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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06151
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, 2003 through October 31, 2004
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.
1.REPORTS TO SHAREOWNERS.
PIONEER
------------------------
EUROPE
FUND
Annual
Report
10/31/04
[LOGO] PIONEER
Investments(R)
Table of Contents
- ---------------------------------------------------------------
Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Comparing Ongoing Fund Expenses 8
Portfolio Management Discussion 10
Schedule of Investments 13
Financial Statements 19
Notes to Financial Statements 28
Report of Independent Registered Public Accounting Firm 35
Trustees, Officers and Service Providers 36
The Pioneer Family of Mutual Funds 43
Pioneer Europe Fund
- --------------------------------------------------------------------------------
LETTER TO SHAREOWNERS 10/31/04
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
High energy prices and rising interest rates caused concern among investors
during the third quarter of 2004. As oil prices touched $50 per barrel for the
first time, many consumers, faced with high priced gasoline and anticipating a
winter of hefty heating bills, responded by holding back on spending. Consumers
account for the bulk of the nation's economic activity, and retail sales over
the summer were erratic. Beyond soaring energy costs, which have the effect of
a tax increase on individuals and businesses, the slack job creation data of
the last few months also undermined confidence in the economic outlook. The
markets in general fell during the third quarter. Continued unsettled
conditions in Iraq and the ever present specter of terrorism also weighed on
investors' minds. Overseas, global markets were fairly stable, after stumbling
earlier in the year.
But the fuzzy economic picture was good news for bond investors. Despite three
hikes in short-term interest rates, the first increases in four years, bond
prices rose and yields fell over the period. Longer-term Treasury securities
were the strongest performers, with corporate bonds, including high-yield
issues, also delivering favorable returns. Lower long-term rates were also
beneficial to the housing and mortgage industries. Behind the rally in bonds
lies investor skepticism about the strength and durability of the current
economic recovery. A slowing recovery leading to an easing of inflationary
pressures may convince the Federal Reserve Board to slow the pace of future
rate increases. Less inflation would also mean better real returns for bond
holders.
Pioneer believes that the economy will continue to expand in 2005, but at a
more measured tempo. After an extended period of cutting costs and bolstering
balance sheets, many corporations are financially stronger than they have been
in some time. And although short-term interest rates have risen, they are still
relatively low and do not appear to be a barrier for companies needing to
borrow for expansion. Equity valuations now appear better aligned with earnings
prospects than was the case a year ago, when prices ran ahead of profit
expectations. Therefore, steady but moderate expansion in corporate profits has
the potential to drive stock prices higher.
A one-step approach to portfolio allocation
Building and maintaining a long-term strategy for your portfolio means deciding
on an appropriate mix of investments, then adjusting the weightings as time
passes and your goals change. The Pioneer Ibbotson Asset Allocation Series is a
family of three portfolios - moderate, growth and aggressive - each comprising
a select group of Pioneer funds. Ibbotson Associates, a leading authority on
investing and asset allocation, diversifies, reallocates and automatically
rebalances the portfolios periodically. By rebalancing the portfolio as rates
of return on stocks, bonds and other investments vary, Ibbotson seeks to manage
risk and to keep your holdings in line with the Fund's stated goals.
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,
/s/ 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 10/31/04
Portfolio Diversification
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(As a percentage of total investment portfolio)
[The following table was depicted as a pie chart in the printed material.]
International Common Stocks 98.9%
Preferred International Stocks 1.1%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[The following table was depicted as a line chart in the printed material.]
United Kingdom 28.2%
France 26.4%
Switzerland 11.1%
Germany 9.5%
Italy 7.2%
Netherlands 5.2%
Spain 4.8%
Ireland 2.4%
Belgium 2.3%
Sweden 1.3%
Finland 1.0%
Norway 0.6%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Vodafone Group Plc 5.03%
2. BP Amoco Plc 4.12
3. Eni S.p.A. 3.22
4. Total SA 3.18
5. UBS AG 3.01
6. Societe Generale AG 2.82
7. Nestle SA (Registered Shares) 2.58
8. BNP Paribas SA 2.51
9. Royal Bank of Scotland Group Plc 2.20
10. France Telecom 2.17
This list excludes money market and derivative instruments. The portfolio is
actively managed, and current holdings may be different.
2
Pioneer Europe Fund
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PERFORMANCE UPDATE 10/31/04 CLASS A SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/04 10/31/03
$27.36 $22.66
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 10/31/04) Income Capital Gains Capital Gains
$0.0927 $ - $ -
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 October 31, 2004)
Net Asset Public Offering
Period Value Price (POP)
10 Years 6.88% 6.25%
5 Years -2.18 -3.33
1 Year 21.19 14.23
- --------------------------------------------------------------------------------
Value of $10,000 Investment
[The following table was depicted as a mountain chart in the printed material.]
Pioneer Europe Fund MSCI Europe Index
------------------- -----------------
10/94 9425 10000
10852 11321
10/96 12784 13298
16402 16754
10/98 18781 20616
20473 23201
10/00 21871 23419
15260 18069
10/02 12956 15559
15133 19317
10/04 18340 23549
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. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
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 is a
capitalization-weighted index of the 15 European country indexes included in the
MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria,
Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and the United Kingdom. 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 the Index.
3
Pioneer Europe Fund
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PERFORMANCE UPDATE 10/31/04 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/04 10/31/03
$25.02 $20.85
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 10/31/04) Income Capital Gains Capital Gains
$ - $ - $ -
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 October 31, 2004)
If If
Period Held Redeemed
10 Years 6.62% 6.62%
5 Years -3.13 -3.32
1 Year 20.00 16.00
- --------------------------------------------------------------------------------
Value of $10,000 Investment
[The following table was depicted as a mountain chart in the printed material.]
Pioneer Europe Fund MSCI Europe Index
------------------- -----------------
10/94 10000 10000
11443 11321
10/96 13369 13298
17026 16754
10/98 19325 20618
20895 23201
10/00 22129 23419
15282 18069
10/02 12853 15559
14855 19317
10/04 17826 23549
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 deduction of applicable contingent deferred sales
charge (CDSC). The maximum CDSC is 4% and declines over six years. All results
are historical and assume the reinvestment of dividends and capital gains.
Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI Europe Index is a capitalization-weighted index of the 15 European
country indexes included in the MSCI EAFE (Europe, Australasia, Far East)
Index. These countries are: Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom. 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 the Index.
4
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS C SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/04 10/31/03
$24.97 $20.79
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 10/31/04) Income Capital Gains Capital Gains
$ - $ - $ -
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 October 31, 2004)
If If
Period Held Redeemed
Life-of-Class
(1/31/96) 4.95% 4.95%
5 Years -3.09 -3.09
1 Year 20.11 20.11
- --------------------------------------------------------------------------------
Value of $10,000 Investment
[The following table was depicted as a mountain chart in the printed material.]
Pioneer Europe Fund MSCI Europe Index
------------------- -----------------
1/96 10000 10000
11391 11232
14520 14151
10/98 16509 17414
17862 19596
10/00 18921 19780
13077 15262
10/02 10992 13141
12710 16316
10/04 15265 19890
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.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI Europe Index is a capitalization-weighted index of the 15 European
country indexes included in the MSCI EAFE (Europe, Australasia, Far East)
Index. These countries are: Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom. 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 the Index.
5
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS R SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/04 10/31/03
$27.20 $22.67
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 10/31/04) Income Capital Gains Capital Gains
$0.2025 $ - $ -
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 October 31, 2004)
If If
Period Held Redeemed
10 Years 6.42% 6.42%
5 Years -2.54 -2.54
1 Year 20.95 20.95
- --------------------------------------------------------------------------------
Value of $10,000 Investment
[The following table was depicted as a mountain chart in the printed material.]
Pioneer Europe Fund MSCI Europe Index
------------------- -----------------
10/94 10000 10000
11454 11321
10/96 13438 13298
17147 16754
10/98 19531 20618
21189 23201
10/00 22520 23419
15632 18069
10/02 13207 15559
15401 19317
10/04 18629 23549
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. All results are historical
and assume the reinvestment of dividends and capital gains. Other share classes
are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
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 is a
capitalization-weighted index of the 15 European country indexes included in
the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. 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 the Index.
6
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS Y SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/04 10/31/03
$28.25 $23.40
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03 - 10/31/04) Income Capital Gains Capital Gains
$0.2739 $ - $ -
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 October 31, 2004)
If If
Period Held Redeemed
Life-of-Class
(7/2/98) 7.95% 7.95%
5 Year -1.58 -1.58
1 Year 22.02 22.02
- --------------------------------------------------------------------------------
Value of $10,000 Investment
[The following table was depicted as a mountain chart in the printed material.]
Pioneer Europe Fund MSCI Europe Index
------------------- -----------------
7/98 10000 10000
8458 9064
9269 10199
10/00 9950 10295
6973 7943
10/02 5960 6840
7015 8492
10/04 8560 10353
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.
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 and can be rescinded at any time. See the
prospectus and financial statements for complete details.
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 MSCI Europe Index is a
capitalization-weighted index of the 15 European country indexes included in the
MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria,
Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and the United Kingdom. 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 the Index.
7
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 May 1, 2004 through October 31, 2004
Actual
Share Class A B C R Y
- --------------------------------------------------------------------------------------------
Beginning Account Value
On 5/1/04 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value
On 10/31/04 $1,085.25 $1,080.30 $1,081.00 $1,083.20 $1,089.08
Expenses Paid
During Period* $ 9.61 $ 14.59 $ 14.09 $ 13.27 $ 6.37
* Expenses are equal to the Fund's annualized expense ratio of 1.83%, 2.79%,
2.69%, 2.53% and 1.21%, 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 184/366 (to reflect the one-half year period).
8
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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), or redemption fees. 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% return per year before expenses, reflecting the
period from May 1, 2004 through October 31, 2004
Hypothetical
Share Class A B C R Y
- -------------------------------------------------------------------------------------------
Beginning Account Value
On 5/1/04 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value
On 10/31/04 $1,015.94 $1,010.96 $1,011.21 $1,014.43 $1,019.30
Expenses Paid
During Period* $ 9.29 $ 14.11 $ 13.61 $ 12.83 $ 6.16
* Expenses are equal to the Fund's annualized expense ratio of 1.83%, 2.79%,
2.69%, 2.53% and 1.21% 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 184/366 (to reflect the one-half year period).
9
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 10/31/04
- --------------------------------------------------------------------------------
The 12 months ended October 31, 2004, was a favorable period for European
stocks. In spite of high energy prices, attractive stock price levels, high
dividend yields and receding fears of inflation have contributed to strong
returns for Pioneer Europe Fund, as Stan Pearson, who is responsible for the
day-to-day management of the Fund, discusses in the following interview.
Q: How did the Fund perform during its fiscal year?
A: For the 12 months ended October 31, 2004, the Fund's Class A, B and C
shares returned 21.19%, 20.00% and 20.11% at net asset value,
respectively. These results lagged the Fund's benchmark, the Morgan
Stanley Capital International (MSCI) Europe Index, which posted a return
of 21.89% for the same period. The Fund's returns at net asset value
surpassed the average 8.56% return of its Lipper category of 124 European
funds.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: Which stocks contributed to the Fund's performance?
A: Many of the Fund's holdings that had been punished by investors early in
the fiscal year recovered nicely during the reporting period, when
investors reassessed their tolerance for risk. Sanofi-Aventis (France),
the world's largest pharmaceutical firm following the merger of the two
French giants, began trading at extremely low valuations as investors
doubted the firm's ability to generate enough cash to repay the debt
amassed as a result of the transaction. As the market's skepticism
dissipated, the stock rose nicely. Pharmaceutical giants Roche Holdings
(Switzerland) and Astrazeneca (United Kingdom) also made a notable
contribution to performance.
In the telecommunication services industry, we've focused on operators
with a high level of exposure to the European market, which continues to
generate attractive growth. Vodafone (United Kingdom), a long-time
holding, was one of the Fund's best performing stocks for the 12 months.
10
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund also enjoyed strong performance from its emphasis on energy
stocks, which are benefiting from high oil prices. BP (United Kingdom),
Total (France) and ENI (Italy) represented some of the portfolio's best
performers for the year. Similarly, strong stock selection and an
overweight position in the capital goods sector generated strong returns.
Sandvik (Sweden), Schneider Electric (France), ACS (Spain) and Saint
Gobain (France) are profiting from the cyclical upturn and increased
capital expenditures. We are emphasizing large-capitalization stocks, but,
more importantly, high-quality companies with sound balance sheets and the
ability to grow their business and return some of the growth in the form
of dividends. In the materials sector, another cyclical industry, we think
rising demand for cement and solution chemicals offer strong growth
opportunities for Italcementi (Italy) and Lafarge (France), respectively.
Zurich Financial Services (Switzerland), AXA (France) and Assicurazioni
Generali (Italy) led the portfolio's insurance holdings and contributed
nicely. During the year, underlying fundamentals in the sector improved on
the back of the strong equity markets, and rising investor demand helped
push stock prices higher. Finally, our decision not to invest in the
semiconductor industry helped performance because it struggled throughout
the fiscal year as growth forecasts proved to be overly optimistic.
Q: What holdings proved most disappointing?
A: While information technology represents a small portion of the Fund's
assets, this sector turned in the most disappointing performance for the
12 months. Both software and services as well as technology hardware and
equipment were hard hit. Global jitters about the outlook for technology
demand held back the sector. We've been underweighting technology stocks
for some time out of concern for their valuations and low demand.
Communications equipment provider Nokia (Finland) struggled due to
concerns about the company's ability to meet earnings targets, and we
reduced the Fund's exposure as a result. Nokia's sharp underperformance
explains a significant portion of the Fund's underperformance relative to
its benchmark, the MSCI Europe Index.
11
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 10/31/04 (continued)
- --------------------------------------------------------------------------------
Q: Any notable sales or purchases to mention?
A: Yes. We sold positions in building materials company Wolseley (United
Kingdom) and food, beverage and tobacco retailer Diageo (United Kingdom)
because they had reached their price targets. We added new positions in
retailer Boots (United Kingdom), Italcementi (Italy) and media company
Lagardere (France). We also purchased telecommunications company Belgacom
(Belgium) during its initial public offering.
Q: What is your outlook?
A: After the strong appreciation of the past year, we think global equity
markets are entering a period of unspectacular but steady returns.
European companies have the capacity to expand margins and profits, but
earnings growth is likely to be modest. In a climate where equity
appreciation is driven by modest earnings growth, we consider high
dividend yields and strong cash flow to be important sources of stock
price support. Therefore, we are placing a premium on stocks with the
stability and predictability of robust dividend yields.
At present levels, European equities are appropriately discounting an
environment characterized by moderate, albeit gently, accelerating
macroeconomic growth, low inflation and low volatility. We believe such a
global equity environment is likely to result in moderate expectations for
equity returns across Europe for the foreseeable future.
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 susceptible
to adverse economic, political or regulatory developments affecting those
countries.
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.
12
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/04
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 1.1%
Automobiles & Components - 1.1%
Automobile Manufacturers - 1.1%
2,956 Porsche AG Designs $ 1,889,973
------------
TOTAL PREFERRED STOCK
(Cost $832,471) $ 1,889,973
------------
COMMON STOCKS - 98.4%
Energy - 11.1%
Integrated Oil & Gas - 7.3%
753,333 BP Amoco Plc $ 7,294,071
248,663 Eni S.p.A. 5,711,163
------------
$ 13,005,234
------------
Oil & Gas Refining Marketing & Transportation - 3.8%
79,040 Statoil ASA* $ 1,147,043
27,015 Total SA 5,631,385
------------
$ 6,778,428
------------
Total Energy $ 19,783,662
------------
Materials - 7.5%
Commodity Chemicals - 1.6%
45,777 BASF India, Ltd. $ 2,867,981
------------
Construction Materials - 4.9%
70,766 CRH Plc $ 1,690,469
95,871 Italcementi S.p.A. 1,468,804
40,370 Lafarge SA 3,701,463
16,433 Vinci SA 1,963,997
------------
$ 8,824,733
------------
Diversified Metals & Mining - 1.0%
66,458 Rio Tinto Plc $ 1,744,074
------------
Total Materials $ 13,436,788
------------
Capital Goods - 6.7%
Aerospace & Defense - 0.5%
198,518 Bae Systems $ 872,162
------------
Construction & Engineering - 3.6%
141,634 ACS, Actividades de Construccion y Servicios SA $ 2,753,875
66,767 Compagnie de Saint Gobain 3,683,251
------------
$ 6,437,126
------------
13
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/04 (continued)
- --------------------------------------------------------------------------------
Shares Value
Electrical Components & Equipment - 1.3%
34,963 Schneider Electric SA $ 2,325,392
------------
Industrial Machinery - 1.3%
22,894 Atlas Copco AB $ 950,821
33,005 SKF AB 1,284,446
------------
$ 2,235,267
------------
Total Capital Goods $ 11,869,947
------------
Commercial Services & Supplies - 1.3%
Diversified Commercial Services - 1.3%
98,805 TNT Post Group NV $ 2,396,653
------------
Total Commercial Services & Supplies $ 2,396,653
------------
Automobiles & Components - 0.8%
Auto Parts & Equipment - 0.8%
27,644 Compagnie Generale des Etablissements Michelin $ 1,510,888
------------
Total Automobiles & Components $ 1,510,888
------------
Hotels, Restaurants & Leisure - 1.5%
Restaurants - 1.5%
275,351 Compass Group Plc $ 1,142,196
97,115 GUS Plc 1,593,124
------------
Total Hotels, Restaurants & Leisure $ 2,735,320
------------
Media - 2.5%
Advertising - 0.6%
36,113 Publicis SA $ 1,081,800
------------
Publishing - 1.9%
75,831 Elsevier NV $ 1,000,199
85,548 Vivendi Universal* 2,344,840
------------
$ 3,345,039
------------
Total Media $ 4,426,839
------------
Retailing - 1.4%
Apparel Retail - 0.6%
7,356 Adidas-Salomon AG* $ 1,032,685
------------
Specialty Stores - 0.8%
318,207 HMV Group Plc* $ 1,414,938
------------
Total Retailing $ 2,447,623
------------
14
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Food & Drug Retailing - 4.8%
Drug Retail - 0.9%
132,406 Boots Co., Plc $ 1,602,902
------------
Food Retail - 3.9%
19,275 Nestle SA (Registered Shares) $ 4,577,464
432,362 Tesco Plc 2,286,604
------------
$ 6,864,068
------------
Total Food & Drug Retailing $ 8,466,970
------------
Food, Beverage & Tobacco - 2.4%
Tobacco - 2.4%
27,505 Altadis SA* $ 1,012,751
214,490 British American Tobacco Plc 3,238,058
------------
Total Food, Beverage & Tobacco $ 4,250,809
------------
Health Care Equipment & Services - 0.5%
Health Care Distributors - 0.5%
12,204 Celesio AG $ 887,034
------------
Total Health Care Equipment & Services $ 887,034
------------
Pharmaceuticals & Biotechnology - 8.5%
Pharmaceuticals - 8.5%
5,920 Actelion, Ltd.* $ 680,872
88,450 Astrazeneca Plc 3,634,045
140,628 GlaxoSmithKline Plc 2,977,612
28,545 Roche Holdings AG 2,930,347
48,182 Sanofi-Aventis 3,531,773
21,392 Schering AG 1,380,224
------------
Total Pharmaceuticals & Biotechnology $ 15,134,873
------------
Banks - 14.4%
Diversified Banks - 14.4%
100,830 Allied Irish Banks Plc $ 1,760,529
146,073 Banco Bilbao Vizcaya Argentaria SA 2,302,872
375,995 Barclays Plc 3,693,119
64,976 BNP Paribas SA 4,444,096
67,449 Credit Agricole SA 1,986,185
85,902 CS Group* 2,953,382
53,683 Depfa Bank Plc 817,665
50,433 Dexia 1,016,227
15
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/04 (continued)
- --------------------------------------------------------------------------------
Shares Value
Diversified Banks (continued)
167,261 HSBC Holding Plc $ 2,703,032
131,253 Royal Bank of Scotland Group Plc 3,891,195
------------
Total Banks $ 25,568,302
------------
Diversified Financials - 10.5%
Asset Management & Custody Banks - 0.4%
32,000 Man Group Plc* $ 769,114
------------
Diversified Financial Services - 10.1%
39,370 Deutsche Boerse AG $ 1,974,294
73,914 Fortis NV* 1,890,452
75,033 ING Groep NV 1,996,662
26,878 Lagardere SCA 1,738,209
53,557 Societe Generale AG 4,991,127
73,760 UBS AG 5,339,183
------------
$ 17,929,927
------------
Total Diversified Financials $ 18,699,041
------------
Insurance - 4.7%
Life & Health Insurance - 0.8%
48,369 Assicurazioni Generali $ 1,445,208
------------
Multi-Line Insurance - 3.2%
124,278 AXA $ 2,690,466
21,227 Zurich Financial Services* 3,039,789
------------
$ 5,730,255
------------
Reinsurance - 0.7%
36,184 Hannover Rueckversicheru $ 1,182,202
------------
Total Insurance $ 8,357,665
------------
Software & Services - 0.8%
IT Consulting & Other Services - 0.8%
21,807 Atos Origin* $ 1,371,238
------------
Total Software & Services $ 1,371,238
------------
Technology Hardware & Equipment - 3.8%
Semiconductors - 1.0%
79,159 Philips Electronics NV $ 1,884,070
------------
Communications Equipment - 1.0%
117,615 Nokia Oyj $ 1,811,888
------------
16
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Computer Hardware - 0.7%
393,352 Dixons Group Plc $ 1,250,190
------------
Electronic Equipment & Instruments - 1.1%
25,607 Siemens $ 1,914,902
------------
Total Technology Hardware & Equipment $ 6,861,050
------------
Telecommunication Services - 12.6%
Alternate Carriers - 2.2%
133,461 France Telecom $ 3,841,077
------------
Integrated Telecommunication Services - 5.4%
84,879 Belgacom SA* $ 3,127,237
299,574 Telecom Italia Mobile S.p.A. 1,776,344
708,752 Telecom Italia S.p.A. 2,377,917
145,271 Telefonica SA 2,410,274
------------
$ 9,691,772
------------
Wireless Telecommunication Services - 5.0%
3,440,224 Vodafone Group Plc $ 8,902,372
------------
Total Telecommunication Services $ 22,435,221
------------
Utilities - 2.6%
Electric Utilities - 2.6%
45,956 E.On AG $ 3,751,676
100,327 National Grid Transco Plc 874,215
------------
$ 4,625,891
------------
Total Utilities $ 4,625,891
------------
TOTAL COMMON STOCKS
(Cost $138,275,713) $175,265,814
------------
TOTAL INVESTMENTS IN SECURITIES - 99.5%
(Cost $139,108,184)(a)(b) $177,155,787
------------
OTHER ASSETS AND LIABILITIES - 0.5% $ 862,389
------------
TOTAL NET ASSETS - 100.0% $178,018,176
============
17
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/04 (continued)
- --------------------------------------------------------------------------------
* 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:
United Kingdom 28.2%
France 26.4
Switzerland 11.1
Germany 9.5
Italy 7.2
Netherlands 5.2
Spain 4.8
Ireland 2.4
Belgium 2.3
Sweden 1.3
Finland 1.0
Norway 0.6
-----
Total 100.0%
=====
(b) At October 31, 2004, the net unrealized gain on investments based on cost
for federal income tax purposes of $141,160,002 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 (1,374,618)
-----------
Net unrealized gain $35,995,785
===========
Purchases and sales of securities (excluding temporary cash investments) for the
year ended October 31, 2004 aggregated $83,736,315 and $111,360,628,
respectively.
18
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 10/31/04
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (cost $139,108,184) $177,155,787
Cash 1,275,519
Receivables -
Investment securities sold 179,476
Fund shares sold 13,524
Dividends, interest and foreign taxes withheld 296,204
Other 6,430
------------
Total assets $178,926,940
------------
LIABILITIES:
Payables -
Investment securities purchased $ 175,517
Fund shares repurchased 307,207
Forward foreign currency settlement contracts, net 834
Due to affiliates 351,236
Accrued expenses 73,970
------------
Total liabilities $ 908,764
------------
NET ASSETS:
Paid-in capital $199,863,275
Undistributed net investment income 152,110
Accumulated net realized loss on investments and foreign
currency transactions (60,067,485)
Net unrealized gain on investments 38,047,603
Net unrealized gain on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies 22,673
------------
Total net assets $178,018,176
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $119,215,921/4,357,716 shares) $ 27.36
============
Class B (based on $44,515,095/1,779,529 shares) $ 25.02
============
Class C (based on $12,023,490/481,558 shares) $ 24.97
============
Class R (based on $37,681/1,385 shares) $ 27.20
============
Class Y (based on $2,225,989/78,793 shares) $ 28.25
============
MAXIMUM OFFERING PRICE:
Class A ($27.36 \d 94.25%) $ 29.03
============
19
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 10/31/04
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $603,162) $ 4,194,430
Interest 28,828
-----------
Total investment income $ 4,223,258
-----------
EXPENSES:
Management fees $ 1,796,579
Transfer agent fees and expenses
Class A 537,327
Class B 320,176
Class C 77,528
Class R 86
Class Y 538
Distribution fees
Class A 296,831
Class B 465,152
Class C 122,048
Class R 88
Administrative reimbursements 69,928
Custodian fees 71,892
Registration fees 2,466
Professional fees 73,616
Fees and expenses of nonaffiliated trustees 3,668
Miscellaneous 15,616
-----------
Total expenses $ 3,853,539
Less fees paid indirectly (6,105)
-----------
Net expenses $ 3,847,434
-----------
Net investment income $ 375,824
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $12,726,500
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (223,032) $12,503,468
----------- -----------
Change in net unrealized gain (loss) on:
Investments $20,769,833
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (32,161) $20,737,672
----------- -----------
Net gain on investments and foreign currency transactions $33,241,140
-----------
Net increase in net assets resulting from operations $33,616,964
===========
20
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 10/31/04 and 10/31/03, respectively
Year Ended Year Ended
10/31/04 10/31/03
FROM OPERATIONS:
Net investment income $ 375,824 $ 717,207
Net realized gain (loss) on investments and foreign
currency transactions 12,503,468 (13,169,625)
Change in net unrealized gain (loss) on investments
and foreign currency transactions 20,737,672 39,615,457
------------- -------------
Net increase in net assets resulting from operations $ 33,616,964 $ 27,163,039
------------- -------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.09 and $0.00 per share, respectively) $ (450,346) $ --
Class R ($0.20 and $0.00 per share, respectively) (6) --
Class Y ($0.27 and $0.00 per share, respectively) (22,571) --
------------- -------------
Total distributions to shareowners $ (472,923) $ --
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 27,110,624 $ 189,080,988
Reinvestment of distributions 436,182 --
Cost of shares repurchased (55,162,643) (226,348,321)
------------- -------------
Net decrease in net assets resulting from Fund
share transactions $ (27,615,837) $ (37,267,333)
------------- -------------
Net increase (decrease) in net assets $ 5,528,204 $ (10,104,294)
------------- -------------
NET ASSETS:
Beginning of year $ 172,489,972 $ 182,594,266
------------- -------------
End of year (including undistributed net
investment income of $152,110 and $472,241,
respectively) $ 178,018,176 $ 172,489,972
============= =============
21
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
For the Years Ended 10/31/04 and 10/31/03, respectively
'04 Shares '04 Amount '03 Shares '03 Amount
CLASS A
Shares sold 699,433 $ 17,712,093 8,641,097 $167,590,556
Reinvestment of distributions 16,745 416,120 - -
Less shares repurchased (1,307,766) (33,004,089) (9,673,419) (190,142,083)
---------- ------------ ---------- ------------
Net decrease (591,588) $(14,875,876) (1,032,322) $(22,551,527)
========== ============ ========== ============
CLASS B
Shares sold 191,971 $ 4,554,640 185,386 $ 3,518,231
Less shares repurchased (636,150) (14,942,100) (844,268) (15,582,369)
---------- ------------ ---------- ------------
Net decrease (444,179) $(10,387,460) (658,882) $(12,064,138)
========== ============ ========== ============
CLASS C
Shares sold 198,957 $ 4,627,926 943,312 $ 17,383,577
Less shares repurchased (284,998) (6,650,160) (1,063,578) (19,709,696)
---------- ------------ ---------- ------------
Net decrease (86,041) $ (2,022,234) (120,266) $ (2,326,119)
========== ============ ========== ============
CLASS R
Shares sold 1,403 $ 35,823 28 $ 500
Less shares repurchased (46) (1,158) - -
---------- ------------ ---------- ------------
Net increase 1,357 $ 34,665 28 $ 500
========== ============ ========== ============
CLASS Y
Shares sold 6,816 $ 180,142 30,059 $ 588,124
Reinvestment of distributions 786 20,062 - -
Less shares repurchased (21,544) (565,136) (46,183) (914,173)
---------- ------------ ---------- ------------
Net decrease (13,942) $ (364,932) (16,124) $ (326,049)
========== ============ ========== ============
22
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 22.66 $ 19.40 $ 22.85 $ 32.75 $ 31.71
-------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.14 $ 0.17 $ 0.06 $ 0.07 $ (0.15)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 4.65 3.09 (3.51) (9.97) 2.30
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations $ 4.79 $ 3.26 $ (3.45) $ (9.90) $ 2.15
Distributions to shareowners:
Net investment income (0.09) - - - (0.00)(a)
Net realized gain - - - - (1.11)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ 4.70 $ 3.26 $ (3.45) $ (9.90) $ 1.04
-------- -------- -------- -------- --------
Net asset value, end of period $ 27.36 $ 22.66 $ 19.40 $ 22.85 $ 32.75
======== ======== ======== ======== ========
Total return* 21.19% 16.80% (15.10)% (30.23)% 6.83%
Ratio of net expenses to average net assets+ 1.83% 1.98% 1.89% 1.76% 1.54%
Ratio of net investment income (loss) to average net assets+ 0.52% 0.76% 0.14% (0.07)% (0.39)%
Portfolio turnover rate 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) $119,216 $112,160 $116,051 $167,568 $314,781
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.83% 1.98% 1.89% 1.76% 1.54%
Net investment income (loss) 0.52% 0.76% 0.14% (0.07)% (0.39)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.83% 1.98% 1.89% 1.74% 1.52%
Net investment income (loss) 0.52% 0.76% 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.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
23
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS B 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 20.85 $ 18.04 $ 21.45 $ 31.06 $ 30.38
------- ------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.11) $ (0.06) $ (0.40) $ (0.38) $ (0.40)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 4.28 2.87 (3.01) (9.23) 2.19
------- ------- -------- -------- -------
Net increase (decrease) from investment operations $ 4.17 $ 2.81 $ (3.41) $ (9.61) $ 1.79
Distributions to shareowners:
Net realized gain - - - - (1.11)
------- ------- -------- -------- -------
Net increase (decrease) in net asset value $ 4.17 $ 2.81 $ (3.41) $ (9.61) $ 0.68
------- ------- -------- -------- -------
Net asset value, end of period $ 25.02 $ 20.85 $ 18.04 $ 21.45 $ 31.06
======= ======= ======== ======== =======
Total return* 20.00% 15.58% (15.90)% (30.94)% 5.90%
Ratio of net expenses to average net assets+ 2.82% 3.02% 2.81% 2.64% 2.37%
Ratio of net investment loss to average net assets+ (0.47)% (0.31)% (0.78)% (0.94)% (1.21)%
Portfolio turnover rate 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) $44,515 $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 2.82% 3.02% 2.81% 2.64% 2.37%
Net investment loss (0.47)% (0.31)% (0.78)% (0.94)% (1.21)%
Ratios with waiver of management fees by
PIM and reduction for fees paid indirectly:
Net expenses 2.82% 3.01% 2.81% 2.63% 2.36%
Net investment loss (0.47)% (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.
+ 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
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS C 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 20.79 $ 17.98 $ 21.39 $ 30.95 $ 30.27
------- ------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.10) $ (0.05) $ (0.45) $ (0.44) $ (0.39)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 4.28 2.86 (2.96) (9.12) 2.18
------- ------- -------- -------- -------
Net increase (decrease) from investment operations $ 4.18 $ 2.81 $ (3.41) $ (9.56) $ 1.79
Distributions to shareowners:
Net realized gain - - - - (1.11)
------- ------- -------- -------- -------
Net increase (decrease) in net asset value $ 4.18 $ 2.81 $ (3.41) $ (9.56) $ 0.68
------- ------- -------- -------- -------
Net asset value, end of period $ 24.97 $ 20.79 $ 17.98 $ 21.39 $ 30.95
======= ======= ======== ======== =======
Total return* 20.11% 15.63% (15.94)% (30.89)% 5.93%
Ratio of net expenses to average net assets+ 2.77% 2.97% 2.82% 2.60% 2.34%
Ratio of net investment loss to average net assets+ (0.44)% (0.24)% (0.80)% (0.93)% (1.19)%
Portfolio turnover rate 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) $12,023 $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 2.77% 2.97% 2.82% 2.60% 2.34%
Net investment loss (0.44)% (0.24)% (0.80)% (0.93)% (1.19)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 2.76% 2.96% 2.82% 2.58% 2.33%
Net investment loss (0.43)% (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.
+ 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
- --------------------------------------------------------------------------------
Year Ended 4/1/03 to (a)
10/31/04 10/31/03
CLASS R
Net asset value, beginning of period $ 22.67 $ 17.92
------- -------
Increase from investment operations:
Net investment income $ 0.18 $ 0.18
Net realized and unrealized gain on investments and
foreign currency transactions 4.55 4.57
------- -------
Net increase from investment operations $ 4.73 $ 4.75
Distributions to shareowners:
Net investment income (0.20) -
------- -------
Net increase in net asset value $ 4.53 $ 4.75
------- -------
Net asset value, end of period $ 27.20 $ 22.67
======= =======
Total return* 20.95% 26.51%
Ratio of net expenses to average net assets+ 2.13% 1.75%**
Ratio of net investment income to average net assets+ 0.31% 1.46%**
Portfolio turnover rate 47% 53%
Net assets, end of period (in thousands) $ 38 $ 1
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 2.13% 1.75%**
Net investment income 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 the
period, reinvestment of distributions, and the complete redemption of the
investment at net asset value at the end of the period.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
26
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS Y 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00 (a)
Net asset value, beginning of period $ 23.40 $ 19.88 $ 23.26 $ 33.19 $ 31.97
------- -------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.32 $ 0.33 $ 0.11 $ (0.25) $ -
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 4.80 3.19 (3.49) (9.68) 2.33
------- -------- --------- --------- ---------
Net increase (decrease) from investment operations $ 5.12 $ 3.52 $ (3.38) $ (9.93) $ 2.33
Distributions to shareowners:
Net investment income (0.27) - - - (0.00)(b)
Net realized gain - - - - (1.11)
------- -------- --------- --------- ---------
Net increase (decrease) in net asset value $ 4.85 $ 3.52 $ (3.38) $ (9.93) $ 1.22
------- -------- --------- --------- ---------
Net asset value, end of period $ 28.25 $ 23.40 $ 19.88 $ 23.26 $ 33.19
======= ======== ========= ========= =========
Total return* 22.02% 17.71% (14.53)% (29.92)% 7.35%
Ratio of net expenses to average net assets+ 1.16% 1.20% 1.19% 1.20% 1.08%
Ratio of net investment income (loss) to average net assets+ 1.16% 1.52% 0.87% 0.53% (0.01)%
Portfolio turnover rate 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) $ 2,226 $ 2,170 $ 2,164 $ 1,834 $ 2,953
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.16% 1.20% 1.19% 1.20% 1.08%
Net investment income (loss) 1.16% 1.52% 0.87% 0.53% (0.01)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.16% 1.20% 1.16% 1.19% 1.07%
Net investment income 1.16% 1.52% 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 the
period, reinvestment of distributions, and the complete redemption of the
investment at net asset value at the end of the period.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
27
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/04
- --------------------------------------------------------------------------------
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 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
28
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
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
29
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/04 (continued)
- --------------------------------------------------------------------------------
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 October 31, 2004, the Fund had no outstanding portfolio hedges. The
Fund's gross forward currency settlement hedges receivable and payable
were $3,125 and $3,959, respectively, resulting in a net payable of $834.
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 October 31, 2004, the Fund had no open
futures contracts.
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.
30
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
========
- --------------------------------------------
The following shows the components of accumulated 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.
At October 31, 2004, the Fund reclassified $223,032 to decrease
undistributed net investment income and $223,032 to decrease accumulated
net realized loss on investments and foreign currency transactions to
reflect permanent book/tax differences. The reclassification has no impact
on the net assets of the Fund and presents the Fund's capital accounts on
a tax basis.
31
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/04 (continued)
- --------------------------------------------------------------------------------
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 $15,120 in underwriting commissions on the
sale of Class A shares during the year ended October 31, 2004.
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, 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 October 31, 2004, $183,488 was payable to
PIM related to management fees, administrative costs and certain other services
and is included in due to affiliates.
32
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 $93,408 in transfer agent
fees payable to PIMSS at October 31, 2004.
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 $74,340 in distribution fees payable to PFD at
October 31, 2004. The Fund also has adopted a separate service plan for Class R
shares (Service Plan). The Service Plan authorizes the Fund to pay securities
dealers, plan administrators or other service organizations that agree to
provide certain services to retirement plans or plan participants holding
shares of the Fund a service fee of up to 0.25% of the Fund's average daily net
assets attributable to Class R shares held by such plans.
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 that are redeemed within
six 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
33
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/04 (continued)
- --------------------------------------------------------------------------------
July 1, 2004, the CDSC on Class R shares was eliminated. Proceeds from the
CDSCs are paid to PFD. For the year ended October 31, 2004, CDSCs in the amount
of $46,323 were paid to PFD.
The Fund charges a 2.0% redemption fee on Class A, Class B and Class C shares
sold within 30 days of purchase. For Class A 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 year ended October 31, 2004, the
Fund collected $3,450 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 year ended October 31, 2004, the Fund's expenses
were reduced by $6,105 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 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
year ended October 31, 2004, 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 would be subject to the
approval of the shareholders of the Pioneer Europe Select Fund in early 2005.
There can be no assurance that this transaction will be completed.
34
Pioneer Europe Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareowners of
Pioneer Europe Fund:
We have audited the statement of assets and liabilities, including the schedule
of investments, of Pioneer Europe Fund (the "Fund") as of October 31, 2004, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the three years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
financial highlights for each of the two years in the period ended October 31,
2001 were audited by other auditors who have ceased operations and whose
report, dated December 7, 2001, expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and financial
highlights. Our procedures included confirmation of securities owned as of
October 31, 2004, by correspondence with the custodian and brokers or by other
appropriate auditing procedures where replies from brokers were not received.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Europe Fund at October 31, 2004, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
Ernst & Young LLP
Boston, Massachusetts
December 10, 2004
35
Pioneer Europe Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's
affairs. The officers of the Fund are responsible for the Fund's operations.
The Fund's Trustees and officers are listed below, together with their
principal occupations during the past five years. Trustees who are interested
persons of the Fund within the meaning of the Investment Company Act of 1940
are referred to as Interested Trustees. Trustees who are not interested persons
of the Fund are referred to as Independent Trustees. Each of the Trustees
serves as a trustee of each of the 65 U.S. registered investment portfolios for
which Pioneer Investment Management, Inc. ("Pioneer") serves as investment
adviser (the "Pioneer Funds"). The address for all Interested Trustees and all
officers of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Fund's statement of additional information provides more detailed
information regarding the Fund's Trustees and is available upon request,
without charge, by calling 1-800-225-6292.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at www.pioneerfunds.com and on the SEC's website at
http://www.sec.gov.
36
Pioneer Europe Fund
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Positions Held Term of Office and Principal Occupation Other Directorships Held
Name and Age With the Fund Length of Service During Past Five Years by this Trustee
John F. Cogan, Jr. (78)* Chairman of the Board, Since 1999. Deputy Chairman and a Director of Harbor Global
Trustee and President Serves until Director of Pioneer Global Company, Ltd.
retirement or Asset Management S.p.A.
removal ("PGAM"); Non-Executive
Chairman and a Director of
Pioneer Investment
Management USA Inc.
("PIM-USA"); Chairman and a
Director of Pioneer;
Director of Pioneer
Alternative Investment
Management Limited
(Dublin); President and a
Director of Pioneer
Alternative Investment
Management (Bermuda)
Limited and affiliated
funds; President and
Director of Pioneer Funds
Distributor, Inc. ("PFD");
President of all of the
Pioneer Funds; and Of
Counsel (since 2000,
partner prior to 2000),
Wilmer Cutler Pickering
Hale and Dorr LLP (counsel
to PIM-USA and the Pioneer
Funds)
*Mr. Cogan is an Interested Trustee because he is an officer or director of
Pioneer and certain of its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Osbert M. Hood (52)** Trustee and Since June, 2003. President and Chief None
Executive Vice Serves until Executive Officer, PIM-USA
President retirement or since May 2003 (Director
removal since January 2001);
President and Director of
Pioneer since May 2003;
Chairman and Director of
Pioneer Investment
Management Shareholder
Services, Inc. ("PIMSS")
since May 2003; Executive
Vice President of all of
the Pioneer Funds since
June 2003; Executive Vice
President and Chief
Operating Officer of
PIM-USA, November 2000 to
May 2003; Executive Vice
President, Chief Financial
Officer and Treasurer, John
Hancock Advisers, L.L.C.,
Boston, MA, November 1999
to November 2000; Senior
Vice President and Chief
Financial Officer, John
Hancock Advisers, L.L.C.,
April 1997 to November 1999
**Mr. Hood is an Interested Trustee because he is an officer or director of
Pioneer and certain of its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
37
Pioneer Europe Fund
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Positions Held Term of Office and Principal Occupation Other Directorships Held
Name, Age and Address With the Fund Length of Service During Past Five Years by this Trustee
Mary K. Bush (56) Trustee Since 1999. President, Bush International Director of Brady
3509 Woodbine Street, Serves until (international financial Corporation (industrial
Chevy Chase, MD 20815 retirement or advisory firm) identification and
removal specialty coated material
products manufacturer),
Millennium Chemicals,
Inc. (commodity
chemicals), Mortgage
Guaranty Insurance
Corporation, and R.J.
Reynolds Tobacco
Holdings, Inc. (tobacco)
- ------------------------------------------------------------------------------------------------------------------------------------
Richard H. Egdahl, M.D. (77) Trustee Since 1999. Alexander Graham Bell Professor None
Boston University Healthcare Serves until of Health Care Entrepreneurship,
Entrepreneurship Program, retirement or Boston University; Professor of
53 Bay State Road, removal Management, Boston University
Boston, MA 02215 School of Management; Professor
of Public Health, Boston
University School of Public
Health; Professor of Surgery,
Boston University School of
Medicine; and University
Professor, Boston University
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (57) Trustee Since 1999. Founding Director, The Winthrop None
1001 Sherbrooke Street West, Serves until Group, Inc. (consulting firm);
Montreal, Quebec, Canada retirement or Professor of Management, Faculty
H3A 1G5 removal of Management, McGill University
- ------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (56) Trustee Since 1999. President and Chief Executive Director of New American
One Boston Place, 28th Floor, Serves until Officer, Newbury, Piret & High Income Fund, Inc.
Boston, MA 02108 retirement or Company, Inc. (investment (closed-end investment
removal banking firm) company)
- ------------------------------------------------------------------------------------------------------------------------------------
38
Pioneer Europe Fund
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Positions Held Term of Office and Principal Occupation Other Directorships Held
Name, Age and Address With the Fund Length of Service During Past Five Years by this Trustee
Stephen K. West (76) Trustee Since 1999. Senior Counsel, Sullivan & Director, The Swiss
125 Broad Street, Serves until Cromwell (law firm) Helvetia Fund, Inc.
New York, NY 10004 retirement or (closed-end investment
removal company) and
AMVESCAP PLC
(investment managers)
- ------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (68) Trustee Since 1999. President, John Winthrop & Co., None
One North Adgers Wharf, Serves until Inc. (private investment firm)
Charleston, SC 29401 retirement or
removal
- ------------------------------------------------------------------------------------------------------------------------------------
39
Pioneer Europe Fund
- ------------------------------------------------------------------------------------------------------------------------------------
FUND OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
Positions Held Term of Office and Principal Occupation Other Directorships Held
Name, Age and Address With the Fund Length of Service During Past Five Years by this Officer
Dorothy E. Bourassa (56) Secretary Since September, Secretary of PIM-USA; Senior None
2003. Serves at Vice President-Legal of Pioneer;
the discretion of and Secretary/Clerk of most of
board. PIM-USA's subsidiaries since
October 2000; Secretary of all
of the Pioneer Funds since
September 2003 (Assistant
Secretary from November 2000 to
September 2003); and Senior
Counsel, Assistant Vice
President and Director of
Compliance of PIM-USA from April
1998 through October 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (39) Assistant Since September, Assistant Vice President and None
Secretary 2003. Serves at Senior Counsel of Pioneer since
the discretion of July 2002; Vice President and
board. Senior Counsel of BISYS Fund
Services, Inc. (April 2001 to
June 2002); Senior Vice
President and Deputy General
Counsel of Funds Distributor,
Inc. (July 2000 to April 2001;
Vice President and Associate
General Counsel from July 1996
to July 2000); Assistant
Secretary of all of the Pioneer
Funds since September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
David C. Phelan (47) Assistant Since September, Partner, William Cutler None
Secretary 2003. Serves at Pickering Hale and Dorr LLP;
the discretion of Assistant Secretary of all of
board. Pioneer Funds since September
2003
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (59) Treasurer Since November, Vice President-Fund Accounting, None
2000. Serves at Administration and Custody
the discretion of Services of Pioneer (Manager
board. from September 1996 to February
1999); and Treasurer of all of
the Pioneer Funds (Assistant
Treasurer from June 1999 to
November 2000)
- ------------------------------------------------------------------------------------------------------------------------------------
40
Pioneer Europe Fund
- ------------------------------------------------------------------------------------------------------------------------------------
FUND OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Positions Held Term of Office and Principal Occupation Other Directorships Held
Name, Age and Address With the Fund Length of Service During Past Five Years by this Officer
Mark E. Bradley (45) Assistant Since November 2004. Deputy Treasurer of Pioneer None
Treasurer Serves at the discretion since 2004; Treasurer and
of the Board Senior Vice President, CDC
IXIS Asset Management
Services from 2002 to 2003;
Assistant Treasurer and Vice
President, MFS Investment
Management from 1997 to
2002; and Assistant
Treasurer of all of the
Pioneer Funds since November
2004
- ------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (39) Assistant Since November, 2000. Assistant Vice None
Treasurer Serves at the discretion President-Fund Accounting,
of board. Administration and Custody
Services of Pioneer (Fund
Accounting Manager from 1994
to 1999); and Assistant
Treasurer of all of the
Pioneer Funds since November
2000
- ------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (46) Assistant Since May, 2002. Fund Accounting Manager-Fund None
Treasurer Serves at the discretion Accounting, Administration
of board. and Custody Services of
Pioneer; and Assistant
Treasurer of all of the
Pioneer Funds since May 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (30) Assistant Since September, 2003. Fund Administration None
Treasurer Serves at the discretion Manager-Fund Accounting,
of board. Administration and Custody
Services since June 2003;
Assistant Vice
President-Mutual Fund
Operations of State Street
Corporation from June 2002
to June 2003 (formerly
Deutsche Bank Asset
Management); Pioneer Fund
Accounting, Administration
and Custody Services (Fund
Accounting Manager from
August 1999 to May 2002,
Fund Accounting Supervisor
from 1997 to July 1999);
Assistant Treasurer of all
of the Pioneer Funds since
September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
41
Pioneer Europe Fund
- ------------------------------------------------------------------------------------------------------------------------------------
FUND OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Positions Held Term of Office and Principal Occupation Other Directorships Held
Name, Age and Address With the Fund Length of Service During Past Five Years by this Officer
Martin J. Wolin (37) Chief Compliance Since October 2004. Chief Compliance Officer of None
Officer Serves at the discretion Pioneer (Director of
of the Board Compliance and Senior
Counsel from November 2000
to September 2004); Vice
President and Associate
General Counsel of UAM Fund
Services, Inc. (mutual fund
administration company) from
February 1998 to November
2000; and Chief Compliance
Officer of all of the
Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
42
- --------------------------------------------------------------------------------
THE PIONEER FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
Please consider a fund's investment objective, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about a 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
advisor, call 1-800-225-6292 or visit our web site at www.pioneerfunds.com.
U.S. Equity Asset Allocation
Pioneer Fund Pioneer Ibbotson Moderate
Pioneer Balanced Fund Allocation Fund
Pioneer Equity Income Fund Pioneer Ibbotson Growth
Pioneer Equity Opportunity Fund Allocation Fund
Pioneer Growth Shares Pioneer Ibbotson Aggressive
Pioneer Mid Cap Growth Fund Allocation Fund
Pioneer Mid Cap Value Fund
Pioneer Oak Ridge Large Cap International/Global Equity
Growth Fund Pioneer Emerging Markets Fund
Pioneer Oak Ridge Small Cap Pioneer Europe Select Fund
Growth Fund Pioneer Europe Fund
Pioneer Papp America-Pacific Pioneer International Equity Fund
Rim Fund Pioneer International Value Fund
Pioneer Papp Small and Mid Cap
Growth Fund Fixed Income
Pioneer Papp Stock Fund Pioneer America Income Trust
Pioneer Papp Strategic Pioneer Bond Fund
Growth Fund Pioneer Global High Yield Fund
Pioneer Real Estate Shares Pioneer High Yield Fund
Pioneer Research Fund* Pioneer Short Term Income Fund
Pioneer Small Cap Value Fund Pioneer Strategic Income Fund
Pioneer Small Company Fund Pioneer Tax Free Income Fund
Pioneer Value Fund
Money Market
Pioneer Cash Reserves Fund**
* Name change effective December 11, 2003. Formerly known as Pioneer Core
Equity Fund.
** An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
43
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
- --------------------------------------------------------------------------------
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/a/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,
call 1-800-225-6292 or visit our website 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
website at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund,
including fees associated with the routine and
non-routine filings of its Form N-1A, totaled
approximately $25,200 in 2004 and
approximately $20,100 in 2003.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
Fees for audit-related services provided to the
Fund during the fiscal years ended October 31,
2004 and 2003 totaled $10,000 in each year
and were for the reviews of the Funds semi
annual financial statements.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for
tax returns, and tax advisory services totaled
$6,000 in 2004 and $3,600 in 2003.
Additionally, there were fees for tax
compliance services in 2003 that totaled
approximately $4,100 for the 2002 tax returns.
(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.
Audit-Related and Other Fees
There were no audit-related and other services
provided to the Fund during the fiscal years ended
October 31, 2004 and 2003.
(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 recognizes 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 recognizes 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"), recently 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 has 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. The Committee
continues to review the facts and circumstances
surrounding the matter, including the issue of
whether the monies transferred for employees' taxes
were de facto monies due the employees for tax
payments rather than monies belonging to UCI.
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.
Aggregate Non-Audit Fees
The aggregate non-audit fees for the Fund and
affiliates, as previously defined, totaled
$16,000 in 2004 and $41,000 in 2003. These
fees include services provided prior to May 6,
2003, the effective date of the pre-approval
process
(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.
Non-Audit Services
Beginning with non-audit service contracts
entered into on or after May 6, 2003, the
effective date of the new SEC pre-approval
rules, the Funds audit committee is required
to pre-approve services to affiliates defined by
SEC rules to the extent that the services are
determined to have a direct impact on the
operations or financial reporting of the Fund.
For the years ended October 31, 2004 and
2003, there were no services provided to an
affiliate that required the Funds audit
committee pre-approval.
The Funds audit committee of the Board of Trustees
has considered whether the provision of non-audit
services that were rendered to the Affiliates (as
defined) that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X
is compatible with maintaining the principal
accountants independence.
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 December 28, 2004
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 December 28, 2004
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date December 28, 2004
* Print the name and title of each signing officer under his or her signature.