merrill lynch due diligence meeting - pioneer...

The Power of Collective ExpertisePaul F. Cloonan, CFACo-Head of Equity Research, USSenior Vice President

Merrill LynchDue Diligence Meeting22-24 October 2012, Boston

For 2012 Merrill Lynch Due Diligence Meeting Attendees Only and Not to be Distributed to the Public

For 2012 Merrill Lynch Due Diligence Meeting Attendees Only and Not to be Distributed to the Public |

Agenda

Portfolio Overview

Key Facts

Investment Philosophy

Investment Process

Performance

Portfolio Characteristics

Portfolio Management Team


Pioneer Funds – U.S. ResearchPortfolio Overview

Broadly diversified* US equity portfolio

Sector neutral versus benchmark (S&P 500 Index)

– As such performance is not achieved through sector positions but by selecting the most attractive companies

Managed by Pioneer Investments’ US Research Analysts

Best ideas of analysts in each sector

Based on proprietary fundamental research

Leverage off Research team of experienced and specialised career analysts

* Diversification does not guarantee a profit or protect against a loss.


Agenda

Portfolio Overview

Key Facts


Investment Process

Performance




Pioneer Funds – U.S. ResearchKey Facts

First Nav Date (A Class) 27 December 2001

Benchmark S&P 500

Morningstar Rating

Total AUM (Mil) $2,302.4

Total Number of Holdings 101

Fund Inception 20 April 1998

Source: Pioneer Investments as at 28 September 2012. Morningstar Ratings: Copyright © 2012 Morningstar UK Limited. All Rights Reserved. The information contained herein: (1) may not be copied or distributed; and (2) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.


Agenda

Portfolio Overview

Key Facts


Investment Process

Performance




Pioneer Funds – U.S. ResearchInvestment Philosophy

Bottom-up, research-driven investment philosophy

Specialist career Analysts, with in-depth knowledge of companies and sectors

Aim to produce stable outperformance over time using insights gained from research


Agenda

Portfolio Overview

Key Facts


Investment Process

Performance




Quantitative Analysts

Risk budgeting

Stock screening/idea generation

Performance monitoring

Quant. financial models

Fundamental Analysts

Approx. 14 US equity analysts*

Career Analysts

Extensive company contacts and research coverage

Idea generation/Sponsor stocks

Manage research portfolio

Portfolio Managers

Define investment caseIdentify discountConstruct Portfolio

Target price reachedStory changesBetter opportunities

Sell Discipline

Buy Discipline

Pioneer Funds – U.S. ResearchInvestment ProcessBottom-up, research-driven, integrated team effort with Quantitative Research Analysts and Portfolio Managers

*Source: Pioneer Investments as at 30 September 2012.


Pioneer Funds – U.S. ResearchPioneer Investments’ US Equity Research Team

S&P 500Sector Breakdown

J. Clarkson WilliamsTechnology Hardware Pioneer Investments since 1995Over 20 years in Investment Management

Paul Cloonan, CFASemiconductors and MediaPioneer Investments since 1997Over 15 years in Investment Management

Christian FayPharmaceuticals, Life Science Tools and EquipmentPioneer Investments since 2006Over 10 years in Investment Management

David SobellBiotechnology, Health Care Equipment and ServicesPioneer Investments since 2000Over 15 years in Investment Management

Yves RaymondSoftware and ServicesPioneer Investments since 1999Over 10 years in Investment Management

George SidgwickTelecommunications and MediaPioneer Investments since 2003Over 8 years in Investment Management

Bradley GalkoCapital GoodsPioneer Investments since 2001Over 15 years in Investment Management

Carol LintzConsumerPioneer Investments since 2006Over 25 years in Investment ManagementRobert PetrieConsumerPioneer Investments since 2012Over 14 years in Investment Management

Terry ShuInsurance and UtilitiesPioneer Investments since 2008Over 30 years in Investment Management

James MoynihanBanks and Real EstatePioneer Investments since 2007Over 20 years in Investment Management

Brian PopielDiversified FinancialsPioneer Investments since 2011Over 12 years in Investment Management

John PeckhamMaterials Pioneer Investments since 2002Over 10 years in Investment ManagementJohn MurrayEnergy Pioneer Investments since 2012Over 12 years in Investment Management

As at 30 September 2012.


Pioneer Funds – U.S. ResearchInvestment Process

Stock Selection – Research Insights and Investment Cases

Research insight is a fundamentally different understanding of an investment controversy or critical issue that manifests itself in a material price anomaly versus the existing share price.

Investment case is a clear, concise articulation of an analyst’s research insight. An articulation of what an analyst understands regarding investment controversy that is different to what is imputed in the share price.


Pioneer Funds – U.S. ResearchInvestment Process

Portfolio

Industry analysis

Company positioning

Strategy assessment

Management evaluation

Financial modelling

Valuation

Risk assessment

InvestmentRating


Pioneer Funds – U.S. ResearchInvestment Process: Ratings

Rating Description

Buy Very best ideas – held in European or US Research portfolios

Overweight Stocks which we expect to outperform their sector

Sell Stocks which we expect to underperform their sector

Avoid Stocks which should not be owned due to issues such as accounting fraud, unsustainable business model, etc.

Analysts have to make a call – no ‘neutral’ ratings

Strength of ‘Buy’ conviction reflected by size of holding in research portfolio

Best ideas held in research portfolio


Pioneer Funds – U.S. ResearchInvestment Process: Stock Selection – Valuation Analysis

Focus on cash flow to minimise accounting distortions of earnings

All analysis based upon proprietary financial models

Discounted cash flow analysis a key tool

Price/Cash flow (EV/EBITDA* preferred)Return on capital employedEarnings and cash flow growthDividend yieldPrice/Earnings

Ratios used as proxies for NPV

Sensitivity analysisVisibility and transparencyBalance sheet position

Risk to delivery of cash flows

Common aim to establish Net Present Value of business

*EV/EBITDA represents the Enterprise Multiple, or Enterprise Value divided by Earnings before Interest, Taxes, Depreciation and Amortization.


Agenda

Portfolio Overview

Key Facts


Investment Process

Performance




3 Years Ann.

5 Years Ann.

1 Year

10 Years Ann.

3rd

3rd1st

3rd

Quartile

15%

21%

29%

35%

% Rank

Source: Morningstar: Copyright © 2012 Morningstar UK Limited. All Rights Reserved. The information contained herein: (1) may not be copied or distributed; and (2) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Unless otherwise stated, Morningstar overall ratings and rankings are based on Class A USD non distributing units. Morningstar quartile rankings are based on a comparison of the relevant Pioneer Investments fund’s Morningstar relative performance to all the other funds in the same Morningstar category.

2nd

2nd

1st

Pioneer Funds – U.S. ResearchPerformance vs. Morningstar Peers as at 28 September 2012


Pioneer Funds – U.S. ResearchTrailing Returns

5 Years Ann. 0.26 1.05 -0.79

1 Year 27.39 30.20 -2.81

3 Years Ann. 11.28 13.22 -1.94

YTD 14.36 16.44 -2.08

1 Month 2.21 2.58 -0.37

3 Months 5.64 6.35 -0.71

Fund % Benchmark % Relative %

Source: Pioneer Investments as at 28 September 2012. Performance figures are in USD and have been converted from the sub-fund's base currency, the euro. Performance data provided refers to Class A units only, and is based upon NAV net of fees. For details of other unit Classes available, please refer to the prospectus.


Pioneer Funds – U.S. ResearchCalendar Year Returns 2008 - 2012

2010 13.62 15.06 -1.44

2009 28.85 26.46 2.39

2008 -36.39 -37.00 0.61

2011 -0.49 2.11 -2.60

2012 (YTD) 14.36 16.44 -2.08

Fund % Benchmark % Relative %



Pioneer Funds – U.S. ResearchCalendar Year Returns 2008 - 2012

Pioneer Funds – U.S. Research Class A USD Non-Distributing

S&P 500

Relative



Pioneer Funds – U.S. ResearchGrowth of 10,000 USD

Pioneer Funds – U.S. Research Class A USD Non-Distributing

S&P 500



Pioneer Funds – U.S. ResearchRisk Analysis (3 Years)

Beta 1.0079

R-Squared 0.9613

Alpha -0.37 %

Standard Deviation 15.82 %

Sharpe Ratio 0.73

Source: Pioneer Investments as at 28 September 2012. Risk Measures, except Standard Deviation and Sharpe Ratio, are based on Class E Units, which are only offered for public sale in Italy. Standard Deviation and Sharpe Ratio: Morningstar.


Agenda

Portfolio Overview

Key Facts


Investment Process

Performance




Pioneer Funds – U.S. ResearchTop 10 Holdings

Google Inc IT US 2.5

Oracle Corp IT US 1.9

PNC Financial Services Group Inc Financials US 2.1

Pfizer Inc Health Care US 2.1

Johnson & Johnson Health Care US 1.9

Apple Inc IT US 5.5

Exxon Mobil Corp Energy US 3.8

Chevron Corp Energy US 2.7

Microsoft Corp IT US 2.6

Name Sector Country %

Source: Pioneer Investments as at 30 Setpember 2012.

Verizon Communications Inc. Telecoms US 2.2


Pioneer Funds – U.S. ResearchSector Breakdown

Source: Pioneer Investments as at 28 September 2012. The cash position reflects the percentage of settled and available cash. Please see additional GICS disclaimer in the Additional Notes.


Pioneer Funds – U.S. ResearchCountry Breakdown

Source: Pioneer Investments as at 28 September 2012. The cash position reflects the percentage of settled and available cash.


Agenda

Portfolio Overview

Key Facts


Investment Process

Performance




Pioneer Funds – U.S. ResearchPortfolio Management Team

Paul Cloonan

Portfolio ManagerCo-Head of Equity Research, U.S.Senior Vice PresidentPaul Cloonan is the Co-Head of Equity Research, U.S. and Fundamental Equity Analyst with specific responsibilities for the US Semiconductor and Media sectors. He is also Portfolio Manager on Pioneer Disciplined Growth Fund, Pioneer Disciplined Value Fund, Pioneer Research Fund, Pioneer Funds – U.S. Research and Pioneer Funds – U.S. Research Value.

Paul joined Pioneer Investments in 1997 as an analyst for our Emerging Markets team. He focused on developing markets in Asia, such as China, Taiwan, South Korea, India, Thailand and Malaysia and was co-portfolio manager of Pioneer Investments’ Asia ex Japan portfolios. In 2004, he joined our US Technology research team assuming responsibility for coverage of the Semiconductor sector. In 2005, he also assumed coverage of the US Media sector. In 2006, he was named sector co-ordinator for Global Technology, Media and Telecommunications equity research. In 2010, he was named Head of U.S. Equity Research.

Before joining Pioneer Investments, Paul served as a manager in the Financial Advisory Services Group of Ernst & Young, LLP, where he provided company and industry research, and performed valuation analyses for clients engaged in acquisitions, corporate restructuring and other activities. He holds a BA degree from the College of the Holy Cross (1989), a MBA from Babson College (1994) and is a CFA charterholder.


Pioneer Funds – U.S. ResearchAdditional Notes

The Global Industry Classification Standard (GICS) SM was developed by and is the exclusive property and a service mark of Standard & Poor's and MSCI. Neither Standard & Poor's, MSCI nor any other party involved in making or compiling any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the forgoing, in no event shall Standard & Poor's, MSCI, any of their affiliates or any third party involved in making or compiling any GICS classification have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.


Important Information

Unless otherwise stated all information contained in this document is from Pioneer Investments and is as at 28 September 2012.

Pioneer Funds – U.S. Research is a sub-fund (the “Sub-Funds”) of Pioneer Funds (the “Fund”), a fonds commun de placement with several separate sub-funds established under the laws of the Grand Duchy of Luxembourg.

Past performance does not guarantee and is not indicative of future results. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. Unless otherwise stated, all views expressed are those of Pioneer Investments. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. More recent returns may be different than those shown. Please contact your local sales representative for more current performance results.

This material is not a prospectus and does not constitute an offer to buy or a solicitation to sell any units of the Fund or any services, by or to anyone in any jurisdiction in which such offer or solicitation would be unlawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. For additional information on the Fund, a free prospectus should be requested from Pioneer Global Investments Limited (“PGIL”), 1 George’s Quay Plaza, George’s Quay, Dublin 2, Ireland. Call +353 1 480 2000 Fax +353 1 449 5000.

This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any United States person (being residents and citizens of the United States or partnerships or corporations organized under United States laws). The Fund has not been registered in the United States under the Investment Company Act of 1940 and units of the Fund are not registered in the United States under the Securities Act of 1933.

This document is not intended for and no reliance can be placed on this document by retail clients, to whom the document should not be provided.

The content of this document is approved by PGIL. In the UK, it is directed at professional clients and not at retail clients and it is approved for distribution by Pioneer Global Investments Limited (London Branch), Portland House, Bressenden Place, London, SW1E 5BH, authorised by the Central Bank of Ireland and regulated by the Financial Services Authority for the conduct of UK business. The Fund is an unregulated collective investment scheme under the UK Financial Services and Markets Act 2000 and therefore does not carry the protection provided by the UK regulatory system.

Pioneer Funds Distributor, Inc., 60 State Street, Boston, MA 02109 (“PFD”), a U.S.-registered broker-dealer, provides marketing services in connection with the distribution of Pioneer Investments’ products. PFD markets these products to financial intermediaries, both within and outside of the U.S. (in jurisdictions where permitted to do so) for sale to clients who are not United States persons.

For 2012 Merrill Lynch Due Diligence Attendees Only and Not to be Distributed to the Public.

Pioneer Investments is a trading name of the Pioneer Global Asset Management S.p.A. group of companies.

Date of First Use: 23 October 2012

merrill lynch due diligence meeting - pioneer...

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