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Pioneer Funds

Pioneer Funds. To Choose or Not to Choose An Analysis of an ORP. Introduction. Purpose of Project Evaluate returns for those participating in the ORP provider’s fund offerings Who is eligible & Risks of ORP? Investment strategy, tax situation, style of manager Manage own investments

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Pioneer Funds

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  1. Pioneer Funds To Choose or Not to Choose An Analysis of an ORP

  2. Introduction • Purpose of Project • Evaluate returns for those participating in the ORP provider’s fund offerings • Who is eligible & Risks of ORP? • Investment strategy, tax situation, style of manager • Manage own investments • Temporal & Index Benchmark of Pioneer Group • 3 yr returns on S&P 500 Index

  3. Important Aspect of Mutual Funds • What is a mutual fund? • “Pool of money” • Why you should invest in a mutual fund? • Diversify risk • Time and Fund Management Expertise • Disadvantages of mutual funds? • Limits potential gains • Diminished returns due to commission & fees

  4. Low-to-Medium Risk Money market funds ST securities, low rates Fund of funds High diversification Index funds Minimal trading activity Balanced funds Grow capital, generate income Large cap funds Example: Wal-Mart High Risk Pure bonds Keep principal until maturity Small cap funds IPO, no dividends International funds Volatility financial mkt. abroad Types of Mutual Funds

  5. History of Pioneer “Pioneer Fund” founded in 1928 by Philip Carret Philip Carret friends with WARREN Buffet Wizard of the market 13% average return in 55 yrs

  6. Pioneer Today • Pioneer today is owned by Uni Credito Italiano Banking Group based in Milan • Pioneer Investments has 180 investors in 4 cities: Boston, Dublin, Milian, and Sinagpore • Investment in the US $35 Billion • Investments in the World $150 Billion • Approximately 40 different funds.

  7. Evaluation Method • Three methods • Morningstar “Star” Rating • 1-5 stars • Takes into account relative risk adjusted return over multiple time periods including all fees and expenses • Compare to S&P • for 3 year return • Compare to Benchmark • For 3 year return

  8. Pioneer Star Rating

  9. Pioneer Funds vs. Benchmarks(3 Year Returns) LEGEND A = Small Company H = International Equity O = Mid Cap Value V = Municipal Bond B = Global High Yield I = Balanced P = Equity Income W = Bond C = Mid Cap Growth J = Fund B Q = Tax Free Income X = Europe Select D = International Value K = High Yield R = America Income Y = Strategic Income E = Growth Opportunities L = Research S = Cash Reserves Z = Emerging Markets F = Pioneer Small Cap Val M = Growth Shares T = Real Estate G = Europe N = Value U = California Tax-Free Income

  10. Pioneer Fund Expense Ratios

  11. Conclusionits in the results • High expense ratios • Under performed the S&P 500 index • Under performed temporal benchmarks • Low Morningstar ratings • Some non-existent • Low management tenure • Recently purchased by a large banking group

  12. ConclusionLimitations • Data collected using only Morningstar and Pioneer’s websites • Needs a comparison to other ORP choices • May not be the worst of the worst • Results tend to support EMH • Too small of a sample to make assumption • Only 40 funds analyzed • Analysis can not account for luck • Good or Bad

  13. ConclusionRecommendation • Pioneer funds should not be chosen for an ORP • All ORPs should be evaluated • Best choice may be an index strategy • Not an actively managed mutual fund strategy

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