-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MSagfVYoiWDyzvMvxfocGjFj8f7dUxN79oA9xJdPLZ/0lA8bzCBs0BLP4gSxIqtK 0jBMDsPUhOFlnAIXv62cWw== 0000863334-98-000013.txt : 19980623 0000863334-98-000013.hdr.sgml : 19980623 ACCESSION NUMBER: 0000863334-98-000013 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980430 FILED AS OF DATE: 19980622 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER GROWTH TRUST CENTRAL INDEX KEY: 0000863334 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 043098863 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06106 FILM NUMBER: 98651442 BUSINESS ADDRESS: STREET 1: 60 STATE ST - 19TH FL CITY: BOSTON STATE: MA ZIP: 02109-1820 BUSINESS PHONE: 6177427825 MAIL ADDRESS: STREET 1: 60 STATE ST STREET 2: 19TH FLOOR CITY: BOSTON STATE: MA ZIP: 02109-1820 N-30D 1 SEMI-ANNUAL REPORT [logo] PIONEER Pioneer Equity-Income Fund SEMIANNUAL REPORT 4/30/98 Table of Contents - -------------------------------------------------------------------------------- Letter from the Chairman 1 Portfolio Summary 2 Performance Update 3 Portfolio Management Discussion 6 Schedule of Investments 9 Financial Statements 16 Notes to Financial Statements 22 Report of Independent Public Accountants 26 Results of Shareowner Meetings 27 Trustees, Officers and Service Providers 29
Pioneer Equity-Income Fund LETTER FROM THE CHAIRMAN 4/30/98 Dear Shareowner, - -------------------------------------------------------------------------------- I am pleased to introduce this semiannual report for Pioneer Equity-Income Fund, covering the six months ended April 30, 1998. On behalf of your investment team, I thank you for your interest and this opportunity to comment on today's investing environment. The United States' economic news continued to be positive, propelling our domestic stock market to yet another series of record highs. Large- capitalization stocks were the big winners, with the Dow Jones Industrial Average returning over 22% as concerns about the Asian financial crisis drew investors toward the safety of U.S. "blue chip" companies like those in your Fund. We believe that using a solid value approach to choosing stocks - purchasing them at reasonable prices and holding them until we think they reach full value - - will help provide the best opportunity for positive long-term results. While it is impossible to predict the direction of the markets with any degree of certainty, the fact remains that large company stocks' record-breaking pace has pushed that group's average price-to-earnings ratio to an all-time high. The rest of the market, on the other hand, is trading at lower levels. It would not be surprising to see new trends emerge as investors search for more reasonable valuations. Since markets tend to run in cycles, we encourage you to speak with your investment professional about managing your risk by spreading your investments among different types of funds, including those that invest overseas or globally. Investors who maintain a diversified portfolio and a long-term perspective have the potential to weather any short-term risks the market may pose. I encourage you to read on to learn more about Pioneer Equity-Income Fund. If you have questions, please contact your investment professional, or Pioneer at 1-800-225-6292. Respectfully, /s/ John F. Cogan, Jr., John F. Cogan, Jr., Chairman and President 1 Pioneer Equity-Income Fund PORTFOLIO SUMMARY 4/30/98 P o r t f o l i o D i v e r s i f i c a t i o n - -------------------------------------------------------------------------------- (As a percentage of total investment portfolio) [pie chart] U.S. Common Stocks 98.8% U.S. Convertible Securities 0.7% U.S. Preferred Stocks 0.2% Short-Term Cash Equivalents 0.3% S e c t o r D i s t r i b u t i o n - -------------------------------------------------------------------------------- (As a percentage of equity holdings) [pie chart] Financial 22% Communication Services 14% Utilities 13% Healthcare 11% Basic Materials 9% Consumer Cyclicals 7% Consumer Staples 7% Energy 7% Technology 6% Capital Goods 4% 1 0 L a r g e s t H o l d i n g s - -------------------------------------------------------------------------------- (As a percentage of equity holdings) 1. Schering-Plough Corp. 4.81% 6. Amoco Corp. 2.33% 2. SBC Communications, Inc. 2.76 7. May Department 2.13 Stores Co. 3. Ameritech Corp. 2.75 8. Chrysler Corp. 2.03 4. Ford Motor Co. 2.50 9. Eastman Kodak Co. 1.95 5. American National 2.40 10. Old Kent Financial Corp. 1.93 Insurance Co.
Fund holdings will vary for other periods. 2 Pioneer Equity-Income Fund PERFORMANCE UPDATE 4/30/98 CLASS A SHARES S h a r e P r i c e s a n d D i s t r i b u t i o n s - -------------------------------------------------------------------------------- Net Asset Value per Share 4/30/98 10/31/97 $ 28.28 $ 24.78 Distributions per Share Income Short-Term Long-Term (10/31/97- 4/30/98) Dividends Capital Gains Capital Gains $ 0.248 $ 0.089 $ 0.636
I n v e s t m e n t R e t u r n s - -------------------------------------------------------------------------------- The mountain chart on the right shows the growth of a $10,000 investment made in Pioneer Equity-Income Fund at public offering price, compared to the growth of the Standard & Poor's 500 Index. [boxed table] - ---------------------------------------- Average Annual Total Returns (As of April 30, 1998) Public Net Asset Offering Period Value Price* Life-of-Fund 17.55% 16.66% (7/25/90) 5 Years 17.93 16.54 1 Year 39.97 31.94
- ---------------------------------------- * Reflects deduction of the maximum 5.75% sales charge at the beginning of the period and assumes reinvestment of distributions at net asset value. [mountain chart] Growth of $10,000
Pioneer Equity-Income Standard & Poor's Fund* 500 Index 7/25/90 9425 10000 8160 8597 9913 10794 11025 11477 4/92 11947 12311 12848 12616 14517 13446 15509 14494 4/94 15111 14162 15523 15055 16234 16628 18552 19023 4/96 20518 21639 21433 23593 23654 27073 27948 31168 4/98 33109 38170
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. 3 Pioneer Equity-Income Fund PERFORMANCE UPDATE 4/30/98 CLASS B SHARES S h a r e P r i c e s a n d D i s t r i b u t i o n s - -------------------------------------------------------------------------------- Net Asset Value per Share 4/30/98 10/31/97 $ 28.09 $ 24.63 Distributions per Share Income Short-Term Long-Term (10/31/97- 4/30/98) Dividends Capital Gains Capital Gains $ 0.161 $ 0.089 $ 0.636
I n v e s t m e n t R e t u r n s - -------------------------------------------------------------------------------- The mountain chart on the right shows the growth of a $10,000 investment made in Pioneer Equity-Income Fund, compared to the growth of the Standard & Poor's 500 Index. [boxed table] - ---------------------------------------- Average Annual Total Returns (As of April 30, 1998) If If Period Held Redeemed* Life-of-Fund 21.39% 21.12% (4/4/94) 1 Year 38.89 34.89
- ---------------------------------------- * Reflects deduction of the maximum applicable contingent deferred sales charge (CDSC) at the end of the period and assumes reinvestment of distributions. The maximum CDSC of 4% declines over six years. [mountain chart] Growth of $10,000
Pioneer Equity-Income Standard & Poor's Fund* 500 Index 4/94 10000 10000 10343 10273 10666 10521 10593 10921 4/95 10436 10956 11036 12062 12072 13259 12575 13800 4/96 13678 15181 13854 15697 13330 15443 14416 17115 4/97 15614 19176 15846 19639 18565 23490 18646 22610 20258 24332 4/98 21809 27689
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. 4 Pioneer Equity-Income Fund PERFORMANCE UPDATE 4/30/98 CLASS C SHARES S h a r e P r i c e s a n d D i s t r i b u t i o n s - -------------------------------------------------------------------------------- Net Asset Value per Share 4/30/98 10/31/97 $ 28.06 $ 24.61 Distributions per Share Income Short-Term Long-Term (10/31/97- 4/30/98) Dividends Capital Gains Capital Gains $ 0.160 $ 0.089 $ 0.636
I n v e s t m e n t R e t u r n s - -------------------------------------------------------------------------------- The mountain chart on the right shows the growth of a $10,000 investment made in Pioneer Equity-Income Fund, compared to the growth of the Standard & Poor's 500 Index. [boxed table] - ------------------------------------- Average Annual Total Returns (As of April 30, 1998) If If Period Held Redeemed* Life-of-Fund 23.49% 23.49% (1/31/96) 1 Year 38.88 38.88
- ------------------------------------- * Assumes reinvestment of distributions. The 1% contingent deferred sales charge (CDSC) applies to investments sold within one year of purchase. [mountain chart] Growth of $10,000
Pioneer Equity-Income Standard & Poor's Fund* 500 Index 1/96 10000 10000 4/96 10133 10340 9745 10172 10/96 10534 11274 11405 12632 4/97 11575 12937 13563 15473 10/97 13622 14894 14795 16028 4/98 16075 18240
The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. 5 Pioneer Equity-Income Fund PORTFOLIO MANAGEMENT DISCUSSION 4/30/98 Dear Shareowner, - -------------------------------------------------------------------------------- We are pleased to report Pioneer Equity-Income Fund's continued success as we hit the midpoint of its ninth fiscal year. While the stock market in the United States has not gone up in a straight line in recent months, it has gone up, and so has the Fund's share price. For the six months ended April 30, 1998, the Fund delivered total returns of 18.46% for Class A Shares, 18.03% for Class B Shares and 18.00% for Class C Shares - all at net asset value. These returns were ahead of the average equity-income fund's return of 16.30%. (Lipper Analytical Services, Inc., an independent mutual fund research firm, tracked 214 funds for the six months.) Looking at the past 12 months, the Fund's returns earned it a place among the top 16% of similar funds. (Of 197 funds, Class A Shares ranked 23, Class B, 30 and Class C, 31.)* Dividends Are Still Important, although Not Very Popular In the three months ended April 30, 1998, however, the Fund's performance lost some of its momentum, and its portfolio of dividend-paying stocks lagged the broader market. In general, the strength in the stock market has been concentrated in "growth" names, and dividends have appeared to be of scant interest to investors. We find that dividends can provide a useful buffer during rough periods for stocks, and we always view a lack of emphasis on them by investors as a sign of diminished caution. Going back through American financial history, one learns that dividends were frequently much more highly prized than they are today. In the 1800s, for instance, when equity prices were not always so easy to determine and transactions were sometimes difficult to undertake, the cash that companies returned to stockholders in the form of dividends was regarded as the surest kind of return. In this century, too, over some long stretches when share prices have been relatively flat or directionless - - -------------------------------------------------------------------------------- * Lipper Analytical Services, an independent research organization, ranks funds according to total return performance. Rankings vary over time and do not reflect the effects of sales charges. For the three- and five-year periods, the Fund's Class A Shares ranked 32 and 42 of 130 and 68 funds, respectively. Past performance does not guarantee future results. 6 Pioneer Equity-Income Fund for example between the late 1920s and the early 1940s and between the late 1960s and early 1980s - investors have regarded dividends favorably. The dividend yield on the Standard & Poor's 500 Index today is at an all-time low of 1.41%; when your Fund was introduced in 1990, it was 3.28%. We do not know where yields will go from here, but we intend to continue our emphasis on strong dividend-payers. It is part of our discipline not to abandon caution. The Trend toward Consolidation Everyone who follows the stock market will certainly have taken note of the large number of mergers and acquisitions. Companies in the United States and Europe have been bitten by the consolidation bug. Consultants, investment bankers and economic commentators alike have counseled companies to "bulk up" in their basic business or combine with companies having similar kinds of products that might then be "cross sold." To date, this trend has translated into big gains for your Fund. The financial services sector has seen an especially large number of such mergers, but many other industries have also been affected - automobiles, telecommunications, electric utilities, entertainment, transportation, oil and gas. Your Fund has significant investments in most of these industries; a number of holdings are, in fact, merged entities. Bell Atlantic, for example, combines the former Bell Atlantic and Nynex, and SBC Communications joins the former Southwestern Bell with Pacific Telesis. The portfolio received shares of Kinder Morgan Energy Partners when it acquired Santa Fe Pacific Pipeline Partners. Most recently, First Union absorbed CoreStates Financial in exchange for stock. Portfolio companies Chrysler, H.F. Ahmanson, Mercantile Stores, Ameritech and DQE have all received merger proposals. In fact, offers for Ameritech and DQE have come from other companies in the portfolio (SBC Communications and Allegheny Energy, respectively). Years down the road mergers sometimes unwind, often helping boost stock prices when investors perceive that the change will increase profitability. E.I. DuPont de Nemours has just announced that it will begin the process of "spinning off" its Conoco oil-and-gas subsidiary. Pepsico has already done that with its restaurant operations, and Ford has distributed shares of Associates First Financial. Little is "permanent" in the business world; change is usually the norm. The magnitude and intensity of present-day corporate transactions are remarkable, however, by any standards. For us as investment analysts, the challenge is to look at each transaction closely and 7 Pioneer Equity-Income Fund decide whether it creates the potential for additional value in our portfolio. The market pitches opportunities at us on almost a daily basis, it seems, and we have to choose, and fairly quickly, which ones to swing at. The Portfolio at Midyear Recent portfolio activity included two initial purchases and two liquidations. Mellon Bank is a strong presence in "fee-based" financial services including mutual funds, pension funds and shareholder services, as well as a good operator in commercial and retail banking. Its returns on equity are high. Johnson & Johnson is one of the oldest and most diversified pharmaceutical, hospital-supply and consumer-healthcare products companies. Known universally for its baby powders and Band-Aids, Johnson & Johnson has also paid dividends regularly for many decades. In the case of the positions sold, Borden Chemicals & Plastics and Peoples Energy, we could no longer feel confident in their prospects relative to alternative investments. On a sector basis, we made few adjustments over the period. The portfolio remains well diversified, and our emphasis on telecommunications is still in place, having generated good results to date. Saddling Up and Moving Out Knowing the future would not, we think, be an unalloyed benefit in investing, popular views notwithstanding. Events are predicted everyday, but reactions to them can be very surprising. Thus, we could know what will happen without knowing the repercussions, and investment opportunities and difficulties often lie in the repercussions. We always take our cues from the companies themselves. We look at what they are doing with their capital-spending and research-and-development dollars, and we are always looking for evidence of change, tangible signs of new development and real commitments to futuristic concepts. We prefer to invest in companies that are themselves investing. This is our basic task, and this is how we believe we can help you meet your long-term goals. We are grateful for your continued support. Please get in touch at any time with questions or comments. Respectfully, /s/ John A. Carey John A. Carey, Portfolio Manager 8 Pioneer Equity-Income Fund SCHEDULE OF INVESTMENTS 4/30/98
Principal Amount Value INVESTMENT IN SECURITIES - 99.7% CONVERTIBLE CORPORATE BOND - 0.2% $1,250,000 Phototronics Inc., 6.0%, 6/1/04 $ 1,859,825 ------------ Total Convertible Corporate Bond (Cost $1,250,000) $ 1,859,825 ------------ Shares PREFERRED STOCKS - 0.7% 15,300 Airtouch Communications, Inc., 4.25%, 8/16/16 (Convertible) $ 1,175,231 22,200 Lakehead Pipe Line Partners, L.P. 1,037,850 51,500 Lomak Petroleum, 5.75%, 11/1/27 (144A) (Convertible) 2,198,432 20,000 The Rouse Co., $3.00 (Series B) (Convertible) 1,000,000 500 Sprint Corp., 8.25%, 3/31/00 (Convertible) 30,563 ------------ Total Preferred Stocks (Cost $5,153,452) $ 5,442,076 ------------ COMMON STOCKS - 98.8% Basic Materials - 8.7% Aluminum - 0.4% 44,000 Aluminum Company of America $ 3,410,000 ------------ Chemicals - 3.5% 116,000 Dow Chemical Co. $ 11,215,750 133,000 E.I. du Pont de Nemours and Co. 9,684,063 135,000 Eastman Chemical Co. 9,281,250 ------------ $ 30,181,063 ------------ Chemicals (Diversified) - 1.1% 179,224 ARCO Chemical Inc. $ 9,521,275 ------------ Chemicals (Specialty) - 0.4% 82,300 Nalco Chemical Co. $ 3,271,425 ------------ Paper & Forest Products - 0.4% 91,400 Mead Corp. $ 3,164,725 ------------ Iron & Steel - 1.3% 13,800 Great Northern Iron Ore Properties $ 759,000 523,405 Roanoke Electric Steel Corp. 10,598,951 ------------ $ 11,357,951 ------------
The accompanying notes are an integral part of these financial statements. 9 Pioneer Equity-Income Fund SCHEDULE OF INVESTMENTS 4/30/98 (continued)
Shares Value Metals & Mining - 1.6% 201,600 Phelps Dodge Corp. $ 13,532,400 ------------ Total Basic Materials $ 74,438,839 ------------ Capital Goods - 3.8% Electrical Equipment - 0.5% 46,900 Hubbell, Inc. (Class B) $ 2,312,756 28,800 Thomas & Betts Corp. 1,681,200 ------------ $ 3,993,956 ------------ Machinery (Diversified) - 1.7% 506,457 The Gorman-Rupp Co.+ $ 10,192,447 115,200 The Timken Co. 4,600,800 ------------ $ 14,793,247 ------------ Manufacturing (Diversified) - 0.8% 117,800 Johnson Controls, Inc. $ 6,994,375 ------------ Manufacturing (Specialized) - 0.8% 166,150 Diebold, Inc. $ 6,812,150 ------------ Total Capital Goods $ 32,593,728 ------------ Communications Services - 13.9% Telecommunications - 1.2% 5,000 AT&T Corp. $ 300,313 145,000 Sprint Corp. 9,905,313 ------------ $ 10,205,626 ------------ Telephone - 12.7% 275,500 Aliant Communications, Inc. $ 7,817,313 548,700 Ameritech Corp. 23,354,044 156,712 Bell Atlantic Corp. 14,662,367 163,200 BellSouth Corp. 10,475,400 275,700 GTE Corp. 16,111,219 566,000 SBC Communications, Inc. 23,453,625 239,877 U.S. West Communication Group 12,653,512 ------------ $108,527,480 ------------ Total Communications Services $118,733,106 ------------ Consumer Cyclicals - 7.5% Automobiles - 4.5% 430,300 Chrysler Corp. $ 17,292,681 463,800 Ford Motor Co. 21,247,838 ------------ $ 38,540,519 ------------
10 The accompanying notes are an integral part of these financial statements. Pioneer Equity-Income Fund
Shares Value Publishing - 0.7% 80,000 The McGraw-Hill Co., Inc. $ 6,195,000 ------------ Retail (Department Stores) - 2.3% 294,000 May Department Stores Co. $ 18,136,125 19,000 Mercantile Stores Co., Inc. 1,388,187 ------------ $ 19,524,312 ------------ Total Consumer Cyclicals $ 64,259,831 ------------ Consumer Staples - 7.0% Beverages - 0.1% 9,000 Pepsico, Inc. $ 357,187 ------------ Entertainment - 1.6% 531,200 Cedar Fair, L.P. $ 14,076,800 ------------ Food - 4.3% 271,800 BestFoods $ 14,915,025 138,000 General Mills, Inc. 9,323,625 157,750 H.J. Heinz Co. 8,597,375 60,000 Sara Lee Corp. 3,573,750 ------------ $ 36,409,775 ------------ Household Products - 1.0% 28,000 Colgate-Palmolive Co. $ 2,511,250 114,000 Kimberly Clark Corp. 5,785,500 ------------ $ 8,296,750 ------------ Total Consumer Staples $ 59,140,512 ------------ Energy - 6.7% Oil (Domestic Integrated) - 1.0% 110,000 Atlantic Richfield Co. $ 8,580,000 ------------ Oil (International Integrated) - 5.7% 447,000 Amoco Corp. $ 19,779,750 187,500 Chevron Corp. 15,503,906 74,000 Exxon Corp. 5,397,375 101,000 Mobil Corp. 7,979,000 ------------ $ 48,660,031 ------------ Total Energy $ 57,240,031 ------------
The accompanying notes are an integral part of these financial statements. 11 Pioneer Equity-Income Fund SCHEDULE OF INVESTMENTS 4/30/98 (continued)
Shares Value Financial - 22.2% Banks (Major Regional) - 4.1% 268,300 The Bank of New York Co., Inc. $ 15,846,469 206,550 First Union Corp. 12,470,456 42,800 Mellon Bank Corp. 3,081,600 52,000 National City Corp. 3,601,000 ------------ $ 34,999,525 ------------ Banks (Regional) - 4.7% 607,500 First Security Corp. $ 14,883,750 250,000 First Tennessee National Corp. 8,609,375 422,484 Old Kent Financial Corp. 16,424,065 ------------ $ 39,917,190 ------------ Financial (Diversified) - 2.2% 121,555 Associates First Capital Corp. $ 9,086,237 312,023 The Rouse Co. 9,633,710 ------------ $ 18,719,947 ------------ Insurance (Life/Health) - 2.5% 188,700 American National Insurance Co. $ 20,379,600 5,000 AmerUs Life Holdings, Inc. 160,000 21,000 ReliaStar Financial Corp. 958,125 ------------ $ 21,497,725 ------------ Insurance (Property/Casualty) - 5.0% 170,100 Chubb Corp. $ 13,427,269 116,700 HSB Group, Inc. 7,702,200 240,500 Safeco Corp. 12,009,969 113,100 St. Paul Companies, Inc. 9,585,225 ------------ $ 42,724,663 ------------ Investment Management - 3.2% 232,600 Alliance Capital Management, L.P. $ 6,178,437 113,800 Eaton Vance Corp. (Non-voting) 5,576,200 201,000 T. Rowe Price Associates, Inc. 15,175,500 ------------ $ 26,930,137 ------------ Savings & Loan Companies - 0.5% 5,000 H.F. Ahmanson & Co. $ 381,250 69,000 Astoria Financial Corp. 4,045,125 ------------ $ 4,426,375 ------------ Total Financial $189,215,562 ------------
12 The accompanying notes are an integral part of these financial statements. Pioneer Equity-Income Fund
Shares Value Healthcare - 10.5% Healthcare (Diversified) - 5.4% 178,300 Abbott Laboratories $ 13,038,187 50,000 American Home Products Corp. 4,656,250 100,000 Bristol-Myers Squibb Co. 10,587,500 40,000 Johnson & Johnson 2,855,000 80,000 Warner-Lambert Co. 15,135,000 ------------ $ 46,271,937 ------------ Healthcare (Drugs/Major Pharmaceuticals) - 4.8% 510,800 Schering-Plough Corp. $ 40,927,850 ------------ Healthcare (Medical Products/Supplies) - 0.3% 34,000 Becton, Dickinson & Co. $ 2,367,250 ------------ Total Healthcare $ 89,567,037 ------------ Technology - 5.9% Communications Equipment - 0.6% 110,000 Harris Corp. $ 5,321,250 ------------ Computer (Hardware) - 2.2% 210,600 Hewlett-Packard Co. $ 15,860,812 23,000 IBM, Corp. 2,665,125 ------------ $ 18,525,937 ------------ Equipment (Semiconductors) - 1.2% 497,000 Helix Technology Corp. $ 9,940,000 ------------ Photography/Imaging - 1.9% 230,000 Eastman Kodak Co. $ 16,603,125 ------------ Total Technology $ 50,390,312 ------------ Utilities - 12.6% Electric Companies - 5.6% 296,200 Allegheny Energy, Inc. $ 9,071,125 436,500 Baltimore Gas & Electric Co. 13,749,750 5,000 Boston Edison Co. 203,750 345,450 DPL, Inc. 6,282,872 200,000 DQE, Inc. 6,875,000 134,100 DTE Energy Co. 5,255,044 215,000 Kansas City Power & Light Co. 6,396,250 ------------ $ 47,833,791 ------------
The accompanying notes are an integral part of these financial statements. 13 Pioneer Equity-Income Fund SCHEDULE OF INVESTMENTS 4/30/98 (continued)
Shares Value Natural Gas - 6.5% 100,600 Buckeye Partners, L.P. $ 2,904,825 190,750 Consolidated Natural Gas Co. 10,968,125 190,000 El Paso Natural Gas Co. 7,018,125 60,000 Equitable Resources, Inc. 1,950,000 110,950 Indiana Energy, Inc. 3,494,925 116,700 KeySpan Energy Corp. 3,982,387 60,882 Kinder Morgan Energy Partners, L.P. 2,187,947 174,800 NICOR, Inc. 7,155,875 119,500 Public Service Co. of North Carolina, Inc. 2,449,750 223,300 Questar Corp. 9,685,637 80,000 Sonat, Inc. 3,550,000 ------------ $ 55,347,596 ------------ Water Utility - 0.5% 150,400 American Water Works Co., Inc. $ 4,502,600 ------------ Total Utilities $107,683,987 ------------ Total Common Stocks (Cost $548,665,831) $843,262,945 ------------ TOTAL INVESTMENT IN SECURITIES (Cost $555,069,283) $850,564,846 ------------
Principal Amount TEMPORARY CASH INVESTMENT - 0.3% Commercial Paper - 0.3% $2,824,000 Household Finance Corp., 5.51%, 5/1/98 $ 2,824,000 ------------ TOTAL TEMPORARY CASH INVESTMENT (Cost $2,824,000) $ 2,824,000 ------------ TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH INVESTMENT - 100% (Cost $557,893,283)(a) $853,388,846 ------------
+ Investment held by Fund representing 5% or more of the outstanding voting stock of such company. 144A Security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers in a transaction exempt from registration. At April 30, 1998, the value of these securities amounted to $2,198,432 or 0.3% of total net assets. 14 The accompanying notes are an integral part of these financial statements. Pioneer Equity-Income Fund (a) At April 30, 1998, the net unrealized gain on investments based on cost for federal income tax purposes of $557,893,283 was as follows: Aggregate gross unrealized gain for all investments in which there is an excess of value over tax cost $296,295,113 Aggregate gross unrealized loss for all investments in which there is an excess of tax cost over value (799,550) ------------ Net unrealized gain $295,495,563 ------------
Purchases and sales of securities (excluding temporary cash investments) for the six months ended April 30, 1998, aggregated $87,672,520 and $18,541,230, respectively. The accompanying notes are an integral part of these financial statements. 15 Pioneer Equity-Income Fund BALANCE SHEET 4/30/98 ASSETS: Investment in securities, at value (including temporary cash investment of $2,824,000) (cost $557,893,283) $853,388,846 Cash 771 Receivables - Fund shares sold 3,719,329 Dividends and interest 1,728,294 Other 3,310 ------------ Total assets $858,840,550 ------------ LIABILITIES: Payables - Fund shares repurchased $ 584,054 Due to affiliates 865,051 Accrued expenses 84,452 ------------ Total liabilities $ 1,533,557 ------------ NET ASSETS: Paid-in capital $559,838,023 Accumulated undistributed net investment income 2,207,562 Distributions in excess of net realized gain on investments (234,155) Net unrealized gain on investments 295,495,563 ------------ Total net assets $857,306,993 ------------ NET ASSET VALUE PER SHARE: (Unlimited number of shares authorized) Class A (based on $570,924,218/20,191,582 shares) $ 28.28 ------------ Class B (based on $266,062,942/9,470,324 shares) $ 28.09 ------------ Class C (based on $20,319,833/724,243 shares) $ 28.06 ------------ MAXIMUM OFFERING PRICE: Class A $ 30.01 ------------
16 The accompanying notes are an integral part of these financial statements. Pioneer Equity-Income Fund STATEMENT OF OPERATIONS For the Six Months Ended 4/30/98
INVESTMENT INCOME: Dividends $10,944,341 Interest 149,781 ----------- Total investment income $ 11,094,122 ------------ EXPENSES: Management fees $ 2,218,291 Transfer agent fees Class A 370,904 Class B 186,508 Class C 17,354 Distribution fees Class A 634,720 Class B 1,160,561 Class C 78,916 Accounting 34,121 Custodian fees 40,783 Registration fees 50,016 Professional fees 21,261 Printing 24,080 Fees and expenses of nonaffiliated trustees 7,155 Miscellaneous 20,091 ----------- Total expenses $ 4,864,761 Less fees paid indirectly (47,487) ------------ Net expenses $ 4,817,274 ------------ Net investment income $ 6,276,848 ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments $ 578,234 Change in net unrealized gain on investments 119,071,862 ------------ Net gain on investments $119,650,096 ------------ Net increase in net assets resulting from operations $125,926,944 ------------
The accompanying notes are an integral part of these financial statements. 17 Pioneer Equity-Income Fund STATEMENTS OF CHANGES IN NET ASSETS For the Six Months Ended 4/30/98 and the Year Ended 10/31/97
Six Months Ended Year Ended 4/30/98 10/31/97 FROM OPERATIONS: Net investment income $ 6,276,848 $ 11,397,594 Net realized gain on investments 578,234 19,772,281 Change in net unrealized gain on investments 119,071,862 116,333,355 ------------ ------------ Net increase in net assets resulting from operations $125,926,944 $147,503,230 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A ($0.25 and $0.50 per share, respectively) $ (4,738,878) $ (8,790,651) Class B ($0.16 and $0.33 per share, respectively) (1,402,394) (2,466,847) Class C ($0.16 and $0.33 per share, respectively) (94,566) (116,752) Net realized gain: Class A ($0.73 and $0.95 per share, respectively) (13,377,839) (15,676,400) Class B ($0.73 and $0.95 per share, respectively) (6,017,168) (6,437,316) Class C ($0.73 and $0.95 per share, respectively) (384,858) (212,007) ------------ ------------ Total distributions to shareholders $(26,015,703) $(33,699,973) ------------ ------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sale of shares $150,665,049 $149,366,290 Reinvestment of distributions 24,054,494 31,076,966 Cost of shares repurchased (83,307,959) (103,447,399) ------------ ------------ Net increase in net assets resulting from fund share transactions $ 91,411,584 $ 76,995,857 ------------ ------------ Net increase in net assets $191,322,825 $190,799,114 NET ASSETS: Beginning of period 665,984,168 475,185,054 ------------ ------------ End of period (including accumulated undistributed net investment income of $2,207,562 and $2,166,552, respectively) $857,306,993 $665,984,168 ------------ ------------
'98 Shares '98 Amount '97 Shares '97 Amount CLASS A Shares sold 3,694,843 $ 99,036,735 3,879,341 $87,709,414 Reinvestment of distributions 664,288 17,057,651 1,117,055 22,915,378 Less shares repurchased (2,423,406) (64,844,535) (3,257,004) (73,268,206) ---------- ------------ ---------- ------------ Net increase 1,935,725 $ 51,249,851 1,739,392 $37,356,586 ---------- ------------ ---------- ------------ CLASS B Shares sold 1,684,393 $ 44,995,113 2,439,283 $54,427,605 Reinvestment of distributions 260,053 6,616,672 391,406 7,922,751 Less shares repurchased (647,915) (17,400,809) (1,304,045) (29,250,894) ---------- ------------ ---------- ------------ Net increase 1,296,531 $ 34,210,976 1,526,644 $33,099,462 ---------- ------------ ---------- ------------ CLASS C Shares sold 247,839 $ 6,633,201 325,018 $ 7,229,271 Reinvestment of distributions 14,933 380,171 11,617 238,837 Less shares repurchased (39,275) (1,062,615) (40,498) (928,299) ---------- ------------ ---------- ------------ Net increase 223,497 $ 5,950,757 296,137 $ 6,539,809 ---------- ------------ ---------- ------------
18 The accompanying notes are an integral part of these financial statements. Pioneer Equity-Income Fund FINANCIAL HIGHLIGHTS 4/30/98
Six Months Ended Year Ended 4/30/98 10/31/97 CLASS A Net asset value, beginning of period $ 24.78 $ 20.37 ---------- -------- Increase (decrease) from investment operations: Net investment income $ 0.24 $ 0.50 Net realized and unrealized gain (loss) on investments 4.24 5.36 ---------- -------- Net increase from investment operations $ 4.48 $ 5.86 Distributions to shareholders: Net investment income (0.25) (0.50) Net realized gain (0.73) (0.95) ---------- ---------- Net increase (decrease) in net asset value $ 3.50 $ 4.41 ---------- ---------- Net asset value, end of period $ 28.28 $ 24.78 ---------- ---------- Total return* 18.46% 30.40% Ratio of net expenses to average net assets 1.03%**+ 1.11%+ Ratio of net investment income to average net assets 1.90%**+ 2.22%+ Portfolio turnover rate 5%** 18% Average brokerage commission per share $ 0.0587 $ 0.0583 Net assets, end of period (in thousands) $ 570,924 $452,300 Ratios assuming reduction for fees paid indirectly: Net expenses 1.02%** 1.10% Net investment income 1.91%** 2.23% Year Ended Year Ended Year Ended Year Ended 10/31/96 10/31/95 10/31/94 10/31/93 CLASS A Net asset value, beginning of period $ 18.22 $ 16.16 $ 16.92 $ 14.56 -------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income $ 0.55 $ 0.54 $ 0.55 $ 0.50 Net realized and unrealized gain (loss) on investments 2.24 2.45 (0.54) 2.46 -------- ------- -------- -------- Net increase from investment operations $ 2.79 $ 2.99 $ 0.01 $ 2.96 Distributions to shareholders: Net investment income (0.50) (0.53) (0.54) (0.50) Net realized gain (0.14) (0.40) (0.23) (0.10) ---------- ------- -------- -------- Net increase (decrease) in net asset value $ 2.15 $ 2.06 $ (0.76) $ 2.36 ---------- ------- -------- -------- Net asset value, end of period $ 20.37 $ 18.22 $ 16.16 $ 16.92 ---------- ------- -------- -------- Total return* 15.53% 19.51% 0.09% 20.71% Ratio of net expenses to average net assets 1.19%+ 1.29%+ 1.24% 1.33% Ratio of net investment income to average net assets 2.85%+ 3.26%+ 3.43% 3.20% Portfolio turnover rate 47% 13% 27% 14% Average brokerage commission per share $ 0.0585 - - - Net assets, end of period (in thousands) $336,384 $249,981 $175,943 $143,025 Ratios assuming reduction for fees paid indirectly: Net expenses 1.18% 1.27% - - Net investment income 2.86% 3.28% - -
*Assumes initial investment at net asset value at the beginning of each period, reinvestment of distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. **Annualized. +Ratios assuming no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 19 Pioneer Equity-Income Fund FINANCIAL HIGHLIGHTS 4/30/98
Six Months Ended Year Ended 4/30/98 10/31/97 CLASS B Net asset value, beginning of period $ 24.63 $ 20.26 ---------- -------- Increase from investment operations: Net investment income $ 0.15 $ 0.33 Net realized and unrealized gain on investments 4.20 5.32 ---------- -------- Net increase from investment operations $ 4.35 $ 5.65 Distributions to shareholders: Net investment income (0.16) (0.33) In excess of net investment income - - Net realized gain (0.73) (0.95) ---------- --------- Net increase in net asset value $ 3.46 $ 4.37 ---------- --------- Net asset value, end of period $ 28.09 $ 24.63 ---------- --------- Total return* 18.03% 29.35% Ratio of net expenses to average net assets 1.80%**+ 1.88%+ Ratio of net investment income to average net assets 1.12%**+ 1.45%+ Portfolio turnover rate 5%** 18% Average brokerage commission per share $ 0.0587 $ 0.0583 Net assets, end of period (in thousands) $266,063 $201,360 Ratios assuming reduction for fees paid indirectly: Net expenses 1.78%** 1.87% Net investment income 1.14%** 1.46% Year Ended Year Ended 4/4/94 to 10/31/96 10/31/95 10/31/94 CLASS B Net asset value, beginning of period $ 18.15 $ 16.14 $ 15.46 -------- ------- -------- Increase from investment operations: Net investment income $ 0.41 $ 0.45 $ 0.21 Net realized and unrealized gain on investments 2.22 2.41 0.71 -------- ------- -------- Net increase from investment operations $ 2.63 $ 2.86 $ 0.92 Distributions to shareholders: Net investment income (0.38) (0.45) (0.21) In excess of net investment income - - (0.03) Net realized gain (0.14) (0.40) - ---------- ------- --------- Net increase in net asset value $ 2.11 $ 2.01 $ 0.68 ---------- ------- --------- Net asset value, end of period $ 20.26 $ 18.15 $ 16.14 ---------- ------- --------- Total return* 14.70% 18.64% 5.93% Ratio of net expenses to average net assets 1.95%+ 2.02%+ 1.92%** Ratio of net investment income to average net assets 2.06%+ 2.35%+ 2.35%** Portfolio turnover rate 47% 13% 27% Average brokerage commission per share $ 0.0585 - - Net assets, end of period (in thousands) $134,657 $60,433 $ 12,663 Ratios assuming reduction for fees paid indirectly: Net expenses 1.94% 1.98% - Net investment income 2.07% 2.39% -
*Assumes initial investment at net asset value at the beginning of each period, reinvestment of distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. **Annualized. +Ratios assuming no reduction for fees paid indirectly. 20 The accompanying notes are an integral part of these financial statements. Pioneer Equity-Income Fund FINANCIAL HIGHLIGHTS 4/30/98
Six Months Ended Year Ended 1/31/96 to 4/30/98 10/31/97 10/31/96 CLASS C Net asset value, beginning of period $ 24.61 $ 20.25 $ 19.49 --------- -------- --------- Increase from investment operations: Net investment income $ 0.14 $ 0.32 $ 0.27 Net realized and unrealized gain on investments 4.20 5.32 0.76 --------- -------- --------- Net increase from investment operations $ 4.34 $ 5.64 $ 1.03 Distributions to shareholders: Net investment income (0.16) (0.33) (0.27) Net realized gain (0.73) (0.95) - --------- --------- --------- Net increase in net asset value $ 3.45 $ 4.36 $ 0.76 --------- --------- --------- Net asset value, end of period $ 28.06 $ 24.61 $ 20.25 --------- --------- --------- Total return* 18.00% 29.32% 5.34% Ratio of net expenses to average net assets 1.85%**+ 1.93%+ 1.98%**+ Ratio of net investment income to average net assets 1.05%**+ 1.35%+ 1.91%**+ Portfolio turnover rate 5%** 18% 47% Average brokerage commission per share $0.0587 $0.0583 $0.0585 Net assets, end of period (in thousands) $20,320 $12,324 $ 4,144 Ratios assuming reduction for fees paid indirectly: Net expenses 1.83%** 1.91% 1.94%** Net investment income 1.07%** 1.37% 1.95%**
* Assumes initial investment at net asset value at the beginning of each period, reinvestment of distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. + Ratio assuming no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 21 Pioneer Equity-Income Fund NOTES TO FINANCIAL STATEMENTS 4/30/98 1. Organization and Significant Accounting Policies Pioneer Equity-Income Fund (the Fund), one of three funds that composes Pioneer Growth Trust, is a Massachusetts business 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 of capital. The Fund offers three classes of shares - Class A, Class B and Class C shares. Shares of Class A, Class B and Class C each represent an interest in the same portfolio of investments of the Fund and have equal rights to voting, redemptions, dividends and liquidation, except that each class of shares can bear different transfer agent and distribution fees and have exclusive voting rights with respect to the distribution plans that have been adopted by Class A, Class B and Class C shareholders, respectively. The Fund's financial statements have been prepared in conformity with generally accepted accounting principles that require the management of the Fund to, among other things, make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Fund, which are in conformity with those generally accepted in the investment company industry: A. Security Valuation Security transactions are recorded on trade date. Each day, 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Temporary cash investments are valued at amortized cost. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. It is the Fund's practice to first select for sale those securities 22 Pioneer Equity-Income Fund that have the highest cost and also qualify for long-term capital gain or loss treatment for tax purposes. Settlements from litigation and class action suits are recognized when the Fund acquires an enforceable right to such awards. Included in net realized gain from investments is $76,196 of class action settlements received by the Fund during the six months ended April 30, 1998. B. Federal Income Taxes It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income and net realized capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with federal income tax rules. Therefore, the source of the Fund's distributions may be shown in the accompanying financial statements as either from or in excess of net investment income or net realized gain on investment transactions, or from paid-in capital, depending on the type of book/tax differences that may exist. C. Fund Shares The Fund records sales and repurchases of its shares on trade date. Net losses, if any, as a result of cancellations are absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and an indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $213,743 in underwriting commissions on the sale of fund shares during the six months ended April 30, 1998. D. Class Allocations Distribution fees are calculated based on the average daily net asset value attributable to Class A, Class B and Class C shares of the Fund, respectively. Shareholders of each class share all expenses and fees paid to the transfer agent, Pioneering Services Corporation (PSC), for their services, which are allocated based on the number of accounts in each class and the ratable allocation of related out-of-pocket expense (see Note 3). Income, common expenses and realized and unrealized 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. 23 Pioneer Equity-Income Fund NOTES TO FINANCIAL STATEMENTS 4/30/98 (continued) Distributions to shareholders are recorded as of the ex-dividend date. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time, and in the same amount, except that Class A, Class B and Class C shares can bear different transfer agent and distribution fees. 2. Management Agreement Pioneering Management Corporation (PMC), the Fund's investment adviser, manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management fees are calculated daily at the annual rate of 0.65% of the Fund's average daily net assets up to $300 million; 0.60% of the next $200 million; 0.50% of the next $500 million; and 0.45% of the excess over $1 billion. Effective May 1, 1998, management fees are 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 agreement, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Fund. At April 30, 1998, $413,499 was payable to PMC related to management fees and certain other services. 3. Transfer Agent PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent and shareholder services to the Fund at negotiated rates. Included in due to affiliates is $109,002 in transfer agent fees payable to PSC at April 30, 1998. 4. Distribution Plans The Fund adopted a Plan of Distribution for each class of shares (Class A Plan, Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service fee of up to 0.25% of the Fund's average daily net assets in reimbursement of its actual expenditures to finance activities primarily intended to result in the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of the average daily net assets attributable to each class of shares. The fee consists of a 0.25% service fee and a 0.75% distribution fee paid as compensation for personal services and/or account maintenance services or distribution services with regard to Class B and Class C shares. Included in due to affiliates is $342,550 in distribution fees payable to PFD at April 30, 1998. 24 Pioneer Equity-Income Fund In addition, redemptions of each class of shares may be subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of certain net asset value purchases of Class A shares within one year of purchase. Class B shares that are redeemed within six years of purchase are subject to a CDSC at declining rates beginning at 4.0%, based on the lower of cost or market value of shares being redeemed. Redemptions of Class C shares within one year of purchase are subject to a CDSC of 1.00%. Proceeds from the CDSC are paid to PFD. For the six months ended April 30, 1998, CDSCs in the amount of $132,505 were paid to PFD. 5. Expense Offsets The Fund has entered into certain expense offset arrangements resulting in a reduction in the Fund's total expenses. For the six months ended April 30, 1998, the Fund's expenses were reduced by $47,487 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 of up to $25 million is payable at the Federal Funds Rate plus 3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the borrowing exceeds $25 million at any one time. The Funds pay an annual commitment fee for this facility. The commitment fee is allocated among such Funds based on their respective borrowing limits. For the six months ended April 30, 1998, there were 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, 1998:
Dividend Affiliates Purchases Sales Income Value - --------------------- ----------- ------- ----------- -------------- The Gorman-Rupp Co. $ - $ - $141,808 $10,192,447
25 Pioneer Equity-Income Fund REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and the Board of Trustees of Pioneer Equity-Income Fund: We have audited the accompanying balance sheet, including the schedule of investments, of Pioneer Equity-Income Fund (one of the portfolios constituting Pioneer Growth Trust) as of April 30, 1998, and the related statement of operations, the statements of changes in net assets, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 1998 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Pioneer Equity-Income Fund (of Pioneer Growth Trust) as of April 30, 1998, the results of its operations, the changes in its net assets, and the financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Boston, Massachusetts June 5, 1998 26 Pioneer Equity-Income Fund RESULTS OF SHAREOWNER MEETINGS On April 21, 1998, Pioneer Equity-Income Fund held a special meeting of shareowners. The following proposals were passed by shareowner vote. Here are the detailed results of the votes. Proposal 1(b) - A new management contract with Pioneering Management Corporation.
Affirmative Against Abstain 12,342,073.544 2,553,113.461 1,438,172.480
Proposal 2 - Elect nine Trustees to serve on the Board of Trustees.
Nominee Affirmative Withheld Mary K. Bush 18,361,655.451 503,500.034 John F. Cogan, Jr. 18,385,433.187 479,722.298 Richard H. Egdahl, M.D. 18,398,609.132 466,546.353 Margaret B.W. Graham 18,380,108.006 485,047.479 John W. Kendrick 18,392,698.733 472,456.752 Marguerite A. Piret 18,394,622.984 470,532.501 David D. Tripple 18,387,384.359 477,771.126 Stephen K. West 18,407,770.302 457,385.183 John Winthrop 18,402,612.486 462,542.999
Proposal 4 - Approve an amendment to or elimination of the Funds' fundamental investment restrictions regarding: Proposal 4a - Borrowing.
Affirmative Against Abstain 13,174,128.400 1,447,782.366 1,711,448.719
Proposal 4b - Investment in voting securities of a single issuer.
Affirmative Against Abstain 13,485,920.574 1,083,629.702 1,763,809.209
Proposal 4c - Shareholder approval for the modification of certain investment restrictions.
Affirmative Against Abstain 13,645,103.669 1,056,168.994 1,632,086.822
Proposal 5 - Ratify the selection of Arthur Andersen LLP as the Fund's independent public accountants for the fiscal year ending October 31, 1998.
Affirmative Against Abstain 17,281,838.651 298,885.935 1,284,430.899
27 Pioneer Equity-Income Fund RESULTS OF SHAREOWNER MEETINGS (continued) The remaining proposal up for shareowner approval, Proposal 3, has been adjourned to the shareowner meeting on June 18, 1998. Proposal 3 - Allow the Fund to be reorganized as a separate Delaware business trust. Currently, Pioneer Growth Trust is registered as a single Massachusetts business trust with three funds, one of which is your Fund. As a separate Delaware business trust, the Fund and its shareowners could benefit from a decreased possibility of shareholder and trustee liability and various potential operating efficiencies all described in the Proxy Statement. 28 Pioneer Equity-Income Fund TRUSTEES, OFFICERS AND SERVICE PROVIDERS Trustees Officers John F. Cogan, Jr. John F. Cogan, Jr., Chairman and Mary K. Bush President Richard H. Egdahl, M.D. David D. Tripple, Executive Vice Margaret B.W. Graham President John W. Kendrick John A. Carey, Vice President Marguerite A. Piret William H. Keough, Treasurer David D. Tripple Joseph P. Barri, Secretary Stephen K. West John Winthrop Investment Adviser Pioneering Management Corporation Custodian Brown Brothers Harriman & Co. Independent Public Accountants Arthur Andersen LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Hale and Dorr LLP Shareowner Services and Transfer Agent Pioneering Services Corporation 29 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: Pioneering Services Corporation 60 State Street Boston, Massachusetts 02109 Our toll-free fax 1-800-225-4240 Our Internet e-mail address ask.pioneer@piog.com (for general questions about Pioneer only) Visit our web site: www.pioneerfunds.com This report must be preceded or accompanied by a current Fund prospectus. [logo] PIONEER Pioneer Funds Distributor, Inc. 60 State Street 0698 - 5286 Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc. www.pioneerfunds.com [recycle symbol]Printed on Recycled Paper -----END PRIVACY-ENHANCED MESSAGE-----