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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 Select Equity 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: August 31
Date of reporting period: September 1, 2004 through August 31, 2005
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
PIONEER
-------
EUROPE
SELECT EQUITY
FUND*
Annual
Report
8/31/05
[LOGO]PIONEER
Investments(R)
*Formerly Pioneer Europe Select Fund. Name change effective June 24, 2005.
Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareowners 1
Portfolio Summary 2
Prices and Distributions 3
Performance Update 4
Comparing Ongoing Fund Expenses 9
Portfolio Management Discussion 11
Schedule of Investments 15
Financial Statements 19
Notes to Financial Statements 28
Report of Independent Registered Public Accounting Firm 38
Trustees, Officers and Service Providers 39
Pioneer Europe Select Equity Fund
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LETTER TO SHAREOWNERS 8/31/05
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Dear Shareowner,
- --------------------------------------------------------------------------------
Questions about the economic outlook moved from theoretical to real when
Hurricane Katrina wreaked its devastation on people and property in New Orleans
and the Gulf Coast. Before the storm struck, the economy had been motoring
forward, with strong profit growth and good jobs numbers being reported across a
range of sectors. And even after ten straight hikes by the Federal Reserve
Board, interest rates remained at tolerable levels, while businesses and
households were managing to live with rising energy costs. Now, the Fed must
decide whether to raise rates further to avert higher inflation ignited by
Katrina-induced spikes in oil and gas prices, or to stand aside lest higher
rates stifle the ongoing expansion. But the massive outpouring of federal
recovery spending may be enough of a stimulus for the Fed to move forward with
its "measured" rate increases. Constraints on energy availability and
disruptions at the Port of Louisiana, a key export-import portal, may also put
the brakes on gross domestic product (GDP) growth for a time.
Consumers may also face difficult choices. The national savings rate stands at
zero or less, leaving households with little financial slack to absorb punishing
price increases at the pump and in their heating and utility bills. However,
consumers are notably resilient. If conditions remain favorable in the job
market, their behavior seems unlikely to change very much.
Barring surprises, Katrina's apparent impact does not undercut our favorable
expectations for the rest of the year. Carefully selected, high-quality stocks
and bonds still show potential for solid results even in a slower-growth
environment. With that in mind, our global investment experts are well
positioned to seek attractive opportunities around the world.
Large or small? Bonds or stocks? Domestic or international?
Just what your mix of investments should be isn't a question to be taken
lightly. Your long-term return will depend on which kinds of investments you
own, as well as your individual holdings. For a review of your portfolio and
ideas for aligning your investments with your aspirations, talk to your
financial professional.
Before investing consider the fund's investment objectives, risks, charges and
expenses. Contact your advisor or Pioneer Investments for a prospectus
containing this information. Read it carefully.
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 Select Equity Fund
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PORTFOLIO SUMMARY 8/31/05
- --------------------------------------------------------------------------------
Sector Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.]
Financials 28.0%
Industrials 15.9%
Consumer Discretionary 15.7%
Energy 12.9%
Telecommunication Services 9.4%
Materials 8.9%
Health Care 7.6%
Consumer Staples 1.6%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.]
United Kingdom 28.9%
France 27.2%
Germany 18.1%
Switzerland 7.4%
Spain 5.8%
Ireland 4.8%
Italy 4.5%
Netherlands 3.3%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)*
1. Vodafone Group Plc 5.52%
2. BP Amoco Plc 5.23
3. BNP Paribas SA 4.73
4. Eni S.p.A. 4.47
5. Royal Bank of Scotland Group Plc 4.34
6. Astrazeneca Plc 4.02
7. France Telecom SA 3.83
8. UBS AG 3.79
9. CS Group 3.59
10. GlaxoSmithKline Plc 3.54
* This list excludes temporary cash and derivative investments. The portfolio
is actively managed and current holdings may be different.
2
Pioneer Europe Select Equity Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class 8/31/05 8/31/04*
----- ------- --------
A $31.54 $27.25
B $28.63 $24.85
C $28.60 $24.81
R $31.27 $ -
Y $32.54 $ -
Distributions Per Share
- --------------------------------------------------------------------------------
9/1/04 - 8/31/05
----------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
----- ---------- ------------- -------------
A $0.1861 $0.2429 $0.4740
B $0.0942 $0.2429 $0.4740
C $0.1286 $0.2429 $0.4740
R $ - $ - $ -
Y $ - $ - $ -
* Historical net asset value per share amounts have been adjusted to reflect
the conversion ratios used for the merger of the Europe Fund and Europe
Select Equity Fund.
3
Pioneer Europe Select Equity Fund
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PERFORMANCE UPDATE 8/31/05 CLASS A SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) Europe
Index.
Average Annual Total Returns
(As of August 31, 2005)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
Life-of-Class
(12/29/00) 7.58% 6.22%
1 Year 24.53 17.41
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
Value of $10,000 Investment
Pioneer Europe MSCI Europe
Select Equity Fund Index
12/00 9425 10000
8/01 7681 8111
7546 6834
8/03 8281 7457
10646 9218
8/05 13258 11700
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.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 5.75% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Returns prior to June 24, 2005, effective date for the Fund's name change,
reflect performance of Europe Select Fund. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
4
Pioneer Europe Select Equity Fund
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PERFORMANCE UPDATE 8/31/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of August 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 6.64% 6.47%
1 Year 23.19 19.26
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
Value of $10,000 Investment
Pioneer Europe MSCI Europe
Select Equity Fund Index
12/00 10000 10000
8/01 8130 8111
7940 6834
8/03 8620 7457
10953 9218
8/05 13401 11700
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 held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected."If redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CSDC). Effective December 1, 2004, the period during which a CDSC is applied to
withdrawals was shortened to 5 years. The maximum CDSC for class B shares
continues to be 4%. For more complete information, please see the prospectus for
details. Note: Shares purchased prior to December 1, 2004 remain subject to the
CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerfunds.com/bshares. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ.
Returns prior to June 24, 2005, effective date for the Fund's name change,
reflect performance of Europe Select Fund. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
5
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 8/31/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of August 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 6.99% 6.99%
1 Year 23.53 23.57
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
Value of $10,000 Investment
Pioneer Europe MSCI Europe
Select Equity Fund Index
12/00 10000 10000
8/01 8140 8111
7960 6834
8/03 8690 457
11094 9218
8/05 13709 11700
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not reflect
the 1% front-end sales charge in effect prior to February 1, 2004. If you paid a
1% sales charge, your returns would be lower than those shown above. "If held"
results represent the percent change in net asset value per share. Returns would
have been lower had sales charges been reflected. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Returns prior to June 24, 2005, effective date for the Fund's name change,
reflect performance of Europe Select Fund. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
6
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 8/31/05 CLASS R SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of August 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 7.06% 7.06%
1 Year 24.01 24.01
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
Value of $10,000 Investment
Pioneer Europe MSCI Europe
Select Equity Fund Index
12/00 10000 10000
8/01 8122 8111
7940 6834
8/03 8669 7457
11089 9218
8/05 13752 11700
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 June 24, 2005 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 June 24, 2005, the actual performance of
Class R shares is reflected, which performance may be influenced by the smaller
asset size of Class R shares compared to Class A shares. The performance of
Class R shares does not reflect the 1% CDSC that was in effect prior to July 1,
2004. Class R shares are not subject to sales charges and are available for
limited groups of eligible investors, including institutional investors. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ.
Returns prior to June 24, 2005, effective date for the Fund's name change,
reflect performance of Europe Select Fund. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
7
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 8/31/05 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
MSCI Europe Index.
Average Annual Total Returns
(As of August 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 7.61% 7.61%
1 Year 24.70 24.70
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
Value of $10,000 Investment
Pioneer Europe MSCI Europe
Select Equity Fund Index
12/00 10000 10000
8/01 8150 8111
8007 6834
8/03 8786 7457
11295 9218
8/05 14085 11700
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 A shares are
used as a proxy through 6/24/05. 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.
Returns prior to June 24, 2005, effective date for the Fund's name change,
reflect performance of Europe Select Fund. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees, expenses or sales charges. You
cannot invest directly in an Index.
8
Pioneer Europe Select Equity 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.
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 Select Equity Fund
Based on actual returns from March 1, 2005 through August 31, 2005
Share Class A B C R Y
- -------------------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 3/1/05
Ending Account $1,019.82 $1,013.99 $1,015.12 $1,061.90 $1,063.60
Value On 8/31/05
Expenses Paid $ 10.94 $ 15.33 $ 14.00 $ 4.17 $ 2.30
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.71%, 2.69%,
2.41%, 2.14% and 1.18%, multiplied by the average account value over the
period, multiplied by 184/365, for Class A, Class B & Class C (to reflect the
one-half year period) and 69/365 for Class R & Class Y (to reflect the
partial year period).
9
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES (continued)
- --------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the
5% hypothetical examples that appear in the shareholder reports of the other
funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Europe Select Equity Fund
Based on a hypothetical 5% return per year before expenses, reflecting the
period from March 1, 2005 through August 31, 2005
Share Class A B C R Y
- -------------------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 3/1/05
Ending Account $1,016.59 $1,011.64 $1,013.06 $1,005.41 $1,007.22
Value On 8/31/05
Expenses Paid $ 10.92 $ 15.31 $ 13.98 $ 4.06 $ 2.24
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.71%, 2.69%,
2.41%, 2.14% and 1.18%, multiplied by the average account value over the
period, multiplied by 184/365, for Class A, Class B & Class C (to reflect the
one-half year period) and 69/365 for Class R & Class Y (to reflect the
partial year period).
10
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 8/31/05
- --------------------------------------------------------------------------------
Helped by supportive valuations, low interest rates and healthy corporate
finances, European equities posted strong results for the 12 months ended August
31, 2005, despite the relatively slow pace of economic growth. In the following
interview, Andrew Arbuthnott discusses the events and factors that affected your
Fund's performance during the 12 months. Mr. Arbuthnott is a member of the team
at Pioneer Investment Management in Dublin, Ireland, that is responsible for the
Fund's day-to-day management.
This is the first report for Pioneer Europe Select Equity Fund since the June
merger of Pioneer Europe Select Fund and Pioneer Europe Fund. The Fund is being
managed in the same style as the Europe Select Fund, with a relatively focused
portfolio of stocks of approximately 30 different companies. The management team
emphasizes fundamental analysis in selecting investments from among established,
mid- and large-cap corporations in Europe. The portfolio is assembled through a
bottom-up, stock selection rather than from any top-down sector decisions based
on macroeconomic trends.
Q: How did Pioneer Europe Select Equity Fund perform during the 12 months that
ended on August 31, 2005?
A: The Fund delivered strong results, despite somewhat lagging its benchmarks
for European equities. Pioneer Europe Select Equity Fund Class A shares had a
total return of 24.53% for the period, at net asset value. During the same 12
months, the MSCI Europe Index returned 26.34%, while the average return of
the 101 funds in Lipper's European Regional Fund category was 25.56%. The
underperformance versus the benchmarks can be attributed to the the Fund's
investment discipline, which tends to emphasize established, mid- and
large-cap stocks. This discipline, which has been successful over the longer
term, avoids the more volatile areas of the European market, including
Eastern European emerging markets and small company stocks, both of which
tended to produce stronger results during the fiscal year.
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.
11
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 8/31/05 (continued)
- --------------------------------------------------------------------------------
Q: What were the principal factors that affected European stock values during
the 12 months?
A: European economies generally showed sluggish growth during the fiscal year.
While some countries, such as Ireland and Spain, expanded at healthy rates,
gross domestic product (GDP) growth in most countries was lackluster. In the
United Kingdom, the pace of economic growth slowed after short-term interest
rates were hiked to control inflationary risks. Despite the modest growth
trends, equity prices rose briskly, supported by low stock valuation, low
interest rates in most countries, and generally strong corporate balance
sheets and impressive cash flows. Large-cap European companies tended to
offer shareholders relatively high dividend yields, and many corporations
embarked on policies to enhance shareholder value, including stock buy-back
programs, corporate restructuring efforts and investments to improve
long-term growth.
By sectors, energy stocks produced the most impressive returns, helped by the
rapidly rising prices for oil and natural gas. Other areas that generally
performed well included the real estate, capital goods, utilities and
diversified financials industries. While all parts of the European market had
positive performance, those industries that lagged the overall market
included retailing, semiconductors, food and staples retailing,
pharmaceuticals, media and banking.
In contrast to recent years, when currency fluctuations tended to have a
significant impact on investment results, currency played a minor role in the
final returns for the fiscal year. However, during the period, the relative
values of the euro and the U.S. dollar did fluctuate dramatically, adding to
short-term volatility.
Q: What were some of the investments that most significantly affected
performance?
A: Our stock selections in the capital goods industry were particularly
successful. One of the top-performing companies over the year was ACS, a
Spanish construction corporation that also is involved in managing
transportation and waste control systems. Its stock appreciated by 77% in
euro terms over the 12 months. VINCI, a French company involved in similar
operations, was another strong contributor. VINCI's stock rose by 60% from
our investment in November 2004 through the end of the fiscal year.
Schneider, a French capital goods company, also delivered strong results.
12
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
While pharmaceutical companies in general tended to trail market results, our
selections performed well, led by two U.K.-based companies, AstraZeneca and
GlaxoSmithKline. Among our consumer durables and apparel industry holdings,
Adidas, the sports footwear and apparel company that has announced plans to
buy U.S.-based Reebok, was an excellent performer, rising by 34% in euro
terms over the fiscal year. Within the telecommunications sector, successful
holdings included France Telecom and Vodafone. Individual stocks that did
well included: Eni, an Italian-based oil company; and long-term holding
Allied Irish Bank, and Deutsch Boerse, a company whose properties include the
German stock exchange. We sold the position in Deutsche Boerse before the end
of the fiscal year.
Detracting from results, however, were our investments in automobile
companies, which were hurt both by a confluence of issues, including:
short-term currency volatility; concerns about the effects of rising energy,
steel and other commodity costs; and worries about the implications of the
deteriorating credit quality of bonds issued by General Motors and Ford. One
Fund holding, Porsche, still managed to perform well, rising by 27% over the
year, but two other positions, Peugeot of France and BMW of Germany, both
underperformed the market. Our lack of exposure to metals and mining
companies also held back relative performance, as these companies appreciated
with rising commodity prices. CRH, an Irish building materials company and a
long-term holding, did moderately well, rising 20% over the year, but
LaFarge, the French-based concrete company, substantially underperformed the
market even though its stock price rose by 7%. Other holdings that detracted
from results included Boots, a U.K.-based pharmacy chain, which declined by
6% during the year, and TNT, a service and express delivery service based in
The Netherlands, which performed positively but still lagged the overall
market.
Q: What is your investment outlook?
A: We are reasonably confident about the prospects for European stocks, although
we would caution shareholders not to expect a repeat of the returns of the
past two years. Stock valuations in Europe remain reasonable, and many
corporations offer attractive dividend yields at a time when fixed-income
securities have very low rates. European-based companies continue to have
healthy financial positions and the ability to sustain shareholder-friendly
policies. In addition, short-term interest rates remain low on the Continent
and some countries, notably Germany, are beginning to
13
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 8/31/05 (continued)
- --------------------------------------------------------------------------------
reform their economic systems. While the conditions are positive for European
equities, economic growth remains weak in many markets, and the effects of
high energy prices still have not been fully realized.
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. The
Fund invests in a limited number of securities and, as a result, the Fund's
performance may be more volatile than the performance of funds holding more
securities.
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.
14
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/05
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 2.8%
Automobiles & Components - 2.8%
Automobile Manufacturers - 2.8%
6,674 Porsche AG $ 5,219,946
------------
Total Automobiles & Components $ 5,219,946
------------
TOTAL PREFERRED STOCK
(Cost $3,838,292) $ 5,219,946
------------
COMMON STOCK - 95.8%
Energy - 12.7%
Integrated Oil & Gas - 12.7%
858,169 BP Amoco Plc $ 9,789,154
282,926 Eni S.p.A. 8,367,283
201,221 Repsol SA 5,957,127
------------
$ 24,113,564
------------
Total Energy $ 24,113,564
------------
Materials - 8.7%
Construction Materials - 6.0%
196,250 CRH Plc $ 5,338,894
66,735 Lafarge BR 6,206,276
------------
$ 11,545,170
------------
Diversified Chemical - 2.7%
72,724 BASF AG $ 5,110,861
------------
Total Materials $ 16,656,031
------------
Capital Goods - 12.5%
Building Products - 3.1%
97,311 Compagnie de Saint Gobain $ 5,938,712
------------
Construction & Engineering - 4.4%
160,828 ACS, Actividades de Construccion y Servicios, SA $ 4,847,793
39,235 VINCI SA 3,486,071
------------
$ 8,333,864
------------
Electrical Components & Equipment - 1.8%
41,895 Schneider Electric SA $ 3,306,837
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/05 (continued)
- --------------------------------------------------------------------------------
Shares Value
Industrial Conglomerates - 3.2%
80,089 Siemens $ 6,084,045
------------
Total Capital Goods $ 23,663,458
------------
Transportation - 3.2%
Air Freight & Couriers - 3.2%
238,480 TNT NV $ 6,138,911
------------
Total Transportation $ 6,138,911
------------
Automobiles & Components - 8.8%
Auto Parts & Equipment - 2.5%
77,605 Compagnie Generale des Etablissements Michelin $ 4,732,074
------------
Automobile Manufacturers - 3.9%
60,501 Bayerische Motoren Werke AG $ 2,735,292
74,709 PSA Peugeot Citroen 4,666,470
------------
$ 7,401,762
------------
Tires & Rubber - 2.4%
57,109 Continental AG $ 4,536,405
------------
Total Automobiles & Components $ 16,670,241
------------
Consumer Durables & Apparel - 2.6%
Apparel, Accessories & Luxury Goods - 2.6%
27,064 Adidas-Salomon AG $ 4,839,237
------------
Total Consumer Durables & Apparel $ 4,839,237
------------
Retailing - 1.4%
Computer & Electronics Retail - 1.4%
998,096 Dixons Group Plc $ 2,729,644
------------
Total Retailing $ 2,729,644
------------
Food & Drug Retailing - 1.6%
Drug Retail - 1.6%
269,376 Boots Co. Plc $ 3,005,465
------------
Total Food & Drug Retailing $ 3,005,465
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Pharmaceuticals & Biotechnology - 7.5%
Pharmaceuticals - 7.5%
164,342 Astrazeneca Plc $ 7,529,191
273,323 GlaxoSmithKline Plc 6,618,655
------------
$ 14,147,846
------------
Total Pharmaceuticals & Biotechnology $ 14,147,846
------------
Banks - 14.0%
Diversified Banks - 14.0%
173,019 Allied Irish Banks Plc $ 3,737,016
593,398 Barclays Plc 5,921,984
120,990 BNP Paribas SA 8,853,168
278,217 Royal Bank of Scotland Group Plc 8,112,941
------------
$ 26,625,109
------------
Total Banks $ 26,625,109
------------
Diversified Financials - 13.6%
Diversified Capital Markets - 7.3%
154,422 CS Group* $ 6,723,583
86,332 UBS AG 7,090,248
------------
$ 13,813,831
------------
Diversified Financial Services - 6.3%
62,342 Deutsche Bank AG* $ 5,426,271
60,124 Societe Generale* 6,529,738
------------
$ 11,956,009
------------
Total Diversified Financials $ 25,769,840
------------
Telecommunication Services - 9.2%
Integrated Telecommunication Services - 3.8%
236,877 France Telecom SA $ 7,160,127
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/05 (continued)
- --------------------------------------------------------------------------------
Shares Value
Wireless Telecommunication Services - 5.4%
3,770,814 Vodafone Group Plc $ 10,332,471
------------
Total Telecommunication Services $ 17,492,598
------------
TOTAL COMMON STOCK
(Cost $153,166,870) $181,851,944
------------
TOTAL INVESTMENTS IN SECURITIES - 98.6%
(Cost $157,005,162) (a) (b) $187,071,890
------------
OTHER ASSETS AND LIABILITIES - 1.4% $ 2,600,400
------------
TOTAL NET ASSETS - 100.0% $189,672,290
============
* Non-income producing security
(a) At August 31, 2005, the net unrealized gain on investments based on cost
for federal income tax purposes of $157,694,122 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $29,498,311
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (120,543)
-----------
Net unrealized gain $29,377,768
===========
(b) Distributions of investments by country of issue (excluding temporary
cash investments), as a percentage of total investment in securities, is
as follows:
United Kingdom 28.9%
France 27.2
Germany 18.1
Switzerland 7.4
Spain 5.8
Ireland 4.8
Italy 4.5
Netherlands 3.3
----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments) for
the year ended August 31, 2005 aggregated $78,396,096 and $75,768,708,
respectively.
18 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 8/31/05
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (cost $157,005,162) $187,071,890
Cash 2,239,503
Receivables -
Fund shares sold 54,523
Dividends, interest and foreign taxes withheld 893,987
Due from Pioneer Investment Management, Inc. 4,403
Other 617
------------
Total assets $190,264,923
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 272,348
Due to affiliates 173,428
Accrued expenses 146,857
------------
Total liabilities $ 592,633
------------
NET ASSETS:
Paid-in capital $184,512,684
Undistributed net investment income 1,007,178
Accumulated net realized loss on investments and foreign
currency transactions (25,917,000)
Net unrealized gain on investments 30,066,728
Net unrealized gain on forward foreign currency contracts
and other assets and liabilities denominated in
foreign currencies 2,700
------------
Total net assets $189,672,290
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $129,215,087/4,096,257 shares) $ 31.54
============
Class B (based on $42,248,682/1,475,349 shares) $ 28.63
============
Class C (based on $14,660,552/512,569 shares) $ 28.60
============
Class R (based on $53,426/1,708 shares) $ 31.27
============
Class Y (based on $3,494,543/107,393 shares) $ 32.54
============
MAXIMUM OFFERING PRICE:
Class A ($31.54 [divided by] 94.25%) $ 33.46
============
The accompanying notes are an integral part of these financial statements. 19
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 8/31/05
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $129,944) $ 1,064,145
Interest 15,381
-----------
Total investment income $ 1,079,526
-----------
EXPENSES:
Management fees $ 438,640
Transfer agent fees and expenses
Class A 118,433
Class B 66,851
Class C 23,385
Class R 46
Class Y 28
Distribution fees
Class A 64,688
Class B 98,149
Class C 48,545
Class R 48
Administrative reimbursements 24,414
Custodian fees 91,138
Registration fees 97,410
Professional fees 26,970
Printing expense 30,376
Fees and expenses of nonaffiliated trustees 7,510
Miscellaneous 7,194
-----------
Total expenses $ 1,143,825
-----------
Less management fees waived and expenses
reimbursed by Pioneer Investment Management, Inc. (265,544)
Less fees paid indirectly (12,757)
-----------
Net expenses $ 865,524
-----------
Net investment income $ 214,002
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $12,945,459
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (129,497) $12,815,962
----------- -----------
Change in net unrealized gain (loss) on:
Investments $ (687,991)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 36,970 $ (651,021)
----------- -----------
Net gain on investments and foreign
currency transactions $12,164,941
-----------
Net increase in net assets resulting from operations $12,378,943
===========
20 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 8/31/05 and 8/31/04, respectively
Year Ended Year Ended
8/31/05 8/31/04
FROM OPERATIONS:
Net investment income $ 214,002 $ 44,161
Net realized gain on investments and foreign
currency transactions 12,815,962 279,264
Change in net unrealized gain (loss) on investments
and foreign currency transactions (651,021) 307,810
------------ ----------
Net increase in net assets resulting from
operations $ 12,378,943 $ 631,235
------------ ----------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.19* and $0.25* per share, respectively) $ (104,079) $ (12,726)
Class B ($0.09* and $0.11* per share, respectively) (20,763) (3,245)
Class C ($0.13* and $0.25* per share, respectively) (32,010) (8,506)
Net realized gain:
Class A ($0.72* and $0.00 per share, respectively) $ (354,852) $ -
Class B ($0.72* and $0.00 per share, respectively) (142,572) -
Class C ($0.72* and $0.00 per share, respectively) (164,906) -
------------ ----------
Total distributions to shareowners $ (819,182) $ (24,477)
------------ ----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 13,853,315 $5,025,100
Shares issued in reorganization 172,232,428 -
Reinvestment of distributions 583,662 17,543
Cost of shares repurchased (14,736,364) (1,254,026)
Redemption fees 9,008 -
------------ ----------
Net increase in net assets resulting from
Fund share transactions $171,942,049 $3,788,617
------------ ----------
Net increase in net assets $183,501,810 $4,395,375
NET ASSETS:
Beginning of year 6,170,480 1,775,105
------------ ----------
End of year (including undistributed net investment
income of $1,007,178 and $24,348, respectively) $189,672,290 $6,170,480
============ ==========
* Historical distribution per share amounts prior to June 24, 2005 have been
adjusted to reflect the conversion ratios utilized for the merger of the
Europe Fund and Europe Select Fund.
The accompanying notes are an integral part of these financial statements. 21
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
'05 Shares '05 Amount '04 Shares '04 Amount
CLASS A*
Shares sold 246,778 $ 7,600,141 99,363 $2,609,406
Shares Issued in
Reorganization 3,998,421 118,720,989 - -
Reinvestment of distributions 10,423 311,471 447 11,406
Less shares repurchased (273,436) (8,366,404) (28,403) (729,581)
--------- ------------ ------- ----------
Net increase 3,982,186 $118,266,197 71,407 $1,891,231
========= ============ ======= ==========
CLASS B*
Shares sold 74,664 $ 2,104,729 47,408 $1,145,432
Shares Issued in
Reorganization 1,475,024 39,828,322 - -
Reinvestment of distributions 4,838 131,446 111 2,586
Less shares repurchased (139,768) (3,905,571) (10,225) (244,413)
--------- ------------ ------- ----------
Net increase 1,414,758 $ 38,158,926 37,294 $ 903,605
========= ============ ======= ==========
CLASS C*
Shares sold 101,900 $ 2,873,196 53,563 $1,270,262
Shares Issued in
Reorganization 420,453 11,339,208 - -
Reinvestment of distributions 5,182 140,745 152 3,551
Less shares repurchased (77,710) (2,171,611) (11,559) (280,032)
--------- ------------ ------- ----------
Net increase 449,825 $ 12,181,538 42,156 $ 993,781
========= ============ ======= ==========
CLASS R*
Shares sold 81 $ 2,502
Shares Issued in
Reorganization 1,657 48,790
Less shares repurchased (30) (905)
--------- ------------
Net increase 1,708 $ 50,387
========= ============
CLASS Y*
Shares sold 41,514 $ 1,272,747
Shares Issued in
Reorganization 75,016 2,295,119
Less shares repurchased (9,137) (291,873)
--------- ------------
Net increase 107,393 $ 3,275,993
========= ============
* Historical share amounts prior to June 24, 2005 have been adjusted to reflect
the conversion ratios utilized for the merger of the Europe Fund and Europe
Select Fund.
22 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended
CLASS A 8/31/05 (b) 8/31/04 (b)
Net asset value, beginning of period $ 27.25 $21.41
-------- ------
Increase (decrease) from investment operations:
Net investment income $ 0.11 $ 0.20
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 5.09 5.89
-------- ------
Net increase (decrease) from investment operations $ 5.20 $ 6.09
Distributions to shareowners:
Net investment income (0.19) (0.25)
Net realized gain (0.72) -
-------- ------
Total distributions $ (0.91) $(0.25)
-------- ------
Redemption Fee $ -(c) $ -
-------- ------
Net increase (decrease) in net asset value $ 4.29 $ 5.84
-------- ------
Net asset value, end of period $ 31.54 $27.25
======== ======
Total return* 24.53% 28.56%
Ratio of net expenses to average net assets+ 1.71% 1.25%
Ratio of net investment income to average net assets+ 0.72% 1.58%
Portfolio turnover rate 149% 48%
Net assets, end of period (in thousands) $129,215 $3,108
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.21% 8.30%
Net investment income (loss) 0.22% (5.47)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.69% 1.25%
Net investment income 0.74% 1.58%
Year Ended Year Ended 12/29/00 (a)
CLASS A 8/31/03 (b) 8/31/02 (b) to 8/31/01 (b)
Net asset value, beginning of period $ 19.51 $ 20.10 $ 24.66
--------- --------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.17 $ 0.10 $ 0.12
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.73 (0.44) (4.68)
--------- --------- ----------
Net increase (decrease) from investment operations $ 1.90 $ (0.34) $ (4.56)
Distributions to shareowners:
Net investment income - (0.25) -
Net realized gain - - -
--------- --------- ----------
Total distributions $ - $ (0.25) $ -
--------- --------- ----------
Redemption Fee $ - $ - $ -
--------- --------- ----------
Net increase (decrease) in net asset value $ 1.90 $ (0.59) $ (4.56)
--------- --------- ----------
Net asset value, end of period $ 21.41 $ 19.51 $ 20.10
========= ========= ==========
Total return* 9.73% (1.76)% (18.50)%
Ratio of net expenses to average net assets+ 1.62% 1.75% 1.76%**
Ratio of net investment income to average net assets+ 1.02% 0.17% 0.92%**
Portfolio turnover rate 67% 68% 135%**
Net assets, end of period (in thousands) $ 914 $ 567 $ 266
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 16.15% 31.21% 39.42%**
Net investment income (loss) (13.51)% (29.29)% (36.74)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.62% 1.75% 1.75%**
Net investment income 1.02% 0.17% 0.93%**
(a) Class A shares were first publicly offered on December 29, 2000.
(b) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(c) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 23
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended
CLASS B 8/31/05 (b) 8/31/04 (b)
Net asset value, beginning of period $ 24.85 $ 19.65
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.03) $ (0.02)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 4.62 5.33
------- -------
Net increase (decrease) from investment operations $ 4.59 $ 5.31
Distributions to shareowners:
Net investment income (0.09) (0.11)
Net realized gain (0.72) -
------- -------
Total distributions $ (0.81) $ (0.11)
------- -------
Redemption Fee $ -(c) $ -
------- -------
Net increase (decrease) in net asset value $ 3.78 $ 5.20
------- -------
Net asset value, end of period $ 28.63 $ 24.85
======= =======
Total return* 23.19% 27.07%
Ratio of net expenses to average net assets+ 2.69% 2.17%
Ratio of net investment income (loss) to average net assets+ (0.27)% 0.65%
Portfolio turnover rate 149% 48%
Net assets, end of period (in thousands) $42,249 $ 1,505
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 3.32% 9.20%
Net investment loss (0.90)% (6.38)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.65% 2.17%
Net investment income (loss) (0.23)% 0.65%
Year Ended Year Ended 12/29/00 (a)
CLASS B 8/31/03 (b) 8/31/02 (b) to 8/31/01 (b)
Net asset value, beginning of period $ 18.10 $ 18.53 $ 22.80
--------- --------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.02) $ (0.11) $ 0.04
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.57 (0.32) (4.31)
--------- --------- ----------
Net increase (decrease) from investment operations $ 1.55 $ (0.43) $ (4.27)
Distributions to shareowners:
Net investment income - - -
Net realized gain - - -
--------- --------- ----------
Total distributions $ - $ - $ -
--------- --------- ----------
Redemption Fee $ - $ - $ -
--------- --------- ----------
Net increase (decrease) in net asset value $ 1.55 $ (0.43) $ (4.27)
--------- --------- ----------
Net asset value, end of period $ 19.65 $ 18.10 $ 18.53
========= ========= ==========
Total return* 8.57% (2.34)% (18.70)%
Ratio of net expenses to average net assets+ 2.78% 2.33% 2.34%**
Ratio of net investment income (loss) to average net assets+ (0.10)% (0.52)% 0.29%**
Portfolio turnover rate 67% 68% 135%**
Net assets, end of period (in thousands) $ 457 $ 295 $ 158
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 17.41% 31.81% 40.08%**
Net investment loss (14.73)% (30.00)% (37.45)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.78% 2.33% 2.33%**
Net investment income (loss) (0.10)% (0.52)% 0.30%**
(a) Class B shares were first publicly offered on December 29, 2000.
(b) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(c) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
24 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended
CLASS C 8/31/05 (b) 8/31/04 (b)
Net asset value, beginning of period $ 24.81 $ 19.63
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.01 $ 0.09
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 4.61 5.34
------- -------
Net increase (decrease) from investment operations $ 4.62 $ 5.43
Distributions to shareowners:
Net investment income (0.13) (0.25)
Net realized gain (0.72) -
------- -------
Total distributions $ (0.85) $ (0.25)
------- -------
Redemption Fee $ 0.02 $ -
------- -------
Net increase (decrease) in net asset value $ 3.79 $ 5.18
------- -------
Net asset value, end of period $ 28.60 $ 24.81
======= =======
Total return* 23.53% 27.67%
Ratio of net expenses to average net assets+ 2.41% 1.72%
Ratio of net investment income (loss) to average net assets+ 0.35% 1.14%
Portfolio turnover rate 149% 48%
Net assets, end of period (in thousands) $14,661 $ 1,557
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 3.72% 8.75%
Net investment loss (0.96)% (5.89)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.39% 1.72%
Net investment income (loss) 0.37% 1.14%
Year Ended Year Ended 12/29/00 (a)
CLASS C 8/31/03 (b) 8/31/02 (b) to 8/31/01 (b)
Net asset value, beginning of period $ 17.98 $ 18.39 $ 22.59
--------- --------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.07 $ (0.09) $ 0.05
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.58 (0.32) (4.25)
--------- --------- ----------
Net increase (decrease) from investment operations $ 1.65 $ (0.41) $ (4.20)
Distributions to shareowners:
Net investment income - - -
Net realized gain - - -
--------- --------- ----------
Total distributions $ - $ - $ -
--------- --------- ----------
Redemption Fee $ - $ - $ -
--------- --------- ----------
Net increase (decrease) in net asset value $ 1.65 $ (0.41) $ (4.20)
--------- --------- ----------
Net asset value, end of period $ 19.63 $ 17.98 $ 18.39
========= ========= ==========
Total return* 9.17% (2.21)% (18.60)%
Ratio of net expenses to average net assets+ 2.27% 2.22% 2.08%**
Ratio of net investment income (loss) to average net assets+ 0.54% (0.35)% 0.45%**
Portfolio turnover rate 67% 68% 135%**
Net assets, end of period (in thousands) $ 404 $ 201 $ 105
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 17.02% 31.70% 40.11%**
Net investment loss (14.21)% (29.83)% (37.58)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.27% 2.22% 2.07%**
Net investment income (loss) 0.54% (0.35)% 0.46%**
(a) Class C shares were first publicly offered on December 29, 2000.
(b) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 25
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
6/24/05 (a)
to
CLASS R 8/31/05
Net asset value, beginning of period $ 29.45
-------
Increase from investment operations:
Net investment income $ 0.01
Net realized and unrealized gain on investments and
foreign currency transactions 1.81
-------
Net increase from investment operations $ 1.82
-------
Net increase in net asset value $ 1.82
-------
Net asset value, end of period $ 31.27
=======
Total return* 6.19%(b)
Ratio of net expenses to average net assets+ 2.14%**
Ratio of net investment income to average net assets+ 0.08%**
Portfolio turnover rate 149%
Net assets, end of period (in thousands) $ 53
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.14%**
Net investment income 0.08%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.00%**
Net investment income 0.22%**
(a) Class R shares were first publicly offered on June 24, 2005.
(b) Not annualized.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
6/24/05 (a)
to
CLASS Y 8/31/05
Net asset value, beginning of period $ 30.59
-------
Increase from investment operations:
Net investment income $ 0.07
Net realized and unrealized gain on investments and
foreign currency transactions 1.88
-------
Net increase from investment operations $ 1.95
-------
Net increase in net asset value $ 1.95
-------
Net asset value, end of period $ 32.54
=======
Total return* 6.36%(b)
Ratio of net expenses to average net assets+ 1.18%**
Ratio of net investment income to average net assets+ 1.05%**
Portfolio turnover rate 149%
Net assets, end of period (in thousands) $ 3,495
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 1.18%**
Net investment income 1.05%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.18%**
Net investment income 1.05%**
(a) Class Y shares were first publicly offered on June 24, 2005.
(b) Not annualized.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 27
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/05
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Europe Select Equity Fund (the Fund) is a Delaware statutory trust
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. On June 24, 2005 Pioneer Europe Select Fund was
merged into Pioneer Europe Fund and, in connection with the merger, Pioneer
Europe Fund was renamed Pioneer Europe Select Equity Fund. Pioneer Europe Select
Fund is the accounting survivor and its historical performance, as adjusted, is
presented in the Fund's financial highlights. These financial highlights and
shareholder activity as reflected in the statement of changes in net assets have
been adjusted to reflect the conversion ratios used for the merger of Europe
Fund and Europe Select Fund. The investment objective of the Fund is long-term
capital growth.
The Fund offers five classes of shares - Class A, Class B, Class C, Class R and
Class Y shares. Class A, Class B and Class C Shares were first publicly offered
on December 29, 2000. Class R and Class Y shares were first publicly offered on
June 24, 2005. Shares of Class A, Class B, Class C, Class R and Class Y each
represent an interest in the same portfolio of investments of the Fund and have
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
revenues and expenses during the reporting period. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Trust in the preparation of its financial statements,
which are consistent with those policies generally accepted in the investment
company industry:
28
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 at the last sale price on the
principal exchange where they are traded. Securities that have not traded on
the date of valuation, or securities for which sale prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market 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 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. Cash equivalent securities are valued at
amortized cost.
Dividend income is recorded on the ex-dividend date, except that certain
dividends where the ex-dividend date may have passed are recorded as soon as
the Fund becomes aware of the ex-dividend data in the exercise of reasonable
diligence. Interest income, including interest on income bearing cash
accounts, is recorded on the accrual basis, 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.
Investing in the securities of European issuers involves unique risks
compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent the Fund invests a significant portion of its
investments in any one European region.
29
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/05 (continued)
- --------------------------------------------------------------------------------
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 translations 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 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 entering 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 August 31, 2005, the Fund had no outstanding portfolio hedges or
settlement hedges.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investments companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with
30
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
federal income tax rules. Therefore, the sources of the Trust'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 August 31, 2005, the Fund reclassified $925,680 to increase undistributed
net investment income, $38,199,569 to decrease accumulated net realized gain
on investments and foreign currency transactions and $37,273,889 to increase
paid-in capital to reflect permanent book-tax differences. The permanent
book-tax differences relate to Section 988 foreign currency character
reclassifications and merger related items (including differences related to
Pioneer Europe Select Fund and Pioneer Europe Select Equity Fund having
different reporting periods and there being different accounting and tax
survivors). The reclassification has no impact on the net assets of the Fund
and is designed to present the Fund's capital accounts on a tax basis.
At August 31, 2005, the Fund had a net capital loss carryforward of
$25,228,040, of which $11,591,470 will expire in 2010 and $13,636,570 will
expire in 2011, if not utilized.
For federal income tax purposes, Pioneer Europe Select Fund ceased to exist
on June 24, 2005 and will file a final tax return for the period from
September 1, 2004 through June 24, 2005. The tax character of distributions
paid by Pioneer Europe Select Fund was:
- --------------------------------------------------------------------------------
2005 2004
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary Income $403,585 $24,477
Long-term capital gain 415,597 -
-------- -------
Total $819,182 $24,477
======== =======
- --------------------------------------------------------------------------------
For federal income tax purposes, Pioneer Europe Fund (now Pioneer Europe
Select Equity Fund) is the tax survivor of the merger and will file a tax
return from November 1, 2004 through August 31, 2005, including combined
operations of the merged Fund. Pioneer Europe Select Equity Fund paid
ordinary income distributions of $151,401 for the period from November 1,
2004 through August 31, 2005.
31
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/05 (continued)
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at August 31, 2005.
- --------------------------------------------------------------------------------
2005
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 1,007,178
Capital loss carryforward (25,228,040)
Unrealized appreciation 29,380,468
-----------
Total $ 5,159,606
===========
- --------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appre ciation is
attributable to the tax deferral of losses on wash sales.
E. 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 $26,366 in underwriting commissions on the sale
of Class A shares during the year ended August 31, 2005.
F. 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 their 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.
32
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary of
UniCredito Italiano, manages the Trust'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 $200 million; and 0.75% of the excess
over $500 million.
Effective June 24, 2005, PIM has voluntarily agreed to limit ordinary operating
expenses to the extent required to reduce Fund expenses to 1.75%, 2.65%, 2.65%
and 2.00% of the average daily net assets attributable to Class A, Class B,
Class C and Class R shares, respectively. Class Y shares do not have an expense
limitation. These expense limitations are in effect through December 31, 2008
for Class A shares and through December 31, 2006 for Class B, Class C and Class
R shares.
Prior to the merger, PIM had contractually agreed not to impose all or a portion
of its management fee and to assume other operating expenses of Pioneer Europe
Select Fund to the extent necessary to limit Class A expenses to 1.75% of the
average daily net assets attributable to Class A shares. The portion of the
Fund-wide expenses attributable to Class B and Class C shares were reduced only
to the extent that such expenses are reduced for Class A shares. PIM had
voluntarily agreed to further reduce Class A expenses to 1.25%. This additional
waiver was voluntary and could have been revised or terminated at any time by
PIM.
In addition, under the management fees, administrative costs and certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At August 31, 2005, $8,693 was payable to PIM
related to management fees, administrative costs and certain other services and
is included in due to affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due to affiliates is $83,232 in transfer agent
fees payable to PIMSS at August 31, 2005.
33
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/05 (continued)
- --------------------------------------------------------------------------------
4. Distribution Plans
The Fund adopted Plans of Distribution with respect 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 under 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 $81,503 in distribution fees payable to PFD at August 31, 2005.
The Fund has also 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 may be subject to a contingent
deferred sales charge (CDSC). Effective February 1, 2004, a CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A shares
within 18 months of purchase (12 months for shares purchased prior to February
1, 2004). Class B shares subscribed on or after December 1, 2004 that are
redeemed within five years of purchase are subject to a CDSC at declining rates
beginning at 4.00%, based on the lower of cost or market value of shares being
redeemed. Shares purchased prior to December 1, 2004 remain subject to the CDSC
in effect at the time those shares were purchased. Redemptions of Class C shares
within one year of purchase are subject to a CDSC of 1.00%. Proceeds from the
CDSCs are paid to PFD. For the year ended August 31, 2005 CDSCs in the amount of
$50,565 were paid to PFD.
34
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund charges a 2.0% redemption fee on shares sold within 30 days of
purchase. For Class A, Class R and Class Y shares, the fee became effective
November 1, 2003, while for Class B and Class 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 August 31, 2005, the
Fund collected $9,008 in redemption fees, which are included in the Fund's
capital account.
5. Expense Offset Arrangements
The Fund can enter 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 August 31, 2005, the Fund's expenses were reduced
by $12,757 under such arrangements.
6. Merger Information
On June 21, 2005, beneficial owners of Pioneer Europe Select Fund approved a
proposed Agreement and Plan of Reorganization that provided for the merger
listed below. This tax-free reorganization was accomplished on June 24, 2005, by
exchanging all of Europe Select Fund's net assets for Europe Fund's shares,
based on Europe Fund's Class A, Class B, Class C, Class R and Class Y shares'
ending net asset value, respectively. In connection with the reorganization,
Pioneer Europe Fund was subsequently renamed Pioneer Europe Select Equity Fund.
The following charts show the details of the reorganizations as of that closing
date ("Closing Date"):
35
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/05 (continued)
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Pioneer Europe Pioneer Europe
Pioneer Europe Fund Select Fund Select Equity Fund
(Pre-Reorganization) (Pre-Reorganization) (Post-Reorganization)
- -----------------------------------------------------------------------------------------
Net Assets
Class A $118,720,989 $ 7,534,637 $126,255,626
Class B 39,828,322 2,849,243 42,677,565
Class C 11,339,208 3,362,380 14,701,588
Class R 48,790 - 48,790
Class Y 2,295,119 - 2,295,119
------------ ----------- ------------
Total Net
Assets $172,232,428 $13,746,260 $185,978,688
------------ ----------- ------------
Shares Outstanding
Class A 3,998,421 253,776* 4,252,197
Class B 1,475,024 105,527* 1,508,551
Class C 420,453 124,671* 545,125
Class R 1,657 - 1,657
Class Y 75,016 - 75,016
Shares Issued
in Reorganization
Class A 3,998,421
Class B 1,475,024
Class C 420,453
Class R 1,657
Class Y 75,016
- -----------------------------------------------------------------------------------------
* Share amounts have been adjusted to reflect the conversion ratios utilized
for the merger.
36
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Unrealized Accumulated
Appreciation Gain
on Closing Date on Closing Date
- --------------------------------------------------------------------------------
Pioneer Europe Fund $30,263,828 $(38,630,452)
=========== ============
- --------------------------------------------------------------------------------
On June 24, 2005, the unrealized appreciation of Pioneer Europe Select Fund,
which as noted above, was the acquired fund for tax purposes, was $864,305.
7. Additional Information (unaudited)
The Fund has designated $470,356 as a capital gain dividend for the purposes of
the dividend paid deduction.
37
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareowners of
Pioneer Europe Select Equity Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Pioneer Europe Select Equity Fund (the "Fund",
formerly the Pioneer Europe Select Fund) as of August 31, 2005, 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 four years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the period ended August 31, 2001 were audited by other auditors
who have ceased operations and whose report, dated October 5, 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. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of August 31, 2005, by correspondence with the custodian. 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 Select Equity Fund at August 31, 2005, the results of its
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights for the
four years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
[Signature of Ernst & Young LLP]
Boston, Massachusetts
October 7, 2005
38
Pioneer Europe Select Equity 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 88 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 web site at http://www.sec.gov.
39
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
INTERESTED TRUSTEES
- --------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Fund and Term of Office
John F. Cogan, Jr. (79)* Chairman of the Trustee since 1990.
Board, Serves until
Trustee and President successor trustee is
elected or earlier
retirement or
removal
*Mr. Cogan is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Osbert M. Hood (53)** Trustee and Trustee since 2003.
Executive Vice Serves until
President successor trustee is
elected or earlier
retirement or removal
**Mr. Hood is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Trustee
John F. Cogan, Jr. (79)* Deputy Chairman and a Director of Pioneer Global Asset Chairman and Director of
Management S.p.A ("PGAM"); Non-Executive Chairman ICI Mutual Insurance
and a Director of Pioneer Investment Management USA Company; Director
Inc. ("PIM-USA"); Chairman and a Director of Pioneer; of Harbor Global
Director of Pioneer Alternative Investment Management Company, Ltd.
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 (53)** President and Chief Executive Officer, PIM-USA since None
May 2003 (Director 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 Operation Officer of
PIM-USA, November 2000 to May 2003.
**Mr. Hood is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
40
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Positions Held Length of Service
Name, Age and Address With the Fund and Term of Office
David R. Bock**(61) Trustee Trustee since 2005.
3050 K. Street NW, Serves until successor
Washington, DC 20007 trustee is elected or
earlier retirement or
removal.
**Mr. Bock became a Trustee of the Fund on January 1, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (57) Trustee Trustee since 1997.
3509 Woodbine Street, Serves until
Chevy Chase, MD 20815 successor trustee
is elected or earlier
retirement or removal
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (58) Trustee Trustee since 1990.
1001 Sherbrooke Street West, Serves until
Montreal, Quebec, Canada successor trustee
H3A 1G5 is elected or earlier
retirement or removal
- ------------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name, Age and Address Principal Occupation During Past Five Years by this Trustee
David R. Bock**(61) Senior Vice President and Chief Financial Officer, I-trax, Director of The Enterprise
3050 K. Street NW, Inc. (publicly traded health care services company) Social Investment
Washington, DC 20007 (2001 - present); Managing Partner, Federal City Capital Company (privately-held
Advisors (boutique merchant bank) (1995 - 2000; 2002 affordable housing
to 2004); Executive Vice President and Chief Financial finance company);
Officer, Pedestal Inc. (internet-based mortgage trading Director of New York
company) (2000 - 2002) Mortgage Trust (publicly
traded mortgage REIT)
**Mr. Bock became a Trustee of the Fund on January 1, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (57) President, Bush International (international financial Director of Brady
3509 Woodbine Street, advisory firm) Corporation (industrial
Chevy Chase, MD 20815 identification and
specialty coated
material products
manufacturer),
Millennium Chemicals,
Inc. (commodity
chemicals), Mortgage
Guaranty Insurance
Corporation, and R.J.
Reynolds Tobacco
Holdings, Inc. (tobacco)
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (58) Founding Director, The Winthrop Group, Inc. (consulting None
1001 Sherbrooke Street West, firm); Professor of Management, Faculty of Management,
Montreal, Quebec, Canada McGill University
H3A 1G5
- ------------------------------------------------------------------------------------------------------------------------------------
41
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Positions Held Length of Service
Name, Age and Address With the Fund and Term of Office
Marguerite A. Piret (57) Trustee Trustee since 1990.
One Boston Place, 28th Floor, Serves until
Boston, MA 02108 successor trustee
is elected or earlier
retirement or removal
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (76) Trustee Trustee since 1993.
125 Broad Street, Serves until
New York, NY 10004 successor trustee
is elected or earlier
retirement or removal
- ------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (69) Trustee Trustee since 1990.
One North Adgers Wharf, Serves until
Charleston, SC 29401 successor trustee
is elected or earlier
retirement or removal
- ------------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name, Age and Address Principal Occupation During Past Five Years by this Trustee
Marguerite A. Piret (57) President and Chief Executive Officer, Newbury, Piret & Director of New America
One Boston Place, 28th Floor, Company, Inc. (investment banking firm) High Income Fund, Inc.
Boston, MA 02108 (closed-end investment
company)
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (76) Senior Counsel, Sullivan & Cromwell (law firm) Director, The Swiss
125 Broad Street, Helvetia Fund, Inc.
New York, NY 10004 (closed-end investment
company) and
AMVESCAP PLC
(investment managers)
- ------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (69) President, John Winthrop & Co., Inc. None
One North Adgers Wharf, (private investment firm)
Charleston, SC 29401
- ------------------------------------------------------------------------------------------------------------------------------------
42
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Fund and Term of Office
Dorothy E. Bourassa (57) Secretary Since September,
2003. Serves
at the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (40) Assistant Secretary Since September,
2003. Serves at
the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
David C. Phelan (48) Assistant Secretary Since September,
2003. Serves at
the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (60) Treasurer Since November
2000. Serves at
the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (45) Assistant Treasurer Since 2004. Serves
at the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Officer
Dorothy E. Bourassa (57) Secretary of PIM-USA; Senior Vice President - Legal None
of Pioneer; and Secretary/Clerk of most of PIM-USA's
subsidiaries; Secretary of all of the Pioneer Funds since
September 2003 (Assistant Secretary from November
2000 to September 2003)
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (40) Assistant Vice President and Senior Counsel of None
Pioneer since July 2002; Vice President and 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; Assistant Secretary of all Pioneer Funds since
September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
David C. Phelan (48) Partner, Wilmer Cutler Pickering Hale and Dorr LLP; None
Assistant Secretary of all Pioneer Funds since
September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (60) Vice President - Fund Accounting, Administration None
and Custody Services of Pioneer; and Treasurer of all
of the Pioneer Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (45) Deputy Treasurer of Pioneer since 2004; Treasurer None
and 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
- ------------------------------------------------------------------------------------------------------------------------------------
43
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Fund and Term of Office
Luis I. Presutti (40) Assistant Treasurer Since 2000. Serves
at the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (47) Assistant Treasurer Since 2002. Serves
at the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (31) Assistant Treasurer Since September,
2003. Serves
at the discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Martin J. Wolin (38) Chief Compliance Since October, 2004.
Officer Serves at the
discretion of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Officer
Luis I. Presutti (40) Assistant Vice President - Fund Accounting, None
Administration and Custody Services of Pioneer; and
Assistant Treasurer of all of the Pioneer Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (47) Fund Accounting Manager - Fund Accounting, None
Administration and Custody Services of Pioneer; and
Assistant Treasurer of all of the Pioneer Funds since
May 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (31) Fund Administration Manager - Fund Accounting, None
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, Assistant
Treasurer of all Pioneer Funds since September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Martin J. Wolin (38) Chief Compliance Officer of Pioneer (Director of None
Compliance and Senior Counsel from November 2000
to September 2004); and Chief Compliance Officer of all
of the Pioneer Funds since 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
The outstanding capital stock of PFD, PIM and PIMSS is indirectly wholly owned by UniCredito Italiano S.p.A.("UniCredito Italiano"),
one of the largest banking groups in Italy. PIM, the Fund's investment adviser, provides investment management and financial
services to mutual funds, institutional and other clients.
44
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@pioneerinvest.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
Please consider the Fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about the Fund and should be read carefully before you invest. To obtain a
prospectus and for other information on any Pioneer fund, call 1-800-225-6292 or
visit our web site www.pioneerfunds.com.
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund, including fees associated with
the annual filings of its Form N-1A totaled approximately $31,510 in 2005
and $25,200 in 2004.
(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 totaled $0 on 2005 and
$10,000 in 2004 for the review of the Fund's 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, totaled
approximately $6,800 for 2005 and $6,000 for 2004.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
Other Fees
There were no other services provided to the Fund during the fiscal years ended
August 31, 2005 and October 31, 2004.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after May 6,
2003, the effective date of the new SEC pre-approval rules, the Fund's audit
committee is required to pre-approve services to affiliates defined by SEC
rules to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Fund. For the years ended
August 31, 2005 and October 31, 2004, there were no services provided to an
affiliate that required the Fund's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
Aggregate Non-Audit Fees
The aggregate non-audit fees for the Fund and affiliates, as previously
defined, totaled approximately $6,800 in 2005 and $6,000 in 2004.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has considered whether the
provision of non-audit services that were rendered to the Affiliates (as
defined) that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
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 Select Equity Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date October 27, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date October 27, 2005
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date October 27, 2005
* Print the name and title of each signing officer under his or her signature.