0.2%
$ 175,000 A1/A+ Aloca, Inc., 7.375%, 8/1/10 $ 212,023
------------
Diversified Metals & Mining - 0.4%
425,000 Baa3/BBB- Inco Ltd., 7.20%, 9/15/32 $ 468,419
------------
Metal & Glass Containers - 0.1%
125,000 Baa3/BBB- Tenneco Packaging, 8.125%, 6/15/17 $ 161,292
------------
Paper Packaging - 0.4%
500,000 Baa3/BBB Sealed Air Corp., 5.375%, 4/15/08 $ 524,744
------------
Paper Products - 0.4%
500,000 Baa3/BBB- Abitibi-Consolidated, Inc., 6.95%, 4/1/08 $ 526,239
------------
Specialty Chemicals - 0.5%
300,000 BAA1/BBB+ Ferro Corp., 9.125%, 1/1/09 $ 352,407
300,000 Baa3/BBB- Polyone Corp., 8.875%, 5/1/12 267,000
------------
$ 619,407
------------
Total Materials $ 2,512,124
------------
Capital Goods - 0.9%
Aerospace & Defense - 0.1%
100,000 B3/B K&F Industries, 9.625%, 12/15/10 $ 111,000
------------
Electrical Components & Equipment - 0.1%
200,000 Ba1/BBB- Thomas & Betts, 7.25%, 6/1/13 $ 200,000
------------
Industrial Conglomerates - 0.2%
145,000 Aaa/AAA General Electric Capital Corp., 6.125%,
2/22/11 $ 165,342
90,000 Aaa/AAA General Electric Capital Corp., 6.75%,
3/15/32 105,261
------------
$ 270,603
------------
Industrial Machinery - 0.5%
140,000 A2/A+ Caterpillar, Inc., 7.25%, 9/15/09 $ 170,566
400,000 Baa3/BBB- Timken Co., 5.75%, 2/15/10 421,122
------------
$ 591,688
------------
Total Capital Goods $ 1,173,291
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
Principal S&P/Moody's
Amount Ratings Value
Commercial Services & Supplies - 0.3%
Environmental Services - 0.3%
$ 350,000 BA3/BB- Allied Waste, 8.875%, 1/1/09 $ 366,188
------------
Total Commercial Services & Supplies $ 366,188
------------
Automobiles & Components - 1.3%
Automobile Manufacturers - 1.3%
1,000,000 A3/BBB General Motors, 7.2%, 1/15/11 $ 1,007,926
500,000 A2/BBB+ Ford Motor Credit Co., 5.8%, 1/12/09 496,929
150,000 A2/BBB+ Ford Motor Credit Co., 9.14%, 12/30/14 159,504
------------
Total Automobiles & Components $ 1,664,359
------------
Hotels, Restaurants & Leisure - 1.2%
Casinos & Gaming - 0.3%
300,000 Ba1/BBB- Park Place Entertainment, 7.00%,
4/15/13 (144A) $ 321,000
100,000 B1/B+ Turning Stone, 9.125%, 12/15/10 106,625
------------
$ 427,625
------------
Hotels, Resorts & Cruise Lines - 0.9%
500,000 Ba1/BBB- Hilton Hotels, 7.625%, 12/1/12 $ 547,500
500,000 Ba1/BBB- Starwood Hotels, 7.875%, 5/1/12 547,500
------------
$ 1,095,000
------------
Total Hotels, Restaurants & Leisure $ 1,522,625
------------
Media - 2.4%
Broadcasting & Cable TV - 1.2%
300,000 Ba1/BB+ British Sky Broadcasting, 8.2%, 7/15/09 $ 355,500
500,000 Baa3/BBB Comcast Cable Corp., 7.125%, 6/15/13 584,189
530,000 Baa3/BBB Cox Communications, 7.125%, 10/1/12 632,890
------------
$ 1,572,579
------------
Movies & Entertainment - 0.8%
850,000 Baa1/BBB+ AOL Time Warner, Inc., 6.875%, 5/1/12 $ 970,374
------------
Publishing - 0.4%
512,000 Baa1/BBB+ News America, Inc., 7.3%, 4/30/28 $ 581,403
------------
Total Media $ 3,124,356
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Balanced Fund
SCHEDULE OF INVESTMENTS 6/30/03 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings Value
Retailing - 0.7%
Department Stores - 0.3%
$ 150,000 Ba3/BBB- J.C. Penney Co., 8.0%, 3/1/10 $ 157,125
176,000 Ba2/BBB- J.C. Penney Co., 8.25%, 8/15/22 172,480
------------
$ 329,605
------------
Specialty Stores - 0.4%
500,000 Baa3/BBB- Toys "R" Us, 7.875%, 4/15/13 $ 537,858
------------
Total Retailing $ 867,463
------------
Food & Drug Retailing - 0.2%
Hypermarkets & Supercenters - 0.2%
200,000 AA3/AA Wal-Mart Stores, 6.875%, 8/10/09 $ 240,712
------------
Total Food & Drug Retailing $ 240,712
------------
Health Care Equipment & Supplies - 1.2%
Health Care Distributors - 0.3%
300,000 B2/BB- Biovail Corp. International, 7.875%,
4/1/10 $ 318,000
------------
Health Care Equipment - 0.3%
350,000 Baa3/BBB Beckman Industries, Inc., 7.45%, 3/4/08 $ 412,856
------------
Health Care Facilities - 0.4%
500,000 Ba1/BBB- HCA, Inc., 6.3%, 10/1/12 $ 511,179
------------
Health Care Supplies - 0.2%
250,000 Ba1/BBB- Bausch & Lomb, 7.125%, 8/1/28 $ 239,688
------------
Total Health Care Equipment & Supplies $ 1,481,723
------------
Pharmaceuticals & Biotechnology - 0.1%
Pharmaceuticals - 0.1%
100,000 A1/AA- Pharmacia Corp., 6.6%, 12/1/28 $ 121,389
------------
Total Pharmaceuticals & Biotechnology $ 121,389
------------
Banks - 0.5%
Banks - 0.1%
100,000 A1/A First Union National Bank, 7.8%, 8/18/10 $ 124,076
------------
Diversified Banks - 0.2%
225,000 Aa2/A+ National Westminster, 7.375%, 10/1/09 $ 275,911
------------
Thrifts & Mortgage Finance - 0.2%
300,000 A1/A Sovereign Bank, 5.125%, 3/15/13 $ 309,820
------------
Total Banks $ 709,807
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
Principal S&P/Moody's
Amount Ratings Value
Diversified Financials - 2.9%
Consumer Finance - 1.7%
$ 10,000 Baa2/BBB- Capital One Bank, 6.875%, 2/1/06 $ 10,730
300,000 Baa2/BBB- Capital One Bank, 4.875%, 5/15/08 306,152
1,150,000 A2/A- Household Financial, 6.5%, 11/15/08 1,322,302
500,000 BBB+Baa2 MBNA America Bank NA, 5.375%,
1/15/08 540,578
------------
$ 2,179,762
------------
Investment Banking & Brokerage - 0.1%
75,000 A1/A+ Goldman Sachs Group, Inc., 6.875%,
1/15/11 $ 88,496
------------
Diversified Financial Services - 0.9%
300,000 Baa3/A- Brascan Corp., 5.75%, 3/1/10 $ 319,315
275,000 A+/Aa2 Ciigroup, Inc., 7.25%, 10/1/10 333,194
125,000 Baa1/BBB Norfolk Southern Corp., 7.35%, 5/15/07 145,654
300,000 Baa2/BBB- PF Export Rec., 6.44%, 6/1/15 (144A) 303,750
------------
$ 1,101,913
------------
Specialized Finance - 0.2%
300,000 B2/BB- MDP Acquistions, 9.625%, 10/1/12 $ 331,500
------------
Total Diversified Financials $ 3,701,671
------------
Insurance - 0.5%
Life & Health Insurance - 0.2%
300,000 Baa3/BBB- Providen Companies, 7.0%, 7/15/18 $ 300,000
------------
Property & Casualty Insurance - 0.3%
350,000 Baa2/BBB+ Berkley (WR), 5.875%, 2/15/13 $ 372,237
------------
Total Insurance $ 672,237
------------
Real Estate - 0.9%
Real Estate Investment Trusts - 0.9%
300,000 Baa3/BBB- Colonial Realty LP, 6.15%, 4/15/13 $ 317,598
400,000 Ba1/BBB- Health Care REIT, Inc., 7.5%, 8/15/07 427,391
400,000 Baa/BBB- Hospitality Properties Trust, 6.75%,
2/15/13 424,208
------------
$ 1,169,197
------------
Total Real Estate $ 1,169,197
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Balanced Fund
SCHEDULE OF INVESTMENTS 6/30/03 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings Value
Technology Hardware & Development - 1.2%
Communications Equipment - 0.3%
$ 350,000 Ba3/BB+ Rogers Wireless, 9.625%, 5/1/11 $ 402,500
------------
Computer Hardware - 0.7%
500,000 Baa3/BBB- NCR Corp., 7.125%, 6/15/09 $ 549,253
300,000 Ba1/BB+ UNISYS Corp., 6.875%, 3/15/10 312,000
------------
$ 861,253
------------
Technology Distributors - 0.2%
300,000 Baa3/BBB- Arrow Electronic, Inc., 6.875%, 7/1/13 $ 297,115
------------
Total Technology Hardware & Development $ 1,560,868
------------
Telecommunication Services - 0.2%
Integrated Telecommunication Services - 0.2%
150,000 A1/A+ Verizon Global, 7.75%, 12/1/30 $ 189,972
------------
Total Telecommunication Services $ 189,972
------------
Utilities - 2.2%
Electric Utilities - 2.2%
550,000 Ba2/BB CMS Panhandle, 6.5%, 7/15/09 $ 607,750
300,000 Baa1/BBB+ Constellation Energy, 7.0%, 4/1/12 349,449
480,000 Baa1/BBB+ Dominion Resources, 5.125%, 12/15/09 517,350
110,000 Baa2/BBB- FirstEnergy Corp., 7.38%, 11/15/31 123,204
130,000 Baa2/BBB- FLP Energy America, 6.64%, 6/20/23
(144A) 130,000
500,000 Baa2/BBB- Great Lakes Power Inc., 8.3%, 3/1/05 537,474
500,000 Baa1/BBB+ Oncor Electric Delivery, 6.375%, 1/15/15
(144A) 567,213
------------
Total Utilities $ 2,832,440
------------
TOTAL CORPORATE BONDS
(Cost $23,716,054) $ 25,501,272
------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 17.5%
230,212 Federal Home Loan Mortgage Comission,
6.50%, 5/1/09 $ 243,381
838,033 Federal Home Loan Mortgage Comission,
6.0%, 1/1/33 868,907
998,994 Federal Home Loan Mortgage Comission,
6.0%, 4/1/33 1,035,797
990,965 Federal Home Loan Mortgage Comission,
6.0%, 5/1/33 1,027,468
18 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
Principal
Amount Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - (continued)
$ 40,000 Federal National Mortgage Association, 7.125%,
6/15/10 $ 49,445
1,260,000 Federal National Mortgage Association, 6.125%,
3/15/12 1,485,972
371,627 Federal National Mortgage Association, 6.0%,
11/1/16 387,880
1,011,974 Federal National Mortgage Association, 5.5%,
2/1/17 1,051,376
441,810 Federal National Mortgage Association, 6.5%,
4/1/29 466,423
276,768 Federal National Mortgage Association, 6.5%,
9/1/32 292,428
83,407 Federal National Mortgage Association, 6.5%,
10/1/32 86,979
1,711,484 Federal National Mortgage Association, 6.0%,
1/1/33 1,779,263
964,740 Federal National Mortgage Association, 6.0%,
1/1/33 1,002,946
1,701,702 Federal National Mortgage Association, 6.0%,
1/1/33 1,769,093
965,645 Federal National Mortgage Association, 6.0%,
2/1/33 1,003,894
997,223 Federal National Mortgage Association, 5.5%,
5/1/33 1,032,477
701,775 Government National Mortgage Association, 6.5%
10/15/28 737,989
96,474 Government National Mortgage Association, 7.5%,
1/15/30 102,539
146,472 Government National Mortgage Association, 8.0%,
2/15/30 158,084
2,662,718 Government National Mortgage Association, 6.0%,
11/15/32 2,792,494
125,000 Treasury Inflation IX Note/Bond, 3.375%, 1/15/07 156,136
1,500,000 U.S. Treasury Notes, 5.625%, 5/15/08 1,719,609
700,000 U.S. Treasury Notes, 4.75%, 11/15/08 775,989
2,285,000 U.S. Treasury Notes, 4.0%, 11/15/12 2,377,739
------------
$ 22,404,308
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $21,781,366) $ 22,404,308
------------
The accompanying notes are an integral part of these financial statements. 19
Pioneer Balanced Fund
SCHEDULE OF INVESTMENTS 6/30/03 (unaudited) (continued)
Principal
Amount Value
FOREIGN GOVERNMENT BOND - 0.4%
$ 500,000 Republic of Chile, 5.5%, 1/15/13 $ 529,000
------------
TOTAL FOREIGN GOVERNMENT BOND
(Cost $495,662) $ 529,000
------------
TEMPORARY CASH INVESTMENT - 2.2%
Repurchase Agreement - 2.2%
$2,800,000 Bear Stearns & Co., Inc., 1.08%, dated 6/30/03,
repurchase price of $2,800,000 plus accrued inter-
est on 7/1/03 collateralized by $2,708,000 U.S.
Treasury Notes, 11.875%, 11/15/03 $ 2,800,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $2,800,000) $ 2,800,000
------------
TOTAL INVESTMENT IN SECURITIES - 100.0%
(cost 119,397,969) (a)(b)(c) $128,130,372
============
* Non-income producing security.
(144A) Security is exempt from registration under Rule 144A
of the Securities Act of 1933. Such securities may
be resold normally to qualified institutional buyers
in a transaction exempt from registration. At June
30, 2003, the value of these securities amounted to
$1,321,963, or 1.03% of total net assets.
(a) At June 30, 2003, the net unrealized gain on
investments based on cost for federal income tax
purposes of $119,337,539 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $10,136,243
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (1,343,410)
-----------
Net unrealized gain $8,792,833
===========
(b) At December 31, 2002, the Fund had a net capital
loss carryforward of $8,355,755 which will expire
between 2006 and 2010, if not utilized.
(c) The Fund elected to defer approximately $6,577,422
of capital losses recognized between November 1,
2002 and December 31, 2002 to its fiscal year ending
December 31, 2003.
(d) TBA (To Be Assigned) securities are purchased on a
forward commitment basis with an approximate
(generally plus/minus 2.5%) principal and no
definite maturity date period. The actual principal
amount and maturity date will be determined upon
settlement when the specific mortgage pools are
assigned.
Purchases and sales of securities (excluding
temporary cash investments ) for the six months
ended June 30, 2003 aggregated $30,978,266 and
$42,993,349, respectively.
20 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
BALANCE SHEET 6/30/03 (unaudited)
ASSETS:
Investment in securities, at value (cost $119,397,969) $128,130,372
Cash 62,223
Receivables -
Fund shares sold 93,807
Dividends and interest 630,862
Other 476
------------
Total assets $128,917,740
------------
LIABILITIES:
Payables -
Investment securities purchased $ 253,963
Fund shares repurchased 223,471
Due to affiliates 133,767
Accrued expenses 148,645
Other 19,593
------------
Total liabilities $ 779,439
------------
NET ASSETS:
Paid-in capital $134,230,879
Accumulated undistributed net investment income 116,194
Accumulated net realized loss on investments (14,941,175)
Net unrealized gain on investments 8,732,403
------------
Total net assets $128,138,301
------------
NET ASSET VALUE PER SHARES:
(Unlimited number of shares authorized)
Class A (based on $106,287,246/11,886,572 shares) $ 8.94
============
Class B (based on $14,617,158/1,652,042 shares) $ 8.85
============
Class C (based on $7,233,897/811,096 shares) $ 8.92
============
MAXIMUM OFFERING PRICE:
Class A ($8.94 [divided by] 95.5%) $ 9.36
============
Class C ($8.92 [divided by] 99.0%) $ 9.01
============
The accompanying notes are an integral part of these financial statements. 21
Pioneer Balanced Fund
STATEMENT OF OPERATIONS (unaudited)
For the Six Months Ended 6/30/03
INVESTMENT INCOME:
Dividends $ 378,860
Interest 1,383,369
----------
Total investment income $ 1,762,229
-----------
EXPENSES:
Management fees $ 405,980
Transfer agent fees
Class A 161,719
Class B 36,495
Class C 16,249
Distribution fees
Class A 129,440
Class B 72,164
Class C 34,659
Administrative fees 19,935
Custodian fees 27,285
Registration fees 39,968
Professional fees 14,098
Printing 37,724
Fees and expenses of nonaffiliated trustees 4,766
Miscellaneous 9,426
----------
Total expenses $ 1,009,908
Less fees paid indirectly (1,819)
-----------
Net expenses $ 1,008,089
-----------
Net investment income $ 754,140
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from investments $ 14,404
Change in net unrealized gain (loss) from investments 9,552,517
-----------
Net gain on investments $ 9,566,921
-----------
Net increase in net assets resulting from operations $10,321,061
===========
22 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended 6/30/03 and the Year Ended 12/31/02
Six Months
Ended
6/30/03 Year Ended
(unaudited) 12/31/02
FROM OPERATIONS:
Net investment income $ 754,140 $ 1,471,864
Net realized gain (loss) on investments and futures
contracts 14,404 (13,206,171)
Change in net unrealized gain (loss) on investments
and futures contracts 9,552,517 (6,441,443)
------------ ------------
Net increase (decrease) in net assets resulting
from operations $ 10,321,061 $(18,175,750)
------------ ------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.06 and $0.11 per share, respectively) $ (721,370) $ (1,553,122)
Class B ($0.02 and $0.04 per share, respectively) (32,702) (68,665)
Class C ($0.02 and $0.04 per share, respectively) (15,710) (24,320)
------------ ------------
Total distributions to shareowners $ (769,782) $ (1,646,107)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 17,397,554 $ 32,572,418
Reinvestment of distributions 700,089 1,495,510
Cost of shares repurchased (30,306,293) (48,805,333)
------------ ------------
Net decrease in net assets resulting from Fund
share transactions $(12,208,650) $(14,737,405)
------------ ------------
Net decrease in net assets $ (2,657,371) $(34,559,262)
NET ASSETS:
Beginning of period 130,795,672 165,354,934
------------ ------------
End of period (including accumulated undistributed
net investment income of $116,194 and
$131,836, respectively) $128,138,301 $130,795,672
============ ============
The accompanying notes are an integral part of these financial statements. 23
Pioneer Balanced Fund
STATEMENTS OF CHANGES IN NET ASSETS (continued)
For the Six Months Ended 6/30/03 and Year Ended 12/31/02
'03 Shares '03 Amount
(unaudited) (unaudited) '02 Shares '02 Amount
CLASS A
Shares sold 1,079,782 $ 9,035,893 1,744,538 $ 14,929,254
Reinvestment of distributions 76,346 656,967 163,664 1,412,321
Less shares repurchased (2,138,635) (18,039,906) (4,028,040) (34,603,084)
---------- ----------- ---------- ------------
Net decrease (982,507) $(8,347,046) (2,119,838) $(18,261,509)
---------- ----------- ---------- ------------
CLASS B
Shares sold 612,325 $ 5,076,479 1,251,868 $ 10,454,475
Reinvestment of distributions 3,376 28,805 7,172 60,869
Less shares repurchased (944,760) (7,865,440) (1,212,895) (10,069,264)
---------- ----------- ---------- ------------
Net increase (decrease) (329,059) $(2,760,156) 46,145 $ 446,080
========== =========== ========== ============
CLASS C
Shares sold 392,114 $ 3,285,182 850,865 $ 7,188,689
Reinvestment of distributions 1,664 14,317 2,620 22,320
Less shares repurchased (526,540) (4,400,947) (491,900) (4,132,985)
---------- ----------- ---------- ------------
Net increase (decrease) (132,762) $(1,101,448) 361,585 $ 3,078,024
========== =========== ========== ============
24 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
FINANCIAL HIGHLIGHTS
Six Months
Ended
6/30/03 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/02 12/31/01(a) 12/31/00 12/31/99 12/31/98
CLASS A
Net asset value, beginning of period $ 8.29 $ 9.46 $ 9.94 $ 9.73 $ 9.74 $ 10.15
--------- --------- --------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.06 $ 0.11 $ 0.19 $ 0.30 $ 0.31 $ 0.30
Net realized and unrealized gain (loss) on investments 0.65 (1.17) (0.47) 0.22 (0.01) (0.18)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment operations $ 0.71 $ (1.06) $ (0.28) $ 0.52 $ 0.30 $ 0.12
Distributions to shareowners:
Net investment income (0.06) (0.11) (0.20) (0.31) (0.31) (0.30)
Net realized gain -- -- -- -- -- (0.23)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value $ 0.65 $ (1.17) $ (0.48) $ 0.21 $ (0.01) $ (0.41)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 8.94 $ 8.29 $ 9.46 $ 9.94 $ 9.73 $ 9.74
--------- --------- --------- --------- --------- ---------
Total return* 8.59% (11.20)% (2.87)% 5.38% 3.15% 1.14%
Ratio of net expenses to average net assets+ 1.46%** 1.41% 1.31% 1.23% 1.23% 1.17%
Ratio of net investment income to average net assets+ 1.36%** 1.19% 1.97% 2.96% 3.21% 2.92%
Portfolio turnover rate 25%** 180% 133% 17% 46% 94%
Net assets, end of period (in thousands) $ 106,287 $ 106,734 $ 141,746 $ 162,855 $ 214,866 $ 257,419
Ratios with reduction for fees paid indirectly:
Net expenses 1.46%** 1.41% 1.30% 1.20% 1.21% 1.16%
Net investment income 1.36%** 1.19% 1.98% 2.99% 3.23% 2.93%
* 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.
(a) At January 1, 2001, the Fund began accreting discounts and amortizing
premiums on debt securities. The effect of this change for the year ended
December 31, 2001 was to decrease net investment income by less than one
cent per share, increase net realized and unrealized gain (loss) by less
than one cent per share and decrease the ratio of net investment income to
average net assets assuming reduction for fees paid indirectly from 2.02%
to 1.98%. Per share ratios and supplemental data for periods prior to
January 1, 2001, have not been restated to reflect this change in
presentation.
The accompanying notes are an integral part of these financial statements. 25
Pioneer Balanced Fund
FINANCIAL HIGHLIGHTS
Six Months
Ended
6/30/03 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/02 12/31/01(a) 12/31/00 12/31/99 12/31/98
CLASS B
Net asset value, beginning of period $ 8.21 $ 9.36 $ 9.85 $ 9.64 $ 9.65 $ 10.08
--------- --------- --------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.02 $ 0.02 $ 0.12 $ 0.19 $ 0.22 $ 0.23
Net realized and unrealized gain (loss) on investments 0.64 (1.13) (0.48) 0.23 (0.01) (0.21)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment operations $ 0.66 $ (1.11) $ (0.36) $ 0.42 $ 0.21 $ 0.02
Distributions to shareowners:
Net investment income (0.02) (0.04) (0.13) (0.21) (0.22) (0.22)
Net realized gain -- -- -- -- -- (0.23)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value $ 0.64 $ (1.15) $ (0.49) $ 0.21 $ (0.01) $ (0.43)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 8.85 $ 8.21 $ 9.36 $ 9.85 $ 9.64 $ 9.65
========= ========= ========= ========= ========= =========
Total return* 8.05% (11.90)% (3.72)% 4.39% 2.24% 0.19%
Ratio of net expenses to average net assets+ 2.40%** 2.32% 2.20% 2.15% 2.14% 2.03%
Ratio of net investment income to average net assets+ 0.42%** 0.28% 1.04% 2.03% 2.30% 2.09%
Portfolio turnover rate 25%** 180% 133% 17% 46% 94%
Net assets, end of period (in thousands) $ 14,617 $ 16,256 $ 18,110 $ 16,413 $ 19,865 $ 22,737
Ratios with reduction of fees paid indirectly:
Net expenses 2.40%** 2.32% 2.19% 2.13% 2.12% 2.01%
Net investment income 0.42%** 0.28% 1.05% 2.05% 2.32% 2.11%
* 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.
(a) At January 1, 2001, the Fund began accreting discounts and amortizing
premiums on debt securities. The effect of this change for the year ended
December 31, 2001 was to decrease net investment income by less than one
cent per share, increase net realized and unrealized gain (loss) by less
than one cent per share and decrease the ratio of net investment income to
average net assets assuming reduction for fees paid indirectly from 1.08%
to 1.05%. Per share ratios and supplemental data for periods prior to
January 1, 2001, have not been restated to reflect this change in
presentation.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Balanced Fund
FINANCIAL HIGHLIGHTS
Six Months
Ended
6/30/03 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/02 12/31/01(a) 12/31/00 12/31/99 12/31/98
CLASS C
Net asset value, beginning of period $ 8.27 $ 9.44 $ 9.94 $ 9.73 $ 9.75 $ 10.17
--------- --------- --------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.02 $ 0.01 $ 0.13 $ 0.15 $ 0.21 $ 0.23
Net realized and unrealized gain (loss) on investments 0.65 (1.14) (0.54) 0.23 (0.02) (0.20)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment operations $ 0.67 $ (1.13) $ (0.41) $ 0.38 $ 0.19 $ 0.03
Distributions to shareowners:
Net investment income (0.02) (0.04) (0.09) (0.17) (0.21) (0.22)
Net realized gain -- -- -- -- -- (0.23)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value $ 0.65 $ (1.17) $ (0.50) $ 0.21 $ (0.02) $ (0.42)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 8.92 $ 8.27 $ 9.44 $ 9.94 $ 9.73 $ 9.75
========= ========= ========= ========= ========= =========
Total return* 8.11% (12.02)% (4.11)% 3.95% 2.02% 0.27%
Ratio of net expenses to average net assets+ 2.36%** 2.53% 2.44% 2.61% 2.38% 2.12%
Ratio of net investment income to average net assets+ 0.46%** 0.06% 0.75% 1.56% 2.09% 2.01%
Portfolio turnover rate 25%** 180% 133% 17% 46% 94%
Net assets, end of period (in thousands) $ 7,234 $ 7,806 $ 5,499 $ 3,426 $ 3,734 $ 3,778
Ratios with reduction of fees paid indirectly:
Net expenses 2.36%** 2.53% 2.43% 2.59% 2.35% 2.09%
Net investment income 0.46%** 0.06% 0.76% 1.58% 2.12% 2.04%
* 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.
(a) Aat January 1, 2001, the Fund began accreting discounts and amortizing
premiums on debt securities. The effect of this change for the year ended
December 31, 2001, was to decrease net investment income by less than one
cent per share, increase net realized and unrealized gain (loss) by less
than one cent per share and decrease the ratio of net investment income to
average net assets assuming reduction for fees paid indirectly from 0.86%
to 0.76%. Per share ratios and supplemental data for periods prior to
January 1, 2001, have not been restated to reflect this change in
presentation.
The accompanying notes are an integral part of these financial statements. 27
Pioneer Balanced Fund
NOTES TO FINANCIAL STATEMENTS 6/30/03 (unaudited)
1. Organization and Significant Accounting Policies
Pioneer Balanced Fund (the Fund) is a Delaware business trust registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund's investment objective is to seek capital growth
and current income.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Shares of each class 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 has exclusive voting rights with respect to the
distribution plans that have been adopted by Class A, Class B and Class C
shareowners, respectively.
The Fund's financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America that
require the management of the Fund to, among other things, make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund, which are in conformity with those generally accepted in the
investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value
is computed once daily, on each day the New York Stock Exchange is open,
as of the close of regular trading on the Exchange. In computing the net
asset value, debt securities are valued at prices supplied by independent
pricing services, which consider such factors as Treasury spreads, yields,
maturities and ratings. All discounts/premiums are accreted/amortized for
financial reporting purposes. Valuations may be supplemented by dealers
and other sources, as required. Equity 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
28
Pioneer Balanced Fund
the mean between the last bid and asked prices. Securities for which
market quotations are not readily available are valued at their fair
values as determined by, or under the direction of, the Board of Trustees.
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Fund is informed of the ex-dividend
data in exercise of reasonable diligence. Interest income, including
interest on income bearing cash accounts, is recorded on the accrual
basis. Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. 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 paid or received by the Fund, depending on the daily fluctuation in
the value of the contracts, and are recorded by the Fund as unrealized
gains or losses. 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 risk which may exceed the amounts recognized by the
Fund. Changes in the value of the contracts may not directly correlate to
the changes in the value of the underlying securities. These risks may
decrease the effectiveness of the Fund's hedging and trading strategies
and potentially result in a loss. As of June 30, 2003, the Fund had no
open futures contracts.
29
Pioneer Balanced Fund
NOTES TO FINANCIAL STATEMENTS 6/30/03 (unaudited) (continued)
C. 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 characterization of distributions to shareowners for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
The tax character of current year distributions paid will be determined at
the end of the current fiscal year. The tax character of distributions
paid during the year ended December 31, 2002 was as follows:
2002
----------
Distributions paid from:
Ordinary income $1,646,107
Long-term capital gain --
----------
Total $1,646,107
----------
The following shows components of distributable earnings on a federal
income tax basis at December 31, 2002. These amounts do not include the
capital loss carryforward.
2002
---------
Undistributed ordinary income $ 49,004
Undistributed long-term gain --
Unrealized depreciation (759,684)
---------
Total $(710,680)
---------
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the tax deferral of losses on wash sales and the
tax treatment of premuim amortization.
30
Pioneer Balanced Fund
D. 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.
(UniCredito Italiano), earned $8,414 in underwriting commissions on the
sale of Fund shares during the six months ended June 30, 2003.
E. 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. 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 their 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.
F. 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.
31
Pioneer Balanced Fund
NOTES TO FINANCIAL STATEMENTS 6/30/03 (unaudited) (continued)
2. Management Agreement
PIM, the Fund's investment adviser and a wholly owned indirect subsidiary of
UniCredito Italiano, manages the Fund's portfolio. Management fees are
calculated daily at the annual rate of 0.65% of the Fund's average daily net
assets up to $1 billion; 0.60% of the next $4 billion; and 0.55% of the excess
over $5 billion.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At June 30, 2003, $76,685 was payable to PIM
related to management fees, administrative fees and certain other services.
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 $14,355 in transfer agent
fees payable to PIMSS at June 30, 2003.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 under 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 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 $42,727
in distribution fees payable to PFD at June 30, 2003.
32
Pioneer Balanced Fund
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 4.00%, based on the lower of cost or market
value of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the six months ended June 30, 2003, CDSCs in the amount of $17,594 were
paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended June 30, 2003,
the Fund's expenses were reduced by $1,819 under such arrangements.
6. Line of Credit Facility
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
June 30, 2003, the Fund had no borrowings under this agreement.
33
Pioneer Balanced Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
Mary K. Bush Osbert M. Hood, Executive
Richard H. Egdahl, M.D. Vice President*
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood* Joseph P. Barri, 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
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
*Mr. Hood was elected Trustee and Executive Vice President on June 3, 2003.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). This
information is also available on our web site at www.pioneerfunds.com and on
the Securities and Exchange Commission's web site at http://www.sec.gov.
34
Pioneer Balanced Fund
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
professional, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest.
U.S. Equity
Pioneer Fund
Pioneer Balanced Fund
Pioneer Equity Income Fund
Pioneer Core Equity Fund
Pioneer Growth Shares
Pioneer Mid Cap Growth Fund
Pioneer Mid Cap Value Fund
Pioneer Real Estate Shares
Pioneer Small Cap Value Fund
Pioneer Small Company Fund
Pioneer Stable Value Fund
Pioneer Value Fund
International/Global Equity
Pioneer Emerging Markets Fund
Pioneer Europe Select Fund
Pioneer Europe Fund
Pioneer International Equity Fund
Pioneer International Value Fund
Fixed Income
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer High Yield Fund
Pioneer Strategic Income Fund
Pioneer Tax Free Income Fund
Money Market
Pioneer Cash Reserves Fund*
* An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
35
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 701/2 earning income. Individuals can contribute up to
$3,000 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
$3,000 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
$11,000 per year. In addition, each year the business may contribute up to 25%
of pay.
401(k) Plan*
Allows employees to make pre-tax contributions through payroll deduction, up to
$11,000 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 decide whether to
contribute. Employers must contribute.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
36
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.
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.
Money Purchase Pension Plan (MPP)
Allows employer contributions, up to 25% of pay annually. Companies must
contribute a fixed percentage of pay each year.
Defined Benefit Pension Plan
Requires a business to contribute enough each year to fund a specific future
benefit. Most beneficial to older employees who need to accumulate assets
rapidly.
* 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.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
37
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, Inc.
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
This report must be preceded or accompanied by a current Fund prospectus.
[LOGO] PIONEER Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
13706-00-0803
(C)2003 Pioneer Funds Distributor, Inc.
Underwriter of Pioneer mutual funds, Member SIPC
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.
Not applicable for semiannual reports; to be answered on annual submissions
after July 15, 2003.
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.
(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)).
(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 for semiannual reports; to be answered on annual submissions
after July 15, 2003.
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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
Not applicable for semiannual reports; to be answered on annual submissions
after December 15, 2003.
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) The registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation of
these
controls and procedures as of a date within 90 days prior to the filing date of
this report.
(b) There were no significant changes in the registrants 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.
Not applicable.
(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 Balanced Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date August 25, 2003
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 August 25, 2003
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date August 25, 2003
* Print the name and title of each signing officer under his or her signature.