OMB APPROVAL
OMB Number: 3235-0570
Expires: November 30, 2005
Estimated average burden
hours per response..... 5.0
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 811-06151
Pioneer Europe Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: October 31
Date of reporting period: November 1, 2004 through April 30, 2005
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
PIONEER
-------
EUROPE
FUND
Semiannual
Report
4/30/05
[Logo]
PIONEER
Investments(R)
Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareowners 1
Portfolio Summary 2
Prices and Distributions 3
Performance Update 4
Comparing Ongoing Fund Expenses 9
Portfolio Management Discussion 11
Schedule of Investments 14
Financial Statements 20
Notes to Financial Statements 29
Factors Considered by the Independent Trustees in Approving
the Management Contract 37
Trustees, Officers and Service Providers 42
Pioneer Europe Fund
- --------------------------------------------------------------------------------
LETTER TO SHAREOWNERS 4/30/05
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
U.S. stocks moved higher early in 2005, with the Standard & Poor's 500 Stock
Index and the Dow Jones Industrial Average advancing to three-year highs in
early March. But from then on, soaring prices for heating oil and gasoline, plus
the steady ratcheting up of interest rates by the Federal Reserve Board
overwhelmed sentiment and caused stocks to retrace their gains. By the end of
April, the Dow Industrials, the S&P 500 and the tech-heavy NASDAQ composite were
in negative territory for the year.
With investors less welcoming of risk and the economy giving mixed signals,
value stocks were more resilient than growth stocks. In addition,
large-capitalization stocks held up better than small- and mid-sized issues that
might be more vulnerable in an economic "soft patch," in the phrase of Federal
Reserve Board Chairman Alan Greenspan.
Determined to prevent damaging inflation, the Fed has repeatedly raised
short-term interest rates. As a result, bond returns were modestly negative in
most sectors. Fixed-income investors also became more risk-averse; high-yield
and other corporate sectors retrenched after a run of stellar performance while
Treasuries and mortgage-backed securities showed small declines, with long-term
issues showing positive. Municipal revenue bonds trended higher even against a
backdrop of heavy new issuance by states and localities.
Higher U.S. interest rates enhanced the dollar's appeal and brought at least a
pause in its long, sharp drop. But the stronger dollar muted returns for U.S.
investors in overseas markets. Globally, economies rich in metals and other
industrial commodities continued to thrive on heavy demand from China and
elsewhere. Meanwhile, growth in Japan may have stalled, and Europe's expansion
moved ahead slowly.
We believe that the U.S. economy and corporate earnings will continue to grow at
a moderate pace. Oil prices have receded from their record highs, but high
energy costs and rising interest rates may be in the headlines for a while.
Looking beyond present concerns, Pioneer's global investment experts continue to
find stocks and bonds with attractive long-term potential for our domestic and
international funds.
Expanding your opportunities
This period was like all others; different classes of investments delivered
different returns. That's why allocating your portfolio across several
investment categories is one way to seek wider opportunities. Pioneer's
disciplined approach and growing range of products are designed to help you
achieve this important objective. For thoughtful guidance on how to align your
portfolio with your goals, contact your financial professional.
Please consider a fund's investment objective, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about each fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, contact your
financial advisor, call 1-800-225-6292 or visit our web site at
www.pioneerfunds.com.
Respectfully,
[Signature of Osbert M. Hood]
Osbert M. Hood
President
Pioneer Investment Management, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 4/30/05
- --------------------------------------------------------------------------------
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
International Common Stocks 98.1%
International Preferred Stocks 1.9%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
France 26.0%
United Kingdom 23.6%
Switzerland 15.2%
Germany 13.0%
Spain 5.9%
Netherlands 5.2%
Italy 4.1%
Sweden 2.0%
Ireland 1.8%
United States 1.3%
Finland 0.8%
Austria 0.8%
European Union 0.3%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)*
1. Vodafone Group Plc 4.78%
2. Total SA 4.11
3. Royal Bank of Scotland Group Plc 3.85
4. CS Group 3.03
5. UBS AG 2.98
6. AstraZeneca Plc 2.81
7. France Telecom SA 2.66
8. BNP Paribas SA 2.63
9. E.On AG 2.57
10. epsol SA Registered Shares 2.56
*This list excludes temporary cash and derivative instruments. The portfolio is
actively managed, and current holdings may be different.
2
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class 4/30/05 10/31/04
- ----- ------- --------
A $29.40 $27.36
B $26.77 $25.02
C $26.75 $24.97
R $29.17 $27.20
Y $30.26 $28.25
Distributions Per Share
- --------------------------------------------------------------------------------
11/1/04 - 4/30/05
-----------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ----- ------ ------------- -------------
A $0.0313 $ - $ -
B $ - $ - $ -
C $ - $ - $ -
R $0.0543 $ - $ -
Y $0.2108 $ - $ -
3
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 4/30/05 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund at public offering price, compared to
that of the Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------
Average Annual Total Returns
(As of April 30, 2005)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 7.33% 6.70%
5 Years -5.04 -6.16
1 Year 15.71 10.02
- --------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer MSCI
Europe Europe
Fund Index
4/95 9424 10000
11424 11594
4/97 13873 14024
20981 20404
4/99 19204 21557
24771 23711
4/01 17642 20540
15318 18028
4/03 12793 15293
16383 20574
4/05 19125 24340
Call 1-800-225-6292 or visit www.pioneerfunds.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.
POP returns reflect deduction of maximum 5.75% sales charge. NAV 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.
The Fund will charge a 2% redemption fee on proceeds from shares redeemed or
exchanged within 30 days of acquiring (either by purchasing or exchanging) Fund
shares. See the prospectus for complete details.
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 taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
4
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 4/30/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
- --------------------------------------------------
Average Annual Total Returns
(As of April 30, 2005)
If If
Period Held Redeemed
10 Years 6.37% 6.37%
5 Years -5.99 -5.99
1 Year 14.48 11.59
- --------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer MSCI
Europe Europe
Fund Index
4/95 10000 10000
12039 11594
4/97 14492 14024
21749 20404
4/99 19743 21557
25260 23711
4/01 17812 20540
15311 18028
4/03 12664 15293
16045 20574
4/05 18546 24340
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If redeemed" returns reflect the deduction of applicable contingent deferred
sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC
is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. "If Held" results represent the percent change in net
asset value per share. Returns would have been lower had sales charges been
reflected. Note: Shares purchased prior to December 1, 2004 remain subject to
the CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ.
The Fund will charge a 2% redemption fee on proceeds from shares redeemed or
exchanged within 30 days of acquiring (either by purchasing or exchanging) Fund
shares. See the prospectus for complete details.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
5
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 4/30/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
- --------------------------------------------------
Average Annual Total Returns
(As of April 30, 2005)
If If
Period Held Redeemed
Life-of-Class
(1/31/96) 5.46% 5.46%
5 Years -5.93 -5.93
1 Year 14.76 14.76
- --------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer MSCI
Europe Europe
Fund Index
4/95 10000 10000
10542 10378
4/97 12705 12553
19095 18264
4/99 17343 19297
22198 21225
4/01 15669 18386
13468 16138
4/03 11139 13690
14122 18416
4/05 16353 21788
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not reflect
the 1% front-end sales charge in effect prior to February 1, 2004. If you paid a
1% sales charge, your returns would be lower than those shown above. "If Held"
results represent the percent change in net asset value per share. Returns would
have been lower had sales charges been reflected. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
The Fund will charge a 2% redemption fee on proceeds from shares redeemed or
exchanged within 30 days of acquiring (either by purchasing or exchanging) Fund
shares. See the prospectus for complete details.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
6
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 4/30/05 CLASS R SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
- --------------------------------------------------
Average Annual Total Returns
(As of April 30, 2005)
If If
Period Held Redeemed
10 Years 6.88% 6.88%
5 Years -5.37 -5.37
1 Year 15.44 15.44
- --------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer MSCI
Europe Europe
Fund Index
4/95 9424 10000
12067 11594
4/97 14577 14024
21942 20404
4/99 19980 21557
25641 23711
4/01 18170 20540
15694 18028
4/03 13052 15293
16721 20574
4/05 19460 24340
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of Class R shares for the period prior to the commencement of
operations of Class R shares on 4/1/03 is based on the performance of Class A
shares, reduced to reflect the higher distribution and service fees of Class R
shares. For the period after April 1, 2003, the actual performance of Class R
shares is reflected, which performance may be influenced by the smaller asset
size of Class R shares compared to Class A shares. The performance of Class R
shares does not reflect the 1% CDSC that was in effect prior to July 1, 2004.
Class R shares are not subject to sales charges and are available for limited
groups of eligible investors, including institutional investors. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
The Fund will charge a 2% redemption fee on proceeds from shares redeemed or
exchanged within 30 days of acquiring (either by purchasing or exchanging) Fund
shares. See the prospectus for complete details.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
7
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 4/30/05 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
- --------------------------------------------------
Average Annual Total Returns
(As of April 30, 2005)
If If
Period Held Redeemed
10 Years 7.76% 7.76%
5 Years -4.47 -4.47
1 Year 16.32 16.32
- --------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer MSCI
Europe Europe
Fund Index
4/95 10000 10000
12122 11594
4/97 14721 14024
22264 20404
4/99 20445 21557
26529 23711
4/01 18968 20540
16555 18028
4/03 13936 15293
17973 20574
4/05 21110 24340
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class 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.
The Fund will charge a 2% redemption fee on proceeds from shares redeemed or
exchanged within 30 days of acquiring (either by purchasing or exchanging) Fund
shares. See the prospectus for complete details.
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.
Index comparison begins July 31, 1998. The Morgan Stanley Capital International
(MSCI) Europe Index measures the performance of stocks in European developed
markets. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in an Index.
8
Pioneer Europe Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments and
redemption fees.
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 Europe Fund
Based on actual returns from November 1, 2004 through April 30, 2005
Share Class A B C R Y
- -------------------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 11/1/04
Ending Account $1,075.70 $1,069.90 $1,071.30 $1,074.40 $1,078.50
Value On 4/30/05
Expenses Paid $ 9.06 $ 14.06 $ 13.30 $ 10.29 $ 5.98
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.76%, 2.74%,
2.59%, 2.00%, and 1.16% for Class A, Class B, Class C, Class R and Class Y
shares, respectively, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the one-half year period).
9
Pioneer Europe Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES (continued)
- --------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Europe Fund
Based on a hypothetical 5% per year return before expenses, reflecting the
period from November 1, 2004 through April 30, 2005
Share Class A B C R Y
- -------------------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 11/1/04
Ending Account $1,016.07 $1,011.21 $1,011.95 $1,014.88 $1,019.04
Value On 4/30/05
Expenses Paid $ 8.80 $ 13.66 $ 12.92 $ 9.99 $ 5.81
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.76%, 2.74%,
2.59%, 2.00%, and 1.16% for Class A, Class B, Class C, Class R and Class Y,
respectively, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period.
10
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 4/30/05
- --------------------------------------------------------------------------------
European stocks moved higher during the first half of Pioneer Europe Fund's
fiscal year, supported in large part by the positive global economic backdrop.
Stocks in the diversified financials and health care sectors were particularly
influential, which Stan Pearson, who is responsible for the day-to-day
management of the Fund, highlights in the discussion below.
Q: How did the Fund perform during the first half of its fiscal year?
A: For the six months ended April 30, 2005, the Fund's Class A shares returned
7.57% at net asset value. Favorable as those results were, they lagged the
Fund's benchmark, the Morgan Stanley Capital International (MSCI) Europe
Index, which posted a return of 9.55%, and its Lipper category of 113
European Funds, which posted an average return of 10.14% for the same
period.
Bank holdings, particularly Royal Bank of Scotland and BNP Paribas, were a
major factor in the Fund's underperformance relative to its benchmark and
its peer group. Investments in Royal Bank of Scotland, the Fund's third
largest holding on April 30, underperformed as a result of investor
concerns about a potential slowdown in consumer spending and the housing
market in the United Kingdom. A slowdown could translate into reduced
consumer demand for loans. It was also feared that slower growth could
impact consumer credit quality and force the bank to make higher provisions
for bad debts going forward. Similarly, concerns over sluggish growth in
the Euro zone negatively affected the performance of BNP Paribas (France).
We continue to hold both stocks, because we believe the companies still
offer strong growth potential and have attractive price valuations
supported by high dividend yields. In addition, Royal Bank of Scotland and
BNP Paribas are benefiting from their diversified businesses - retail,
corporate, and investment banking, which are spread across regions, thereby
creating strong capital positions and a more solid earnings mix. With its
positive cash-flow position, BNP has initiated a share buy-back program.
Call 1-800-225-6292 or visit www.pioneerfunds.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
11
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 4/30/05 (continued)
- --------------------------------------------------------------------------------
principal value will fluctuate, and shares, when redeemed, may be worth
more or less than their original cost.
Q: Which stocks contributed to the Fund's performance?
A: While some banking stocks proved disappointing during the six months ended
April 30, 2005 an overweight position and effective stock selection in the
diversified financials sector proved positive. Deutsche Boerse (Germany)
was a positive contributor. During the first quarter of 2005, the stock
recovered strongly after withdrawing its bid for the London Stock Exchange.
We sold the entire position in the company towards the end of the period to
profit from the price appreciation.
Stock selection in the health care equipment and services sector was also
positive over the six months. The pharmaceutical wholesaler Celesio
(Germany) performed very well, and we sold the position to realize profits
in December. Healthcare-equipment manufacturer Fresenius AG (Germany)
posted results that exceeded market expectations. We believe the stock is
attractively valued and offers upside potential on the back of improving
results and relatively strong growth opportunities for the sector.
Our underweight position and successful stock selection in the technology
hardware sector also were positive contributors. With the sector
underperforming the market for the six months under review, our decision to
limit the Fund's exposure proved wise. The technology sector underperformed
the market on the back of investor concerns over the sector's earnings
outlook as investment spending by companies remains subdued. We added
Ericsson (Sweden) to the portfolio, which outperformed for the six months
ended April 30, and decided against owning the French stock Alcatel, which
was favorable, since the stock lost ground for the six-month period.
Ericsson, which is undervalued in our opinion, is the top
telecommunications equipment producer for mobile phones and should benefit
with the transition from second to third generation mobile telephony in
Europe. Lastly, the Fund's energy exposure contributed at times during the
period, but was neutral overall for the six months.
Q: Did you add any new holdings to the portfolio?
A: We found several new investment opportunities. In the automobile sector, we
added Continental (Germany) based on its compelling price valuation and our
expectation that the company will increase earnings as its new car safety
system, the Electronic Stability
12
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Program penetrates the U.S. market. Synthes (Switzerland), which develops
and produces medical products for orthopedic surgery, is well positioned to
benefit from a growing market. We think Swiss Re (Switzerland), a
reinsurance company, offers an attractive growth opportunity. The outlook
for the stock is supported by our view that the reinsurance cycle appears
relatively stable at this time. We favor Telekom Austria, as the company is
creating attractive growth opportunities in Eastern Europe.
Among the Fund's holdings sold were HSBC Holding (U.K.), Fortis (Benelux)
and Assicurazioni Generali (Italy), because the stocks had reached the
price targets set by the portfolio management team.
Q: What is your outlook?
A: The European economy appears set to grow at a very modest pace, with gross
domestic product expected to be around 1.6% during 2005. However, while
unemployment remains high and inflation appears under control, the European
Central Bank is likely to keep interest rates low. The low borrowing cost
is good news, but we are not expecting to see any major acceleration in the
economic cycle during the rest of the year. The dividend yield in the
European equity market is high at around 3.0%, offering valuation support,
even if growth is low.
We believe European markets will continue to move in a positive direction
and will be characterized by steady but modest returns. Stock price
valuations are quite reasonable, particularly in comparison to the low
interest rate environment and the lower return available from government
bonds. Our primary focus will remain on stocks that we consider to be
attractive in terms of valuation and risk.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
The portfolio may invest a substantial amount of its assets in issuers located
in a limited number of countries and therefore is more susceptible to adverse
economic, political, or regulatory developments affecting those countries. These
risks may increase share price volatility.
13
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/05 (unaudited)
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 1.9%
Automobiles & Components - 0.9%
Automobile Manufacturers - 0.9%
2,513 Porsche AG Designs $ 1,625,421
------------
Total Automobiles & Components $ 1,625,421
------------
Health Care Equipment & Services - 1.0%
Health Care Equipment - 1.0%
15,387 Fresenius AG* $ 1,788,631
------------
Total Health Care Equipment & Services $ 1,788,631
------------
TOTAL PREFERRED STOCK
(Cost $2,163,236) $ 3,414,052
------------
COMMON STOCK - 97.8%
Energy - 10.9%
Integrated Oil & Gas - 4.3%
304,647 BP Amoco Plc $ 3,101,000
181,630 Eni S.p.A. 4,553,949
------------
$ 7,654,949
------------
Oil & Gas Refining & Marketing - 6.6%
179,633 Repsol SA (Registered Shares) $ 4,562,645
33,035 Total SA 7,326,342
------------
$ 11,888,987
------------
Total Energy $ 19,543,936
------------
Materials - 10.2%
Commodity Chemicals - 2.0%
54,474 BASF India, Ltd.* $ 3,523,714
------------
Construction Materials - 6.8%
126,362 CRH Plc $ 3,133,063
38,281 Holcim, Ltd. 2,325,083
106,033 Italcementi S.p.A. 1,724,089
36,575 Lafarge SA 3,324,024
11,743 Vinci SA 1,763,162
------------
$ 12,269,421
------------
Diversified Metals & Mining - 1.4%
80,856 Rio Tinto Plc $ 2,436,759
------------
Total Materials $ 18,229,894
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Capital Goods - 5.5%
Construction & Engineering - 3.5%
70,746 ACS, Actividades de Construccion y Servicios SA $ 1,724,467
64,255 Compagnie de Saint Gobain 3,623,408
5,330 Technip 902,975
------------
$ 6,250,850
------------
Electrical Component & Equipment - 1.1%
26,902 Schneider Electric SA $ 1,935,618
------------
Industrial Machinery - 0.9%
38,752 SKF AB* $ 1,633,478
------------
Total Capital Goods $ 9,819,946
------------
Commercial Services & Supplies - 1.1%
Diversified Commercial Services - 1.1%
71,368 TNT Post Group NV $ 1,939,822
------------
Total Commercial Services & Supplies $ 1,939,822
------------
Automobiles & Components - 3.1%
Auto Parts & Equipment - 3.1%
41,452 Continental AG* $ 3,051,830
42,466 Compagnie Generale des Etablissements Michelin 2,570,446
------------
Total Automobiles & Components $ 5,622,276
------------
Consumer Durables & Apparel - 1.5%
Apparel, Accessories & Luxury Goods - 1.5%
17,665 Adidas-Salomon AG $ 2,736,168
------------
Total Consumer Durables & Apparel $ 2,736,168
------------
Consumer Services - 1.0%
Restaurants - 1.0%
408,290 Compass Group Plc $ 1,823,380
------------
Total Consumer Services $ 1,823,380
------------
Media - 1.6%
Advertising - 0.6%
36,113 Publicis SA $ 1,032,748
------------
Publishing - 1.0%
64,225 Elsevier NV $ 923,801
28,434 Vivendi Universal* 844,198
------------
$ 1,767,999
------------
Total Media $ 2,800,747
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Retailing - 2.4%
Computer & Electronics Retail - 0.5%
313,173 Dixons Group Plc $ 850,789
------------
Distributors - 1.1%
228,920 Buhrmann NV* $ 2,039,392
------------
Specialty Stores - 0.8%
318,207 HMV Group Plc $ 1,378,556
------------
Total Retailing $ 4,268,737
------------
Food & Drug Retailing - 1.9%
Food Retail - 1.9%
12,874 Nestle SA (Registered Shares)* $ 3,378,183
------------
Total Food & Drug Retailing $ 3,378,183
------------
Food, Beverage & Tobacco - 1.0%
Tobacco - 1.0%
92,545 British American Tobacco Plc $ 1,728,265
------------
Total Food, Beverage & Tobacco $ 1,728,265
------------
Health Care Equipment & Services - 1.3%
Health Care Equipment - 1.3%
20,951 Synthes, Inc. $ 2,374,095
------------
Total Health Care Equipment & Services $ 2,374,095
------------
Pharmaceuticals & Biotechnology - 9.4%
Pharmaceuticals - 9.4%
18,842 Actelion, Ltd.* $ 2,014,165
114,562 AstraZeneca Plc 5,015,335
125,088 GlaxoSmithKline Plc 3,153,485
18,941 Roche Holdings AG 2,289,750
14,238 Sanofi-Aventis 1,259,951
21,115 Schering AG 1,392,866
166,180 Shire Pharmaceuticals Group Plc* 1,722,100
------------
$ 16,847,652
------------
Total Pharmaceuticals & Biotechnology $ 16,847,652
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Banks - 11.0%
Diversified Banks - 11.0%
410,769 Barclays Plc $ 4,212,040
115,949 Banco Bilbao Vizcaya Argentaria SA 1,794,933
71,183 BNP Paribas SA 4,687,393
80,791 Credit Agricole SA 2,090,429
228,156 Royal Bank of Scotland Group Plc 6,870,129
------------
Total Banks $ 19,654,924
------------
Diversified Financials - 11.1%
Asset Management & Custody Banks - 0.4%
32,000 Man Group Plc $ 743,978
------------
Diversified Capital Markets - 6.0%
128,350 CS Group* $ 5,398,840
66,457 UBS AG* 5,324,355
------------
$ 10,723,195
------------
Other Diversified Financial Services - 4.7%
63,784 ING Groep NV $ 1,747,708
43,732 Societe Generale AG 4,357,105
34,426 Swiss Re 2,281,000
------------
$ 8,385,813
------------
Total Diversified Financials $ 19,852,986
------------
Insurance - 4.3%
Multi-Line Insurance - 3.8%
145,264 AXA $ 3,578,689
18,767 Zurich Financial Services* 3,167,529
------------
$ 6,746,218
------------
Reinsurance - 0.5%
23,244 Hannover Rueckversicheru $ 866,353
------------
Total Insurance $ 7,612,571
------------
Software & Services - 1.2%
IT Consulting & Other Services - 1.2%
36,815 Atos Origin* $ 2,213,894
------------
Total Software & Services $ 2,213,894
------------
Technology Hardware & Equipment - 5.4%
Semiconductors - 1.5%
106,809 Philips Electronics NV $ 2,662,463
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Communications Equipment - 1.9%
661,714 Ericsson LM Tel Sur (Class B)* $ 1,962,012
93,277 Nokia Oyj 1,479,974
------------
$ 3,441,986
------------
Electronic Equipment & Instruments - 2.0%
49,228 Siemens $ 3,606,280
------------
Total Technology Hardware & Equipment $ 9,710,729
------------
Telecommunication Services - 10.1%
Integrated Telecommunication Services - 5.3%
162,104 France Telecom SA $ 4,742,166
145,271 Telefonica SA 2,468,683
74,764 Telekom Austria AG* 1,435,881
269,491 Telecom Italia S.p.A. 909,968
------------
$ 9,556,698
------------
Wireless Telecommunication Services - 4.8%
3,273,551 Vodafone Group Plc $ 8,522,801
------------
Total Telecommunication Services $ 18,079,499
------------
Utilities - 3.8%
Electric Utilities - 2.6%
54,471 E.On AG* $ 4,588,238
------------
Gas Utilities - 1.2%
511,131 Centrica Plc* $ 2,163,396
------------
Total Utilities $ 6,751,634
------------
TOTAL COMMON STOCK
(Cost $142,545,360) $174,989,338
------------
TOTAL INVESTMENT IN SECURITIES - 99.7%
(Cost $144,708,596) (a) (b) $178,403,390
------------
OTHER ASSETS AND LIABILITIES - 0.3% $ 594,115
------------
TOTAL NET ASSETS - 100.0% $178,997,505
============
18 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Non-income producing security
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings (excluding temporary cash investments) is as follows:
France 26.0%
United Kingdom 23.6
Switzerland 15.2
Germany 13.0
Spain 5.9
Netherlands 5.2
Italy 4.1
Sweden 2.0
Ireland 1.8
United States 1.3
Finland 0.8
Austria 0.8
European Union 0.3
-----
Total 100.0%
=====
(b) At April 30, 2005, the net unrealized gain on investments based on cost for
federal income tax purposes of $146,760,414 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $37,370,403
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (5,727,427)
-----------
Net unrealized gain $31,642,976
===========
Purchases and sales of securities (excluding temporary cash investments) for the
year ended April 30, 2005 aggregated $57,950,060 and $69,883,788 respectively.
The accompanying notes are an integral part of these financial statements. 19
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 4/30/05 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (cost $144,708,596) $178,403,390
Foreign currencies, at value (cost $529,644) 526,370
Receivables -
Investment securities sold 5,798,096
Fund shares sold 45,693
Dividends, interest and foreign taxes withheld 1,046,305
Other 5,787
------------
Total assets $185,825,641
------------
LIABILITIES:
Payables -
Investment securities purchased $ 1,351,545
Fund shares repurchased 1,599,537
Forward foreign currency settlement contracts, net 6,658
Due to bank 3,432,631
Due to affiliates 375,274
Accrued expenses 62,491
------------
Total liabilities $ 6,828,136
------------
NET ASSETS:
Paid-in capital $187,674,508
Accumulated net investment income 395,981
Accumulated net realized loss on investments and
foreign currency transactions (42,762,610)
Net unrealized gain on investments 33,694,794
Net unrealized loss on forward foreign currency contracts
and other assets and liabilities denominated in foreign
currencies (5,168)
------------
Total net assets $178,997,505
------------
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $122,980,207/4,183,340 shares) $ 29.40
============
Class B (based on $41,631,284/1,554,953 shares) $ 26.77
============
Class C (based on $12,047,578/450,459 shares) $ 26.75
============
Class R (based on $46,290/1,587 shares) $ 29.17
============
Class Y (based on $2,292,146/75,740 shares) $ 30.26
============
MAXIMUM OFFERING PRICE:
Class A ($29.40 [divided by] 94.25%) $ 31.19
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/05
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $331,192) $ 2,328,378
Interest 8,312
-----------
Total investment income $ 2,336,690
-----------
EXPENSES:
Management fees $ 948,739
Transfer agent fees and expenses
Class A 231,362
Class B 138,079
Class C 29,423
Class R 78
Class Y 146
Distribution fees
Class A 157,327
Class B 231,954
Class C 66,473
Class R 112
Administrative reimbursements 18,033
Custodian fees 34,809
Registration fees 48,551
Professional fees 6,476
Printing expense 17,435
Fees and expenses of nonaffiliated trustees 3,192
Miscellaneous 14,488
-----------
Total expenses $ 1,946,677
Less fees paid indirectly (5,259)
-----------
Net expenses $ 1,941,418
-----------
Net investment income $ 395,272
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $17,534,140
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (229,265) $17,304,875
----------- -----------
Change in net unrealized loss on:
Investments $(4,352,809)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (27,841) $(4,380,650)
----------- -----------
Net gain on investments and foreign currency
transactions $12,924,225
-----------
Net increase in net assets resulting from operations $13,319,497
===========
The accompanying notes are an integral part of these financial statements. 21
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/05 and the Year Ended 10/31/04
Six Months
Ended Year
4/30/05 Ended
(unaudited) 10/31/04
FROM OPERATIONS:
Net investment income $ 395,272 $ 375,824
Net realized gain on investments and foreign currency
transactions 17,304,875 12,503,468
Change in net unrealized gain (loss) on investments
and foreign currency transactions (4,380,650) 20,737,672
------------ ------------
Net increase in net assets resulting from
operations $ 13,319,497 $ 33,616,964
------------ ------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.03 and $0.09 per share, respectively) $ (135,185) $ (450,346)
Class R ($0.05 and $0.20 per share, respectively) (77) (6)
Class Y ($0.21 and $0.27 per share, respectively) (16,139) (22,571)
------------ ------------
Total distributions to shareowners $ (151,401) $ (472,923)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 18,301,638 $ 27,110,624
Reinvestment of distributions 132,279 436,182
Cost of shares repurchased (30,622,684) (55,162,643)
------------ ------------
Net decrease in net assets resulting from fund
share transactions $(12,188,767) $(27,615,837)
------------ ------------
Net increase in net assets $ 979,329 $ 5,528,204
------------ ------------
NET ASSETS:
Beginning of period $178,018,176 $172,489,972
------------ ------------
End of period (including undistributed net investment
income of $395,981 and $152,110, respectively) $178,997,505 $178,018,176
============ ============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
'05 Shares '05 Amount
(unaudited) (unaudited) '04 Shares '04 Amount
CLASS A
Shares sold 379,786 $ 11,330,150 699,433 $ 17,712,093
Reinvestment of distributions 4,225 125,910 16,745 416,120
Less shares repurchased (558,387) (16,585,710) (1,307,766) (33,004,089)
-------- ------------ ---------- ------------
Net decrease (174,376) $ (5,129,650) (591,588) $(14,875,876)
======== ============ ========== ============
CLASS B
Shares sold 145,795 $ 3,940,867 191,971 $ 4,554,640
Less shares repurchased (370,371) (10,074,389) (636,150) (14,942,100)
-------- ------------ ---------- ------------
Net decrease (224,576) $ (6,133,522) (444,179) $(10,387,460)
======== ============ ========== ============
CLASS C
Shares sold 106,028 $ 2,873,663 198,957 $ 4,627,926
Less shares repurchased (137,127) (3,713,128) (284,998) (6,650,160)
-------- ------------ ---------- ------------
Net decrease (31,099) $ (839,465) (86,041) $ (2,022,234)
======== ============ ========== ============
CLASS R
Shares sold 272 $ 8,010 1,403 $ 35,823
Less shares repurchased (70) (2,142) (46) (1,158)
-------- ------------ ---------- ------------
Net increase 202 $ 5,868 1,357 $ 34,665
======== ============ ========== ============
CLASS Y
Shares sold 4,799 $ 148,948 6,816 $ 180,142
Reinvestment of distributions 208 6,369 786 20,062
Less shares repurchased (8,060) (247,315) (21,544) (565,136)
-------- ------------ ---------- ------------
Net decrease (3,053) $ (91,998) (13,942) $ (364,932)
======== ============ ========== ============
The accompanying notes are an integral part of these financial statements. 23
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/2005 Year Ended Year Ended
CLASS A (unaudited) 10/31/04 10/31/03
Net asset value, beginning of period $ 27.36 $ 22.66 $ 19.40
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.11 $ 0.14 $ 0.17
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.96 4.65 3.09
-------- -------- --------
Net increase (decrease) from investment operations $ 2.07 $ 4.79 $ 3.26
Distributions to shareowners:
Net investment income (0.03) (0.09) -
Net realized gain - - -
-------- -------- --------
Net increase (decrease) in net asset value $ 2.04 $ 4.70 $ 3.26
-------- -------- --------
Net asset value, end of period $ 29.40 $ 27.36 $ 22.66
======== ======== ========
Total return* 7.57% 21.19% 16.80%
Ratio of net expenses to average net assets+ 1.76%** 1.83% 1.98%
Ratio of net investment income (loss) to average net assets+ 0.72%** 0.52% 0.76%
Portfolio turnover rate 62%** 47% 53%
Net assets, end of period (in thousands) $122,980 $119,216 $112,160
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.76%** 1.83% 1.98%
Net investment income (loss) 0.72%** 0.52% 0.76%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 1.76%** 1.83% 1.98%
Net investment income (loss) 0.72%** 0.52% 0.76%
Year Ended Year Ended Year Ended
CLASS A 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 22.85 $ 32.75 $ 31.71
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.06 $ 0.07 $ (0.15)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (3.51) (9.97) 2.30
-------- -------- --------
Net increase (decrease) from investment operations $ (3.45) $ (9.90) $ 2.15
Distributions to shareowners:
Net investment income - - (0.00)(a)
Net realized gain - - (1.11)
-------- -------- --------
Net increase (decrease) in net asset value $ (3.45) $ (9.90) $ 1.04
-------- -------- --------
Net asset value, end of period $ 19.40 $ 22.85 $ 32.75
======== ======== ========
Total return* (15.10)% (30.23)% 6.83%
Ratio of net expenses to average net assets+ 1.89% 1.76% 1.54%
Ratio of net investment income (loss) to average net assets+ 0.14% (0.07)% (0.39)%
Portfolio turnover rate 38% 116% 46%
Net assets, end of period (in thousands) $116,051 $167,568 $314,781
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.89% 1.76% 1.54%
Net investment income (loss) 0.14% (0.07)% (0.39)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 1.89% 1.74% 1.52%
Net investment income (loss) 0.14% (0.05)% (0.37)%
(a) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
24
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/2005 Year Ended
CLASS B (unaudited) 10/31/04
Net asset value, beginning of period $ 25.02 $ 20.85
------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.04) $ (0.11)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.79 4.28
------- -------
Net increase (decrease) from investment operations $ 1.75 $ 4.17
Distributions to shareowners:
Net realized gain - -
------- -------
Net increase (decrease) in net asset value $ 1.75 $ 4.17
------- -------
Net asset value, end of period $ 26.77 $ 25.02
======= =======
Total return* 6.99% 20.00%
Ratio of net expenses to average net assets+ 2.75%** 2.82%
Ratio of net investment loss to average net assets+ (0.32)%** (0.47)%
Portfolio turnover rate 62%** 47%
Net assets, end of period (in thousands) $41,631 $44,515
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.75%** 2.82%
Net investment loss (0.32)%** (0.47)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 2.74%** 2.82%
Net investment loss (0.31)%** (0.47)%
Year Ended Year Ended Year Ended Year Ended
CLASS B 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 18.04 $ 21.45 $ 31.06 $ 30.38
------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment loss $ (0.06) $ (0.40) $ (0.38) $ (0.40)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 2.87 (3.01) (9.23) 2.19
------- ------- ------- --------
Net increase (decrease) from investment operations $ 2.81 $ (3.41) $ (9.61) $ 1.79
Distributions to shareowners:
Net realized gain - - - (1.11)
------- ------- ------- --------
Net increase (decrease) in net asset value $ 2.81 $ (3.41) $ (9.61) $ 0.68
------- ------- ------- --------
Net asset value, end of period $ 20.85 $ 18.04 $ 21.45 $ 31.06
======= ======= ======= ========
Total return* 15.58% (15.90)% (30.94)% 5.90%
Ratio of net expenses to average net assets+ 3.02% 2.81% 2.64% 2.37%
Ratio of net investment loss to average net assets+ (0.31)% (0.78)% (0.94)% (1.21)%
Portfolio turnover rate 53% 38% 116% 46%
Net assets, end of period (in thousands) $46,358 $52,009 $83,075 $150,436
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 3.02% 2.81% 2.64% 2.37%
Net investment loss (0.31)% (0.78)% (0.94)% (1.21)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 3.01% 2.81% 2.63% 2.36%
Net investment loss (0.30)% (0.78)% (0.93)% (1.20)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
25
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/2005 Year Ended
CLASS C (unaudited) 10/31/04
Net asset value, beginning of period $ 24.97 $ 20.79
------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.01) $ (0.10)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.79 4.28
------- -------
Net increase (decrease) from investment operations $ 1.78 $ 4.18
Distributions to shareowners:
Net realized gain - -
------- -------
Net increase (decrease) in net asset value $ 1.78 $ 4.18
------- -------
Net asset value, end of period $ 26.75 $ 24.97
======= =======
Total return* 7.13% 20.11%
Ratio of net expenses to average net assets+ 2.59%** 2.77%
Ratio of net investment loss to average net assets+ (0.11)%** (0.44)%
Portfolio turnover rate 62%** 47%
Net assets, end of period (in thousands) $12,048 $12,023
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.59%** 2.77%
Net investment loss (0.11)%** (0.44)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 2.59%** 2.76%
Net investment loss (0.11)%** (0.43)%
Year Ended Year Ended Year Ended Year Ended
CLASS C 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 17.98 $ 21.39 $ 30.95 $ 30.27
------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.05) $ (0.45) $ (0.44) $ (0.39)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 2.86 (2.96) (9.12) 2.18
------- ------- ------- -------
Net increase (decrease) from investment operations $ 2.81 $ (3.41) $ (9.56) $ 1.79
Distributions to shareowners:
Net realized gain - - - (1.11)
------- ------- ------- -------
Net increase (decrease) in net asset value $ 2.81 $ (3.41) $ (9.56) $ 0.68
------- ------- ------- -------
Net asset value, end of period $ 20.79 $ 17.98 $ 21.39 $ 30.95
======= ======= ======= =======
Total return* 15.63% (15.94)% (30.89)% 5.93%
Ratio of net expenses to average net assets+ 2.97% 2.82% 2.60% 2.34%
Ratio of net investment loss to average net assets+ (0.24)% (0.80)% (0.93)% (1.19)%
Portfolio turnover rate 53% 38% 116% 46%
Net assets, end of period (in thousands) $11,801 $12,391 $21,503 $46,544
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.97% 2.82% 2.60% 2.34%
Net investment loss (0.24)% (0.80)% (0.93)% (1.19)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 2.96% 2.82% 2.58% 2.33%
Net investment loss (0.23)% (0.80)% (0.91)% (1.18)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
26
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/05 Year Ended 4/1/03 (a) to
CLASS R (unaudited) 10/31/04 10/31/03
Net asset value, beginning of period $27.20 $22.67 $17.92
------ ------ ------
Increase from investment operations:
Net investment income $ 0.08 $ 0.18 $ 0.18
Net realized and unrealized gain on investments
and foreign currency transactions 1.94 4.55 4.57
------ ------ ------
Net increase from investment operations $ 2.02 $ 4.73 $ 4.75
Distributions to shareowners:
Net investment income (0.05) (0.20) -
------ ------ ------
Net increase in net asset value $ 1.97 $ 4.53 $ 4.75
------ ------ ------
Net asset value, end of period $29.17 $27.20 $22.67
====== ====== ======
Total return* 7.44% 20.95% 26.51%
Ratio of net expenses to average net assets+ 2.00%** 2.13% 1.75%**
Ratio of net investment income to average
net assets+ 0.53%** 0.31% 1.46%**
Portfolio turnover rate 62%** 47% 53%
Net assets, end of period (in thousands) $ 46 $ 38 $ 1
Ratios with waiver of management fees by
PIM and reduction for fees paid indirectly:
Net expenses 2.00%** 2.13% 1.75%**
Net investment income 0.53%** 0.31% 1.46%**
(a) Class R shares were first publicly offered on April 1, 2003.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 27
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
4/30/2005 Year Ended Year Ended
CLASS Y (unaudited) 10/31/04 10/31/03
Net asset value, beginning of period $28.25 $23.40 $19.88
------ ------ ------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.20 $ 0.32 $ 0.33
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 2.02 4.80 3.19
------ ------ ------
Net increase (decrease) from investment operations $ 2.22 $ 5.12 $ 3.52
Distributions to shareowners:
Net investment income (0.21) (0.27) -
Net realized gain - - -
------ ------ ------
Net increase (decrease) in net asset value $ 2.01 $ 4.85 $ 3.52
------ ------ ------
Net asset value, end of period $30.26 $28.25 $23.40
====== ====== ======
Total return* 7.85% 22.02% 17.71%
Ratio of net expenses to average net assets+ 1.16%** 1.16% 1.20%
Ratio of net investment income (loss) to average net assets+ 1.31%** 1.16% 1.52%
Portfolio turnover rate 62%** 47% 53%
Net assets, end of period (in thousands) $2,292 $2,226 $2,170
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.16%** 1.16% 1.20%
Net investment income (loss) 1.31%** 1.16% 1.52%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 1.16%** 1.16% 1.20%
Net investment income 1.31%** 1.16% 1.52%
Year Ended Year Ended Year Ended
CLASS Y 10/31/02 10/31/01 10/31/00 (a)
Net asset value, beginning of period $ 23.26 $ 33.19 $31.97
------- ------- ------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.11 $ (0.25) $ -
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (3.49) (9.68) 2.33
------- ------- ------
Net increase (decrease) from investment operations $ (3.38) $ (9.93) $ 2.33
Distributions to shareowners:
Net investment income - - (0.00)(b)
Net realized gain - - (1.11)
------- ------- ------
Net increase (decrease) in net asset value $ (3.38) $ (9.93) $ 1.22
------- ------- ------
Net asset value, end of period $ 19.88 $ 23.26 $33.19
======= ======= ======
Total return* (14.53)% (29.92)% 7.35%
Ratio of net expenses to average net assets+ 1.19% 1.20% 1.08%
Ratio of net investment income (loss) to average net assets+ 0.87% 0.53% (0.01)%
Portfolio turnover rate 38% 116% 46%
Net assets, end of period (in thousands) $ 2,164 $ 1,834 $2,953
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.19% 1.20% 1.08%
Net investment income (loss) 0.87% 0.53% (0.01)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 1.16% 1.19% 1.07%
Net investment income 0.90% 0.54% 0.00%
(a) The per share data presented above is based upon the average shares
outstanding for the year presented.
(b) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
28
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/05 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Europe Fund (the Fund) is a Massachusetts business 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.
The Fund offers five classes of shares - Class A, Class B, Class C, Class R and
Class Y shares. Each class of shares represents an interest in the same
portfolio of investments of the Fund and has equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B, Class C and Class R shareowners, respectively. There is no distribution
plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
income, expenses and gains and losses on investments during the reporting year.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements, which are consistent with those policies generally
accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value of
the Fund is computed once daily, on each day the New York Stock Exchange
(NYSE) is open, as of the close of regular trading on the NYSE. In
computing the net asset value, securities are valued using the last sale
price on the principal exchange where they are traded. Securities that have
not traded on the date of valuation, or securities for which sale prices
are not generally reported, are valued using the mean between the last bid
and asked prices. Securities for which market quotations are not readily
available are valued at their fair values as determined by, or under the
direction of, the Board of Trustees. The Fund invests primarily in
securities of non-U.S. issuers. The principal exchanges and
29
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
markets for such securities have closing times prior to the close of the
NYSE. However, the value of these securities may be influenced by changes
in global markets occurring after the closing times of the local exchanges
and markets up to the time the Fund determines its net asset value.
Consequently, the Board of Trustees of the Fund has determined that the use
of daily fair valuations as provided by a pricing service is appropriate
for the Fund. The Fund may also take into consideration other significant
events in determining the fair value of these securities. Thus, the Fund's
securities valuations may differ from prices reported by the various local
exchanges and markets. Temporary cash investments are valued at amortized
cost.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Fund becomes aware of the ex-dividend
data in the exercise of reasonable diligence. Interest income is recorded
on the accrual basis. Dividend and interest income are reported net of
unrecoverable foreign taxes withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollars actually received. Further,
the effects of changes in foreign currency exchange rates on investments
are not segregated in the statement of operations from the effects of
changes in market price of those securities but are included with the net
realized and unrealized gain or loss on investments.
30
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the
time a portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to meet
the terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar.
At April 30, 2005, the Fund had no outstanding portfolio hedges. The Fund's
gross forward currency settlement hedges receivable and payable were
$957,791 and $964,449, respectively, resulting in a net payable of $6,658.
D. Futures Contracts
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices and currency rates or to seek to increase
total return. Upon entering into a futures contract, the Fund is required
to deposit with a broker an amount of cash or securities equal to the
minimum "initial margin" requirements of the associated futures exchange.
Subsequent payments for futures contracts ("variation margin") are paid or
received by the Fund, depending on the daily fluctuation in the value of
the contracts, and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund realizes a gain or loss equal to the
difference between the opening and closing value of the contract. The use
of futures contracts involves, to varying degrees, elements of market and
counterparty risks which may exceed the amounts recognized by the Fund.
Changes in value of the contracts may not directly correlate to the changes
in value of the underlying securities. These risks may decrease the
effectiveness of the Fund's hedging strategies and potentially result in a
loss. As of April 30, 2005, the Fund had no open futures contracts.
31
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the Fund's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain on investment transactions,
or from paid-in capital, depending on the type of book/tax differences that
may exist.
At October 31, 2004, the Fund had a net capital loss carryforward of
$58,015,667, of which the following amounts will expire between 2009 and
2011 if not utilized: $20,588,660 in 2009, $23,790,437 in 2010 and
$13,636,570 in 2011.
There were no distributions paid during the fiscal year ended October 31,
2003. The tax character of distributions paid during the year ended October
31, 2004 was as follows:
- ---------------------------------------------
2004
- ---------------------------------------------
Distributions paid from:
Ordinary Income $472,923
Long-term capital gain -
--------
Total $472,923
========
- ---------------------------------------------
32
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following shows the components of accumulated undistributed profits and
losses on a federal income tax basis at October 31, 2004:
- -------------------------------------------------------
2004
- -------------------------------------------------------
Undistributed ordinary income $ 151,276
Capital loss carryforward (58,015,667)
Unrealized appreciation 36,019,292
------------
Total $(21,845,099)
============
- -------------------------------------------------------
The difference between book basis and tax-basis unrealized appreciation is
attributable to the tax deferral of losses on wash sales and the mark to
market of forward currency contracts.
F. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano), earned $9,286 in underwriting commissions on the
sale of Class A shares during the six months ended April 30, 2005.
G. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B, Class C and Class R shares of the Fund,
respectively (see Note 4). Class Y shares are not subject to a distribution
plan. Shareowners of each class share all expenses and fees paid to the
transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expenses (see Note 3). Income, common expenses and realized and unrealized
gains and losses are calculated at the Fund level and allocated daily to
each class of shares based on the respective percentage of adjusted net
assets at the beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time and in the same amount,
except that Class A, Class B, Class C,
33
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
Class R and Class Y shares can bear different transfer agent and
distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary of
UniCredito Italiano, manages the Fund's portfolio. Management fees are
calculated daily at the annual rate of 1.00% of the Fund's average daily net
assets up to $300 million; 0.85% of the next $200 million; and 0.75% of the
excess over $500 million.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At April 30, 2005, $164,939 was payable to PIM
related to management fees, administrative costs and certain other services and
is included in due to affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due to affiliates is $135,412 in transfer agent
fees payable to PIMSS at April 30, 2005.
4. Distribution and Service Plans
The Fund adopted Plans of Distribution with respect to Class A, Class B, Class
C, and Class R shares (Class A Plan, Class B Plan, Class C Plan and Class R
Plan) in accordance with Rule 12b-1 of the Investment Company Act of 1940.
Pursuant to the Class A Plan, the Fund pays PFD a service fee of up to 0.25% of
the average daily net assets attributable to Class A shares in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class C
shares. Pursuant to the Class R Plan, the Fund pays PFD 0.50% of the average
daily net assets attributable to Class R shares for distribution services.
Included in due to affiliates is $74,923 in distribution fees payable to PFD at
April 30, 2005. The Fund also has adopted a separate service plan for Class R
34
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
shares (Service Plan). The Service Plan authorizes the Fund to pay securities
dealers, plan administrators or other service organizations that agree to
provide certain services to retirement plans or plan participants holding shares
of the Fund a service fee of up to 0.25% of the Fund's average daily net assets
attributable to Class R shares held by such plans.
In addition, redemptions of each class of shares (except Class Y shares) may be
subject to a contingent deferred sales charge (CDSC). Effective February 1,
2004, a CDSC of 1.00% may be imposed on redemptions of certain net asset value
purchases of Class A shares within 18 months of purchase (12 months for shares
purchased prior to February 1, 2004). Class B shares subscribed on or after
December 1, 2004 that are redeemed within five years of purchase are subject to
a CDSC at declining rates beginning at 4.00%, based on the lower of cost or
market value of shares being redeemed. Redemptions of Class C shares within one
year of purchase are subject to a CDSC of 1.00%. Redemptions of Class R shares
within 18 months of purchase were subject to a CDSC of 1.00%. Effective July 1,
2004, the CDSC on Class R shares was eliminated. Proceeds from the CDSCs are
paid to PFD. For the six months ended April 30, 2005, CDSCs in the amount of
$24,154 were paid to PFD.
The Fund charges a 2.0% redemption fee on shares sold within 30 days of
purchase. For Class A, R and Y shares this fee became effective November 1,
2003, while for Class B and C shares, this fee became effective July 1, 2004.
The fee does not apply to certain types of transactions as described in the
Fund's prospectus. For the six months ended April 30, 2005, the Fund collected
$8,936 in redemption fees, which are included in the Fund's capital account.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses, due to interest earned on
cash held by PIMSS. For the six months ended April 30, 2005, the Fund's expenses
were reduced by $5,259 under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other Funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured revolving
line of credit facility. Borrowings are used solely
35
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
for temporary or emergency purposes. The Fund may borrow up to the lesser of $50
million or the limits set by its prospectus for borrowings. Interest on
collective borrowings is payable at the Federal Funds Rate plus 1/2% on an
annualized basis. The Funds pay an annual commitment fee for this facility. The
commitment fee is allocated among such Funds based on their respective borrowing
limits. For the six months ended April 30, 2005, the Fund had no borrowings
under this agreement.
7. Additional Information
The Fund's Board of Trustees have approved the merger of the Pioneer Europe
Select Fund into the Fund. The plans include renaming the merged entity the
Pioneer Europe Select Equity Fund. This transaction is subject to the approval
of the shareholders of the Pioneer Europe Select Fund in 2005. There can be no
assurance that this transaction will be completed.
36
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN APPROVING THE MANAGEMENT
CONTRACT
- --------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees") vote
separately annually to approve the Fund's management contract (the "Management
Contract"). The Trustees have determined that the terms of the Management
Contract are fair and reasonable and that renewal of the contract will enable
the Fund to receive quality investment advisory services at a cost deemed
reasonable and is in the best interests of the Fund and its shareholders. In
making such determinations, the Independent Trustees relied upon the assistance
of counsel to the Independent Trustees and counsel to the Fund.
Throughout the year, the Independent Trustees regularly met in executive session
separately from the Interested Trustees of the Fund and any officer of Pioneer
Investment Management, Inc., the Fund's adviser (the "Investment Adviser"), or
its affiliates. While the Trustees, including the Independent Trustees, act on
all major matters relating to the Fund, a significant portion of the activities
of the Board of Trustees (including certain of those described herein) is
conducted through committees, the members of which are comprised exclusively of
Independent Trustees. Such committee meetings are attended by officers of the
Fund or the Investment Adviser to the extent requested by the members of the
committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract, and relied
upon their knowledge, resulting from their meetings throughout the year, of the
Investment Adviser, its services and the Fund. Both in meetings specifically
dedicated to renewal of the Management Contract and at other meetings during the
course of the year, the Trustees, including the Independent Trustees, received
materials relating to the Investment Adviser's investment and management
services under the Management Contract. These materials included (i) information
on the investment performance of the Fund, a peer group of funds and two
indices, in each case selected by the Independent Trustees for this purpose,
(ii) sales and redemption data in respect to the Fund, (iii) the general
investment outlook in the markets in which the Fund invests, (iv) arrangements
in respect of the distribution of the Fund's shares, (v) the procedures employed
to determine the value of each of the Fund's assets, (vi) the Investment
Adviser's management of the relationships with the Fund's unaffiliated service
providers, (vii) the record of compliance with the Fund's investment policies
and restrictions and with the Fund's Code
37
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN APPROVING THE MANAGEMENT
CONTRACT (continued)
- --------------------------------------------------------------------------------
of Ethics and the structure and responsibilities of the Investment Adviser's
compliance department, (viii) the nature, cost and character of non-investment
management services provided by the Investment Adviser and its affiliates and
(ix) the disclosures included in the Fund's prospectuses and reports to
shareholders.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested and the Investment
Adviser provided additional information in order to evaluate the quality of the
Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one, three and five-year periods
ended June 30, 2004 for the Fund and a peer group selected by the Independent
Trustees for this purpose, (2) management fees incurred by a peer group of funds
selected by the Independent Trustees for this purpose, (3) the advisory fees of
comparable portfolios of other clients of the Investment Adviser, (4) expense
ratios for the Fund and a peer group of funds selected by the Independent
Trustees for this purpose, (5) the overall organization of the Investment
Adviser, (6) the Investment Adviser's financial results and condition, including
its and certain of its affiliates profitability from services performed for the
Fund, (7) transfer agency fees and administrative reimbursements paid to the
Investment Adviser or affiliates, (8) investment management staffing, and (9)
operating expenses paid to third parties. The Trustees also reviewed information
regarding the potential for the Fund and the Investment Adviser to benefit from
further economies of scale in the management of the Fund in light of reasonable
growth expectations for the Fund and certain of the Fund's expenses that are not
incurred as fees based on a percentage of net assets.
The following summarizes matters considered by the Trustees in connection with
their renewal of the Fund's Management Contract. The Trustees did not identify
any single factor as all-important or controlling, and the summary does not
detail all the matters that were considered.
A. Ancillary Benefits to Shareholders. The Trustees considered the benefits to
shareholders of investing in a Fund that is part of a large number of
investment companies offering a variety of investment disciplines and
providing for a large variety of Fund and shareholder services.
38
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Fund's investment objective and regulatory
requirements. The Trustees also reviewed the Fund's investment performance,
as well as the Fund's performance based upon total return compared to both
the performance of a peer group and the results of two indices, in each
case selected by the Independent Trustees for this purpose. The Fund's
performance based on total return was in the third quintile of the peer
group for the 12 months ended June 30, 2004, in the third quintile for the
three years ended June 30, 2004 and in the fifth quintile for the five
years ended June 30, 2004. (In all quintile rankings referred to throughout
this discussion first quintile is most favorable to the Fund's
shareholders. Thus, highest relative performance would be first quintile
and lowest relative expenses also would be first quintile.) The Trustees
concluded that the performance of the Fund supported the continuation of
the Management Contract.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of
the Fund and the Fund's investment objective and discipline. The
Independent Trustees also have had discussions with senior management of
the Investment Adviser responsible for investment operations and the senior
management of the Investment Adviser's equities group. Among other things,
the Trustees considered the number, education and experience of the
Investment Adviser's investment staff and their use of technology and
emphasis on analytics in view of the risk profile of securities in which
the Fund invests. The Trustees concluded that the Investment Adviser had
the quality and depth of personnel and the well-developed methods essential
to performing its duties under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality, cost and extent of other services provided to shareholders of the
Fund, including administrative and shareholder services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness of the arrangements for reimbursement of the
Investment Adviser's out-of-pocket costs and expenses, including overhead,
for certain administrative services that the Investment Adviser is
39
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN APPROVING THE MANAGEMENT
CONTRACT (continued)
- --------------------------------------------------------------------------------
not required to provide under the Management Contract. The Trustees also
considered the nature and extent of the other services provided by the
Investment Adviser's affiliates under other contracts and its supervision
of third party service providers. Based on these considerations, the
Trustees concluded that the nature, quality, cost and extent of such
services are satisfactory and reliable and serve the shareholders of the
Fund well.
E. Management Fee and Expenses. The Trustees considered the Investment
Adviser's fee under the Management Contract relative to the management fees
charged by a peer group of funds selected by the Independent Trustees for
this purpose using data provided by an independent third party. The Fund's
management fee for the 12 months ended June 30, 2004 was in the fourth
quintile relative to the management fees paid by the other funds in that
peer group for the comparable period. The Trustees determined that the fee
under the Management Contract was reasonable and fair in light of both the
overall nature and quality of services provided by the Investment Advisor
and the fees charged by the funds in the peer group. The Trustees also
considered the Fund's expense ratio (both before and after giving effect to
expense limitations) for the 12 months ended June 30, 2004 and expense
ratios for the comparable period of a peer group of funds selected by the
Independent Trustees for this purpose. The Fund's expense ratio was in the
third quintile of this peer group for the most recent fiscal year. The
Trustees concluded that the Fund's overall expense ratio was reasonable
compared to that of most of the comparable funds.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer Funds,
including details with respect to the Fund. This consideration included a
review of the Investment Adviser's methodology in allocating certain of its
costs to the management of each Fund. The Trustees also considered the
financial results realized by the Investment Adviser in connection with the
operation of the Fund. They further considered the profits realized by the
Investment Adviser and its affiliates from non-fund businesses that may
benefit from or be related to the Fund's business. The Trustees considered
the Investment Adviser's profit margins in comparison with the limited
available industry data. The Trustees concluded that the Investment
Adviser's profits from management of the
40
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Pioneer Funds, including the financial results derived from the Fund, bear
a reasonable relationship to the services rendered and are fair for the
management of the Fund.
G. Economies of Scale. The Trustees considered whether the Fund has
appropriately benefited from any economies of scale, and whether there was
potential for realization of any further economies of scale. Because of
break points in the management fee, the Trustees concluded that any
perceived or potential economies of scale would be shared at future asset
levels in a reasonable manner as the Fund grows in size between the Fund's
shareholders and the Investment Advisor.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Fund, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates, including fees for services such as shareholder services. The
Trustees also considered the receipt of sales loads and payments under Rule
12b-1 plans in respect to the Pioneer Funds (including the Fund), and
benefits to the Investment Adviser from the use of "soft" commission
dollars to pay for research and brokerage services. The Trustees further
considered the revenues and profitability of the Investment Adviser's
businesses other than the fund business, including the Investment Adviser's
institutional investment advisory business. The Trustees considered the
intangible benefits that accrue to the Investment Adviser and its
affiliates by virtue of its relationship with the Fund and the Pioneer
Funds as a group. The Trustees concluded that all these types of benefits
accruing to the Investment Adviser were reasonable in the context of the
overall relationship between the Investment Adviser and the Fund.
Conclusion. The Trustees, in light of the Investment Adviser's overall
performance, considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their evaluation of all material
factors deemed relevant and the advice of independent counsel, the Trustees
concluded that the Management Contract with the Fund is fair and reasonable and
voted to approve the continuation of the Management Contract for another year.
41
Pioneer Europe Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Osbert M. Hood, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood Dorothy E. Bourassa, Secretary
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 6-month period ended August 31, 2004 is publicly available to
shareowners at www.pioneerfunds.com. This information is also available on the
Securities and Exchange Commission's web site at http://www.sec.gov.
42
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
43
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
44
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@piog.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
Please consider the Fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about the Fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
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.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The Fund's independent auditor, Ernst & Young
LLP ("E&Y"), has advised the Securities
and Exchange Commission, the Public Company
Accounting Oversight Board, and the Audit
Committee of the Fund's Board of Trustees that
certain non-audit work performed by E&Y's China
affiliate raised questions regarding E&Y's
independence with respect to its performance of
audit services for the Fund. In July 2004, E&Y
became aware that member firms in China ("E&Y
China") provided certain tax services to offices of
UniCredito Italiano, S.p.A. ("UCI"), a member of
the Fund's Investment Company Complex. The
services included receipt and disbursement of
monies transferred to E&Y China by UCI in
payment of individual expatriate income taxes due
on returns prepared by E&Y China for certain UCI
employees located in China from October 1998 to
May 2003. E&Y became auditors of the Fund in
May 2002. These expatriate tax services were
discontinued in May 2003. The fees received by
E&Y China for all such services totaled $3,685.
The Fund's Audit Committee and E&Y have
discussed the matter, including the nature of the
services provided, the personnel involved in
providing the services and the fees received by
E&Y for performing the services. E&Y has informed
the Audit Committee that based on its internal reviews
and the de minimis nature of the services provided and
fees received, it does not believe its independence
with respect to the Fund has been impaired.
N/A
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
N/A
ITEMS 5-6. [RESERVED]
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. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer and principal financial
officer have concluded, that the registrant's disclosure controls and
procedures are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Europe Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date June 28, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date June 28, 2005
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date June 28, 2005
* Print the name and title of each signing officer under his or her signature.