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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21108
Pioneer Fundamental Growth Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: March 31
Date of reporting period: April 1, 2005 through March 31, 2006
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
-----------------------
FUNDAMENTAL
GROWTH
FUND
Annual
Report
3/31/06
[LOGO] PIONEER
Investments(R)
Table of Contents
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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 21
Notes to Financial Statements 27
Report of Independent Registered Public Accounting Firm 34
Factors Considered by the Independent Trustees in Approving
the Management Contract 35
Trustees, Officers and Service Providers 41
President's
Dear Shareowners,
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There's a conundrum seen when observing the U.S. economy. In spite of sky high
oil prices and real estate prices starting to soften, the U.S. economy was on a
tear in the first quarter of 2006. Sizzling, roaring, and surging are terms used
recently in headlines to describe the current state of our economy.
Our nation's gross domestic product (GDP), the broadest measure of the economy's
strength, rose at an annual rate of 4.8% in the first quarter, the fastest
growth rate since the third quarter of 2003. Part of this growth is a rebound
from a soft fourth quarter, but there is also real underlying growth. Business
spending is up 14.3% as the caution of previous years is being overcome by the
need for equipment and technology. Consumers are doing their part by pushing the
sales of consumer durables up 20.6% through the purchase of new household goods
and luxury items.
It is difficult to project how long this growth will last, but most economists
tend to agree that it can do so as long as business and consumer demand
continues and inflation remains low.
Foreign markets are also faring well, benefiting from growth-oriented economic
policies, and world economic growth is becoming more broadly based. The Japanese
economy is expanding, and there are signs of a sustained recovery in Europe.
Growth in the emerging economies and developing nations remains solid, with
tremendous strength in China, India and Russia. Looking forward, we expect
strong growth to continue, yet we remain cautious.
Investor confidence, a favorable economic climate and healthy corporate
profitability and cash flow have helped global stock markets continue their
strong performance in 2006.
The broad U.S. stock market is doing extremely well thus far in 2006. Investors
seem to have grown accustomed to companies generally delivering on their
earnings promises, lessening anxiety in the marketplace. Investors are feeling
confident with stocks, especially those of mid-sized and small companies, which
have far outpaced large-cap stocks.
Yet, the Federal Reserve response to the strong economy in the first quarter has
been cautious, weighing whether further interest hikes are necessary.
2
Letter
This concerns some in the financial markets, who have grown accustomed to the
Fed confidently determining the movement of rates in the past.
The Treasury-bond market ended the first quarter with short- and long-term bond
yields almost equal - a flat yield curve. Although municipal-bond yields are not
quite flat, the difference between short- and long-term interest rates is the
smallest it has been since 1989. Even if the Fed's interest rate hikes end soon,
intermediate and long interest rates are still low relative to inflation.
In summary, the economy and financial markets in the U.S. are prospering and the
fundamentals remain, in our view, healthy going forward. However, there are no
guarantees in investing: we know from a long-view of history that sudden shifts
can occur with little warning. We need only look to the natural disasters and
political upheavals of 2005. As such, we continue to pursue our philosophy in
stock and bond portfolio management: global resources dedicated to fundamental
research in the pursuit of opportunities that offer an attractive balance of
risk and reward to help our shareowners grow their assets.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
3
Pioneer Fundamental Growth Fund
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PORTFOLIO MANAGEMENT DISCUSSION 3/31/06
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Backed by persistent economic growth and healthy improvement in corporate
profits, large-company stocks performed strongly during the 12 months ended
March 31, 2006, overcoming the results of short-term volatility in the financial
markets. In the following interview, Christopher M. Galizio and Stephen A.
Balter, co-managers of Pioneer Fundamental Growth Fund, discuss the factors that
affected Fund performance over the 12 months.
Q: How did the Fund perform?
A: The Fund had positive results over its fiscal year. During the 12 months
ended March 31, 2006, Pioneer Fundamental Growth Fund's Class A shares
returned 11.10% at net asset value. In comparison, during the same period,
the benchmark Russell 1000 Growth Index rose 13.14%, while the average
return of the 691 funds in Lipper's large-cap growth category was 14.24%.
Fund performance was positive, but some specific holdings hurt performance
versus the benchmark index. We also trailed the Lipper competitive group
average, primarily because we placed less emphasis on energy stocks than
other growth funds that overweighted the energy sector.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: What were the principal factors that influenced performance during the 12
months?
A: Despite a series of intermittent concerns, including the effects of
dramatically higher energy prices, devastation caused by hurricanes in the
Gulf Coast, and international tensions, stocks continued to perform well
over the fiscal year. Stock averages generally rose on the strength of a
strong economic recovery, persisting since 2003, which has led to steadily
growing profits and improving corporate balance sheets. Believing that the
expansion was evolving from its early fast-growth stage, we began moving
the portfolio's emphasis away from highly cyclical industries and toward
companies with more reasonable valuations and greater
4
Pioneer Fundamental Growth Fund
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prospects to benefit from long-term secular changes to the economy and
society. As we did so, we migrated away from the highly industrial
companies that had done well in the early stages of the recovery. We moved
the portfolio toward a greater focus on companies in sectors such as
information technology, where companies were continuing to innovate and
manufacture productivity-enhancing products, and health care, where trends
such as the aging of the baby boom generation were producing rising demand
for new services and products.
Over the course of the 12 months, the markets were affected by the sharp
rise in energy prices. While this rise helped drive extraordinarily good
performance by companies in energy-related industries, other companies felt
their effects. Retailers including industry-leading Wal-Mart, heavily
dependent on spending by lower- and middle-income consumers, felt the
effects of a squeeze on family budgets. Higher energy costs also
contributed to inflationary pressures and to the profit margins of some
industrial companies that began to feel the impacts of rising prices in
metals and other commodities. Acting as a counter-force to these
inflationary pressures, however, was the impact of technology-related
productivity improvements, and the continued efforts of the Federal Reserve
to restrain inflation by raising short-term interest rates. In that
environment, information technology stocks performed well, helped
principally by increased spending by corporate customers. Technology
companies heavily dependent on sales of personal computers, however, were
less successful as revenue growth slowed.
Q: What types of investments had a positive impact on performance?
A: Our selections in health care helped substantially. Within the health-care
sector, we tried to avoid the large-cap pharmaceutical companies, which
were feeling the effects of competition from generic products as well as
price pressures on drug costs, including from the Medicare program. We
placed greater emphasis on smaller pharmaceutical companies as well as on
biotechnology corporations. Two standout performers among our health-care
holdings were IVAX and Endo Pharmaceuticals, both generic drug
manufacturers. IVAX, which had an excellent pipeline of new and developing
products, was acquired at a premium price by Teva, another generic
manufacturer. The stock price for Endo appreciated during the year after
the company gained approval for a generic version of OxyContin. In
addition, AstraZeneca, a
5
Pioneer Fundamental Growth Fund
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PORTFOLIO MANAGEMENT DISCUSSION 3/31/06 (continued)
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European-based pharmaceutical company, and Cardinal Healthcare, a drug
distribution company, both contributed to performance during the 12 months.
Within the information-technology sector, we had excellent performance from
Cisco Systems, a beneficiary of strong capital investments in information
systems. The growth of Internet-based commerce led to healthy demand for
the routers and other hardware for which Cisco is an industry leader. Other
tech holdings that did well included Corning, a leader in the production of
the technology for flat-panel televisions and computer monitors, and Texas
Instruments, which experienced strong demand for its sophisticated
semiconductors that are used in the latest generation of wireless phones.
We also had good results from some consumer holdings, including pharmacy
chain CVS, which gained new efficiencies through the acquisition of parts
of the Eckerd chain, and Femsa, the Mexican bottling and brewing company
that also operates the largest chain of convenience stores in Mexico.
Q: What were some of the more disappointing investments?
A: Tyco International, an industrial conglomerate, failed to reach its growth
targets as the efforts to turn around operations of some of its subsidiary
companies did not meet expectations.
Two health-care holdings also proved disappointing. Boston Scientific's
stock price declined because of market unease over the company's successful
bid to acquire another cardiac device manufacturer, Guidant. Orthopedic
products company Biomet disappointed investors when it failed to meet its
growth targets, resulting in the resignation of its long-time chief
executive.
Among our information technology positions, Dell was hurt by a slowdown and
increased price competition of personal computer manufacturers, while Intel
faced new competition from other semiconductor developers such as AMD.
We have sold the position in Intel, but we continue to see value and hold
positions in Tyco, Boston Scientific, Biomet and Dell.
6
Pioneer Fundamental Growth Fund
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Q: What is your investment outlook?
A: We continue to maintain an emphasis on secular growth companies, especially
in the technology sector, a group which accounted for almost 30% of Fund
assets at the end of the fiscal year. We have added some companies that
produce the infrastructure hardware for the Internet and that can benefit
from continued advances in telecommunications technology. We have
maintained an emphasis on health-care stocks, which comprised over 25% of
assets on March 31, 2006. However, in health care we are more concerned
about higher stock prices and the effects of expiring patent protection,
increased competition and rising regulatory pressures.
We believe the outlook for the overall economy is good, although
corporations will feel the effects of higher interest rates on their
borrowing costs and rising commodity and energy prices on their profit
margins. In addition, stock prices are not as reasonable as they were a
year ago.
In this environment, we look for moderate results from the stock market,
with the performance edge likely to come from fundamental analysis and
stock selection - areas that are our focus.
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 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.
7
Pioneer Fundamental Growth Fund
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PORTFOLIO SUMMARY 3/31/06
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material]
U.S. Common Stocks 92.6%
Depositary Receipts for International Stocks 5.2
Temporary Cash Investment 2.2%
Sector Distribution
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(As a percentage of equity holdings)
[The following data was represented as a pie chart in the printed material]
Information Technology 30.1%
Health Care 25.2%
Consumer Discretionary 12.9%
Industrials 11.4%
Consumer Staples 9.2%
Financials 4.2%
Energy 2.7%
Materials 1.7%
Utilities 1.6%
Telecommunication Services 1.0%
10 Largest Holdings
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(As a percentage of equity holdings) *
1. Microsoft Corp. 4.99%
2. Cisco Systems, Inc. 4.56
3. General Electric Co. 3.62
4. Texas Instruments, Inc. 3.54
5. Amgen, Inc. 3.53
6. Macrovision Corp. 3.30
7. Home Depot, Inc. 3.08
8. Oracle Corp. 3.00
9. Procter & Gamble Co. 2.94
10. Johnson & Johnson 2.88
* This list excludes temporary cash and derivative instruments. Portfolio
holdings will vary for other periods.
8
Pioneer Fundamental Growth Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
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Class 3/31/06 3/31/05
------- --------- --------
A $10.98 $11.28
Class 3/31/06 12/15/05
------- --------- --------
B $10.95 $10.76
C $10.95 $10.76
Distributions Per Share
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4/1/05 - 3/31/06
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
------- ------------ --------------- --------------
A $0.0578 $0.8736 $0.5742
12/15/05 - 3/31/06
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
------- ------------ --------------- --------------
B $ - $ - $ -
C $ - $ - $ -
9
Pioneer Fundamental Growth Fund
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PERFORMANCE UPDATE 3/31/06 CLASS A SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Fundamental Growth Fund at public offering price,
compared to that of the Russell 1000 Growth Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of March 31, 2006)
Public
Net Asset Offering
Period Value Price
Life-of-Class
(8/22/02) 9.75% 7.96%
1 Year 11.10 4.70
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[The following data was represented as a line chart in the printed material]
Value of $10,000 Investment
Pioneer Russell
Fundamental 1000
Growth Fund Growth Index
8/02 9,425 10,000
3/03 8,866 9,500
3/04 11,765 12,559
3/05 12,412 12,705
3/06 $13,790 $14,374
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
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 performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Russell 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.
10
Pioneer Fundamental Growth Fund
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PERFORMANCE UPDATE 3/31/06 CLASS B SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Fundamental Growth Fund compared to that of the
Russell 1000 Growth Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of March 31, 2006)
Period If If
Held Redeemed
Life-of-Class
(12/15/05) 1.77% -2.23%
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[The following data was represented as a line chart in the printed material]
Value of $10,000 Investment
Pioneer Russell
Fundamental 1000
Growth Fund Growth Index
12/05 10,000 10,000
3/06 $9,979 $10,309
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If Redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied to
withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus for
details.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Russell 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.
11
Pioneer Fundamental Growth Fund
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PERFORMANCE UPDATE 3/31/06 CLASS C SHARES
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Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Fundamental Growth Fund compared to that of the
Russell 1000 Growth Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of March 31, 2006)
Period If If
Held Redeemed
Life-of-Class
(12/15/05) 1.77% 0.77%
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[The following data was represented as a line chart in the printed material]
Value of $10,000 Investment
Pioneer Russell
Fundamental 1000
Growth Fund Growth Index
12/05 10,000 10,000
3/06 $10,269 $10,309
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). "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.
The Russell 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.
12
Pioneer Fundamental Growth Fund
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COMPARING ONGOING FUND EXPENSES
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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 Fundamental Growth Fund
Based on actual returns from October 1, 2005 through March 31, 2006.
Share Class A B C
- --------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00
On 10/1/05**
Ending Account Value $1,044.37 $1,017.70 $1,017.70
On 3/31/06
Expenses Paid During Period* $ 6.44 $ 21.69 $ 21.69
* Expenses are equal to the Fund's annualized expense ratio of 1.29%, 2.15%
and 2.15% for Class A, Class B and Class C shares, respectively, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period) (107/365 for Class B and Class C shares).
** 12/15/05 for Class B and Class C shares.
13
Pioneer Fundamental Growth Fund
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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 Fundamental Growth Fund
Based on a hypothetical 5% return per year before expenses, reflect ing the
period from October 1, 2005 through March 31, 2006.
Share Class A B C
- --------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00
On 10/1/05**
Ending Account Value $1,018.52 $1,008.35 $1,008.35
On 3/31/06
Expenses Paid During Period* $ 6.36 $ 21.59 $ 21.59
* Expenses are equal to the Fund's annualized expense ratio of 1.29%, 2.15%
and 2.15% for Class A, Class B and Class C shares, respectively, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period) (107/365 for Class B and Class C shares).
** 12/15/05 for Class B and Class C shares.
14
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/06
- --------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 98.8%
Energy - 2.7%
Coal & Consumable Fuels - 1.1%
600 Massey Energy Co. $ 21,642
----------
Integrated Oil & Gas - 1.6%
300 ConocoPhillips $ 18,944
490 Repsol SA (A.D.R.) (b) 13,965
----------
$ 32,909
----------
Total Energy $ 54,551
----------
Materials - 1.7%
Diversified Chemical - 1.2%
590 Dow Chemical Co. $ 23,954
----------
Industrial Gases - 0.5%
200 Praxair, Inc. $ 11,030
----------
Total Materials $ 34,984
----------
Capital Goods - 11.2%
Aerospace & Defense - 2.3%
100 L-3 Communications Holdings, Inc. $ 8,579
640 United Technologies Corp. 37,101
----------
$ 45,680
----------
Building Products - 1.4%
680 American Standard Companies, Inc. $ 29,145
----------
Construction, Farm Machinery & Heavy Trucks - 0.6%
160 Deere & Co. $ 12,648
----------
Industrial Conglomerates - 6.9%
2,100 General Electric Co. $ 73,038
490 3M Co. 37,088
1,170 Tyco International, Ltd. 31,450
----------
$ 141,576
----------
Total Capital Goods $ 229,049
----------
Consumer Services - 2.2%
Education Services - 0.7%
390 Career Education Corp.* $ 14,715
----------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Fundamental Growth Fund
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SCHEDULE OF INVESTMENTS 3/31/06 (continued)
- --------------------------------------------------------------------------------
Shares Value
Hotels, Resorts & Cruise Lines - 1.4%
600 Carnival Corp. $ 28,421
----------
Restaurants - 0.1%
108 Tim Hortons, Inc.* $ 2,867
----------
Total Consumer Services $ 46,003
----------
Media - 3.0%
Advertising - 0.4%
100 Omnicom Group $ 8,325
----------
Broadcasting & Cable TV - 2.0%
4,840 Liberty Media Corp.* $ 39,736
----------
Movies & Entertainment - 0.6%
320 Viacom, Inc. (Class B) $ 12,416
----------
Total Media $ 60,477
----------
Retailing - 7.5%
Apparel Retail - 4.5%
700 Abercrombie & Fitch Co. $ 40,810
840 Ross Stores, Inc. 24,520
1,030 TJX Companies, Inc. 25,565
----------
$ 90,895
----------
Home Improvement Retail - 3.0%
1,470 Home Depot, Inc. $ 62,181
----------
Total Retailing $ 153,076
----------
Food & Drug Retailing - 1.9%
Drug Retail - 1.9%
1,320 CVS Corp. $ 39,428
----------
Total Food & Drug Retailing $ 39,428
----------
Food, Beverage & Tobacco - 3.6%
Soft Drinks - 0.9%
200 Fomento Economico Mexicano SA de C.V. $ 18,332
----------
Tobacco - 2.7%
780 Altria Group, Inc. $ 55,271
----------
Total Food, Beverage & Tobacco $ 73,603
----------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Household & Personal Products - 3.6%
Household Products - 2.9%
1,030 Procter & Gamble Co. $ 59,349
----------
Personal Products - 0.7%
430 Avon Products, Inc. $ 13,403
----------
Total Household & Personal Products $ 72,752
----------
Health Care Equipment & Services - 10.9%
Health Care Distributors - 1.8%
490 Cardinal Health, Inc. $ 36,515
----------
Health Care Equipment - 5.8%
640 Biomet, Inc. $ 22,733
2,410 Boston Scientific Corp.* 55,551
510 Guidant Corp. 39,811
----------
$ 118,095
----------
Health Care Services - 1.1%
890 IMS Health, Inc. $ 22,935
----------
Health Care Supplies - 1.1%
420 Cooper Companies, Inc. $ 22,693
----------
Managed Health Care - 1.1%
400 United Healthcare Group, Inc. $ 22,344
----------
Total Health Care Equipment & Services $ 222,582
----------
Pharmaceuticals & Biotechnology - 14.0%
Biotechnology - 6.3%
980 Amgen, Inc.* $ 71,295
1,000 Cubist Pharmaceuticals, Inc.* 22,970
290 Gilead Sciences, Inc.* 18,043
440 Vertex Pharmaceuticals, Inc.* 16,100
----------
$ 128,408
----------
Pharmaceuticals - 7.7%
590 Astrazeneca Plc (A.D.R.) $ 29,636
500 Eli Lilly & Co. 27,650
980 Johnson & Johnson 58,036
666 Par Pharmaceutical Co., Inc.* 18,768
The accompanying notes are an integral part of these financial statements. 17
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/06 (continued)
- --------------------------------------------------------------------------------
Shares Value
Pharmaceuticals - continued
578 Teva Pharmaceutical Industries, Ltd. $ 23,802
----------
$ 157,892
----------
Total Pharmaceuticals & Biotechnology $ 286,300
----------
Banks - 0.5%
Diversified Banks - 0.5%
190 Wachovia Corp. $ 10,650
----------
Total Banks $ 10,650
----------
Diversified Financials - 2.7%
Consumer Finance - 1.5%
600 American Express Co. $ 31,530
----------
Investment Banking & Brokerage - 1.2%
300 Merrill Lynch & Co., Inc. $ 23,628
----------
Total Diversified Financials $ 55,158
----------
Insurance - 0.9%
Multi-Line Insurance - 0.9%
290 American International Group, Inc. $ 19,166
----------
Total Insurance $ 19,166
----------
Software & Services - 11.2%
Systems Software - 11.2%
3,009 Macrovision Corp.* $ 66,649
3,700 Microsoft Corp. 100,676
4,420 Oracle Corp.* 60,510
----------
$ 227,835
----------
Total Software & Services $ 227,835
----------
Technology Hardware & Equipment - 14.2%
Communications Equipment - 9.1%
4,250 Cisco Systems, Inc.* $ 92,098
500 Corning, Inc.* 13,455
145 F5 Networks, Inc.* 10,511
2,300 Juniper Networks, Inc.* 43,976
1,100 Motorola, Inc. 25,201
----------
$ 185,241
----------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Computer Hardware - 5.1%
440 Apple Computer, Inc.* $ 27,597
1,950 Dell, Inc.* 58,031
800 Palm, Inc.*(b) 18,528
----------
$ 104,156
----------
Total Technology Hardware & Equipment $ 289,397
----------
Semiconductors - 4.5%
Semiconductors - 4.5%
200 Himax Technologies, Inc. (A.D.R.)* $ 1,750
2,200 Texas Instruments, Inc. 71,434
700 Xilinx, Inc.*(b) 17,822
----------
$ 91,006
----------
Total Semiconductors $ 91,006
----------
Telecommunication Services - 1.0%
Wireless Telecommunication Services - 1.0%
980 Vodafone Group Plc (A.D.R.) $ 20,482
----------
Total Telecommunication Services $ 20,482
----------
Utilities - 1.5%
Independent Power Producer & Energy Traders - 1.5%
700 TXU Corp. $ 31,332
----------
Total Utilities $ 31,332
----------
TOTAL COMMON STOCKS
(Cost $1,897,159) $2,017,831
----------
TEMPORARY CASH INVESTMENT - 2.2%
Security Lending Collateral - 2.2%
44,227 Securities Lending Investment Fund, 4.67% $ 44,227
----------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $44,227) $ 44,227
----------
TOTAL INVESTMENT IN SECURITIES - 101.0%
(Cost $1,941,386)(a) $2,062,058
----------
OTHER ASSETS AND LIABILITIES - (1.0)% $ (20,017)
----------
TOTAL NET ASSETS - 100.0% $2,042,041
==========
The accompanying notes are an integral part of these financial statements. 19
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/06 (continued)
- --------------------------------------------------------------------------------
* Non-income producing security.
(A.D.R.) American Depositary Receipt.
(a) At March 31, 2006, the net unrealized gain on investments based on
cost for federal income tax purposes of $1,959,442 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $161,073
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (58,457)
--------
Net unrealized gain $102,616
========
(b) At March 31, 2006, the following securities were out on loan:
Shares Security Value
665 Palm, Inc.* $15,401
465 Repsol SA (A.D.R.) 13,253
570 Xilinx, Inc.* 14,512
-------
Total $43,166
=======
Purchases and sales of securities (excluding temporary cash investments) for the
year ended March 31, 2006 aggregated $1,915,989 and $1,802,769, respectively.
20 The accompanying notes are an integral part of these financial statements.
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 3/31/06
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including securities
loaned of $43,166) (cost $1,941,386) $2,062,058
Cash 53,484
Receivables -
Investment securities sold 42,393
Dividends, interest and foreign taxes withheld 1,752
Due from Pioneer Investment Management, Inc. 20,828
Other 1,954
----------
Total assets $2,182,469
----------
LIABILITIES:
Payables -
Investment securities purchased $ 35,412
Upon return of securities loaned 44,227
Due to affiliates 8,857
Accrued expenses 51,932
----------
Total liabilities $ 140,428
----------
NET ASSETS:
Paid-in capital $1,885,621
Accumulated net realized gain on investments 35,748
Net unrealized gain on investments 120,672
----------
Total net assets $2,042,041
----------
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $1,728,979/157,423 shares) $ 10.98
==========
Class B (based on $211,005/19,262 shares) $ 10.95
==========
Class C (based on $102,057/9,321 shares) $ 10.95
==========
MAXIMUM OFFERING PRICE:
Class A ($10.98 [divided by] 94.25%) $ 11.65
==========
The accompanying notes are an integral part of these financial statements. 21
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 3/31/06
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $208) $19,766
Interest 1,310
Income from securities loaned, net 144
-------
Total investment income $ 21,220
---------
EXPENSES:
Management fees $13,387
Transfer agent fees and expenses
Class A 3,712
Class B 1,485
Class C 848
Distribution fees
Class A 1,052
Class B 452
Class C 289
Administrative reimbursements 18,570
Custodian fees 16,706
Registration fees 2,497
Professional fees 35,476
Printing expense 7,869
Fees and expenses of nonaffiliated trustees 8,348
Miscellaneous 2,168
-------
Total expenses $ 112,859
Less management fees waived and
expenses reimbursed by Pioneer
Investment Management, Inc. (89,263)
Less fees paid indirectly (3)
---------
Net expenses $ 23,593
---------
Net investment loss $ (2,373)
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 134,416
---------
Change in net unrealized gain on investments $ 56,151
---------
Net gain on investments $ 190,567
---------
Net increase in net assets resulting from operations $ 188,194
=========
22 The accompanying notes are an integral part of these financial statements.
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 3/31/06 and 3/31/05
Year Ended Year Ended
3/31/06 3/31/05
FROM OPERATIONS:
Net investment income (loss) $ (2,373) $ 8,657
Net realized gain on investments 134,416 272,479
Change in net unrealized gain (loss) on investments 56,151 (189,108)
---------- ----------
Net increase in net assets resulting from
operations $ 188,194 $ 92,028
---------- ----------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.06 and $0.00 per share, respectively) $ (8,670) $ -
Net realized gain:
Class A ($1.45 and $1.27 per share, respectively) (217,170) (189,810)
---------- ----------
Total distributions to shareowners $ (225,840) $ (189,810)
---------- ----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 390,524 $ -
Cost of shares repurchased (2,684) -
---------- ----------
Net increase in net assets resulting from
Fund share transactions $ 387,840 $ -
---------- ----------
Net increase (decrease) in net assets $ 350,194 $ (97,782)
NET ASSETS:
Beginning of year 1,691,847 1,789,629
---------- ----------
End of year (including undistributed net investment
income of $0 and $8,657, respectively) $2,042,041 $1,691,847
========== ==========
CLASS A* '06 Shares '06 Amount
Shares sold 7,674 $ 83,794
Less shares repurchased (251) (2,684)
---------- ----------
Net increase 7,423 $ 81,110
========== ==========
CLASS B*
Shares sold 19,262 $ 206,489
---------- ----------
Net increase 19,262 $ 206,489
========== ==========
CLASS C*
Shares sold 9,321 $ 100,241
---------- ----------
Net increase 9,321 $ 100,241
========== ==========
* Class A, Class B and Class C shares were first publicly offered on December
15, 2005.
The accompanying notes are an integral part of these financial statements. 23
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
8/22/02 (a)
Year Ended Year Ended Year Ended to
3/31/06 3/31/05 3/31/04 3/31/03
------- ------- ------- -------
Class A
Net asset value, beginning of period $ 11.28 $ 11.93 $ 8.99 $ 10.00
------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.01) $ 0.06 $ (0.03) $ (0.01)
Net realized and unrealized gain (loss) on investments 1.22 0.56 2.97 (1.00)
------- ------- ------- -------
Net increase (decrease) in net assets from investment operations $ 1.21 $ 0.62 $ 2.94 $ (1.01)
------- ------- ------- -------
Distributions to shareowners:
Net investment income (0.06) - - -
Net realized gain (1.45) (1.27) - -
------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.30) $ (0.65) $ 2.94 $ (1.01)
------- ------- ------- -------
Net asset value, end of period $ 10.98 $ 11.28 $ 11.93 $ 8.99
======= ======= ======= =======
Total return* 11.10% 5.50% 32.70% (10.10)%
Ratio of net expenses to average net assets+ 1.29% 1.30% 1.30% 1.30%**
Ratio of net investment income (loss) to average net assets+ (0.11)% 0.51% (0.33)% (0.27)%**
Portfolio turnover rate 102% 236% 41% 6%
Net assets, end of period (in thousands) $ 1,729 $ 1,692 $ 1,790 $ 1,349
Ratios with no waiver of management fees and assumption of expenses by
PIM and no reductions for fees paid indirectly:
Net expenses 6.09% 6.00% 5.38%*** 13.80%**
Net investment loss (4.91)% (4.20)% (4.41)%*** (12.77)%**
Ratios with waiver of management fees and assumption of expenses by
PIM and reductions for fees paid indirectly:
Net expenses 1.29% 1.30% 1.30% 1.30%**
Net investment income (loss) (0.11)% 0.51% (0.33)% (0.27)%**
(a) Class A shares commenced operations on August 22, 2002 and were first
publicly offered on December 15, 2005.
* 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, and no sales
charges. Total return would be reduced if sales charges were taken into
account. Total return is not annualized.
** Annualized.
*** In the absence of the negative registration fees in the statement of
operations, which relates to a change in estimate for registration fees
in the period ended March 2003, the gross expense ratio to average net
assets would have been 5.31%. As a result of the expense limitation
arrangement (see footnote 2), there would be no effect on the per share
operating performance, total return and the net expense and net
investment loss ratios to average net assets.
+ Ratios with no reduction for fees paid indirectly.
24 The accompanying notes are an integral part of these financial statements.
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
12/15/05 (a)
to
3/31/06
---------
Class B
Net asset value, beginning of period $ 10.76
---------
Increase (decrease) from investment operations:
Net investment loss $ (0.02)
Net realized and unrealized gain on investments 0.21
---------
Net increase in net assets from investment operations $ 0.19
---------
Net asset value, end of period $ 10.95
=========
Total return* 1.77%(b)
Ratio of net expenses to average net assets+ 2.15%**
Ratio of net investment loss to average net assets+ (0.71)%**
Portfolio turnover rate 102%
Net assets, end of period (in thousands) $ 211
Ratios with no waiver of management fees and assumption
of expenses by PIM and no reductions for fees
paid indirectly:
Net expenses 11.90%**
Net investment loss (10.46)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reductions for fees paid indirectly:
Net expenses 2.15%**
Net investment loss (0.71)%**
(a) Class B shares were first publicly offered on December 15, 2005.
(b) Not annualized.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 25
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
12/15/05 (a)
to
3/31/06
---------
Class C
Net asset value, beginning of period $ 10.76
---------
Increase (decrease) from investment operations:
Net investment loss $ (0.02)
Net realized and unrealized gain on investments 0.21
---------
Net increase in net assets from investment operations $ 0.19
---------
Net asset value, end of period $ 10.95
=========
Total return* 1.77%(b)
Ratio of net expenses to average net assets+ 2.15%**
Ratio of net investment loss to average net assets+ (0.80)%**
Portfolio turnover rate 102%
Net assets, end of period (in thousands) $ 102
Ratios with no waiver of management fees and assumption
of expenses by PIM and no reductions for fees
paid indirectly:
Net expenses 11.50%**
Net investment loss (10.15)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reductions for fees paid indirectly:
Net expenses 2.15%**
Net investment loss (0.80)%**
(a) Class C shares were first publicly offered on December 15, 2005.
(b) Not annualized.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/06
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Fundamental Growth Fund (the Fund), formerly Pioneer Large Cap Growth
Fund, is a Delaware statutory trust registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund was
organized on March 12, 2002, and commenced operations on August 22, 2002. Prior
to August 22, 2002, the Fund had no operations other than those relating to
organizational matters and the initial capitalization of the Fund by Pioneer
Funds Distributor, Inc. (PFD). The Fund's shares, including Class A shares, were
first publicly offered on December 15, 2005. Prior to December 15, 2005 all Fund
shares outstanding were owned by PFD. The Fund's investment objective is to seek
long-term capital growth.
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 shareowners, respectively.
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
periods. Actual results could differ from those estimates. The following is a
summary of significant accounting policies followed by the Fund in the
preparation of its financial statements, which are consistent with those
policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value of
the Fund is computed once daily, on each day the New York Stock Exchange
(NYSE) is open, as of the close of regular trading on the NYSE. In
computing the net asset value, securities
27
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/06 (continued)
- --------------------------------------------------------------------------------
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. As of March 31, 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 exercise of reasonable diligence. Interest income, including
interest on income bearing cash accounts, is recorded on the accrual basis.
Dividends and interest are reported net of unrecoverable foreign taxes
withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
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 investment risks.
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 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
28
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 distributions paid during the years ended March 31,
2005 and March 31, 2006 were as follows:
- --------------------------------------------------------------------------------
2006 2005
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary Income $ 139,710 $ 6,855
Long-term capital gain 86,130 182,955
--------- ---------
Total $ 225,840 $ 189,810
========= =========
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at March 31, 2006.
- --------------------------------------------------------------------------------
2006
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 9,949
Undistributed long-term gain 43,855
Unrealized appreciation 102,616
---------
Total $ 156,420
=========
- --------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appreciation is
attributable to the tax deferral of losses on wash sales.
At March 31, 2006, the Fund has reclassified $2,386 to decrease
distributions in excess of net investment income and $2,386 to decrease
accumulated net realized gain on investments to reflect permanent book/tax
differences. The reclassification has no impact on the net assets of the
Fund and is designed to present the Fund's capital accounts on a tax basis.
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
29
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/06 (continued)
- --------------------------------------------------------------------------------
Italiano), earned $44 in underwriting commissions on the sale of Class A
shares during the year ended March 31, 2006.
D. Security Lending
The Fund lends securities in the 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 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 fair value 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 Brown Brothers
Harriman & Co., the Fund's custodian.
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. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively (see Note 4). 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
30
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different transfer
agent and distribution fees.
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.
PIM has agreed not to impose its management fee and to assume other operating
expenses of the Fund to the extent necessary to limit expenses to 1.25%, 2.15%
and 2.15% of the average daily net assets attributable to Class A, Class B and
Class C shares, respectively. These expense limitations became effective
December 15, 2005 and are in effect through August 1, 2008 for Class A shares
and through August 1, 2006 for Class B and Class C shares. Prior to December 15,
2005, Pioneer had voluntarily agreed not to charge all or a portion of its
management fee and, if necessary, to limit other ordinary operating expenses to
the extent required to reduce Class A expenses to 1.30% of the Fund's average
daily net assets attributable to Class A shares.
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 March 31, 2006, $235 was payable to PIM
related to management fees, administrative costs and certain other services and
is included in due to affiliates.
3. Transfer Agent
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly owned
indirect subsidiary of UniCredito Italiano, provides substantially all transfer
agent and shareowner services to the Fund at
31
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/06 (continued)
- --------------------------------------------------------------------------------
negotiated rates. Included in due to affiliates is $7,231 in transfer agent fees
payable to PIMSS at March 31, 2006.
4. Distribution Plan
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the average daily net assets attributable to Class A
shares in reimbursement of its actual expenditures to finance activities
primarily intended to result in the sale of Class A shares. Pursuant to the
Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of the average daily
net assets attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for personal
services and/or account maintenance services or distribution services with
regard to Class B and Class C shares. Included in due to affiliates is $1,391 in
distribution fees payable to PFD at March 31, 2006.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). Effective December 15, 2005, 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. Class B shares subscribed on or after December 15,
2005 that are redeemed within five years of purchase are subject to a CDSC at
declining rates beginning at 4.00%, based on the lower of cost or market value
of shares being redeemed. 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 year ended March 31, 2006, there were no CDSCs paid to PFD.
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the year ended March 31, 2006, the Fund's expenses were
reduced by $3 under such arrangements.
32
Pioneer Fundamental Growth Fund
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ADDITIONAL INFORMATION (unaudited)
For the fiscal year ended March 31, 2006, certain dividends paid by the Fund may
be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth
Tax Relief Reconciliation Act (the Act) of 2003. The Fund intends to designate
up to the maximum amount of such dividends allowable under the Act, as taxed at
a maximum rate of 15%. Complete information will be computed and reported in
conjunction with your 2006 form 1099-DIV.
The qualifying percentage of the Fund's ordinary income dividends for the
purpose of the corporate dividends received deduction was 12.23%.
33
Pioneer Fundamental Growth Fund
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees and the Shareowners of
Pioneer Fundamental Growth Fund:
We have audited the accompanying statement of assets and liabilities of Pioneer
Fundamental Growth Fund (formerly Pioneer Large Cap Growth Fund) (the "Fund"),
including the schedule of investments, as of March 31, 2006, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of March 31, 2006, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. 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 Fundamental Growth Fund at March 31, 2006, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the four
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
May 12, 2006
34
Pioneer Fundamental Growth Fund
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FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT
- --------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees") vote
separately annually to approve the Fund's management contract (the "Management
Contract"). The Trustees have determined that the terms of the Management
Contract are fair and reasonable and that renewal of the contract will enable
the Fund to receive quality investment advisory services at a cost deemed
reasonable and in the best interests of the Fund and its shareholders. In making
such determinations, the Independent Trustees relied upon the assistance of
counsel to the Independent Trustees and counsel to the Fund.
Throughout the year, the Independent Trustees regularly met in executive session
separately from the Interested Trustees of the Fund and any officer of Pioneer
Investment Management, Inc., the Fund's adviser (the "Investment Adviser"), or
its affiliates. While the Trustees, including the Independent Trustees, act on
all major matters relating to the Fund, a significant portion of the activities
of the Board of Trustees (including certain of those described herein) is
conducted through committees, the members of which are comprised exclusively of
Independent Trustees. Such committee meetings are attended by officers of the
Fund or the Investment Adviser to the extent requested by the members of the
committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract, and relied
upon their knowledge, resulting from their meetings throughout the year, of the
Investment Adviser, its services and the Fund. Both in meetings specifically
dedicated to renewal of the Management Contract and at other meetings during the
course of the year, the Trustees, including the Independent Trustees, received
materials relating to the Investment Adviser's investment and management
services under the Management Contract. These materials included (i) information
on the investment performance of the Fund, a peer group of funds and an index,
in each case selected by the Independent Trustees for this purpose, (ii) sales
and redemption data in respect to the Fund, (iii) the general investment outlook
in the markets in which the Fund invests, (iv) arrangements in respect of the
distribution of the Fund's shares, (v) the procedures employed to determine the
value of each of the Fund's assets, (vi) the Investment Adviser's management of
the relationships with the Fund's unaffiliated service providers, (vii) the
record of compliance with the Fund's
35
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
investment policies and restrictions and with the Fund's Code of Ethics and the
structure and responsibilities of the Investment Adviser's compliance
department, (viii) the nature, cost and character of non-investment management
services provided by the Investment Adviser and its affiliates and (ix) the
disclosures included in the Fund's prospectuses and reports to shareholders. The
Trustees also reviewed information regarding the potential for each of the Fund
and the Investment Adviser to benefit from further economies of scale in the
management of the Fund in light of reasonable growth expectations for the Fund,
the break points in the Fund's management fee and of a peer group of funds
selected by the Independent Trustees for this purpose and certain of the Fund's
expenses that are not incurred as fees based on a percentage of net assets.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested and the Investment
Adviser provided additional information in order to evaluate the quality of the
Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one year period for the Fund and a
peer group selected by the Independent Trustees for this purpose, (2) management
fees incurred by a peer group of funds selected by the Independent Trustees for
this purpose, (3) the advisory fees of comparable portfolios of other clients of
the Investment Adviser, (4) expense ratios for the Fund and a peer group of
funds selected by the Independent Trustees for this purpose, (5) the overall
organization of the Investment Adviser, (6) the Investment Adviser's financial
results and condition, including its and certain of its affiliates profitability
from services performed for the Fund, (7) transfer agency fees and
administrative reimbursements paid to the Investment Adviser or affiliates, (8)
investment management staffing, and (9) operating expenses paid to third
parties. The Trustees also reviewed information regarding the potential for each
of the Fund and the Investment Adviser to benefit from further economies of
scale in the management of the Fund in light of reasonable growth expectations
for the Fund, the break points in the Fund's management fee and of a peer group
of funds selected by the Independent Trustees for this purpose and certain of
the Fund's expenses that are not incurred as fees based on a percentage of net
assets.
36
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following summarizes factors considered by the Trustees in connection with
reviewing the information described above and their renewal of the Fund's
Management Contract. The Trustees did not identify any single factor as
all-important or controlling, and the summary does not detail all the matters
that were considered.
A. Ancillary Benefits to Shareholders. The Trustees considered the benefits to
shareholders of investing in a Fund that is part of a large number of
investment companies offering a variety of investment disciplines and
providing for a large variety of Fund and shareholder services.
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Fund's investment objective and regulatory
requirements. The Trustees also reviewed the Fund's investment performance,
as well as the Fund's performance based upon total return compared to both
the performance of a peer group and the results of an index, in each case
selected by the Independent Trustees for this purpose. The Fund's
performance, based on total return, was in the first quintile of the peer
group for the 12 months ended June 30, 2005. (In all quintile rankings
referred to throughout this discussion first quintile is most favorable to
the Fund's shareholders. Thus, highest relative performance would be first
quintile and lowest relative expenses also would be first quintile.) The
Trustees concluded that the performance of the Fund supported the
continuation of the Management Contract.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of
the Fund and the Fund's investment objective and discipline. The
Independent Trustees also have had discussions with senior management of
the Investment Adviser responsible for investment operations and the senior
management of the Investment Adviser's equities group. Among other things,
the Trustees considered the number, education and experience of the
Investment Adviser's investment staff and their use of technology and
emphasis on analytics in view of the risk profile of securities in which
the Fund invests. The Trustees
37
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
concluded that the Investment Adviser had the quality and depth of
personnel and the well-developed methods essential to performing its duties
under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality, cost and extent of other services provided to shareholders of the
Fund, including administrative and shareholder services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness of the arrangements for reimbursement of the
Investment Adviser's out-of-pocket costs and expenses, including overhead,
for certain administrative services that the Investment Adviser is not
required to provide under the Management Contract. The Trustees also
considered the nature and extent of the other services provided by the
Investment Adviser's affiliates under other contracts and its supervision
of third party service providers. Based on these considerations, the
Trustees concluded that the nature, quality, cost and extent of such
services are satisfactory and reliable and serve the shareholders of the
Fund well.
E. Management Fee and Expenses. The Trustees considered the Investment
Adviser's fee under the Management Contract relative to the management fees
charged by a peer group of funds selected by the Independent Trustees for
this purpose using data provided by an independent third party. The Fund's
management fee for the 12 months ended June 30, 2005 was in the second
quintile relative to the management fees paid by the other funds in that
peer group for the comparable period. The Trustees determined that the fee
under the Management Contract was reasonable and fair in light of both the
overall nature and quality of services provided by the Investment Adviser
and the fees charged by the funds in the peer group. The Trustees also
considered the Trust's expense ratio for the 12 months ended June 30, 2005
and expense ratios for the comparable period of a peer group of funds
selected by the Independent Trustees for this purpose. The Trust's expense
ratio (after giving effect to expense limitations) was in the second
quintile of the applicable peer group for the most recent fiscal year of
the peer
38
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
group. The Trustees concluded that the Trust's expense ratio was capped at
a level that was reasonable relative to comparable funds.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer Funds,
including details with respect to the Fund. This consideration included a
review of the Investment Adviser's methodology in allocating certain of its
costs to the management of each Fund. The Trustees also considered the
financial results realized by the Investment Adviser in connection with the
operation of the Fund. They further considered the profits realized by the
Investment Adviser and its affiliates from non-fund businesses that may
benefit from or be related to the Fund's business. The Trustees considered
the Investment Adviser's profit margins in comparison with the limited
available industry data. The Trustees concluded that the Investment
Adviser's profits from management of the Pioneer Funds, including the
financial results derived from the Fund, bear a reasonable relationship to
the services rendered and are fair for the management of the Fund.
G. Economies of Scale. The Trustees considered whether the Fund has
appropriately benefited from any economies of scale, and whether there was
potential for realization of any further economies of scale. The Trustees
concluded that, given current and anticipated asset levels, a breakpoint in
the management fee was not necessary. As the assets increase, the Trustees
will continue to evaluate annually the appropriateness of breakpoints.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Fund, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates, including fees for services such as shareholder services. The
Trustees also considered the receipt of sales loads and payments under Rule
12b-1 plans in respect to the Pioneer Funds (including the Fund), and
benefits to the Investment Adviser from the use of "soft" commission
dollars to pay for research services. The Trustees
39
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
further considered the revenues and profitability of the Investment
Adviser's businesses other than the fund business, including the Investment
Adviser's institutional investment advisory business. The Trustees
considered the intangible benefits that accrue to the Investment Adviser
and its affiliates by virtue of its relationship with the Fund and the
Pioneer Funds as a group. The Trustees concluded that all these types of
benefits accruing to the Investment Adviser were reasonable in the context
of the overall relationship between the Investment Adviser and the Fund.
Conclusion. The Trustees, in light of the Investment Adviser's overall
performance, considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their evaluation of all material
factors deemed relevant and the advice of independent counsel, the Trustees
concluded that the Management Contract with the Fund is fair and reasonable and
voted to approve the continuation of the Management Contract for another year.
40
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's affairs.
The officers of the Fund are responsible for the Fund's operations. The Fund's
Trustees and officers are listed below, together with their principal
occupations during the past five years. Trustees who are interested persons of
the Fund within the meaning of the Investment Company Act of 1940 are referred
to as Interested Trustees. Trustees who are not interested persons of the Fund
are referred to as Independent Trustees. Each of the Trustees (except Mr. Hood
and Mr. West) serve as a Trustee of the 91 U.S. registered investment portfolios
for which Pioneer Investment Management, Inc. ("Pioneer") serves as investment
adviser (the "Pioneer Funds"). Mr. Hood and Mr. West serve as Trustees for 35 of
the 91 Pioneer Funds. The address for all Interested Trustees and all officers
of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Fund's statement of additional information provides more detailed
information regarding the Fund's Trustees and is available upon request, without
charge, by calling 1-800-225-6292.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is publicly available to shareowners
at www.pioneerfunds.com and on the SEC's web site at http://www.sec.gov.
41
Pioneer Fundamental Growth Fund
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INTERESTED TRUSTEES
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation Other Directorships
Name and Age With the Fund and Term of Office During Past Five Years Held by this Trustee
John F. Cogan, Jr. (79)* Chairman of the Trustee since 2002. Deputy Chairman and a Director of Chairman and
Board, Serves until successor Pioneer Global Asset Management S.p.A. Director of ICI
Trustee and President trustee is elected or ("PGAM"); Non-Executive Chairman and a Mutual Insurance
earlier retirement or Director of Pioneer Investment Company; Director of
removal. Management USA Inc. ("PIM-USA"); Harbor Global
Chairman and a Director of Pioneer; Company, Ltd.
Director of Pioneer Alternative
Investment Management Limited
(Dublin); President and a Director of
Pioneer Alternative Investment
Management (Bermuda) Limited and
affiliated funds; Director of
PIOGLOBAL Real Estate Investment Fund
(Russia); Director of Nano-C, Inc.
(since 2003); Director of Cole
Investment Corporation (since 2004);
Director of Fiduciary Counseling Inc.;
President and Director of Pioneer
Funds Distributor, Inc. ("PFD");
President of all of the Pioneer Funds;
and Of Counsel, Wilmer Cutler
Pickering Hale and Dorr LLP (counsel
to PIM-USA and the Pioneer Funds).
*Mr. Cogan is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Osbert M. Hood (53)** Trustee and Trustee since 2003. President and Chief Executive Officer, None
Executive Vice Serves until successor PIM-USA since May 2003 (Director since
President trustee is elected or January 2001); President and Director
earlier retirement or of Pioneer since May 2003; Chairman
removal. and Director of Pioneer Investment
Management Shareholder Services, Inc.
("PIMSS") since May 2003; Executive
Vice President of all of the Pioneer
Funds since June 2003; Executive Vice
President and Chief Operating Officer
of PIM-USA, November 2000 to May 2003.
**Mr. Hood is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
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42
Pioneer Fundamental Growth Fund
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INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Positions Held Length of Service Principal Occupation Other Directorships
Address With the Fund and Term of Office During Past Five Years Held by this Trustee
David R. Bock **(62) Trustee Trustee since 2005. Senior Vice President and Chief Director of The
3050 K. Street NW, Serves until successor Financial Officer, I-trax, Inc. Enterprise Social
Washington, DC 20007 trustee is elected or (publicly traded health care services Investment Company
earlier retirement or company) (2001 - present); Managing (privately-held
removal. Partner, Federal City Capital Advisors affordable housing
(boutique merchant bank) (2002 to finance company);
2004); Executive Vice President and Director of New York
Chief Financial Officer, Pedestal Inc. Mortgage Trust
(internet-based mortgage trading (publicly traded
company) (2000 - 2002). mortgage REIT)
**Mr. Bock became a Trustee of the Fund on January 1, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (57) Trustee Trustee since 2002. President, Bush International Director of Brady
3509 Woodbine Street, Serves until (international financial advisory Corporation
Chevy Chase, MD 20815 successor trustee firm). (industrial
is elected or earlier identification and
retirement or removal. specialty coated
material products
manufacturer),
Mortgage Guaranty
Insurance
Corporation, and
Briggs & Stratton,
Inc. (engine
manufacturer)
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (58) Trustee Trustee since 2002. Founding Director, The Winthrop Group, None
1001 Sherbrooke Street West, Serves until successor Inc. (consulting firm); Desautels,
Montreal, Quebec, Canada trustee is elected or Faculty of Management, McGill
H3A 1G5 earlier retirement or University.
removal.
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43
Pioneer Fundamental Growth Fund
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- --------------------------------------------------------------------------------
Name, Age and Positions Held Length of Service Principal Occupation Other Directorships
Address With the Fund and Term of Office During Past Five Years Held by this Trustee
Thomas J. Perna (55) Trustee Trustee since 2006. Private investor (2004 - present); Director of
89 Robbins Avenue, Serves until successor Senior Executive Vice President, The Quadriserv Inc.
Berkeley Heights, NJ 07922 trustee is elected or Bank of New York (financial and (technology products
earlier retirement or securities services) (1986 - 2004). for securities
removal. lending industry)
- ------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (57) Trustee Trustee since 2002. President and Chief Executive Officer, Director of New
One Boston Place, 28th Floor, Serves until successor Newbury, Piret & Company, Inc. America High Income
Boston, MA 02108 trustee is elected or (investment banking firm). Fund, Inc.
earlier retirement or (closed-end
removal. investment company)
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (77) Trustee Trustee since 2002. Senior Counsel, Sullivan & Cromwell Director, The Swiss
125 Broad Street, Serves until successor (law firm). Helvetia Fund, Inc.
New York, NY 10004 trustee is elected or (closed-end
earlier retirement or investment company)
removal. and AMVESCAP PLC
(investment
managers)
- ------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (69) Trustee Trustee since 2002. President, John Winthrop & Co., Inc. None
One North Adgers Wharf, Serves until successor (private investment firm).
Charleston, SC 29401 trustee is elected or
earlier retirement or
removal.
- ------------------------------------------------------------------------------------------------------------------------------------
44
Pioneer Fundamental Growth Fund
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FUND OFFICERS
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation Other Directorships
Name and Age With the Fund and Term of Office During Past Five Years Held by this Officer
Dorothy E. Bourassa (58) Secretary Since September, Secretary of PIM-USA; Senior Vice None
2002. Serves President - Legal of Pioneer; and
at the discretion of Secretary/Clerk of most of PIM-USA's
the Board. subsidiaries; Secretary of all of the
Pioneer Funds since September 2003
(Assistant Secretary from November
2000 to September 2003).
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (41) Assistant Since September, Assistant Vice President and Senior None
Secretary 2003. Serves at Counsel of Pioneer since July 2002;
the discretion of Vice President and Senior Counsel of
the Board. BISYS Fund Services, Inc. (April 2001
to June 2002); Senior Vice President
and Deputy General Counsel of Funds
Distributor, Inc. (July 2000 to April
2001; Assistant Secretary of all
Pioneer Funds since September 2003.
- ------------------------------------------------------------------------------------------------------------------------------------
David C. Phelan (48) Assistant Since September, Partner, Wilmer Cutler Pickering Hale None
Secretary 2003. Serves at and Dorr LLP; Assistant Secretary of
the discretion of all Pioneer Funds since September
the Board. 2003.
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (60) Treasurer Since November, Vice President - Fund Accounting, None
2000. Serves at Administration and Custody Services of
the discretion of Pioneer; and Treasurer of all of the
the Board. Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (46) Assistant Since November, Deputy Treasurer of Pioneer since None
Treasurer 2004. Serves 2004; Treasurer and Senior Vice
at the discretion President, CDC IXIS Asset Management
of the Board. Services from 2002 to 2003; Assistant
Treasurer and Vice President, MFS
Investment Management from 1997 to
2002; and Assistant Treasurer of all
of the Pioneer Funds since November
2004.
- ------------------------------------------------------------------------------------------------------------------------------------
45
Pioneer Fundamental Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation Other Directorships
Name and Age With the Fund and Term of Office During Past Five Years Held by this Officer
Luis I. Presutti (40) Assistant Since 2002. Serves Assistant Vice President - Fund None
Treasurer at the discretion Accounting, Administration and Custody
of the Board. Services of Pioneer; and Assistant
Treasurer of all of the Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (47) Assistant Since 2002. Fund Accounting Manager - Fund None
Treasurer Serves at the Accounting, Administration and Custody
discretion of Services of Pioneer; and Assistant
the Board. Treasurer of all of the Pioneer Funds
since May 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (32) Assistant Since September, Fund Administration Manager - Fund None
Treasurer 2002. Serves Accounting, Administration and Custody
at the discretion of Services since June 2003; Assistant
the Board. Vice President - Mutual Fund
Operations of State Street Corporation
from June 2002 to June 2003 (formerly
Deutsche Bank Asset Management);
Pioneer Fund Accounting,
Administration and Custody Services
(Fund Accounting Manager from August
1999 to May 2002); Assistant Treasurer
of all Pioneer Funds since September
2003.
- ------------------------------------------------------------------------------------------------------------------------------------
Terrence J. Cullen (45) Chief Compliance Since March, 2006. Chief Compliance Officer of Pioneer None
Officer Serves at the and Pioneer Funds since March 2006;
discretion of Vice President and Senior Counsel of
the Board. Pioneer since September 2004; and
Senior Vice President and Counsel,
State Street Research & Management
Company (February 1998 to September
2004).
- ------------------------------------------------------------------------------------------------------------------------------------
The outstanding capital stock of PFD, PIM and PIMSS is indirectly wholly owned
by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest
banking groups in Italy. PIM, the Fund's investment adviser, provides investment
management and financial services to mutual funds, institutional and other
clients.
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HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@pioneerinvest.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
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 http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund, including fees associated with
the annual filing of its Form N-1A, totaled approximately $27,600 in 2006
and $24,000 in 2005.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
There were no fees for audit-related services provided to the Fund during
the fiscal years ended March 31, 2006 and 2005.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns, totaled
approximately $6,800 and $6,000 in 2006 and 2005, respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
All Other Fees
There were no fees for other services provided to the Fund during the
fiscal years ended March 31, 2006 and 2005.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after May 6,
2003, the effective date of the new SEC pre-approval rules, the Fund's audit
committee is required to pre-approve services to affiliates defined by SEC
rules to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Fund. For the years ended
March 31, 2006 and 2005, there were no services provided to an affiliate that
required the Fund's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Fund and affiliates, as previously
defined, totaled approximately $6,800 in 2006 and $7,100 in 2005.
The Fund's audit committee of the Board of Trustees has considered whether
the provision of non-audit services that were rendered to the Affiliates
(as defined) that were not pre-approved pursuant to paragraph (c)(7)(ii)
of Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's independent auditor, Ernst &
Young LLP ("E&Y"), has advised the Audit
Committee of the Fund's Board of Trustees that
E&Ys Spanish affiliate (E&Y Spain) performed
certain non-audit work for Pioneer Global
Investments Limited ("PGIL"), an affiliate of the
Funds investment adviser. The services involved
the receipt and disbursement of monies transferred
to E&Y Spain by PGIL in payment of individual
payroll and related income tax withholdings due on
returns prepared by E&Y Spain for certain PGIL
employees located in Spain from February 2001 to
October 2005. E&Y became auditors of the Fund in
May 2002. These payroll and tax services were
discontinued in November 2005. The annual fee
received by E&Y Spain for all such services totaled
approximately 9,000 Euro per year. E&Y has informed
the Audit Committee that based on its internal
reviews and the de minimus nature of the services
provided and fees received, E&Y does not believe
its independence with respect to the Fund has been
impaired or that it is disqualified from acting as
independent auditors to the Fund.
N/A
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer and principal financial
officer have concluded, that the registrant's disclosure controls and
procedures are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Fundamental Growth Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date May 30, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date May 30, 2006
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date May 30, 2006
* Print the name and title of each signing officer under his or her signature.