--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PIONEER
-------
INDEPENDENCE
FUND
PINDX
Ticker Symbol
Semiannual
Report
6/30/07
[LOGO]PIONEER
Investments(R)
Table of Contents
--------------------------------------------------------------------------------
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Comparing Ongoing Fund Expenses 13
Schedule of Investments 15
Financial Statements 20
Notes to Financial Statements 28
Trustees, Officers and Service Providers 35
President's
Dear Shareowner,
--------------------------------------------------------------------------------
Staying diversified and keeping your portfolio invested in the markets are two
general investment principles that have served investors well over time. Those
were particularly useful guides during the past year, as U.S. and global stock
and bond markets grew strongly during the period.
In the first half of 2007, U.S. equity markets proved resilient in the face of
a slowing economy. The Standard & Poor's 500 Stock Index set a record high in
late May and returned 7% in the first half of the year. The Dow Xxxxx
Industrial Average returned 9%, building on a five-year bull market.
International developed and emerging markets equities performed even better
than U.S. equities, with the MSCI EAFE (developed market) Index returning 11%
and the MSCI Emerging Markets Index returning 18% in the first half of 2007.
The general U.S. bond market, as measured by the Xxxxxx Brothers Aggregate Bond
Index, returned 1% in the first half, as rising bond yields produced price
declines that partially offset income earned. The high yield market, as
measured by the Xxxxxxx Xxxxx High Yield Bond Master II Index, returned 3%,
reflecting its higher yields and continuing investor confidence in the strength
of the U.S. economy.
The United States has enjoyed a cyclical recovery with strong economic growth.
While the growth has slowed recently, we believe that continuing growth at a
moderate rate appears to be more likely than a recession. Slowing growth was
due in large part to a decline in the rate of new home construction and in part
to the lagging effects of rising energy and commodity prices as well as rising
short-term interest rates. Slowing economic activity is also due in part to the
natural maturation of the cyclical expansion as U.S. factories approach full
utilization and the labor market approaches full employment. This slowdown is
therefore not entirely unwelcome, as it reduces the threat of higher inflation.
The Federal Reserve Board (the Fed) continues to highlight its commitment to
keeping inflationary pressures contained. This is in keeping with "best
practices" among the world's central banks: low and stable inflation is
believed to be the best backdrop for stable economic growth and low average
unemployment over the long term. Keeping inflation low is also an important
support for stock and bond valuations, and so the Fed's policy is
investor-friendly.
2
Letter
In Europe, solid GDP growth driven by a positive operating environment for
European companies, especially those that are benefiting from strong export
markets for their goods and services, is driving unemployment lower and
supporting growing consumption. European inflationary pressures appear to be
largely under control, with the European Central bank remaining strongly
vigilant. Japanese economic growth continues to make progress, and the country
has become a more attractive market as deflationary problems recede. Economic
growth in emerging market countries remains faster than in the developed world
as they continue to "catch up." Leading the way is China, which continues its
rise as a world economic power.
Looking forward, we believe that the overall climate for equity investors
generally will continue to be positive, although valuations are less attractive
than they were a year ago, and a correction after a period of strong
performance is possible. Rising yields have depressed year-to-date bond
returns, but increased the attractiveness of bonds looking forward.
Sudden swings in the markets are always to be expected. Just as staying
diversified and invested are important investment principles, it is also
important to pay attention to asset allocation. As always, we encourage
shareholders to work closely with their financial advisor to find the mix of
stocks, bonds and money market assets that is aligned to their particular risk
tolerance and investment objective.
Respectfully,
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
President and CEO
Pioneer Investment Management USA, 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.
3
Pioneer Independence Fund
--------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/07
--------------------------------------------------------------------------------
Successful stock selection spread across varied sectors was once again the key
to strong performance for Pioneer Independence Fund. In the following
discussion, Portfolio Manager Xxxxxx Xxxxxxx describes the period's investment
background and details some of the companies behind the Fund's solid results.
Q: What was the market background for the first six months of the year?
A: The stock market moved higher in the first part of 2007, as prices rose
along with corporate earnings to extend the rally that began last summer.
But equities stalled in February amid turmoil in the subprime mortgage
market. Also causing concern were China's efforts to cool its red-hot
economy, a move that could slash demand for numerous products and
commodities, including metals. The selloff was brief, however, and stocks
rose again until renewed subprime worries brought another decline in May.
Shares then moved higher until the end of the period.
Surprisingly strong first quarter earnings were key drivers of the
continued strength. In addition, the weak U.S. dollar provided a tail wind
for companies that generate substantial profits overseas, as earnings in
stronger currencies translated into larger numbers of dollars. In
addition, many firms instituted sizeable share-buyback programs, further
bolstering equity prices.
Q: How did the Fund perform against that background?
A: For the six months ended June 30, 2007, Independence Fund's Class A shares
had a total return of 11.52% at net asset value, exceeding the 8.13% and
7.18% returns, respectively, of the Fund's benchmarks, the Xxxxxxx
1000[RegTM] Growth Index and the Xxxxxxx 1000 Index*. The Fund's results
also exceeded the 7.58% average return of the 741 funds in the Lipper
Large Cap Growth Funds category.
Call 0-000-000-0000 or visit xxx.xxxxxxxxxxxxxxxxxx.xxx for the most
recent month-end performance results. Current performance may be lower or
higher than the performance data quoted.
4
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The performance data quoted represent past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: Which of your decisions affected performance favorably over the past six
months?
A: Successful stock selection was the key to the Fund's outperformance of its
benchmarks, while sector weightings made a modest contribution. The
Fund's sector allocations are not pre-determined, but are the result of
the stocks we choose based on our research-intensive approach. The
portfolio's results during the period benefited from overweight positions
in the strongly performing energy and technology sectors, as well as from
our small exposure to the weak consumer discretionary area. In the
laggard consumer staples sector, our underweight stance, plus good
performance by individual holdings, enhanced results. Results among
materials and industrial companies also were favorable.
Q: Which holdings contributed most to Fund returns?
A: Supermarket chain Xxxx Xxxxx was the period's top performer. We conducted
extensive research following the company's emergence from bankruptcy, a
period when investors often overlook companies. Based on our conclusion
that Xxxx Xxxxx held exceptional potential, we started investing in
January. That decision has been rewarded as shares moved significantly
higher during the period.
Shares of Corning rebounded sharply from last year's decline, thanks to
firmer pricing for specialty glass used in LCD displays for flat-panel
televisions and other products. Glass-making capacity overall is expanding
at a more rational pace, one that is better aligned with demand growth
than was the case last year. The result has been stronger earnings for the
whole industry.
We had reduced our stake in Apple Computer as its valuation rose, but very
favorable operating results have brought further price appreciation and
all but restored the Fund's weighting in the stock. Holiday sales for
iPods were very strong, and Apple's notebook computers have gained market
share. In addition, the company enjoyed exceptional publicity leading up
to the introduction of the iPhone at the end of June.
5
Pioneer Independence Fund
--------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/07 (continued)
--------------------------------------------------------------------------------
Shares of cell phone maker Nokia also delivered strong gains. Nokia has
captured market share from struggling rivals while at the same time
expanding operating margins. We believe that prospects for continued
earnings growth appear favorable.
Q: What were some of the period's disappointments?
A: Disappointing holdings were few and declines generally minor over this
period of strong performance. Vertex Pharmaceutical - which specializes
in drugs targeting serious diseases - fell along with the weak biotech
sector. However, there were no company-related problems; clinical trials
for Vertex's Hepatitis C treatment are proceeding; and we believe the
investment rationale for holding the stock remains intact.
Broadcom, which makes components for telecommunications and other
applications, was a laggard in the semiconductor sector. After
contributing solidly to performance in earlier quarters, its shares have
drifted in the absence of any specific news.
Investor fears that subprime mortgage problems might spread to other
credit sectors held back stocks of financial companies. Citigroup sagged
following its strong run last year, while Xxxxxxx Xxxxx also languished.
Q: What is your outlook for the balance of the year?
A: We believe a rebounding economy and continued dollar weakness will serve as
catalysts for additional earnings expansion in upcoming quarters. Stock
prices do not appear to be out of line with our earnings outlook, and we
are still finding good companies to buy. In addition, corporate balance
sheets are very healthy overall, with large stores of cash in many cases.
Available cash and borrowings should sustain the current wave of stock
buybacks, adding further support to stock prices. Technology will
continue to be a key area of emphasis, as many tech companies carry
valuations in line with the broader market despite their potential for
greater earnings growth.
A reaccelerating economy would support our conviction that rate cuts from
the Federal Reserve Board (the Fed) are not forthcoming. And with core
inflation contained for now, rate hikes also seem improbable. Thus far, it
appears that credit difficulties are
6
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
confined to the subprime sector. However, any contagion from that source
could lead to higher rates as lenders tighten standards and make borrowing
difficult for both companies and individuals. Under that scenario, which
we do not think likely, the Fed might cut rates to reignite the economy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
At times, the Fund's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting those
industries and sectors.
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 opinions 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.
* Note to Shareholders: The Fund's benchmark has changed from the Xxxxxxx 1000
Index to the Xxxxxxx 1000 Growth Index due to the Fund's investment
category being restated as a large cap growth fund. Previously, the Fund
was categorized as a large cap core fund. We will continue to provide the
Fund's performance results measured against both its current and prior
benchmarks for a period of one year (one semiannual and one annual
reporting cycle).
7
Pioneer Independence Fund
--------------------------------------------------------------------------------
PORTFOLIO SUMMARY 6/30/07
--------------------------------------------------------------------------------
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
U.S. Common Stocks 85.2%
Depositary Receipts for International Stocks 12.8%
Temporary Cash Investments 2.0%
Sector Distribution
--------------------------------------------------------------------------------
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Information Technology 37.6%
Health Care 16.0%
Financials 15.5%
Industrials 8.8%
Consumer Staples 8.0%
Consumer Discretionary 6.4%
Energy 6.3%
Materials 0.9%
Telecommunication Services 0.5%
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of equity holdings)*
--------------------------------------------------------------------------------
1. Corning, Inc. 4.84%
--------------------------------------------------------------------------------
2. Intel Corp. 4.80
--------------------------------------------------------------------------------
3. Apple, Inc. 4.66
--------------------------------------------------------------------------------
4. Xxxxxxx-Xxxxx Squibb Co. 3.57
--------------------------------------------------------------------------------
5. Nokia Corp. (A.D.R.) 3.34
--------------------------------------------------------------------------------
6. X.X. Xxxxxx Chase & Co. 3.27
--------------------------------------------------------------------------------
7. Honeywell International, Inc. 3.13
--------------------------------------------------------------------------------
8. Taiwan Semiconductor Manufacturing Co. (A.D.R.) 3.00
--------------------------------------------------------------------------------
9. Xxxx Corp. 2.97
--------------------------------------------------------------------------------
10. Juniper Networks, Inc. 2.94
--------------------------------------------------------------------------------
* This list excludes temporary cash investments and derivative instruments. The
portfolio is actively managed, and current holdings may be different. The
holdings listed should not be considered recommendations to buy or sell any
security listed.
8
Pioneer Independence Fund
-----------------------------------------------------------------------------
PRICES AND DISTRIBUTIONS
--------------------------------------------------------------------------------
Net Asset Value Per Share
--------------------------------------------------------------------------------
Class 6/30/07 12/31/06
----- ------- --------
A $14.33 $12.85
C $14.16 $12.74
Y $14.36 $12.85
Distributions Per Share
--------------------------------------------------------------------------------
1/1/07 - 6/30/07
----------------
Short-Term Long-Term
Class Dividends Capital Gains Capital Gains
----- --------- ------------- -------------
A $ - $ - $ -
C $ - $ - $ -
Y $ - $ - $ -
--------------------------------------------------------------------------------
INDEX DEFINITIONS
--------------------------------------------------------------------------------
The Xxxxxxx 1000 Index measures the performance of large-cap U.S. stocks. The
Xxxxxxx 1000 Growth Index measures the performance of large-cap U.S. growth
stocks. Index returns assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an index.
The index defined here pertains to the "Value of $10,000 Investment" charts on
pages 10-12.
9
Pioneer Independence Fund
--------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/07 CLASS A* SHARES
--------------------------------------------------------------------------------
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Independence Fund at public offering price, compared
to that of the Xxxxxxx 1000 Index and Xxxxxxx 1000 Growth Index.
------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
Net Asset Public
Value Offering
Period (NAV) Price (POP)
Life-of-Class
(3/16/98) 6.67% 6.00%
5 Years 11.35 10.03
1 Year 20.31 13.41
------------------------------------------------------------
Expense Ratio
(Per prospectus dated April 30, 2007)
Gross Net
1.50% 1.25%
------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Xxxxxxx Xxxxxxx 1000
Independence Fund 1000 Index** Growth Index**
3/98 9425 10000 10000
9333 10250 10454
6/99 10475 12497 13304
13224 13653 16719
6/01 12363 11612 10671
10007 9535 7844
6/03 10297 9626 8075
11886 11501 9519
6/05 12216 12413 9679
14237 13540 10271
6/07 17129 16306 12226
Call 0-000-000-0000 or visit xxx.xxxxxxxxxxxxxxxxxx.xxx for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of Class A shares for the period prior to the commencement of
operations of Class A shares is the net asset value performance of the Fund's
Class P shares, which has been restated to reflect differences in applicable
sales charges, but not differences in expenses, including Rule 12b-1 fees
applicable to Class A shares.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 5.75% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 5/1/09 for Class A Shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time. Please see the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
* Formerly designated Class P.
** Index comparison begins 3/31/98.
10
Pioneer Independence Fund
--------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/07 CLASS C SHARES
--------------------------------------------------------------------------------
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Independence Fund, compared to that of the Xxxxxxx
1000 Index and Xxxxxxx 1000 Growth Index.
----------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
Life-of-Class
(3/10/06) 13.40% 13.40%
1 Year 19.67 19.67
----------------------------------------------------------
Expense Ratio
(Per prospectus dated April 30, 2007)
Gross Net
2.08% 2.08%
----------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Xxxxxxx Xxxxxxx 1000
Independence Fund 1000 Index* Growth Index*
3/06 10000 10000 10000
6/06 9774 9834 9610
6/07 11697 11843 11440
Call 0-000-000-0000 or visit xxx.xxxxxxxxxxxxxxxxxx.xxx for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). "If Held" results represent the percent change in
net asset value per share. Returns would have been lower had sales charges been
reflected. All results are historical and assume the reinvestment of dividends
and capital gains. Other share classes are available for which performance and
expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
* Index comparison begins 3/31/06.
11
Pioneer Independence Fund
--------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/07 CLASS Y SHARES
--------------------------------------------------------------------------------
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Independence Fund, compared to that of the Xxxxxxx
1000 Index and Xxxxxxx 1000 Growth Index.
----------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
Life-of-Class
(3/16/98) 6.72% 6.72%
5 Years 11.45 11.45
1 Year 20.74 20.74
----------------------------------------------------------
Expense Ratio
(Per prospectus dated April 30, 2007)
Gross Net
1.29% 1.29%
----------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Xxxxxxx Xxxxxxx 1000
Independence Fund 1000 Index* Growth Index*
3/98 10000 10000 10000
9900 10250 10454
6/99 11112 12497 13304
14028 13653 16719
6/01 13115 11612 10671
10615 9535 7844
6/03 10924 9626 8075
12608 11501 9519
6/05 12959 12413 9679
15114 13540 10271
6/07 18250 16306 12226
Call 0-000-000-0000 or visit xxx.xxxxxxxxxxxxxxxxxx.xxx for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of Class Y shares for the period prior to the commencement of
operations of Class Y shares is the net asset value performance of the Fund's
shares, which has not been restated to reflect any differences in expenses,
including Rule 12b-1 fees applicable to Class P shares. Class Y shares are not
subject to sales charges and are available for limited groups of eligible
investors, including institutional investors. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
* Index comparison begins 3/31/98.
12
Pioneer Independence Fund
--------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES
--------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period"
to estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Independence Fund
Based on actual returns from January 1, 2007 through June 30, 2007.
Actual Share Class A* A** C Y
----------------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 1/1/07
Ending Account Value $1,115.20 $1,063.40 $1,111.50 $1,117.50
On 6/30/07
Expenses Paid During Period* $ 6.98 $ 5.93 $ 10.16 $ 4.36
* Formerly designated Class P.
** Class A converted to Class P on June 22, 2007.
*** Expenses are equal to the Fund's annualized expense ratio of 1.33%, 1.16%,
1.94% and 0.83% for Class A*, Class A**, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period) (173/365 for
Class A** shares).
13
Pioneer Independence Fund
--------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES (continued)
--------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the
5% hypothetical examples that appear in the shareholder reports of the other
funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Independence Fund
Based on a hypothetical 5% per year return before expenses, reflect
ing the period from January 1, 2007 through June 30, 2007.
Hypothetical Share Class A* A** C Y
-----------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 1/1/07
Ending Account Value $1,018.20 $1,019.04 $1,015.17 $1,020.68
On 6/30/07
Expenses Paid $ 6.66 $ 5.81 $ 9.69 $ 4.16
During Period*
* Formerly designated Class P.
** Class A converted to Class P on June 22, 2007.
*** Expenses are equal to the Fund's annualized expense ratio of 1.33%, 1.16%,
1.94% and 0.83% for Class A*, Class A**, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period) (173/365 for
Class A** shares).
14
Pioneer Independence Fund
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (unaudited)
--------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 99.7%
Energy - 6.2%
Integrated Oil & Gas - 6.2%
33,000 Exxon Mobil Corp. $ 2,768,040
306,415 Xxxx Corp. 18,066,228
192,380 Suncor Energy, Inc. 17,298,810
------------
$ 38,133,078
------------
Total Energy $ 38,133,078
------------
Materials - 0.9%
Diversified Metals & Mining - 0.6%
38,065 First Quantum Minerals, Ltd. $ 3,274,586
------------
Industrial Gases - 0.3%
27,900 Praxair, Inc. $ 2,008,521
------------
Total Materials $ 5,283,107
------------
Capital Goods - 8.8%
Aerospace & Defense - 7.8%
97,900 Boeing Co. $ 9,414,064
47,400 General Dynamics Corp. 3,707,628
338,450 Honeywell International, Inc. 19,047,966
214,800 United Technologies Corp. 15,235,764
------------
$ 47,405,422
------------
Construction & Farm Machinery & Heavy Trucks - 1.0%
81,600 Caterpillar, Inc. $ 6,389,280
------------
Total Capital Goods $ 53,794,702
------------
Automobiles & Components - 1.0%
Automobile Manufacturers - 1.0%
651,000 Ford Motor Corp. (b) $ 6,132,420
------------
Total Automobiles & Components $ 6,132,420
------------
Media - 1.6%
Movies & Entertainment - 1.6%
473,000 Time Warner, Inc. $ 9,951,920
------------
Total Media $ 9,951,920
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Independence Fund
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (unaudited) (continued)
--------------------------------------------------------------------------------
Shares Value
Retailing - 3.7%
Apparel Retail - 1.5%
345,900 TJX Companies, Inc. $ 9,512,250
------------
Computer & Electronics Retail - 0.8%
101,300 Best Buy Co., Inc. $ 4,727,671
------------
Department Stores - 1.4%
50,325 Sears Holdings Corp.* $ 8,530,087
------------
Total Retailing $ 22,770,008
------------
Food & Drug Retailing - 4.4%
Drug Retail - 1.5%
116,800 CVS Corp. $ 4,257,360
109,900 Walgreen Co. 4,785,046
------------
$ 9,042,406
------------
Food Retail - 2.9%
608,909 Xxxx-Xxxxx Stores, Inc.* $ 17,841,034
------------
Total Food & Drug Retailing $ 26,883,440
------------
Food Beverage & Tobacco - 2.8%
Packaged Foods & Meats - 1.9%
204,600 X.X. Xxxxx Co., Inc. $ 9,712,362
18,000 Nestle SA (A.D.R.) 1,716,876
------------
$ 11,429,238
------------
Soft Drinks - 0.9%
84,600 PepsiCo, Inc. $ 5,486,310
------------
Total Food Beverage & Tobacco $ 16,915,548
------------
Household & Personal Products - 0.9%
Household Products - 0.9%
80,100 Colgate-Palmolive Co. $ 5,194,485
------------
Total Household & Personal Products $ 5,194,485
------------
Health Care Equipment & Services - 1.4%
Health Care Equipment - 1.4%
169,200 Medtronic, Inc. $ 8,774,712
------------
Total Health Care Equipment & Services $ 8,774,712
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares Value
Pharmaceuticals & Biotechnology - 14.5%
Biotechnology - 5.8%
409,150 Cubist Pharmaceuticals, Inc.*(b) $ 8,064,346
331,000 Gilead Sciences, Inc.* 12,832,870
517,220 Vertex Pharmaceuticals, Inc.* 14,771,803
------------
$ 35,669,019
------------
Pharmaceuticals - 8.7%
688,400 Xxxxxxx-Xxxxx Squibb Co. $ 21,725,904
213,325 Xxx Lilly & Co. 11,920,601
127,500 Xxxxxxx & Xxxxxxx 7,856,550
275,800 Teva Pharmaceutical Industries, Ltd. 11,376,750
------------
$ 52,879,805
------------
Total Pharmaceuticals & Biotechnology $ 88,548,824
------------
Diversified Financials - 13.5%
Consumer Finance - 3.1%
163,050 American Express Co. $ 9,975,399
117,200 Capital One Financial Corp. 9,193,168
------------
$ 19,168,567
------------
Investment Banking & Brokerage - 3.5%
28,700 Xxxxxxx Sachs Group, Inc. $ 6,220,725
177,655 Xxxxxxx Xxxxx & Co., Inc. 14,848,405
------------
$ 21,069,130
------------
Diversified Financial Services - 6.9%
93,640 Bank of America Corp. $ 4,578,060
341,200 Citigroup, Inc. 17,500,148
410,650 X.X. Xxxxxx Chase & Co. 19,895,992
------------
$ 41,974,200
------------
Total Diversified Financials $ 82,211,897
------------
Insurance - 2.0%
Multi-Line Insurance - 2.0%
95,000 American International Group, Inc. $ 6,652,850
53,900 Hartford Financial Services Group, Inc. 5,309,689
------------
$ 11,962,539
------------
Total Insurance $ 11,962,539
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Independence Fund
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (unaudited) (continued)
--------------------------------------------------------------------------------
Shares Value
Software & Services - 2.3%
Data Processing & Outsourced Services - 0.7%
84,600 Automatic Data Processing, Inc. $ 4,100,562
------------
Systems Software - 1.6%
508,300 Oracle Corp.* $ 10,018,593
------------
Total Software & Services $ 14,119,155
------------
Technology Hardware & Equipment - 20.0%
Communications Equipment - 15.4%
565,200 Cisco Systems, Inc.* $ 15,740,820
1,152,920 Corning, Inc.* 29,457,106
710,800 Juniper Networks, Inc.* 17,890,836
722,400 Nokia Corp. (A.D.R.) 20,306,664
240,430 Qualcomm, Inc. 10,432,258
------------
$ 93,827,684
------------
Computer Hardware - 4.6%
232,695 Apple, Inc.* $ 28,398,098
------------
Total Technology Hardware & Equipment $122,225,782
------------
Semiconductors - 15.2%
Semiconductor Equipment - 0.7%
212,700 Applied Materials, Inc. $ 4,226,349
------------
Semiconductors - 14.5%
556,750 Broadcom Corp.* $ 16,284,937
1,229,600 Intel Corp. 29,215,296
570,700 Marvell Technology Group, Ltd.* 10,392,447
1,641,589 Taiwan Semiconductor Manufacturing Co. (A.D.R.) 18,270,882
380,750 Texas Instruments, Inc. 14,327,622
------------
$ 88,491,184
------------
Total Semiconductors $ 92,717,533
------------
Telecommunication Services - 0.5%
Integrated Telecommunication Services - 0.5%
75,400 AT&T Corp. $ 3,129,100
------------
Total Telecommunication Services $ 3,129,100
------------
TOTAL COMMON STOCKS
(Cost $501,552,233) $608,748,250
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares Value
TEMPORARY CASH INVESTMENTS - 2.1%
Repurchase Agreement - 0.9%
5,200,000 UBS Warburg, Inc., 4.25%, dated 6/31/07,
repurchase price of $5,200,000 plus accrued
interest on 7/2/07 collateralized by $5,398,000
U.S. Treasury Note, 3.375% 11/15/2008 $ 5,200,000
------------
Security Lending Collateral - 1.2%
7,559,558 Securities Lending Investment Fund, 5.28% $ 7,559,558
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $12,759,558) $ 12,759,558
------------
TOTAL INVESTMENT IN SECURITIES - 101.8%
(Cost $514,311,791) (a) $621,507,808
------------
OTHER ASSETS AND LIABILITIES - (1.8%) $(10,726,715)
------------
TOTAL NET ASSETS - 100.0% $610,781,093
============
* Non-income producing security.
(A.D.R.) American Depository Receipt.
(a) At June 30, 2007, the net unrealized gain on investments based on cost
for federal income tax purposes of $514,311,791 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost. $110,639,982
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value. (3,443,965)
------------
Net unrealized gain $107,196,017
============
(b) At June 30, 2007, the following securities were out on loan:
Shares Security Value
61,501 Cubist Pharmaceuticals, Inc.* $1,212,185
644,490 Ford Motor Corp. 6,071,096
----------
Total $7,283,281
==========
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended June 30, 2007, aggregated $113,343,262 and $62,230,038
respectively.
The accompanying notes are an integral part of these financial statements. 19
Pioneer Independence Fund
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 6/30/07 (unaudited)
--------------------------------------------------------------------------------
ASSETS:
Investment in securities (including securities loaned of
$7,283,281) (cost $514,311,791) $621,507,808
Receivables -
Fund shares sold 810,133
Dividends, interest and foreign taxes withheld 710,914
Due from Pioneer Investment Management, Inc. 21,538
Other 69,906
------------
Total assets $623,120,299
------------
LIABILITIES:
Payables -
Investment securities purchased $ 3,820,607
Fund shares repurchased 190,355
Upon return of securities loaned 7,559,558
Due to bank 473,011
Due to affiliates 234,644
Accrued expenses 61,031
------------
Total liabilities $ 12,339,206
------------
NET ASSETS:
Paid-in capital $488,931,058
Undistributed net investment income 900,306
Accumulated net realized gain on investments and foreign
currency transactions 13,753,712
Net unrealized gain on investments 107,196,017
------------
Total net assets $610,781,093
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A* (based on $571,655,184/39,891,078 shares) $ 14.33
============
Class C (based on $3,509,096/247,847 shares) $ 14.16
============
Class Y (based on $35,616,813/2,480,508 shares) $ 14.36
============
MAXIMUM OFFERING PRICE:
Class A* ($14.33 [divided by] 94.25%) $ 15.20
============
* Formerly designated Class P.
20 The accompanying notes are an integral part of these financial statements.
Pioneer Independence Fund
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended 6/30/07
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $229,570) $ 4,167,448
Interest 185,127
Income from securities loaned, net 64,466
-----------
Total investment income $ 4,417,041
-----------
EXPENSES:
Management fees $ 2,078,618
Transfer agent fees and expenses
Class A* 771,863
Class A** 2,212
Class C 1,105
Class Y 157
Distribution fees
Class A* 614,898
Class A** 5,629
Class C 10,105
Administrative reimbursements 62,359
Custodian fees 13,785
Registration fees 22,340
Professional fees 44,627
Printing expense 35,083
Fees and expenses of nonaffiliated trustees 7,210
Miscellaneous 4,909
-----------
Total expenses $ 3,674,900
Less management fees waived and expenses
reimbursed by Pioneer Investment Management, Inc. (8,740)
-----------
Net expenses $ 3,666,160
-----------
Net investment income $ 750,881
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on:
Investments $10,395,970
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 28,357 $10,424,327
----------- -----------
Change in net unrealized gain on investments $50,245,656
-----------
Net gain on investments and foreign currency transactions $60,669,983
-----------
Net increase in net assets resulting from operations $61,420,864
===========
* Formerly designated Class P.
** Class A converted to Class P shares on June 22, 2007.
The accompanying notes are an integral part of these financial statements. 21
Pioneer Independence Fund
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Six Months Ended 6/30/07 and the Year Ended 12/31/06, respectively
Six Months
Ended
6/30/07 Year Ended
(unaudited) 12/31/07
FROM OPERATIONS:
Net investment income $ 750,881 $ 543,557
Net realized gain on investments and foreign
currency transactions 10,424,327 33,763,828
Change in net unrealized gain on investments and
foreign currency transactions 50,245,656 11,987,521
------------ ------------
Net increase in net assets resulting
from operations $ 61,420,864 $ 46,294,906
------------ ------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A* ($0.00 and $0.01 per share,
respectively) $ - $ (331,848)
Class A** ($0.00 and $0.08 per share,
respectively) - (11,929)
Class C ($0.00 and $0.07 per share, respectively) - (3,907)
Class Y ($0.00 and $0.04 per share, respectively) - (30)
Net realized gain:
Class A* ($0.00 and $1.17 per share,
respectively) - (41,119,820)
Class A** ($0.00 and $1.17 per share, respectively) - (104,227)
Class C ($0.00 and $1.17 per share, respectively) - (39,627)
Class Y ($0.00 and $1.17 per share, respectively) - (889)
------------ ------------
Total distributions to shareowners $ - $(41,612,277)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 93,499,227 $ 95,883,480
Reinvestment of distributions - 41,348,917
Cost of shares repurchased (42,850,609) (36,469,738)
------------ ------------
Net increase in net assets resulting from fund
share transactions $ 50,648,618 $100,762,659
------------ ------------
Net increase in net assets $112,069,482 $105,445,288
NET ASSETS:
Beginning of period 498,711,611 393,266,323
------------ ------------
End of period $610,781,093 $498,711,611
============ ============
Undistributed net investment income $ 900,306 $ 149,425
============ ============
* Formerly Class P shares renamed Class A on June 22, 2007.
** Class A converted to Class P shares on June 22, 2007.
22 The accompanying notes are an integral part of these financial statements.
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
'07 Shares '07 Amount '06 Shares '06 Amount
(unaudited) (unaudited)
CLASS A*
Shares sold 3,307,071 $ 44,247,522 7,032,425 $ 92,797,840
Conversion of Class A shares
to Class P shares 534,036 7,599,362 - -
Reinvestment of distributions 48 627 3,168,465 41,279,184
Less shares repurchased (2,527,136) (34,042,191) (2,761,158) (36,402,604)
---------- ------------ ---------- ------------
Net increase 1,314,019 $ 17,805,320 7,439,732 $ 97,674,420
========== ============ ========== ============
CLASS A** (1/1 - 6/22)
Shares sold 444,783 $ 6,003,744 159,741 $ 2,134,457
Conversion of Class A shares
to Class P shares (530,091) (7,537,505) - -
Reinvestment of distributions 32 428 4,678 61,024
Less shares repurchased (605,036) (8,544,286) (4,198) (55,905)
---------- ------------ ---------- ------------
Net increase (decrease) (690,312) $(10,077,619) 160,221 $ 2,139,576
========== ============ ========== ============
CLASS C
Shares sold 183,990 $ 2,478,885 70,923 $ 941,183
Reinvestment of distributions 11 153 673 8,709
Less shares repurchased (6,919) (93,291) (831) (11,229)
---------- ------------ ---------- ------------
Net increase 177,082 $ 2,385,747 70,765 $ 938,663
========== ============ ========== ============
CLASS Y
Shares sold 2,491,826 $ 33,168,506 759 $ 10,000
Less shares repurchased (12,077) (170,841) - -
---------- ------------ ---------- ------------
Net increase 2,479,749 $ 32,997,665 759 $ 10,000
========== ============ ========== ============
* Formerly Class P shares renamed Class A on June 22, 2007.
** Class A converted to Class P shares on June 22, 2007.
The accompanying notes are an integral part of these financial statements. 23
Pioneer Independence Fund
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Six
Months Ended Year Ended Year Ended Year Ended Year Ended Year Ended
6/30/07 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
CLASS A*
Net asset value, beginning of period $ 12.85 $ 12.63 $ 12.16 $ 11.11 $ 8.56 $ 11.00
-------- -------- -------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.02 $ 0.01 $ 0.01 $ 0.01 $ (0.03) $ (0.01)
Net realized and unrealized gain (loss)
on investments and foreign currency transactions 1.46 1.39 1.15 1.05 2.58 (2.43)
-------- -------- -------- -------- -------- -------
Net increase (decrease) from investment operations $ 1.48 $ 1.40 $ 1.16 $ 1.06 $ 2.55 $ (2.44)
Distributions to shareowners:
Net investment income - (0.01) (0.01) (0.01) - -
Net realized gain - (1.17) (0.68) - - -
-------- -------- -------- -------- -------- -------
Net increase (decrease) in net asset value $ 1.48 $ 0.22 $ 0.47 $ 1.05 $ 2.55 $ (2.44)
-------- -------- -------- -------- -------- -------
Net asset value, end of period $ 14.33 $ 12.85 $ 12.63 $ 12.16 $ 11.11 $ 8.56
======== ========= ======== ======== ======== =======
Total return** 11.52% 10.96% 9.59% 9.53% 29.79% (22.18)%
Ratio of net expenses to average net assets+ 1.33%*** 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income (loss) to average net assets+ 0.25%*** 0.12% 0.09% 0.06% (0.32)% (0.11)%
Portfolio turnover rate 23%*** 72% 100% 93% 89% 53%
Net assets, end of period (in thousands) $571,655 $495,745 $393,266 $291,317 $189,401 $86,712
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 1.34%*** 1.53% 1.53% 1.96% 2.09% 2.65%
Net investment income (loss) 0.24%*** 0.09% 0.06% (0.40)% (0.90)% (1.26)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.33%*** 1.50% 1.50% 1.50% 1.50% 1.50%
Net investment income (loss) 0.25%*** 0.12% 0.09% 0.06% (0.32)% (0.11)%
* Formerly Class P shares renamed Class A shares on June 22, 2007.
** 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
24
Pioneer Independence Fund
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
12/31/06 3/10/06 (a)
to 6/22/07 (e) to 12/31/06 (b)
CLASS A**
Net asset value, beginning of period $12.83 $13.17
------ ------
Increase from investment operations:
Net investment income $ 0.02 $ -(c)
Net realized and unrealized gain on investments 1.37 0.91
------ ------
Net increase from investment operations $ 1.39 $ 0.91
Distributions to shareowners:
Net investment income - (0.08)
Net realized gain - (1.17)
------ ------
Net increase (decrease) in net asset value $ 1.39 $(0.34)
------ ------
Net asset value, end of period $14.22 $12.83
====== ======
Total return* 6.34% 6.82%(d)
Ratio of net expenses to average net assets 1.16%*** 1.25%***
Ratio of net investment income (loss) to average
net assets 0.54%*** (0.13)%***
Portfolio turnover rate 23%*** 72%
Net assets, end of period (in thousands) $ - $2,056
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 1.16%*** 1.63%***
Net investment income (loss) 0.54%*** (0.51)%***
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.16%*** 1.25%***
Net investment income (loss) 0.54%*** (0.13)%***
(a) Class A shares were first publicly offered on March 10, 2006.
(b) Net investment income and distribution per share amounts have been
calculated using different methods.
(c) Amount rounds to less than one cent per share.
(d) Not Annualized.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions and the complete redemption of
the investment at net asset value at the end of the period.
** On June 22, 2007 Class A shares converted to Class P shares all of which
were then renamed Class A.
*** Annualized.
The accompanying notes are an integral part of these financial statements. 25
Pioneer Independence Fund
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Period Ended
6/30/07 3/10/06 (a)
(unaudited) to 12/31/06 (b)
CLASS C
Net asset value, beginning of period $ 12.74 $13.17
------- ------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.02) $ -(c)
Net realized and unrealized gain on investments 1.44 0.81
------- ------
Net increase from investment operations $ 1.42 $ 0.81
Distributions to shareowners:
Net investment income - (0.07)
Net realized gain - (1.17)
------- ------
Net increase (decrease) in net asset value $ 1.42 $(0.43)
------- ------
Net asset value, end of period $ 14.16 $12.74
======= =======
Total return* 11.15% 6.04%(d)
Ratio of net expenses to average net assets 1.94%** 2.08%**
Ratio of net investment loss to average net assets (0.31)%** (1.05)%**
Portfolio turnover rate 23%** 72%
Net assets, end of period (in thousands) $ 3,509 $ 901
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 1.94%** 2.08%**
Net investment loss (0.31)%** (1.05)%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.94%** 2.08%**
Net investment loss (0.31)%** (1.05)%**
(a) Class C shares were first publicly offered on March 10, 2006.
(b) Net investment income and distribution per share amounts have been
calculated using different methods.
(c) Amount rounds to less than one cent per share.
(d) Not Annualized.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of the period.
** Annualized.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Independence Fund
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Period Ended
6/30/07 3/10/06 (a)
(unaudited) to 12/31/06 (b)
CLASS Y
Net asset value, beginning of period $ 12.85 $13.17
------- ------
Increase from investment operations:
Net investment income $ 0.03 $ 0.03
Net realized and unrealized gain on investments 1.48 0.86
------- ------
Net increase from investment operations $ 1.51 $ 0.89
Distributions to shareowners:
Net investment income - (0.04)
Net realized gain - (1.17)
------- ------
Net increase (decrease) in net asset value $ 1.51 $(0.32)
------- ------
Net asset value, end of period $ 14.36 $12.85
======= =======
Total return* 11.75% 6.74%(c)
Ratio of net expenses to average net assets 0.83%** 1.29%**
Ratio of net investment income to average net assets 0.80%** 0.26%**
Portfolio turnover rate 23%** 72%
Net assets, end of period (in thousands) $35,617 $ 10
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 0.83%** 1.29%**
Net investment income 0.80%** 0.26%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 0.83%** 1.29%**
Net investment income 0.80%** 0.26%**
(a) Class Y shares were first publicly offered on March 10, 2006.
(b) Net investment income and distribution per share amounts have been
calculated using different methods.
(c) Not Annualized.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of the period.
** Annualized.
The accompanying notes are an integral part of these financial statements. 27
Pioneer Independence Fund
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Independence Fund (the Fund) is a Delaware statutory trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek capital
appreciation.
The Fund offers three classes of shares - Class A, Class C and Class Y shares.
On June 22, 2007, then existing Class A Shares of the Fund were converted to
Class P shares which were then renamed Class A. Shares of Class A, Class C, and
Class Y each represent an interest in the same portfolio of investments of the
Fund and have equal rights to voting, redemptions, dividends and liquidation,
except that each class of shares can bear different transfer agent and
distribution fees and have exclusive voting rights with respect to the
distribution plans that have been adopted by Class A and Class C shareowners,
respectively. There is no distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Fund to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains and losses on investments during the
reporting year. Actual results could differ from those estimates.
Information regarding the Fund's principal investment risks is contained in the
Fund's prospectus(es). Please refer to those documents when considering the
Fund's risks. At times, the Fund's investments may represent industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting those
industries and sectors.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
28
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value
of the Fund is computed once daily, on each day that the New York Stock
Exchange (NYSE) is open, as of the close of the regular trading on the
NYSE. In computing the net asset value, securities are valued at the last
sale price on the principal exchange where they are traded. Securities
that have not traded on the date of valuation, or securities for which
sale prices are not generally reported, are valued at the mean between the
last bid and asked prices. Securities for which market quotations are not
readily available are valued at their fair values as determined by, or
under the direction of, the Board of Trustees. Trading in foreign
securities is substantially completed each day at various times prior to
the close of the NYSE. The values of such securities used in computing the
net asset value of the Fund's shares are determined as of such times. The
Fund also may use the fair value of a security including a non-U.S.
security when the closing market price on the principal exchange where the
security is traded no longer reflects the value of the security. At June
30, 2006, there were no securities fair valued. Temporary cash investments
are valued at amortized cost.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Fund becomes aware of the ex-dividend
data in the exercise of reasonable diligence. Dividend and interest income
is recorded on the accrual basis.
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 amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with
29
Pioneer Independence Fund
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited) (continued)
--------------------------------------------------------------------------------
federal income tax rules. Therefore, the sources of the Fund's
distributions may be shown in the accompanying financial statements as
either from or in excess of net investment income or net realized gain on
investment transactions, or from paid-in capital, depending on the type of
book/tax differences that may exist.
The tax character of current year distributions will be determined at the
end of the current fiscal year end. The tax character of distributions
paid during the year ended December 31, 2006 was as follows:
--------------------------------------------------------------------------------
2006
--------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $12,320,497
Long-term capital gain 29,291,780
-----------
Total $41,612,277
===========
--------------------------------------------------------------------------------
The following shows the components of distributable earnings on a
federal income tax basis at December 31, 2006.
--------------------------------------------------------------------------------
2006
--------------------------------------------------------------------------------
Undistributed ordinary income $ 149,425
Undistributed long-term gain 3,367,554
Unrealized appreciation 56,912,192
-----------
Total $60,429,171
===========
--------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appre
ciation is attributable to the tax deferral of losses on wash sales.
C. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
PFD, the principal underwriter for the Fund and a wholly owned indirect
subsidiary of UniCredito Italiano S.p.A. (UniCredito Italiano), earned
$449 in underwriting commissions on the sale of Class A shares during the
six months ended June 30, 2007.
30
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan (see
Note 4). Shareowners of each class share all expenses and fees paid to the
transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expenses (see Note 3). Income, common expenses and realized and unrealized
gains and losses are calculated at the Fund level and allocated daily to
each class of shares based on their respective percentage of adjusted net
assets at the beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, on the same day, and in
the same amount, except that Class A, Class C and Class Y shares can bear
different transfer agent and distribution fees.
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
payments in lieu of dividends on the securities loaned. Gain or loss on
the fair value of the loaned securities that
31
Pioneer Independence Fund
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited) (continued)
--------------------------------------------------------------------------------
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 sponsored
by Xxxxx Brothers Xxxxxxxx & Co., the Fund's custodian.
G. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates. Net realized gains and losses on foreign currency
transactions represent, among other things, the net realized gains and
losses on foreign currency contracts, disposition of foreign currencies
and the difference between the amount of income accrued and the U.S.
dollars actually received. Further, the effects of changes in foreign
currency exchange rates on investments are not segregated in the statement
of operations from the effects of changes in market price on those
securities but are included with the net realized and unrealized gain or
loss on investments.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredito Italiano, manages the
Fund's portfolio. Management fees are calculated daily at the annual rate of
0.75% of the Fund's average daily net assets. Effective May 1st, 2007, PIM has
contractually agreed to limit ordinary operating expenses to the extent
required to reduce Fund expenses to 1.25% and 2.15% of the average daily net
assets attributable to Class A and Class C shares, respectively. Class Y shares
do not have an expense limitation. These expense limitations are in effect
through May 1, 2009 for Class A shares and through May 1, 2008 for Class C
shares. There can be no assurance that PIM will extend the expense limitations
beyond these dates.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At June 30, 2007, $25,870 was payable to PIM
related to management fees,
32
Pioneer Independence Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
administrative fees and certain other services, and is included in due from
affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due from affiliates is $200,748 in transfer agent
fees payable from PIMSS at June 30, 2007.
4. Distribution and Service Plans
The Fund adopted a Plan of Distribution for each class of shares (except Class
Y shares) (Class A Plan and Class C Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD
a service fee of up to 0.25% of the average daily net assets attributable to
Class A shares in reimbursement of its actual expenditures to finance
activities primarily intended to result in the sale of Class A shares. Pursuant
to the Class C plan, the Fund pays PFD 1.00% of the average daily net assets
attributable to Class C 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 C
shares. Included in due from affiliates is $8,026 distribution fees payable to
PFD at June 30, 2007.
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 18 months of purchase. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the six months ended June 30, 2007, there were no CDSCs paid to PFD.
5. Line of Credit
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $200 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 $200 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
33
Pioneer Independence Fund
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited) (continued)
--------------------------------------------------------------------------------
annual commitment fee for this facility. The commitment fee is allocated among
such Funds based on their respective borrowing limits. For the six months ended
June 30, 2007, the Fund had no borrowings under this agreement.
6. Expense Arrangements with Affiliates
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction of the Fund's total expenses due to interest earned on
cash held by PIMSS. For the six months ended June 30, 2007, the Fund's expenses
were not reduced under such arrangements.
Through June 22, 2007, the Fund also had an arrangement whereby the Fund paid
for certain custodian fees as well as recordkeeping, printing, legal and
auditing expenses of Pioneer Independence Plans, a systematic investment plan
previously sponsored by PFD (see Note 1). From January 1, 2007 through June 22,
2007, expenses allocated to the former Class P shares (renamed Class A on June
22, 2007) include approximately $635,000 under this arrangement.
7. New Pronouncements
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157), was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Fund's financial statement disclosures.
34
Pioneer Independence Fund
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Trustees Officers
Xxxx X. Xxxxx, Xx., Chairman Xxxx X. Xxxxx, Xx., President
Xxxxx X. Xxxx Xxxxxx X. Xxxxxxxxx, Executive
Xxxx X. Xxxx Vice President
Xxxxxxxx X.X. Xxxxxx Xxxxxxx Xxxx, Treasurer
Xxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxxx, Secretary
Xxxxxx X. Xxxxx
Xxxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxx
Xxxx Xxxxxxxx
Investment Adviser and Administrator
Pioneer Investment Management, Inc.
Custodian
Xxxxx Brothers Xxxxxxxx & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx 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 (0-000-000-0000). Information
regarding how the Fund voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at xxx.xxxxxxxxxxxxxxxxxx.xxx. This information is also available
on the Securities and Exchange Commission's web site at xxxx://xxx.xxx.xxx.
35
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This page for your notes.
36
--------------------------------------------------------------------------------
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 0-000-000-0000
FactFone(SM) for automated fund yields, prices,
account information and transactions 0-000-000-0000
Retirement plans information 0-000-000-0000
Telecommunications Device for the Deaf (TDD) 0-000-000-0000
Write to us:
PIMSS, Inc.
X.X. Xxx 00000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Our toll-free fax 0-000-000-0000
Our internet e-mail address xxx.xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
(for general questions about Pioneer only)
Visit our web site: xxx.xxxxxxxxxxxxxxxxxx.xxx
Before investing consider the Fund's investment objectives, risks, charges and
expenses. Contact your advisor or Pioneer Investments for a prospectus
containing this information. Read it carefully.
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
web site at xxxx://xxx.xxx.xxx. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
