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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)
Terrence J. Cullen, 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, 2014 through December 31, 2014
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 STOCKHOLDERS.
Pioneer Real
Estate Shares
--------------------------------------------------------------------------------
Annual Report | December 31, 2014
--------------------------------------------------------------------------------
Ticker Symbols:
Class A PWREX
Class C PCREX
Class Y PYREX
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
President's Letter 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Comparing Ongoing Fund Expenses 13
Schedule of Investments 15
Financial Statements 18
Notes to Financial Statements 25
Report of Independent Registered Public Accounting Firm 32
Approval of Investment Advisory and Sub-Advisory Agreements 33
Trustees, Officers and Service Providers 38
Pioneer Real Estate Shares | Annual Report | 12/31/14 1
President's Letter
Dear Shareowner,
Today's market environment presents numerous opportunities as well as challenges
for investors. A disparate global economic landscape has formed, with the U.S.
facing prospects for continued growth, while questions abound regarding the
outlook for other regions. Employment, household income, and corporate profits
have been rising in the U.S. and inflation pressures remain low. However, many
countries across Europe as well as Japan face muted growth. In addition, a
variety of factors have clouded the outlook for countries such as Russia and
Brazil and China's investment-driven economy continues to slow.
Monetary policies of major central banks are diverging, reflecting different
economic conditions. With the U.S. economy no longer in need of extraordinary
stimulus, the Federal Reserve Board may be closer to raising short-term interest
rates. Conversely, the European Central Bank and the Bank of Japan are likely to
be adding, not removing, stimulus.
While we anticipate continued growth for the U.S., the outlook is far from
certain, nor is the outlook for other regions necessarily dire. It remains to be
seen how weakness outside the U.S. will affect global growth and whether easing
monetary policies in other regions will spur an economic recovery.
While these economic conditions may lead to increasing volatility in 2015, we
believe the opportunity for investors to earn attractive returns will persist.
However, in an environment where interest rates remain low and equity valuations
have been buoyed by an extended bull market, we believe it is imperative
investors adhere to a disciplined investment approach that is consistent with
one's goals and objectives, being mindful of the tradeoff between risk and
return.
Since 1928 Pioneer's investment professionals have been focused on identifying
and capitalizing on investment opportunities that present themselves in a
variety of ever changing market conditions, including those we face today. We
seek returns consistent with our strategies' stated style and objectives and
consistent with our shareholders' expectations, regardless of
2 Pioneer Real Estate Shares | Annual Report | 12/31/14
market conditions. We believe our shareowners benefit from the experience
and tenure of our investment teams, the insights generated from extensive
research resources and a commitment to prudent risk management designed
to mitigate downside and preserve returns over time.
We encourage you to work with your financial advisor to develop an overall
investment plan that addresses both your short- and long-term goals, and to
implement such a plan in a disciplined manner, as we do when deploying
strategies on behalf of our shareowners.
We greatly appreciate your trust in us in the past and look forward to
continuing to serve you in the future.
Sincerely,
/s/ Lisa M. Jones
Lisa M. Jones
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Fund's historical or future performance are
statements of opinion 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 | 12/31/14 3
Portfolio Management Discussion | 12/31/14
In the following interview, Matthew Troxell of AEW Capital Management, L.P.,
sub-adviser to Pioneer Real Estate Shares, discusses the market environment for
real-estate-related investments and the Fund's performance during the 12-month
period ended December 31, 2014.
Q How did Pioneer Real Estate Shares perform during the 12 months ended
December 31, 2014?
A Pioneer Real Estate Shares Class A shares returned 29.63% at net asset value
during the 12-month period ended December 31, 2014, while the Fund's
benchmark, the Morgan Stanley Capital International (MSCI) U.S. Real Estate
Investment Trust (REIT) Index (the MSCI Index)(1) returned 30.38%. During
the same period, the average return for the 251 mutual funds in Lipper's
Real Estate Funds category was 27.64%, and the average return of the 274
mutual funds in Morningstar's Real Estate Funds category was 28.03%.
Q Which investment strategies or individual holdings detracted the most from
the Fund's benchmark-relative performance during the 12-month period ended
December 31, 2014?
A In terms of stock selection, the Fund's benchmark-relative results were
weakest in the diversified, hotel, and industrial REIT sectors. The
individual positions that detracted most from benchmark-relative returns
during the period included overweight allocations to the underperforming
Forest City Enterprises and Extended Stay America, and a lack of portfolio
exposure to the outperforming General Growth Properties.
Forest City announced a write-down during the first quarter of 2014, which
hurt its performance. The company continued to be a value play throughout
2014 as it has been in the process of simplifying its structure and
operations to become more REIT-like. In January 2015, management announced
it will officially convert to REIT status beginning January 1, 2016, and the
stock has returned more than 10% since the announcement. Extended Stay
(1) The MSCI information may only be used for your internal use, may not be
reproduced or redisseminated in any form and may not be used as a basis for
or a component of any financial instruments or products or indices. None of
the MSCI information is intended to constitute investment advice or a
recommendation to make (or refrain from making) any kind of investment
decision and may not be relied on as such. Historical data and analysis
should not be taken as an indication or guarantee of any future performance
analysis, forecast or prediction. The MSCI information is provided on an "as
is" basis and the user of this information assumes the entire risk of any
use made of this information. MSCI, each of its affiliates and each other
person involved in or related to compiling, computing or creating any MSCI
information (collectively, the "MSCI Parties") expressly disclaims all
warranties (including, without limitation, any warranties of originality,
accuracy, completeness, timeliness, non-infringement, merchantability and
fitness for a particular purpose) with respect to this information. Without
limiting any of the foregoing, in no event shall any MSCI Party have any
liability for any direct, indirect, special, incidental, punitive,
consequential (including, without limitation, lost profits) or any other
damages.
4 Pioneer Real Estate Shares | Annual Report | 12/31/14
America reported lower-than-expected earnings in the fourth quarter of 2014
as the company rolled out its new revenue management system and standardized
housekeeping and maintenance programs. In our view, the earnings misses were
merely attributable to the growing pains associated with becoming a
publicly-traded company. We still like Extended Stay's relative valuation
and we expect to maintain the Fund's overweight exposure. General Growth
Properties reported strong operational results in the third quarter of 2014.
While the Fund's portfolio had no exposure to the company,
benchmark-relative performance did benefit from an overweight position in
General Growth's regional mall peer, Macerich Company, which helped to
offset some of the negative effects of not owning General Growth.
Q Which individual holdings or investment decisions contributed to the Fund's
performance relative to the MSCI Index benchmark during the 12-month period
ended December 31, 2014?
A Against a backdrop of low interest rates, investor demand for the attractive
yield opportunities offered by REITs was strong, providing a solid tailwind
in addition to the improving underlying fundamentals of the asset class.
The Fund's performance relative to the MSCI Index benchmark during the
period benefited from positive stock selection results in the office,
triple-net-lease, and health care sectors. Sector allocation results also
contributed positively to the Fund's relative performance, namely, a
portfolio underweight in the underperforming triple-net-lease sector and
overweight in the outperforming manufactured home and diversified sectors.
(A triple-net-lease is a lease agreement that designates the lessee, or
tenant, as being solely responsible for all of the costs relating to the
asset being leased - including net real estate taxes, net building insurance
premiums and net common area maintenance costs - in addition to the rental
fee applied under the lease. Because the tenant is covering these "triple"
costs, which would otherwise be the responsibility of the property owner,
the rent charged under a triple-net-lease agreement is generally lower than
the rent charged in a standard lease agreement.)
With regard to individual securities, the Fund's benchmark-relative
performance during the 12-month period benefited from a lack of exposure to
the underperforming American Realty Capital Properties as well as overweight
positions in the outperforming apartment REIT, Equity Residential, and the
office REIT, Kilroy Realty. American Realty Capital Properties announced a
series of accounting errors in the fourth quarter of 2014, which were
intentionally not corrected, a development which brought the company under
investigation by the Securities and Exchange Commission and the FBI. The
apartment sector outperformed during the year, and so the Fund benefited
from its overweight position in Equity
Pioneer Real Estate Shares | Annual Report | 12/31/14 5
Residential, which also reported strong earnings reports throughout 2014.
Kilroy Realty benefited from the office market recovery on the west coast of
the United States.
Q Did you implement any major changes to the Fund's investment strategy during
the 12-month reporting period ended December 31, 2014?
A We didn't make any significant changes to the Fund's strategy during the
period. The portfolio remained oriented toward companies with stronger
balance sheets and higher-quality assets, and those with good development
pipelines. We believe development is currently the best source of external
growth, given the lack of acquisitions in the market today. As U.S. economic
growth gains momentum, such companies are best positioned to increase
revenues in a way that should offset the effect of rising interest rates, in
our opinion. We also believe they are in a better position to raise
dividends* in order to stay competitive with rising bond yields as well as
to offset the effect of potentially higher financing costs.
Based upon improving property market fundamentals and relative valuations
within the REIT sector, however, our preference for attractive value led us
to increase the portfolio's overweight in the diversified and office REIT
sectors, decrease the overweight position in the storage sector, and
increase the underweights in the triple-net-lease and health care sectors.
Q Did the Fund invest in any derivative securities during the 12-month period
ended December 31, 2014? If so, did the positions have an effect on the
Fund's performance?
A No. We did not invest the Fund in any derivatives during the period.
Q What is your outlook for REITs in 2015?
A Looking ahead, we believe real estate fundamentals continue to support
earnings growth for REITs. Apartment vacancy rates have leveled off at
healthy levels, but vacancy rates in other property types continue to trend
downward slowly. Supply risk continues to be limited on a national level,
with only the apartment REIT sector's having climbed back to long-term
construction averages. While a few select office and industrial markets are
also seeing some supply growth, that has largely been in response to the
very strong demand in those particular regions of the country. More
encouragingly, rents are now moving up in all property types, and some
longer-lease property types are transitioning to an environment where new
leases will likely be signed at higher rents than the prior leases, thus
providing a boost to net operating income. Given those factors, we expect
high-single-digit earnings growth across the REIT spectrum in 2015.
* Dividends are not guaranteed.
6 Pioneer Real Estate Shares | Annual Report | 12/31/14
Please refer to the Schedule of Investments on pages 15-17 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.
The Fund invests in a limited number of securities and, as a result, the Fund's
performance may be more volatile than the performance of other funds holding
more securities.
When interest rates rise, the prices of fixed-income securities in the Fund will
generally fall. Conversely, when interest rates fall, the prices of fixed-income
securities in the Fund will generally rise.
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.
These risks may increase share price volatility.
Before investing, consider the product's investment objectives, risks, charges
and expenses. Contact your advisor or Pioneer Investments for a prospectus or
summary prospectus containing this information. Read it carefully.
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 opinion as of the date of this report. Past performance is no
guarantee of future results.
Pioneer Real Estate Shares | Annual Report | 12/31/14 7
Portfolio Summary | 12/31/14
Sector Distribution
--------------------------------------------------------------------------------
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Apartment 14.9%
Office 14.6%
Regional Mall 14.1%
Health Care 10.7%
Diversified 8.6%
Storage 8.2%
Shopping Center 7.8%
Hotel 7.4%
Industrial 7.2%
Cash and equivalents 3.2%
Triple Net Lease 1.7%
Manufactured Home 1.6%
10 Largest Holdings*
--------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Simon Property Group, Inc. 8.61%
--------------------------------------------------------------------------------
2. Equity Residential Property Trust, Inc. 6.20
--------------------------------------------------------------------------------
3. AvalonBay Communities, Inc. 5.24
--------------------------------------------------------------------------------
4. Boston Properties, Inc. 5.17
--------------------------------------------------------------------------------
5. Public Storage, Inc. 5.11
--------------------------------------------------------------------------------
6. Prologis, Inc. 4.94
--------------------------------------------------------------------------------
7. Health Care Real Estate Investment Trust, Inc. 3.99
--------------------------------------------------------------------------------
8. HCP, Inc. 3.73
--------------------------------------------------------------------------------
9. Kilroy Realty Corp. 3.47
--------------------------------------------------------------------------------
10. Taubman Centers, Inc. 3.46
--------------------------------------------------------------------------------
* This list excludes temporary cash investments and derivative instruments.
The portfolio is actively managed, and current holdings may be different.
The holdings listed should not be considered recommendations to buy or sell
any securities listed.
8 Pioneer Real Estate Shares | Annual Report | 12/31/14
Prices and Distributions | 12/31/14
Net Asset Value per Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class 12/31/14 12/31/13
--------------------------------------------------------------------------------
A $29.58 $24.56
--------------------------------------------------------------------------------
C $29.15 $24.24
--------------------------------------------------------------------------------
Y $29.54 $24.52
--------------------------------------------------------------------------------
Distributions per Share: 1/1/14- 12/31/14
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-Term Long-Term
Class Dividends Capital Gains Capital Gains
--------------------------------------------------------------------------------
A $0.2941 $0.0417 $1.8093
--------------------------------------------------------------------------------
C $0.1241 $0.0417 $1.7458
--------------------------------------------------------------------------------
Y $0.4131 $0.0417 $1.8093
--------------------------------------------------------------------------------
Index Definition
--------------------------------------------------------------------------------
The MSCI U.S. REIT Index is an unmanaged, 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 are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. It is not possible to invest
directly in an index.
The index defined here pertains to the "Value of $10,000 Investment" and "Value
of $5 Million Investment" charts on pages 10-12.
Pioneer Real Estate Shares | Annual Report | 12/31/14 9
Performance Update | 12/31/14 Class A Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Class A shares of Pioneer Real Estate Shares at public
offering price during the periods shown, compared to that of the Morgan Stanley
Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2014)
--------------------------------------------------------------------------------
Net Public
Asset Offering MSCI
Value Price U.S. REIT
Period (NAV) (POP) Index
--------------------------------------------------------------------------------
10 Years 7.89% 7.26% 8.31%
5 Years 16.21 14.84 17.05
1 Year 29.63 22.16 30.38
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2014)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
1.48%
-------------------------------------------------------------------------------
[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
12/31/2004 $ 9,425 $ 10,000
12/31/2005 $ 10,817 $ 11,213
12/31/2006 $ 14,688 $ 15,241
12/31/2007 $ 11,839 $ 12,678
12/31/2008 $ 7,304 $ 7,864
12/31/2009 $ 9,507 $ 10,114
12/31/2010 $ 12,193 $ 12,995
12/31/2011 $ 13,277 $ 14,124
12/31/2012 $ 15,368 $ 16,633
12/31/2013 $ 15,542 $ 17,044
12/31/2014 $ 20,147 $ 22,222
Call 1-800-225-6292 or visit us.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.
10 Pioneer Real Estate Shares | Annual Report | 12/31/14
Performance Update | 12/31/14 Class C Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Class C shares of Pioneer Real Estate Shares during the
periods shown, compared to that of the Morgan Stanley Capital International
(MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2014)
--------------------------------------------------------------------------------
MSCI
If If U.S. REIT
Period Held Redeemed Index
--------------------------------------------------------------------------------
10 Years 6.96% 6.96% 8.31%
5 Years 15.22 15.22 17.05
1 Year 28.50 28.50 30.38
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2014)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
2.32%
--------------------------------------------------------------------------------
[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
12/31/2004 $ 10,000 $ 10,000
12/31/2005 $ 11,385 $ 11,213
12/31/2006 $ 15,325 $ 15,241
12/31/2007 $ 12,249 $ 12,678
12/31/2008 $ 7,490 $ 7,864
12/31/2009 $ 9,653 $ 10,114
12/31/2010 $ 12,267 $ 12,995
12/31/2011 $ 13,257 $ 14,124
12/31/2012 $ 15,212 $ 16,633
12/31/2013 $ 15,254 $ 17,044
12/31/2014 $ 19,600 $ 22,222
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). If 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.
Pioneer Real Estate Shares | Annual Report | 12/31/14 11
Performance Update | 12/31/14 Class Y Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $5 million
investment made in Class Y shares of Pioneer Real Estate Shares during the
periods shown, compared to that of the Morgan Stanley Capital
International (MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2014)
--------------------------------------------------------------------------------
MSCI U.S.
If If REIT
Period Held Redeemed Index
--------------------------------------------------------------------------------
10 Years 8.50% 8.50% 8.31%
5 Years 16.81 16.81 17.05
1 Year 30.22 30.22 30.38
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2014)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
1.01%
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $5 Million Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index
12/31/2004 $ 5,000,000 $ 5,000,000
12/31/2005 $ 5,768,117 $ 5,606,646
12/31/2006 $ 7,869,453 $ 7,620,540
12/31/2007 $ 6,372,080 $ 633,092
12/31/2008 $ 3,957,252 $ 3,932,154
12/31/2009 $ 5,198,986 $ 5,057,100
12/31/2010 $ 6,705,246 $ 6,497,283
12/31/2011 $ 7,348,609 $ 7,062,080
12/31/2012 $ 8,545,238 $ 8,316,683
12/31/2013 $ 8,682,669 $ 8,522,204
12/31/2014 $ 11,306,524 $ 11,111,229
Call 1-800-225-6292 or visit us.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.
12 Pioneer Real Estate Shares | Annual Report | 12/31/14
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, 2014 through December 31, 2014.
--------------------------------------------------------------------------------
Share Class A C Y
--------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00
Value on 7/1/14
--------------------------------------------------------------------------------
Ending Account $1,106.53 $1,101.96 $1,108.82
Value on 12/31/14
--------------------------------------------------------------------------------
Expenses Paid $ 7.81 $ 12.40 $ 5.42
During Period*
--------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.47%,
2.34%, and 1.02% for Class A, Class C, and Class Y shares, respectively,
multiplied by the average account value over the period, multiplied by
184/365 (to reflect the one-half year period).
Pioneer Real Estate Shares | Annual Report | 12/31/14 13
Comparing Ongoing Fund Expenses (continued)
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares
Based on a hypothetical 5% per year return before expenses, reflecting the
period from July 1, 2014 through December 31, 2014.
--------------------------------------------------------------------------------
Share Class A C Y
--------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00
Value on 7/1/14
--------------------------------------------------------------------------------
Ending Account $1,017.80 $1,013.41 $1,020.06
Value on 12/31/14
--------------------------------------------------------------------------------
Expenses Paid $ 7.48 $ 11.88 $ 5.19
During Period*
--------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.47%, 2.34%,
and 1.02% for Class A, Class C, and Class Y shares, respectively, multiplied
by the average account value over the period, multiplied by 184/365 (to
reflect the one-half year period).
14 Pioneer Real Estate Shares | Annual Report | 12/31/14
Schedule of Investments | 12/31/14
-------------------------------------------------------------------------------------
Shares Value
-------------------------------------------------------------------------------------
COMMON STOCKS -- 96.7%
CONSUMER SERVICES -- 2.4%
Hotels, Resorts & Cruise Lines -- 2.4%
98,300 Extended Stay America, Inc. $ 1,898,173
85,100 Hilton Worldwide Holdings, Inc. 2,220,259
-------------
$ 4,118,432
-------------
Total Consumer Services $ 4,118,432
-------------------------------------------------------------------------------------
REAL ESTATE -- 94.3%
Diversified REIT -- 6.1%
61,000 American Assets Trust, Inc. $ 2,428,410
101,800 Empire State Realty Trust, Inc. 1,789,644
64,400 Liberty Property Trust 2,423,372
47,200 STORE Capital Corp. 1,019,992
23,000 Vornado Realty Trust 2,707,330
-------------
$ 10,368,748
-------------------------------------------------------------------------------------
Health Care REIT -- 10.7%
140,000 HCP, Inc. $ 6,164,200
87,200 Health Care Real Estate Investment Trust, Inc. 6,598,424
76,700 Ventas, Inc. 5,499,390
-------------
$ 18,262,014
-------------------------------------------------------------------------------------
Hotel & Resort REIT -- 5.0%
42,100 Chatham Lodging Trust $ 1,219,637
188,300 Host Hotels & Resorts, Inc. 4,475,891
87,200 RLJ Lodging Trust 2,923,816
-------------
$ 8,619,344
-------------------------------------------------------------------------------------
Industrial REIT -- 5.8%
190,000 Prologis, Inc. $ 8,175,700
106,600 Rexford Industrial Realty, Inc. 1,674,686
-------------
$ 9,850,386
-------------------------------------------------------------------------------------
Office REIT -- 16.4%
124,100 BioMed Realty Trust, Inc. $ 2,673,114
66,500 Boston Properties, Inc. 8,557,885
61,200 Douglas Emmett, Inc. 1,738,080
91,000 DuPont Fabros Technology, Inc. 3,024,840
360,100 Gramercy Property Trust, Inc. 2,484,690
83,000 Kilroy Realty Corp. 5,732,810
40,300 Paramount Group, Inc. 749,177
167,800 Piedmont Office Realty Trust, Inc. 3,161,352
-------------
$ 28,121,948
-------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/14 15
Schedule of Investments | 12/31/14 (continued)
-------------------------------------------------------------------------------------
Shares Value
-------------------------------------------------------------------------------------
Residential REIT -- 16.4%
56,100 American Campus Communities, Inc. $ 2,320,296
48,600 American Homes 4 Rent 827,658
53,000 AvalonBay Communities, Inc. 8,659,670
44,600 Camden Property Trust 3,293,264
53,200 Equity LifeStyle Properties, Inc. 2,742,460
142,800 Equity Residential Property Trust, Inc. 10,258,752
-------------
$ 28,102,100
-------------------------------------------------------------------------------------
Retail REIT -- 23.1%
78,400 Acadia Realty Trust $ 2,511,152
182,300 DDR Corp. 3,347,028
34,500 Federal Realty Investment Trust 4,604,370
47,900 National Retail Properties, Inc. 1,885,823
71,600 Ramco-Gershenson Properties Trust 1,341,784
96,100 Retail Opportunity Investments Corp. 1,613,519
78,200 Simon Property Group, Inc. 14,241,002
75,000 Taubman Centers, Inc. 5,731,500
50,100 The Macerich Co. 4,178,841
-------------
$ 39,455,019
-------------------------------------------------------------------------------------
Specialized REIT -- 8.2%
89,200 CubeSmart $ 1,968,644
63,000 Extra Space Storage, Inc. 3,694,320
45,700 Public Storage, Inc. 8,447,645
-------------
$ 14,110,609
-------------------------------------------------------------------------------------
Diversified Real Estate Activities -- 1.0%
41,800 Alexander & Baldwin, Inc. $ 1,641,068
-------------------------------------------------------------------------------------
Real Estate Operating Companies -- 1.6%
130,000 Forest City Enterprises, Inc. $ 2,769,000
-------------
Total Real Estate $ 161,300,236
-------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $84,170,815) $ 165,418,668
-------------------------------------------------------------------------------------
TOTAL INVESTMENT IN SECURITIES -- 96.7%
(Cost $84,170,815) (a) $ 165,418,668
-------------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES -- 3.3% $ 5,652,921
-------------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $ 171,071,589
=====================================================================================
The accompanying notes are an integral part of these financial statements.
16 Pioneer Real Estate Shares | Annual Report | 12/31/14
REIT Real Estate Investment Trust.
(a) At December 31, 2014, the net unrealized appreciation on
investments based on cost for federal income tax purposes of
$86,233,142 was as follows:
Aggregate gross unrealized appreciation for all investments in which
there is an excess of value over tax cost $79,390,812
Aggregate gross unrealized depreciation for all investments in which
there is an excess of tax cost over value (205,286)
-----------
Net unrealized appreciation $79,185,526
===========
Purchases and sales of securities (excluding temporary cash investments) for the
year ended December 31, 2014 aggregated $34,654,523 and $32,808,583,
respectively.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below.
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.) See Notes to Financial Statements -- Note 1A.
Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining fair value of investments) See Notes
to Financial Statements -- Note 1A.
Generally, equity securities are categorized as Level 1, fixed income securities
and senior loans as Level 2 and securities valued using fair value methods
(other than prices supplied by independent pricing services) as Level 3.
The following is a summary of the inputs used as of December 31, 2014, in
valuing the Fund's investments:
-------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------
Common Stocks $165,418,668 $ -- $ -- $165,418,668
-------------------------------------------------------------------------------
Total $165,418,668 $ -- $ -- $165,418,668
===============================================================================
During the year ended December 31, 2014, there were no transfers between Levels
1, 2 and 3.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/14 17
Statement of Assets and Liabilities | 12/31/14
ASSETS:
Investment in securities (cost $84,170,815) $165,418,668
Cash 4,186,987
Receivables --
Investment securities sold 453,503
Fund shares sold 238,488
Dividends 907,615
Other 36,364
--------------------------------------------------------------------------------
Total assets $171,241,625
================================================================================
LIABILITIES:
Payables --
Fund shares repurchased $ 75,350
Due to affiliates 53,664
Accrued expenses 41,022
--------------------------------------------------------------------------------
Total liabilities $ 170,036
================================================================================
NET ASSETS:
Paid-in capital $ 88,806,437
Accumulated net realized gain 1,017,299
Net unrealized appreciation on investments 81,247,853
--------------------------------------------------------------------------------
Total net assets $171,071,589
================================================================================
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $107,116,329/3,621,355 shares) $ 29.58
Class C (based on $13,434,880/460,951 shares) $ 29.15
Class Y (based on $50,520,380/1,710,323 shares) $ 29.54
MAXIMUM OFFERING PRICE:
Class A ($29.58 / 94.25%) $ 31.38
================================================================================
The accompanying notes are an integral part of these financial statements.
18 Pioneer Real Estate Shares | Annual Report | 12/31/14
Statement of Operations
For the Year Ended 12/31/14
INVESTMENT INCOME:
Dividends $ 3,950,585
Interest 958
----------------------------------------------------------------------------------------------
Total investment income $ 3,951,543
----------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 1,240,771
Transfer agent fees
Class A 141,325
Class B* 20,565
Class C 26,565
Class Y 1,993
Distribution fees
Class A 237,560
Class B* 28,376
Class C 120,365
Shareholder communications expense 154,191
Administrative reimbursements 67,450
Custodian fees 7,310
Registration fees 77,776
Professional fees 46,177
Printing expense 34,368
Fees and expenses of nonaffiliated Trustees 6,271
Miscellaneous 16,107
----------------------------------------------------------------------------------------------
Total expenses $ 2,227,170
----------------------------------------------------------------------------------------------
Net investment income $ 1,724,373
----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $13,311,930
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation on investments $24,436,374
----------------------------------------------------------------------------------------------
Net gain on investments $37,748,304
----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $39,472,677
==============================================================================================
* Class B shares converted to Class A shares on November 10, 2014.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/14 19
Statements of Changes in Net Assets
-----------------------------------------------------------------------------------------
Year Ended Year Ended
12/31/14 12/31/13
-----------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 1,724,373 $ 1,286,381
Net realized gain on investments 13,311,930 9,163,065
Change in net unrealized appreciation (depreciation)
on investments 24,436,374 (8,974,246)
-----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 39,472,677 $ 1,475,200
-----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.29 and $0.22 per share, respectively) $ (989,405) $ (754,256)
Class C ($0.12 and $0.02 per share, respectively) (53,796) (7,932)
Class Y ($0.41 and $0.36 per share, respectively) (681,172) (524,193)
Net realized gain:
Class A ($1.85 and $0.27 per share, respectively) (6,373,490) (906,742)
Class B ($0.10 and $0.14 per share, respectively)* (11,714) (22,961)
Class C ($1.79 and $0.27 per share, respectively) (778,104) (131,999)
Class Y ($1.85 and $0.27 per share, respectively) (3,044,959) (387,975)
-----------------------------------------------------------------------------------------
Total distributions to shareowners $ (11,932,640) $ (2,736,058)
-----------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale or exchange of shares $ 57,260,120 $ 36,227,317
Reinvestment of distributions 9,852,654 2,104,342
Cost of shares repurchased (53,512,265) (41,130,187)
-----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
Fund share transactions $ 13,600,509 $ (2,798,528)
-----------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 41,140,546 $ (4,059,386)
NET ASSETS:
Beginning of year $ 129,931,043 $133,990,429
-----------------------------------------------------------------------------------------
End of year $ 171,071,589 $129,931,043
=========================================================================================
* Class B shares converted to Class A shares on November 10, 2014.
The accompanying notes are an integral part of these financial statements.
20 Pioneer Real Estate Shares | Annual Report | 12/31/14
----------------------------------------------------------------------------------------
'14 Shares '14 Amount '13 Shares '13 Amount
----------------------------------------------------------------------------------------
Class A
Shares sold 868,137 $ 24,367,044 663,832 $ 17,329,001
Reinvestment of distributions 249,424 7,140,185 63,237 1,598,276
Less shares repurchased (757,730) (21,239,437) (870,384) (22,597,136)
----------------------------------------------------------------------------------------
Net increase (decrease) 359,831 $ 10,267,792 (143,315) $ (3,669,859)
========================================================================================
Class B*
Shares sold or exchanged 2,048 $ 54,831 9,788 $ 252,200
Reinvestment of distributions 426 11,665 911 22,722
Less shares repurchased (147,771) (4,288,435) (86,615) (2,201,551)
----------------------------------------------------------------------------------------
Net decrease (145,297) $ (4,221,939) (75,916) $ (1,926,629)
========================================================================================
Class C
Shares sold 148,015 $ 4,122,869 94,498 $ 2,444,157
Reinvestment of distributions 28,300 798,667 5,356 133,782
Less shares repurchased (153,105) (4,257,714) (180,295) (4,533,347)
----------------------------------------------------------------------------------------
Net increase (decrease) 23,210 $ 663,822 (80,441) $ (1,955,408)
========================================================================================
Class Y
Shares sold 1,039,298 $ 28,715,376 627,929 $ 16,201,959
Reinvestment of distributions 66,517 1,902,137 13,872 349,562
Less shares repurchased (851,884) (23,726,679) (463,004) (11,798,153)
----------------------------------------------------------------------------------------
Net increase 253,931 $ 6,890,834 178,797 $ 4,753,368
========================================================================================
* Class B shares converted to Class A shares on November 10, 2014.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/14 21
Financial Highlights
-----------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/14 12/31/13 12/31/12 12/31/11 12/31/10
-----------------------------------------------------------------------------------------------------------------------------------
Class A
Net asset value, beginning of period $ 24.56 $ 24.76 $ 21.79 $ 20.41 $ 16.24
-----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.30 $ 0.23 $ 0.45 $ 0.42 $ 0.21
Net realized and unrealized gain (loss) on investments 6.86 0.06 2.97 1.37 4.34
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 7.16 $ 0.29 $ 3.42 $ 1.79 $ 4.55
-----------------------------------------------------------------------------------------------------------------------------------
Distribution to shareowners:
Net investment income $ (0.29) $ (0.22) $ (0.45) $ (0.41) $ (0.22)
Net realized gain (1.85) (0.27) -- -- --
Tax return of capital -- -- -- -- (0.16)
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (2.14) $ (0.49) $ (0.45) $ (0.41) $ (0.38)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 5.02 $ (0.20) $ 2.97 $ 1.38 $ 4.17
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.58 $ 24.56 $ 24.76 $ 21.79 $ 20.41
===================================================================================================================================
Total return* 29.63% 1.14% 15.75% 8.90% 28.25%
Ratio of net expenses to average net assets 1.47% 1.48% 1.52% 1.59% 1.62%
Ratio of net investment income (loss) to average net assets 1.09% 0.89% 1.87% 1.94% 1.17%
Portfolio turnover rate 22% 17% 8% 8% 14%
Net assets, end of period (in thousands) $107,116 $ 80,091 $ 84,310 $ 75,318 $ 75,520
===================================================================================================================================
* 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.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/14
-----------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/14 12/31/13 12/31/12 12/31/11 12/31/10
-----------------------------------------------------------------------------------------------------------------------------------
Class C
Net asset value, beginning of period $ 24.24 $ 24.45 $ 21.53 $ 20.15 $ 16.06
-----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.06 $ 0.00(a) $ 0.24 $ 0.23 $ 0.06
Net realized and unrealized gain (loss) on investments 6.76 0.08 2.93 1.38 4.27
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 6.82 $ 0.08 $ 3.17 $ 1.61 $ 4.33
-----------------------------------------------------------------------------------------------------------------------------------
Distribution to shareowners:
Net investment income $ (0.12) $ (0.02) $ (0.25) $ (0.23) $ (0.14)
Net realized gain (1.79) (0.27) -- -- --
Tax return of capital -- -- -- -- (0.10)
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (1.91) $ (0.29) $ (0.25) $ (0.23) $ (0.24)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 4.91 $ (0.21) $ 2.92 $ 1.38 $ 4.09
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.15 $ 24.24 $ 24.45 $ 21.53 $ 20.15
===================================================================================================================================
Total return* 28.50% 0.27% 14.75% 8.07% 27.08%
Ratio of net expenses to average net assets 2.35% 2.32% 2.37% 2.42% 2.50%
Ratio of net investment income (loss) to average net assets 0.20% 0.02% 1.03% 1.09% 0.31%
Portfolio turnover rate 22% 17% 8% 8% 14%
Net assets, end of period (in thousands) $ 13,435 $ 10,609 $ 12,667 $ 11,216 $ 12,082
===================================================================================================================================
(a) Amount rounds to less than $0.00 or $(0.00) 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.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/14 23
Financial Highlights (continued)
-----------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/14 12/31/13 12/31/12 12/31/11 12/31/10
-----------------------------------------------------------------------------------------------------------------------------------
Class Y
Net asset value, beginning of period $ 24.52 $ 24.74 $ 21.78 $ 20.39 $ 16.23
-----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.43 $ 0.36 $ 0.56 $ 0.56 $ 0.33
Net realized and unrealized gain (loss) on investments 6.85 0.05 2.97 1.37 4.32
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 7.28 $ 0.41 $ 3.53 $ 1.93 $ 4.65
-----------------------------------------------------------------------------------------------------------------------------------
Distribution to shareowners:
Net investment income $ (0.41) $ (0.36) $ (0.57) $ (0.54) $ (0.28)
Net realized gain (1.85) (0.27) -- -- --
Tax return of capital -- -- -- -- (0.21)
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (2.26) $ (0.63) $ (0.57) $ (0.54) $ (0.49)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 5.02 $ (0.22) $ 2.96 $ 1.39 $ 4.16
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.54 $ 24.52 $ 24.74 $ 21.78 $ 20.39
===================================================================================================================================
Total return* 30.22% 1.61% 16.28% 9.60% 28.97%
Ratio of net expenses to average net assets 1.03% 1.01% 1.03% 1.00% 1.00%
Ratio of net investment income (loss) to average net assets 1.54% 1.41% 2.48% 2.35% 1.79%
Portfolio turnover rate 22% 17% 8% 8% 14%
Net assets, end of period (in thousands) $ 50,520 $ 35,711 $ 31,610 $ 15,811 $ 46,845
===================================================================================================================================
* 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.
The accompanying notes are an integral part of these financial statements.
24 Pioneer Real Estate Shares | Annual Report | 12/31/14
Notes to Financial Statements | 12/31/14
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 three classes of shares designated as Class A, Class C and Class
Y shares. The Fund ceased to offer Class B shares on November 10, 2014. Class B
shares were converted to Class A shares as of the close of business on November
10, 2014. 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
rates of 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 from net investment income earned 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. Each share class has
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.
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
period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value of
the Fund is computed once daily, on each day the New York Stock Exchange
(NYSE) is open, as of the close of regular trading on the NYSE. In computing
Pioneer Real Estate Shares | Annual Report | 12/31/14 25
the net asset value, securities that have traded on an exchange 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 available, generally are valued at the mean
between the last bid and asked prices. Shares of money market mutual funds
are valued at such funds' net asset value. Cash may include overnight time
deposits at approved financial institutions.
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.
Securities for which independent pricing services are unable to supply
prices or for which market prices and/or quotations are not readily
available or are considered to be unreliable are valued by a fair valuation
team comprised of certain personnel of Pioneer Investment Management, Inc.
(PIM), the Fund's investment adviser, pursuant to procedures adopted by the
Fund's Board of Trustees. PIM's fair valuation team uses fair value methods
approved by the Valuation Committee of the Board of Trustees. PIM's fair
valuation team is responsible for monitoring developments that may impact
fair valued securities and for discussing and assessing fair values on an
ongoing basis, and at least quarterly, with the Valuation Committee of the
Board of Trustees.
Inputs used when applying fair value methods to value a security may include
credit ratings, the financial condition of the company, current market
conditions and comparable securities. The Fund may use fair value methods if
it is determined that a significant event has occurred after the close of
the exchange or market on which the security trades and prior to the
determination of the Fund's net asset value. Examples of a significant event
might include political or economic news, corporate restructurings, natural
disasters, terrorist activity or trading halts. Thus, the valuation of the
Fund's securities may differ significantly from exchange prices and such
differences could be material.
At December 31, 2014, there were no securities that were valued using fair
value methods (other than securities that were valued using prices supplied
by independent pricing services or broker-dealers).
B. Investment Income and Transactions
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.
26 Pioneer Real Estate Shares | Annual Report | 12/31/14
Interest income, including interest on income bearing cash accounts, is
recorded on the accrual basis. Dividend and interest income are reported net
of unrecoverable foreign taxes withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
C. 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 provision for federal income taxes is required.
As of December 31, 2014, the Fund did not accrue any interest or penalties
related to uncertain tax positions, which, if applicable, would be recorded
as an income tax expense in the Statement of Operations. Tax returns filed
within the prior three years remain subject to examination by Federal and
State tax authorities.
The amount and character of income and capital gain distributions to
shareowners are determined in accordance with federal income tax rules,
which may differ from U.S. generally accepted accounting principles.
Distributions in excess of net investment income or net realized gains are
temporary overdistributions for financial statement purposes resulting from
differences in the recognition or classification of income or distributions
for financial statement and tax purposes. Capital accounts within the
financial statements are adjusted for permanent book/tax differences to
reflect tax character, but are not adjusted for temporary differences.
The tax character of distributions paid during the years ended December 31,
2014 and December 31, 2013 were as follows:
----------------------------------------------------------------------------
2014 2013
----------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 1,957,547 $1,286,381
Long-term capital gain 9,975,093 1,449,677
----------------------------------------------------------------------------
Total $11,932,640 $2,736,058
============================================================================
The following shows the components of distributable earnings on a federal
income tax basis at December 31, 2014:
----------------------------------------------------------------------------
2014
----------------------------------------------------------------------------
Distributable Earnings:
Undistributed long-term capital gain $ 3,079,626
Net unrealized appreciation 79,185,526
----------------------------------------------------------------------------
Total $82,265,152
============================================================================
Pioneer Real Estate Shares | Annual Report | 12/31/14 27
The difference between book-basis and tax-basis net unrealized appreciation
is attributable to the tax deferral of losses on wash sales.
D. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit),
earned $12,183 in underwriting commissions on the sale of Class A shares
during the year ended December 31, 2014.
E. Class Allocations
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on its 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 and Class C shares of the Fund (see Note 4). Class Y
shares do not pay distribution fees. All expenses and fees paid to the
transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services are allocated among the classes of shares 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 and at the same time, except that net
investment income dividends to Class A, Class C and Class Y shares can
reflect different transfer agent and distribution expense rates.
F. Risks
Because the Fund may invest a substantial portion of its assets in Real
Estate Investment Trusts (REITs), the Fund may be subject to certain risks
associated with direct investments in REITs. REITs may be affected by
changes in the value of their underlying properties and by defaults of their
borrowers or tenants. REITs depend generally on their ability to generate
cash flow to make distributions to shareowners, and certain REITs have
self-liquidation provisions by which mortgages held may be paid in full and
distributions of capital returns may be made at any time. In addition, the
performance of a REIT may be affected by its failure to qualify for tax-free
pass through of income under the Internal Revenue Code or its failure to
maintain exemption from registration under the Investment Company Act of
1940. The Fund's prospectus contains unaudited information regarding the
Fund's principal risks. Please refer to that document when considering the
Fund's principal risks.
28 Pioneer Real Estate Shares | Annual Report | 12/31/14
G. 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 equal to or in excess of the repurchase price. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Fund's custodian or a subcustodian of the Fund. PIM is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price. At December 31, 2014, the Fund had no
open repurchase agreements.
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 up to $1 billion and 0.75% on assets over $1
billion. For the year ended December 31, 2014, the effective management fee
(excluding waivers and/or assumption of expenses) was equal to 0.80% of the
Fund's daily net assets. PIM pays a portion of the fee it receives from the Fund
to AEW Capital Management, 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 as administrative reimbursements. Included in
"Due to affiliates" reflected on the Statement of Assets and Liabilities is
$7,815 in management fees, administrative costs and certain other reimbursements
payable to PIM at December 31, 2014.
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 reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareholder communications activities such as proxy and
statement mailings, outgoing phone calls and omnibus relationship contracts. For
the year ended December 31, 2014, such out-of-pocket expenses by class of shares
were as follows:
--------------------------------------------------------------------------------
Shareholder Communications:
--------------------------------------------------------------------------------
Class A $ 97,834
Class B* 11,212
Class C 19,185
Class Y 25,960
--------------------------------------------------------------------------------
Total $154,191
================================================================================
* Class B shares converted to Class A shares on November 10, 2014.
Pioneer Real Estate Shares | Annual Report | 12/31/14 29
Included in "Due to affiliates" reflected on the Statement of Assets and
Liabilities is $43,610 in transfer agent fees and out-of-pocket reimbursements
payable to PIMSS at December 31, 2014.
4. Distribution Plan
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 of the
Investment Company Act of 1940 with respect to its Class A 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 also pays PFD 1.00% of the average daily
net assets attributable to Class C shares. The fee for 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 C shares. Included in "Due to affiliates" reflected on the
Statement of Assets and Liabilities is $2,239 in distribution fees payable to
PFD at December 31, 2014.
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 12 months of purchase. Redemptions of Class C shares within 12 months of
purchase are subject to a CDSC of 1.00%, based on the lower of cost or market
value of shares being redeemed. Shares purchased as part of an exchange remain
subject to any CDSC that applied to the original purchase of those shares. There
is no CDSC for Class Y shares. Proceeds from the CDSCs are paid to PFD. For the
year ended December 31, 2014, CDSCs in the amount of $1,615 were paid to PFD.
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS which
may result in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the year ended December 31, 2014, the Fund's expenses
were not reduced under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), participates in a 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 the amount available under the facility or
the
30 Pioneer Real Estate Shares | Annual Report | 12/31/14
limits set for borrowing by the Fund's prospectus and the 1940 Act. The credit
facility in effect until February 12, 2014 was in the amount of $215 million. As
of February 12, 2014, the facility is in the amount of $240 million. Under such
facility, depending on the type of loan, interest on borrowings is payable at
the London Interbank Offered Rate (LIBOR) plus 0.90% (0.85% as of February 12,
2014) on an annualized basis, or the Alternate Base Rate, which is the greater
of (a) the facility's administrative agent's daily announced prime rate on the
borrowing date, (b) 2% plus the Federal Funds Rate on the borrowing date and (c)
2% plus the overnight Euro dollar rate on the borrowing date. The Funds pay an
annual commitment fee to participate in a credit facility. The commitment fee is
allocated among participating Funds based on an allocation schedule set forth in
the credit agreement. For the year ended December 31, 2014, the Fund had no
outstanding borrowings.
7. Change in Independent Registered Public Accounting Firm
The Board of Trustees of the Fund, with the approval and recommendation of the
Audit Committee, appointed Deloitte & Touche LLP to serve as the Fund's
independent registered public accounting firm for the fiscal year ending
December 31, 2014. Deloitte & Touche LLP replaces Ernst & Young LLP, which
resigned as the Fund's independent registered public accounting firm, effective
upon completion of the audit of the Fund's financial statements for the fiscal
year ended December 31, 2013.
During the periods that Ernst & Young LLP served as the Fund's independent
registered public accounting firm, including the Fund's two most recent fiscal
years ending December 31, 2013 and December 31, 2012, Ernst & Young LLP's
reports on the financial statements of the Fund have not contained an adverse
opinion or disclaimer of opinion and have not been qualified or modified as to
uncertainty, audit scope or accounting principles. Further, there have been no
disagreements with Ernst & Young LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the satisfaction of Ernst & Young LLP would have
caused Ernst & Young LLP to make reference to the subject matter of the
disagreement in connection with its report on the financial statements. In
addition, there have been no reportable events of the kind described in Item 304
(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934.
8. Conversion of Class B Shares
As of the close of business on November 10, 2014 (the "Conversion Date"), all
outstanding Class B shares of the Fund were converted to Class A shares.
Pioneer Real Estate Shares | Annual Report | 12/31/14 31
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, including
the schedule of investments, of Pioneer Real Estate Shares (the "Fund"), as of
December 31, 2014, and the related statements of operations and changes in net
assets, and the financial highlights for the year 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 audit. The statement of changes
in net assets of the Fund for the year ended December 31, 2013, and the
financial highlights for the years ended December 31, 2013, 2012, 2011, and 2010
were audited by other auditors. Those auditors expressed an unqualified opinion
on those financial statements and financial highlights in their report dated
February 25, 2014.
We conducted our audit 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. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit 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, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2014 by correspondence with the
custodian. We believe that our audit provides 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 as of December 31, 2014, and the results of its
operations, the changes in its net assets, and the financial highlights for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
February 23, 2015
32 Pioneer Real Estate Shares | Annual Report | 12/31/14
Approval of Investment Advisory and Sub-Advisory Agreements
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Real Estate Shares (the Fund) 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. In order for PIM to remain the
investment adviser of the Fund and the sub-adviser to remain the sub-adviser of
the Fund, the Trustees of the Fund must determine annually whether to renew the
investment advisory agreement and the sub-advisory agreement for the Fund.
The contract review process began in January 2014 as the Trustees of the Fund
agreed on, among other things, an overall approach and timeline for the process.
Contract review materials were provided to the Trustees in March 2014 and July
2014. Supplemental contract review materials were provided to the Trustees in
September 2014. In addition, the Trustees reviewed and discussed the Fund's
performance at regularly scheduled meetings throughout the year, and took into
account other information related to the Fund provided to the Trustees at
regularly scheduled meetings, in connection with the review of the Fund's
investment advisory and sub-advisory agreements.
In March 2014, the Trustees, among other things, discussed the memorandum
provided by Fund counsel that summarized the legal standards and other
considerations that are relevant to the Trustees in their deliberations
regarding the renewal of the investment advisory agreement and the sub-advisory
agreement, and reviewed and discussed the qualifications of the investment
management teams, as well as the level of investment by the Fund's portfolio
managers in the Fund. In July 2014, the Trustees, among other things, reviewed
the Fund's management fee and total expense ratios, the financial statements of
PIM and its parent companies, the profitability analyses provided by PIM, and
possible economies of scale. The Trustees also reviewed the profitability of the
institutional business of PIM and PIM's affiliate, Pioneer Institutional Asset
Management, Inc. (together with PIM, "Pioneer"), as compared to that of PIM's
fund management business, and considered the differences between the fees and
expenses of the Fund and the fees and expenses of Pioneer's institutional
accounts, as well as the different services provided by PIM to the Fund and by
Pioneer to the institutional accounts. The Trustees further considered contract
review materials in September 2014, including the materials provided by the
sub-adviser to the Fund.
At a meeting held on September 16, 2014, based on their evaluation of the
information provided by PIM, the sub-adviser and third parties, the Trustees of
the Fund, including the Independent Trustees voting separately,
Pioneer Real Estate Shares | Annual Report | 12/31/14 33
unanimously approved the renewal of the investment advisory agreement and
the sub-advisory agreement for another year. In considering the renewal of the
investment advisory agreement and the sub-advisory agreement, the Trustees
considered various factors that they determined were relevant, including the
factors described below. In all quintile rankings referred to throughout this
disclosure, first quintile is most favorable to the Fund's shareowners. The
Trustees did not identify any single factor as the controlling factor in
determining to approve the renewal of the agreements.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM and the sub-adviser to the Fund, taking into account the
investment objective and strategy of the Fund. The Trustees reviewed the terms
of the investment advisory agreement and 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 PIM and the
sub-adviser and the personnel of PIM and the sub-adviser who provide investment
management services to the Fund. They also reviewed the amount of non-Fund
assets managed by the portfolio managers of the Fund. The Trustees considered
the non-investment resources and personnel of PIM involved in PIM's services to
the Fund, including PIM's compliance and legal resources and personnel. The
Trustees noted the substantial attention and high priority given by PIM's senior
management to the Pioneer fund complex. The Trustees further considered
differences in services provided by PIM and the sub-adviser under the investment
advisory agreement and the sub-advisory agreement, respectively.
The Trustees considered that PIM supervises and monitors the performance of the
Fund's service providers (including the sub-adviser) and provides the Fund with
personnel (including Fund officers) and other resources that are necessary for
the Fund's business management and operations. The Trustees also considered
that, as administrator, PIM is responsible for the administration of the Fund's
business and other affairs. The Trustees considered the fees paid to PIM for the
provision of administration services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had been provided by each of PIM and the Sub-
Adviser to the Portfolio were satisfactory and consistent with the terms of the
investment advisory agreement and the sub-advisory agreement, respectively.
Performance of the Fund
In considering the Fund's performance, the Trustees regularly review and discuss
analysis and data prepared by PIM and information comparing the Fund's
performance with the performance of its peer group of funds as classified by
each of Morningstar, Inc. (Morningstar) and Lipper, and with the
34 Pioneer Real Estate Shares | Annual Report | 12/31/14
performance of the Fund's benchmark index. They also discuss the Fund's
performance with PIM and the sub-adviser on a regular basis. The Trustees
confirmed that these regular reviews and discussions were factored into the
Trustees' deliberations concerning the renewal of the advisory and sub-advisory
agreements. For purposes of their contract renewal deliberations, the Trustees
considered the discussions held throughout the year regarding the Fund's
performance and the performance results of the Fund over various time periods,
including the Fund's performance results for periods ended June 30, 2014. The
Trustees indicated that they were satisfied with PIM's and the sub-adviser's
investment discipline and approach in the prevailing market conditions,
notwithstanding relatively poor peer comparisons of total return over the 1-year
period.
Management Fee and Expenses
The Trustees considered information showing the fees and expenses of the Fund in
comparison to the management fees and expense ratios of its peer group of funds
as classified by Morningstar and also to 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 also considered that PIM, not the Fund, paid the sub-adviser pursuant
to the sub-advisory agreement. The Trustees evaluated both the fee under the
sub-advisory agreement and the portion of the fee under the investment advisory
agreement retained by PIM.
The Trustees considered that the Fund's management fee for the twelve months
ended June 30, 2014 was in the third quintile relative to the management fees
paid by other funds in its Morningstar peer group for the comparable period. The
Trustees also considered the breakpoint in the management fee schedule and the
reduced fee rate above a certain asset level. The Trustees considered that the
expense ratio of the Fund's Class A shares for the twelve months ended June 30,
2014 was in the fourth quintile relative to its Morningstar peer group and in
the third quintile relative its Strategic Insight peer group, in each case for
the comparable period. The Trustees considered the impact of transfer agency,
sub-transfer agency, and other non-management fee expenses on the expense ratios
of the Fund, and noted the impact of expenses relating to small accounts and
omnibus accounts on transfer and sub-transfer agency expenses generally. The
Trustees noted that they separately review the Fund's transfer agency,
sub-transfer agency and intermediary arrangements.
The Trustees reviewed management fees charged by Pioneer to institutional and
other clients, including publicly offered European funds sponsored by affiliates
of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory
capacity), and unaffiliated foreign and domestic separate accounts. The Trustees
also considered PIM's costs in providing services to the
Pioneer Real Estate Shares | Annual Report | 12/31/14 35
Fund and Pioneer's costs in providing services to the other clients and
considered the differences in management fees and profit margins for Fund and
non-Fund services. In evaluating the fees associated with Pioneer's client
accounts, the Trustees took into account the respective demands, resources and
complexity associated with the Fund and client accounts. The Trustees noted
that, in some instances, the fee rates for those clients were lower than the
management fee for the Fund and considered that, under the investment advisory
agreement with the Fund, PIM performs additional services for the Fund that it
does not provide to those other clients or services that are broader in scope,
including oversight of the Fund's other service providers and activities related
to compliance and the extensive regulatory and tax regimes to which the Fund is
subject. The Trustees also considered the different entrepreneurial risks
associated with PIM's management of the Fund and Pioneer's management of the
other client accounts.
The Trustees reviewed management fees charged by the sub-adviser to its other
clients. The Trustees noted that the sub-advisory fees paid to the sub-adviser
with respect to the Fund were within the range of the fee rates charged by the
Sub-Adviser to its other clients.
The Trustees concluded that the management fee payable by the Fund to PIM, as
well as the fees payable by PIM to the sub-adviser, were reasonable in relation
to the nature and quality of the services provided by PIM and the sub-adviser
to the Fund.
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. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Fund. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's 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
concluded that PIM's profitability with respect to the management of the Fund
was not unreasonable.
Economies of Scale
The Trustees considered PIM's views relating to economies of scale in connection
with the Pioneer Funds as fund assets grow and the extent to which any such
economies of scale are shared with funds and fund shareholders. The Trustees
noted the breakpoint in the management fee
36 Pioneer Real Estate Shares | Annual Report | 12/31/14
schedule. The Trustees recognize that economies of scale are difficult to
identify and quantify, and that, among other factors that may be relevant, are
the following: fee levels, expense subsidization, investment by PIM in research
and analytical capabilities and PIM's commitment and resource allocation to the
Fund. The Trustees noted that profitability also may be an indicator of the
availability of any economies of scale, although profitability may vary for
other reasons including reductions in expenses. The Trustees concluded that
economies of scale, if any, were being appropriately shared with the Funds.
Other Benefits
The Trustees considered the other benefits to PIM and the sub-adviser from its
relationship with the Fund. The Trustees considered the character and amount of
fees paid by the Fund, other than under the investment advisory agreement, for
services provided by PIM and its affiliates. The Trustees further considered the
revenues and profitability of PIM's businesses other than the fund business.
Pioneer is the principal U.S. asset management business of Pioneer Global Asset
Management, the worldwide asset management business of UniCredit Group, which
manages over $150 billion in assets (including the Funds). Pioneer and the Funds
receive reciprocal intangible benefits from the relationship, including mutual
brand recognition and, for the Funds, direct and indirect access to the
resources of a large global asset manager. The Trustees concluded that any such
benefits received by Pioneer as a result of its relationship with the Funds were
reasonable and their consideration of the advisory agreement between the Fund
and PIM and the fees thereunder were unaffected by Pioneer's possible receipt of
any such intangible benefits.
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that each of the
investment advisory agreement between PIM and the Fund and the sub-advisory
agreement between PIM and the sub-adviser, including, in each case, the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of each of the investment advisory agreement and the sub-advisory
agreement for the Fund.
Pioneer Real Estate Shares | Annual Report | 12/31/14 37
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Morgan, Lewis & Bockius 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 us.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at www.sec.gov.
Trustees and Officers
The Fund's Trustees and officers are listed below, together with their principal
occupations during at least 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 52 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.
The Statement of Additional Information of the Fund includes additional
information about the Trustees and is available, without charge, upon request,
by calling 1-800-225-6292.The Statement of Additional Information of the Fund
includes additional information about the Trustees and is available, without
charge, upon request, by calling 1-800-225-6292.
38 Pioneer Real Estate Shares | Annual Report | 12/31/14
Independent Trustees
-----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
-----------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (64) Trustee since 2006. Serves Private investor (2004 - 2008 and Director, Broadridge Financial
Chairman of the Board until a successor trustee 2013 - present); Chairman (2008 - Solutions, Inc. (investor
and Trustee is elected or earlier 2013) and Chief Executive Officer communications and securities
retirement or removal. (2008 - 2012), Quadriserv, Inc. processing provider for financial
(technology products for securities services industry) (2009 -
lending industry); and Senior present); Director, Quadriserv,
Executive Vice President, The Bank Inc. (2005 - 2013); and
of New York (financial and Commissioner, New Jersey State
securities services) (1986 - 2004) Civil Service Commission (2011 -
present)
-----------------------------------------------------------------------------------------------------------------------------------
David R. Bock (71) Trustee since 2005. Serves Managing Partner, Federal City Director of New York Mortgage
Trustee until a successor trustee Capital Advisors (corporate advisory Trust (publicly-traded mortgage
is elected or earlier services company) (1997 - 2004 and REIT) 2004 - 2009, 2012 -
retirement or removal. 2008 - present); Interim Chief present); Director (of The Swiss
Executive Officer, Oxford Analytica, Helvetia Fund, Inc. (closed-end
Inc. (privately-held research and fund) (2010 - present); Director
consulting company) (2010); of Oxford Analytica, Inc. (2008 -
Executive Vice President and Chief present); and Director of
Financial Officer, I-trax, Inc. Enterprise Community Investment,
(publicly traded health care Inc. (privately-held affordable
services company) (2004 - 2007); and housing finance company) (1985 -
Executive Vice President and Chief 2010)
Financial Officer, Pedestal Inc.
(internet-based mortgage trading
company) (2000 - 2002); Private
consultant (1995-1997), Managing
Director, Lehman Brothers
(investment banking firm)
(1992-1995); and Executive, The
World Bank (1979-1992)
-----------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (70) Trustee since 2008. Serves William Joseph Maier Professor of Trustee, Mellon Institutional
Trustee until a successor trustee Political Economy, Harvard Funds Investment Trust and Mellon
is elected or earlier University (1972 - present) Institutional Funds Master
retirement or removal. Portfolio (oversaw 17 portfolios
in fund complex) (1989-2008)
-----------------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/14 39
Independent Trustees (continued)
-----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
-----------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (67) Trustee since 1995. Serves Founding Director, Vice President None
Trustee until a successor trustee and Corporate Secretary, The
is elected or earlier Winthrop Group, Inc. (consulting
retirement or removal. firm) (1982 - present); Desautels
Faculty of Management, McGill
University (1999 - present); and
Manager of Research Operations and
Organizational Learning, Xerox
PARC, Xerox's advance research
center (1990-1994)
-----------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (66) Trustee since 1995. Serves President and Chief Executive Director of New America High
Trustee until a successor trustee Officer, Newbury, Piret & Company, Income Fund, Inc. (closed-end
is elected or earlier Inc. (investment banking firm) investment company) (2004 -
retirement or removal. (1981 - present) present); and Member, Board of
Governors, Investment Company
Institute (2000 - 2006)
-----------------------------------------------------------------------------------------------------------------------------------
Fred J. Ricciardi (67) Trustee since 2014. Serves Consultant (investment company None
Trustee until a successor trustee services) (2012 - present);
is elected or earlier Executive Vice President, BNY
retirement or removal. Mellon (financial and investment
company services) (1969 - 2012);
Director, BNY International
Financing Corp. (financial
services) (2002 - 2012); and
Director, Mellon Overseas
Investment Corp. (financial
services) (2009 - 2012)
-----------------------------------------------------------------------------------------------------------------------------------
40 Pioneer Real Estate Shares | Annual Report | 12/31/14
Interested Trustee
-----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
-----------------------------------------------------------------------------------------------------------------------------------
Kenneth J. Taubes (56)* Trustee since 2014. Serves Director and Executive Vice President (since None
Trustee until a successor trustee 2008) and Chief Investment Officer, U.S.
is elected or earlier (since 2010) of PIM-USA; Executive Vice
retirement or removal. President of Pioneer (since 2008); Executive
Vice President of Pioneer Institutional Asset
Management, Inc. (since 2009); and Portfolio
Manager of Pioneer (since 1999)
-----------------------------------------------------------------------------------------------------------------------------------
* Mr. Taubes is an Interested Trustee because he is an officer of the Fund's
investment adviser and certain of its affiliates.
Pioneer Real Estate Shares | Annual Report | 12/31/14 41
Advisory Trustee
-----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
-----------------------------------------------------------------------------------------------------------------------------------
Lorraine Monchak (58)** Advisory Trustee since Chief Investment Officer, 1199 SEIU Funds None
Advisory Trustee 2014. (healthcare workers union pension funds) (2001
- present); Vice President - International
Investments Group, American International
Group, Inc. (insurance company) (1993 - 2001);
Vice President Corporate Finance and Treasury
Group, Citibank, N.A.(1980 - 1986 and 1990 -
1993); Vice President - Asset/Liability
Management Group, Federal Farm Funding
Corporation (government-sponsored issuer of
debt securities) (1988 - 1990); Mortgage
Strategies Group, Shearson Lehman Hutton, Inc.
(investment bank) (1987 - 1988); and Mortgage
Strategies Group, Drexel Burnham Lambert, Ltd.
(investment bank) (1986 - 1987)
-----------------------------------------------------------------------------------------------------------------------------------
** Ms. Monchak is a non-voting advisory trustee.
42 Pioneer Real Estate Shares | Annual Report | 12/31/14
Fund Officers
-----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Officer
-----------------------------------------------------------------------------------------------------------------------------------
Lisa M. Jones (52) Since 2014. Serves at the Chair, Director, CEO and President of Pioneer None
President and Chief discretion of the Board Investment Management-USA (since September
Executive Officer 2014); Chair, Director, CEO and President of
Pioneer Investment Management, Inc. (since
September 2014); Chair, Director, CEO and
President of Pioneer Funds Distributor, Inc.
(since September 2014); Chair, Director, CEO
and President of Pioneer Institutional Asset
Management, Inc. (since September 2014); and
Chair, Director, and CEO of Pioneer Investment
Management Shareholder Services, Inc. (since
September 2014); Managing Director, Morgan
Stanley Investment Management (2010 - 2013);
and Director of Institutional Business, CEO of
International, Eaton Vance Management (2005 -
2010)
-----------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (50) Since 2003. Serves at the Vice President and Associate General Counsel None
Secretary and Chief discretion of the Board. of Pioneer since January 2008; Secretary and
Legal Officer Chief Legal Officer of all of the Pioneer
Funds since June 2010; Assistant Secretary of
all of the Pioneer Funds from September 2003
to May 2010; and Vice President and Senior
Counsel of Pioneer from July 2002 to December
2007
-----------------------------------------------------------------------------------------------------------------------------------
Carol B. Hannigan (53) Since 2010. Serves at the Fund Governance Director of Pioneer since None
Assistant Secretary discretion of the Board. December 2006 and Assistant Secretary of all
the Pioneer Funds since June 2010; Manager -
Fund Governance of Pioneer from December 2003
to November 2006; and Senior Paralegal of
Pioneer from January 2000 to November 2003
-----------------------------------------------------------------------------------------------------------------------------------
Thomas Reyes (52) Since 2010. Serves at the Senior Counsel of Pioneer since May 2013 and None
Assistant Secretary discretion of the Board. Assistant Secretary of all the Pioneer Funds
since June 2010; and Counsel of Pioneer from
June 2007 to May 2013
-----------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (55) Since 2008. Serves at the Vice President - Fund Treasury of Pioneer; None
Treasurer and Chief discretion of the Board. Treasurer of all of the Pioneer Funds since
Financial and March 2008; Deputy Treasurer of Pioneer from
Accounting Officer March 2004 to February 2008; and Assistant
Treasurer of all of the Pioneer Funds from
March 2004 to February 2008
-----------------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/14 43
Fund Officers (continued)
-----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Officer
-----------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (49) Since 2000. Serves at the Director - Fund Treasury of Pioneer; and None
Assistant Treasurer discretion of the Board. Assistant Treasurer of all of the Pioneer
Funds
-----------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (56) Since 2002. Serves at the Fund Accounting Manager - Fund Treasury of None
Assistant Treasurer discretion of the Board. Pioneer; and Assistant Treasurer of all of the
Pioneer Funds
-----------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (35) Since 2009. Serves at the Fund Administration Manager - Fund Treasury of None
Assistant Treasurer discretion of the Board. Pioneer since November 2008; Assistant
Treasurer of all of the Pioneer Funds since
January 2009; and Client Service Manager -
Institutional Investor Services at State
Street Bank from March 2003 to March 2007
-----------------------------------------------------------------------------------------------------------------------------------
Jean M. Bradley (62) Since 2010. Serves at the Chief Compliance Officer of Pioneer and of all None
Chief Compliance Officer discretion of the Board. the Pioneer Funds since March 2010; Chief
Compliance Officer of Pioneer Institutional
Asset Management, Inc. since January 2012;
Chief Compliance Officer of Vanderbilt Capital
Advisors, LLC since July 2012: Director of
Adviser and Portfolio Compliance at Pioneer
since October 2005; and Senior Compliance
Officer for Columbia Management Advisers, Inc.
from October 2003 to October 2005
-----------------------------------------------------------------------------------------------------------------------------------
Kelly O'Donnell (43) Since 2006. Serves at the Director - Transfer Agency Compliance of None
Anti-Money Laundering Officer discretion of the Board. Pioneer and Anti-Money Laundering Officer of
all the Pioneer Funds since 2006
-----------------------------------------------------------------------------------------------------------------------------------
44 Pioneer Real Estate Shares | Annual Report | 12/31/14
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
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: us.pioneerinvestments.com
This report must be preceded or 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.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
Securities offered through Pioneer Funds Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2015 Pioneer Investments 18631-09-0215
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 12(a)(1), 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 (see attachment);
(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.
Pioneer Real Estate Shares:
Audit Fees
The audit services provided to the Fund were totaled
approximately $24,292 payable to Deloitte & Touche
LLP for the year ended December 31, 2014 and $33,690
were paid to the former auditor, Ernst & Young LLP
for the year ended December 31, 2013.
(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.
Pioneer Real Estate Shares:
Audit-Related Fees
There were no audit related fees and other fees for
the Fund payable to Deloitte & Touche LLP for
the year ended December 31, 2014 and no audit related
fees and other fees were paid to the former auditor,
Ernst & Young LLP for the year ended December 31, 2013.
(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.
Pioneer Real Estate Shares:
Tax Fees
Fees for tax compliance services, primarily for tax
returns, totaled approximately $5,600 payable to
Deloitte & Touche LLP for the year ended December 31,
2014 and $8,131 were paid to the former auditor,
Ernst & Young LLP for the year ended December 31, 2013.
(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.
Pioneer Real Estate Shares:
Other Fees
There were no audit related fees and other fees for
the Fund payable to Deloitte & Touche LLP for
the year ended December 31, 2014 and no audit related
fees and other fees were paid to the former auditor,
Ernst & Young LLP for the year ended December 31, 2013.
(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, 2014
and 2013, 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 accountants 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 registrants accountant
for services rendered to the registrant, and rendered to the registrants
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.
Aggregate Non-Audit Fees
The aggregate non-audit fees for the Fund were $5,600
December 31, 2014 and $8,131 were paid to the former
auditor, Ernst & Young LLP for the year ended December 31,
2013.
(h) Disclose whether the registrants audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrants 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 registrant's 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 of Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.1212
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 registrant's portfolio ("Portfolio Manager"). Also state each Portfolio
Manager's 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 registrant's equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781).
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 registrant's board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 407(c)(2)(iv) of
Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15))
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 registrant's board of
directors since the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-R 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 and
principal financials officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR
270.30a-3(c))) as of a date within 90 days of the filing date of the report
that includes the disclosure required by this paragraph,
based on the evaluation of these controls and procedures required by Rule
30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b)
under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on the evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that
occured during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
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.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) 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.
(2) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2(a) under the Act
(17 CFR 270.30a-2(a)) , exactly as set forth below:
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/ Lisa M. Jones
Lisa M. Jones, President & Chief Executive Officer
Date February 27, 2015
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/ Lisa M. Jones
Lisa M. Jones, President & Chief Executive Officer
Date February 27, 2015
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date February 27, 2015
* Print the name and title of each signing officer under his or her signature.