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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 811-21664
Pioneer Series Trust III
(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: June 30
Date of reporting period: July 1, 2006 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
-------
CULLEN VALUE
FUND
CVFCX
Ticker Symbol
Annual
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 15
Schedule of Investments 17
Financial Statements 22
Notes to Financial Statements 31
Report of Independent Registered Public Accounting Firm 39
Trustees, Officers and Service Providers 40
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 recent months, 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.
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.
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.
2
Letter
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 Cullen Value Fund
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/07
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The U.S. stock market surged upward throughout the 12 months ending June 30,
2007, in a rally only briefly interrupted by short-lived corrections. Rising
corporate profits encouraged investors to bid up the prices of almost all
equities over the period. In the following interview, James P. Cullen discusses
the factors that influenced Pioneer Cullen Value Fund's performance during the
12 months. As President of Cullen Capital Management LLC, Mr. Cullen oversees
the team responsible for the daily management of the Fund.
Q: How did the Fund perform during the 12 months ending June 30, 2007?
A: Cullen Value Fund's Class A shares had a total return of 17.13% at net
asset value for the 12 months ending June 30, 2007. During the same
period, the Standard & Poor's 500 Index (the S&P 500) rose 20.59%. The
average return of the 498 funds in Lipper's Large Cap Value category was
20.81% for the 12 months.
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 were the principal factors that influenced Fund performance during the
12 months?
A: Stock prices kept climbing through virtually the entire fiscal year. While
there was some volatility along the way, the 12-month period was
remarkably unusual in how greatly the number of positive days in the
market outnumbered negative days. Such an environment isn't necessarily
conducive to our style, as we focus on stocks with relatively low
price-to-earnings ratios compared to the overall market, and we invest in
companies with good long-term prospects. Because of our long-term focus,
we usually do better during periods when stocks move both up and down,
rather than in periods - such as the last 12 months - when momentum seems
to be driving equity prices ever higher.
4
Pioneer Cullen Value Fund
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Q: What were your principal strategies during the period?
A: As stock prices kept rising, we began to see the market as overbought -
influenced more by speculative behavior than economic fundamentals - and
we became somewhat more conservative even as more speculative,
smaller-company stocks became fashionable in the market. Among other
things, we maintained an emphasis on financials and pharmaceutical stocks
- two areas with defensive characteristics which underperformed the
market during the persistent rally. We also had a large exposure to the
consumer staples sector - another more defensive area. Within consumer
staples, we held major positions in global companies such as Unilever,
Nestle and Diageo. Our consumer staples weighting was more than twice
that of the S&P 500 at the end of the period.
We were underweighted in energy for the period, although we built up our
position in the sector during the first half of 2007 by adding companies
such as Devon Energy, an exploration and production company; Gazprom, the
Russian energy giant; and ConocoPhillips, a major integrated oil and
energy company. Overall, though, our de-emphasis on energy did not help
performance during the period.
In general, we made few major changes to the portfolio. For example, while
we sold our position in Hartford Financial, we used the proceeds to
initiate an investment in another insurance giant, American International
Group (AIG), which we liked because of its exposure to international
markets. While we reduced our position in financials stocks in 2006, we
still maintained a focus on them, emphasizing the larger, diversified
financial services corporations that have increased their profiles in
international markets. Noteworthy examples include our holdings in shares
of Morgan Stanley, Merrill Lynch and JP Morgan Chase. On June 30, 2007,
our weighting in the financials sector accounted for approximately 23.5%
of Fund assets, which was more than the weighting in the S&P 500. While we
have maintained our general weighting in health care - less than that in
the S&P 500 - we did make some minor adjustments. For example, in the
pharmaceuticals area, while we sold our investment in Sanofi Aventis, we
added a position in Wyeth. The decision was based on our belief that in an
era
5
Pioneer Cullen Value Fund
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/07 (continued)
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of industry consolidation, Wyeth is better positioned as a potential
acquisition candidate.
Q: What types of individual investments most affected results over the 12
months?
A: We had excellent performance from some of the mid-sized companies in our
portfolio. For example, Borg-Warner, a manufacturer of highly engineered
components, such as drive trains for the automotive industry, gained 39%
and was among the top contributors to results. Other mid-sized companies,
such as railroad corporation Canadian Pacific and technology manufacturer
Arrow Electronics, also turned in excellent results.
Other holdings that outperformed the market and added to the Fund's
returns included: technology companies Hewlett-Packard and Nokia; consumer
staples companies Unilever, Bunge, Diageo and Nestle; insurer MetLife; oil
company ConocoPhillips; diversified industrial company 3M;
telecommunication services providers Verizon and AT&T; and Cemex, the
Mexican-based materials giant.
After helping support performance in 2006, our exposure to the diversified
financials industry was a drag on performance in 2007, as investors
worried about the potential fallout from the problems in the subprime
mortgage lending area. However, we continue to like the prospects of our
financials holdings and have maintained our positions. Also holding back
results was Regions Financial, a banking corporation based in the
Southeast. Investors have been leery of acquisitions the company has made,
but we think the corporation has sound prospects.
Q: What is your investment outlook?
A: We plan to continue to pursue our strategy, which is to buy higher-quality
companies at inexpensive prices relative to our estimate of long-term
prospects. We continue to like the prospects of our consumer staples
holdings - many of which have a major presence in the global marketplace.
The recent advances in the stock market have been primarily liquidity
driven. In other words, new money has entered the market, attracted by
robust recent returns, and has driven up stock prices in general. As a
consequence, many of the best
6
Pioneer Cullen Value Fund
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performing stocks have been highly speculative. However, as corporate
earnings growth slows, we think the stock market is likely to return to a
more normal situation, creating conditions where the types of high-quality
value stocks that we emphasize can do well. Many of our holdings boast
high dividend yields, which also should be an advantage as the market
enters a more uncertain period.
Investments in mid-sized companies may offer the potential for higher returns,
but are also subject to greater short-term price fluctuations than larger, more
established companies. The Fund invests in a limited number of securities and,
as a result, the Fund's performance may be more volatile than the performance
of other funds holding more securities. Investing in foreign and/or emerging
markets securities involves risks relating to interest rates, currency exchange
rates, economic, and political conditions. At times, the Fund's investments may
represent industries or industry sectors that are interrelated or have common
risks, making it more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These opinions 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 Cullen Value Fund
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PORTFOLIO SUMMARY 6/30/07
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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]
Depositary Receipts for International Stocks 12.6%
Temporary Cash Investments 13.1%
U.S. Common Stocks 74.3%
Sector Distribution
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(As a percentage of equity holdings)*
[THE FOLLOWING DATA IS A REPRESENTATION OF A PIE CHART IN THE PRINTED MATERIAL]
Materials 4.0%
Consumer Discretionary 4.2%
Telecommunication Services 5.3%
Information Technology 6.4%
Energy 8.4%
Health Care 8.8%
Industrials 13.7%
Consumer Staples 23.0%
Financials 26.2%
10 Largest Holdings
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(As a percentage of equity holdings)*
1. Unilever NV 3.95%
2. 3M Co. 3.61
3. MetLife, Inc. 3.47
4. Devon Energy Corp. 3.44
5. American International Group, Inc. 3.43
6. United Technologies Corp. 3.41
7. Morgan Stanley 3.32
8. ConocoPhillips 3.32
9. Wyeth 3.31
10. Bunge, Ltd. 3.29
* This list excludes temporary cash and derivative instruments. The portfolio
is actively managed, and current holdings may be different. The holdings
listed should not be considered recommendations to buy or sell any security
listed.
8
Pioneer Cullen Value Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
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Class 6/30/07 6/30/06
----- ------- -------
A $21.21 $18.28
B $20.96 $18.11
C $20.95 $18.12
Y $21.30 $18.34
Class 6/30/07 11/1/06*
----- ------- -------
R $21.15 $19.51
Distributions Per Share
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7/1/06 - 6/30/07
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ------------ --------------- --------------
A $0.1782 $ - $0.0091
B $0.0503 $ - $0.0091
C $0.0912 $ - $0.0091
Y $0.2179 $ - $0.0091
11/1/06* - 6/30/07
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ------------ --------------- --------------
R $0.1948 $ - $0.0091
* Class R shares were first publicly offered on November 1, 2006.
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INDEX DEFINITIONS
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The Standard & Poor's 500 Index is a commonly used measure of the broad U.S.
stock market. 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.
The index defined here pertains to the "Value of $10,000 Investment" charts on
pages 10-14.
9
Pioneer Cullen Value Fund
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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 Cullen Value Fund at public offering price, compared
to that of the S&P 500 Index.
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Average Annual Total Returns
(As of June 30, 2007)
Net Public
Asset Value Offering
Period (NAV) Price (POP)
Life-of-Fund
(7/1/00) 12.35% 11.41%
5 Years 13.50 12.16
1 Year 17.13 10.36
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Expense Ratio
(Per prospectus dated November 1, 2006)
Gross Net
1.15% 1.15%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Cullen
Value Fund S&P 500 Index
7/00 $ 9,425 $10,000
$10,341 $ 8,653
6/02 $10,912 $ 7,098
$10,362 $ 7,115
6/04 $12,874 $ 8,474
$15,296 $ 9,009
6/06 $17,550 $ 9,786
6/07 $20,555 $11,800
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.
Pioneer Cullen Value Fund was created through the reorganization of the
predecessor Cullen Value Fund on 2/28/05. The performance of Class A shares of
the Fund from July 1, 2000 to February 25, 2005 is the performance of Cullen
Value Fund's single class, which has been restated to reflect differences in any
applicable sales charge, (but not other differences in expenses). If all
expenses of the Fund were reflected, the performance would be lower.
10
Pioneer Cullen Value Fund
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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 Cullen Value Fund, compared to that of the S&P 500
Index.
- -------------------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
Life-of-Fund
(7/1/00) 12.02% 12.02%
5 Years 13.03 13.03
1 Year 16.09 12.09
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Expense Ratio
(Per prospectus dated November 1, 2006)
Gross Net
2.09% 2.09%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Cullen
Value Fund S&P 500 Index
7/00 $10,000 $10,000
$10,970 $ 8,653
6/02 $11,576 $ 7,098
$10,992 $ 7,115
6/04 $13,657 $ 8,474
$16,186 $ 9,009
6/06 $18,398 $ 9,786
6/07 $21,357 $11,800
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"
results reflect the deduction of the maximum applicable contingent deferred
sales charge (CDSC). The maximum CDSC is 4.0% and declines over five years.
Class B shares reflect the deduction of the maximum applicable contingent
deferred sales charge (CDSC). 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.
Pioneer Cullen Value Fund was created through the reorganization of the
predecessor Cullen Value Fund on 2/28/05. The performance of Class B shares of
the Fund from July 1, 2000 to February 25, 2005 is the performance of Cullen
Value Fund's single class, which has been restated to reflect differences in any
applicable sales charge, (but not other differences in expenses). If all
expenses of the Fund were reflected, the performance would be lower.
11
Pioneer Cullen Value Fund
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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 Cullen Value Fund, compared to that of the S&P 500
Index.
- -------------------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
Life-of-Fund
(7/1/00) 12.06% 12.06%
5 Years 13.08 13.08
1 Year 16.21 16.21
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Expense Ratio
(Per prospectus dated November 1, 2006)
Gross Net
1.94% 1.94%
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[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Cullen
Value Fund S&P 500 Index
7/00 $10,000 $10,000
$10,970 $ 8,653
6/02 $11,576 $ 7,098
$10,992 $ 7,115
6/04 $13,657 $ 8,474
$16,186 $ 9,009
6/06 $18,421 $ 9,786
6/07 $21,407 $11,800
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). "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.
Pioneer Cullen Value Fund was created through the reorganization of the
predecessor Cullen Value Fund on 2/28/05. The performance of Class C shares of
the Fund from July 1, 2000 to February 25, 2005 is the performance of Cullen
Value Fund's single class, which has been restated to reflect differences in any
applicable sales charge, (but not other differences in expenses). If all
expenses of the Fund were reflected, the performance would be lower.
12
Pioneer Cullen Value Fund
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PERFORMANCE UPDATE 6/30/07 CLASS R SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Cullen Value Fund, compared to that of the S&P 500
Index.
- -------------------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
Life-of-Fund
(7/1/00) 11.82% 11.82%
5 Years 12.97 12.97
1 Year 16.70 16.70
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Expense Ratio
(Per prospectus dated November 1, 2006)
Gross Net
1.75% 1.40%
- -------------------------------------------------------------------------
[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Cullen
Value Fund S&P 500 Index
7/00 $10,000 $10,000
$10,921 $ 8,653
6/02 $11,466 $ 7,098
$10,834 $ 7,115
6/04 $13,394 $ 8,474
$15,835 $ 9,009
6/06 $18,078 $ 9,786
6/07 $21,096 $11,800
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.
The performance of Class R shares for the period prior to the commencement of
operations of Class R shares on November 1, 2006, is based on the performance
of the Fund's Class A shares, reduced to reflect the higher distribution and
service fees of Class R shares. For the period after November 1, 2006, the
actual performance of Class R shares is reflected. Class R 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 net expense ratio reflects contractual expense limitations currently in
effect through 11/1/07 for Class R Shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time. Please see the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Pioneer Cullen Value Fund was created through the reorganization of the
predecessor Cullen Value Fund on 2/28/05. The performance of Class R shares of
the Fund from July 1, 2000 to February 25, 2005 is the performance of Cullen
Value Fund's single class, which has been restated to reflect the higher
distribution and service fees of the Fund's Class R shares.
13
Pioneer Cullen Value Fund
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PERFORMANCE UPDATE 6/30/07 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Cullen Value Fund, compared to that of the S&P 500
Index.
- -------------------------------------------------------------------------
Average Annual Total Returns
(As of June 30, 2007)
If If
Period Held Redeemed
Life-of-Fund
(7/1/00) 12.46% 12.46%
5 Years 13.66 13.66
1 Year 17.47 17.47
- -------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated November 1, 2006)
Gross Net
0.83% 0.83%
- -------------------------------------------------------------------------
[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Pioneer Cullen
Value Fund S&P 500 Index
7/00 $10,000 $10,000
$10,970 $ 8,653
6/02 $11,576 $ 7,098
$10,992 $ 7,115
6/04 $13,657 $ 8,474
$16,237 $ 9,009
6/06 $18,691 $ 9,786
6/07 $21,956 $11,800
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 Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher.
Class A shares are used as a proxy through February 28, 2005 the inception date
of Class Y shares.
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.
Pioneer Cullen Value Fund was created through the reorganization of the
predecessor Cullen Value Fund on 2/28/05. The performance of Class Y shares of
the Fund from July 1, 2000 to February 25, 2005 is the performance of Cullen
Value Fund's single class, which has not been restated to reflect any
differences in expenses. Cullen Value Fund had higher expenses than those of the
Fund's Class Y shares.
14
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period"
to estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Cullen Value Fund
Based on actual returns from January 1, 2007** through June 30, 2007.
Share Class A B C R Y
- ----------------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 1/1/07**
Ending Account Value $1,060.58 $1,055.94 $1,056.45 $ 994.01 $ 1061.83
(after expenses)
On 6/30/07
Expenses Paid $ 5.52 $ 10.14 $ 9.53 $ 9.25 $ 3.94
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.08%, 1.99%,
1.87%, 1.40% and 0.77% for Class A, Class B, Class C, Class R 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)
(242/365 for Class R shares).
** 11/1/06 for Class R shares.
15
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES (continued)
- --------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Cullen Value Fund
Based on a hypothetical 5% per year return before expenses, reflecting the
period from January 1, 2007** through June 30, 2007.
Share Class A B C R Y
- ----------------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 1/1/07**
Ending Account Value $1,019.44 $1,014.93 $1,015.52 $1,023.87 $1,020.98
(after expenses)
On 6/30/07
Expenses Paid $ 5.41 $ 9.94 $ 9.35 $ 9.39 $ 3.86
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.08%, 1.99%,
1.87%, 1.40% and 0.77% for Class A, Class B, Class C, Class R 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)
(242/365 for Class R shares).
** 11/1/06 for Class R shares.
16
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07
- --------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 89.9%
Energy - 7.6%
Integrated Oil & Gas - 4.5%
1,181,000 ConocoPhillips $ 92,708,500
1,119,400 Gazprom (A.D.R.)* 46,936,778
--------------
$ 139,645,278
--------------
Oil & Gas Exploration & Production - 3.1%
1,227,350 Devon Energy Corp. $ 96,089,232
--------------
Total Energy $ 235,734,510
--------------
Materials - 3.6%
Construction Materials - 1.9%
1,596,437 Cemex SA (A.D.R.)* $ 58,908,525
--------------
Diversified Metals & Mining - 0.4%
441,430 Anglo American Plc $ 12,951,556
--------------
Forest Products - 1.3%
508,800 Weyerhaeuser Co. $ 40,159,584
--------------
Total Materials $ 112,019,665
--------------
Capital Goods - 10.6%
Aerospace & Defense - 5.9%
1,656,250 Raytheon Co. $ 89,255,313
1,341,100 United Technologies Corp. 95,124,223
--------------
$ 184,379,536
--------------
Industrial Conglomerates - 4.7%
1,161,000 3M Co. $ 100,763,190
1,182,600 General Electric Co. (b) 45,269,928
--------------
$ 146,033,118
--------------
Total Capital Goods $ 330,412,654
--------------
Transportation - 1.6%
Railroads - 1.6%
642,350 Canadian National Railway Co. $ 32,714,886
269,900 Canadian Pacific Railway, Ltd. (b) 18,574,518
--------------
$ 51,289,404
--------------
Total Transportation $ 51,289,404
--------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (continued)
- --------------------------------------------------------------------------------
Shares Value
Automobiles & Components - 2.4%
Auto Parts & Equipment - 2.4%
868,750 BorgWarner, Inc. $ 74,747,250
--------------
Total Automobiles & Components $ 74,747,250
--------------
Retailing - 1.4%
Home Improvement Retail - 1.4%
1,070,070 Home Depot, Inc. $ 42,107,255
--------------
Total Retailing $ 42,107,255
--------------
Food, Beverage & Tobacco - 17.7%
Agricultural Products - 3.8%
797,500 Archer Daniels Midland Co. $ 26,389,275
1,088,200 Bunge, Ltd. (b) 91,952,900
--------------
$ 118,342,175
--------------
Distillers & Vintners - 2.8%
1,049,000 Diageo Plc (A.D.R.) $ 87,392,190
--------------
Packaged Foods & Meats - 11.1%
1,412,400 General Mills, Inc. $ 82,512,408
2,057,450 Kraft Foods, Inc. 72,525,113
832,500 Nestle SA (A.D.R.) 79,405,515
3,557,050 Unilever NV 110,339,691
--------------
$ 344,782,727
--------------
Total Food, Beverage & Tobacco $ 550,517,092
--------------
Household & Personal Products - 2.9%
Household Products - 2.9%
1,359,350 Kimberly-Clark Corp. $ 90,926,922
--------------
Total Household & Personal Products $ 90,926,922
--------------
Pharmaceuticals & Biotechnology - 7.9%
Pharmaceuticals - 7.9%
1,275,000 GlaxoSmithKline $ 66,771,750
3,372,950 Pfizer, Inc. 86,246,332
1,612,000 Wyeth 92,432,080
--------------
$ 245,450,162
--------------
Total Pharmaceuticals & Biotechnology $ 245,450,162
--------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Banks - 3.4%
Diversified Banks - 1.0%
606,350 Icici Bank, Ltd. (b) $ 29,802,103
--------------
Regional Banks - 2.4%
2,270,000 Regions Financial Corp. $ 75,137,000
--------------
Total Banks $ 104,939,103
--------------
Diversified Financials - 12.3%
Investment Banking & Brokerage - 5.7%
1,005,350 Merrill Lynch & Co., Inc. $ 84,027,153
1,106,000 Morgan Stanley 92,771,280
--------------
$ 176,798,433
--------------
Diversified Financial Services - 6.6%
1,544,100 Bank of America Corp. $ 75,491,049
858,200 Citigroup, Inc. 44,017,078
1,748,450 J.P. Morgan Chase & Co. 84,712,403
--------------
$ 204,220,530
--------------
Total Diversified Financials $ 381,018,963
--------------
Insurance - 7.9%
Life & Health Insurance - 3.1%
1,504,900 MetLife, Inc. $ 97,035,952
--------------
Multi-Line Insurance - 3.1%
1,367,400 American International Group, Inc. $ 95,759,022
--------------
Property & Casualty Insurance - 1.7%
978,650 Chubb Corp. $ 52,984,111
--------------
Total Insurance $ 245,779,085
--------------
Technology Hardware & Equipment - 5.8%
Communications Equipment - 2.3%
2,494,700 Nokia Corp. (A.D.R.) $ 70,126,017
--------------
Computer Hardware - 2.4%
1,710,050 Hewlett-Packard Co. $ 76,302,431
--------------
Technology Distributors - 1.1%
863,102 Arrow Electronics, Inc.* $ 33,169,010
--------------
Total Technology Hardware & Equipment $ 179,597,458
--------------
The accompanying notes are an integral part of these financial statements. 19
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/07 (continued)
- --------------------------------------------------------------------------------
Shares Value
Telecommunication Services - 4.8%
Integrated Telecommunication Services - 4.8%
1,762,713 AT&T Corp. $ 73,152,590
1,842,800 Verizon Communications, Inc. 75,868,071
--------------
$ 149,020,661
--------------
Total Telecommunication Services $ 149,020,661
--------------
TOTAL COMMON STOCKS
(Cost $2,439,222,894) $2,793,560,184
--------------
Principal
Amount
TEMPORARY CASH INVESTMENTS - 13.5%
Repurchase Agreement - 10.1%
$313,400,000 UBS Warburg, Inc., 4.25%, dated 6/29/07,
repurchase price of $313,400,000 plus
accrued interest on 7/2/06, collateralized by
$320,470,000 U.S. Treasury Bill, 3.0%, 2/15/08 $ 313,400,000
--------------
Shares
Security Lending Collateral - 3.4%
107,027,127 Securities Lending Investment Fund, 5.28% $ 107,027,127
--------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $420,427,127) $ 420,427,127
--------------
TOTAL INVESTMENT IN SECURITIES - 103.4%
(Cost $2,859,650,021) (a) $3,213,987,311
--------------
OTHER ASSETS AND LIABILITIES - (3.4)% $ (104,889,538)
--------------
TOTAL NET ASSETS - 100.0% $3,109,097,773
==============
(A.D.R.) American Depositary Receipt
* Non-income producing security
(a) At June 30, 2007, the net unrealized gain on investments based on cost
for federal income tax purposes of $2,859,677,777 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $362,627,569
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (8,318,035)
------------
Net unrealized gain $354,309,534
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(b) At June 30, 2007, the following securities were out on loan:
Shares Security Value
180,000 General Electric Co. $ 6,890,400
267,001 Canadian Pacific Railway, Ltd. 18,375,009
600,286 Icici Bank, Ltd. 29,504,057
610,565 Bunge, Ltd. 51,592,743
------------
Total $106,362,209
============
Purchases and sales of securities (excluding temporary cash investments) for the
year ended June 30, 2007 aggregated $1,666,130,238 and $302,124,684,
respectively.
The accompanying notes are an integral part of these financial statements. 21
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 6/30/07
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (including securities loaned of
$106,362,209) (cost $2,859,650,021) $3,213,987,311
Receivables -
Fund shares sold 11,745,952
Dividends, interest and foreign taxes withheld 4,123,704
Due from Pioneer Investment Management, Inc. 134
Other 142,527
--------------
Total assets $3,229,999,628
--------------
LIABILITIES:
Payables -
Investment securities purchased $ 6,905,956
Fund shares repurchased 3,891,088
Upon return of securities loaned 107,027,127
Due to bank 2,440,337
Due to affiliates 488,389
Accrued expenses 148,958
--------------
Total liabilities $ 120,901,855
--------------
NET ASSETS:
Paid-in capital $2,724,149,317
Undistributed net investment income 23,031,983
Accumulated net realized gain on investments 7,579,183
Net unrealized gain on investments 354,337,290
--------------
Total net assets $3,109,097,773
==============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $1,828,452,933/86,210,753 shares) $ 21.21
==============
Class B (based on $112,794,592/5,381,257 shares) $ 20.96
==============
Class C (based on $568,384,668/27,125,815 shares) $ 20.95
==============
Class R (based on $300,041/14,187 shares) $ 21.15
==============
Class Y (based on $599,165,539/28,125,946 shares) $ 21.30
==============
MAXIMUM OFFERING PRICE:
Class A ($21.21 [divided by] 94.25%) $ 22.50
==============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 6/30/07
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $1,181,497) $51,117,936
Interest 12,719,933
Income from securities loaned, net 643,649
-----------
Total investment income $ 64,481,518
------------
EXPENSES:
Management fees $15,430,618
Transfer agent fees and expenses
Class A 1,691,001
Class B 264,798
Class C 651,695
Class R 329
Class Y 194,572
Distribution fees
Class A 3,509,652
Class B 930,223
Class C 4,258,983
Class R 435
Administrative reimbursements 538,238
Custodian fees 98,737
Registration fees 419,313
Professional fees 97,229
Printing expense 93,090
Fees and expenses of nonaffiliated trustees 32,838
Miscellaneous 66,575
-----------
Total expenses $ 28,278,326
Less management fees waived and
expenses reimbursed by Pioneer
Investment Management, Inc. (189)
Less fees paid indirectly (87,527)
------------
Net expenses $ 28,190,610
------------
Net investment income $ 36,290,908
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 7,613,458
------------
Change in net unrealized gain on investments $308,605,704
------------
Net gain on investments $316,219,162
------------
Net increase in net assets resulting from operations $352,510,070
============
The accompanying notes are an integral part of these financial statements. 23
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 6/30/07 and 6/30/06, respectively
Year Ended Year Ended
6/30/07 6/30/06
FROM OPERATIONS:
Net investment income $ 36,290,908 $ 7,389,493
Net realized gain on investments 7,613,458 1,037,803
Change in net unrealized gain on investments 308,605,704 36,398,672
-------------- --------------
Net increase in net assets resulting
from operations $ 352,510,070 $ 44,825,968
-------------- --------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.18 and $0.06 per share, respectively) $ (12,692,282) $ (1,076,506)
Class B ($0.05 and $0.02 per share, respectively) (245,476) (32,578)
Class C ($0.09 and $0.03 per share, respectively) (1,995,476) (126,099)
Class R ($0.19 and $0.00 per share, respectively) (100) -
Class Y ($0.22 and $0.07 per share, respectively) (4,650,239) (130,785)
Net realized gain:
Class A ($0.01 and $0.22 per share, respectively) (624,075) (2,916,130)
Class B ($0.01 and $0.22 per share, respectively) (43,661) (348,294)
Class C ($0.01 and $0.22 per share, respectively) (190,920) (726,773)
Class R ($0.01 and $0.00 per share, respectively) (5) -
Class Y ($0.01 and $0.22 per share, respectively) (184,467) (257,476)
-------------- --------------
Total distributions to shareowners $ (20,626,701) $ (5,614,641)
-------------- --------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $2,066,748,759 $1,186,900,603
Reinvestment of distributions 17,398,541 4,781,704
Cost of shares repurchased (562,649,037) (106,963,735)
-------------- --------------
Net increase in net assets resulting from
Fund share transactions $1,521,498,263 $1,084,718,572
-------------- --------------
Net increase in net assets $1,853,381,632 $1,123,929,899
NET ASSETS:
Beginning of year 1,255,716,141 131,786,242
-------------- --------------
End of year $3,109,097,773 $1,255,716,141
============== ==============
Undistributed net investment income $ 23,031,983 $ 6,324,648
============== ==============
24 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
'07 Shares '07 Amount '06 Shares '06 Amount
CLASS A
Shares sold 61,832,165 $1,220,948,227 42,286,846 $ 757,080,541
Reinvestment of distributions 550,862 10,927,966 197,960 3,436,964
Less shares repurchased (20,467,656) (413,581,805) (4,285,181) (77,351,272)
----------- -------------- ---------- -------------
Net increase 41,915,371 $ 818,294,388 38,199,625 $ 683,166,233
=========== ============== ========== =============
CLASS B
Shares sold 3,014,943 $ 58,613,504 3,491,596 $ 61,531,816
Reinvestment of distributions 11,854 233,322 17,905 309,043
Less shares repurchased (1,116,576) (22,154,742) (809,579) (14,412,348)
----------- -------------- ---------- -------------
Net increase 1,910,221 $ 36,692,084 2,699,922 $ 47,428,511
=========== ============== ========== =============
CLASS C
Shares sold 16,183,786 $ 315,120,489 12,835,487 $ 228,358,732
Reinvestment of distributions 84,443 1,660,924 39,395 679,959
Less shares repurchased (2,346,183) (47,109,602) (634,602) (11,356,823)
----------- -------------- ---------- -------------
Net increase 13,922,046 $ 269,671,811 12,240,280 $ 217,681,868
=========== ============== ========== =============
CLASS R*
Shares sold 14,961 $ 303,866
Less shares repurchased (774) (16,342)
----------- --------------
Net increase 14,187 $ 287,524
=========== ==============
CLASS Y
Shares sold 23,926,529 $ 471,762,673 7,733,787 $ 139,929,514
Reinvestment of distributions 230,091 4,576,329 20,467 355,738
Less shares repurchased (3,885,630) (79,786,546) (212,897) (3,843,292)
----------- -------------- ---------- -------------
Net increase 20,270,990 $ 396,552,456 7,541,357 $ 136,441,960
=========== ============== ========== =============
* Class R shares were first publicly offered on November 1, 2006
The accompanying notes are an integral part of these financial statements. 25
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
6/30/07 6/30/06 6/30/05 (a) 6/30/04 6/30/03
CLASS A
Net asset value, beginning of period $ 18.28 $ 16.19 $ 13.96 $ 11.27 $ 11.90
---------- -------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.26 $ 0.14 $ 0.05 $ 0.02 $ 0.04
Net realized and unrealized gain (loss) on investments 2.86 2.23 2.55 2.71 (0.64)
---------- -------- ------- ------- -------
Net increase (decrease) from investment operations $ 3.12 $ 2.37 $ 2.60 $ 2.73 $ (0.60)
Distributions to shareowners:
Net investment income (0.18) (0.06) (0.03) (0.04) (0.03)
Net realized gain (0.01) (0.22) (0.34) - -
---------- -------- ------- ------- -------
Net increase (decrease) in net asset value $ 2.93 $ 2.09 $ 2.23 $ 2.69 $ (0.63)
---------- -------- ------- ------- -------
Net asset value, end of period $ 21.21 $ 18.28 $ 16.19 $ 13.96 $ 11.27
========== ======== ======= ======= =======
Total return* 17.13% 14.73% 18.81% 24.24% (5.04)%
Ratio of net expenses to average net assets+ 1.09% 1.15% 1.66% 1.92% 2.22%
Ratio of net investment income (loss) to average net assets+ 1.67% 1.57% 0.62% 0.32% 0.30%
Portfolio turnover rate 15% 21% 49% 70% 71%
Net assets, end of period (in thousands) $1,828,453 $809,593 $98,690 $33,089 $22,235
Ratios with no reimbursement of management fees and
assumption of expenses by PIM and no reduction for fees
paid indirectly:
Net expenses 1.09% 1.15% 1.64% 1.92% 2.22%
Net investment income (loss) 1.67% 1.57% 0.64% 0.32% 0.30%
Ratios with reimbursement of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.08% 1.15% 1.66% 2.00% 2.00%
Net investment income 1.68% 1.57% 0.62% 0.24% 0.52%
(a) Effective December 28, 2004 PIM became the sub-advisor for the Fund and
subsequently became the advisor on February 28, 2005.
* 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.
+ Ratios with no reduction for fees paid indirectly.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
2/28/05 (a)
Year Ended Year Ended to
6/30/07 6/30/06 6/30/05
CLASS B
Net asset value, beginning of period $ 18.11 $ 16.15 $ 16.05
-------- ------- --------
Increase from investment operations:
Net investment income $ 0.10 $ 0.04 $ 0.01
Net realized and unrealized gain
on investments 2.81 2.16 0.09
-------- ------- --------
Net increase from investment operations $ 2.91 $ 2.20 $ 0.10
Distributions to shareowners:
Net investment income (0.05) (0.02) -
Net realized gain (0.01) (0.22) -
-------- ------- --------
Net increase in net asset value $ 2.85 $ 1.96 $ 0.10
-------- ------- --------
Net asset value, end of period $ 20.96 $ 18.11 $ 16.15
======== ======= ========
Total return* 16.09% 13.66% 0.62%***
Ratio of net expenses to average net assets+ 2.00% 2.09% 2.10%**
Ratio of net investment income to average
net assets+ 0.75% 0.56% 0.40%**
Portfolio turnover rate 15% 21% 49%**
Net assets, end of period (in thousands) $112,795 $62,860 $ 12,454
Ratios with no waiver of management fees
and assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 2.00% 2.09% 2.19%**
Net investment income 0.75% 0.56% 0.31%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.99% 2.09% 2.10%**
Net investment income 0.76% 0.56% 0.40%**
(a) Class B shares were first publicly offered on February 28, 2005.
* 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.
*** Not annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 27
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
2/28/05 (a)
Year Ended Year Ended to
6/30/07 6/30/06 6/30/05
CLASS C
Net asset value, beginning of period $ 18.12 $ 16.15 $ 16.05
-------- -------- --------
Increase from investment operations:
Net investment income $ 0.11 $ 0.05 $ 0.01
Net realized and unrealized gain
on investments 2.82 2.17 0.09
-------- -------- --------
Net increase from investment operations $ 2.93 $ 2.22 $ 0.10
Distributions to shareowners:
Net investment income (0.09) (0.03) -
Net realized gain (0.01) (0.22) -
-------- -------- --------
Net increase in net asset value $ 2.83 $ 1.97 $ 0.10
-------- -------- --------
Net asset value, end of period $ 20.95 $ 18.12 $ 16.15
======== ======== ========
Total return* 16.21% 13.81% 0.62%***
Ratio of net expenses to average net assets+ 1.87% 1.94% 2.15%**
Ratio of net investment income to average
net assets+ 0.89% 0.83% 0.34%**
Portfolio turnover rate 15% 21% 49%**
Net assets, end of period (in thousands) $568,385 $239,241 $ 15,560
Ratios with no waiver of management fees
and assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 1.87% 1.94% 2.27%**
Net investment income 0.89% 0.83% 0.22%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.87% 1.94% 2.15%**
Net investment income 0.89% 0.83% 0.34%**
(a) Class C shares were first publicly offered on February 28, 2005.
* 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.
*** Not annualized.
+ Ratios with no reduction for fees paid indirectly.
28 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
11/1/06 (a)
to
6/30/07
CLASS R
Net asset value, beginning of period $ 19.51
-------
Increase from investment operations:
Net investment income $ 0.28
Net realized and unrealized gain on investments 1.56
-------
Net increase from investment operations $ 1.84
Distributions to shareowners:
Net investment income (0.19)
Net realized gain (0.01)
-------
Net increase in net asset value $ 1.64
-------
Net asset value, end of period $ 21.15
=======
Total return* 9.52%***
Ratio of net expenses to average net assets+ 1.40%**
Ratio of net investment income to average net assets+ 1.47%**
Portfolio turnover rate 15%**
Net assets, end of period (in thousands) $ 300
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction for
fees paid indirectly:
Net expenses 1.62%**
Net investment income 1.25%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.40%**
Net investment income 1.47%**
(a) Class R shares were first publicly offered on November 1, 2006.
* 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 the end of each period.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
*** Not annualized.
The accompanying notes are an integral part of these financial statements. 29
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
2/28/05 (a)
Year Ended Year Ended to
6/30/07 6/30/06 6/30/05
CLASS Y
Net asset value, beginning of period $ 18.34 $ 16.20 $ 16.05
-------- -------- -------
Increase from investment operations:
Net investment income $ 0.28 $ 0.10 $ 0.03
Net realized and unrealized gain
on investments 2.91 2.33 0.12
-------- -------- -------
Net increase from investment operations $ 3.19 $ 2.43 $ 0.15
Distributions to shareowners:
Net investment income (0.22) (0.07) -
Net realized gain (0.01) (0.22) -
-------- -------- -------
Net increase in net asset value $ 2.96 $ 2.14 $ 0.15
-------- -------- -------
Net asset value, end of period $ 21.30 $ 18.34 $ 16.20
======== ======== =======
Total return* 17.47% 15.12% 0.93%***
Ratio of net expenses to average net assets+ 0.77% 0.83% 0.99%**
Ratio of net investment income to average
net assets+ 2.00% 1.91% 1.60%**
Portfolio turnover rate 15% 21% 49%***
Net assets, end of period (in thousands) $599,166 $144,022 $ 5,082
Ratios with no waiver of management fees
and assumption of expenses by PIM and
no reduction for fees paid indirectly:
Net expenses 0.77% 0.83% 0.99%**
Net investment income 2.00% 1.91% 1.60%**
Ratios with waiver of management fees and
assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 0.77% 0.83% 0.99%**
Net investment income 2.00% 1.91% 1.60%**
(a) Class Y shares were first publicly offered on February 28, 2005.
* 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 the end of each period.
** Annualized.
*** Not annualized.
+ Ratios with no reduction for fees paid indirectly.
30 The accompanying notes are an integral part of these financial statements.
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Cullen Value Fund (the Fund) is a diversified series of Pioneer Series
Trust III, a Delaware statutory trust registered under the Investment Company
Act of 1940 as an open-end management investment company. The investment
objective of the Fund is to seek capital appreciation. Current income is a
secondary objective.
The Fund offers five classes of shares - Class A, Class B, Class C, Class R, and
Class Y shares. Class R shares were first publicly offered on November 1, 2006.
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 the level of transfer agent and distribution fees may
differ among classes. Class A, Class B, Class C, and Class R shareowners have
exclusive voting rights with respect to the distribution plan for each class.
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.
At times, the Fund's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting those
industries and sectors. Information regarding the Fund's principal risks are
contained in the Fund's prospectus. Please refer to those documents when
considering the Fund's risks.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value of
the Fund is computed once daily, on each day the New York Stock Exchange
(NYSE) is open, as of the close of regular
31
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (continued)
- --------------------------------------------------------------------------------
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. Temporary cash
investments are valued at cost which approximates market value.
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Fund becomes aware of the ex-dividend
data in exercise of reasonable diligence. Dividend and interest income is
recorded on the accrual basis, net of unrecoverable foreign taxes withheld
at the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the Fund's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net
32
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
realized gain on investment transactions, or from paid-in capital,
depending on the type of book/tax differences that may exist.
The tax character of distributions paid during the years ended June 30,
2007 and June 30, 2006 were as follows:
- --------------------------------------------------------------------------------
2007 2006
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $19,583,573 $1,675,415
Long-term capital gain 1,043,128 3,939,226
----------- ----------
Total $20,626,701 $5,614,641
=========== ==========
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at June 30, 2007
- --------------------------------------------------------------------------------
2007
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 23,031,983
Undistributed long-term gain 7,606,939
Unrealized appreciation 354,309,534
------------
Total $384,948,456
============
- --------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appre ciation is
attributable to the tax deferral of losses on wash sales.
C. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano), earned approximately $278,292 in underwriting
commissions on the sale of Class A shares during the year 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, Class C, and Class R 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
33
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (continued)
- --------------------------------------------------------------------------------
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expenses (see Note 3).
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on their respective percentage of adjusted net assets at the
beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, on the same day, and in
the same amount, except that Class A, Class B, Class C, Class R, and Class
Y shares can bear different transfer agent and distribution fees.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value
of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the value of the repurchase agreement at the time of purchase.
The collateral for all repurchase agreements is held in safekeeping in the
customer-only account of the Fund's custodian, or subcustodians. The Fund's
investment adviser, Pioneer Investment Management, Inc. (PIM), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
F. 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
34
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Investment Fund, which is sponsored by Brown Brothers Harriman & Co., the
Fund's custodian.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredito Italiano, manages the
Fund's portfolio. PIM receives a basic fee that is calculated at the annual rate
of 0.70% of the Fund's average daily net assets up to $1 billion, 0.65% of the
next $1 billion, 0.60% of the next $1 billion, and 0.55% of assets over $3
billion. For the year ended June 30, 2007, the net management fee was equivalent
to 0.66% of average daily net assets.
PIM, and not the Fund, pays a portion of the fee it receives from the Fund to
Cullen LLC as compensation for Cullen's subadvisory services to the Fund.
Through November 1, 2009 PIM has agreed not to impose all or a portion of its
management fee and to assume other operating expenses of the Fund to the extent
necessary to limit Class A expenses to 1.25% of the average daily net assets
attributable to Class A shares. Through November 1, 2007, PIM has agreed not to
impose all or a portion of its management fee and to assume other operating
expenses of the Fund to the extent necessary to limit Class B and Class C
expenses to 2.15% of the average daily net assets attributable to Class B and
Class C shares, respectively.
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, 2007, $113,771 was payable to PIM
related to management fees, administrative costs and certain others 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 are $312,346 in transfer agent
fees payable to PIMSS at June 30, 2007.
35
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (continued)
- --------------------------------------------------------------------------------
4. Distribution and Service Plans
The Fund adopted a Plan of Distribution with respect to Class A, Class B, Class
C, and Class R shares in accordance with Rule 12b-1 of the Investment Company
Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service fee of up
to 0.25% of the average daily net assets attributable to Class A shares in
reimbursement of its actual expenditures to finance activities primarily
intended to result in the sale of Class A shares. Pursuant to the Class B Plan
and the Class C Plan, the Fund pays PFD 1.00% of the average daily net assets
attributable to each class of shares. This fee consists of a 0.25% service fee
and a 0.75% distribution fee both paid as compensation for personal services
and/or account maintenance services or distribution services with regard to
Class B and Class C shares. Pursuant to the Class R Plan, the Fund pays PFD
0.50% of the net average daily net assets attributable to Class R shares as
compensation for distribution services. The Fund also has adopted a separate
service plan for Class R shares (Service Plan). The Service Plan authorizes the
Fund to pay securities dealers, plan administrators or other service
organizations that agree to provide certain services to retirement plans or plan
participants holding shares of the Fund a service fee of up to 0.25% of the
Fund's average daily net assets attributable to Class R shares held by such
plans. Included in due to affiliates is $62,272 in distribution fees payable to
PFD at June 30, 2007.
In addition, redemptions of each class of shares (except Class R and 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 4.00%, based on the lower of cost or market value of shares being redeemed.
Redemptions of Class C shares within one year of purchase were subject to a CDSC
of 1.00%. There is no CDSC for Class R and Class Y shares. Proceeds from the
CDSCs are paid to PFD. For the year ended June 30, 2007, CDSCs in the amount of
$372,482 were paid to PFD.
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the year ended
36
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
June 30, 2007, the Fund's expenses were reduced by $87,527 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 year ended
June 30, 2007, the Fund had no borrowings under this agreement.
7. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions have a
"more-likely-than-not" probability of being sustained by the applicable tax
authority. Tax positions deemed to not meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the reporting period in which
they are realized. Adoption of FIN 48 is required for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of no
later than June 30, 2008. At this time, management is evaluating the
implications of FIN 48 and any impact in the financial statements has not yet
been determined.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal
years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
37
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/07 (continued)
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION (unaudited)
For the fiscal year ended June 30, 2007, certain dividends paid by the Fund may
be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth
Tax Relief Reconciliation Act (the Act) of 2003. The Fund intends to designate
up to the maximum amount of such dividends allowable under the Act, as taxed at
a maximum rate of 15%. Complete information will be computed and reported in
conjunction with your 2007 form 1099-DIV.
The qualifying percentage of the Fund's ordinary income dividends for the
purpose of the corporate dividends received deduction was 96.32%.
38
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareowners of Pioneer Cullen Value Fund:
We have audited the accompanying statement of assets and liabilities of Pioneer
Cullen Value Fund (the "Fund"), including the schedule of investments, as of
June 30, 2007, and the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the two years in the period ended
June 30, 2004 were audited by other auditors whose report, dated August 9, 2004,
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of June 30, 2007, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Cullen Value Fund at June 30, 2007, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
indicated therein, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
August 15, 2007
39
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's affairs.
The officers of the fund are responsible for the fund's operations. The fund's
Trustees and officers are listed below, together with their principal
occupations during the past five years. Trustees who are interested persons of
the fund within the meaning of the 1940 Act are referred to as Interested
Trustees. Trustees who are not interested persons of the Fund are referred to as
Independent Trustees. Each of the Trustees (except Mr. Kingsbury, Mr. West and
Mr. Bock) serves as a Trustee of each of the 83 U.S. registered investment
portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds").
Mr. Kingsbury serves as Trustee of 34 of the 83 Pioneer Funds, Mr. West serves
as Trustee of 33 of the 83 Pioneer Funds, and Mr. Bock serves as Trustee of 82
of the 83 Pioneer Funds. The address for all Interested Trustees and all
officers of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Fund's statement of additional information provides more detailed
information regarding the Fund's Trustees and is available upon request, without
charge, by calling 1-800-225-6292.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is publicly available to shareowners
at www.pioneerinvestments.com and on the SEC's web site at http://www.sec.gov.
40
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
INTERESTED TRUSTEES
- --------------------------------------------------------------------------------
Other
Directorships
Positions Held Length of Service Principal Occupation During Past Held by this
Name and Age With the Fund and Term of Office Five Years Trustee
John F. Cogan, Jr. (81)* Chairman of the Trustee since 2004. Deputy Chairman and a Director of None
Board, Trustee and Serves until a Pioneer Global Asset Management S.p.A.
President successor trustee is ("PGAM"); Non-Executive Chairman and a
elected or earlier Director of Pioneer Investment
retirement or removal. Management USA Inc. ("PIM-USA");
Chairman and a Director of Pioneer;
Chairman and Director of Pioneer
Institutional Asset Management, Inc.
(since 2006); Director of Pioneer
Alternative Investment Management
Limited (Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda) Limited
and affiliated funds; Director of
PIOGLOBAL Real Estate Investment Fund
(Russia) (until June 2006); Director of
Nano-C, Inc. (since 2003); Director of
Cole Management Inc. (since 2004);
Director of Fiduciary Counseling, Inc.;
President and Director of Pioneer Funds
Distributor, Inc. ("PFD") (until May
2006); President of all of the Pioneer
Funds; and Of Counsel, Wilmer Cutler
Pickering Hale and Dorr LLP (counsel to
PIM-USA and the Pioneer Funds)
- -----------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (48)* Trustee and Trustee since March Director, CEO and President of Pioneer None
Executive Vice 2007. Serves until a Investment Management USA Inc.; Pioneer
President successor trustee is Investment Management, Inc. and Pioneer
elected or earlier Institutional Asset Management, Inc.
retirement or removal. (since March 2007); Executive Vice
President of all of the Pioneer Funds
(since March 2007); Director of Pioneer
Global Asset Management S.p.A. (since
March 2007); Head of New Markets
Division, Pioneer Global Asset
Management S.p.A. (2000 - 2007)
- -----------------------------------------------------------------------------------------------------------------------------------
41
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Positions Held Length of Service
Name, Age and Address With the Fund and Term of Office
David R. Bock (63) Trustee Trustee since 2005.
3050 K Street NW, Serves until a
Washington, DC 20007 successor trustee is
elected or earlier
retirement or removal.
- --------------------------------------------------------------------------------
Mary K. Bush (59) Trustee Trustee since 2004.
3509 Woodbine Street Serves until a
Chevy Chase, MD 20815 successor trustee is
elected or earlier
retirement or removal.
- --------------------------------------------------------------------------------
Margaret B.W. Graham (60) Trustee Trustee since 2004.
1001 Sherbrooke Street West, Serves until a
Montreal, Quebec, Canada successor trustee is
H3A 1G5 elected or earlier
retirement or removal.
- --------------------------------------------------------------------------------
Other Directorships Held
Name, Age and Address Principal Occupation During Past Five Years by this Trustee
David R. Bock (63) Executive Vice President and Chief Financial Officer, Director of The Enterprise
3050 K Street NW, I-trax, Inc. (publicly traded health care services company) Social Investment
Washington, DC 20007 (2004 - present); Partner, Federal City Capital Advisors Company (privately-held
(boutique merchant bank) (1997 to 2004); and Executive affordable housing
Vice President and Chief Financial Officer, Pedestal Inc. finance company); and
(internet-based mortgage trading company) (2000 - 2002) Director of New York
Mortgage Trust (publicly
traded mortgage REIT)
- ----------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (59) President, Bush International, LLC (international financial Director of Brady
3509 Woodbine Street advisory firm) Corporation (industrial
Chevy Chase, MD 20815 identification and
specialty coated material
products manufacturer);
Director of Briggs &
Stratton Co. (engine
manufacturer); Director of
UAL Corporation (airline
holding company); and
Director of Mantech
International Corporation
(national security,
defense, and intelligence
technology firm)
- ----------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (60) Founding Director, Vice President and Corporate Secretary, None
1001 Sherbrooke Street West, The Winthrop Group, Inc. (consulting firm); and Desautels
Montreal, Quebec, Canada Faculty of Management, McGill University
H3A 1G5
- ----------------------------------------------------------------------------------------------------------------------------
42
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other
Directorships
Positions Held Length of Service Principal Occupation During Past Held by this
Name, Age and Address With the Fund and Term of Office Five Years Trustee
Thomas J. Perna (56) Trustee Trustee since 2006. Private investor (2004 - present); Director of Quadriserv
89 Robbins Avenue, Serves until a and Senior Executive Vice President, Inc. (technology
Berkeley Heights, NJ 07922 successor trustee is The Bank of New York (financial and products for
elected or earlier securities services) (1986 - 2004) securities lending
retirement or removal. industry)
- ------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (59) Trustee Trustee since 2004. President and Chief Executive Officer, Director of New America
200 State Street, 12th Floor, Serves until a Newbury, Piret & Company, Inc. High Income Fund, Inc.
Boston, MA 02109 successor trustee is (investment banking firm) (closed-end investment
elected or earlier company)
retirement or removal.
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (78) Trustee Trustee since 2004. Senior Counsel, Sullivan & Cromwell Director, The Swiss
125 Broad Street, Serves until a (law firm) Helvetia Fund, Inc.
New York, NY 10004 successor trustee is (closed-end investment
elected or earlier company)
retirement or removal.
- ------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (71) Trustee Trustee since 2004. President, John Winthrop & Co., Inc. None
One North Adgers Wharf, Serves until a (private investment firm)
Charleston, SC 29401 successor trustee is
elected or earlier
retirement or removal.
- ------------------------------------------------------------------------------------------------------------------------------------
43
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
FUND OFFICERS
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Past Other Directorships
Name and Age With the Fund and Term of Office Five Years Held by this Officer
Dorothy E. Bourassa (59) Secretary Since 2004. Serves Secretary of PIM-USA; Senior Vice None
at the discretion President - Legal of Pioneer;
of the Board Secretary/Clerk of most of PIM-USA's
subsidiaries; and Secretary of all of
the Pioneer Funds since September 2003
(Assistant Secretary from November 2000
to September 2003)
- -----------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (42) Assistant Secretary Since 2004. Serves Vice President and Senior Counsel of None
at the discretion Pioneer since July 2002; Vice President
of the Board and Senior Counsel of BISYS Fund
Services, Inc. (April 2001 to June
2002); Senior Vice President and Deputy
General Counsel of Funds Distributor,
Inc. (July 2000 to April 2001), and
Assistant Secretary of all of the
Pioneer Funds since September 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Christopher P. Harvey (46) Assistant Secretary Since 2006. Serves Partner, Wilmer Cutler Pickering Hale None
at the discretion and Dorr LLP; and Assistant Secretary of
of the Board all of the Pioneer Funds since July 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (62) Treasurer Since 2004. Serves Vice President - Fund Accounting, None
at the discretion Administration and Controllership
of the Board Services of Pioneer; and Treasurer of
all of the Pioneer Funds
- -----------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (47) Assistant Treasurer Since 2004. Serves Deputy Treasurer of Pioneer since 2004; None
at the discretion Treasurer and Senior Vice President, CDC
of the Board IXIS Asset Management Services from 2002
to 2003; and Assistant Treasurer of all
of the Pioneer Funds since November 2004
- -----------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (42) Assistant Treasurer Since 2004. Serves Assistant Vice President - Fund None
at the discretion Accounting, Administration and
of the Board Controllership Services of Pioneer; and
Assistant Treasurer of all of the
Pioneer Funds
- -----------------------------------------------------------------------------------------------------------------------------------
44
Pioneer Cullen Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other
Directorships
Positions Held Length of Service Principal Occupation During Past Held by this
Name and Age With the Fund and Term of Office Five Years Officer
Gary Sullivan (49) Assistant Treasurer Since 2004. Serves Fund Accounting Manager - Fund Accounting, None
at the discretion of Administration and Controllership Services
the Board of Pioneer; and Assistant Treasurer of all
of the Pioneer Funds since May 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (33) Assistant Treasurer Since 2004. Serves Fund Administration Manager - Fund None
at the discretion of Accounting, Administration and
the Board Controllership Services since June 2003;
Assistant Vice President - Mutual Fund
Operations of State Street Corporation
from June 2002 to June 2003 (formerly
Deutsche Bank Asset Management); Pioneer
Fund Accounting, Administration and
Controllership Services (Fund Accounting
Manager from August 1999 to May 2002); and
Assistant Treasurer of all of the Pioneer
Funds since September 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (47) Chief Compliance Since January 2007. Chief Compliance Officer of Pioneer None
Officer Serves at the since December 2006 and of all the
discretion of the Pioneer Funds since January 2007; Vice
Board President and Compliance Officer, MFS
Investment Management (August 2005 to
December 2006); Consultant, Fidelity
Investments (February 2005 to July
2005); Independent Consultant (July 1997
to February 2005)
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers
or directors of the fund's investment adviser and certain of its affiliates.
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly
owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest
banking groups in Italy. Pioneer, the fund's investment adviser, provides
investment management and financial services to mutual funds, institutional and
other clients.
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HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@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.
Audit Fees
Fees for audit services provided to the Fund, including fees
associated with the annual filing of its Form N-1A, totaled
approximately $28,715 in 2007 and $27,985 in 2006.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees and Other Fees
There were no fees for audit-related or other services provided
to the Fund during the fiscal years ended June 30, 2007 and
2006.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns,
totaled approximately $7,820 and $7,140 in 2007 and 2006,
respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or
after May 6, 2003, the effective date of the new SEC pre-
approval rules, the Fund's audit committee is required to pre-
approve services to affiliates defined by SEC rules to the
extent that the services are determined to have a direct impact
on the operations or financial reporting of the Fund. For the
years ended June 30, 2007 and 2006, there were no services
provided to an affiliate that required the Fund's audit
committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Fund and affiliates, as
previously defined, totaled approximately $7,820 in 2007 and
$7,140 in 2006.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has
considered whether the provision of non-audit services that
were rendered to the Affiliates (as defined) that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence.
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 Series Trust III
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.