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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 811-06151
Pioneer Europe Select Equity 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: August 31
Date of reporting period: September 1, 2006 through February 28, 2007
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
-----------------------
EUROPE
SELECT EQUITY
FUND
Semiannual
Report
2/28/07
[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 14
Schedule of Investments 16
Financial Statements 20
Notes to Financial Statements 29
Factors Considered by the Independent Trustees in Approving
the Management Contract 37
Trustees, Officers and Service Providers 42
Chairman's
Dear Shareowner,
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As the global economy reacted to good and bad news of 2006, overall it managed
to keep chugging along with fairly stable growth. Looking back, the economic
stories included slowing economic growth bringing monetary tightening to an end
in the United States, price action in oil and other commodity markets
threatening to unsettle global growth and inflation, geopolitical uncertainties
and corporate earnings growth surpassing market expectations.
Global growth surpassed most analyst expectations in 2006. The International
Monetary Fund estimates world output increased by 5.1% in 2006, up from 4.9% in
2005 and above the 3.7% average annual pace of growth of the previous 20 years.
Growth is estimated to slow modestly in 2007 but to remain well above the
long-term average.
U.S. economic growth slowed gradually over 2006, with full-year growth of GDP of
3.1%, modestly below 2005 growth but still strong enough to lower the
unemployment rate to 4.5%. While many observers were concerned that a weakening
housing sector could be a drag on consumer spending, the consumer has shown
resilience supported by a strong labor market and associated income growth and
by oil and gasoline prices falling from record highs in the second half of 2006.
Corporate America has also proved resilient in the face of the slowing housing
sector, with business investment growing at its fastest rate since 2000.
The Federal Reserve stopped increasing interest rates in mid-2006, but has
retained its bias to tighten rates, reflecting upside risks to inflation,
particularly from the tight labor market, and confidence that the economy
remained on solid ground. Consumers welcomed the relief from oil prices that
peaked at mid-year and fell sharply towards year-end. Likewise, in the second
half of 2006, they benefited from the modest easing of core inflation (which
excludes energy and food items), though such core inflation remains above what
is generally considered the central bank's "comfort zone."
The European economy surpassed many economists' expectations in 2006. Eurozone
GDP grew at a 3% pace, much stronger than its 1.8% average annual growth pace
since 2000. Underlying this strength has been buoyant and broad-based strength
in business sentiment and investment and in exports. While household consumption
showed mixed results, the unemployment rate fell to 7.7% by the end of 2006. The
European Central Bank raised interest rates gradually to 3.5% over the course of
2006, reflecting firm economic growth, steadily tightening labor market
conditions, and fast growing money supply. Core inflation in the Eurozone
remains reasonably benign, at roughly 1.5% per annum. European stock markets
posted strong returns; appreciation of the Euro relative to both the dollar and
Yen made the Eurozone stock market the top performer of 2006.
The Japanese economy continued to grow firmly in 2006. Business investment was
the major driver of expansion as increasing capacity utilization and better
sentiment encouraged a new wave of investment. As deflation ended, the Bank of
Japan ended its zero interest rate policy, although it has raised rates to only
0.25% in 2006. After a strong showing in 2005, the Japanese stock market posted
only muted gains in 2006.
Emerging economies enjoyed strong, relatively uninterrupted economic growth in
2006. Good financing conditions, buoyant commodity prices, which boosted income
and investment in commodity exporting countries, and strong export demand from
developed economies drove this growth. The emerging market stock
2
Letter
index was very strong in early 2006, sold off to near start-of-year levels, then
rallied to finish the year only marginally behind the Eurozone. We believe
similar growth can be expected in the emerging markets if current domestic
economic and political conditions prevail.
While global economic momentum has started to slow, we expect the global economy
to continue growing firmly in 2007, supported by business investment, rising
employment, and lower energy prices. A slowdown in the U.S. growth rate would be
welcome, since rapid growth could increase the risk of inflationary pressures,
which would force the Federal Reserve to raise interest rates. We expect Europe
and Japan to grow similarly, while emerging market economies are expected to
continue their strong growth. In this scenario, fixed-income assets are expected
to produce total returns generally in line with their current yields, while
equities are expected to produce returns generally in line with earnings growth,
which we forecast to be moderately above bond yields.
Our cautiously optimistic outlook on most regions of the world and asset classes
reinforces the importance of Pioneer Investments' message that investors should
remain diversified, take a long-term view rather than over-reacting to breaking
news, and base investment decisions on economic and market fundamentals rather
than on emotion. Our investment philosophy and approach continue to be based on
the use of fundamental research to identify a range of opportunities that offer
an attractive balance of risk and reward to help Fund shareowners work toward
achieving their long-term goals.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr., Chairman
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 Europe Select Equity Fund
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PORTFOLIO MANAGEMENT DISCUSSION 2/28/07
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European equity markets sustained their upward trajectory during the six months
ended February 28, 2007, propelled by a healthy economy and improving corporate
profitability. In the following interview, Andrew Arbuthnott discusses the
events and factors that affected the performance of Pioneer Europe Select Equity
Fund over the six months. Mr. Arbuthnott is responsible for the Fund's
day-to-day management and is supported by a team of portfolio managers and
analysts.
Q: How did Europe Select Equity Fund perform during the six months ended
February 28, 2007?
A: The Fund's Class A shares had a total return of 10.93%, at net asset value,
for the six months. During the same period, the Fund's benchmark, the MSCI
Europe Index, returned 12.74%, while the average return of the 101 funds in
Lipper's European Funds category was 13.55%.
Call 1-800-225-6292 or visit www.pioneerinvestments.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 was the investment environment like in Europe during the six months
ended February 28, 2007?
A: European stock markets performed quite well, even with a rather sudden
decline of equities in the final two days of the period. Major European
economies continued to expand, while corporations on the continent reported
generally good profit growth, with many companies raising their stock
dividend payments to shareholders. The improvement extended to Germany,
which had lagged other European national economies in recent years.
Inflationary pressures remained subdued, while short-term interest rates
continued to be relatively moderate and liquidity in the capital markets
remained favorable - even after the European Central Bank raised rates
during the period. Heightened merger- and-acquisition activity and the
presence of many private equity funds gave further support to the markets.
The returns realized by U.S.
4
Pioneer Europe Select Equity Fund
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investors in Europe were helped further as the euro gained 3.2% in value
against the U.S. dollar during the six months.
The automotive industry led the market performance for the six months,
rising by 30% in U.S. dollar terms. Other leading industries included
capital goods, telecommunications, transportation, materials and utilities.
The pharmaceutical industry produced the worst performance of any area in
the economy for the six months, while the information technology, banking,
and beverage and tobacco companies also tended to lag the market.
Q: What types of investments had the greatest impact on Fund performance?
A: The Fund's overweighting of the automotive industry, combined with good
stock selection of auto-related stocks, helped substantially. Porsche, for
example, rose by 29%, based on good earnings and cash flow generated by the
success of its new car models. Michelin, the global tire company, was
another major contributor before we sold it during the reporting period to
take profits. Our selections in diversified financials also helped, with
Credit Suisse a notable contributor during the six months. We were
neutral-weighted, relative to the benchmark index, in the energy industry,
but favorable stock selection added to returns. The position in Repsol, the
Spanish-based oil company, was a significant help. WPP, the U.K.-based
advertising and communications group, also did very well, rising by 20%,
including the currency effect, for the six months. In the transportation
industry, two standouts were TNT, the Dutch-based postal and express
delivery company, and Ryanair, the Irish-based airline that has become the
leading low-cost operator in Europe. From the materials sector, we had
excellent performance from Swiss-based Holcim, a global leader in the
cement industry with strong presence in both developed and emerging
markets.
Hurting results was our underweight position in the telecommunications
services sector, which did well during the second half of 2006. We remained
unenthusiastic about stocks in this area, however, because of concerns
about pressures from intensified competition, the risks of greater
regulatory initiatives, and the potential of new technologies changing the
nature of competition. Our de-emphasis of utilities stocks also did not
help. Stock prices
5
Pioneer Europe Select Equity Fund
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PORTFOLIO MANAGEMENT DISCUSSION 2/28/07 (continued)
- --------------------------------------------------------------------------------
in this sector rose, aided by brisk merger-and-acquisition activity,
despite our concerns about company valuations. Similarly, our
underweighting of insurance stocks did not help when they outperformed the
market. In the capital goods industry, our holdings produced positive
results but nevertheless failed to keep up with the industry average return
of 27% in U.S. dollar terms. Capital goods holdings that proved to be a
drag on results during the six months included Siemens of Germany. In the
consumer services area, our holding in Opap, a Greek company involved in
the gaming industry, proved disappointing as its profits failed to meet
market expectations.
Q: What is your investment outlook?
A: While we do not expect European stock markets to repeat their robust
results for 2005 and 2006, we continue to have a positive outlook. European
stocks remain reasonably priced and dividends are very competitive, even if
earnings growth rates should decelerate, as we expect. European equities
remain competitively valued compared to other asset classes, and the
corporate sector generally is in solid financial shape, with healthy cash
flows, strong balance sheets and reasonable debt. Many companies are using
their cash either to increase dividend payouts, invest to expand, or to
fund acquisition activities. There are risk factors present, however. Oil
and commodity prices remain high, even after receding during the second
half of 2006, and we think there may be some weakening in the value of the
U.S. dollar.
We think these risk factors are moderate and that European stocks remain
attractive.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
The Fund may invest a substantial amount of its assets in issuers located in a
limited number of countries and, therefore, is susceptible to adverse economic,
political or regulatory developments affecting those countries. The Fund invests
in a limited number of securities and, as a result, the Fund's performance may
be more volatile than the performance of funds holding more securities. 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
6
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Europe Select Equity Fund
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PORTFOLIO SUMMARY 2/28/07
- --------------------------------------------------------------------------------
Sector Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[The following data was represented as a pie chart in the printed material]
Financials 31.0%
Consumer Discretionary 24.3%
Industrials 13.2%
Health Care 10.6%
Energy 9.3%
Materials 7.0%
Utilities 2.5%
Information Technology 2.1%
Geographical Distribution
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(As a percentage of equity holdings)
[The following data was represented as a bar chart in the printed material]
United Kingdom 32.4%
Switzerland 13.8%
Germany 11.4%
Ireland 5.7%
Sweden 5.6%
Italy 5.4%
Netherlands 5.2%
United States 5.2%
France 3.9%
Denmark 2.9%
Panama 2.2%
Norway 2.2%
Spain 2.1%
Greece 2.0%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)*
1. Royal Bank of Scotland Group Plc 4.59%
2. CS Group 4.57
3. BP Amoco Plc 4.20
4. TNT NV 4.11
5. BNP Paribas SA 3.89
6. CRH Plc 3.88
7. Barclays Plc 3.82
8. Wolseley Plc 3.46
9. Roche Holdings AG 3.39
10. Persimmon Plc 3.33
* This list excludes temporary cash and derivative instruments. The portfolio
is actively managed, and current holdings may be different. The holdings
listed should not be considered recommendations to buy or sell any security
listed.
8
Pioneer Europe Select Equity Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class 2/28/07 8/31/06
- ------- --------- --------
A $41.48 $37.83
B $37.77 $34.26
C $37.52 $34.16
Y $42.75 $39.06
Class 1/31/07 8/31/06
- ------- --------- --------
R* $42.03 $37.32
Distributions Per Share
- --------------------------------------------------------------------------------
9/1/06 - 2/28/07
-----------------------------------------------
Net Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ---------------- --------------- --------------
A $0.4887 $ - $ -
B $0.0257 $ - $ -
C $0.2133 $ - $ -
Y $0.6953 $ - $ -
9/1/06 - 1/31/07
-----------------------------------------------
Net Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ---------------- --------------- --------------
R* $0.2543 $ - $ -
* Class R shares were liquidated on 1/31/07.
9
Pioneer Europe Select Equity Fund
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PERFORMANCE UPDATE 2/28/07 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 Europe Select Equity Fund at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) Europe
Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of February 28, 2007)
Net Asset Public
Value Offering
Period (NAV) Price (POP)
Life-of-Class
(12/29/00) 10.83% 9.77%
5 Years 18.09 16.72
1 Year 21.22 14.26
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Expense Ratio
(As of January 1, 2007)
Gross Net
1.66% 1.66%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer
Europe MSCI
Select Europe
Equity Fund Index
12/00 $ 9,425 $10,000
2/01 8,464 9,127
2/02 7,737 7,616
2/03 6,821 6,067
2/04 10,491 9,539
2/05 13,000 11,460
2/06 14,660 13,033
2/07 17,771 16,461
Call 1-800-225-6292 or visit www.pioneerinvestments.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.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. Returns prior to June 24, 2005 reflect the
performance of the predecessor fund, which has not been restated to reflect any
differences in expenses.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 1/1/09 for Class A Shares. There can be no assurance that Pioneer
will extend the expense limitations beyond such time. Please see the prospectus
and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, 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 Europe Select Equity Fund
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PERFORMANCE UPDATE 2/28/07 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of February 28, 2007)
Period If Held If Redeemed
Life-of-Class
(12/29/00) 9.82% 9.82%
5 Years 16.91 16.91
1 Year 19.91 15.91
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Expense Ratio
(As of January 1, 2007)
Gross Net
2.74% 2.65%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer
Europe MSCI
Select Europe
Equity Fund Index
12/00 $10,000 $10,000
2/01 8,980 9,127
8,160 7,616
2/03 7,130 6,067
10,843 9,539
2/05 13,307 11,460
14,864 13,033
2/07 17,823 16,461
Call 1-800-225-6292 or visit www.pioneerinvestments.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
(CSDC). 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. Note: Shares purchased prior to December 1, 2004 remain subject to the
CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com/ bshares. 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.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. Returns prior to June 24, 2005 reflect the
performance of the predecessor fund, which has not been restated to reflect any
differences in expenses.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 1/1/08 for Class B Shares. There can be no assurance that Pioneer
will extend the expense limitations beyond such time. Please see the prospectus
and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, 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 Europe Select Equity Fund
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PERFORMANCE UPDATE 2/28/07 CLASS C 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 Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of February 28, 2007)
Period If Held If Redeemed
Life-of-Class
(12/29/00) 10.13% 10.13%
5 Years 17.28 17.28
1 Year 20.13 20.13
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Expense Ratio
(As of January 1, 2007)
Gross Net
2.59% 2.59%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer
Europe MSCI
Select Europe
Equity Fund Index
12/00 $10,000 $10,000
2/01 8,990 9,127
2/02 8,170 7,616
2/03 7,180 6,067
2/04 10,963 9,539
2/05 13,500 11,460
2/06 15,093 13,033
2/07 18,131 16,461
Call 1-800-225-6292 or visit www.pioneerinvestments.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). The performance of Class C shares does not reflect
the 1% front-end sales charge in effect prior to February 1, 2004. If you paid a
1% sales charge, your returns would be lower than those shown above. "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.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. Returns prior to June 24, 2005 reflect the
performance of the predecessor fund, which has not been restated to reflect any
differences in expenses.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 1/1/08 for Class C Shares. There can be no assurance that Pioneer
will extend the expense limitations beyond such time. Please see the prospectus
and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, 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 Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/07 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of February 28, 2007)
Period If Held If Redeemed
Life-of-Class
(12/29/00) 11.00% 11.00%
5 Years 18.32 18.32
1 Year 21.93 21.93
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Expense Ratio
(As of January 1, 2007)
Gross Net
1.10% 1.10%
- --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer
Europe MSCI
Select Europe
Equity Fund Index
12/00 $10,000 $10,000
2/01 8,980 9,127
2/02 8,209 7,616
2/03 7,237 6,067
2/04 11,131 9,539
2/05 13,793 11,460
2/06 15,611 13,033
2/07 19,034 16,461
Call 1-800-225-6292 or visit www.pioneerinvestments.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 Y shares are not subject to sales charges and are available for limited
groups of eligible investors, including institutional investors. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. The predecessor fund did not offer Class Y shares.
Returns prior to June 24, 2005 are based on the net asset value performance of
the predecessor fund's Class A shares, which has not been restated to reflect
any differences in expenses, including Rule 12b-1 fees applicable to Class A
shares.
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 Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
13
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period"
to estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Europe Select Equity Fund
Based on actual returns from September 1, 2006 through
February 28, 2007
Share Class A B C R Y
- -----------------------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00
On 9/1/06
Ending Account Value $1,109.30 $ 1,103.20 $ 1,104.60 $ 1,127.50 $ 1,112.20
On 2/28/07**
Expenses Paid During Period* $ 7.79 $ 13.82 $ 12.26 $ 8.92 $ 4.43
* Expenses are equal to the Fund's annualized expense ratio of 1.49%, 2.65%,
2.35%, 2.00% and 1.00%, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the partial year period) (153/365
for Class R shares).
** 1/31/07 for Class R shares.
14
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Europe Select Equity Fund
Based on a hypothetical 5% return per year before expenses, reflecting the
period from September 1, 2006 through February 28, 2007
Share Class A B C R Y
- -----------------------------------------------------------------------------------------------
Beginning Account Value $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00
On 9/1/06
Ending Account Value $ 1,017.41 $ 1,011.65 $ 1,013.14 $ 1,012.58 $ 1,016.77
On 2/28/07**
Expenses Paid During Period* $ 7.45 $ 13.22 $ 11.73 $ 8.44 $ 4.23
* Expenses are equal to the Fund's annualized expense ratio of 1.49%, 2.65%,
2.35%, 2.00% and 1.00%, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the partial year period) (153/365
for Class R shares).
** 1/31/07 for Class R shares.
15
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 2/28/07 (unaudited)
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 2.7%
Automobiles & Components - 2.7%
Automobile Manufacturers - 2.7%
5,327 Porsche AG $ 7,010,362
------------
Total Automobiles & Components $ 7,010,362
------------
TOTAL PREFERRED STOCK
(Cost $3,343,655) $ 7,010,362
------------
COMMON STOCKS - 93.8%
Energy - 9.0%
Integrated Oil & Gas - 9.0%
1,006,107 BP Amoco Plc $ 10,331,452
235,910 Eni S.p.A. 7,229,088
165,501 Repsol SA 5,241,339
------------
$ 22,801,879
------------
Total Energy $ 22,801,879
------------
Materials - 6.8%
Construction Materials - 6.8%
229,277 CRH Plc $ 9,547,465
78,535 Holcim, Ltd. 7,779,960
------------
$ 17,327,425
------------
Total Materials $ 17,327,425
------------
Capital Goods - 7.1%
Construction & Farm Machinery & Heavy Trucks - 0.7%
22,889 Volvo AB (Class B)* $ 1,760,122
------------
Industrial Conglomerates - 3.1%
74,257 Siemens $ 7,791,989
------------
Trading Companies & Distributors - 3.3%
341,006 Wolseley Plc $ 8,520,884
------------
Total Capital Goods $ 18,072,995
------------
Transportation - 5.7%
Air Freight & Couriers - 4.0%
234,626 TNT NV $ 10,105,632
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Airlines - 1.7%
573,446 Ryanair Holdings Plc* $ 4,361,384
------------
Total Transportation $ 14,467,016
------------
Automobiles & Components - 4.3%
Auto Parts & Equipment - 1.4%
63,996 Autoliv, Inc. $ 3,650,972
------------
Tires & Rubber - 2.9%
59,275 Continental AG $ 7,393,277
------------
Total Automobiles & Components $ 11,044,249
------------
Consumer Durables & Apparel - 7.2%
Apparel, Accessories & Luxury Goods - 2.3%
118,491 Adidas-Salomon AG $ 5,818,387
------------
Homebuilding - 4.9%
300,262 Persimmon Plc $ 8,199,044
392,045 Wimpey (George) Plc 4,376,829
------------
$ 12,575,873
------------
Total Consumer Durables & Apparel $ 18,394,260
------------
Consumer Services - 4.1%
Casinos & Gaming - 1.9%
136,629 Opap SA $ 4,834,153
------------
Hotels, Resorts & Cruise Lines - 2.2%
120,934 Carnival Corp. $ 5,613,756
------------
Total Consumer Services $ 10,447,909
------------
Media - 3.2%
Advertising - 3.2%
565,132 WPP Group Plc $ 8,172,935
------------
Total Media $ 8,172,935
------------
Retailing - 1.8%
Department Stores - 1.8%
116,791 Next Plc $ 4,679,214
------------
Total Retailing $ 4,679,214
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 2/28/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Health Care Equipment & Services - 2.1%
Health Care Equipment - 2.1%
43,584 Synthes, Inc. $ 5,451,908
------------
Total Health Care Equipment & Services $ 5,451,908
------------
Pharmaceuticals & Biotechnology - 8.1%
Pharmaceuticals - 8.1%
108,495 Astrazeneca Plc $ 6,088,308
136,690 Bristol-Myers Squibb Co. 3,607,249
46,850 Roche Holdings AG* 8,346,471
120,149 Shire Plc 2,540,731
------------
$ 20,582,759
------------
Total Pharmaceuticals & Biotechnology $ 20,582,759
------------
Banks - 23.0%
Diversified Banks - 23.0%
77,287 ABN AMRO Holding NV* $ 2,712,462
649,628 Barclays Plc 9,409,195
91,913 BNP Paribas SA 9,563,334
156,869 Danske Bank* 7,243,720
409,065 Dnb Nor Asa 5,529,744
821,528 Intesa San Paolo* 5,974,664
287,305 Royal Bank of Scotland Group Plc 11,305,931
223,355 Skand Enkilda Banken 6,808,330
------------
$ 58,547,380
------------
Total Banks $ 58,547,380
------------
Diversified Financials - 7.0%
Diversified Capital Markets - 7.0%
162,379 CS Group $ 11,253,550
111,258 UBS AG 6,571,571
------------
$ 17,825,121
------------
Total Diversified Financials $ 17,825,121
------------
Technology Hardware & Equipment - 2.0%
Communications Equipment - 2.0%
1,431,088 Ericsson LM Tel Sur B $ 5,114,234
------------
Total Technology Hardware & Equipment $ 5,114,234
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Utilities - 2.4%
Multi-Utilities - 2.4%
407,486 National Grid Plc* $ 6,110,115
------------
Total Utilities $ 6,110,115
------------
TOTAL COMMON STOCKS
(Cost $187,432,394) $239,039,399
------------
TOTAL INVESTMENT IN SECURITIES - 96.5%
(Cost $190,776,049) (a) (b) $246,049,761
------------
OTHER ASSETS AND LIABILITIES - 3.5% $ 8,885,544
------------
TOTAL NET ASSETS - 100.0% $254,935,305
============
* Non-income producing security.
(a) At February 28, 2007, the net unrealized gain on investments based oncost
for federal income tax purposes of $191,136,813 was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $56,209,396
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (1,296,448)
-----------
Net unrealized gain $54,912,948
===========
(b) Distributions of investments by country of issue, as percentage of total
equity holdings (excluding temporary cash investments) is as follows:
United Kingdom 32.4%
Switzerland 13.8
Germany 11.4
Ireland 5.7
Sweden 5.6
Italy 5.4
Netherlands 5.2
United States 5.2
France 3.9
Denmark 2.9
Panama 2.2
Norway 2.2
Spain 2.1
Greece 2.0
---
100%
===
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended February 28, 2007 aggregated $72,644,305 and $52,293,908,
respectively.
The accompanying notes are an integral part of these financial statements. 19
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 2/28/07 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (cost $190,776,049) $246,049,761
Cash 6,472,328
Foreign currencies, at value (cost $131) 131
Receivables -
Fund shares sold 2,481,315
Dividends, interest and foreign taxes withheld 653,708
Other 48,792
------------
Total assets $255,706,035
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 474,225
Due to affiliates 171,699
Accrued expenses 124,806
------------
Total liabilities $ 770,730
------------
NET ASSETS:
Paid-in capital $195,399,430
Distributions in excess of net investment income (908,193)
Accumulated net realized gain on investments and foreign
currency transactions 5,167,289
Net unrealized gain on investments 55,273,712
Net unrealized gain on forward foreign currency contracts
and other assets and liabilities denominated in foreign
currencies 3,067
------------
Total net assets $254,935,305
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $188,546,534/4,544,987 shares) $ 41.48
============
Class B (based on $32,365,668/856,941 shares) $ 37.77
============
Class C (based on $20,260,792/539,935 shares) $ 37.52
============
Class Y (based on $13,762,311/321,938 shares) $ 42.75
============
MAXIMUM OFFERING PRICE:
Class A ($41.48 [divided by] 94.25%) $ 44.01
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 2/28/07
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $125,850) $ 1,259,828
Interest 102,980
-----------
Total investment income $ 1,362,808
-----------
EXPENSES:
Management fees $ 964,191
Transfer agent fees and expenses
Class A 257,213
Class B 114,866
Class C 33,625
Class R 1,455
Class Y 179
Distribution fees
Class A 199,447
Class B 159,915
Class C 87,152
Class R 286
Administrative reimbursements 24,759
Custodian fees 39,275
Registration fees 4,122
Professional fees 30,947
Printing expense 28,000
Fees and expenses of nonaffiliated trustees 765
Miscellaneous 12,154
-----------
Total expenses $ 1,958,351
Less management fees waived and expenses
reimbursed by Pioneer Investment Management, Inc. (4,610)
Less fees paid indirectly (12,185)
-----------
Net expenses $ 1,941,556
-----------
Net investment loss $ (578,748)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $13,615,830
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (64,741) $13,551,089
----------- -----------
Change in net unrealized gain on:
Investments $ 9,281,117
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 466 $ 9,281,583
----------- -----------
Net gain on investments and foreign currency transactions $22,832,672
-----------
Net increase in net assets resulting from operations $22,253,924
===========
The accompanying notes are an integral part of these financial statements. 21
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 2/28/07 and the Year Ended 8/31/06, respectively
Six Months Ended
2/28/07 Year Ended
(unaudited) 8/31/06
FROM OPERATIONS:
Net investment income (loss) $ (578,748) $ 2,263,512
Net realized gain on investments and foreign
currency transactions 13,551,089 17,268,753
Change in net unrealized gain on investments
foreign currency transactions 9,281,583 15,925,768
------------- -------------
Net increase in net assets resulting from
operations $ 22,253,924 $ 35,458,033
------------- -------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.49 and $0.24 per share, respectively) $ (2,128,405) $ (928,894)
Class B ($0.03 and $0.00 per share, respectively) (22,431) -
Class C ($0.21 and $0.07 per share, respectively) (104,920) (35,655)
Class R ($0.25 and $0.30 per share, respectively) (746) (952)
Class Y ($0.70 and $0.41 per share, respectively) (71,612) (42,073)
------------- -------------
Total distributions to shareowners $ (2,328,114) $ (1,007,574)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 51,389,256 $ 39,982,365
Reinvestment of distributions 2,023,046 901,560
Cost of shares repurchased (24,241,009) (59,171,619)
Redemption Fees - 3,147
------------- -------------
Net increase (decrease) in net assets resulting
from Fund share transactions $ 29,171,293 $ (18,284,547)
------------- -------------
Net increase in net assets $ 49,097,103 $ 16,165,912
NET ASSETS:
Beginning of period 205,838,202 189,672,290
------------- -------------
End of period $ 254,935,305 $ 205,838,202
============= =============
Undistributed (distributions in excess of) net
investment income $ (908,193) $ 1,998,669
============= =============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
'07 Shares '07 Amount '06 Shares '06 Amount
(unaudited) (unaudited)
CLASS A
Shares sold 713,131 $ 29,074,441 903,475 $ 31,809,911
Reinvestment of distributions 45,361 1,887,950 26,478 858,693
Less shares repurchased (324,822) (13,212,823) (914,893) (30,897,558)
-------- ------------- -------- -------------
Net increase 433,670 $ 17,749,568 15,060 $ 1,771,046
======== ============= ======== =============
CLASS B
Shares sold 187,571 $ 6,935,890 141,314 $ 4,483,916
Reinvestment of distributions 564 21,419 - -
Less shares repurchased (234,792) (8,618,855) (713,065) (22,404,853)
-------- ------------- -------- -------------
Net decrease (46,657) $ (1,661,546) (571,751) $ (17,920,937)
======== ============= ======== =============
CLASS C
Shares sold 138,071 $ 5,139,450 91,123 $ 2,897,861
Reinvestment of distributions 2,417 91,112 995 29,333
Less shares repurchased (47,548) (1,745,433) (157,692) (4,893,772)
-------- ------------- -------- -------------
Net increase (decrease) 92,940 $ 3,485,129 (65,574) $ (1,966,578)
======== ============= ======== =============
CLASS R
Shares sold 522 $ 20,824 2,272 $ 73,397
Reinvestment of distributions 18 745 29 943
Less shares repurchased (4,038) (168,760) (511) (17,620)
-------- ------------- -------- -------------
Net increase (decrease) (3,498) $ (147,191) 1,790 $ 56,720
======== ============= ======== =============
CLASS Y
Shares sold 232,524 $ 10,218,651 20,160 $ 717,280
Reinvestment of distributions 509 21,820 378 12,591
Less shares repurchased (11,628) (495,138) (27,398) (957,816)
-------- ------------- -------- -------------
Net increase (decrease) 221,405 $ 9,745,333 (6,860) $ (227,945)
======== ============= ======== =============
The accompanying notes are an integral part of these financial statements. 23
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
2/28/07 Ended Ended Ended Ended Ended
CLASS A (unaudited) 8/31/06 8/31/05 (a) 8/31/04 (a) 8/31/03 (a) 8/31/02 (a)
Net asset value, beginning of period $ 37.83 $ 31.54 $ 27.25 $ 21.41 $ 19.51 $ 20.10
--------- --------- --------- --------- --------- ---------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.07) $ 0.50 $ 0.11 $ 0.20 $ 0.17 $ 0.10
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 4.21 6.03 5.09 5.89 1.73 (0.44)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment
operations $ 4.14 $ 6.53 $ 5.20 $ 6.09 $ 1.90 $ (0.34)
--------- --------- --------- --------- --------- ---------
Distributions to shareowners:
Net investment income $ (0.49) $ (0.24) $ (0.19) $ (0.25) $ - $ (0.25)
Net realized gain - - (0.72) - - -
--------- --------- --------- --------- --------- ---------
Total distributions $ (0.49) $ (0.24) $ (0.91) $ (0.25) $ - $ (0.25)
--------- --------- --------- --------- --------- ---------
Redemption fee $ - $ -(b) $ -(b) $ - $ - $ -
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value $ 3.65 $ 6.29 $ 4.29 $ 5.84 $ 1.90 $ (0.59)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 41.48 $ 37.83 $ 31.54 $ 27.25 $ 21.41 $ 19.51
========= ========= ========= ========= ========= =========
Total return* 10.93% 20.83% 24.53% 28.56% 9.73% (1.76)%
Ratio of net expenses to average net assets+ 1.50%** 1.66% 1.71% 1.25% 1.62% 1.75%
Ratio of net investment income (loss) to average
net assets+ (0.30)%** 1.47% 0.72% 1.58% 1.02% 0.17%
Portfolio turnover rate 47%** 43% 149% 48% 67% 68%
Net assets, end of period (in thousands) $ 188,547 $ 155,550 $ 129,215 $ 3,108 $ 914 $ 567
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 1.50%** 1.66% 2.21% 8.30% 16.15% 31.21%
Net investment income (loss) (0.30)%** 1.47% 0.22% (5.47)% (13.51)% (29.29)%
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.49%** 1.66% 1.69% 1.25% 1.62% 1.75%
Net investment income (loss) (0.29)%** 1.47% 0.74% 1.58% 1.02% 0.17%
(a) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(b) Amount rounds to less than one cent per share.
* 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.
24
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
2/28/07 Ended Ended Ended Ended Ended
CLASS B (unaudited) 8/31/06 8/31/05 (a) 8/31/04 (a) 8/31/03 (a) 8/31/02 (a)
Net asset value, beginning of period $ 34.26 $ 28.63 $ 24.85 $ 19.65 $ 18.10 $ 18.53
--------- --------- --------- --------- --------- ---------
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.25) $ 0.24 $ (0.03) $ (0.02) $ (0.02) $ (0.11)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 3.79 5.39 4.62 5.33 1.57 (0.32)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment
operations $ 3.54 $ 5.63 $ 4.59 $ 5.31 $ 1.55 $ (0.43)
--------- --------- --------- --------- --------- ---------
Distributions to shareowners:
Net investment income $ (0.03) $ - $ (0.09) $ (0.11) $ - $ -
Net realized gain - - (0.72) - - -
--------- --------- --------- --------- --------- ---------
Total distributions $ 0.03 $ - $ (0.81) $ (0.11) $ - $ -
--------- --------- --------- --------- --------- ---------
Redemption fee $ - $ -(b) $ -(b) $ - $ - $ -
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value $ 3.51 $ 5.63 $ 3.78 $ 5.20 $ 1.55 $ (0.43)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 37.77 $ 34.26 $ 28.63 $ 24.85 $ 19.65 $ 18.10
========= ========= ========= ========= ========= =========
Total return* 10.32% 19.66% 23.19% 27.07% 8.57% (2.34)%
Ratio of net expenses to average net assets+ 2.67%** 2.65% 2.69% 2.17% 2.78% 2.33%
Ratio of net investment income (loss) to average
net assets+ (1.49)%** 0.36% (0.27)% 0.65% (0.10)% (0.52)%
Portfolio turnover rate 47%** 43% 149% 48% 67% 68%
Net assets, end of period (in thousands) $ 32,366 $ 30,960 $ 42,249 $ 1,505 $ 457 $ 295
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 2.69%** 2.74% 3.32% 9.20% 17.41% 31.81%
Net investment income (loss) (1.51)%** 0.27% (0.90)% (6.38)% (14.73)% (30.00)%
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 2.65%** 2.65% 2.65% 2.17% 2.78% 2.33%
Net investment income (loss) (1.47)%** 0.36% (0.23)% 0.65% (0.10)% (0.52)%
(a) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(b) Amount rounds to less than one cent per share.
* 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 Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
2/28/07 Ended Ended Ended Ended Ended
CLASS C (unaudited) 8/31/06 8/31/05 (a) 8/31/04 (a) 8/31/03 (a) 8/31/02 (a)
Net asset value, beginning of period $ 34.16 $ 28.60 $ 24.81 $ 19.63 $ 17.98 $ 18.39
--------- --------- --------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.22) $ 0.19 $ 0.01 $ 0.09 $ 0.07 $ (0.09)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 3.79 5.44 4.61 5.34 1.58 (0.32)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment
operations $ 3.57 $ 5.63 $ 4.62 $ 5.43 $ 1.65 $ (0.41)
--------- --------- --------- --------- --------- ---------
Distributions to shareowners:
Net investment income $ (0.21) $ (0.07) $ (0.13) $ (0.25) $ - $ -
Net realized gain - - (0.72) - - -
--------- --------- --------- --------- --------- ---------
Total distributions $ (0.21) $ (0.07) $ (0.85) $ (0.25) $ - $ -
--------- --------- --------- --------- --------- ---------
Redemption fee $ - $ -(b) $ 0.02 $ - $ - $ -
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value $ 3.36 $ 5.56 $ 3.79 $ 5.18 $ 1.65 $ (0.41)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 37.52 $ 34.16 $ 28.60 $ 24.81 $ 19.63 $ 17.98
========= ========= ========= ========= ========= =========
Total return* 10.46% 19.73% 23.53% 27.67% 9.17% (2.21)%
Ratio of net expenses to average net assets+ 2.36%** 2.59% 2.41% 1.72% 2.27% 2.22%
Ratio of net investment income (loss) to average
net assets+ (1.15)%** 0.52% 0.35% 1.14% 0.54% (0.35)%
Portfolio turnover rate 47%** 43% 149% 48% 67% 68%
Net assets, end of period (in thousands) $ 20,261 $ 15,270 $ 14,661 $ 1,557 $ 404 $ 201
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 2.36%** 2.59% 3.72% 8.75% 17.02% 31.70%
Net investment income (loss) (1.15)%** 0.52% (0.96)% (5.89)% (14.21)% (29.83)%
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 2.35%** 2.59% 2.39% 1.72% 2.27% 2.22%
Net investment income (loss) (1.14)%** 0.52% 0.37% 1.14% 0.54% (0.35)%
(a) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(b) Amount rounds to less than one cent per share.
* 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.
26
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
9/1/06
to Year 6/24/05 (a)
1/31/07 (c) Ended to
(unaudited) 8/31/06 8/31/05
CLASS R
Net asset value, beginning of period $ 37.32 $ 31.27 $ 29.45
---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.13) $ 0.49 $ 0.01
Net realized and unrealized gain on
investments and foreign currency
transactions 5.09 5.86 1.81
---------- ---------- ----------
Net increase from investment operations $ 4.96 $ 6.35 $ 1.82
---------- ---------- ----------
Distributions to shareowners:
Net investment income (0.25) (0.30) -
---------- ---------- ----------
Net increase in net asset value $ 4.71 $ 6.05 $ 1.82
---------- ---------- ----------
Net asset value, end of period $ 42.03 $ 37.32 $ 31.27
========== ========== ==========
Total return* 12.75% 20.46% 6.19%(b)
Ratio of net expenses to average net assets+ 2.02%** 2.00% 2.14%**
Ratio of net investment income (loss) to average
net assets+ (1.02)%** 1.37% 0.08%**
Portfolio turnover rate 47%** 43% 149%
Net assets, end of period (in thousands) $ - $ 131 $ 53
Ratios with no waiver of management fees and
assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 3.99%** 6.27% 2.14%**
Net investment income (loss) (2.99)%** 5.63% 0.08%**
Ratios with waiver of management fees
and assumption of expenses by PIM
and reduction for fees paid indirectly:
Net expenses 2.00%** 2.00% 2.00%**
Net investment income (loss) (1.00)%** 1.37% 0.22%**
(a) Class R shares were first publicly offered on June 24, 2005.
(b) Not annualized.
(c) Class R shares were liquidated on 1/31/07.
* 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. 27
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended Year 6/24/05 (a)
2/28/07 Ended to
(unaudited) 8/31/06 8/31/05
CLASS Y
Net asset value, beginning of period $ 39.06 $ 32.54 $ 30.59
---------- ---------- ----------
Increase from investment operations:
Net investment income $ 0.24 $ 0.89 $ 0.07
Net realized and unrealized gain on
investments and foreign currency
transactions 4.15 6.04 1.88
---------- ---------- ----------
Net increase from investment operations $ 4.39 $ 6.93 $ 1.95
---------- ---------- ----------
Distributions to shareowners:
Net investment income (0.70) (0.41) -
---------- ---------- ----------
Net increase in net asset value $ 3.69 $ 6.52 $ 1.95
---------- ---------- ----------
Net asset value, end of period $ 42.75 $ 39.06 $ 32.54
========== ========== ==========
Total return* 11.22% 21.50% 6.36%(b)
Ratio of net expenses to average
net assets+ 1.00%** 1.10% 1.18%**
Ratio of net investment income to average
net assets+ 0.40%** 2.00% 1.05%**
Portfolio turnover rate 47%** 43% 149%
Net assets, end of period (in thousands) $ 13,762 $ 3,927 $ 3,495
Ratios with no waiver of management fees
and assumption of expenses by PIM
and no reduction for fees paid indirectly:
Net expenses 1.00%** 1.10% 1.18%**
Net investment income 0.40%** 2.00% 1.05%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.00%** 1.10% 1.18%**
Net investment income 0.40%** 2.00% 1.05%**
(a) Class Y shares were first publicly offered on June 24, 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.
28 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/07 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Europe Select Equity Fund (the Fund) is a Massachusetts business trust
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The investment objective of the Fund is long-term
growth of capital.
The Fund offers four classes of shares - Class A, Class B, Class C, and Class Y
shares. Class A, Class B and Class C Shares were first publicly offered on
December 29, 2000. Class R and Class Y shares were first publicly offered on
June 24, 2005. All Class R shares were liquidated on February 1, 2007. Shares of
Class A, Class B, Class C, Class R and Class Y each represent an interest in the
same portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B, Class C and Class R shareowners, respectively. There is no distribution
plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Investing in the securities of European issuers involves unique risks compared
to investing in securities of U.S. issuers. These risks are more pronounced to
the extent the Fund invests a significant portion of its investments in any one
European region. Information regarding the Fund's principal investment risks is
contained in the Fund's prospectus(es). Please refer to those documents when
considering the Fund's risks.
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:
29
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
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 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. The Fund invests primarily in
securities of non-U.S. issuers. The principal exchanges and markets for
such securities have closing times prior to the close of the NYSE. However,
the value of these securities may be influenced by changes in global
markets occurring after the closing times of the local exchanges and
markets up to the time the Fund determines its net asset value.
Consequently, the Board of Trustees of the Fund has determined that the use
of daily fair valuations as provided by a pricing service is appropriate
for the Fund. The Fund may also take into consideration other significant
events in determining the fair value of these securities. Thus, the Fund's
securities valuations may differ from prices reported by the various local
exchanges and markets. Temporary cash investments are valued at amortized
cost.
Dividend income is recorded on the ex-dividend date, except that certain
dividends where the ex-dividend date may have passed are recorded as soon
as the Fund becomes aware of the ex-dividend data in the exercise of
reasonable diligence. Interest income, including interest on income bearing
cash accounts, is recorded on the accrual basis, 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.
30
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on foreign
currency contracts, disposition of foreign currencies and the difference
between the amount of income accrued and the U.S. dollars actually
received. Further, the effects of changes in foreign currency exchange
rates on investments are not segregated in the statement of operations from
the effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the
time a portfolio hedge is offset by entering into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to meet
the terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar.
At February 28, 2007, the Fund had no outstanding portfolio hedges or
settlement hedges.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investments 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
31
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
federal income tax rules. Therefore, the sources of the Trust's
distributions may be shown in the accompanying financial statements as
either from or in excess of net investment income or net realized gain on
investment transactions, or from paid-in-capital, depending on the type of
book/tax differences that may exist.
At August 31, 2006, the Fund had a net capital loss carry forward of
$8,023,036, which will expire in 2011 if not utilized.
At August 31, 2006, the Fund has reclassified $264,447 to decrease
accumulated net investment income and $264,447 to decrease accumulated net
realized loss on investments and foreign currency transactions to reflect
permanent book/tax differences. The reclassification has no impact on the
net asset value of the Fund and is designed to present the Fund's capital
accounts on a tax basis.
The tax character of distributions paid will be determined at the end of
the current fiscal year. The tax character of distributions paid during the
year ended August 31, 2006, was as follows:
- --------------------------------------------------------------------------------
2006
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary Income $ 1,007,574
Long-term capital gain -
-----------
Total $ 1,007,574
===========
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at August 31, 2006.
- --------------------------------------------------------------------------------
2006
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 1,998,669
Capital loss carryforward (8,023,036)
Unrealized appreciation 45,634,432
-----------
Total $39,610,065
===========
- --------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appreciation is
attributable to the tax deferral of losses on wash sales.
32
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano) earned $19,199 in underwriting commissions on the
sale of Class A shares during the six months ended February 28, 2007.
F. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B, Class C and Class R shares of the Fund,
respectively (See Note 4). Class Y shares are not subject to a distribution
plan. Shareowners of each class share all expenses and fees paid to the
transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expenses (see Note 3). Income, common expenses and realized and unrealized
gains and losses are calculated at the Fund level and allocated daily to
each class of shares based on their respective percentage of adjusted net
assets at the beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, Class C, Class R and Class Y shares can bear
different transfer agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary of
UniCredito Italiano, manages the Trust's portfolio. Management fees are
calculated daily at the annual rate of 0.85% of the Fund's average daily nets
assets up to $500 million; and 0.75% of the excess over $500 million. The
management fee was equivalent to 0.85% of the average daily net assets for the
period.
Effective June 24, 2005, PIM has contractually agreed to limit ordinary
operating expenses to the extent required to reduce Fund expenses to 1.75%,
2.65%, 2.65% and 2.00% of the average daily net assets attributable to Class A,
Class B, Class C and Class R shares,
33
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
respectively. Class Y shares do not have an expense limitation. These expense
limitations are in effect through January 1, 2009 for Class A shares and through
January 1, 2008 for Class B, Class C and Class R shares.
Prior to the merger, PIM had contractually agreed not to impose all or a portion
of its management fee and to assume other operating expenses of Pioneer Europe
Select Fund to the extent necessary to limit Class A expenses to 1.75% of the
average daily net assets attributable to Class A shares. The portion of the
Fund-wide expenses attributable to Class B and Class C shares were reduced only
to the extent that such expenses are reduced for Class A shares.
In addition, under the management fees, administrative costs and certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At February 28, 2007, $6,086 was payable to PIM
related to management fees, administrative costs and certain other services and
is included in due to affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due to affiliates is $162,967 in transfer agent
fees payable to PIMSS at February 28, 2007.
4. Distribution Plans
The Fund adopted Plans of Distribution with respect Class A, Class B, Class C,
and Class R shares (Class A Plan, Class B Plan, Class C Plan, and Class R Plan)
in accordance with Rule 12b-1 under 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. Pursuant to
the Class R Plan, the Fund pays PFD 0.50% of the average daily net assets
attributable to Class R shares for distribution services.
34
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Included in due to affiliates is $2,646 in distribution fees payable to PFD at
February 28, 2007. The Fund has also adopted a separate service plan for Class R
shares (Service Plan). The Service Plan authorizes the Fund to pay securities
dealers, plan administrators or other service organizations that agree to
provide certain services to retirement plans or plan participants holding shares
of the Fund a service fee of up to 0.25% of the Fund's average daily net assets
attributable to Class R shares held by such plans.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within 18 months of
purchase. Class B shares 2004 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%. There are no CDSCs
for Class R shares. Proceeds from the CDSCs are paid to PFD. For the six months
ended February 28, 2007 CDSCs in the amount of $12,677 were paid to PFD.
5. Expense Offset Arrangements
The Fund can enter 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 six months ended February 28, 2007 the Fund's expenses were
reduced by $12,185 under such arrangements.
6. Subsequent Event
On September 19, 2006, the Board of Trustees approved the liquidation of the
Fund's Class R shares. This liquidation took place on February 1, 2007.
35
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
7. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions have a
"more-likely-than-not" probability of being sustained by the applicable tax
authority. Tax positions deemed to not meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the reporting period in which
they are realized. Adoption of FIN 48 is required for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of no
later than June 29, 2007. At this time, management is evaluating the
implications of FIN 48 and any impact in the financial statements has not yet
been determined.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal
years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
36
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
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"), voting
separately, annually 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: (i) will
enable the Fund to receive quality investment advisory services at a fee deemed
reasonable; and (ii) is in the best interests of the Fund and its shareowners.
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 Interested
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 and/or officers of 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 also
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
information on (i) the investment performance of the Fund, a peer group of funds
as classified by Morningstar, Inc., an independent evaluation service
("Morningstar") and an index considered appropriate by the Independent Trustees
for this purpose, (ii) sales and redemption activity in respect of 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
37
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
compliance with the Fund's investment policies and restrictions and with the
Fund's Code of Ethics and the structure and responsibilities of the Investment
Adviser's compliance department and (viii) the nature, cost and character of
non-investment management services provided by the Investment Adviser and its
affiliates.
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, three and five year periods for
the Fund and a peer group of funds selected on the basis of criteria considered
appropriate by the Independent Trustees for this purpose, (2) management and
other fees incurred by a peer group of funds selected on the basis of criteria
considered appropriate 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 on
the basis of criteria considered appropriate 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 in providing services to 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
by the Funds 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 and certain of the Fund's expenses that are
incurred on a basis other than as a percentage of net assets.
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 Shareowners. The Trustees considered the benefits to
shareowners of investing in a Fund that is part of a large number of
investment companies offering a variety
38
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
of investment disciplines and providing for a large variety of Fund and
shareowner 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 absolute investment
performance based upon total return, as well as the Fund's performance
relative to the performance of both a peer group and an index considered
appropriate by the Independent Trustees for this purpose. The Fund's
performance, based upon total return, was in the fifth quintile of its
Morningstar category peer group for the 12 months ended June 30, 2006, the
third quintile of the peer group for the three years ended June 30, 2006,
and the second quintile for the five years ended June 30, 2006. (In all
quintile rankings referred to throughout this discussion first quintile is
most favorable to the Fund's shareowners. Thus, highest relative
performance would be first quintile and lowest relative expenses also would
be first quintile.) The Trustees, focusing on three-year total returns,
concluded that the performance of the Fund was satisfactory.
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 size, 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 concluded that the Investment Adviser had
the quality and depth of personnel and the well-developed methods essential
to perform its duties under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality and extent of other services provided to shareowners of the Fund,
including administrative and shareowner services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness of the
39
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
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 or its affiliates under other
contracts, as well as the Investment Adviser's supervision of third party
service providers. Based on these considerations, the Trustees concluded
that the nature, quality and extent of such services are satisfactory and
reliable and serve the shareowners 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 its Morningstar category peer group. The Fund's management fee
for the 12 months ended June 30, 2006 was in the third quintile relative to
the management fees paid by the other funds in that peer group for the
comparable period. The Trustees also considered the Fund's expense ratio
for the 12 months ended June 30, 2006 and expense ratios for the comparable
period of the peer group of funds selected on the basis of criteria
considered appropriate by the Independent Trustees for this purpose using
data provided by Strategic Insight Mutual Fund Research and Consulting,
LLC, an independent third party. The Trustees found the Fund's expense
ratio for the 12 months ended June 30, 2006 to be in the fifth quintile,
according to data for the applicable peer group for the most recent fiscal
year.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer Funds,
including a review of the Investment Adviser's methodology in allocating
certain of its costs to the management of each Fund, as well as 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
industry data available. 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.
40
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. Economies of Scale. The Trustees considered the economies of scale with
respect to the management of the Fund, whether the Fund had appropriately
benefited from any economies of scale, and whether there was potential for
realization of any further economies of scale. The Trustees concluded that
in light of anticipated growth of the Fund, break points in the management
fee were not necessary at this time. However, the Trustees would evaluate
the need for break points from time to time.
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 shareowner services. The
Trustees also considered the receipt of sales loads and payments under Rule
12b-1 plans in respect of 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 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. In light of the Investment Adviser's overall performance, the
Trustees considered it appropriate to continue to retain the management services
of the Investment Adviser. Based on their review of the overall nature and
quality of services provided by the Investment Adviser and the fees charged by
other funds in the Fund's relevant peer group, and taking into account all
material factors deemed relevant by the Trustees as well as the advice of
independent counsel, the Trustees concluded that the Management Contract with
the Fund, including the fee payable thereunder, was fair and reasonable and that
its renewal was in the best interests of the Fund and its shareholders.
Accordingly, the Trustees voted to approve the continuation of the Management
Contract for another year.
41
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Vincent Nave, Treasurer
Mary K. Bush Dorothy E. Bourassa, Secretary
Margaret B.W. Graham
Thomas J. Perna
Marguerite A. Piret
John Winthrop
Investment Adviser and Administrator
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
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.
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.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at http://www.sec.gov.
42
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This page for your notes.
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This page for your notes.
44
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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@pioneerinvestments.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerinvestments.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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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.
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 control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
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 Europe Select Equity Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date April 27, 2007
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 April 27, 2007
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date April 27, 2007
* Print the name and title of each signing officer under his or her signature.