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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07870
Pioneer Real Estate Shares
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: December 31
Date of reporting period: January 1, 2008 through December 31, 2008
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
Annual Report | December 31, 2008
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Ticker Symbols:
Class A PWREX
Class B PBREX
Class C PCREX
Class Y PYREX
[LOGO]PIONEER
Investments(R)
visit us: pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 7
Prices and Distributions 8
Performance Update 9
Comparing Ongoing Fund Expenses 13
Schedule of Investments 15
Financial Statements 20
Notes to Financial Statements 28
Report of Independent Registered Public Accounting Firm 34
Approval of Sub-Advisory Agreement 35
Trustees, Officers and Service Providers 38
Pioneer Real Estate Shares | Annual Report | 12/31/08 1
President's Letter
Dear Shareowner,
Stock and bond markets around the globe this year have experienced one of their
most tumultuous periods in history. Investors have witnessed volatility of a
magnitude that many have never before seen. Distance often provides the best
vantage point for perspective. Still, we believe that the benefits of basic
investment principles that have stood the test of time -- even in the midst of
market turmoil -- cannot be underestimated.
First, invest for the long term. The founder of Pioneer Investments, Philip L.
Carret, began his investment career during the 1920s. One lesson he learned is
that while great prosperity affords an advantageous time for selling stocks,
extreme economic slumps can create opportunities for purchase. Indeed, many of
our portfolio managers, who follow the value-conscious investing approach of
our founder, are looking at recent market conditions as an opportunity to buy
companies whose shares we believe have been unjustifiably beaten down by
indiscriminate selling, but that we have identified as having strong prospects
over time. While investors may be facing a sustained market downturn, we
continue to believe that patience, along with staying invested in the market,
are important considerations for long-term investors.
A second principle is to stay diversified across different types of
investments. The global scope of the current market weakness poses challenges
for this basic investment axiom. But the turbulence makes now a good time to
reassess your portfolio and make sure that your investments continue to meet
your needs. We believe you should work closely with your financial advisor to
find the mix of stocks, bonds and money market assets that is best aligned to
your particular risk tolerance and investment objective.
As the investment markets sort through the continuing crisis in the financial
industry, we are staying focused on the fundamentals and risk management. With
more than 80 years of experience behind us, we have learned how to navigate
turbulent markets. At Pioneer Investments, risk management has always been a
critical part of our culture -- not just during periods of extraordinary
volatility. Our investment process is based on fundamental research,
quantitative analysis and active portfolio management. This three-pillared
process, which we apply to each of our portfolios, is supported by an
integrated team approach and is designed to carefully balance risk and reward.
While we
2 Pioneer Real Estate Shares | Annual Report | 12/31/08
see potential chances for making money in many corners of the market, it takes
research and experience to separate solid investment opportunities from
speculation.
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
www.pioneerinvestments.com. Thank you for investing with Pioneer.
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.
Pioneer Real Estate Shares | Annual Report | 12/31/08 3
Portfolio Management Discussion | 12/31/08
The U.S. real estate market posted its worst year of performance in 2008, which
coincided with the most disappointing year for the broader stock market since
the Great Depression. With many long-standing pillars of the financial
community collapsing, the credit markets sharply contracting, and the economy
tipping into recession, real estate investment trust (REIT) prices came under
significant pressure, as Matthew Troxell of AEW Capital Management, L.P., the
Fund's subadvisor, explains in the following interview.
Q How did the Fund perform amidst the extreme volatility and challenging market
conditions?
A For the 12 months ended December 31, 2008, Class A shares posted a return of
-38.31% at net asset value, but held up better than the -39.93% average
return for the 232 funds in Lipper's Real Estate Funds category over the
same period. The Fund modestly underperformed its benchmark, the Morgan
Stanley Capital International (MSCI) U.S. REIT Index, which returned
-37.97% over the same 12-month period. The underperformance was largely
attributable to the Fund's underweighting to the outperforming health care
sector and overweighting to the underperforming regional mall sector.
Negative sector allocation was partially offset by solid stock selection
results, particularly in the industrial, regional mall and health care
sectors.
Q How did the problems in the credit markets directly impact the REIT sector?
A There was a dramatic decrease in the amount of third-party commercial
mortgage capital available for property investment. Consequently, the cost
of available debt increased considerably. That resulted in a sharp decline
in commercial real estate transactions, which, in turn, put downward
pressure on stock price valuations. The market also punished companies with
excessive debt on their balance sheets and/or those with significant
development exposure.
Q Which holdings helped the Fund's performance over the year ended December 31,
2008?
A Top performers for the Fund included Public Storage, which owns self-
storage facilities throughout the country and benefited from solid earnings
results, minimal debt and significant cash flow; Omega Healthcare, whose
positive performance reflected the defensive characteristics of the
company's solid balance sheet and stable income stream; and the industrial
REIT Liberty Property Trust, which, although down for the fiscal year
overall, was
4 Pioneer Real Estate Shares | Annual Report | 12/31/08
one of the top performers in the battered industrial sector, relatively
speaking, after a dismal year in 2007.
Q Which Fund holdings proved most disappointing over the year ended
December 31, 2008?
A The biggest disappointments for the Fund during the period were Developers
Diversified Realty, Starwood Hotels & Resorts Worldwide, and Brookfield
Office Properties. Developers Diversified, a shopping center REIT, suffered
in large part due to concerns over the company's near-term debt maturities
and the weakening retail environment. Starwood's decline was reflective of
problems in the hotel sector in general, which suffered as a result of the
slowing economy and the impact of rising fuel costs on travel. Brookfield
lost ground due to the company's significant exposure to New York City
office space in its portfolio. Concerns that job losses will increase
vacancy levels in the city also weighed on the company's stock price. We
continue to believe the companies represent solid values relative to their
peers, and maintain the Fund's overweight positions in all three stocks.
Q How are the property sectors holding up given the recession?
A In our view, the underlying property market fundamentals have deteriorated
due to the ongoing economic slowdown, particularly in those markets most
affected by the housing market downturn. In the retail sector, property
vacancies have increased quickly for several consecutive quarters, as
American consumers have become increasingly reluctant to spend, and
retailers have curtailed expansion plans and, in some cases, closed stores.
Continued sluggishness is expected into 2009 as a weak housing sector and
very depressed consumer sentiment may put restraints on spending. We do
believe, however, that the sector should be fairly well positioned when
demand recovers, since supply growth has been moderate.
Conditions in the apartment sector have been impacted, both negatively and
positively, by troubles in the single-family housing sector. Rising
foreclosures and stricter loan underwriting standards are forcing some home
buyers and would-be buyers to become renters, while rentals of investor-owned
homes and condominiums are providing housing alternatives to
would-be-renters. We feel the conditions are likely to persist until a
clear bottom is reached in single-family fundamentals.
Office property vacancies have begun to climb in central business district
locations, especially those closely tied to the fortunes of financial
employers and, to an even greater degree, those in suburban locations. With
unemployment rising, demand remains the primary concern, as supply has
remained in check and may even further weaken in the wake of the credit
crunch. Within the industrial sector, fundamentals have been deteriorating
for much of the past year and space availability has been climbing.
Pioneer Real Estate Shares | Annual Report | 12/31/08 5
In the hotel sector, occupancy figures were approximately 8% lower than a
year ago, and room rates have been weakening after holding up for much of
2008. Consequently, revenues per available room have been declining. We
expect hotel occupancies to remain under pressure as both leisure and
business travelers become more cautious in a slowing economy.
Q What is your outlook?
A We believe that the market environment in 2009 will be challenging --
particularly for real estate owners -- given our belief that debt capital
will be scarcer and higher-priced than it has been in the past. However, we
think the likely effect of this challenging environment has been, to a
degree, already priced into real estate securities. In this market, we will
remain focused on companies that have high-quality assets, solid management
teams and stable balance sheets. We will continue to make incremental
changes to the Fund as values and catalysts continue to change.
Please refer to the Schedule of Investments on pages 15-19 for a full listing
of Fund securities.
The Fund invests in REIT securities, the value of which can fall for a variety
of reasons, such as declines in rental income, fluctuating interest rates, poor
property management, environmental liabilities, uninsured damage, increased
competition, or changes in real estate tax laws. At times, the Fund's
investments may represent industries or industry sectors that are interrelated
or have common risks, making it more susceptible to any economic, political, or
regulatory developments or other risks affecting those industries or sectors.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
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.
6 Pioneer Real Estate Shares | Annual Report | 12/31/08
Portfolio Summary | 12/31/08
Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
U.S. Common Stocks 80.6%
Temporary Cash Investments 19.4%
Sector Diversification
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(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Apartment 16.8%
Office 13.6%
Shopping Center 13.5%
Industrial 12.0%
Regional Mall 11.9%
Healthcare 11.3%
Storage 8.5%
Diversified 6.4%
Hotel 4.6%
Triple Net Lease 1.4%
10 Largest Holdings*
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(As a percentage of equity holdings)
1. Simon Property Group 8.40%
2. Equity Residential Property Trust 6.58
3. Public Storage, Inc. 5.77
4. Boston Properties, Inc. 5.23
5. Nationwide Health Properties, Inc. 5.12
6. Vornado Realty Trust 4.92
7. Regency Centers Corp. 4.81
8. AvalonBay Communities, Inc. 4.72
9. Federal Realty Investment Trust 4.57
10. Liberty Property Trust 3.97
* This list excludes temporary cash and derivative instruments. Portfolio
holdings will vary for other periods. The holdings listed should not be
considered recommendations to buy or sell any securities listed.
Pioneer Real Estate Shares | Annual Report | 12/31/08 7
Prices and Distributions | 12/31/08
Net Asset Value per Share
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Class 12/31/08 12/31/07
A $ 13.00 $ 21.94
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B $ 12.84 $ 21.68
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C $ 12.86 $ 21.72
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Y $ 12.98 $ 21.90
- ------------------------------------------
Distributions per Share: 1/1/08-12/31/08
- --------------------------------------------------------------------------------
Net
Investment Short-Term Long-Term Non-taxable
Class Income Capital Gains Capital Gains Distributions
A $ 0.4628 $ -- $ -- $ 0.2896
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B $ 0.2435 $ -- $ -- $ 0.2896
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C $ 0.2942 $ -- $ -- $ 0.2896
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Y $ 0.5817 $ -- $ -- $ 0.2896
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8 Pioneer Real Estate Shares | Annual Report | 12/31/08
Performance Update | 12/31/08 Class A Shares
Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Real Estate Shares at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) U.S. REIT
Index.
Average Annual Total Returns
(As of December 31, 2008)
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Net Asset Public Offering
Period Value (NAV) Price (POP)
- ------------------------------------------------------------------
10 Years 6.72% 6.09%
5 Years 0.95 -0.24
1 Year -38.31 -41.86
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Expense Ratio
(Per prospectus dated May 1, 2008)
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Gross Net
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1.36% 1.36%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index
12/98 9,425 10,000
8,982 9,545
12/00 11,615 12,104
12,482 13,657
12/02 12,933 14,155
17,236 19,356
12/04 23,313 25,450
26,761 28,538
12/06 36,338 38,789
29,290 32,267
12/08 18,070 20,015
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 5.75% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI U.S. REIT Index is a widely used index comprising a broad
representation of the most actively traded real estate trusts, and is designed
to be a measure of real estate equity performance. Index returns assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index. Note to
Shareowners: Effective April 1, 2008, the Fund's benchmark changed to the MSCI
REIT Index. The securities represented in the new index better reflect the
types of securities in which the Fund is likely to invest. Previously, the
benchmark was the Dow Jones Wilshire Real Estate Securities Index (RESI), which
changed investment models in mid-2007, thus rendering it less appropriate as a
benchmark for the Portfolio. Returns for the Dow Jones Wilshire RESI were no
longer available for Pioneer's shareowner reporting purposes after June 30,
2008.
Pioneer Real Estate Shares | Annual Report | 12/31/08 9
Performance Update | 12/31/08 Class B Shares
Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Real Estate Shares, compared to that of the Morgan
Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2008)
- ----------------------------------------------------------------
If If
Period Held Redeemed
- ----------------------------------------------------------------
10 Years 5.81% 5.81%
5 Years -0.01 -0.01
1 Year -39.01 -41.38
- ----------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2008)
- ----------------------------------------------------------------
Gross Net
- ----------------------------------------------------------------
2.28% 2.28%
- ----------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index
12/98 10,000 10,000
9,455 9,545
12/00 12,150 12,104
12,930 13,657
12/02 13,297 14,155
17,592 19,356
12/04 23,608 25,450
26,845 28,538
12/06 36,110 38,789
28,836 32,267
12/08 17,587 20,015
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details. Note: Shares purchased prior to December 1, 2004 remain subject to
the CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI U.S. REIT Index is a widely used index comprising a broad
representation of the most actively traded real estate trusts, and is designed
to be a measure of real estate equity performance. 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. Note to
Shareowners: Effective April 1, 2008, the Fund's benchmark changed to the MSCI
REIT Index. The securities represented in the new index better reflect the
types of securities in which the Fund is likely to invest. Previously, the
benchmark was the Dow Jones Wilshire Real Estate Securities Index (RESI), which
changed investment models in mid-2007, thus rendering it less appropriate as a
benchmark for the Portfolio. Returns for the Dow Jones Wilshire RESI were no
longer available for Pioneer's shareowner reporting purposes after June 30,
2008.
10 Pioneer Real Estate Shares | Annual Report | 12/31/08
Performance Update | 12/31/08 Class C Shares
Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Real Estate Shares, compared to that of the Morgan
Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2008)
- ----------------------------------------------------------------
If If
Period Held Redeemed
- ----------------------------------------------------------------
10 Years 5.89% 5.89%
5 Years 0.12 0.12
1 Year -38.85 -38.85
- ----------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2008)
- ----------------------------------------------------------------
Gross Net
- ----------------------------------------------------------------
2.17% 2.17%
- ----------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index
12/98 10,000 10,000
9,459 9,545
12/00 12,147 12,104
12,952 13,657
12/02 13,314 14,155
17,621 19,356
12/04 23,661 25,450
26,938 28,538
12/06 36,259 38,789
28,982 32,267
12/08 17,723 20,015
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI U.S. REIT Index is a widely used index comprising a broad
representation of the most actively traded real estate trusts, and is designed
to be a measure of real estate equity performance. 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. Note to
Shareowners: Effective April 1, 2008, the Fund's benchmark changed to the MSCI
REIT Index. The securities represented in the new index better reflect the
types of securities in which the Fund is likely to invest. Previously, the
benchmark was the Dow Jones Wilshire Real Estate Securities Index (RESI), which
changed investment models in mid-2007, thus rendering it less appropriate as a
benchmark for the Portfolio. Returns for the Dow Jones Wilshire RESI were no
longer available for Pioneer's shareowner reporting purposes after June 30,
2008.
Pioneer Real Estate Shares | Annual Report | 12/31/08 11
Performance Update | 12/31/08 Class Y Shares
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Real Estate Shares, compared to that of the Morgan
Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2008)
- ----------------------------------------------------------------
If If
Period Held Redeemed
- ----------------------------------------------------------------
10 Years 7.31% 7.31%
5 Years 1.48 1.48
1 Year -37.90 -37.90
- ----------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2008)
- ----------------------------------------------------------------
Gross Net
- ----------------------------------------------------------------
0.90% 0.90%
- ----------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index
12/98 10,000 10,000
9,590 9,545
12/00 12,467 12,104
13,464 13,657
12/02 14,031 14,155
18,824 19,356
12/04 25,594 25,450
29,527 28,538
12/06 40,283 38,789
32,618 32,267
12/08 20,257 20,015
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class Y shares are not subject to sales charges and are available for limited
groups of eligible investors, including institutional investors. All results
are historical and assume the reinvestment of dividends, and capital gains.
Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI U.S. REIT Index is a widely used index comprising a broad
representation of the most actively traded real estate trusts, and is designed
to be a measure of real estate equity performance. 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. Note to
Shareowners: Effective April 1, 2008, the Fund's benchmark changed to the MSCI
REIT Index. The securities represented in the new index better reflect the
types of securities in which the Fund is likely to invest. Previously, the
benchmark was the Dow Jones Wilshire Real Estate Securities Index (RESI), which
changed investment models in mid-2007, thus rendering it less appropriate as a
benchmark for the Portfolio. Returns for the Dow Jones Wilshire RESI were no
longer available for Pioneer's shareowner reporting purposes after June 30,
2008.
12 Pioneer Real Estate Shares | Annual Report | 12/31/08
Comparing Ongoing Fund Expenses
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
- --------------------------------------------------------------------------------
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
(1) Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
(2) Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period"
to estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares
Based on actual returns from July 1, 2008 through December 31, 2008.
Share Class A B C Y
Beginning Account $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00
Value on 7/1/08
- --------------------------------------------------------------------------------------
Ending Account $ 636.70 $ 632.55 $ 633.88 $ 638.95
Value on 12/31/08
- --------------------------------------------------------------------------------------
Expenses Paid $ 6.71 $ 11.12 $ 10.23 $ 4.20
During Period*
- --------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.63%, 2.71%,
2.49% and 1.02% for Class A, Class B, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 184/366 (to reflect the one-half year period).
Pioneer Real Estate Shares | Annual Report | 12/31/08 13
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the
5% hypothetical examples that appear in the shareholder reports of the other
funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares
Based on a hypothetical 5% return per year before expenses, reflecting the
period from July 1, 2008 through December 31, 2008.
Share Class A B C Y
Beginning Account $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00
Value on 7/1/08
- --------------------------------------------------------------------------------------
Ending Account $ 1,016.94 $ 1,011.51 $ 1,012.62 $ 1,020.01
Value on 12/31/08
- --------------------------------------------------------------------------------------
Expenses Paid $ 8.26 $ 13.70 $ 12.60 $ 5.18
During Period*
- --------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.63%, 2.71%,
2.49% and 1.02% for Class A, Class B, Class C and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 184/366 (to reflect the one-half year period).
14 Pioneer Real Estate Shares | Annual Report | 12/31/08
Schedule of Investments | 12/31/08
Shares Value
COMMON STOCKS -- 96.0%
CONSUMER SERVICES -- 1.5%
Hotels, Resorts & Cruise Lines -- 1.5%
82,200 Starwood Hotels & Resorts Worldwide, Inc. $ 1,471,380
------------
Total Consumer Services $ 1,471,380
- ---------------------------------------------------------------------------------
REAL ESTATE -- 94.5%
Diversified Real Estate Investment Trusts -- 9.0%
163,000 Liberty Property Trust (b) $ 3,721,290
9,900 PS Business Parks, Inc. 442,134
76,500 Vornado Realty Trust 4,616,775
------------
$ 8,780,199
- ---------------------------------------------------------------------------------
Industrial Real Estate Investment Trusts -- 7.4%
85,300 AMB Property Corp. (b) $ 1,997,726
398,800 DCT Industrial Trust, Inc. (b) 2,017,928
94,400 Dupont Fabros Technology, Inc. 195,408
99,000 First Potomac Realty Trust 920,700
153,900 ProLogis Trust (b) 2,137,671
------------
$ 7,269,433
- ---------------------------------------------------------------------------------
Office Real Estate Investment Trusts -- 12.1%
113,800 BioMed Property Trust, Inc. (b) $ 1,333,736
89,200 Boston Properties, Inc. (b) 4,906,000
105,900 Brandywine Realty Trust (b) 816,489
7,900 Corporate Office Properties Trust, Inc. 242,530
40,900 Digital Realty Trust, Inc. (b) 1,343,565
205,200 HRPT Properties Trust 691,524
74,000 Kilroy Realty Corp. 2,476,040
------------
$ 11,809,884
- ---------------------------------------------------------------------------------
Real Estate Operating Companies -- 2.2%
272,200 Brookfield Properties Corp. $ 2,104,106
- ---------------------------------------------------------------------------------
Residential Real Estate Investment Trusts -- 16.1%
124,879 Apartment Investment & Management Co. (b) $ 1,442,352
73,000 AvalonBay Communities, Inc. 4,422,340
117,500 Camden Property Trust 3,682,450
207,000 Equity Residential Property Trust 6,172,740
------------
$ 15,719,882
- ---------------------------------------------------------------------------------
Retail Real Estate Investment Trusts -- 25.8%
159,000 Developers Diversified Realty Corp. (b) $ 775,920
69,000 Federal Realty Investment Trust (b) 4,283,520
126,900 Kimco Realty Corp. (b) 2,319,732
154,300 Kite Realty Group Trust 857,908
22,000 National Retail Properties, Inc. 378,180
39,500 Realty Income Corp. (b) 914,425
96,600 Regency Centers Corp. (b) 4,511,220
148,300 Simon Property Group (b) 7,879,179
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 15
Schedule of Investments | 12/31/08 (continued)
Shares Value
Retail Real Estate Investment Trusts -- (continued)
38,300 Taubman Centers, Inc. $ 975,118
125,200 The Macerich Co. (b) 2,273,632
------------
$ 25,168,834
- ---------------------------------------------------------------------------------
Specialized Real Estate Investment Trusts -- 21.9%
252,700 Extra Space Storage, Inc. (b) $ 2,607,864
96,000 HCP, Inc. (b) 2,665,920
368,500 Host Hotels & Resorts, Inc. (b) 2,789,545
6,800 Lasalle Hotel Properties, Inc. 75,140
167,000 Nationwide Health Properties, Inc. (b) 4,796,240
193,700 Omega Healthcare Investors, Inc. 3,093,389
68,000 Public Storage, Inc. 5,406,000
------------
$ 21,434,098
------------
Total Real Estate $ 92,286,436
- ---------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $114,211,747) $ 93,757,816
- ---------------------------------------------------------------------------------
Principal
Amount
TEMPORARY CASH INVESTMENTS -- 23.1%
Securities Lending Collateral -- 23.1% (c)
Certificates of Deposit:
$ 522,592 Abbey National Plc, 3.15%, 8/13/09 $ 522,592
522,521 Bank of Nova Scotia, 3.21%, 5/5/09 522,521
835,141 Bank of Scotland NY, 2.92%, 6/5/09 835,141
940,665 Barclays Bank, 1.5%, 5/27/09 940,665
166,151 Calyon NY, 4.62%, 1/16/09 166,151
1,045,184 CBA, 4.87%, 7/16/09 1,045,184
940,665 DNB NOR Bank ASA NY, 3.04%, 6/5/09 940,665
957,388 Intesa SanPaolo S.p.A., 1.44%, 5/22/09 957,388
60,538 NORDEA NY, 4.13%, 4/9/09 60,538
783,888 Royal Bank of Canada NY, 2.7%, 8/7/09 783,888
522,592 Royal Bank of Scotland, 3.06%, 3/5/09 522,592
104,470 Skandinavian Enskilda Bank NY, 3.06%, 2/13/09 104,470
1,045,184 Societe Generale, 3.29%, 9/4/09 1,045,184
940,665 Svenska Bank NY, 4.61%, 7/8/09 940,665
1,045,184 U.S. Bank NA, 2.25%, 8/24/09 1,045,184
------------
$ 10,432,830
- ---------------------------------------------------------------------------------
Commercial Paper:
99,594 BBVA U.S., 2.83%, 3/12/09 $ 99,594
1,045,184 Monumental Global Funding, Ltd., 2.5%, 8/17/09 1,045,184
522,592 CME Group, Inc., 2.9%, 8/6/09 522,592
522,537 General Electric Capital Corp., 2.86%, 3/16/09 522,537
1,026,371 American Honda Finance Corp., 4.95%, 7/14/09 1,026,371
1,045,184 HSBC Bank, Inc., 2.5%, 8/14/09 1,045,184
The accompanying notes are an integral part of these financial statements.
16 Pioneer Real Estate Shares | Annual Report | 12/31/08
Principal
Amount Value
Commercial Paper -- (continued):
$ 522,592 IBM, 2.39%, 9/25/09 $ 522,592
940,665 Met Life Global Funding, 3.19%, 6/12/09 940,665
940,665 New York Life Global, 2.13%, 9/4/09 940,665
888,406 Westpac Banking Corp., 2.34%, 6/1/09 888,406
------------
$ 7,553,790
- ---------------------------------------------------------------------------------
Tri-party Repurchase Agreements:
2,299,404 Deutsche Bank, 0.25%, 1/2/09 $ 2,299,404
177,556 Barclays Capital Markets, 0.5%, 1/2/09 177,556
------------
$ 2,476,960
- ---------------------------------------------------------------------------------
Time Deposit:
1,045,184 BNP Paribas, 0.01%, 1/2/09 $ 1,045,184
- ---------------------------------------------------------------------------------
Shares
Money Market Mutual Funds:
261,296 Columbia Government Reserves Fund $ 261,296
783,888 JP Morgan, U.S. Government Money Market Fund 783,888
------------
$ 1,045,184
- ---------------------------------------------------------------------------------
Total Securities Lending Collateral $ 22,553,948
- ---------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $22,553,948) $ 22,553,948
- ---------------------------------------------------------------------------------
TOTAL INVESTMENT IN SECURITIES -- 119.1%
(Cost $136,765,695) (a) $116,311,764
- ---------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (19.1)% $(18,678,508)
- ---------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $ 97,633,256
=================================================================================
(a) At December 31, 2008, the net unrealized loss on investments based on
cost for federal income tax purposes of $140,717,574 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 12,706,086
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (37,111,896)
------------
Net unrealized loss $(24,405,810)
============
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 17
Schedule of Investments | 12/31/08 (continued)
(b) At December 31, 2008, the following securities were out on loan:
Shares Description Value
33,600 AMB Property Corp. $ 786,912
110,000 Apartment Investment & Management Co. 1,270,500
9,600 BioMed Property Trust, Inc. 112,512
17,600 Boston Properties, Inc. 968,000
70,000 Brandywine Realty Trust 539,700
31,000 DCT Industrial Trust, Inc. 156,860
4,000 Developers Diversified Realty Corp. 19,520
38,000 Digital Realty Trust, Inc. 1,248,300
34,000 Extra Space Storage, Inc. 350,880
50,500 Federal Realty Investment Trust 3,135,040
79,600 HCP, Inc. 2,210,492
77,000 Host Hotels & Resorts, Inc. 582,890
20,000 Kimco Realty Corp. 365,600
50,000 Liberty Property Trust 1,141,500
117,600 The Macerich Co. 2,135,616
21,300 Nationwide Health Properties, Inc. 611,736
65,396 ProLogis Trust 908,350
36,100 Realty Income Corp. 835,715
11,700 Regency Centers Corp. 546,390
92,700 Simon Property Group 4,925,151
------------------------------------------------------------------
Total $ 22,851,664
==================================================================
(c) Security lending collateral is managed by Credit Suisse, New York Branch.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended December 31, 2008 aggregated $26,087,695 and $36,257,773,
respectively.
Various inputs are used in determining the value of the Portfolio's
investments. These inputs are summarized in the three broad levels listed
below.
Highest priority is given to Level 1 inputs and lowest priority is given to
Level 3.
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
etc.)
Level 3 -- significant unobservable inputs (including the Portfolio's own
assumptions in determining fair value of investments)
The accompanying notes are an integral part of these financial statements.
18 Pioneer Real Estate Shares | Annual Report | 12/31/08
The following is a summary of the inputs used as of December 31, 2008, in
valuing the Portfolio's assets:
Investments in
Valuation Inputs Securities
Level 1 -- Quoted Prices $ 93,757,816
Level 2 -- Other Significant Observable Inputs 22,553,948
Level 3 -- Significant Unobservable Inputs --
- -----------------------------------------------------------------
Total $ 116,311,764
=================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 19
Statement of Assets and Liabilities | 12/31/08
ASSETS:
Investment in securities, at value (including securities loaned of
$22,851,664) (cost $136,765,695) $116,311,764
Cash 3,235,543
Receivables --
Investment securities sold 280,146
Fund shares sold 132,262
Dividends 1,106,395
Other 29,570
- ------------------------------------------------------------------------------------
Total assets $121,095,680
- ------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Investment securities purchased $ 639,231
Fund shares repurchased 134,845
Upon return of securities loaned 22,553,948
Due to affiliates 47,212
Accrued expenses 87,188
- ------------------------------------------------------------------------------------
Total liabilities $ 23,462,424
- ------------------------------------------------------------------------------------
NET ASSETS:
Paid-in capital $129,099,265
Accumulated net realized loss on investments (11,012,078)
Net unrealized loss on investments (20,453,931)
- ------------------------------------------------------------------------------------
Total net assets $ 97,633,256
====================================================================================
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $55,353,359/4,258,295 shares) $ 13.00
Class B (based on $8,427,904/656,477 shares) $ 12.84
Class C (based on $7,618,887/592,380 shares) $ 12.86
Class Y (based on $26,233,106/2,020,671 shares) $ 12.98
MAXIMUM OFFERING PRICE:
Class A ($13.00 [divided by] 94.25%) $ 13.79
====================================================================================
The accompanying notes are an integral part of these financial statements.
20 Pioneer Real Estate Shares | Annual Report | 12/31/08
Statement of Operations
For the Year Ended 12/31/08
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $22,054) $5,394,619
Interest 46,422
Income from securities loaned, net 153,547
- ---------------------------------------------------------------------------------------
Total investment income $ 5,594,588
- ---------------------------------------------------------------------------------------
EXPENSES:
Management fees $1,202,188
Transfer agent fees
Class A 234,649
Class B 78,406
Class C 47,488
Class Y 751
Distribution fees
Class A 218,437
Class B 145,796
Class C 123,368
Shareholders' communications expense 122,875
Administrative fees 45,064
Custodian fees 58,701
Registration fees 76,805
Professional fees 61,510
Printing expense 46,297
Fees and expenses of nonaffiliated trustees 7,097
Miscellaneous 27,043
- ---------------------------------------------------------------------------------------
Total expenses $ 2,496,475
Less fees paid indirectly (8,700)
- ---------------------------------------------------------------------------------------
Net expenses $ 2,487,775
- ---------------------------------------------------------------------------------------
Net investment income $ 3,106,813
- ---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments $ (9,879,430)
- ---------------------------------------------------------------------------------------
Change in net unrealized loss on investments $(55,661,050)
- ---------------------------------------------------------------------------------------
Net loss on investments $(65,540,480)
- ---------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(62,433,667)
=======================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 21
Statement of Changes in Net Assets
For the Years Ended 12/31/08 and 12/31/07, respectively
Year Ended Year Ended
12/31/08 12/31/07
FROM OPERATIONS:
Net investment income $ 3,106,813 $ 2,590,458
Net realized gain (loss) on investments (9,879,430) 28,550,165
Change in net unrealized loss on investments (55,661,050) (78,881,246)
- --------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(62,433,667) $(47,740,623)
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.46 and $0.36 per share, respectively) $ (1,997,135) $ (1,632,527)
Class B ($0.24 and $0.07 per share, respectively) (171,449) (65,436)
Class C ($0.29 and $0.11 per share, respectively) (179,329) (78,925)
Class Y ($0.58 and $0.50 per share, respectively) (1,079,004) (835,689)
Net realized gain:
Class A ($0.00 and $4.37 per share, respectively) -- (17,216,824)
Class B ($0.00 and $4.37 per share, respectively) -- (3,341,072)
Class C ($0.00 and $4.37 per share, respectively) -- (2,655,779)
Class Y ($0.00 and $4.37 per share, respectively) -- (7,701,384)
Tax return of capital:
Class A ($0.29 and $0.00 per share, respectively) (1,249,707) --
Class B ($0.29 and $0.00 per share, respectively) (206,544) --
Class C ($0.29 and $0.00 per share, respectively) (178,055) --
Class Y ($0.29 and $0.00 per share, respectively) (536,147) --
- --------------------------------------------------------------------------------------------
Total distributions to shareowners $ (5,597,370) $(33,527,636)
- --------------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 39,347,126 $ 63,752,735
Reinvestment of distributions 4,971,103 30,505,083
Cost of shares repurchased (54,576,418) (109,241,936)
- --------------------------------------------------------------------------------------------
Net decrease in net assets resulting from Fund
share transactions $(10,258,189) $(14,984,118)
- --------------------------------------------------------------------------------------------
Net decrease in net assets $(78,289,226) $(96,252,377)
NET ASSETS:
Beginning of year 175,922,482 272,174,859
- --------------------------------------------------------------------------------------------
End of year $ 97,633,256 $175,922,482
- --------------------------------------------------------------------------------------------
Undistributed net investment income $ -- $ 320,104
- --------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Real Estate Shares | Annual Report | 12/31/08
'08 Shares '08 Amount '07 Shares '07 Amount
Class A
Shares sold 1,308,307 $27,208,478 994,319 $ 32,914,661
Reinvestment of distributions 149,644 2,795,752 743,988 16,861,749
Less shares repurchased (1,652,413) (31,691,972) (2,217,291) (68,683,661)
- -----------------------------------------------------------------------------------------------------
Net decrease (194,462) $(1,687,742) (478,984) $(18,907,251)
=====================================================================================================
Class B
Shares sold 171,590 $ 3,400,601 209,823 $ 6,894,004
Reinvestment of distributions 19,100 350,488 140,171 3,090,523
Less shares repurchased (381,164) (7,322,566) (585,583) (18,011,134)
- -----------------------------------------------------------------------------------------------------
Net decrease (190,474) $(3,571,477) (235,589) $ (8,026,607)
=====================================================================================================
Class C
Shares sold 144,485 $ 2,878,143 226,661 $ 7,194,207
Reinvestment of distributions 16,748 304,205 107,365 2,374,472
Less shares repurchased (265,784) (5,214,556) (466,697) (14,390,437)
- -----------------------------------------------------------------------------------------------------
Net decrease (104,551) $(2,032,208) (132,671) $ (4,821,758)
=====================================================================================================
Class Y
Shares sold 394,808 $ 5,859,904 564,016 $ 16,749,863
Reinvestment of distributions 83,015 1,520,658 362,948 8,178,339
Less shares repurchased (499,132) (10,347,324) (290,653) (8,156,704)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) (21,309) $(2,966,762) 636,311 $ 16,771,498
=====================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 23
Financial Highlights
Year Ended Year Ended
12/31/08 12/31/07
Class A
Net asset value, beginning of year $ 21.94 $ 33.07
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.43 $ 0.36
Net realized and unrealized gain (loss) on investments (8.62) (6.76)
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (8.19) $ (6.40)
Distributions to shareowners:
Net investment income (0.46) (0.36)
Net realized gain -- (4.37)
Tax return of capital (0.29) --
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (8.94) $ (11.13)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.00 $ 21.94
==============================================================================================================
Total return* (38.31)% (19.39)%
Ratio of net expenses to average net assets+ 1.63% 1.36%
Ratio of net investment income to average net assets+ 2.10% 1.10%
Portfolio turnover rate 18% 21%
Net assets, end of period (in thousands) $ 55,353 $ 97,691
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 1.63% 1.36%
Net investment income 2.10% 1.10%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 1.63% 1.35%
Net investment income 2.10% 1.11%
- --------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
12/31/06 12/31/05 12/31/04 (a)
Class A
Net asset value, beginning of year $ 25.87 $ 24.52 $ 19.55
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.28 $ 0.28 $ 0.39
Net realized and unrealized gain (loss) on investments 8.88 3.29 6.31
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 9.16 $ 3.57 $ 6.70
Distributions to shareowners:
Net investment income (0.28) (0.24) (0.40)
Net realized gain (1.68) (1.84) (1.33)
Tax return of capital -- (0.14) --
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 7.20 $ 1.35 $ 4.97
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 33.07 $ 25.87 $ 24.52
================================================================================================================================
Total return* 35.79% 14.79% 35.26%
Ratio of net expenses to average net assets+ 1.37% 1.50% 1.56%
Ratio of net investment income to average net assets+ 0.98% 1.14% 1.85%
Portfolio turnover rate 20% 24% 34%
Net assets, end of period (in thousands) $163,088 $110,217 $94,198
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 1.37% 1.50% 1.56%
Net investment income 0.98% 1.14% 1.85%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 1.36% 1.50% 1.56%
Net investment income 0.99% 1.14% 1.85%
- --------------------------------------------------------------------------------------------------------------------------------
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the Fund.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
24 Pioneer Real Estate Shares | Annual Report | 12/31/08
Year Ended Year Ended
12/31/08 12/31/07
Class B
Net asset value, beginning of year $ 21.68 $ 32.74
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.19 $ 0.06
Net realized and unrealized gain (loss) on investments (8.50) (6.68)
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (8.31) $ (6.61)
Distributions to shareowners:
Net investment income (0.24) (0.07)
Net realized gain -- (4.37)
Tax return of capital (0.29) --
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (8.84) $ (11.06)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.84 $ 21.68
==============================================================================================================
Total return* (39.01)% (20.14)%
Ratio of net expenses to average net assets+ 2.72% 2.28%
Ratio of net investment income to average net assets+ 0.89% 0.11%
Portfolio turnover rate 18% 21%
Net assets, end of period (in thousands) $ 8,428 $ 18,364
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 2.72% 2.28%
Net investment income 0.89% 0.11%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 2.71% 2.26%
Net investment income 0.90% 0.13%
- --------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
12/31/06 12/31/05 12/31/04 (a)
Class B
Net asset value, beginning of year $ 25.64 $ 24.32 $ 19.40
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.01 $ 0.06 $ 0.19
Net realized and unrealized gain (loss) on investments 8.78 3.24 6.28
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 8.79 $ 3.30 $ 6.47
Distributions to shareowners:
Net investment income (0.01) (0.05) (0.22)
Net realized gain (1.68) (1.84) (1.33)
Tax return of capital -- (0.09) --
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 7.10 $ 1.32 $ 4.92
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.74 $ 25.64 $ 24.32
================================================================================================================================
Total return* 34.51% 13.72% 34.20%
Ratio of net expenses to average net assets+ 2.31% 2.42% 2.37%
Ratio of net investment income to average net assets+ 0.00%(b) 0.14% 0.96%
Portfolio turnover rate 20% 24% 34%
Net assets, end of period (in thousands) $ 35,442 $29,992 $39,833
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 2.31% 2.42% 2.37%
Net investment income 0.00%(b) 0.14% 0.96%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 2.30% 2.42% 2.37%
Net investment income 0.01% 0.14% 0.96%
- --------------------------------------------------------------------------------------------------------------------------------
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the Fund.
(b) Amount rounds to less than 0.01% per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 25
Financial Highlights (continued)
Year Ended Year Ended
12/31/08 12/31/07
Class C
Net asset value, beginning of year $ 21.72 $ 32.80
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.25 $ 0.10
Net realized and unrealized gain (loss) on investments (8.53) (6.70)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (8.28) $ (6.60)
Distributions to shareowners:
Net investment income (0.29) (0.11)
Net realized gain -- (4.37)
Tax return of capital (0.29) --
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (8.86) $ (11.08)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.86 $ 21.72
==============================================================================================================
Total return* (38.85)% (20.07)%
Ratio of net expenses to average net assets+ 2.50% 2.17%
Ratio of net investment income to average net assets+ 1.18% 0.26%
Portfolio turnover rate 18% 21%
Net assets, end of period (in thousands) $ 7,619 $ 15,139
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 2.50% 2.17%
Net investment income 1.18% 0.26%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 2.49% 2.16%
Net investment income 1.19% 0.27%
- ---------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
12/31/06 12/31/05 12/31/04 (a)
Class C
Net asset value, beginning of year $ 25.68 $ 24.35 $ 19.42
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.02 $ 0.08 $ 0.20
Net realized and unrealized gain (loss) on investments 8.80 3.26 6.29
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 8.82 $ 3.34 $ 6.49
Distributions to shareowners:
Net investment income (0.02) (0.07) (0.23)
Net realized gain (1.68) (1.84) (1.33)
Tax return of capital -- (0.10) --
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 7.12 $ 1.33 $ 4.93
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.80 $ 25.68 $ 24.35
================================================================================================================================
Total return* 34.60% 13.85% 34.27%
Ratio of net expenses to average net assets+ 2.24% 2.32% 2.34%
Ratio of net investment income to average net assets+ 0.10% 0.27% 1.02%
Portfolio turnover rate 20% 24% 34%
Net assets, end of period (in thousands) $27,209 $19,824 $20,675
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 2.24% 2.32% 2.34%
Net investment income 0.10% 0.27% 1.02%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 2.23% 2.32% 2.34%
Net investment income 0.11% 0.27% 1.02%
- --------------------------------------------------------------------------------------------------------------------------------
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the Fund.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
26 Pioneer Real Estate Shares | Annual Report | 12/31/08
Year Ended Year Ended
12/31/08 12/31/07
Class Y
Net asset value, beginning of year $ 21.90 $ 33.03
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.54 $ 0.49
Net realized and unrealized gain (loss) on investments (8.59) (6.75)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (8.05) $ (6.26)
Distributions to shareowners:
Net investment income (0.58) (0.50)
Net realized gain -- (4.37)
Tax return of capital (0.29) --
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (8.92) $ (11.13)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.98 $ 21.90
==============================================================================================================
Total return* (37.90)% (19.03)%
Ratio of net expenses to average net assets+ 1.02% 0.90%
Ratio of net investment income to average net assets+ 2.76% 1.81%
Portfolio turnover rate 18% 21%
Net assets, end of period (in thousands) $ 26,233 $ 44,729
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 1.02% 0.90%
Net investment income 2.76% 1.81%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 1.02% 0.90%
Net investment income 2.76% 1.81%
- ---------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
12/31/06 12/31/05 12/31/04 (a)
Class Y
Net asset value, beginning of year $ 25.84 $ 24.49 $ 19.53
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income $ 0.42 $ 0.35 $ 0.50
Net realized and unrealized gain (loss) on investments 8.87 3.34 6.31
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 9.29 $ 3.69 $ 6.81
Distributions to shareowners:
Net investment income (0.42) (0.34) (0.52)
Net realized gain (1.68) (1.84) (1.33)
Tax return of capital -- (0.16) --
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 7.19 $ 1.35 $ 4.96
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 33.03 $ 25.84 $ 24.49
================================================================================================================================
Total return* 36.43% 15.36% 35.97%
Ratio of net expenses to average net assets+ 0.87% 1.00% 1.01%
Ratio of net investment income to average net assets+ 1.54% 1.84% 2.47%
Portfolio turnover rate 20% 24% 34%
Net assets, end of period (in thousands) $46,436 $26,490 $ 9,172
Ratios with no waiver of management fees by PIM and no reduction for fees paid
indirectly:
Net expenses 0.87% 1.00% 1.01%
Net investment income 1.54% 1.84% 2.47%
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 0.87% 1.00% 1.01%
Net investment income 1.54% 1.84% 2.47%
- --------------------------------------------------------------------------------------------------------------------------------
(a) Effective 5/31/04 AEW Management and Advisors, L.P. became sub-advisor to
the Fund.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at each end of each period.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/08 27
Notes to Financial Statements | 12/31/08
1. Organization and Significant Accounting Policies
Pioneer Real Estate Shares (the Fund) is a Delaware statutory trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek long-term
growth of capital. Current income is a secondary objective.
The Fund offers four classes of shares -- Class A, Class B, Class C, and Class Y
shares. Each class of shares represents an interest in the same portfolio of
investments of the Fund and has identical rights (based on relative net asset
values) to assets and liquidation proceeds. Share classes can bear different
class-specific fees and expenses such as transfer agent and distribution fees.
Differences in class-specific fees and expenses will result in differences in
net investment income and, therefore, the payment of different dividends by each
class. The Amended and Restated Declaration of Trust of the Fund gives the Board
the flexibility to specify either per share voting or dollar-weighted voting
when submitting matters for shareholder approval. Under per share voting, each
share of a class of the Fund is entitled to one vote. Under dollar-weighted
voting, a shareholder's voting power is determined not by the number of shares
owned, but by the dollar value of the shares on the record date. Share classes
have exclusive voting rights with respect to matters affecting only that class,
including with respect to the distribution plan for that class. There is no
distribution plan for Class Y shares. Class B shares convert to Class A shares
approximately eight years after the date of purchase
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.
Because the Fund may invest a substantial portion of its assets in Real Estate
Investment Trusts (REITs), the Fund may be subject to certain risks associated
with direct investments in REITs. REITs may be affected by changes in the value
of their underlying properties and by defaults of their borrowers or tenants.
REITs depend generally on their ability to generate cash flow to make
distributions to shareowners, and certain REITs have self-liquidation
provisions by which mortgages held may be paid in full and distributions of
capital returns may be made at any time. In addition, the performance of a REIT
may be affected by its failure to qualify for tax-free pass-through of income
under
28 Pioneer Real Estate Shares | Annual Report | 12/31/08
the Internal Revenue Code or its failure to maintain exemption from
registration under the Investment Company Act of 1940. The Fund's prospectuses
(unaudited) contain information regarding the Fund's principal risks. 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 on trade date. The net asset value of the
Fund is computed once daily, on each day the New York Stock Exchange (NYSE)
is open, as of the close of regular trading on the NYSE. In computing the
net asset value, securities are valued at the last sale price on the
principal exchange where they are traded. Securities that have not traded on
the date of valuation, or securities for which sale prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market prices and/or quotations are not readily
available are valued using fair value methods pursuant to procedures adopted
by 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 may also use fair
value methods to value 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 December 31, 2008, there
were no securities that were valued using fair value methods. 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
the exercise of reasonable diligence. Interest income is recorded on the
accrual basis.
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. Tax
years for the prior three fiscal years remain subject to examination by tax
authorities.
Pioneer Real Estate Shares | Annual Report | 12/31/08 29
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 from or in excess of net
investment income or net realized gain on investment transactions, or as
from paid-in capital, depending on the type of book/tax differences that may
exist. A portion of the dividend income recorded by the Fund is from
distributions by publicly traded REITs, and such distributions for tax
purposes may also consist of capital gains and return of capital. The actual
return of capital and capital gains portions of such distributions will be
determined by formal notifications from the REITs subsequent to the calendar
year-end. Distributions received from the REITs that are determined to be a
return of capital, are recorded by the Fund as a reduction of the cost basis
of the securities held.
At December 31, 2008, the Fund had a net capital loss carryforward of
$7,060,199, which will expire in 2016 if not utilized.
The tax character of distributions paid during the years ended December 31,
2008 and 2007 was as follows:
2008 2007
Distributions paid from:
Ordinary income $3,426,917 $ 3,370,381
Long-term capital gain -- 30,157,255
Return of capital 2,170,453 --
- -------------------------------------------------------------
Total $5,597,370 $33,527,636
=============================================================
The following shows the components of distributable earnings on a federal
income tax basis at December 31, 2008:
2008
Distributable earnings:
Capital loss carryforward $ (7,060,199)
Unrealized depreciation (24,405,810)
- -------------------------------------------------------
Total $ (31,466,009)
=======================================================
The difference between book basis and tax-basis unrealized depreciation is
attributable to the tax deferral of losses on wash sales.
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Pioneer
Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a
wholly owned indirect subsidiary of UniCredit S.p.A., (UniCredit). PFD
earned $20,363 in underwriting commissions on the sale of Class A shares
during the year ended December 31, 2008.
30 Pioneer Real Estate Shares | Annual Report | 12/31/08
D. Class Allocations
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to all classes of shares
based on their respective percentage of adjusted net assets at the beginning
of the day. Distribution fees are calculated based on the average daily net
asset value attributable to Class A, Class B and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan (see
Note 4). Shareowners of each class participate in all expenses and fees paid
to the transfer agent, Pioneer Investment Management Shareholder Services,
Inc. (PIMSS), for its services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expenses (see Note 3).
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, Class C and Class Y can bear different
transfer agent and distribution fees.
E. Securities Lending
The Fund lends securities in its portfolio to certain broker-dealers or
other institutional investors. When entering into a securities loan
transaction, the Fund typically receives cash collateral from the borrower
equal to at least the value of the securities loaned, which is invested in
temporary cash investments. Credit Suisse, New York Branch, as the Fund's
security lending agent, manages the Fund's securities lending collateral.
The income earned on the investment of collateral is shared with the
borrower and the lending agent in payment of any rebate due to the borrower
with respect to the securities loan, and in compensation for the lending
agent's services to the Fund. The Fund also continues to receive interest or
payments in lieu of dividends on the securities loaned. Gain or loss on the
value of the loaned securities that may occur during the term of the loan
will be for the account of the Fund. The amount of the collateral is
required to be adjusted daily to reflect any price fluctuation in the value
of the loaned securities. The Fund has the right, under the lending
agreement, to terminate the loan and recover the securities from the
borrower with prior notice. The Fund will be required to return the cash
collateral to the borrower and could suffer a loss if the value of the
collateral, as invested, has declined.
F. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest, is
required to be at least equal to or in excess of the value of the repurchase
agreement. The collateral for all repurchase agreements is held in
safekeeping in the customer-only account of the Fund's custodian or
subcustodians.
Pioneer Real Estate Shares | Annual Report | 12/31/08 31
The Fund's investment adviser, Pioneer Investment Management, Inc. (PIM), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit, manages the Fund's
portfolio. Management fees are calculated daily at the annual rate of 0.80% of
the Fund's average daily net assets. PIM pays a portion of the fee it receives
from the Fund to AEW Management and Advisors L.P. as compensation for
sub-advisory services to the Fund.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. Included in "Due to affiliates" reflected on
the statement of Assets and Liabilities is $2,105 in management fees,
administrative costs and certain other fees payable at December 31, 2008.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredit, provides substantially
all transfer agent and shareowner services to the Fund at negotiated rates.
In addition, the Fund reimbursed PIMSS for out-of-pocket expenses related to
shareholder communications activities such as proxy and statement mailings,
outgoing phone calls and omnibus relationship contracts. For the year ended
December 31, 2008, such out of pocket expenses by class of shares were as
follows:
Shareholder Communications:
Class A $ 85,453
Class B 25,318
Class C 11,973
Class Y 131
- ----------------------------------------------
Total $122,875
==============================================
Included in "Due to affiliates" reflected on the Statement of Assets and
Liabilities is $44,332 in transfer agent fees and shareholder communications
expense payable to PIMSS at December 31, 2008.
4. Distribution Plan
The Fund adopted a Distribution Plan pursuant to Rule 12b-1 of the Investment
Company Act of 1940 with respect to its Class A, Class B and Class C shares.
Pursuant to the Plan, the Fund pays PFD 0.25% of the average daily net assets
attributable to Class A shares as compensation for personal services and/or
account maintenance services or distribution services with regard to Class A
shares. Pursuant to the Plan, the Fund pays PFD 1.00% of the average daily net
assets attributable to Class B and Class C shares. The fee for Class B
32 Pioneer Real Estate Shares | Annual Report | 12/31/08
and Class C shares consists of a 0.25% service fee and a 0.75% distribution fee
paid as compensation for personal services and/or account maintenance services
or distribution services with regard to Class B and Class C shares. Prior to
February 1, 2008, PFD was reimbursed under the Distribution Plan for
distribution expenses in an amount up to 0.25% of the average daily net assets
attributable to Class A shares. Included in "Due to affiliates" reflected on
the Statement of Assets and Liabilities is $775 in distribution fees payable to
PFD at December 31, 2008.
In addition, redemptions of each class of shares (except Class Y shares) may be
subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A shares
within 18 months of purchase. Class B shares that are redeemed within five
years of purchase are subject to a CDSC at declining rates beginning at 4.0%,
based on the lower of cost or market value of shares being redeemed.
Redemptions of Class C shares within one year of purchase are subject to a CDSC
of 1.00%, based on the lower of cost or market value of shares being redeemed.
Proceeds from the CDSC are paid to PFD. For the year ended December 31, 2008,
CDSCs in the amount of $41,952 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 December 31, 2008, the Fund's expenses
were reduced by $8,700 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 $115 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 $115 million or the
limits set by its prospectus for borrowings. Interest on 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
participating Funds based on their respective borrowing limits. For year ended
December 31, 2008, the Fund had no borrowings under this agreement.
7. New Pronouncement
In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures
about Derivative instruments and Hedging Activities (SFAS 161), was issued and
is effective for fiscal years beginning after November 15, 2008. SFAS 161
requires enhanced disclosures about an entity's derivative and hedging
activities. Management is currently evaluating the impact the adoption of
SFAS 161 will have on the Fund's financial statement disclosures.
Pioneer Real Estate Shares | Annual Report | 12/31/08 33
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareowners of
Pioneer Real Estate Shares:
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Pioneer
Real Estate Shares (the "Fund"), including the schedule of investments, as of
December 31, 2008, 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 five years in
the period then ended. 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.
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 December 31, 2008, by correspondence
with the custodian and broker 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 Real Estate Shares at December 31, 2008, 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 financial highlights for each of the five
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 18, 2009
34 Pioneer Real Estate Shares | Annual Report | 12/31/08
Approval of Sub-Advisory Agreement (unaudited)
Pioneer Investment Management, Inc. (PIM) serves as the Fund's investment
adviser pursuant to an investment advisory agreement between PIM and the Fund.
PIM has retained AEW Capital Management, L.P. to serve as the sub-adviser to
the Fund pursuant to a sub-advisory agreement between PIM and the sub-adviser.
At a meeting held on January 8, 2008, the Trustees of the Fund approved an
amended and restated investment advisory agreement between the Fund and PIM.
Shareholders of the Fund approved the amended and restated investment advisory
agreement on May 13, 2008. The material factors and conclusions with respect
thereto that formed the basis for the Trustees' approval of the amended and
restated investment advisory agreement are included in the Fund's semi-annual
report for the period ended June 30, 2008.
At a meeting held on November 11, 2008, based on their evaluation of the
information provided by PIM and the sub-adviser, the Trustees of the Fund,
including the independent Trustees voting separately, unanimously approved the
continuation of the sub-advisory agreement for the Fund for another year. In
considering the continuation of the sub-advisory agreement, the Trustees
considered various factors that they determined were relevant, including the
factors described below. The Trustees did not identify any single factor as the
controlling factor in determining to approve the continuation of the sub-
advisory agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services provided
to the Fund by the sub-adviser, taking into account the investment objective
and strategy of the Fund and the information related to the Fund provided to
the Trustees at each quarterly meeting. The Trustees reviewed the terms of the
sub-advisory agreement. The Trustees also reviewed the sub-adviser's investment
approach for the Fund and its research process. The Trustees considered the
resources of the sub-adviser and the personnel of the sub-adviser who provide
investment management services to the Fund.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services provided by the sub-adviser to the Fund were
satisfactory and consistent with the terms of the sub-advisory agreement.
Performance of the Fund
The Trustees considered the performance results of the Fund over various time
periods. They reviewed information comparing the Fund's performance with the
average performance of its peer group of funds as classified by
Pioneer Real Estate Shares | Annual Report | 12/31/08 35
Morningstar, Inc. (Morningstar), an independent provider of investment company
data, and with the performance of the Fund's benchmark index. The Trustees
considered that the Fund's annualized total return was in the third quintile of
its Morningstar category for the one and three year periods ended June 30,
2008. (In all quintile rankings referred to throughout this disclosure, first
quintile is most favorable to the Fund's shareowners. Thus, highest relative
performance would be first quintile and lowest relative expenses would also be
first quintile.) The Trustees concluded that the investment performance of the
Fund was satisfactory.
Sub-advisory Fee and Expenses
The Trustees considered the fees payable to the sub-adviser under the sub-
advisory agreement. They also considered that PIM, not the Fund, paid the
sub-adviser out of the management fees paid to PIM under the investment
advisory agreement. The Trustees considered information regarding the
management fees and expenses of the Fund in comparison to the management fees
of its peer group of funds as classified by Morningstar and the expense ratios
of a peer group of funds selected on the basis of criteria determined by the
independent Trustees for this purpose using data provided by Strategic Insight
Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent
third party.
The Trustees considered that the Fund's management fee for the twelve months
ended June 30, 2008 was in the second quintile relative to the management fees
paid by other funds in its peer group Morningstar category for the comparable
period. The Trustees also considered that the Fund's expense ratio for the
twelve months ended June 30, 2008 was in the first quintile relative to its
Strategic Insight peer group.
The Trustees also reviewed the advisory fees charged by the sub-adviser to its
separate account clients with investment strategies that were similar to the
Fund. The Trustees noted that the fee rates for those separate accounts
generally were in line with the sub-advisory fees paid to the sub-adviser with
respect to the Fund.
The Trustees concluded that the sub-advisory fee payable by PIM to the sub-
adviser of the Fund was reasonable in relation to the nature and quality of
services provided by the sub-adviser. The Trustees also concluded that the
Fund's expense ratio was reasonable.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Fund,
including the methodology used by PIM in allocating certain of its costs to the
management of the Fund. They also considered PIM's profit margin in connection
with the overall operation of the Fund. The Trustees further considered the
sub-advisory fees received by the sub-adviser with respect to the
36 Pioneer Real Estate Shares | Annual Report | 12/31/08
Fund and the percentage that such fees represented of the sub-adviser's overall
revenues (for the 12-month period ended December 31, 2007). They also reviewed
the financial results realized by PIM and its affiliates from non-fund
businesses. The Trustees considered the profit margins with respect to the Fund
in comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
recognized that each of PIM and the sub-adviser should be entitled to earn a
reasonable level of profit for the services provided to the Fund. The Trustees
concluded that the profit margins with respect to the management of the Fund
were not unreasonable.
Economies of Scale
The Trustees considered the economies of scale with respect to the management
of the Fund, whether the Fund had appropriately benefited from any economies of
scale, and whether there was potential for realization of any further economies
of scale. The Trustees considered that, although the Fund pays a management fee
at a fixed rate as a percentage of the Fund's net assets, without any
breakpoints, the management fee rate paid by the Fund for the twelve months
ended June 30, 2008 was in the second quintile relative to the management fees
paid by other funds in its peer group Morningstar category for the comparable
period and that, on a hypothetical basis, such fee would be in the second
quintile relative to the peer group at higher asset levels. The Trustees
concluded that, at current and reasonably foreseeable asset levels, breakpoints
in the management fee currently were not necessary.
Other Benefits
The Trustees considered that the sub-adviser reported that it does not receive
any other benefits from its relationship with the Fund.
Conclusion
After consideration of the factors described above as well as other factors,
the Trustees, including all of the independent Trustees, concluded that the
sub-advisory agreement for the Fund between PIM and the sub-adviser, including
the fees payable thereunder, was fair and reasonable and voted to approve the
continuation of the sub-advisory agreement for the Fund.
Pioneer Real Estate Shares | Annual Report | 12/31/08 37
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
Bingham McCutchen LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at www.pioneerinvestments.com. This information is also available
on the Securities and Exchange Commission's web site at http://www.sec.gov.
Trustees and Officers
The Board of Trustees provides broad supervision over the Fund's affairs. The
officers of the Fund are responsible for the Fund's operations. The 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 serves as a Trustee of each of the 76 U.S. registered
investment portfolios for which Pioneer serves as investment adviser (the
"Pioneer Funds"). The address for all Trustees and all officers of the Fund is
60 State Street, Boston, Massachusetts 02109.
38 Pioneer Real Estate Shares | Annual Report | 12/31/08
Interested Trustees
Position Held Length of Service
Name and Age with the Fund and Term of Office
John F. Cogan, Jr. (82)* Chairman of the Board, Trustee since 1995.
Trustee and President Serves until a successor
trustee is elected or
earlier retirement or
removal.
- -------------------------------------------------------------------------------
Daniel K. Kingsbury (50)* Trustee and Executive Trustee since 2007.
Vice President Serves until a successor
trustee is elected or
earlier retirement or
removal.
- -------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Trustee
John F. Cogan, Jr. (82)* Deputy Chairman and a Director of Pioneer Global Asset Man- None
agement S.p.A. ("PGAM"); Non-Executive Chairman and a Direc-
tor of Pioneer Investment 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
- ---------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (50)* Director, CEO and President of Pioneer Investment Management None
USA Inc. (since February 2007); Director and President of
Pioneer Investment Management, Inc. and Pioneer Institutional
Asset Management, Inc. (since February 2007); Executive Vice
President of all of the Pioneer Funds (since March 2007);
Director of Pioneer Global Asset Management S.p.A. (since April
2007); Head of New Markets Division, Pioneer Global Asset
Management S.p.A. (2000 - 2007)
- ---------------------------------------------------------------------------------------------------------------------
* 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.
Pioneer Real Estate Shares | Annual Report | 12/31/08 39
Independent Trustees
Position Held Length of Service
Name and Age with the Fund and Term of Office
David R. Bock (65) Trustee Trustee since 2005.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------
Mary K. Bush (60) Trustee Trustee since 1997.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Trustee
David R. Bock (65) Executive Vice President and Chief Financial Officer, I-trax, Inc. Director of Enterprise
(publicly traded health care services company) (2004 - 2007); Community Investment, Inc.
Partner, Federal City Capital Advisors (boutique merchant bank) (privately-held affordable
(1997 to 2004 and 2008 - present); and Executive Vice housing finance company);
President and Chief Financial Officer, Pedestal Inc. and Director of New York
(internet-based mortgage trading company) (2000 - 2002) Mortgage Trust (publicly
traded mortgage REIT)
- -----------------------------------------------------------------------------------------------------------------------
Mary K. Bush (60) President, Bush International, LLC (international financial Director of Marriott
advisory firm) International, Inc.; Director
of Discover Financial Services
(credit card issuer and
electronic payment services);
Director of Briggs & Stratton
Co. (engine manufacturer);
Director of UAL Corporation
(airline holding company);
Director of Mantech
International Corporation
(national security, defense,
and intelligence technology
firm); and Member, Board of
Governors, Investment
Company Institute
- -----------------------------------------------------------------------------------------------------------------------
40 Pioneer Real Estate Shares | Annual Report | 12/31/08
Position Held Length of Service
Name and Age with the Fund and Term of Office
Benjamin M. Friedman (64) Trustee Trustee since 2008.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------------
Margaret B.W. Graham (61) Trustee Trustee since 1995.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------------
Thomas J. Perna (58) Trustee Trustee since 2006.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------------
Marguerite A. Piret (60) Trustee Trustee since 1995.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------------
Stephen K. West (80) Trustee Trustee since 1995.
Serves until a successor
trustee is elected or
earlier retirement or
removal.
- ----------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Trustee
Benjamin M. Friedman (64) Professor, Harvard University Trustee, Mellon Institutional
Funds Investment Trust and
Mellon Institutional Funds
Master Portfolio (oversees 17
portfolios in fund complex)
- -------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (61) Founding Director, Vice President and Corporate Secretary, The None
Winthrop Group, Inc. (consulting firm); and Desautels Faculty of
Management, McGill University
- -------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (58) Chief Executive Officer, Quadriserv, Inc. (technology products for None
securities lending industry) (2008 - present); Private investor
(2004 - 2008); and Senior Executive Vice President, The Bank of
New York (financial and securities services) (1986 - 2004)
- -------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (60) President and Chief Executive Officer, Newbury, Piret & Company, Director of New America
Inc. (investment banking firm) High Income Fund, Inc.
(closed-end investment
company)
- -------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (80) Senior Counsel, Sullivan & Cromwell LLP (law firm) Director, The Swiss Helvetia
Fund, Inc. (closed-end
investment company)
- -------------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/08
41
Fund Officers
Position Held Length of Service
Name and Age with the Fund and Term of Office
Dorothy E. Bourassa (60) Secretary Since 2003. Serves at
the discretion of the
Board.
- ------------------------------------------------------------------------
Christopher J. Kelley (44) Assistant Secretary Since 2003. Serves at
the discretion of the
Board.
- ------------------------------------------------------------------------
Mark E. Bradley (49) Treasurer Since 2008. Serves at
the discretion of the
Board.
- ------------------------------------------------------------------------
Luis I. Presutti (43) Assistant Treasurer Since 2000. Serves at
the discretion of the
Board.
- ------------------------------------------------------------------------
Gary Sullivan (50) Assistant Treasurer Since 2002. Serves at
the discretion of the
Board.
- ------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Officer
Dorothy E. Bourassa (60) Secretary of PIM-USA; Senior Vice President -- Legal of Pioneer; None
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 (44) Associate General Counsel of Pioneer since January 2008 and None
Assistant Secretary of all of the Pioneer Funds since September
2003; Vice President and Senior Counsel of Pioneer from July
2002 to December 2007
- ----------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (49) Vice President -- Fund Accounting, Administration and None
Controllership Services of Pioneer; and Treasurer of all of
the Pioneer Funds since March 2008; Deputy Treasurer of Pioneer
from March 2004 to February 2008; Assistant Treasurer of all of
the Pioneer Funds from March 2004 to February 2008; and Treasurer
and Senior Vice President, CDC IXIS Asset Management Services
from 2002 to 2003
- ----------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (43) Assistant Vice President -- Fund Accounting, Administration and None
Controllership Services of Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
- ----------------------------------------------------------------------------------------------------------------------
Gary Sullivan (50) Fund Accounting Manager -- Fund Accounting, Administration None
and Controllership Services of Pioneer; and Assistant Treasurer of
all of the Pioneer Funds
- ----------------------------------------------------------------------------------------------------------------------
42 Pioneer Real Estate Shares | Annual Report | 12/31/08
Position Held Length of Service
Name and Age with the Fund and Term of Office
Katherine Kim Sullivan (35) Assistant Treasurer Since 2003. Serves at
the discretion of the
Board.
- --------------------------------------------------------------------------------
Teri W. Anderholm (49) Chief Compliance Officer Since 2007. Serves at
the discretion of the
Board.
- --------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Officer
Katherine Kim Sullivan (35) Fund Administration Manager -- Fund Accounting, Administration None
and Controllership Services since June 2003 and Assistant
Treasurer of all of the Pioneer Funds since September 2003;
Assistant Vice President -- Mutual Fund Operations of State
Street Corporation from June 2002 to June 2003 (formerly
Deutsche Bank Asset Management)
- ---------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (49) Chief Compliance Officer of Pioneer since December 2006 and of None
all the Pioneer Funds since January 2007; Vice 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)
- ---------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/08 43
This page for your notes.
44 Pioneer Real Estate Shares | Annual Report | 12/31/08
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: pioneerinvestments.com
This report must be accompanied by a prospectus.
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 routine and non routine filings of its
Form N-1A, totaled approximately $37,900 in 2008 and
$35,270 in 2007.
(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
There were no audit-related services provided to
the Fund during the fiscal years ended December 31, 2008
and 2007.
(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 $8,290 in 2008 and $7,820 in 2007.
(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.
Other Fees
There were no other services provided to
the Fund during the fiscal years ended December 31, 2008
and 2007.
(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 December 31, 2008 and 2007, 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 $8,290 in 2008 and $7,820 in
2007.
(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 Real Estate Shares
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date February 27, 2009
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 February 27, 2009
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date February 27, 2009
* Print the name and title of each signing officer under his or her signature.