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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, 2015 through December 31, 2015
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
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Annual Report | December 31, 2015
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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 34
Trustees, Officers and Service Providers 39
Pioneer Real Estate Shares | Annual Report | 12/31/15 1
President's Letter
Dear Shareowner,
Over the past several years, many investors experienced positive returns across
most major asset classes. However, 2015 was a tale of two markets, with
favorable market conditions in the first half of the year, followed by an abrupt
slowdown and increased volatility beginning in August. The global markets were
challenged by significant economic cross-currents in different geographic
regions and industrial sectors. While the U.S. economy gradually improved,
growth slowed in China. Emerging markets struggled following a decline in
commodity prices, especially oil. While lower energy prices are good for the
consumer, there were ripple effects throughout the global economy.
Against this backdrop, the Standard & Poor's 500 Index rose by just 1.4% in
2015, international equity markets were essentially flat, and emerging market
equities fell sharply. Across U.S. fixed-income sectors, U.S. government and
investment-grade corporate bonds were fairly flat for the year, while high-yield
bonds, as measured by the Bank of America Merrill Lynch Master II High Yield
Index, posted a -4.9% total return.
Entering 2016, we see the U.S. economy growing modestly, against an overall
global economic backdrop that remains fragile and points towards structurally
lower growth. As always in a Presidential election year, political rhetoric has
the potential to impact U.S. sectors such as health care in 2016. Economies
around the world in both developed and emerging markets are experiencing deep
structural change. Geopolitical instability on many fronts, the rising risk of
policy mistakes, and market liquidity issues all increase the possibility of
sharp swings in asset values. In this environment, financial markets remain
vulnerable to unusual levels of volatility. While divergences among regions and
industries is an important theme, we are generally optimistic about the outlook
for the U.S. economy, which we expect will see continued, positive growth led by
a strengthened consumer.
Throughout Pioneer's history, we have believed in the importance of active
management. In periods of market volatility, we believe that the value of active
management is even more compelling. Our experienced and tenured investment teams
focus on identifying value across global markets using proprietary research,
careful risk management, and a long-term perspective. Our ongoing goal is to
produce compelling returns consistent with the stated objectives of our
investment products, and with our shareowners' expectations. We believe our
shareowners can benefit from the experience and tenure of our investment teams
as well as the insights generated from our extensive research process.
2 Pioneer Real Estate Shares | Annual Report | 12/31/15
As always, and particularly during times of market uncertainty, 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.
We greatly appreciate the trust you have placed in us 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.
December 31, 2015
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 | 12/31/15 3
Portfolio Management Discussion | 12/31/15
In the following interview, Matthew Troxell of AEW Capital Management, L.P.,
sub-adviser for 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, 2015.
Q How did the Fund perform during the 12-month period ended December 31,
2015?
A Pioneer Real Estate Shares Class A shares returned 4.27% at net asset value
during the 12-month period ended December 31, 2015, while the Fund's
benchmark, the Morgan Stanley Capital International (MSCI) U.S. Real Estate
Investment Trust (REIT) NR Index (the MSCI Index)(1), returned 1.28%.
During the same period, the average return of the 264 mutual funds in
Lipper's Real Estate Funds Category was 2.19%, and the average return of
the 282 mutual funds in Morningstar's Real Estate Funds Category was 2.41%.
Q How would you describe the market environment for REIT investors during the
12-month period ended December 31, 2015?
A While property transaction volume slowed a bit during 2015, real estate
fundamentals and pricing continued to be strong. Apartment vacancy rates
were steady, despite substantial construction deliveries during the year,
as the so-called "Millennial" generation that recently became the nation's
largest demographic group found jobs and formed households, soaking up new
supply. Meanwhile, vacancy rates in other property types continued to trend
downward, albeit slowly.
On a national level, supply risk was limited outside of apartments and
senior housing REITs. A few select office, industrial, and hotel markets
saw meaningful construction, although in most cases, that has been in
response to very strong demand in those same markets. An important
exception is oil-sensitive markets, such as Houston, which have been
deteriorating as substantial new supply runs into weakening demand.
(1) The MSCI information may only be used for your internal use, may not be
reproduced or redissemi-nated 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 | 12/31/15
Nationally, rents have been moving up in all property types, and some
longer-lease property types are transitioning to an environment where new
lease agreements will command higher rents than the in-place leases signed
in the aftermath of the global financial crisis. We think that could
provide a boost to net operating income.
Q Which investments or strategies aided the Fund's benchmark-relative
performance during the 12-month period ended December 31, 2015?
A The Fund's outperformance relative to the MSCI Index during the period
derived mainly from positive stock selection results and positive sector
allocation results. In terms of stock selection, benchmark-relative
performance was strongest in the storage, regional mall, and diversified
REIT sectors. Positive sector allocation results were due primarily to the
Portfolio's underweight exposures to the underperforming triple-net-lease
and health care sectors, and an overweight position in the outperforming
storage REIT sector.
Among individual REITs, top contributors to benchmark-relative performance
during the period included overweight Fund positions in the outperforming
self-storage company CubeSmart and in apartment REIT Equity Residential, as
well as a lack of exposure to underperforming diversified company NorthStar
Realty Finance. Within the storage sector, both demand and supply
fundamentals remain strong, and CubeSmart reported better-than-expected
quarterly results throughout the fiscal year as the company continued to
acquire assets and grow its development pipeline. In the apartment sector,
Equity Residential continued to post solid quarterly results over the
12-month period, benefiting from strong lease-up of its development
pipeline. In the diversified sector, NorthStar is an externally managed
REIT that owns a portfolio of health care, manufactured housing, and
net-lease properties. During the period, the company authorized a share
repurchase program of up to $500 million and spun off NorthStar Realty
Europe, a pure-play office REIT. The stock underperformed during execution
of the company's strategy, and the Fund benefited from not owning it.
Q Which investments or strategies detracted from the Fund's
benchmark-relative performance results for the 12-month period ended
December 31, 2015?
A Stock selection results in the hotel and apartment sectors hurt the Fund's
benchmark-relative returns the most during the period. Among individual
names, the top detractors from relative performance included overweight
portfolio positions in two underperforming hotel REITs, RLJ Lodging Trust
and Hilton Worldwide, and lack of exposure to the outperforming apartment
company Essex Property Trust. The hotel sector was the worst performer
among REITs, by far, during 2015, due to concerns about slowing
Pioneer Real Estate Shares | Annual Report | 12/31/15 5
revenue-per-available-room growth, new supply, and international travel
worries. As a result, the Fund's overweight positions in RLJ and Hilton
were drags on performance. We still like the relative value of hotel
companies, however, and following the correction, we moved the Fund from an
underweight position to a market-weight position in the sector.
Q Did you make any adjustments to the Fund's strategy or sector allocations
during the 12-month period ended December 31, 2015, particularly related to
the anticipated rising-interest-rate environment?
A We didn't make any significant changes to the Fund's investment strategy
during 12-month period. The portfolio continued to be well diversified* by
property type and geographic region, and our investment process continued
to focus on security selection within each property sector.
As always, we sought to construct a portfolio that we believed could help
the Fund outperform in different economic and market environments. Based on
property market fundamentals and relative valuations within the REIT
sector, we increased the Fund's overweight in the regional mall sector
during the period, with a particular focus on companies with "Class A"
malls. We also moved the portfolio from an underweight to an overweight
position in the apartment sector, as fundamentals "re-accelerated" with
rent growth growing once again. Finally, we decreased the Fund's overweight
in the storage sector after several quarters of strong outperformance. The
triple-net-lease and health care sectors remain the portfolio's largest
underweights relative to the MSCI Index, as their fixed-lease structures
tend to makes their cash flows the most bond-like, which, in our view,
could expose both sectors to the price-dampening pressures of a rising-
interest-rate environment.
Q Did the Fund invest in any derivative securities during the 12-month period
ended December 31, 2015?
A No. We did not engage in any derivatives trading during the period.
Q What is your outlook for REITs in 2016?
A We believe the REIT market appears to offer fair valuations as compared
with other asset classes. At the end of 2015, REITs were trading at a 6%
discount to their net asset values, and U.S. REIT dividend yields stood at
3.9%. REIT yield spreads-to-bonds were mixed, however, as they continued to
trade at wider-than-average spreads to Treasuries (meaning they were
relatively less expensive than usual), but were further inside corporate
bond yields, and thus relatively more expensive than normal.
* Diversification does not assure a profit nor protect against loss.
6 Pioneer Real Estate Shares | Annual Report | 12/31/15
While the REIT market may continue to react nervously to upward moves in
interest rates over the short term, we believe earnings should support
ample dividend** growth and help to offset the negative effects of gradual
interest-rate increases. Going forward, we expect REIT returns to be driven
more by current yield and improving earnings fundamentals than by
additional multiples expansion. All told, we expect average cash-flow
growth for REITs to be in the upper single digits for 2016.
Given our bottom-up stock selection process and our view of the REIT market
at the start of 2016, we see the best relative value - and are maintaining
the Fund's largest overweight positions - in the regional mall, apartment,
and manufactured home sectors. The portfolio's largest underweight
exposures relative to the MSCI Index as of period-end were to the
triple-net-lease, health care, and office sectors.
** Dividends are not guaranteed.
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 | 12/31/15 7
Portfolio Summary | 12/31/15
--------------------------------------------------------------------------------
Sector Distribution
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Apartment 16.8%
Regional Mall 15.8%
Office 14.0%
Health Care 9.1%
Storage 8.9%
Shopping Center 8.9%
Industrial 6.5%
Hotel 6.4%
Diversified 5.7%
Cash and equivalents 3.0%
Triple Net Lease 2.9%
Manufactured Home 2.0%
10 Largest Holdings*
--------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Simon Property Group, Inc. 9.84%
--------------------------------------------------------------------------------
2. Equity Residential Property Trust, Inc. 6.90
--------------------------------------------------------------------------------
3. Public Storage, Inc. 6.28
--------------------------------------------------------------------------------
4. AvalonBay Communities, Inc. 5.34
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5. Boston Properties, Inc. 5.33
--------------------------------------------------------------------------------
6. Welltower, Inc. 5.13
--------------------------------------------------------------------------------
7. Prologis, Inc. 5.07
--------------------------------------------------------------------------------
8. Taubman Centers, Inc. 4.35
--------------------------------------------------------------------------------
9. Ventas, Inc. 4.25
--------------------------------------------------------------------------------
10. Federal Realty Investment Trust 2.95
--------------------------------------------------------------------------------
* 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 | 12/31/15
Prices and Distributions | 12/31/15
Net Asset Value per Share
--------------------------------------------------------------------------------
Class 12/31/15 12/31/14
--------------------------------------------------------------------------------
A $26.83 $29.58
--------------------------------------------------------------------------------
C $26.38 $29.15
--------------------------------------------------------------------------------
Y $26.79 $29.54
--------------------------------------------------------------------------------
Distributions per Share: 1/1/15-12/31/15
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-Term Long-Term
Class Dividends Capital Gains Capital Gains
--------------------------------------------------------------------------------
A $0.3075 $0.0180 $3.5860
--------------------------------------------------------------------------------
C $0.0673 $0.0180 $3.5860
--------------------------------------------------------------------------------
Y $0.4124 $0.0180 $3.5860
--------------------------------------------------------------------------------
Index Definition
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The MSCI U.S. REIT NR 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 | 12/31/15 9
Performance Update | 12/31/15 Class A Shares
Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in 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 NR Index.
Average Annual Total Returns
(As of December 31, 2015)
--------------------------------------------------------------------------------
Net Public
Asset Offering MSCI
Value Price U.S. REIT
Period (NAV) (POP) NR Index
--------------------------------------------------------------------------------
10 Years 6.86% 6.23% 5.94%
5 Years 11.49 10.18 10.59
1 Year 4.27 -1.72 1.28
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2015)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
1.47%
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Real Estate Shares MSCI US REIT NR Index
12/05 $ 9,425 $ 10,000
12/06 $ 12,797 $ 13,592
12/07 $ 10,315 $ 11,306
12/08 $ 6,364 $ 7,013
12/09 $ 8,283 $ 9,020
12/10 $ 10,623 $ 11,589
12/11 $ 11,568 $ 12,596
12/12 $ 13,389 $ 14,834
12/13 $ 13,541 $ 15,200
12/14 $ 17,553 $ 19,818
12/15 $ 18,301 $ 20,317
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 | 12/31/15
Performance Update | 12/31/15 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 NR Index.
Average Annual Total Returns
(As of December 31, 2015)
--------------------------------------------------------------------------------
MSCI
If If U.S. REIT
Period Held Redeemed NR Index
--------------------------------------------------------------------------------
10 Years 5.94% 5.94% 5.94%
5 Years 10.56 10.56 10.59
1 Year 3.39 3.39 1.28
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2015)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
2.35%
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Real Estate Shares MSCI US REIT NR Index
12/05 $ 10,000 $ 10,000
12/06 $ 13,460 $ 13,592
12/07 $ 10,759 $ 11,306
12/08 $ 6,579 $ 7,013
12/09 $ 8,479 $ 9,020
12/10 $ 10,775 $ 11,589
12/11 $ 11,644 $ 12,596
12/12 $ 13,361 $ 14,834
12/13 $ 13,398 $ 15,200
12/14 $ 17,216 $ 19,818
12/15 $ 17,800 $ 20,317
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 | 12/31/15 11
Performance Update | 12/31/15 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 NR Index.
Average Annual Total Returns
(As of December 31, 2015)
--------------------------------------------------------------------------------
Net
Asset MSCI U.S.
Value REIT NR
Period (NAV) Index
--------------------------------------------------------------------------------
10 Years 7.45% 5.94%
5 Years 12.03 10.59
1 Year 4.65 1.28
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2015)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
1.03%
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $5 Million Investment
Pioneer Real Estate Shares MSCI US REIT NR Index
12/05 $ 5,000,000 $ 5,000,000
12/06 $ 6,821,439 $ 6,795,989
12/07 $ 5,523,478 $ 5,653,195
12/08 $ 3,430,245 $ 3,506,690
12/09 $ 4,506,611 $ 4,509,914
12/10 $ 5,812,275 $ 5,794,268
12/11 $ 6,369,958 $ 6,297,953
12/12 $ 7,407,226 $ 7,416,806
12/13 $ 7,526,354 $ 7,600,090
12/14 $ 9,800,777 $ 9,908,979
12/15 $ 10,256,071 $ 10,158,714
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 | 12/31/15
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, 2015, through December 31, 2015.
--------------------------------------------------------------------------------
Share Class A C Y
--------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00
Value on 7/1/15
--------------------------------------------------------------------------------
Ending Account $1,105.02 $1,100.24 $1,106.82
Value on 12/31/15
--------------------------------------------------------------------------------
Expenses Paid $ 7.48 $ 11.86 $ 5.42
During Period*
--------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio of 1.41%,
2.24% and 1.02% for Class A, C, and 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 | 12/31/15 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, 2015, through December 31, 2015.
--------------------------------------------------------------------------------
Share Class A C Y
--------------------------------------------------------------------------------
Beginning Account $ 1,000.00 $ 1,000.00 $ 1,000.00
Value on 7/1/15
--------------------------------------------------------------------------------
Ending Account $ 1,018.10 $ 1,013.91 $ 1,020.06
Value on 12/31/15
--------------------------------------------------------------------------------
Expenses Paid $ 7.17 $ 11.37 $ 5.19
During Period*
--------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio of 1.41%,
2.24% and 1.02% for Class A, C, and 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 | 12/31/15
Schedule of Investments | 12/31/15
----------------------------------------------------------------------------------------------
Shares Value
----------------------------------------------------------------------------------------------
COMMON STOCKS -- 94.9%
CONSUMER SERVICES -- 2.5%
Hotels, Resorts & Cruise Lines -- 2.5%
129,500 Extended Stay America, Inc. $ 2,059,050
91,000 Hilton Worldwide Holdings, Inc. 1,947,400
--------------
$ 4,006,450
--------------
Total Consumer Services $ 4,006,450
----------------------------------------------------------------------------------------------
REAL ESTATE -- 92.4%
Diversified REIT -- 5.4%
57,300 American Assets Trust, Inc. $ 2,197,455
104,200 Empire State Realty Trust, Inc.* 1,882,894
345,933 Gramercy Property Trust 2,670,603
86,518 STORE Capital Corp. 2,007,218
--------------
$ 8,758,170
----------------------------------------------------------------------------------------------
Health Care REIT -- 8.9%
115,900 Ventas, Inc. $ 6,540,237
116,000 Welltower, Inc. 7,891,480
--------------
$ 14,431,717
----------------------------------------------------------------------------------------------
Hotel & Resort REIT -- 3.8%
73,600 Chatham Lodging Trust $ 1,507,328
186,900 Host Hotels & Resorts, Inc. 2,867,046
82,200 RLJ Lodging Trust 1,777,986
--------------
$ 6,152,360
----------------------------------------------------------------------------------------------
Industrial REIT -- 6.3%
181,700 Prologis, Inc. $ 7,798,564
150,800 Rexford Industrial Realty, Inc.* 2,467,088
--------------
$ 10,265,652
----------------------------------------------------------------------------------------------
Office REIT -- 11.6%
64,200 Boston Properties, Inc. $ 8,188,068
59,400 Douglas Emmett, Inc. 1,852,092
164,600 Paramount Group, Inc. 2,979,260
226,300 Piedmont Office Realty Trust, Inc. 4,272,544
15,200 Vornado Realty Trust 1,519,392
--------------
$ 18,811,356
----------------------------------------------------------------------------------------------
Residential REIT -- 18.4%
54,000 American Campus Communities, Inc. $ 2,232,360
94,500 American Homes 4 Rent* 1,574,370
44,600 AvalonBay Communities, Inc. 8,212,198
52,500 Camden Property Trust 4,029,900
46,500 Equity LifeStyle Properties, Inc. 3,100,155
130,000 Equity Residential Property Trust, Inc. 10,606,700
--------------
$ 29,755,683
----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/15 15
Schedule of Investments | 12/31/15 (continued)
----------------------------------------------------------------------------------------------
Shares Value
----------------------------------------------------------------------------------------------
Retail REIT -- 24.2%
81,200 Acadia Realty Trust $ 2,691,780
176,700 DDR Corp. 2,975,628
31,000 Federal Realty Investment Trust 4,529,100
92,700 Retail Opportunity Investments Corp. 1,659,330
77,800 Simon Property Group, Inc. 15,127,431
70,700 Tanger Factory Outlet Centers, Inc. 2,311,890
87,200 Taubman Centers, Inc. 6,689,984
40,400 The Macerich Co. 3,259,876
--------------
$ 39,245,019
----------------------------------------------------------------------------------------------
Specialized REIT -- 10.5%
143,300 CubeSmart $ 4,387,846
93,300 DuPont Fabros Technology, Inc. 2,966,007
39,000 Public Storage, Inc. 9,660,300
--------------
$ 17,014,153
----------------------------------------------------------------------------------------------
Diversified Real Estate Activities -- 1.2%
52,500 Alexander & Baldwin, Inc.* $ 1,853,775
----------------------------------------------------------------------------------------------
Real Estate Operating Companies -- 2.1%
155,700 Forest City Enterprises, Inc.* $ 3,414,501
--------------
Total Real Estate $ 149,702,386
----------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $88,094,687) $ 153,708,836
----------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN SECURITIES -- 94.9%
(Cost $88,094,687) (a) $ 153,708,836
----------------------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES -- 5.1% $ 8,316,899
----------------------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $ 162,025,735
----------------------------------------------------------------------------------------------
* Non-income producing security.
REIT Real Estate Investment Trust.
(a) At December 31, 2015, the net unrealized appreciation on investments
based on cost for federal income tax purposes of $89,962,244 was as
follows:
Aggregate gross unrealized appreciation for all investments in which
there is an excess of value over tax cost $ 64,932,634
Aggregate gross unrealized depreciation for all investments in which
there is an excess of tax cost over value (1,186,042)
------------
Net unrealized appreciation $ 63,746,592
============
Purchases and sales of securities (excluding temporary cash investments) for the
year ended December 31, 2015, aggregated $35,012,016 and $49,768,160,
respectively.
The accompanying notes are an integral part of these financial statements.
16 Pioneer Real Estate Shares | Annual Report | 12/31/15
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.
The following is a summary of the inputs used as of December 31, 2015, in
valuing the Fund's investments:
--------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
--------------------------------------------------------------------------------
Common Stocks $153,708,836 $ -- $ -- $153,708,836
--------------------------------------------------------------------------------
Total $153,708,836 $ -- $ -- $153,708,836
================================================================================
During the year ended December 31, 2015, 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 | 12/31/15 17
Statement of Assets and Liabilities | 12/31/15
ASSETS:
Investment in securities (cost $88,094,687) $ 153,708,836
Cash 4,183,871
Receivables --
Investment securities sold 87,015
Fund shares sold 3,661,941
Dividends 719,570
Other assets 33,328
-------------------------------------------------------------------------------------------------
Total assets $ 162,394,561
=================================================================================================
LIABILITIES:
Payables --
Investment securities purchased $ 173,019
Fund shares repurchased 124,431
Due to affiliates 27,330
Trustee fees 23
Accrued expenses 44,023
-------------------------------------------------------------------------------------------------
Total liabilities $ 368,826
=================================================================================================
NET ASSETS:
Paid-in capital $ 94,487,067
Accumulated net realized gain 1,924,519
Net unrealized appreciation on investments 65,614,149
-------------------------------------------------------------------------------------------------
Total net assets $ 162,025,735
=================================================================================================
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $100,842,351/3,758,662 shares) $ 26.83
Class C (based on $12,539,560/475,366 shares) $ 26.38
Class Y (based on $48,643,824/1,815,427 shares) $ 26.79
MAXIMUM OFFERING PRICE:
Class A ($26.83 (divided by) 94.25%) $ 28.47
=================================================================================================
The accompanying notes are an integral part of these financial statements.
18 Pioneer Real Estate Shares | Annual Report | 12/31/15
Statement of Operations
For the Year Ended 12/31/15
INVESTMENT INCOME:
Dividends $ 3,992,964
Interest 882
-----------------------------------------------------------------------------------------------------------------
Total investment income $ 3,993,846
-----------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 1,300,645
Transfer agent fees
Class A 132,726
Class C 25,870
Class Y 1,621
Distribution fees
Class A 259,057
Class C 132,618
Shareholder communications expense 131,280
Administrative expense 64,735
Custodian fees 8,854
Registration fees 63,941
Professional fees 43,318
Printing expense 31,034
Fees and expenses of nonaffiliated Trustees 7,802
Miscellaneous 15,386
-----------------------------------------------------------------------------------------------------------------
Total expenses $ 2,218,887
-----------------------------------------------------------------------------------------------------------------
Net investment income $ 1,774,959
-----------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 20,178,398
-----------------------------------------------------------------------------------------------------------------
Change in net unrealized depreciation on investments $ (15,633,704)
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 4,544,694
-----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 6,319,653
=================================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/15 19
Statements of Changes in Net Assets
---------------------------------------------------------------------------------------------------------
Year Ended Year Ended
12/31/15 12/31/14
---------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income (loss) $ 1,774,959 $ 1,724,373
Net realized gain (loss) on investments 20,178,398 13,311,930
Change in net unrealized appreciation (depreciation)
on investments (15,633,704) 24,436,374
--------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 6,319,653 $ 39,472,677
--------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.31 and $0.29 per share, respectively) $ (1,094,537) $ (989,405)
Class C ($0.07 and $0.12 per share, respectively) (32,391) (53,796)
Class Y ($0.41 and $0.41 per share, respectively) (648,031) (681,172)
Net realized gain:
Class A ($3.60 and $1.85 per share, respectively) (12,166,581) (6,373,490)
Class B ($0.00 and $0.10 per share, respectively)* -- (11,714)
Class C ($3.60 and $1.79 per share, respectively) (1,557,391) (778,104)
Class Y ($3.60 and $1.85 per share, respectively) (5,547,206) (3,044,959)
--------------------------------------------------------------------------------------------------------
Total distributions to shareowners $ (21,046,137) $ (11,932,640)
--------------------------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale or exchange of shares $ 47,909,692 $ 57,260,120
Reinvestment of distributions 17,744,523 9,852,654
Cost of shares repurchased (59,973,585) (53,512,265)
--------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
Fund share transactions $ 5,680,630 $ 13,600,509
--------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (9,045,854) $ 41,140,546
NET ASSETS:
Beginning of year $ 171,071,589 $ 129,931,043
--------------------------------------------------------------------------------------------------------
End of year $ 162,025,735 $ 171,071,589
========================================================================================================
* 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 | 12/31/15
----------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
12/31/15 12/31/15 12/31/14 12/31/14
Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------------
Class A
Shares sold 652,528 $ 19,295,553 868,137 $ 24,367,044
Reinvestment of distributions 484,285 12,902,018 249,424 7,140,185
Less shares repurchased (999,506) (29,197,159) (757,730) (21,239,437)
----------------------------------------------------------------------------------------------------------
Net increase 137,307 $ 3,000,412 359,831 $ 10,267,792
==========================================================================================================
Class B*
Shares sold or exchanged -- $ -- 2,048 $ 54,831
Reinvestment of distributions -- -- 426 11,665
Less shares repurchased -- -- (147,771) (4,288,435)
----------------------------------------------------------------------------------------------------------
Net decrease -- $ -- (145,297) $ (4,221,939)
==========================================================================================================
Class C
Shares sold 145,974 $ 4,288,730 148,015 $ 4,122,869
Reinvestment of distributions 58,052 1,512,534 28,300 798,667
Less shares repurchased (189,611) (5,449,050) (153,105) (4,257,714)
----------------------------------------------------------------------------------------------------------
Net increase 14,415 $ 352,214 23,210 $ 663,822
==========================================================================================================
Class Y
Shares sold 839,619 $ 24,325,409 1,039,298 $ 28,715,376
Reinvestment of distributions 124,978 3,329,971 66,517 1,902,137
Less shares repurchased (859,493) (25,327,376) (851,884) (23,726,679)
----------------------------------------------------------------------------------------------------------
Net increase 105,104 $ 2,328,004 253,931 $ 6,890,834
==========================================================================================================
* 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 | 12/31/15 21
Financial Highlights
------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/15 12/31/14 12/31/13 12/31/12 12/31/11
------------------------------------------------------------------------------------------------------
Class A
Net asset value, beginning of period $ 29.58 $ 24.56 $ 24.76 $ 21.79 $ 20.41
------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.31(a) $ 0.30 $ 0.23 $ 0.45 $ 0.42
Net realized and unrealized gain (loss)
on investments 0.85 6.86 0.06 2.97 1.37
------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 1.16 $ 7.16 $ 0.29 $ 3.42 $ 1.79
------------------------------------------------------------------------------------------------------
Distribution to shareowners:
Net investment income $ (0.31) $ (0.29) $ (0.22) $ (0.45) $ (0.41)
Net realized gain (3.60) (1.85) (0.27) -- --
------------------------------------------------------------------------------------------------------
Total distributions $ (3.91) $ (2.14) $ (0.49) $ (0.45) $ (0.41)
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (2.75) $ 5.02 $ (0.20) $ 2.97 $ 1.38
------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.83 $ 29.58 $ 24.56 $ 24.76 $ 21.79
======================================================================================================
Total return* 4.27% 29.63% 1.14% 15.75% 8.90%
Ratio of net expenses to average net assets 1.41% 1.47% 1.48% 1.52% 1.59%
Ratio of net investment income (loss) to average
net assets 1.06% 1.09% 0.89% 1.87% 1.94%
Portfolio turnover rate 22% 22% 17% 8% 8%
Net assets, end of period (in thousands) $100,842 $107,116 $ 80,091 $84,310 $75,318
======================================================================================================
* 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.
(a) The per share data presented above is based on the average shares
outstanding for the period presented.
The accompanying notes are an integral part of these financial statements.
22 Pioneer Real Estate Shares | Annual Report | 12/31/15
----------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/15 12/31/14 12/31/13 12/31/12 12/31/11
-----------------------------------------------------------------------------------------------------------------
Class C
Net asset value, beginning of period $ 29.15 $ 24.24 $ 24.45 $ 21.53 $ 20.15
-----------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.06(a) $ 0.06 $ 0.00(b) $ 0.24 $ 0.23
Net realized and unrealized gain (loss) on investments 0.84 6.76 0.08 2.93 1.38
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 0.90 $ 6.82 $ 0.08 $ 3.17 $ 1.61
-----------------------------------------------------------------------------------------------------------------
Distribution to shareowners:
Net investment income $ (0.07) $ (0.12) $ (0.02) $ (0.25) $ (0.23)
Net realized gain (3.60) (1.79) (0.27) -- --
-----------------------------------------------------------------------------------------------------------------
Total distributions $ (3.67) $ (1.91) $ (0.29) $ (0.25) $ (0.23)
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (2.77) $ 4.91 $ (0.21) $ 2.92 $ 1.38
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.38 $ 29.15 $ 24.24 $ 24.45 $ 21.53
=================================================================================================================
Total return* 3.39% 28.50% 0.27% 14.75% 8.07%
Ratio of net expenses to average net assets 2.24% 2.35% 2.32% 2.37% 2.42%
Ratio of net investment income (loss) to average net assets 0.21% 0.20% 0.02% 1.03% 1.09%
Portfolio turnover rate 22% 22% 17% 8% 8%
Net assets, end of period (in thousands) $12,540 $13,435 $10,609 $12,667 $11,216
=================================================================================================================
* 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.
(a) The per share data presented above is based on the average shares
outstanding for the period presented.
(b) Amount rounds to less than $0.00 or $(0.00) per share.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/15 23
Financial Highlights (continued)
-----------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/15 12/31/14 12/31/13 12/31/12 12/31/11
-----------------------------------------------------------------------------------------------------------------
Class Y
Net asset value, beginning of period $ 29.54 $ 24.52 $ 24.74 $ 21.78 $ 20.39
-----------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.42(a) $ 0.43 $ 0.36 $ 0.56 $ 0.56
Net realized and unrealized gain (loss) on investments 0.84 6.85 0.05 2.97 1.37
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 1.26 $ 7.28 $ 0.41 $ 3.53 $ 1.93
-----------------------------------------------------------------------------------------------------------------
Distribution to shareowners:
Net investment income $ (0.41) $ (0.41) $ (0.36) $ (0.57) $ (0.54)
Net realized gain (3.60) (1.85) (0.27) -- --
-----------------------------------------------------------------------------------------------------------------
Total distributions $ (4.01) $ (2.26) $ (0.63) $ (0.57) $ (0.54)
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (2.75) $ 5.02 $ (0.22) $ 2.96 $ 1.39
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.79 $ 29.54 $ 24.52 $ 24.74 $ 21.78
=================================================================================================================
Total return* 4.65% 30.22% 1.61% 16.28% 9.60%
Ratio of net expenses to average net assets 1.02% 1.03% 1.01% 1.03% 1.00%
Ratio of net investment income (loss) to average net assets 1.43% 1.54% 1.41% 2.48% 2.35%
Portfolio turnover rate 22% 22% 17% 8% 8%
Net assets, end of period (in thousands) $48,644 $50,520 $35,711 $31,610 $15,811
=================================================================================================================
* 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.
(a) The per share data presented above is based on the average shares
outstanding for the period presented.
The accompanying notes are an integral part of these financial statements.
24 Pioneer Real Estate Shares | Annual Report | 12/31/15
Notes to Financial Statements | 12/31/15
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 offered three classes of shares designated as Class A, Class C and
Class Y shares. 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 of Trustees 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:
A. Security Valuation
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.
Pioneer Real Estate Shares | Annual Report | 12/31/15 25
Equity securities that have traded on an exchange are valued by using the
last sale price on the principal exchange where they are traded. Equity
securities that have not traded on the date of valuation, or securities for
which sale prices are not available, generally are valued using the mean
between the last bid and asked prices or, if both last bid and asked prices
are not available, at the last quoted bid price. Last sale and bid and
asked prices are provided by independent third party pricing services. In
the case of equity securities not traded on an exchange, prices are
typically determined by independent third party pricing services using a
variety of techniques and methods.
Foreign securities are valued in U.S. dollars based on foreign currency
exchange rate quotations supplied by a third party pricing service. Trading
in non-U.S. equity securities is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities
used in computing the net asset value of the Fund's shares are determined
as of such times. The fund may use a fair value model developed by an
independent pricing service to value non-U.S. equity securities.
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, 2015, 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).
26 Pioneer Real Estate Shares | Annual Report | 12/31/15
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. 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.
Security transactions are recorded as of trade date. 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 net 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, 2015, 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.
A portion of the dividend income recorded by the Fund is from distributions
by publicly traded REITs, and such distributions for tax purposes may also
consist of capital gains and return of capital. The actual return of
capital and capital gains portions of such distributions will be determined
by formal notifications from the REITs subsequent to the calendar year-end.
Distributions received from the REITs that are determined to be a return of
capital are recorded by the Fund as a reduction of the cost basis of the
securities held and those determined to be capital gain are reflected as
such on the Statement of Operations.
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.
Pioneer Real Estate Shares | Annual Report | 12/31/15 27
The tax character of distributions paid during the years ended December
31,2015, and December 31, 2014, was follows:
-----------------------------------------------------------------------
2015 2014
-----------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 1,878,915 $ 1,957,547
Long-term capital gain 19,167,222 9,975,093
-----------------------------------------------------------------------
Total $21,046,137 $11,932,640
=======================================================================
The following shows the components of distributable earnings on a federal
income tax basis at December 31, 2015:
-----------------------------------------------------------------------
2015
-----------------------------------------------------------------------
Distributable Earnings:
Undistributed long-term capital gain $ 3,792,076
Net unrealized appreciation 63,746,592
-----------------------------------------------------------------------
Total $67,538,668
=======================================================================
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 $15,870 in underwriting commissions on the sale of
Class A shares during the year ended December 31, 2015.
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
Fund's transfer agent 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.
28 Pioneer Real Estate Shares | Annual Report | 12/31/15
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.
G. Repurchase Agreements
Repurchase agreements are arrangements under which the Fund purchases
securities from a broker-dealer or a bank, called the counterparty, upon
the agreement of the counterparty to repurchase the securities from the
Fund at a later date, and at a specific price, which is typically higher
than the purchase price paid by the Fund. The securities purchased serve as
the Fund's collateral for the obligation of the counterparty to repurchase
the securities. The value of the 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. The Fund's investment adviser, PIM is responsible for determining
that the value of the collateral remains at least equal to the repurchase
price. In the event of a default by the counterparty, the Fund is entitled
to sell the securities, but the Fund may not be able to sell them for the
price at which they were purchased, thus causing a loss to the Fund.
Additionally, if the counterparty becomes insolvent, there is some risk
that the Fund will not have a right to the securities, or the immediate
right to sell the securities. As of and for the year ended December 31,
2015, 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, 2015, the effective management fee
(excluding waivers and/or assumption of expenses) was equal to 0.80% of
Pioneer Real Estate Shares | Annual Report | 12/31/15 29
the Fund's daily net assets. PIM pays a portion of the management 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
$4,902 in management fees, administrative costs and certain other reimbursements
payable to PIM at December 31, 2015.
3. Transfer Agent
Prior to November 2, 2015, Pioneer Investment Management Shareholder Services,
Inc. (PIMSS), a wholly owned indirect subsidiary of UniCredit, provided
substantially all transfer agent and shareowner services to the Fund at
negotiated rates.
Effective November 2, 2015, Boston Financial Data Services serves as the
transfer agent to the Fund at negotiated rates.
In addition, the Fund reimbursed the transfer agent for out-of-pocket expenses
incurred by the transfer agent related to shareholder communications activities
such as proxy and statement mailings, outgoing phone calls and omnibus
relationship contracts. For the year ended December 31, 2015, such out-of-pocket
expenses by class of shares were as follows:
-------------------------------------------------------------------------------
Shareholder Communications:
-------------------------------------------------------------------------------
Class A $ 87,120
Class C 13,018
Class Y 31,142
-------------------------------------------------------------------------------
Total $131,280
===============================================================================
Included in "Due to affiliates" reflected on the Statement of Assets and
Liabilities is $20,340 in transfer agent fees and out-of-pocket reimbursements
payable to the transfer agent at December 31, 2015.
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
30 Pioneer Real Estate Shares | Annual Report | 12/31/15
distribution services with regard to Class C shares. Included in "Due to
affiliates" reflected on the Statement of Assets and Liabilities is $2,088 in
distribution fees payable to PFD at December 31, 2015.
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, 2015, CDSCs in the amount of $1,885 were paid to PFD.
5. Expense Offset Arrangements
The Fund entered into certain expense offset arrangements with PIMSS. For the
year ended December 31, 2015, 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 limits set for borrowing by the Fund's prospectus and the 1940 Act. The
credit facility in effect until June 9, 2015, was in the amount of $215 million.
As of June 9, 2015, 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 0.85% 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
Eurodollar 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, 2015, the Fund had no borrowings
under the credit facility.
Pioneer Real Estate Shares | Annual Report | 12/31/15 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, 2015, and the related statement of operations for the year then
ended and the statements of changes in net assets and the financial highlights
for each of the two years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the years
ended December 31, 2013, 2012, and 2011 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 audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, 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, 2015, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Real Estate Shares as of December 31, 2015, the results of its
operations for the year then ended and the changes in its net assets and the
financial highlights for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Diloitte & Touch LLP
Boston, Massachusetts
February 23, 2016
32 Pioneer Real Estate Shares | Annual Report | 12/31/15
Additional Information
PIM, the Fund's investment adviser, is currently an indirect, wholly owned
subsidiary of UniCredit. On November 11, 2015, UniCredit announced that it
signed a binding master agreement with Banco Santander and affiliates of Warburg
Pincus and General Atlantic (the "Private Equity Firms") with respect to Pioneer
Investments ("Pioneer") and Santander Asset Management ("SAM") (the
"Transaction").
The Transaction, as previously announced by UniCredit, will establish a holding
company, with the name Pioneer Investments, to be owned by UniCredit (50%) and
the Private Equity Firms (50% between them). The holding company will control
Pioneer's U.S. operations, including the Adviser. The holding company also will
own 66.7% of Pioneer's and SAM's combined operations outside the U.S., while
Banco Santander will own directly the remaining 33.3% stake. The closing of the
Transaction is expected to happen in 2016, subject to certain regulatory and
other approvals.
Under the Investment Company Act of 1940, completion of the Transaction will
cause the Fund's current investment advisory agreement with PIM to terminate.
Accordingly, the Fund's Board of Trustees will be asked to approve a new
investment advisory agreement. If approved by the Board, the Portfolio's new
investment advisory agreement will be submitted to the shareholders of the Fund
for their approval.
Pioneer Real Estate Shares | Annual Report | 12/31/15 33
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 2015 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 2015 and July
2015. Supplemental contract review materials were provided to the Trustees in
September 2015. 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 2015, 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 2015, 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 2015, including the materials provided by the
sub-adviser to the Fund.
At a meeting held on September 15, 2015, 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, unanimously
approved the renewal of the investment advisory agreement and
34 Pioneer Real Estate Shares | Annual Report | 12/31/15
the sub-advisory agreement for another year. In approving 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. 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 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 Fund 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
throughout the year 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 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' regular reviews and
discussions were factored into the Trustees' deliberations concerning the
renewal of the advisory and sub-advisory agreements.
Pioneer Real Estate Shares | Annual Report | 12/31/15 35
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. In all quintile rankings referred to below, first
quintile is most favorable to the Fund's shareowners.
The Trustees considered that the Fund's management fee for the most recent
fiscal year 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 most recent fiscal year was
in the fourth quintile relative to its Morningstar peer group and in the fourth
quintile relative its Strategic Insight peer group, in each case for the
comparable period. The Trustees noted the Fund's relatively small asset size
compared to most of the other funds in its peer groups, and that the Fund has
not been able to take advantage of the economies of scale afforded by greater
asset size. 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. They Trustees considered
that such non-management fee operating expenses generally are spread over a
smaller asset base than the other funds in the peer group, which results in
these fees being significantly higher as a percentage of assets. 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 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
36 Pioneer Real Estate Shares | Annual Report | 12/31/15
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 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
Pioneer Real Estate Shares | Annual Report | 12/31/15 37
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.
38 Pioneer Real Estate Shares | Annual Report | 12/31/15
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
Boston Financial Data 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 50 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.
Pioneer Real Estate Shares | Annual Report | 12/31/15 39
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 (65) Trustee since 2006. Private investor (2004 - 2008 and 2013 - present); Director, Broadridge
Chairman of the Board Serves until a Chairman (2008 - 2013) and Chief Executive Officer Financial Solutions,
and Trustee successor trustee (2008 - 2012), Quadriserv, Inc. (technology Inc. (investor
is elected or products for securities lending industry); and communications and
earlier retirement Senior Executive Vice President, The Bank of New securities processing
or removal. York (financial and securities services) (1986 - provider for financial
2004) services industry) (2009
- present); Director,
Quadriserv, Inc. (2005 -
2013); and Commissioner,
New Jersey State Civil
Service Commission (2011
- present)
------------------------------------------------------------------------------------------------------------------------------------
David R. Bock (72) Trustee since 2005. Managing Partner, Federal City Capital Advisors Director of New York
Trustee Serves until a (corporate advisory services company) (1997 - 2004 Mortgage Trust (publicly
successor trustee and 2008 - present); Interim Chief Executive -traded mortgage REIT)
is elected or Officer, Oxford Analytica, Inc. (privately-held (2004 - 2009, 2012 -
earlier retirement research and consulting company) (2010); Executive present); Director of
or removal. Vice President and Chief Financial Officer, The Swiss Helvetia Fund,
I-trax, Inc. (publicly traded health care services Inc. (closed- end fund)
company) (2004 - 2007); and Executive Vice (2010 - present);
President and Chief Financial Officer, Pedestal Director of Oxford
Inc. (internet-based mortgage trading company) Analytica, Inc. (2008 -
(2000 - 2002); Private consultant (1995-1997), present); and Director
Managing Director, Lehman Brothers (investment of Enterprise Community
banking firm) (1992-1995); and Executive, The World Investment, Inc.
Bank (1979-1992) (privately-held
affordable housing
finance company) (1985 -
2010)
------------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman Trustee since 2008. William Joseph Maier Professor of Political Trustee, Mellon
(71) Serves until a Economy, Harvard University (1972 - present) Institutional Funds
Trustee successor trustee Investment Trust and
is elected or Mellon Institutional
earlier retirement Funds Master Portfolio
or removal. (oversaw 17 portfolios
in fund complex) (1989-
2008)
------------------------------------------------------------------------------------------------------------------------------------
40 Pioneer Real Estate Shares | Annual Report | 12/31/15
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 Trustee since 1995. Founding Director, Vice President and Corporate None
(68) Serves until a Secretary, The Winthrop Group, Inc. (consulting
Trustee successor trustee firm) (1982 - present); Desautels Faculty of
is elected or Management, McGill University (1999 - present); and
earlier retirement Manager of Research Operations and Organizational
or removal. Learning, Xerox PARC, Xerox's advance research
center (1990-1994)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (67) Trustee since 1995. President and Chief Executive Officer, Newbury, Director of New America
Trustee Serves until a Piret & Company, Inc. (investment banking firm) High Income Fund, Inc.
successor trustee (1981 - present) (closed-end investment
is elected or company) (2004 -
earlier retirement present); and Member,
or removal. Board of Governors,
Investment Company
Institute (2000 - 2006)
------------------------------------------------------------------------------------------------------------------------------------
Fred J. Ricciardi (68) Trustee since 2014. Consultant (investment company services) (2012 - None
Trustee Serves until a present); Executive Vice President, BNY Mellon
successor trustee (financial and investment company services) (1969 -
is elected or 2012); Director, BNY International Financing Corp.
earlier retirement (financial services) (2002 - 2012); and Director,
or removal. Mellon Overseas Investment Corp. (financial
services) (2009 - 2012)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/15 41
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 (57)* Trustee since 2014. Director and Executive Vice President (since 2008) and None
Trustee Serves until a Chief Investment Officer, U.S. (since 2010) of PIM-USA;
successor trustee is Executive Vice President of Pioneer (since 2008);
elected or earlier Executive Vice President of Pioneer Institutional Asset
retirement or Management, Inc. (since 2009); and Portfolio Manager of
removal. 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.
42 Pioneer Real Estate Shares | Annual Report | 12/31/15
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 (59)** Advisory Trustee Chief Investment Officer, 1199 SEIU Funds Trustee of Pioneer
Advisory Trustee since 2014. (healthcare workers union pension funds) (2001 - closed-end investment
present); Vice President - International companies (5 portfolios)
Investments Group, American International Group, (Sept. 2015 - present)
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.
Pioneer Real Estate Shares | Annual Report | 12/31/15 43
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 (53) Since 2014. Serves Chair, Director, CEO and President of Pioneer Trustee of Pioneer
President and Chief at the discretion Investment Management-USA (since September 2014); closed-end investment
Executive Officer of the Board. Chair, Director, CEO and President of Pioneer companies (5 portfolios)
Investment Management, Inc. (since September 2014); (Sept. 2015 - present)
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 Since 2003. Serves Vice President and Associate General Counsel of None
(51) at the discretion Pioneer since January 2008; Secretary and Chief Legal
Secretary and Chief of the Board. Officer of all of the Pioneer Funds since June 2010;
Legal Officer 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 (54) Since 2010. Serves Fund Governance Director of Pioneer since December None
Assistant Secretary at the discretion 2006 and Assistant Secretary of all the Pioneer Funds
of the Board. 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 (53) Since 2010. Serves Senior Counsel of Pioneer since May 2013 and None
Assistant Secretary at the discretion Assistant Secretary of all the Pioneer Funds since
of the Board. June 2010; and Counsel of Pioneer from June 2007 to
May 2013
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (56) Since 2008. Serves Vice President - Fund Treasury of Pioneer; Treasurer None
Treasurer and Chief at the discretion of all of the Pioneer Funds since March 2008; Deputy
Financial and of the Board. Treasurer of Pioneer from March 2004 to February
Accounting Officer 2008; and Assistant Treasurer of all of the Pioneer
Funds from March 2004 to February 2008
------------------------------------------------------------------------------------------------------------------------------------
44 Pioneer Real Estate Shares | Annual Report | 12/31/15
------------------------------------------------------------------------------------------------------------------------------------
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 (50) Since 2000. Serves at Director - Fund Treasury of Pioneer; and Assistant None
Assistant Treasurer the discretion of the Treasurer of all of the Pioneer Funds
Board.
------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (57) Since 2002. Serves at Fund Accounting Manager - Fund Treasury of Pioneer; and None
Assistant Treasurer the discretion of the Assistant Treasurer of all of the Pioneer Funds
Board.
------------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (36) Since 2009. Serves at Fund Administration Manager - Fund Treasury of Pioneer None
Assistant Treasurer the discretion of the since November 2008; Assistant Treasurer of all of the
Board. 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 (63) Since 2010. Serves at Chief Compliance Officer of Pioneer and of all the None
Chief Compliance Officer the discretion of the Pioneer Funds since March 2010; Chief Compliance Officer
Board. 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 (44) Since 2006. Serves at Director - Transfer Agency Compliance of Pioneer and None
Anti-Money the discretion of the Anti-Money Laundering Officer of all the Pioneer Funds
Laundering Officer Board. since 2006
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/15 45
This page for your notes.
46 Pioneer Real Estate Shares | Annual Report | 12/31/15
This page for your notes.
Pioneer Real Estate Shares | Annual Report | 12/31/15 47
This page for your notes.
48 Pioneer Real Estate Shares | Annual Report | 12/31/15
This page for your notes.
Pioneer Real Estate Shares | Annual Report | 12/31/15 49
This page for your notes.
50 Pioneer Real Estate Shares | Annual Report | 12/31/15
This page for your notes.
Pioneer Real Estate Shares | Annual Report | 12/31/15 51
This page for your notes.
52 Pioneer Real Estate Shares | Annual Report | 12/31/15
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:
--------------------------------------------------------------------------------
Pioneer Funds
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) 2016 Pioneer Investments 18631-10-0216
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.
The audit fees for the Fund were $24,552
payable to Deloitte & Touche LLP for the year ended
December 31, 2015 and $24,292 for the year ended December 31, 2014.
(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.
There were no audit-related services in 2015 or 2014.
(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.
The tax fees for the Fund were $5,600
payable to Deloitte & Touche LLP for the year ended
December 31, 2015 and $5,600 for the year ended December 31, 2014.
(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.
There were no other fees in 2015 or 2014.
(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 2015 and 2014, 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.
The aggregate non-audit fees for the Fund were $5,600
payable to Deloitte & Touche LLP for the year ended
December 31, 2015 and $5,600 for the year ended December 31, 2014.
(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 29, 2016
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 29, 2016
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date February 29, 2016
* Print the name and title of each signing officer under his or her signature.