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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 811-07870
Pioneer Real Estate Shares
(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: December 31
Date of reporting period: January 1, 2007 through June 30, 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
-------
REAL ESTATE
SHARES
PWREX
Ticker Symbol
Semiannual
Report
6/30/07
[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 19
Notes to Financial Statements 27
Trustees, Officers and Service Providers 34
President's
Dear Shareowner,
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Staying diversified and keeping your portfolio invested in the markets are two
general investment principles that have served investors well over time. Those
were particularly useful guides during the past year, as U.S. and global stock
and bond markets grew strongly during the period.
In the first half of 2007, U.S. equity markets proved resilient in the face of a
slowing economy. The Standard & Poor's 500 Stock Index set a record high in late
May and returned 7% in the first half of the year. The Dow Jones Industrial
Average returned 9%, building on a five-year bull market. International
developed and emerging markets equities performed even better than U.S.
equities, with the MSCI EAFE (developed market) Index returning 11% and the MSCI
Emerging Markets Index returning 18% in the first half of 2007.
The general U.S. bond market, as measured by the Lehman Brothers Aggregate Bond
Index, returned 1% in the first half, as rising bond yields produced price
declines that partially offset income earned. The high yield market, as measured
by the Merrill Lynch High Yield Bond Master II Index, returned 3%, reflecting
its higher yields and continuing investor confidence in the strength of the U.S.
economy.
The United States has enjoyed a cyclical recovery with strong economic growth.
While the growth has slowed recently, we believe that continuing growth at a
moderate rate appears to be more likely than a recession. Slowing growth was due
in large part to a decline in the rate of new home construction and in part to
the lagging effects of rising energy and commodity prices as well as rising
short-term interest rates. Slowing economic activity is also due in part to the
natural maturation of the cyclical expansion as U.S. factories approach full
utilization and the labor market approaches full employment. This slowdown is
therefore not entirely unwelcome, as it reduces the threat of higher inflation.
The Federal Reserve Board (the Fed) continues to highlight its commitment to
keeping inflationary pressures contained. This is in keeping with "best
practices" among the world's central banks: low and stable inflation is believed
to be the best backdrop for stable economic growth and low average unemployment
over the long term. Keeping inflation low is also an important support for stock
and bond valuations, and so the Fed's policy is investor-friendly.
2
Letter
In Europe, solid GDP growth driven by a positive operating environment for
European companies, especially those that are benefiting from strong export
markets for their goods and services, is driving unemployment lower and
supporting growing consumption. European inflationary pressures appear to be
largely under control, with the European Central bank remaining strongly
vigilant. Japanese economic growth continues to make progress, and the country
has become a more attractive market as deflationary problems recede. Economic
growth in emerging market countries remains faster than in the developed world
as they continue to "catch up." Leading the way is China, which continues its
rise as a world economic power.
Looking forward, we believe that the overall climate for equity investors
generally will continue to be positive, although valuations are less attractive
than they were a year ago, and a correction after a period of strong performance
is possible. Rising yields have depressed year-to-date bond returns, but
increased the attractiveness of bonds looking forward.
Sudden swings in the markets are always to be expected. Just as staying
diversified and invested are important investment principles, it is also
important to pay attention to asset allocation. As always, we encourage
shareholders to work closely with their financial advisor to find the mix of
stocks, bonds and money market assets that is aligned to their particular risk
tolerance and investment objective.
Respectfully,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, 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 Real Estate Shares
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/07
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After seven years of strong returns, real estate investment trusts (REITs) ended
the first half of 2007 in negative territory with the major U.S. REIT indexes
down approximately 6%. While the correction and its inherent volatility warrants
a more cautionary approach, the underlying fundamentals remain generally strong
across each of the major property types, as Matthew Troxell of AEW Capital
Management, L.P., the Fund's subadviser, explains in the following interview.
Q: What triggered the decline in REIT prices?
A: The sector's downturn, which commenced in early February, was caused by
several factors, including the impact of the market's slightly diminished
(albeit still positive) expectations for REIT earnings in 2007. Turbulence
in the sector increased further in late February and early March due to
problems in both the Chinese market and the U.S. sub-prime lending market,
which impacted markets everywhere - including REITs. The sector's most
precipitous drop occurred in June (REITs were down over 9% for the month),
as rising long-term interest rates and widening credit spreads weighed
heavily on the sector. We also believe that REIT share prices have recently
fallen in some measure because of profit taking, as investors came to grips
with the fact that the sector's spectacular seven-year rally may have run
its course.
Q: How did the Fund perform during the semiannual period?
A: Reflecting the sector's weak performance, the Fund's Class A shares posted
a total return of -7.66% at net asset value for the six months ended June
30, 2007. In comparison, the Fund's benchmark index, Dow Jones Wilshire
Real Estate Securities Index returned, -6.19% and the average return of the
301 real estate funds tracked by Lipper, Inc. was -4.71% for the same
period.
The major driver of the Fund's underperformance relative to the benchmark
index and its peer group was the disappointing returns of stocks in the
shopping center, office and hotel sectors. The negative performance in
these sectors was partially offset by the positive returns of holdings in
the storage and triple net lease sectors. The Fund's exposure to the
underperforming healthcare sector, which struggled in the final weeks of
the semiannual period, impacted its performance relative to the benchmark,
as the index does not have any exposure to this sector.
4
Pioneer Real Estate Shares
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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 investments contributed to performance?
A: Despite the sector's overall decline, several holdings turned in positive
performance. Two of the top individual contributors to the Fund's
performance during the first half of 2007 included Starwood Hotels &
Resorts Worldwide and Archstone-Smith Trust (apartment). Starwood's strong
performance for the period was largely attributable to speculation that the
company might be bought, which began after the removal of the company's CEO
in early April. Archstone-Smith Trust benefited significantly from its
announcement that it was being acquired at a significant premium to its
respective share price.
Q: What investments detracted from performance?
A: Since real estate stocks have been such strong performers in recent years,
posting an annualized return of over 22% between January 2000 and December
2006, some moderation in performance during the first half of 2007 was not
surprising. Two of the most disappointing stocks held by the Fund - Boston
Properties (office) and Developers Diversified Realty (shopping centers) -
declined even though we do not believe that there were any significant
events that led to this weakness. We still currently believe both companies
represent solid values relative to their peers and continued to maintain
the Fund's overweight positions in both stocks as of the date of this
shareholder report. Public Storage - the largest company in the storage
sector - was negatively impacted by an overall slowdown in the industry and
in same-store sales, which, in turn, was driven by lagging home sales.
5
Pioneer Real Estate Shares
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/07 (continued)
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Q: Despite the decline, are the underlying fundamentals of the various
property types that the Fund is invested in still positive?
A: Yes. While geographic regions continue to offer varying degrees of
strength, we believe that the underlying fundamentals generally remain
strong across each of the major property types. In the retail sector,
property occupancies are still high, tenant interest for available space is
still strong, and overall same store sales remain healthy. Office and
industrial fundamentals also remain solid as evidenced by continued high
occupancy levels and rising rents, with coastal locations doing
exceptionally well. Supply is increasing, but not to a point that has
warranted significant concerns. Conditions remain strong in the apartment
sector relative to historical averages, although overall rental growth
appears to be slowing somewhat. In the near term, we believe that the
sector will continue to be supported by the softening housing market and
lenders' tightening credit standards for home buyers. We believe that the
fundamentals remain sound in the lodging sector as well, despite moderating
revenue per available room growth year-over-year and increasing supply
levels.
Q: Did the Fund's sector distribution change noticeably during the six months?
A: We didn't make any significant changes to the Fund's sector allocations
versus the benchmark index during the period. The Fund's industry
weightings are a function of our bottom-up investment process, which
focuses on securities selection within each sector.
Q: Have you become more cautious in your outlook?
A: Yes, despite the solid fundamentals. We expect continued volatility in the
REIT market during the remainder of the year, with several factors playing
a role in the Fund's performance and the duration of the correction. The
factors include higher interest rates, the health of the consumer and the
overall economy, and potential increases in commercial real estate lending
spreads, which could have a negative impact on asset prices and the
privatization activity that has been so important to the sector's growth
recently.
6
Pioneer Real Estate Shares
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It appears that the public property markets have been more preoccupied with
these issues than the private property markets, and their REIT share prices
reflected many of these concerns by the end of the period. Although REITs
on average were trading at over a 10% discount to underlying net asset
values at the end of the period and we believe property fundamentals remain
generally firm, there appears to be few positive catalysts in the current
environment. As always, we'll continue to place great importance on the
quality of a company's balance sheet and earnings stream as we navigate
this more challenging environment.
The Fund invests in REIT securities, the value of which can fall for a variety
of reasons, such as declines in rental income, fluctuating interest rates, poor
property management, environmental liabilities, uninsured damage, increased
competition, or changes in real estate tax laws. At times, the Fund's
investments may represent industries or industry sectors that are interrelated
or have common risks, making it more susceptible to any economic, political, or
regulatory developments or other risks affecting those industries or 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 Real Estate Shares
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PORTFOLIO SUMMARY 6/30/07
Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA IS A REPRESENTATION OF A PIE CHART IN THE PRINTED MATERIAL]
U.S. Common Stocks 92.7%
Temporary Cash Investment 7.3%
Sector Diversification
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(As a percentage of equity holdings)
[THE FOLLOWING DATA IS A REPRESENTATION OF A PIE CHART IN THE PRINTED MATERIAL]
Apartment 19.2%
Office 17.8%
Regional Mall 15.6%
Industrial 12.1%
Shopping Center 11.4%
Hotel 9.2%
Diversified 5.7%
Storage 5.2%
Health Care 2.7%
Triple Net Lease 1.1%
10 Largest Holdings*
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(As a percentage of equity holdings)
1. Simon DeBartolo Group, Inc. 8.41%
2. Boston Properties, Inc. 5.86
3. Equity Residential Property Trust 5.45
4. Vornado Realty Trust 4.28
5. Archstone-Smith Trust 4.19
6. Host Hotels & Resorts, Inc. 4.03
7. Public Storage, Inc. 3.88
8. Brookfield Properties Corp. 3.79
9. Developers Diversifies Realty Corp. 3.60
10. AvalonBay Communities, Inc. 3.58
* This list excludes temporary cash investments 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 Real Estate Shares
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
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Class 6/30/07 12/31/06
- ----- ------- --------
A $30.21 $33.07
B $29.93 $32.74
C $29.97 $32.80
Y $30.18 $33.03
Distributions Per Share
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1/1/07 - 6/30/07
----------------
Short-Term Long-Term
Class Dividends Capital Gains Capital Gains
- ----- --------- ------------- -------------
A $0.3500 $ - $ -
B $0.1900 $ - $ -
C $0.2100 $ - $ -
Y $0.4200 $ - $ -
9
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 6/30/07 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 Real Estate Shares at public offering price, compared
to that of the Dow Jones Wilshire Real Estate Securities Index.
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Average Annual Total Returns
(As of June 30, 2007)
Net Asset Public Offering
Period Value (NAV) Price (POP)
10 Years 12.49% 11.83%
5 Years 19.01 17.60
1 Year 9.56 3.25
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Expense Ratio
(Per prospectus dated May 1, 2007)
Gross Net
1.37% 1.37%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Real Dow Jones Wilshire Real
Estate Shares Estate Securities Index
6/97 $ 9,425 $10,000
$10,026 $10,650
6/99 $ 9,015 $ 9,917
$ 9,387 $10,358
6/01 $11,237 $12,899
$12,817 $14,682
6/03 $13,142 $15,120
$16,835 $19,552
6/05 $22,644 $26,263
$27,923 $32,008
6/07 $30,593 $35,760
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.
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 Dow Jones Wilshire Real Estate Securities Index measures the performance of
publicly traded real estate securities, such as real estate investment trusts
and real estate operating companies. You cannot invest directly in an index.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in the
Index.
10
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 6/30/07 CLASS B SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Real Estate Shares, compared to that of the Dow Jones
Wilshire Real Estate Securities Index.
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Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
10 Years 11.59% 11.59%
5 Years 18.00 18.00
1 Year 8.60 4.60
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Expense Ratio
(Per prospectus dated May 1, 2007)
Gross Net
2.31% 2.31%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Real Dow Jones Wilshire Real
Estate Shares Estate Securities Index
6/97 $10,000 $10,000
$10,558 $10,650
6/99 $ 9,416 $ 9,917
$ 9,739 $10,358
6/01 $11,565 $12,899
$13,084 $14,682
6/03 $13,313 $15,120
$16,917 $19,552
6/05 $22,562 $26,263
$27,563 $32,008
6/07 $29,934 $35,760
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
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied to
withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus for
details. 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.
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 Dow Jones Wilshire Real Estate Securities Index measures the performance of
publicly traded real estate securities, such as real estate investment trusts
and real estate operating companies. You cannot invest directly in an index.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in an
Index.
11
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 6/30/07 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 Real Estate Shares, compared to that of the Dow Jones
Wilshire Real Estate Securities Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
10 Years 11.63% 11.63%
5 Years 18.08 18.08
1 Year 8.63 8.63
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Expense Ratio
(Per prospectus dated May 1, 2007)
Gross Net
2.24% 2.24%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Real Dow Jones Wilshire Real
Estate Shares Estate Securities Index
6/97 $10,000 $10,000
$10,559 $10,650
6/99 $ 9,408 $ 9,917
$ 9,748 $10,358
6/01 $11,569 $12,899
$13,095 $14,682
6/03 $13,334 $15,120
$16,951 $19,552
6/05 $22,627 $26,263
$27,671 $32,008
6/07 $30,059 $35,760
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.
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 Dow Jones Wilshire Real Estate Securities Index measures the performance of
publicly traded real estate securities, such as real estate investment trusts
and real estate operating companies. You cannot invest directly in an index.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in an
Index.
12
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 6/30/07 CLASS Y SHARES
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Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Real Estate Shares, compared to that of the Dow Jones
Wilshire Real Estate Securities Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
10 Years 13.10% 13.10%
5 Years 19.65 19.65
1 Year 10.09 10.09
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Expense Ratio
(Per prospectus dated May 1, 2007)
Gross Net
0.87% 0.87%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Real Dow Jones Wilshire Real
Estate Shares Estate Securities Index
6/97 $10,000 $10,000
$10,642 $10,650
6/99 $ 9,660 $ 9,917
$10,132 $10,358
6/01 $12,188 $12,899
$13,968 $14,682
6/03 $14,415 $15,120
$18,572 $19,552
6/05 $25,104 $26,263
$31,114 $32,008
6/07 $34,254 $35,760
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.
Performance for periods prior to the inception of Class Y shares reflects the
NAV performance of the Fund's Class A shares. The performance does not reflect
differences in expenses, including the Rule 12b-1 fees applicable to Class A
shares. Since fees for Class A shares are generally higher than those of Class Y
shares, the performance shown for Class Y shares prior to its inception would
have been higher. 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.
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 Dow Jones Wilshire Real Estate Securities Index measures the performance of
publicly traded real estate securities, such as real estate investment trusts
and real estate operating companies. You cannot invest directly in an index.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in an
Index.
13
Pioneer Real Estate Shares
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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 Real Estate Shares
Based on actual returns from January 1, 2007 through June 30, 2007
Share Class A B C Y
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Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 1/1/07
Ending Account Value $ 923.40 $ 919.60 $ 919.70 $ 925.60
On 6/30/07
Expenses Paid During Period* $ 6.25 $ 10.52 $ 10.14 $ 4.25
* Expenses are equal to the Fund's annualized expense ratio of 1.31%, 2.21%,
2.13% and 0.89% for Class A, Class B, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period).
14
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Real Estate Shares
Based on a hypothetical 5% return per year before expenses, reflecting the
period from January 1, 2007 through June 30, 2007
Share Class A B C Y
- --------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 1/1/07
Ending Account Value $1,018.30 $1,013.84 $1,014.23 $1,020.38
On 6/30/07
Expenses Paid During Period* $ 6.56 $ 11.03 $ 10.46 $ 4.46
* Expenses are equal to the Fund's annualized expense ratio of 1.31%, 2.21%,
2.13% and 0.89% for Class A, Class B, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period).
15
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (unaudited)
- --------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 98.6%
Consumer Services - 4.0%
Hotels, Resorts & Cruise Lines - 4.0%
163,200 Hilton Hotels Corp. $ 5,462,304
60,000 Starwood Hotels & Resorts 4,024,200
------------
$ 9,486,504
------------
Total Consumer Services $ 9,486,504
------------
Real Estate - 94.0%
Diversified Real Estate Investment Trust- 8.5%
170,000 Liberty Property Trust (b) $ 7,468,100
42,000 PS Business Parks, Inc. 2,661,540
91,700 Vornado Realty Trust (b) 10,072,328
------------
$ 20,201,968
------------
Industrial Real Estate Investment Trusts - 7.8%
97,000 AMB Property Corp. $ 5,162,340
341,200 DCT Industrial Trust, Inc. 3,671,312
67,800 First Potomac Realty Trust 1,579,062
145,900 ProLogis Trust 8,301,710
------------
$ 18,714,424
------------
Mortgage Real Estate Investment Trusts - 1.0%
56,600 iStar Financial, Inc. $ 2,509,078
------------
Office Real Estate Investment Trusts - 14.8%
67,800 BioMed Property Trust, Inc. $ 1,703,136
135,000 Boston Properties, Inc. 13,787,550
170,000 Brandywine Realty Trust 4,858,600
65,000 Corporate Office Properties 2,665,650
42,000 Digital Realty Trust, Inc. 1,582,560
99,100 Highwoods Properties, Inc. 3,716,250
271,000 HRPT Properties Trust 2,818,400
58,500 Kilroy Realty Corp. 4,144,140
------------
$ 35,276,286
------------
Real Estate Management & Development - 3.7%
367,500 Brookfield Properties Corp. $ 8,933,925
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Residential Real Estate Investment Trusts - 19.0%
56,000 Apartment Investment & Management Co. $ 2,823,520
167,000 Archstone-Smith Trust 9,871,370
70,800 AvalonBay Communities, Inc. 8,416,704
107,000 Camden Property Trust 7,165,790
281,000 Equity Residential Property Trust 12,822,030
20,600 Home Properties, Inc. (b) 1,069,758
118,900 United Dominion Realty Trust 3,127,070
------------
$ 45,296,242
------------
Retail Real Estate Investment Trusts - 26.7%
95,000 Cedar Shopping Centers, Inc. $ 1,363,250
161,000 Developers Diversifies Realty Corp. 8,486,310
79,700 Federal Realty Investment Trust 6,157,622
92,000 General Growth Properties, Inc. 4,871,400
94,400 Kimco Realty Corp. 3,593,808
32,500 Kite Realty Group Trust 618,150
100,000 Regency Centers Corp. 7,050,000
212,900 Simon DeBartolo Group, Inc. 19,808,216
83,200 Taubman Centers, Inc. 4,127,552
92,000 The Macerich Co. 7,582,640
------------
$ 63,658,948
------------
Specialized Real Estate Investment Trust - 12.5%
154,700 Ashford Hospitality Trust $ 1,819,272
204,000 Extra Space Storage, Inc. 3,366,000
27,800 Healthcare Realty Trust, Inc. 772,284
26,000 Hospitality Properties Trust 1,078,740
410,000 Host Hotels & Resorts, Inc. 9,479,200
156,500 Nationwide Health Properties, Inc. 4,256,800
119,000 Public Storage, Inc. 9,141,580
------------
$ 29,913,876
------------
Total Real Estate $224,504,747
------------
Telecommunication Services - 0.6%
Integrated Telecommunication Services - 0.6%
49,300 Health Care Property Investors, Inc. (b) $ 1,426,249
------------
Total Telecommunication Services $ 1,426,249
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
TOTAL COMMON STOCKS
(Cost $156,656,293) $235,417,500
------------
TEMPORARY CASH INVESTMENTS - 7.8%
Security Lending Collateral - 7.8%
18,611,225 Securities Lending Investment Fund, 5.28% $ 18,611,225
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $18,611,225) $ 18,611,225
------------
TOTAL INVESTMENT IN SECURITIES - 106.4%
(Cost $175,267,518) $254,028,725
------------
OTHER ASSETS AND LIABILITIES - (6.4%) $(15,192,209)
------------
TOTAL NET ASSETS - 100.0% $238,836,516
============
* Non-income producing security.
(a) At June 30, 2007, the net unrealized gain on investments based on cost for
federal income tax purposes of $175,267,518 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost. $80,669,023
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value. (1,907,816)
-----------
Net unrealized gain $78,761,207
===========
(b) At June 30, 2007, the following securities were out on loan:
Shares Security Value
14,162 Health Care Property Investors, Inc. $ 409,707
20,394 Home Properties, Inc. 1,059,061
168,300 Liberty Property Trust 7,393,419
85,070 Vornado Realty Trust 9,344,089
-----------
Total $18,206,276
===========
Purchases and sales of securities (excluding temporary cash investments) for the
period ended June 30, 2007 aggregated $30,225,934 and $34,378,101 respectively.
18 The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 6/30/07 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (including securities loaned of
$18,206,276) (cost $175,267,518) $254,028,725
Cash 1,417,086
Receivables -
Investment securities sold 1,711,242
Fund shares sold 650,684
Dividends, interest and foreign taxes withheld 884,904
Other 30,830
------------
Total assets $258,723,471
------------
LIABILITIES:
Payables -
Investment securities purchased $ 799,029
Fund shares repurchased 353,974
Upon return of securities loaned 18,611,225
Due to affiliates 86,822
Accrued expenses 35,905
------------
Total liabilities $ 19,886,955
------------
NET ASSETS:
Paid-in capital $146,582,656
Undistributed net investment income 692,825
Accumulated net realized gain on investments 12,799,828
Net unrealized gain on investments 78,761,207
------------
Total net assets $238,836,516
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $140,749,129/4,658,552 shares) $ 30.21
============
Class B (based on $28,341,710/947,072 shares) $ 29.93
============
Class C (based on $21,814,845/727,928 shares) $ 29.97
============
Class Y (based on $47,930,832/1,588,186 shares) $ 30.18
============
MAXIMUM OFFERING PRICE:
Class A ($30.21 [divided by] 94.25%) $ 32.05
============
The accompanying notes are an integral part of these financial statements. 19
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/07
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $15,242) $4,550,991
Interest 161,991
Income from securities loaned, net 14,564
----------
Total investment income $ 4,727,546
------------
EXPENSES:
Management fees $1,117,645
Transfer agent fees and expenses
Class A 149,990
Class B 60,224
Class C 34,826
Class Y 329
Distribution fees
Class A 206,949
Class B 177,345
Class C 139,368
Administrative reimbursements 31,434
Custodian fees 13,567
Registration fees 31,358
Professional fees 27,579
Printing expense 14,653
Fees and expenses of nonaffiliated trustees 4,860
Miscellaneous 5,061
----------
Total expenses $ 2,015,188
Less fees paid indirectly (12,672)
------------
Net expenses $ 2,002,516
------------
Net investment income $ 2,725,030
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 11,844,285
Change in net unrealized loss on investments (35,326,846)
------------
Net loss on investments $(23,482,561)
------------
Net decrease in net assets resulting from operations $(20,757,531)
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/07 and the Year Ended 12/31/06, respectively
Six Months Ended
6/30/07 Year Ended
(unaudited) 12/31/06
FROM OPERATIONS:
Net investment income $ 2,725,030 $ 1,903,072
Net realized gain on investments 11,844,285 15,089,781
Change in net unrealized gain (loss) on investments (35,326,846) 50,495,057
------------- -------------
Net increase (decrease) in net assets resulting
from operations $ (20,757,531) $ 67,487,910
------------- -------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.35 and $0.28 per share, respectively) $ (1,711,761) $ (1,258,729)
Class B ($0.19 and $0.01 per share, respectively) (195,154) (5,469)
Class C ($0.21 and $0.02 per share, respectively) (168,531) (14,555)
Class Y ($0.42 and $0.42 per share, respectively) (619,055) (512,542)
Net realized gain:
Class A ($0.00 and $1.68 per share, respectively) - (7,867,736)
Class B ($0.00 and $1.68 per share, respectively) - (1,751,645)
Class C ($0.00 and $1.68 per share, respectively) - (1,326,725)
Class Y ($0.00 and $1.68 per share, respectively) - (2,116,186)
------------- -------------
Total distributions to shareowners $ (2,694,501) $ (14,853,587)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 44,632,360 $ 78,862,717
Reinvestment of distributions 2,423,240 13,544,137
Cost of shares repurchased (56,941,911) (59,390,077)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions $ (9,886,311) $ 33,016,777
------------- -------------
Net increase (decrease) in net assets $ (33,338,343) $ 85,651,100
NET ASSETS:
Beginning of period 272,174,859 186,523,759
------------- -------------
End of period $ 238,836,516 $ 272,174,859
============= =============
Undistributed net investment income $ 692,825 $ 662,296
============= =============
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
'07 Shares '07 Amount '06 Shares '06 Amount
(unaudited) (unaudited)
CLASS A
Shares sold 748,983 $ 25,967,671 1,601,496 $ 48,330,568
Reinvestment of distributions 46,930 1,525,335 260,538 8,359,232
Less shares repurchased (1,069,102) (35,784,711) (1,190,855) (35,412,699)
---------- ------------- ---------- -------------
Net increase (decrease) (273,189) $ (8,291,705) 671,179 $ 21,277,101
========== ============= ========== =============
CLASS B
Shares sold 164,160 $ 5,637,379 346,132 $ 10,451,504
Reinvestment of distributions 5,474 176,154 49,915 1,595,644
Less shares repurchased (305,102) (10,122,753) (483,202) (14,023,947)
---------- ------------- ---------- -------------
Net decrease (135,468) $ (4,309,220) (87,155) $ (1,976,799)
========== ============= ========== =============
CLASS C
Shares sold 145,006 $ 4,992,447 253,560 $ 7,680,650
Reinvestment of distributions 4,433 143,025 36,096 1,157,458
Less shares repurchased (251,113) (8,276,600) (232,129) (6,760,083)
---------- ------------- ---------- -------------
Net increase (decrease) (101,674) $ (3,141,128) 57,527 $ 2,078,025
========== ============= ========== =============
CLASS Y
Shares sold 244,615 $ 8,034,863 410,449 $ 12,399,995
Reinvestment of distributions 17,931 578,726 76,044 2,431,803
Less shares repurchased (80,029) (2,757,847) (105,997) (3,193,348)
---------- ------------- ---------- -------------
Net increase 182,517 $ 5,855,742 380,496 $ 11,638,450
========== ============= ========== =============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
6/30/07 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/06 12/31/05 12/31/04 (a) 12/31/03 12/31/02
CLASS A
Net asset value, beginning of period $ 33.07 $ 25.87 $ 24.52 $ 19.55 $ 15.30 $ 15.38
-------- -------- -------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.36 $ 0.28 $ 0.28 $ 0.39 $ 0.65 $ 0.57
Net realized and unrealized gain (loss) on investments (2.87) 8.88 3.29 6.31 4.33 0.00(b)
-------- -------- -------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.51) $ 9.16 $ 3.57 $ 6.70 $ 4.98 $ 0.57
Distributions to shareowners:
Net investment income (0.35) (0.28) (0.24) (0.40) (0.73) (0.65)
Net realized gain - (1.68) (1.84) (1.33) - -
Tax return of capital - - (0.14) - - -
-------- -------- -------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.86) $ 7.20 $ 1.35 $ 4.97 $ 4.25 $ (0.08)
-------- -------- -------- ------- ------- -------
Net asset value, end of period $ 30.21 $ 33.07 $ 25.87 $ 24.52 $ 19.55 $ 15.30
======== ======== ======== ======= ======= =======
Total return* (7.66)% 35.79% 14.79% 35.26% 33.27% 3.58%
Ratio of net expenses to average net assets+ 1.32%** 1.37% 1.50% 1.56% 1.68% 1.67%
Ratio of net investment income to average net assets+ 2.06%** 0.98% 1.14% 1.85% 3.81% 3.70%
Portfolio turnover rate 22%** 20% 24% 34% 36% 39%
Net assets, end of period (in thousands) $140,749 $163,088 $110,217 $94,198 $61,455 $44,904
Ratios with reductions for fees paid indirectly:
Net expenses 1.32%** 1.37% 1.50% 1.56% 1.68% 1.67%
Net investment income 2.06%** 0.98% 1.14% 1.85% 3.81% 3.70%
Ratios with waiver of management fees and reduction for fees
paid indirectly:
Net expenses 1.31%** 1.36% 1.50% 1.56% 1.68% 1.67%
Net investment income 2.07%** 0.99% 1.14% 1.85% 3.81% 3.70%
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 23
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
6/30/07 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/06 12/31/05 12/31/04 (a) 12/31/03 12/31/02
CLASS B
Net asset value, beginning of period $ 32.74 $ 25.64 $ 24.32 $ 19.40 $ 15.17 $ 15.25
------- -------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.21 $ 0.01 $ 0.06 $ 0.19 $ 0.51 $ 0.43
Net realized and unrealized gain (loss) on investments (2.83) 8.78 3.24 6.28 4.30 0.02
------- -------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.62) $ 8.79 $ 3.30 $ 6.47 $ 4.81 $ 0.45
Distributions to shareowners:
Net investment income (0.19) (0.01) (0.05) (0.22) (0.58) (0.53)
Net realized gain - (1.68) (1.84) (1.33) - -
Tax return of capital - - (0.09) - - -
------- -------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.81) $ 7.10 $ 1.32 $ 4.92 $ 4.23 $ (0.08)
------- -------- ------- ------- ------- -------
Net asset value, end of period $ 29.93 $ 32.74 $ 25.64 $ 24.32 $ 19.40 $ 15.17
======= ======== ======= ======= ======= =======
Total return* (8.04)% 34.51% 13.72% 34.20% 32.30% 2.84%
Ratio of net expenses to average net assets+ 2.23%** 2.31% 2.42% 2.37% 2.50% 2.40%
Ratio of net investment income to average net assets+ 1.13%** 0.00%(b) 0.14% 0.96% 2.98% 2.90%
Portfolio turnover rate 22%** 20% 24% 34% 36% 39%
Net assets, end of period (in thousands) $28,342 $ 35,442 $29,992 $39,833 $37,325 $28,121
Ratios with reduction for fees paid indirectly:
Net expenses 2.23%** 2.31% 2.42% 2.37% 2.50% 2.40%
Net investment income 1.13%** 0.00%(b) 0.14% 0.96% 2.98% 2.90%
Ratios with waiver of management fees and reduction for fees
paid indirectly:
Net expenses 2.21%** 2.30% 2.42% 2.37% 2.50% 2.40%
Net investment income 1.15%** 0.01% 0.14% 0.96% 2.98% 2.90%
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the Fund.
* 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.
+ Ratio with no reduction for fees paid indirectly.
24 The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
6/30/07 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/06 12/31/05 12/31/04 (a) 12/31/03 12/31/02
CLASS C
Net asset value, beginning of period $ 32.80 $ 25.68 $ 24.35 $ 19.42 $ 15.20 $ 15.28
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.23 $ 0.02 $ 0.08 $ 0.20 $ 0.52 $ 0.44
Net realized and unrealized gain (loss) on investments (2.85) 8.80 3.26 6.29 4.31 0.00(b)
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.62) $ 8.82 $ 3.34 $ 6.49 $ 4.83 $ 0.44
Distributions to shareowners:
Net investment income (0.21) (0.02) (0.07) (0.23) (0.61) (0.52)
Net realized gain - (1.68) (1.84) (1.33) - -
Tax return of capital - - (0.10) - - -
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.83) $ 7.12 $ 1.33 $ 4.93 $ 4.22 $ (0.08)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 29.97 $ 32.80 $ 25.68 $ 24.35 $ 19.42 $ 15.20
======= ======= ======= ======= ======= =======
Total return* (8.03)% 34.60% 13.85% 34.27% 32.35% 2.79%
Ratio of net expenses to average net assets+ 2.14%** 2.24% 2.32% 2.34% 2.39% 2.46%
Ratio of net investment income to average net assets+ 1.23%** 0.10% 0.27% 1.02% 3.20% 2.95%
Portfolio turnover rate 22%** 20% 24% 34% 36% 39%
Net assets, end of period (in thousands) $21,815 $27,209 $19,824 $20,675 $14,686 $ 7,429
Ratios with reduction for fees paid indirectly:
Net expenses 2.14%** 2.24% 2.32% 2.34% 2.39% 2.46%
Net investment income 1.23%** 0.10% 0.27% 1.02% 3.20% 2.95%
Ratios with waiver of management fees and reduction for fees
paid indirectly:
Net expenses 2.13%** 2.23% 2.32% 2.34% 2.39% 2.46%
Net investment income 1.24%** 0.11% 0.27% 1.02% 3.20% 2.95%
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 25
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
6/30/07 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 12/31/06 12/31/05 12/31/04 (a) 12/31/03 12/31/02
CLASS Y
Net asset value, beginning of period $ 33.03 $ 25.84 $ 24.49 $ 19.53 $ 15.27 $ 15.35
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.41 $ 0.42 $ 0.35 $ 0.50 $ 0.76 $ 0.66
Net realized and unrealized gain (loss) on investments (2.84) 8.87 3.34 6.31 4.33 0.00(b)
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.43) $ 9.29 $ 3.69 $ 6.81 $ 5.09 $ 0.66
Distributions to shareowners:
Net investment income (0.42) (0.42) (0.34) (0.52) (0.83) (0.74)
Net realized gain - (1.68) (1.84) (1.33) - -
Tax return of capital - - (0.16) - - -
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.85) $ 7.19 $ 1.35 $ 4.96 $ 4.26 $ (0.08)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 30.18 $ 33.03 $ 25.84 $ 24.49 $ 19.53 $ 15.27
======= ======= ======= ======= ======= =======
Total return* (7.44)% 36.43% 15.36% 35.97% 34.16% 4.21%
Ratio of net expenses to average net assets+ 0.89%** 0.87% 1.00% 1.01% 1.05% 1.10%
Ratio of net investment income to average net assets+ 2.52%** 1.54% 1.84% 2.47% 4.47% 4.39%
Portfolio turnover rate 22%** 20% 24% 34% 36% 39%
Net assets, end of period (in thousands) $47,931 $46,436 $26,490 $ 9,172 $ 4,984 $ 3,671
Ratios with reduction for fees paid indirectly:
Net expenses 0.89%** 0.87% 1.00% 1.01% 1.05% 1.10%
Net investment income 2.52%** 1.54% 1.84% 2.47% 4.47% 4.39%
Ratios with waiver of management fees and reduction for fees
paid indirectly:
Net expenses 0.89%** 0.87% 1.00% 1.01% 1.05% 1.10%
Net investment income 2.52%** 1.54% 1.84% 2.47% 4.47% 4.39%
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the 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, and the complete redemption of
the investment at net asset value at each end of each period.
** Annualized.
+ Ratio with no reduction for fees paid indirectly.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Real Estate Shares (the Fund) is a Delaware statutory trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek long-term
growth of capital. Current income is a secondary objective.
The Fund offers four classes of shares - Class A, Class B, Class C, and Class Y
shares. Each class of shares represents an interest in the same portfolio of
investments of the Fund and has equal rights to voting, redemptions, dividends
and liquidation, except that each class of shares can bear different transfer
agent and distribution fees and have exclusive voting rights with respect to the
distribution plans that have been adopted by Class A, Class B and Class C
shareowners, respectively. 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
income, expenses and gains and losses on investments during the reporting year.
Actual results could differ from those estimates.
Information regarding the Fund's principal risks is contained in the Fund's
prospectus. Please refer to those documents when considering the Fund's risks.
Because the Fund may invest a substantial portion of its assets in Real Estate
Investment Trusts (REITs), the Fund may be subject to certain risks associated
with direct investments in REITs. REITs may be affected by changes in the value
of their underlying properties and by defaults of their borrowers or tenants.
REITs depend generally on their ability to generate cash flow to make
distributions to shareowners, and certain REITs have self-liquidation provisions
by which mortgages held may be paid in full and distributions of capital returns
may be made at any time. In addition, the performance of a REIT may be affected
by its failure to qualify for tax-free pass-through of income under the Internal
Revenue Code or its failure to maintain exemption from registration under the
Investment Company Act of 1940.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements, which are
27
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
consistent with those policies generally accepted in the investment company
industry.
A. Security Valuation
Security transactions are recorded on 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. Trading in foreign securities is
substantially completed each day at various times prior to the close of the
NYSE. The values of such securities used in computing the net asset value
of the Fund's shares are determined as of such times. The Fund also may use
the fair value of a security, including a non-U.S. security, when the
closing market price on the principal exchange where the security is traded
no longer reflects the value of the security. At June 30, 2007 there were
no securities fair valued. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities where the
ex-dividend date may have passed are recorded as soon as the Fund becomes
aware of the ex-dividend data in the exercise of reasonable diligence.
Interest income is recorded on the accrual basis. Temporary cash
investments are valued at cost which approximates market value.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
28
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the Fund's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain on investment transactions,
or from paid-in capital, depending on the type of book/tax differences that
may exist. A portion of the dividend income recorded by the Fund is from
distributions by publicly traded REITs, and such distributions for tax
purposes may also consist of capital gains and return of capital. The
actual return of capital and capital gains portions of such distributions
will be determined by formal notifications from the REITs subsequent to the
calendar year-end. Distributions received from the REITs that are
determined to be a return of capital, are recorded by the Fund as a
reduction of the cost basis of the securities held.
The tax character of current year distributions paid will be determined at
the end of the current fiscal year. The tax character of distributions paid
during, 2006 were as follows:
- --------------------------------------------------------------------------------
2006
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income* $ 1,791,295
Long-term capital gain 13,062,292
-----------
$14,853,587
Return of capital -
-----------
Total $14,853,587
===========
- --------------------------------------------------------------------------------
* Included in the Fund's distributions from 2006 ordinary income is $340,994
in excess of investment company taxable income, which, in accordance with
applicable U.S. tax law, is taxable to shareowners as ordinary income
distributions.
29
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at December 31, 2006.
- --------------------------------------------------------------------------------
2006
- --------------------------------------------------------------------------------
Undistributed long-term gain $ 1,658,666
Undistributed Ordinary Income 662,296
Unrealized appreciation 113,384,930
------------
Total $115,705,892
============
- --------------------------------------------------------------------------------
The difference between book basis and tax-basis unrealized appreciation is
attributable to the tax deferral of losses on wash sales.
C. Fund Shares
The Fund records sales and repurchases of its shares on 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). PFD earned $49,530 in underwriting commissions on the sale of
Class A shares during the six months ended June 30, 2007.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan (see
Note 4). Shareowners of each class share all expenses and fees paid to the
transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services, which are allocated based on the number of
accounts in 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
all classes 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 and Class Y can bear different
transfer agent and distribution fees.
30
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. Securities Lending
The Fund lends securities in its Portfolio to certain broker-dealers or
other institutional investors, with the Fund's custodian acting as the
lending agent. When entering into a loan, the Fund receives collateral,
which is maintained by the custodian and earns income in the form of
negotiated lenders' fees. The Fund also continues to receive interest or
payments in lieu of dividends on the securities loaned. Gain or loss on the
fair value of the loaned securities that may occur during the term of the
loan will be for the account of the Fund. The loans are secured by
collateral of at least 102%, at all times, of the fair value of the
securities loaned. The amount of the collateral will be adjusted daily to
reflect any price fluctuation in the value of the loaned securities. The
Fund has the right under the lending agreements to recover the securities
from the borrower on demand. The Fund invests cash collateral in the
Securities Lending Investment Fund, which is sponsored by Brown Brothers
Harriman & Co., the Fund's custodian.
F. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value
of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the value of the repurchase agreement at the time of purchase.
The collateral for all repurchase agreements is held in safekeeping in the
customer-only account of the Fund's custodian, or subcustodians. The Fund's
investment adviser, Pioneer Investment Management, Inc. (PIM), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredito Italiano, manages the
Fund's portfolio. Management fees are calculated daily at the annual rate of
0.80% of the Fund's average daily net assets. PIM pays a portion of the fee it
receives from the Fund to AEW Management and Advisors LP as compensation for
sub-advisory services to the Fund.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At June 30,
31
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (unaudited) (continued)
- --------------------------------------------------------------------------------
2007, $10,793 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 $71,335 in transfer agent
fees payable to PIMSS at June 30, 2007.
4. Distribution Plans
The Fund adopted a Plan of Distribution with respect to Class A, Class B and
Class C shares (Class A Plan, Class B Plan and Class C Plan) in accordance with
Rule 12b-1 of the Investment Company Act of 1940. Pursuant to the Class A Plan,
the Fund pays PFD a service fee of up to 0.25% of the Fund's average daily net
assets attributable to Class A shares in reimbursement of its actual
expenditures to finance activities primarily intended to result in the sale of
Class A shares. Pursuant to the Class B Plan and the Class C Plan, the Fund pays
PFD 1.00% of the average daily net assets attributable to each class of shares.
The fee consists of a 0.25% service fee and a 0.75% distribution fee paid as
compensation for personal services and/or account maintenance services or
distribution services with regard to Class B and Class C shares. Included in due
to affiliates is $4,694 in distribution fees payable to PFD at June 30, 2007.
In addition, redemptions of each class of shares (except Class Y 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 that are redeemed within five years
of purchase are subject to a CDSC at declining rates beginning at 4.0%, based on
the lower of cost or market value of shares being redeemed. Redemptions of Class
C shares within one year of purchase are subject to a CDSC of 1.00%. Proceeds
from the CDSC are paid to PFD. For the six months ended June 30, 2007, CDSCs in
the amount of $33,085 were paid to PFD.
32
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the six months ended June 30, 2007, the Fund's expenses
were not reduced by $12,672 under such arrangements.
6. Line of Credit Facility
The Fund along with certain other funds in the Pioneer Family of Funds (the
Funds) collectively participate in a $200 million committed, unsecured revolving
line of credit facility. Borrowings are used solely for temporary or emergency
purposes. The Fund may borrow up to the lesser of $200 million or the limits set
by its prospectus for borrowings. Interest on collective borrowings is payable
at the Federal Funds Rate plus 1/2% on an annualized basis. The Funds pay an
annual commitment fee for this facility. The commitment fee is allocated among
such Funds based on their respective borrowing limits. For the six months ended
June 30, 2007, the Fund had no borrowings under this agreement.
7. New Pronouncements
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.
33
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Daniel K. Kingsbury, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Daniel K. Kingsbury Dorothy E. Bourassa, Secretary
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser
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.
34
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This page for your notes.
35
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This page for your notes.
36
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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 schedule 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
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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.
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- --------------------------------------------------------------------------------
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 Real Estate Shares
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date August 29, 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 August 29, 2007
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date August 29, 2007
* Print the name and title of each signing officer under his or her signature.