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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 811-08657
Pioneer Equity Income 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: October 31
Date of reporting period: November 1, 2003 through April 30, 2004
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
-----------------------
EQUITY
INCOME
FUND
Semiannual
Report
4/30/04
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 8
Schedule of Investments 12
Financial Statements 19
Notes to Financial Statements 28
The Pioneer Family of Mutual Funds 34
Trustees, Officers and Service Providers 35
Programs and Services for Pioneer Shareowners 36
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
LETTER TO SHAREOWNERS 4/30/04
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
Last year's stock market rally carried over into early 2004 but ran out of
steam as investors reassessed the dramatic rise in stock valuations. The
technology-rich NASDAQ Composite Index, having risen the fastest, was the first
to feel pressure; the Dow Jones Industrial Average and Standard & Poor's 500
soon gave up some gains as well. Heading into April, these major indicators
were little changed from year-end levels but well ahead of where they stood a
year ago.
In general terms, smaller companies outperformed large companies, and emerging
markets outpaced developed countries, as both benefited from weakness in the
U.S. dollar. Corporate bonds, here and overseas, recorded strong gains. U.S.
Treasury issues also performed well, as the Federal Reserve Board signaled that
it was in no hurry to raise interest rates, given the mixed economic data it
was seeing.
Those mixed economic reports were also responsible for the stock market's
sluggishness. While corporate profits expanded at a healthy rate, unemployment
remained high and consumer confidence dropped sharply in February. Increased
productivity, a company's ability to produce more goods or services for each
hour worked, was a major factor in the disappointing pace of job creation.
However, jobs data improved markedly in March when the government reported U.S.
employers had added over 300,000 jobs, the largest figure in years; at the same
time, January and February numbers were revised upward. Payroll expansion
reached into most sectors, while employment held steady in manufacturing after
a long period of declines. The markets reacted positively to the jobs report.
We believe that renewed hiring means companies are optimistic about the outlook
for profits in the months ahead. In fact, many businesses are building up
inventories in expectation of increased product demand.
The key drivers of the expansion, low interest rates and reduced federal income
taxes, remain in place. Consequently, we think the U.S. economy retains
impressive growth potential through the rest of this year. An expanding economy
could have implications for the way your portfolio is balanced, so an
appointment with your professional financial advisor may well be in order.
More growth choices from Pioneer
When you talk to your advisor, ask to hear about the Pioneer Oak Ridge and
Pioneer Papp Funds. These six additions to our product lineup are designed to
broaden your opportunities to pursue growth. Please consider each fund's
investment objectives, 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 or send money. 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 Equity Income Fund
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 4/30/04
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Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[The following table was depicted as a pie chart in the printed material.]
U.S. Common Stocks 95.9%
Temporary Cash Investments 2.2%
U.S. Convertible Securities 1.9%
Sector Distribution
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(As a percentage of total investment in securities)
[The following table was depicted as a pie chart in the printed material.]
Financials 23.2%
Utilities 15.5%
Energy 12.3%
Consumer Discretionary 10.7%
Industrials 9.3%
Health Care 8.0%
Telecommunication Services 7.7%
Consumer Staples 5.3%
Materials 4.9%
Information Technology 3.1%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of total investment in securities)*
1. ChevronTexaco Corp. 4.51% 6. T. Rowe Price Associates, Inc. 2.50%
2. ConocoPhillips 3.97 7. Charter One Financial, Inc. 2.43
3. PACCAR, Inc. 3.76 8. SBC Communications, Inc. 2.10
4. Exxon Mobil Corp. 3.27 9. Cedar Fair, L.P. 2.01
5. Constellation Energy Group 2.97 10. KeySpan Energy Corp. 2.00
*This list excludes money market and derivative investments. Fund holdings will
vary for other periods.
2
Pioneer Equity Income Fund
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PERFORMANCE UPDATE 4/30/04 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/04 10/31/03
$25.30 $23.57
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 4/30/04) Income Capital Gains Capital Gains
$0.2296 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Equity Income Fund at public offering price,
compared to that of the Russell 1000 Value Index.
Average Annual Total Returns
(As of April 30, 2004)
Net Asset Public Offering
Period Value Price*
10 Years 10.03% 9.38%
5 Years 1.12 -0.07
1 Year 23.82 16.71
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period.
[The following table was depicted as a line chart in the printed material.]
Value of $10,000 Investment
Pioneer Equity Russell 1000
Income Fund* Value Index
4/94 9,425 10,000
9,680 10,268
10/95 11,568 12,805
13,365 15,844
10/97 17,427 21,101
20,684 24,232
10/99 23,013 28,238
24,602 29,796
10/01 22,336 26,261
19,518 23,630
22,619 29,034
4/04 24,503 31,402
Data shown represents past performance. Past performance does not guarantee
future results. Assumes reinvestment of all distributions at net asset
value. Investment return and principal value fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance shown. For
performance data that is current to the most recent month-end, please call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
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.
The Russell 1000 Value Index is a measure of the performance of the
value-oriented stocks in the Russell 1000 Index. 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.
3
Pioneer Equity Income Fund
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PERFORMANCE UPDATE 4/30/04 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
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Net Asset Value
per Share 4/30/04 10/31/03
$25.15 $23.42
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 4/30/04) Income Capital Gains Capital Gains
$0.1179 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Equity Income Fund, compared to that of the Russell
1000 Value Index.
Average Annual Total Returns
(As of April 30, 2004)
If If
Period Held Redeemed*
10 Years 9.19% 9.19%
5 Years 0.31 0.14
1 Year 22.78 18.78
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period. The maximum CDSC of 4% declines to
zero over six years.
[The following table was depicted as a line chart in the printed material.]
Value of $10,000 Investment+
Pioneer Equity Russell 1000
Income Fund* Value Index
4/94 10,000 10,000
10,242 10,268
10/95 12,151 12,805
13,938 15,844
10/97 18,028 21,101
21,243 24,232
10/99 23,459 28,238
24,875 29,796
10/01 22,413 26,261
19,424 23,630
22,319 29,034
4/04 24,081 31,402
Data shown represents past performance. Past performance does not guarantee
future results. Assumes reinvestment of all distributions at net asset
value. Investment return and principal value fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance shown. For
performance data that is current to the most recent month-end, please call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
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.
+ Index comparison begins on 4/30/94. The Russell 1000 Value Index is a
measure of the performance of the value-oriented stocks in the Russell 1000
Index. 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.
4
Pioneer Equity Income Fund
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PERFORMANCE UPDATE 4/30/04 CLASS C SHARES
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Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 4/30/04 10/31/03
$25.08 $23.37
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 4/30/04) Income Capital Gains Capital Gains
$0.1343 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Equity Income Fund at public offering price,
compared to that of the Russell 1000 Value Index.
Average Annual Total Returns
(As of April 30, 2004)
If If
Period Held Redeemed*
Life-of-Class
(1/31/96) 7.48% 7.48%
5 Years 0.25 0.25
1 Year 22.81 22.81
All returns reflect reinvestment of distributions at net asset value.
* 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. Class C shares held for
less than 1 year are subject to a 1% contingent deferred sales charge.
[The following table was depicted as a line chart in the printed material.]
Value of $10,000 Investment+
Pioneer Equity Russell 1000
Income Fund* Value Index
1/96 10,000 10,000
10,534 11,142
10/97 13,622 14,839
16,047 17,040
10/99 17,708 19,857
18,761 20,953
10/01 16,882 18,467
14,626 16,617
16,810 20,416
4/04 18,138 22,080
Data shown represents past performance. Past performance does not guarantee
future results. Assumes reinvestment of all distributions at net asset
value. Investment return and principal value fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance shown. For
performance data that is current to the most recent month-end, please call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
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.
The Russell 1000 Value Index is a measure of the performance of the
value-oriented stocks in the Russell 1000 Index. 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.
5
Pioneer Equity Income Fund
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PERFORMANCE UPDATE 4/30/04 CLASS R SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
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Net Asset Value
per Share 4/30/04 10/31/03
$25.45 $23.71
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 4/30/04) Income Capital Gains Capital Gains
$0.2193 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Equity Income Fund at public offering price,
compared to that of the Russell 1000 Value Index.
Average Annual Total Returns+
(As of April 30, 2004)
If If
Period Held Redeemed*
10 Years 9.59% 9.59%
5 Years 0.82 0.82
1 Year 23.72 23.72
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of a 1% CDSC. Shares sold within 18 months of purchase
may be subject to the CDSC.
[The following table was depicted as a line chart in the printed material.]
Value of $10,000 Investment
Pioneer Equity Russell 1000
Income Fund* Value Index
4/94 10,000 10,000
10,251 10,268
10/95 12,189 12,805
14,012 15,844
10/97 18,177 21,101
21,466 24,232
10/99 23,761 28,238
25,275 29,796
10/01 22,835 26,261
19,855 23,630
23,084 29,034
4/04 24,995 31,402
Data shown represents past performance. Past performance does not guarantee
future results. Assumes reinvestment of all distributions at net asset
value. Investment return and principal value fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance shown. For
performance data that is current to the most recent month-end, please call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
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.
+ The performance of Class R shares for the period prior to the commencement
of operations of Class R shares on April 1, 2003 is based on the
performance of Class A shares, reduced to reflect the higher distribution
and service fees of Class R shares. For the period after April 1, 2003, the
actual performance of Class R shares is reflected, which performance may be
influenced by the smaller asset size of Class R shares compared to Class A
shares.
The Russell 1000 Value Index is a measure of the performance of the
value-oriented stocks in the Russell 1000 Index. 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.
6
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 4/30/04 CLASS Y SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 4/30/04 10/31/03
$25.40 $23.65
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 4/30/04) Income Capital Gains Capital Gains
$0.2766 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Equity Income Fund, compared to that of the Russell
1000 Value Index.
Average Annual Total Returns*
(As of April 30, 2004)
If If
Period Held Redeemed*
Life-of-Class
(7/2/98) 3.07% 3.07%
5 Years 1.55 1.55
1 Year 24.39 24.39
* All returns reflect reinvestment of distributions at net asset value.
[The following table was depicted as a line chart in the printed material.]
Value of $10,000 Investment+
Pioneer Equity Russell 1000
Income Fund* Value Index
7/98 10,000 10,000
10,167 9,698
10/99 11,354 11,301
12,187 11,925
10/01 11,103 10,510
9,744 9,457
11,347 11,620
4/04 12,322 12,567
Data shown represents past performance. Past performance does not guarantee
future results. Assumes reinvestment of all distributions at net asset
value. Investment return and principal value fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance shown. For
performance data that is current to the most recent month-end, please call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
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.
+ Index comparison begins 7/31/98. The Russell 1000 Value Index is a measure
of the performance of the value-oriented stocks in the Russell 1000 Index.
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.
7
Pioneer Equity Income Fund
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/04
- --------------------------------------------------------------------------------
In the following discussion, John Carey, portfolio manager of Pioneer Equity
Income Fund reviews the economic environment and the Fund's performance over
the past six months.
Q: Please summarize the performance of the Fund over the six months ended April
30, 2004.
A: Pioneer Equity Income Fund showed positive returns for the six months ended
April 30, 2004. The total return on Class A shares, which assumes
reinvestment of all income and capital-gains distributions, was 8.33% at net
asset value. That compared favorably with the 8.15% total return on the
Russell 1000 Value Index and the 6.27% total return on the Standard & Poor's
500 Index. Also by comparison, the average fund in the Lipper Analytical
Services equity-income category returned 7.56%. So, it was a successful
period for the Fund in both absolute and relative terms.
In analyzing the performance of the Fund during the period, we find that the
strategy we had followed for some time with respect to the financial sector
finally paid off. We were underweight the sector relative to the Russell
1000 Value Index due to our expectations that a rising interest-rate
environment could be difficult for financial companies. We had also avoided
some of the popular "money-center" banks that we felt might be particularly
susceptible to swings in the bond and stock markets. Sure enough, through
April 30 the financials were underperforming the rest of the market,
vindicating our underweight position; and the worst affected stocks in the
sector included some in which we had not invested.
The sector providing the next largest amount of positive performance
attribution for the Fund was the industrial sector. Our holdings in the
steel industry, Timken and Roanoke Electric Steel, were standouts. Energy
was the third biggest contributor. We were overweight in the sector, which
in fact was the strongest performing part of the Russell Index in the
period, and we chose stocks that did even better than the average stock in
the sector, including ConocoPhillips and ChevronTexaco.
Weak spots for the portfolio included consumer staples and
telecommunications services. In both cases we did not own any shares of one
of the top performers in the sectors, Altria Group in
8
Pioneer Equity Income Fund
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consumer staples and AT&T Wireless in telecommunications. In the former
case, we have maintained a policy, from the inception of the Fund in 1990,
of not buying shares in any tobacco companies; in the case of AT&T Wireless,
which appreciated significantly because it received an acquisition offer, we
require holdings in the Fund to pay dividends, and that company did not pay
one. Otherwise, in information technology, our shares of Diebold declined
due to problems with voting machines made by the company.
Overall, though, it was a good period for the Fund, and we are pleased to
make this report to you.
Q: What changes have you made to the portfolio since October 31?
A: It was an active six months for the Fund, with nine additions to the
portfolio and eight deletions. Moderately increasing our exposure to energy,
we purchased shares of Occidental Petroleum, potentially a beneficiary of
the improved relations with Libya, where the company has historic business
connections. Enlarging our investment in materials, we bought stock in
Valspar, a maker of coatings and other specialty-chemical products. J.C.
Penney appears to be improving in its department-store retailing operations,
and the other attraction to us was the company's interest in selling its
lagging Eckerd drugstore operations. Clorox, the well-known supplier of
household cleaning and bleach products, is responding to improved
management. Other new entries included: Pfizer, the major pharmaceutical
company; U.S. Bancorp, a successful regional bank headquartered in
Minneapolis; Automatic Data Processing, leader in payroll services and other
computerized transaction processing; Hewlett-Packard, profitable
manufacturer of laser and inkjet printers and printer cartridges for
computers; and Equitable Resources, a Pittsburgh-based natural-gas utility.
Liquidations from the portfolio encompassed stocks that had done well and
reached, in our minds, full value, including Deere, Illinois Tool Works,
Tribune, Veeco Instruments convertible debentures, and Merrill Lynch; stocks
where we had revised our longer term strategic outlook and decided to make
substitutions, including Norfolk Southern and Equity Office Properties; and
one case of a security that the company bought back from shareholders for
cash, the Union Pacific convertible preferreds.
9
Pioneer Equity Income Fund
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/04 (continued)
- --------------------------------------------------------------------------------
Q: What is the general prospect for dividend-paying stocks?
A: About three-quarters of the stocks in the Standard & Poor's 500 Index pay
dividends, so dividend-paying companies are not exactly an endangered
species. The federal tax-law changes of 2003 made dividends more attractive
to many people by reducing the maximum federal rate on qualified dividends
to 15%. While some companies appear to have responded by placing more
emphasis on dividend payments, we cannot tell how many of the recent
increases in dividends by companies have been just the normal increases one
would have seen in any case, during an economic (and corporate-profits)
upturn. It remains a powerful alternative for companies thinking about what
to do with their money to reinvest in their business rather than paying out
more in dividends. In Pioneer Equity Income Fund, we have always aimed to
strike a balance, by investing in companies paying dividends as part of a
well-conceived financial strategy, including not only dividend payments but
also capital expenditures, additions to working capital, prudent share
repurchases, and strategic acquisitions. We think that the prospects are
always bright for companies with the management discipline to pay dividends
over many years, and at rising rates, while also providing for the growth of
their business.
Q: What is your outlook?
A: In our October 31, 2003 letter to shareholders, we described some of the
crosscurrents in the market. While we noted the strong, upward trend in
corporate earnings, we also sounded a note of caution about high
stock-market valuation levels and the international situation. Since then,
investors have also focused on high commodities prices, especially the price
of oil, prospective increases in interest rates, and the domestic political
uncertainties of our presidential election year. It is at the moment a real
tussle between the bulls and the bears, that is, between the optimists and
the pessimists on the market. From one day to the next, as a result, the
market is finding it difficult to make headway.
How long this "backing and filling" will last is anyone's guess. It may be
that we need resolution on some of the broader, especially international,
issues troubling investors. Or it may be that the market is merely going
through a normal sorting out after
10
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the very pronounced burst of performance last year; once that is through, we
think stocks will resume their upward move. A lot probably does hinge on
interest rates, although the historical data on that score is hard to
interpret, with some recent commentators even pointing out that the market
has often in the past gone higher as rates have risen. Everything in
moderation, perhaps. In any event, we intend to keep looking for good
investments for your portfolio. Thank you for your continued support.
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.
11
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/04 (unaudited)
- --------------------------------------------------------------------------------
Principal
Amount Value
CONVERTIBLE PREFERRED STOCKS - 1.9%
Automobiles & Components - 1.2%
Automobile Manufacturers - 1.2%
$ 10,000 General Motors Corp., Series B, 5.25%, 3/6/32 $ 251,250
175,000 Ford Capital Trust, 6.5%, 1/15/32 9,835,000
-----------
$10,086,250
-----------
Total Automobiles & Components $10,086,250
-----------
Software & Services - 0.7%
Data Processing & Outsourced Services - 0.7%
320,000 Electronic Data Corp., 7.625%, 8/17/04 $ 5,440,000
-----------
Total Software & Services $ 5,440,000
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $23,629,078) $15,526,250
-----------
CONVERTIBLE CORPORATE BONDS - 0.1%
Retailing - 0.1%
Apparel Retail - 0.1%
800,000 Gap, Inc., 5.75%, 3/15/09 $ 1,153,000
-----------
Total Retailing $ 1,153,000
-----------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost $800,000) $ 1,153,000
-----------
Shares
COMMON STOCKS - 97.9%
Energy - 12.3%
Integrated Oil & Gas - 12.3%
405,700 ChevronTexaco Corp. $ 37,121,550
458,780 ConocoPhillips 32,711,013
633,878 Exxon Mobil Corp. 26,971,509
100,000 Occidental Petroleum Corp. 4,720,000
------------
$101,524,072
------------
Total Energy $101,524,072
------------
Materials - 4.9%
Commodity Chemicals - 1.8%
200,000 Air Products & Chemicals, Inc. $ 9,962,000
105,232 E.I. du Pont de Nemours and Co. 4,519,714
------------
$ 14,481,714
------------
The accompanying notes are an integral part of these financial statements.
12
Pioneer Equity Income Fund
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- --------------------------------------------------------------------------------
Shares Value
Construction Materials - 0.6%
100,000 Vulcan Materials Co. (c) $ 4,624,000
------------
Diversified Chemicals - 0.7%
100,000 PPG Industries, Inc. $ 5,931,000
------------
Paper Products - 0.7%
230,000 Meadwestvaco Corp. $ 6,014,500
------------
Specialty Chemicals - 0.3%
50,000 Valspar Corp. $ 2,482,500
------------
Steel - 0.8%
513,705 Roanoke Electric Steel Corp. $ 6,960,703
------------
Total Materials $ 40,494,417
------------
Capital Goods - 8.8%
Aerospace & Defense - 2.6%
125,000 Boeing Co. $ 5,336,250
168,700 General Dynamics Corp. 15,793,694
------------
$ 21,129,944
------------
Electrical Components & Equipment - 1.3%
175,000 Emerson Electric Co. $ 10,538,500
------------
Industrial Conglomerates - 2.4%
235,600 Johnson Controls, Inc. $ 12,925,016
85,000 United Technologies Corp. 7,332,100
------------
$ 20,257,116
------------
Industrial Machinery - 2.5%
505,957 Gorman-Rupp Co.+ $ 13,306,669
350,000 The Timken Co. 7,721,000
------------
$ 21,027,669
------------
Total Capital Goods $ 72,953,229
------------
Transportation - 0.4%
Railroads - 0.4%
105,000 Burlington Northern, Inc. $ 3,433,500
------------
Total Transportation $ 3,433,500
------------
Automobiles & Components - 3.8%
Automobile Manufacturers - 3.8%
548,625 PACCAR, Inc. $ 30,975,368
------------
Total Automobiles & Components $ 30,975,368
------------
The accompanying notes are an integral part of these financial statements.
13
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Media - 3.5%
Movies & Entertainment - 2.0%
531,200 Cedar Fair, L.P. (c) $ 16,530,944
------------
Publishing - 1.5%
160,000 McGraw-Hill Co., Inc. $ 12,617,600
------------
Total Media $ 29,148,544
------------
Retailing - 2.0%
Department Stores - 1.3%
100,000 J.C. Penney Co., Inc. $ 3,386,000
241,000 May Department Stores Co. 7,422,800
------------
$ 10,808,800
------------
General Merchandise Stores - 0.7%
140,000 Sears, Roebuck and Co. (c) $ 5,607,000
------------
Total Retailing $ 16,415,800
------------
Food, Beverage & Tobacco - 4.5%
Packaged Foods & Meats - 3.4%
430,000 Campbell Soup Co. $ 11,880,900
86,000 General Mills, Inc. 4,192,500
216,250 H.J. Heinz Co., Inc. 8,258,588
184,000 Sara Lee Corp. 4,246,720
------------
$ 28,578,708
------------
Soft Drinks - 1.1%
50,000 The Coca-Cola Co. $ 2,528,500
116,300 PepsiCo, Inc. 6,337,187
------------
$ 8,865,687
------------
Total Food, Beverage & Tobacco $ 37,444,395
------------
Household & Personal Products - 0.8%
Household Products - 0.8%
50,000 Clorox Co. $ 2,589,000
66,000 Colgate-Palmolive Co. 3,820,080
------------
$ 6,409,080
------------
Total Household & Personal Products $ 6,409,080
------------
Health Care Equipment & Services - 4.3%
Health Care Distributors - 3.3%
356,600 Abbott Laboratories $ 15,697,532
210,000 Johnson & Johnson Co. 11,346,300
------------
$ 27,043,832
------------
The accompanying notes are an integral part of these financial statements.
14
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Health Care Equipment - 1.0%
88,000 Becton, Dickinson & Co. $ 4,448,400
100,000 Biomet, Inc. 3,950,000
------------
$ 8,398,400
------------
Total Health Care Equipment & Services $ 35,442,232
------------
Pharmaceuticals & Biotechnology - 3.7%
Pharmaceuticals - 3.7%
200,000 Eli Lilly & Co. $ 14,762,000
290,400 Merck & Co., Inc. 13,648,800
60,000 Pfizer, Inc. 2,145,600
------------
$ 30,556,400
------------
Total Pharmaceuticals & Biotechnology $ 30,556,400
------------
Banks - 13.2%
Diversified Banks - 5.7%
150,000 Bank of America Corp. $ 12,073,500
600,000 Charter One Financial, Inc. 20,022,000
100,000 U.S. Bancorp 2,564,000
215,662 Wells Fargo & Co. 12,176,277
------------
$ 46,835,777
------------
Regional Banks - 5.8%
250,000 First Horizon National Corp.* $ 10,990,000
334,000 National City Corp. 11,579,780
329,400 SouthTrust Corp. 10,237,752
225,000 SunTrust Banks, Inc. 15,311,250
------------
$ 48,118,782
------------
Thrifts & Mortgage Finance - 1.7%
355,000 Washington Mutual, Inc. $ 13,983,450
------------
Total Banks $108,938,009
------------
Diversified Financials - 4.2%
Asset Management & Custody Banks - 3.4%
208,000 Eaton Vance Corp. $ 7,594,080
402,000 T. Rowe Price Associates, Inc. 20,614,560
------------
$ 28,208,640
------------
Investment Banking & Brokerage - 0.8%
175,000 A.G. Edwards, Inc. $ 6,403,250
------------
Total Diversified Financials $ 34,611,890
------------
The accompanying notes are an integral part of these financial statements.
15
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Insurance - 4.6%
Property & Casualty Insurance - 4.6%
205,100 Chubb Corp. $ 14,151,900
280,000 Safeco Corp. 12,261,200
277,800 The St. Paul Travelers Companies, Inc.* 11,298,126
------------
$ 37,711,226
------------
Total Insurance $ 37,711,226
------------
Real Estate - 1.2%
Real Estate Investment Trusts - 1.2%
200,000 Simon DeBartolo Group, Inc. $ 9,642,000
------------
Total Real Estate $ 9,642,000
------------
Software & Services - 0.8%
Application Software - 0.3%
100,000 Microsoft Corp. $ 2,597,000
------------
Data Processing & Outsourced Services - 0.5%
100,000 Automatic Data Processing, Inc. $ 4,381,000
------------
Total Software & Services $ 6,978,000
------------
Technology Hardware & Equipment - 1.6%
Computer Hardware - 1.6%
177,550 Diebold, Inc. $ 8,183,280
150,000 Hewlett-Packard Co. 2,955,000
20,000 IBM Corp. 1,763,400
------------
$ 12,901,680
------------
Total Technology Hardware & Equipment $ 12,901,680
------------
Telecommunication Services - 7.7%
Integrated Telecommunication Services - 7.7%
184,585 Alltel Corp. $ 9,292,009
680,000 AT&T Corp. (c) 11,662,000
396,400 BellSouth Corp. 10,231,084
694,669 SBC Communications, Inc. 17,297,257
400,000 Verizon Communications, Inc. 15,096,000
------------
$ 63,578,350
------------
Total Telecommunication Services $ 63,578,350
------------
The accompanying notes are an integral part of these financial statements.
16
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Utilities - 15.6%
Electric Utilities - 9.8%
235,400 American Electric Power Co., Inc. $ 7,165,576
175,000 Consolidated Edison, Inc. 7,211,750
636,500 Constellation Energy Group 24,492,520
120,000 FPL Group, Inc. 7,634,400
384,400 Great Plains Energy, Inc. (c) 11,997,124
190,000 NSTAR 9,196,000
440,000 Southern Co. 12,654,400
------------
$ 80,351,770
------------
Gas Utilities - 4.6%
454,700 KeySpan Energy Corp. $ 16,437,404
446,600 Questar Corp. 15,840,902
237,933 Vectren Corp. 5,746,082
------------
$ 38,024,388
------------
Multi-Utilities & Unregulated Power - 0.5%
80,000 Equitable Resources, Inc.* $ 3,759,200
------------
Water Utilities - 0.7%
275,625 Aqua America, Inc. $ 5,636,532
------------
Total Utilities $127,771,890
------------
TOTAL COMMON STOCKS
(Cost $600,061,453) $806,930,082
------------
TEMPORARY CASH INVESTMENT - 2.2%
Security Lending Collateral - 2.2%
18,154,200 Securities Lending Investment Fund, 1.02% $ 18,154,200
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $18,154,200) $ 18,154,200
------------
TOTAL INVESTMENT IN SECURITIES - 102.1%
(Cost $642,644,731)(a)(b) $841,763,532
------------
OTHER ASSETS AND LIABILITIES - (2.1)% $(16,996,584)
------------
TOTAL NET ASSETS - 100.0% $824,766,948
============
The accompanying notes are an integral part of these financial statements.
17
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
+ Investment held by the Fund representing 5% or more of the outstanding
voting stock of such company.
* Non-income producing security.
(a) At April 30, 2004, the net unrealized gain on investments based on cost for
federal income tax purposes of $637,547,861 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $223,419,204
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (19,203,533)
------------
Net unrealized gain $204,215,671
============
(b) At October 31, 2003, the Fund had a net capital loss carryforward of
$21,059,152 which will expire in 2010, if not utilized.
(c) At April 30, 2004, the following securities were out on loan:
Shares Description Market Value
646,000 AT&T Corp. $11,078,900
25,000 Cedar Fair, L.P. 778,000
200 Great Plains Energy, Inc. 6,242
131,600 Sears, Roebuck and Co. 5,270,580
6,750 Vulcan Materials Co. 312,120
-----------
Total $17,445,842
===========
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended April 30, 2004 aggregated $86,050,736 and $58,327,481,
respectively.
The accompanying notes are an integral part of these financial statements.
18
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 4/30/04 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities of unaffiliated issuers, at value
(including securities loaned of $17,445,842)
(cost $634,738,232) $828,456,863
Investment in securities of affiliated issuers, at value
(cost $7,906,499) 13,306,669
------------
Total investment in securities, at value
(cost $642,644,731) $841,763,532
Cash 105,976
Receivables -
Fund shares sold 716,636
Dividends, interest and foreign taxes withheld 2,346,886
Other 3,949
------------
Total assets $844,936,979
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 983,771
Upon return of securities loaned 18,154,200
Due to affiliates 929,380
Accrued expenses 102,680
------------
Total liabilities $ 20,170,031
------------
NET ASSETS:
Paid-in capital $629,541,695
Accumulated net investment income 6,289,245
Accumulated net realized loss on investments (10,182,793)
Net unrealized gain on investments 199,118,801
------------
Total net assets $824,766,948
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $551,760,574/21,808,040 shares) $ 25.30
============
Class B (based on $163,092,923/6,485,808 shares) $ 25.15
============
Class C (based on $99,978,174/3,986,200 shares) $ 25.08
============
Class R (based on $1,455,757/57,201 shares) $ 25.45
============
Class Y (based on $8,479,520/333,881 shares) $ 25.40
============
MAXIMUM OFFERING PRICE:
Class A ($25.30 [divided by] 94.25%) $ 26.84
============
Class C ($25.08 [divided by] 99.00%) $ 25.33
============
The accompanying notes are an integral part of these financial statements.
19
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/04
INVESTMENT INCOME:
Dividends (including income from affiliated issuers
of $172,025) $12,852,380
Interest 84,078
Income from securities loaned, net 5,739
----------
Total investment income $12,942,197
-----------
EXPENSES:
Management fees $ 2,438,079
Transfer agent fees
Class A 501,851
Class B 281,845
Class C 129,603
Class R 113
Class Y 94
Distribution fees
Class A 670,301
Class B 868,999
Class C 473,417
Class R 3,049
Administrative fees 85,375
Custodian fees 20,620
Registration fees 85,270
Professional fees 11,223
Printing (51,538)
Fees and expenses of nonaffiliated trustees 7,272
Miscellaneous 7,892
----------
Total expenses $ 5,533,465
Less fees paid indirectly (6,073)
-----------
Net expenses $ 5,527,392
-----------
Net investment income $ 7,414,805
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $10,876,359
-----------
Change in net unrealized gain on investments $44,083,993
-----------
Net gain on investments $54,960,352
-----------
Net increase in net assets resulting from operations $62,375,157
===========
The accompanying notes are an integral part of these financial statements.
20
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/04 and the Year Ended 10/31/03
Six Months
Ended
4/30/04 Year Ended
(unaudited) 10/31/03
FROM OPERATIONS:
Net investment income $ 7,414,805 $ 12,937,620
Net realized gain on investments 10,876,359 10,051,456
Change in net unrealized gain on investments 44,083,993 74,072,740
------------ -------------
Net increase in net assets resulting from
operations $ 62,375,157 $ 97,061,816
------------ -------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.23 and $0.48 per share, respectively) $ (4,885,996) $ (9,674,061)
Class B ($0.12 and $0.30 per share, respectively) (834,519) (2,357,374)
Class C ($0.13 and $0.31 per share, respectively) (511,380) (794,271)
Class R ($0.22 and $0.22 per share, respectively) (10,295) (8)
Class Y ($0.28 and $0.57 per share, respectively) (75,314) (94,823)
------------ -------------
Total distributions to shareowners $ (6,317,504) $ (12,920,537)
------------ -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $114,359,771 $ 207,349,923
Reinvestment of distributions 5,300,641 11,091,391
Cost of shares repurchased (111,611,524) (171,554,173)
------------ -------------
Net increase in net assets resulting from fund
share transactions $ 8,048,888 $ 46,887,141
------------ -------------
Net increase in net assets $ 64,106,541 $ 131,028,420
NET ASSETS:
Beginning of period 760,660,407 629,631,987
------------ -------------
End of period (including accumulated net invest-
ment income of $6,289,245 and $5,191,944
respectively) $824,766,948 $ 760,660,407
============ =============
The accompanying notes are an integral part of these financial statements.
21
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/04 and the Year Ended 10/31/03
'04 Shares '04 Amount
(unaudited) (unaudited) '03 Shares '03 Amount
CLASS A
Shares sold 2,747,791 $ 69,179,472 5,644,025 $122,023,366
Reinvestment of distributions 171,098 4,270,104 398,147 8,548,876
Less shares repurchased (2,379,923) (59,670,854) (4,465,589) (94,953,674)
---------- ------------ ---------- ------------
Net increase 538,966 $ 13,778,722 1,576,583 $ 35,618,568
========== ============ ========== ============
CLASS B
Shares sold 730,755 $ 18,302,597 1,586,012 $ 34,548,323
Reinvestment of distributions 27,666 686,114 93,929 1,992,008
Less shares repurchased (1,542,082) (38,868,067) (2,843,895) (60,772,852)
---------- ------------ ---------- ------------
Net decrease (783,661) $(19,879,356) (1,163,954) $(24,232,521)
========== ============ ========== ============
CLASS C
Shares sold 930,478 $ 23,145,204 2,165,681 $ 47,543,081
Reinvestment of distributions 12,883 318,995 23,341 499,891
Less shares repurchased (507,599) (12,694,566) (718,383) (15,300,896)
---------- ------------ ---------- ------------
Net increase 435,762 $ 10,769,633 1,470,639 $ 32,742,076
========== ============ ========== ============
CLASS R (a)
Shares sold 20,373 $ 518,057 46,311 $ 1,088,556
Reinvestment of distributions 402 10,109 - 3
Less shares repurchased (9,885) (238,439) - (9)
---------- ------------ ---------- ------------
Net increase 10,890 $ 289,727 46,311 $ 1,088,550
========== ============ ========== ============
CLASS Y
Shares sold 126,587 $ 3,214,441 98,343 $ 2,146,597
Reinvestment of distributions 616 15,319 2,346 50,613
Less shares repurchased (5,447) (139,598) (24,898) (526,742)
---------- ------------ ---------- ------------
Net increase 121,756 $ 3,090,162 75,791 $ 1,670,468
========== ============ ========== ============
(a) Class R shares were first publicly offered on April 1, 2003.
The accompanying notes are an integral part of these financial statements.
22
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/04 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A (unaudited) 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
Net asset value, beginning of period $ 23.57 $ 20.80 $ 24.28 $ 29.55 $ 29.97 $ 28.10
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations:
Net investment income $ 0.26 $ 0.47 $ 0.49 $ 0.47 $ 0.58 $ 0.48
Net realized and unrealized gain (loss) on investments 1.70 2.78 (3.50) (2.97) 1.28 2.62
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations $ 1.96 $ 3.25 $ (3.01) $ (2.50) $ 1.86 $ 3.10
Distributions to shareowners:
Net investment income (0.23) (0.48) (0.47) (0.45) (0.52) (0.47)
Net realized gain - - - (2.29) (1.76) (0.76)
Tax return of capital - - - (0.03) - -
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ 1.73 $ 2.77 $ (3.48) $ (5.27) $ (0.42) $ 1.87
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 25.30 $ 23.57 $ 20.80 $ 24.28 $ 29.55 $ 29.97
======== ======== ======== ======== ======== ========
Total return* 8.33% 15.89% (12.62)% (9.21)% 6.90% 11.26%
Ratio of net expenses to average net assets+ 1.08%**(a) 1.17% 1.11% 1.08% 1.11% 1.09%
Ratio of net investment income to average net assets+ 2.10%**(a) 2.24% 2.06% 1.77% 1.95% 1.62%
Portfolio turnover rate 15%** 15% 10% 15% 14% 23%
Net assets, end of period (in thousands) $551,761 $501,283 $409,553 $464,792 $539,602 $661,598
Ratios with reduction for fees paid indirectly:
Net expenses 1.08%**(a) 1.17% 1.10% 1.06% 1.08% 1.07%
Net investment income 2.10%**(a) 2.24% 2.07% 1.79% 1.98% 1.64%
* 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) In the absence of the negative printing fees in the statement of
operations, which relates to a change in estimate for printing fees in the
period ended October 31, 2003, the gross expense ratio and net investment
income ratio to average net assets would have been 1.09% and 2.09%,
respectively.
The accompanying notes are an integral part of these financial statements.
23
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/04 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS B (unaudited) 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
Net asset value, beginning of period $ 23.42 $ 20.67 $ 24.14 $ 29.37 $ 29.78 $ 27.91
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations:
Net investment income $ 0.18 $ 0.32 $ 0.31 $ 0.25 $ 0.35 $ 0.25
Net realized and unrealized gain (loss) on investments 1.67 2.73 (3.50) (2.93) 1.28 2.61
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations $ 1.85 $ 3.05 $ (3.19) $ (2.68) $ 1.63 $ 2.86
Distributions to shareowners:
Net investment income (0.12) (0.30) (0.28) (0.23) (0.28) (0.23)
Net realized gain - - - (2.29) (1.76) (0.76)
Tax return of capital - - - (0.03) - -
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ 1.73 $ 2.75 $ (3.47) $ (5.23) $ (0.41) $ 1.87
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 25.15 $ 23.42 $ 20.67 $ 24.14 $ 29.37 $ 29.78
======== ======== ======== ======== ======== ========
Total return* 7.90% 14.90% (13.34)% (9.90)% 6.04% 10.43%
Ratio of net expenses to average net assets+ 1.96%**(a) 2.02% 1.91% 1.87% 1.91% 1.87%
Ratio of net investment income to average net assets+ 1.24%**(a) 1.41% 1.25% 0.98% 1.15% 0.84%
Portfolio turnover rate 15%** 15% 10% 15% 14% 23%
Net assets, end of period (in thousands) $163,093 $170,283 $174,334 $230,268 $257,999 $328,360
Ratios with reduction for fees paid indirectly:
Net expenses 1.96%**(a) 2.02% 1.90% 1.85% 1.89% 1.85%
Net investment income 1.24%**(a) 1.41% 1.26% 1.00% 1.17% 0.86%
* 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) In the absence of the negative printing fees in the statement of
operations, which relates to a change in estimate for printing fees in the
period ended October 31, 2003, the gross expense ratio and net investment
income ratio to average net assets would have been 1.97% and 1.23%,
respectively.
The accompanying notes are an integral part of these financial statements.
24
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/04 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS C (unaudited) 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
Net asset value, beginning of period $ 23.37 $ 20.63 $ 24.08 $ 29.32 $ 29.75 $ 27.88
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations:
Net investment income $ 0.14 $ 0.24 $ 0.26 $ 0.21 $ 0.30 $ 0.22
Net realized and unrealized gain (loss) on investments 1.70 2.81 (3.45) (2.92) 1.30 2.62
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ 1.84 $ 3.05 $ (3.19) $ (2.71) $ 1.60 $ 2.84
Distributions to shareowners:
Net investment income (0.13) (0.31) (0.26) (0.21) (0.27) (0.21)
Net realized gain - - - (2.29) (1.76) (0.76)
Tax return of capital - - - (0.03) - -
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 1.71 $ 2.74 $ (3.45) $ (5.24) $ (0.43) $ 1.87
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 25.08 $ 23.37 $ 20.63 $ 24.08 $ 29.32 $ 29.75
======= ======= ======= ======= ======= =======
Total return* 7.90% 14.93% (13.37)% (10.02)% 5.94% 10.35%
Ratio of net expenses to average net assets+ 1.92%**(a) 2.00% 1.99% 1.98% 2.02% 1.97%
Ratio of net investment income to average net assets+ 1.26%**(a) 1.36% 1.19% 0.84% 1.05% 0.74%
Portfolio turnover rate 15%** 15% 10% 15% 14% 23%
Net assets, end of period (in thousands) $99,978 $82,979 $42,903 $37,618 $32,050 $41,320
Ratios with reduction for fees paid indirectly:
Net expenses 1.92%**(a) 2.00% 1.98% 1.96% 1.98% 1.94%
Net investment income 1.26%**(a) 1.36% 1.20% 0.86% 1.09% 0.77%
* 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) In the absence of the negative printing fees in the statement of
operations, which relates to a change in estimate for printing fees in the
period ended October 31, 2003, the gross expense ratio and net investment
income ratio to average net assets would have been 1.93% and 1.25%,
respectively.
The accompanying notes are an integral part of these financial statements.
25
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended 4/1/03 (a)
4/30/04 to
(unaudited) 10/31/03
CLASS R
Net asset value, beginning of period $23.71 $19.97
------ ------
Net increase from investment operations:
Net investment income $ 0.22 $ 0.23
Net realized and unrealized gain on investments 1.74 3.73
------ ------
Net increase from investment operations $ 1.96 $ 3.96
Distributions to shareowners:
Net investment income (0.22) (0.22)
------ ------
Net increase in net asset value $ 1.74 $ 3.74
------ ------
Net asset value, end of period $25.45 $23.71
====== ======
Total return* 8.28% 19.87%
Ratio of net expenses to average net assets+ 1.16%**(b) 1.21%**
Ratio of net investment income to average net assets+ 2.02%**(b) 0.97%**
Portfolio turnover rate 15%** 15%
Net assets, end of period (in thousands) $1,456 $1,098
Ratios with reduction for fees paid indirectly:
Net expenses 1.16%**(b) 1.21%**
Net investment income 2.02%**(b) 0.97%**
(a) Class R shares were first publically offered on April 1, 2003.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and 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.
(b) In the absence of the negative printing fees in the statement of
operations, which relates to a change in estimate for printing fees in the
period ended October 31, 2003, the gross expense ratio and net investment
income ratio to average net assets would have been 1.17% and 2.01%,
respectively.
The accompanying notes are an integral part of these financial statements.
26
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/04 Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS Y (unaudited) 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
Net asset value, beginning of period $23.65 $ 20.85 $24.33 $29.59 $30.00 $28.13
------ ------- ------ ------ ------ ------
Net increase (decrease) from investment operations:
Net investment income $ 0.21 $ 0.52 $ 0.55 $ 0.55 $ 0.70 $ 0.59
Net realized and unrealized gain (loss) on investments 1.82 2.85 (3.46) (2.97) 1.27 2.62
------ ------- ------ ------ ------ ------
Net increase (decrease) from investment operations $ 2.03 $ 3.37 $(2.91) $(2.42) $ 1.97 $ 3.21
Distributions to shareowners:
Net investment income (0.28) (0.57) (0.57) (0.52) (0.62) (0.58)
Net realized gain - - - (2.29) (1.76) (0.76)
Tax return of capital - - - (0.03) - -
------ ------- ------ ------ ------ ------
Net increase (decrease) in net asset value $ 1.75 $ 2.80 $(3.48) $(5.26) $(0.41) $ 1.87
------ ------- ------ ------ ------ ------
Net asset value, end of period $25.40 $ 23.65 $20.85 $24.33 $29.59 $30.00
====== ======= ====== ====== ====== ======
Total return* 8.59% 16.45% (12.24)% (8.89)% 7.33% 11.67%
Ratio of net expenses to average net assets+ 0.64%**(a) 0.71% 0.69% 0.66% 0.70% 0.70%
Ratio of net investment income to average net assets+ 2.51%**(a) 2.66% 2.49% 2.17% 2.37% 2.01%
Portfolio turnover rate 15%** 15% 10% 15% 14% 23%
Net assets, end of period (in thousands) $8,480 $ 5,017 $2,842 $2,530 $2,669 $3,517
Ratios with reduction for fees paid indirectly:
Net expenses 0.64%**(a) 0.71% 0.68% 0.64% 0.68% 0.69%
Net investment income 2.51%**(a) 2.66% 2.50% 2.19% 2.39% 2.02%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and 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.
(a) In the absence of the negative printing fees in the statement of
operations, which relates to a change in estimate for printing fees in the
period ended October 31, 2003, the gross expense ratio and net investment
income ratio to average net assets would have been 0.65% and 2.50%,
respectively.
The accompanying notes are an integral part of these financial statements.
27
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/04 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Equity Income 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 objectives of the Fund are current income and
long-term growth.
The Fund offers five classes of shares - Class A, Class B, Class C, Class R and
Class Y shares. Class R shares were first publicly offered April 1, 2003. Each
class of shares represents 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, Class C, and
Class R shareowners, respectively. There is no distribution plan for Class Y
shareowners.
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 period.
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, 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 New York Stock Exchange. The values of such
securities used in computing the net
28
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
asset value of the Fund's shares are determined as of such times. At April
30, 2004, there were no securities fair valued. 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. Dividend and interest income is recorded on the accrual basis, net
of unrecoverable foreign taxes withheld at the applicable country rates.
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. 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 amount and 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. No distributions were paid by the Fund
for the fiscal year ended October 31, 2002. The tax character of
distributions paid during the year ended October 31, 2003 was as follows:
- --------------------------------------------------------------------------------
2003
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $12,920,537
Long-term capital gain -
-----------
Total $12,920,537
===========
- --------------------------------------------------------------------------------
29
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at October 31, 2003.
- --------------------------------------------------------------------------------
2003
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 95,074
Capital loss carryforward (21,059,152)
Unrealized appreciation 160,131,678
------------
Total $139,167,600
============
- --------------------------------------------------------------------------------
The difference between book basis and tax-basis unrealized appreciation is
attributable to the tax adjustments on partnership and REIT holdings.
C. 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 approximately $86,779 in underwriting
commissions on the sale of Fund shares during the six months ended April 30,
2004.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B, Class C and Class R shares of the Fund,
respectively. 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, Class C, Class R and Class Y shares can bear
different transfer agent and distribution fees.
30
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. 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.
F. 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 dividends on
the securities loaned. Gain or loss in the fair value of the loaned
securities that 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 the
collateral will be adjusted daily to reflect any price fluctuation in the
value of the loaned securities. The Fund has the right under the lending
agreements to recover the securities 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.
2. Management Agreement
PIM manages the Fund's portfolio and is a wholly owned indirect subsidiary of
UniCredito Italiano. PIM receives a basic fee that is calculated at the annual
rate of 0.60% of the Fund's average daily net assets up to $10 billion and
0.575% of the excess over $10 billion.
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 April 30, 2004, $437,882 was payable to PIM
related to management fees, administrative and certain other services and is
included in due to affiliates.
31
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
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 $142,903 in transfer agent
fees payable to PIMSS at April 30, 2004.
4. Distribution and Service Plans
The Fund adopted a Plan of Distribution for each class of shares, except Class Y
(Class A Plan, Class B Plan, Class C Plan, Class R Plan) in accordance with Rule
12b-1 of the Investment Company Act of 1940. Pursuant to the Class A Plan, the
Fund pays PFD a service fee of up to 0.25% of the Fund's average daily net
assets in reimbursement of its actual expenditures to finance activities
primarily intended to result in the sale of Class A shares. On qualifying
investments made prior to August 19, 1991, the Class A Plan provides for
reimbursement of such expenditures in an amount not to exceed 0.15%. 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. Pursuant to the Class R Plan, the Fund
pays PFD 0.50% of the average daily net assets attributable to Class R shares
for distribution services. Included in due to affiliates is $348,595 in
distribution fees payable to PFD at April 30, 2004. The Fund also has adopted a
separate service plan for Class R shares (Service Plan). The Service Plan
authorizes the Fund to pay securities dealers, plan administrators or other
service organizations that agree to provide certain services to retirement plans
or plan participants holding shares of the Fund a service fee of up to 0.25% of
the Fund's average daily net assets attributable to Class R shares held by such
plans.
In addition, redemptions of each class of shares (except Class Y 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%.
Redemptions of Class R shares within 18 months of
32
Pioneer Equity Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
purchase may be subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the six months ended April 30, 2004, CDSCs in the amount of $176,070
were paid to PFD.
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 ending April 30, 2004, the Fund's
expenses were reduced by $6,073 under such arrangements.
6. Line Of Credit Facility
The Fund, along with certain others 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 April
30, 2004, the Fund had no borrowings under this agreement.
7. Affiliated Companies
The Fund's investments in certain companies exceed 5% of the outstanding voting
stock. Such companies are deemed affiliates of the Fund for financial reporting
purposes. The following summarizes transactions with affiliates of the Fund as
of April 30, 2004:
- ------------------------------------------------------------------------------------------------------
Beginning Purchases Sales Shares Dividend
Affiliates Value (shares) (shares) Outstanding Income Value
- ------------------------------------------------------------------------------------------------------
Gorman-Rupp Co.
(Common Stock) 12,547,734 - - 505,957 $172,025 $13,306,669
- ------------------------------------------------------------------------------------------------------
33
- --------------------------------------------------------------------------------
THE PIONEER FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
Please consider a fund's investment objective, 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
advisor, call 1-800-225-6292 or visit our web site at www.pioneerfunds.com.
U.S. Equity International/Global Equity
Pioneer Fund Pioneer Emerging Markets Fund
Pioneer Balanced Fund Pioneer Europe Select Fund
Pioneer Equity Income Fund Pioneer Europe Fund
Pioneer Growth Shares Pioneer International Equity Fund
Pioneer Mid Cap Growth Fund Pioneer International Value Fund
Pioneer Mid Cap Value Fund
Pioneer Oak Ridge Large Cap Fixed Income
Growth Fund Pioneer America Income Trust
Pioneer Oak Ridge Small Cap Pioneer Bond Fund
Growth Fund Pioneer Global High Yield Fund
Pioneer Papp America-Pacific Pioneer High Yield Fund
Rim Fund Pioneer Strategic Income Fund
Pioneer Papp Small and Mid Cap Pioneer Tax Free Income Fund
Growth Fund
Pioneer Papp Stock Fund
Pioneer Papp Strategic Money Market
Growth Fund Pioneer Cash Reserves Fund**
Pioneer Real Estate Shares
Pioneer Research Fund*
Pioneer Small Cap Value Fund
Pioneer Small Company Fund
Pioneer Value Fund
* Name change effective December 11, 2003. Formerly known as Pioneer Core
Equity 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.
34
- --------------------------------------------------------------------------------
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 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). This
information is available at pioneerfunds.com and on the Securities and Exchange
Commission's web site at http://www.sec.gov.
35
- --------------------------------------------------------------------------------
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 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 10-digit account number, your three-digit fund number and your four-digit
personal identification number at hand.
6-Month Reinstatement Privilege (for Class A and Class B Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 6 months of your
redemption. You have the choice of investing in any Pioneer fund provided the
account has the exact same registration and meets the fund's minimum investment
requirement. Reinstated accounts may only purchase Class A fund shares.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
36
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the other funds you
have chosen. Over time, your investment will be shifted out of the original
fund. (Automatic Exchange is available for originating accounts with a balance
of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month. Pioneer will send the proceeds by
check to the address you designate, or electronically to your bank account. You
also can authorize Pioneer to make the redemptions payable to someone else.
(SWPs are available for accounts with a value of $10,000 or more.)
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
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 or send money. 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.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
15921-00-0604
(C)2004 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.
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.
N/A
(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 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) 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 Equity Income Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date June 30, 2004
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 June 30, 2004
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date June 30, 2004
* Print the name and title of each signing officer under his or her signature.