OMB APPROVAL
OMB Number: 3235-0570
Expires: September 30, 2007
Estimated average burden
hours per response.....19.4
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, 2005 through February 28, 2006
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*
Semiannual
Report
2/28/06
[Logo] PIONEER
Investments(R)
*Formerly Pioneer Europe Select Fund. Name change effective June 24, 2005.
Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Comparing Ongoing Fund Expenses 15
Schedule of Investments 17
Financial Statements 22
Notes to Financial Statements 31
Factors Considered by the Independent Trustees in Approving
the Management Contract 40
Trustees, Officers and Service Providers 45
President's
Dear Shareowner,
- --------------------------------------------------------------------------------
Looking around the world, there's little doubt that global performance has
improved: economies worldwide are growing. The Japanese economy appears to be
coming out of its decade-long funk, and Europe - despite some mass media reports
- - is continuing to improve. European growth, while not spectacular, is
strengthening.
Fourth quarter 2005 U.S. real Gross Domestic Product (GDP) growth was 1.7%, but
this number - after ten consecutive quarters of growth at a 3% or better rate -
is deceptively low and reflects timing issues as much as weakness. Also
reflecting those timing issues, first quarter 2006 growth might appear stronger
than it actually is. Once the noise abates, we expect GDP growth to be in the
vicinity of 3% for the full year. The economy, we believe, is in good shape.
A few years ago, the Federal Reserve lowered interest rates to 1% to stimulate
the economy. With the economy strong, there is no need for the Fed to continue
to pursue an accommodative monetary policy of lowering rates. Its current
actions are aimed at trying to orchestrate a "soft landing" similar to the one
it engineered in 1994-5, one that keeps the economy growing without creating
inflationary pressures.
On March 28, the Fed raised short-term interest rates for the fifteenth time,
bringing them to 4.75%. The Fed noted that the economy was strong and reaffirmed
that it stood ready to raise rates as required to prevent a resurgence of
inflation. Looking at the economy and the markets, we find the Fed's language
and actions reassuring, rather than unsettling. The good news is that the Fed's
actions and words signal that the U.S. economy remains strong. Further, the
Fed's words signal that they will remain vigilant against the risk of inflation
and remain prepared to ensure that inflation - the great enemy of bond and stock
values - remains low.
While keeping inflation stable and low is the most crucial role of the Fed from
the perspective of a long-term investor, there can be short-term pain as the Fed
raises interest rates. The Fed is not alone in its policies, as central banks
around the world are raising rates to ensure that inflation pressures remain
under control while their economies grow.
2
Letter
While higher short-term interest rates may appear to be a negative development
for investors, we believe in the longer-term view that central banks do their
best work when they keep inflation low enough and stable enough that, to
paraphrase Alan Greenspan, investors do not let it affect their decision making.
Higher energy prices have pushed the Consumer Price Index (CPI) up to
uncomfortable levels, but those higher energy prices have not turned into
broad-based (core) inflation yet. With energy prices seeming to level off,
energy-based inflation concerns are abating. A larger current concern for the
Fed might be that the U.S. economy is operating at increasingly high levels of
capacity utilization and low unemployment rates. In other words, the U.S.
economy is growing fast enough that there are some concerns about overheating,
and a moderation in economic growth would be welcome. This is, indeed, a
Goldilocks economy, balancing between too cold and too hot - but just about
right at the moment.
In summation, we believe that the economy is on solid ground, that the Fed is
pursuing an appropriate course of action to keep the economy growing at a
non-inflationary pace, and that such an economic environment is
investor-friendly.
As always, thank you for the opportunity to serve your investment needs.
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.
3
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 2/28/06
- --------------------------------------------------------------------------------
European equities turned in strong performance during the six months ended
February 28, 2006, helped by reasonable stock valuations, healthy corporate
balance sheets, and increased merger-and-acquisition activity. These factors
helped sustain a rally in European stocks that has persisted for three years
despite a rather sluggish overall economy. In the following interview, Andrew
Arbuthnott discusses the events and factors that affected the Fund's
performance during the six months. Mr. Arbuthnott is responsible for the Fund's
day-to-day management.
Q: How did Pioneer Europe Select Equity Fund perform during the six months
that ended on February 28, 2006?
A: The Fund performed positively, in line with the overall favorable results
of the established companies of Western Europe, though below the
performance of its peers and benchmark. Pioneer Europe Select Equity Fund's
Class A shares had a total return of 10.58%, at net asset value, for the
six months. During the same period, the MSCI Europe Index returned 11.40%,
while the average return of the 103 funds in Lipper's European Funds
category was 12.42%. The Fund's underperformance relative to the Lipper
group can be attributed to the Fund's emphasis on established mid- and
large-cap stocks, while many other funds invest in the more volatile
small-cap and Eastern European markets.
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.
Q: What was the investment environment during the six months?
A: European stock markets produced strong performance during the period.
Company valuations were quite attractive, and corporations were generally
in sound financial condition after recovering from the debt problems of
several years ago. Corporations generally had good cash flows, which
enabled many to increase their dividends, buy back shares, and invest for
future growth, including through mergers and acquisitions. Although
economic growth
4
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
tended to be unimpressive, investors saw potential for acceleration in
2006. At the same time, interest rates were low by historic standards, even
after two rate increases by the European Central Bank. The six months also
saw a rise in merger-and-acquisition activity. In the utilities sector, for
example, E.ON, a German power producer, made an offer for Endesa of Spain,
while Suez made an acquisition proposal to another French company, Gaz de
France. The German company Merck made an offer for another German
pharmaceutical firm, Schering, while Linde, a German industrial gas
corporation, initiated a proposal to BOC, a U.K.-based competitor. While
the Fund owned none of these companies, the increase in merger and
acquisition announcements served as a support for the prices of equities in
general. Providing even more support was the increased activity of private
equity firms looking for companies to acquire.
With this general backdrop, the best performing industry in the market
during the six months was diversified financials, which was up
approximately 33%. The capital goods and insurance industries both rose by
27%, followed closely by materials. The lagging sectors were
telecommunications services, which fell by 12%, while energy, media and
food and staples retailers produced modestly positive results, though
underperforming the market averages. All these results were in euro terms.
The results achieved by U.S.-based investors were undercut by the strength
of the U.S. dollar, which gained 3.4% in value against the euro during the
period.
Q: What were some of the investments that most influenced Fund performance?
A: We overweighted investment banks, which performed very well. Two
Swiss-based institutions, UBS and Credit Suisse, were up 34% and 32% in
euro terms during the six months, while Deutsche Bank of Germany
appreciated by 33%. Because of the strong results, we took some profits and
reduced our positions in investment banks, selling our investment in
Deutsche Bank. Also among our financials holdings, two French-based banks
appreciated by more than 30%: BNP Paribas and Societe Generale.
In the materials sector, Syngenta, a Swiss-based agri-chemical corporation,
and Rio Tinto, a global mining corporation based in the United Kingdom,
both performed very well as world commodity
5
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 2/28/06 (continued)
- --------------------------------------------------------------------------------
prices rose higher. LaFarge, the French company that has grown to become
the global leader in cement production, was another strong contributor.
Another investment that did particularly well was TNT, the Dutch-based mail
and delivery service firm, which rose by 31% in euro terms.
Although we have been underweighting the media industry for some time, we
added two firms in the industry during the final quarter of 2005, and both
investments performed very well: WPP, a U.K. advertising and communications
firm; and Wolters Kluwer, a Netherlands-based publisher of professional
journals. Persimmon, a U.K.-based homebuilder in which we also invested in
late 2005, was another strong performer for the Fund.
Several investments were disappointing, however. Two telecommunications
services positions, France Telecom and Vodafone, a U.K-based firm, both
declined after announcing disappointing earnings resulting from a tough
competitive environment caused by advances in new communications
technologies, including wireless communications, cable and satellite, as
well as greater regulatory pressures. We have liquidated the position in
Vodafone. Our underweight position in utilities, which outperformed the
index, also hurt relative performance, as did stock selection in capital
goods.
Q: What is your investment outlook?
A: We think that the environment for European equities is positive, but the
stock averages will have a hard time matching their outstanding performance
over the past three years, when the MSCI Europe Index had an average annual
return of more than 28%. We believe economic growth should improve in
Europe, although the pace of the expansion is likely to be moderate.
Interest rates are low by historical standards. Stock valuations, although
higher than a year ago, are reasonable, and dividend yields are attractive.
Relative to other classes of assets, including corporate and government
bonds, European equities still appear to be favorably priced. Overall,
strong corporate balance sheets and heightened merger-and-acquisition
activity provide a supportive base for stock prices. There are, though,
some risks. Any significant weakness in the U.S. dollar versus the euro
would hurt many European companies that are exporters, and European
companies remain
6
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
vulnerable to any substantial slowdown in the global economy. We think,
though, that the latter risk is minimal.
Given all these factors, we remain positive about opportunities in the
stock market, although results may not be as good as they were in 2005.
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. At times, the Fund's investments may represent industries or
industry sectors that are interrelated or have common risks, making it more
susceptible to any economic, political, or regulatory developments or other
risks affecting those industries and sectors.
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.
7
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 2/28/06
- --------------------------------------------------------------------------------
Sector Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
Financials 31.0%
Consumer Discretionary 23.6%
Energy 10.9%
Industrials 10.7%
Materials 9.0%
Health Care 6.0%
Consumer Staples 3.9%
Telecommunication Services 3.0%
Information Technology 1.9%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
United Kingdom 28.2%
France 22.5%
Germany 14.0%
Switzerland 12.0%
Netherlands 6.3%
Ireland 5.7%
Spain 3.2%
Italy 2.9%
Swedan 1.9%
Panama 1.9%
Norway 1.4%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)*
1. Royal Bank of Scotland Group Plc 5.60%
2. BP Amoco Plc 4.81
3. BNP Paribas SA 4.80
4. CS Group 4.52
5. TNT NV 4.43
6. Barclays Plc 4.23
7. CRH Plc 3.69
8. Siemens 3.55
9. Roche Holdings AG 3.46
10. UBS AG 3.19
* This list excludes temporary cash and derivative investments. The portfolio
is actively managed and current holdings may be different.
8
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class 2/28/06 8/31/05
- ------- --------- ---------
A $34.62 $31.54
B $31.52 $28.63
C $31.41 $28.60
R $34.21 $31.27
Y $35.63 $32.54
Distributions Per Share
- --------------------------------------------------------------------------------
9/1/05 - 2/28/06
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ------------ --------------- --------------
A $0.2405 $- $-
B $ - $- $-
C $0.0722 $- $-
R $0.2985 $- $-
Y $0.4061 $- $-
9
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/06 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) Europe
Index.
12/00 9425 10000
8464 9127
2/02 7737 7616
6821 6067
2/04 10491 9539
13000 11460
2/06 14660 13033
Average Annual Total Returns
(As of February 28, 2006)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
Life-of-Class
(12/29/00) 8.93% 7.68%
5 Years 11.61 10.29
1 Year 12.77 6.29
- --------------------------------
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.
10
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/06 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.
12/00 10000 10000
8980 9127
2/02 8160 7616
7130 6067
2/04 10843 9539
13305 11460
2/06 14857 13033
Average Annual Total Returns
(As of February 28, 2006)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 7.97% 7.97%
5 Years 10.60 10.60
1 Year 11.70 7.70
- --------------------------------
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.
11
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/06 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.
Dec-00 10000 10000
8990 9127
2-Feb 8170 7616
7180 6067
4-Feb 10963 9539
13500 11460
6-Feb 15090 13033
Average Annual Total Returns
(As of February 28, 2006)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 8.29% 8.29%
5 Years 10.92 10.92
1 Year 11.80 11.80
- --------------------------------
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.
12
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/06 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.
12/00 10000 10000
8972 9127
2/02 8161 7616
7159 6067
2/04 10959 9539
13516 11460
2/06 15191 13033
Average Annual Total Returns
(As of February 28, 2006)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 8.42% 8.42%
5 Years 11.10 11.10
1 Year 12.41 12.41
- --------------------------------
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.
13
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/06 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.
12/00 10000 10000
9080 9127
2/02 8209 7616
7237 6067
2/04 11132 9539
13795 11460
2/06 15606 13033
Average Annual Total Returns
(As of February 28, 2006)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 9.00% 9.00%
5 Years 11.69 11.69
1 Year 13.18 13.18
- --------------------------------
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.
14
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 September 1, 2005 through February 28, 2006
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 9/1/05
Ending Account Value $1,105.80 $1,100.90 $1,101.00 $1,104.20 $1,108.30
On 2/28/06
Expenses Paid $ 9.14 $ 13.80 $ 13.80 $ 10.43 $ 6.64
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.75%, 2.65%,
2.45%, 2.00% and 1.27%, multiplied by the average account value over the
period, multiplied by 181/365, 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).
15
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 September 1, 2005 through February 28, 2006
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 9/1/06
Ending Account Value $1,016.12 $1,011.65 $1,011.45 $1,014.88 $1,018.50
On 2/28/06
Expenses Paid $ 8.75 $ 13.22 $ 13.22 $ 9.99 $ 6.36
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.75%, 2.65%,
2.65%, 2.00% and 1.27%, multiplied by the average account value over the
period, multiplied by 181/365, 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).
16
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 2/28/06 (unaudited)
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 0.0%
Automobiles & Components - 0.0%
Automobile Manufacturers - 0.0%
5,836 Porsche AG* $ 4,913,916
------------
Total Automobiles & Components $ 4,913,916
------------
TOTAL PREFERRED STOCK
(Cost $3,553,694) $ 4,913,916
------------
COMMON STOCK - 0.0%
Energy - 0.0%
Integrated Oil & Gas - 0.0%
824,156 BP Amoco Plc $ 9,095,828
193,850 Eni S.p.A. 5,546,141
215,426 Repsol SA 6,003,278
------------
$ 20,645,247
------------
Total Energy $ 20,645,247
------------
Materials - 0.0%
Construction Materials - 0.0%
213,370 CRH Plc $ 6,981,368
36,433 Lafarge Br 3,806,361
------------
$ 10,787,729
------------
Diversified Metals & Mining - 0.0%
101,910 Rio Tinto Plc $ 4,807,029
------------
Fertilizers & Agricultural Chemicals - 0.0%
10,563 Syngenta AG* $ 1,497,541
------------
Total Materials $ 17,092,299
------------
Capital Goods - 0.0%
Building Products - 0.0%
78,350 Compagnie de Saint Gobain $ 5,227,485
------------
Industrial Conglomerates - 0.0%
73,141 Siemens* $ 6,711,976
------------
Total Capital Goods $ 11,939,461
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 2/28/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Transportation - 0.0%
Air Freight & Couriers - 0.0%
257,553 TNT NV $ 8,382,383
------------
Total Transportation $ 8,382,383
------------
Automobiles & Components - 0.0%
Automobile Manufacturers - 0.0%
67,558 PSA Peugeot Citroen $ 3,938,121
------------
Tires & Rubber - 0.0%
82,656 Compagnie Generale des Etablissements Michelin $ 5,042,579
55,163 Continental AG 5,670,733
------------
$ 10,713,312
------------
Total Automobiles & Components $ 14,651,433
------------
Consumer Durables & Apparel - 0.0%
Apparel, Accessories & Luxury Goods - 0.0%
24,769 Adidas-Salomon AG $ 4,842,398
------------
Homebuilding - 0.0%
185,155 Persimmon Plc $ 4,514,036
293,073 Wimpey (George) Plc* 2,851,568
------------
$ 7,365,604
------------
Total Consumer Durables & Apparel $ 12,208,002
------------
Consumer Services - 0.0%
Hotels, Resorts & Cruise Lines - 0.0%
68,602 Carnival Corp. $ 3,543,293
------------
Total Consumer Services $ 3,543,293
------------
Media - 0.0%
Advertising - 0.0%
500,864 WPP Group Plc $ 5,812,613
------------
Publishing - 0.0%
159,225 Wolters Kluwer NV* $ 3,492,600
------------
Total Media $ 9,305,213
------------
Food & Drug Retailing - 0.0%
Drug Retail - 0.0%
231,488 Boots Group Plc $ 2,866,321
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Hypermarkets & Supercenters - 0.0%
88,934 Carrefour Supermarch* $ 4,415,375
------------
Total Food & Drug Retailing $ 7,281,696
------------
Pharmaceuticals & Biotechnology - 0.0%
Pharmaceuticals - 0.0%
103,559 Astrazeneca Plc $ 4,785,570
44,270 Roche Holdings AG* 6,540,858
------------
$ 11,326,428
------------
Total Pharmaceuticals & Biotechnology $ 11,326,428
------------
Banks - 0.0%
Diversified Banks - 0.0%
155,596 Allied Irish Banks Plc $ 3,716,562
683,309 Barclays Plc 8,005,938
98,142 BNP Paribas SA 9,084,529
224,760 Dnb Nor Asa* 2,728,935
315,850 Royal Bank of Scotland Group Plc 10,600,605
39,494 Societe Generale 5,597,329
------------
$ 39,733,898
------------
Total Banks $ 39,733,898
------------
Diversified Financials - 0.0%
Diversified Capital Markets - 0.0%
154,422 CS Group $ 8,549,729
39,829 Deutsche Bank AG 4,387,243
56,872 UBS AG 6,030,087
------------
$ 18,967,059
------------
Total Diversified Financials $ 18,967,059
------------
Technology Hardware & Equipment - 0.0%
Communications Equipment - 0.0%
1,055,318 Ericsson LM Tel Sur B $ 3,599,696
------------
Total Technology Hardware & Equipment $ 3,599,696
------------
The accompanying notes are an integral part of these financial statements. 19
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 2/28/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
Shares Value
Telecommunication Services - 0.0%
Integrated Telecommunication Services - 0.0%
253,356 France Telecom SA $ 5,530,266
------------
Total Telecommunication Services $ 5,530,266
------------
TOTAL COMMON STOCK
(Cost $150,175,302) $184,206,374
------------
RIGHTS/WARRANTS - 0.0%
Materials - 0.0%
Fertilizers & Agricultural Chemicals - 0.0%
15,723 Syngenta AG - Expires 5/23/06* $ 19,418
------------
Total Materials $ 19,418
------------
TOTAL RIGHTS/WARRANTS
(Cost $12,572) $ 19,418
------------
TOTAL INVESTMENT IN SECURITIES - 0.0%
(Cost $153,741,568) (a) (b) $189,139,708
------------
OTHER ASSETS AND LIABILITIES - 0.0% $ 872,500
------------
TOTAL NET ASSETS - 0.0% $190,012,208
============
* Non-income producing security
(a) At February 28, 2006, the net unrealized gain on investments based on cost
for federal income tax purposes of $153,741,568 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $37,589,445
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (2,191,305)
-----------
Net unrealized gain $35,398,140
===========
20 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(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 28.2%
France 22.5
Germany 14.0
Switzerland 12.0
Netherlands 6.3
Ireland 5.7
Spain 3.2
Italy 2.9
Sweden 1.9
Panama 1.9
Norway 1.4
----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended February 28, 2006 aggregated $48,648,519 and $65,101,240,
respectively.
The accompanying notes are an integral part of these financial statements. 21
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 2/28/06 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (cost $153,741,568) $189,139,708
Cash 386,840
Receivables -
Investment securities sold 518,974
Fund shares sold 120,521
Dividends, interest and foreign taxes withheld 549,218
Other 389
-------------
Total assets $190,715,650
-------------
LIABILITIES:
Payables -
Fund shares repurchased $ 291,142
Forward foreign currency settlement contracts, net 2,991
Due to affiliates 197,687
Accrued expenses 211,622
-------------
Total liabilities $ 703,442
-------------
NET ASSETS:
Paid-in capital $167,607,586
Distributions in excess of net investment income (3,200)
Accumulated net realized loss on investments and foreign
currency transactions (12,979,242)
Net unrealized gain on investments 35,398,140
Net unrealized loss on forward foreign currency contracts
and other assets and liabilities denominated in foreign
currencies (11,076)
-------------
Total net assets $190,012,208
-------------
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $132,200,498/3,818,233 shares) $ 34.62
=============
Class B (based on $39,214,988/1,244,138 shares) $ 31.52
=============
Class C (based on $14,863,666/473,223 shares) $ 31.41
=============
Class R (based on $102,034/2,982 shares) $ 34.21
=============
Class Y (based on $3,631,022/101,906 shares) $ 35.63
=============
MAXIMUM OFFERING PRICE:
Class A ($34.62 [divided by] 94.25%) $ 36.73
=============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 2/28/06
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $183,575) $ 1,840,902
Interest 4,102
-----------
Total investment income $ 1,845,004
-----------
EXPENSES:
Management fees $ 875,769
Transfer agent fees and expenses
Class A 236,287
Class B 121,953
Class C 37,814
Class R 114
Class Y 105
Distribution fees
Class A 133,642
Class B 198,402
Class C 72,105
Class R 201
Administrative reimbursements 11,166
Custodian fees 53,757
Registration fees 100,575
Professional fees 68,263
Printing expense 31,675
Fees and expenses of nonaffiliated trustees 8,145
Miscellaneous 16,505
-----------
Total expenses $ 1,966,478
-----------
Less management fees waived and expenses
reimbursed by Pioneer Investment Management, Inc. (115,774)
Less fees paid indirectly (2,896)
-----------
Net expenses $ 1,847,808
-----------
Net investment loss $ (2,804)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $13,189,127
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (251,369) $12,937,758
----------- -----------
Change in net unrealized gain (loss) on:
Investments $ 5,331,412
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (13,776) $ 5,317,636
----------- -----------
Net gain on investments and foreign currency
transactions $18,255,394
-----------
Net increase in net assets resulting from
operations $18,252,590
===========
The accompanying notes are an integral part of these financial statements. 23
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 2/28/06 and the Year Ended 8/31/05
Six Months
Ended
2/28/06 Year Ended
(unaudited) 8/31/05
FROM OPERATIONS:
Net investment income (loss) $ (2,804) $ 214,002
Net realized gain on investments and foreign currency
transactions 12,937,758 12,815,962
Change in net unrealized gain (loss) on investments 5,317,636 (651,021)
------------- -------------
Net increase in net assets resulting from
operations $ 18,252,590 $ 12,378,943
------------- -------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.24 and $0.19 per share, respectively) $ (928,894) $ (104,079)
Class B ($0.00 and $0.09 per share, respectively) - (20,763)
Class C ($0.07 and $0.13 per share, respectively) (35,655) (32,010)
Class R ($0.30 and $0.00 per share, respectively) (952) -
Class Y ($0.41 and $0.00 per share, respectively) (42,073) -
Net realized gain:
Class A ($0.00 and $0.72 per share, respectively) - (354,852)
Class B ($0.00 and $0.72 per share, respectively) - (142,572)
Class C ($0.00 and $0.72 per share, respectively) - (164,906)
------------- -------------
Total distributions to shareowners $ (1,007,574) $ (819,182)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 10,204,674 $ 13,853,315
Shares issued in reorganization - 172,232,428
Reinvestment of distributions 901,556 583,662
Cost of shares repurchased (28,011,541) (14,736,364)
Redemption fees 213 9,008
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions $ (16,905,098) $ 171,942,049
------------- -------------
Net increase in net assets $ 339,918 $ 183,501,810
NET ASSETS:
Beginning of period 189,672,290 6,170,480
------------- -------------
End of period (including undistributed net investment
income (loss) of $(3,200) and $1,007,178,
respectively) $ 190,012,208 $ 189,672,290
============= =============
24 The accompanying notes are an integral part of these financial
statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
'06 Shares '06 Amount '05 Shares '05 Amount
(unaudited) (unaudited)
CLASS A*
Shares sold 234,041 $ 7,664,193 246,778 $ 7,600,141
Shares issued in
reorganization - - 3,998,421 118,720,989
Reinvestment of distributions 26,478 858,689 10,423 311,471
Less shares repurchased (538,543) (17,332,990) (273,436) (8,366,404)
-------- ------------- --------- ------------
Net increase (decrease) (278,024) $ (8,810,108) 3,982,186 $118,266,197
======== ============= ========= ============
CLASS B*
Shares sold 48,626 $ 1,436,055 74,664 $ 2,104,729
Shares issued in
reorganization - - 1,475,024 39,828,322
Reinvestment of distributions - - 4,838 131,446
Less shares repurchased (279,837) (8,220,320) (139,768) (3,905,571)
-------- ------------- --------- ------------
Net increase (decrease) (231,211) $ (6,784,265) 1,414,758 $ 38,158,926
======== ============= ========= ============
CLASS C*
Shares sold 27,917 $ 825,119 101,900 $ 2,873,196
Shares issued in
reorganization - - 420,453 11,339,208
Reinvestment of distributions 995 29,333 5,182 140,745
Less shares repurchased (68,259) (2,027,086) (77,710) (2,171,611)
-------- ------------- --------- ------------
Net increase (decrease) (39,347) $ (1,172,634) 449,825 $ 12,181,538
======== ============= ========= ============
CLASS R*
Shares sold 1,587 $ 49,287 81 $ 2,502
Shares issued in
reorganization - - 1,657 48,790
Reinvestment of distributions 29 943 - -
Less shares repurchased (342) (11,557) (30) (905)
-------- ------------- --------- ------------
Net increase 1274 $ 38,673 1,708 $ 50,387
======== ============= ========= ============
CLASS Y*
Shares sold 6,895 $ 230,020 41,514 $ 1,272,747
Shares issued in
reorganization - - 75,016 2,295,119
Reinvestment of distributions 378 12,591 - -
Less shares repurchased (12,760) (419,588) (9,137) (291,873)
-------- ------------- --------- ------------
Net increase (decrease) (5,487) $ (176,977) 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 Europe Fund and
Europe Select Fund.
The accompanying notes are an integral part of these financial statements. 25
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months Ended Year
2/28/06 Ended
CLASS A (unaudited) 8/31/05 (b)
Net asset value, beginning of period $ 31.54 $ 27.25
------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.05 $ 0.11
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 3.27 5.09
------- --------
Net increase (decrease) from investment operations $ 3.32 $ 5.20
Distributions to shareowners:
Net investment income (0.24) (0.19)
Net realized gain - (0.72)
------- --------
Total distributions $ (0.24) $ (0.91)
------- --------
Redemption fee $ -(c) $ -(c)
------- --------
Net increase (decrease) in net asset value $ 3.08 $ 4.29
------- --------
Net asset value, end of period $ 34.62 $ 31.54
======= ========
Total return* 10.58% 24.53%
Ratio of net expenses to average net assets+ 1.75%** 1.71%
Ratio of net investment income to average net assets+ 0.27%** 0.72%
Portfolio turnover rate 53%** 149%
Net assets, end of period (in thousands) $132,200 $129,215
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 1.85%** 2.21%
Net investment income (loss) 0.17%** 0.22%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.75%** 1.69%
Net investment income 0.27%** 0.74%
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year Year 12/29/00 (a)
Ended Ended Ended to
CLASS A 8/31/04 (b) 8/31/03 (b) 8/31/02 (b) 8/31/01 (b)
Net asset value, beginning of period $ 21.41 $ 19.51 $ 20.10 $ 24.66
------- --------- --------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.20 $ 0.17 $ 0.10 $ 0.12
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 5.89 1.73 (0.44) (4.68)
------- --------- --------- ----------
Net increase (decrease) from investment operations $ 6.09 $ 1.90 $ (0.34) $ (4.56)
Distributions to shareowners:
Net investment income (0.25) - (0.25) -
Net realized gain - - - -
------- --------- --------- ----------
Total distributions $ (0.25) $ - $ (0.25) $ -
------- --------- --------- ----------
Redemption fee $ - $ - $ - $ -
------- --------- --------- ----------
Net increase (decrease) in net asset value $ 5.84 $ 1.90 $ (0.59) $ (4.56)
------- --------- --------- ----------
Net asset value, end of period $ 27.25 $ 21.41 $ 19.51 $ 20.10
======= ========= ========= ==========
Total return* 28.56% 9.73% (1.76)% (18.50)%
Ratio of net expenses to average net assets+ 1.25% 1.62% 1.75% 1.76%**
Ratio of net investment income to average net assets+ 1.58% 1.02% 0.17% 0.92%**
Portfolio turnover rate 48% 67% 68% 135%**
Net assets, end of period (in thousands) $ 3,108 $ 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 8.30% 16.15% 31.21% 39.42%**
Net investment income (loss) (5.47)% (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 1.25% 1.62% 1.75% 1.75%**
Net investment income 1.58% 1.02% 0.17% 0.93%**
The accompanying notes are an integral part of these financial statements.
(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.
26
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months Ended Year
2/28/06 Ended
CLASS B (unaudited) 8/31/05 (b)
Net asset value, beginning of period $ 28.63 $ 24.85
--------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.08) $ (0.03)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 2.97 4.62
--------- -------
Net increase (decrease) from investment operations $ 2.89 $ 4.59
Distributions to shareowners:
Net investment income - (0.09)
Net realized gain - (0.72)
--------- -------
Total distributions $ - $ (0.81)
--------- -------
Redemption fee $ -(c) $ -(c)
--------- -------
Net increase (decrease) in net asset value $ 2.89 $ 3.78
--------- -------
Net asset value, end of period $ 31.52 $ 28.63
========= =======
Total return* 10.09% 23.19%
Ratio of net expenses to average net assets+ 2.65%** 2.69%
Ratio of net investment income (loss) to average net assets+ (0.70)%** (0.27)%
Portfolio turnover rate 53%** 149%
Net assets, end of period (in thousands) $ 39,215 $42,249
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.88%** 3.32%
Net investment loss (0.93)%** (0.90)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.65%** 2.65%
Net investment income (loss) (0.70)%** (0.23)%
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year Year 12/29/00 (a)
Ended Ended Ended to
CLASS B 8/31/04 (b) 8/31/03 (b) 8/31/02 (b) 8/31/01 (b)
Net asset value, beginning of period $ 19.65 $ 18.10 $ 18.53 $ 22.80
------- --------- --------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.02) $ (0.02) $ (0.11) $ 0.04
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 5.33 1.57 (0.32) (4.31)
------- --------- --------- ----------
Net increase (decrease) from investment operations $ 5.31 $ 1.55 $ (0.43) $ (4.27)
Distributions to shareowners:
Net investment income (0.11) - - -
Net realized gain - - - -
------- --------- --------- ----------
Total distributions $ (0.11) $ - $ - $ -
------- --------- --------- ----------
Redemption fee $ - $ - $ - $ -
------- --------- --------- ----------
Net increase (decrease) in net asset value $ 5.20 $ 1.55 $ (0.43) $ (4.27)
------- --------- --------- ----------
Net asset value, end of period $ 24.85 $ 19.65 $ 18.10 $ 18.53
======= ========= ========= ==========
Total return* 27.07% 8.57% (2.34)% (18.70)%
Ratio of net expenses to average net assets+ 2.17% 2.78% 2.33% 2.34%**.
Ratio of net investment income (loss) to average net assets+ 0.65% (0.10)% (0.52)% 0.29%**
Portfolio turnover rate 48% 67% 68% 135%**
Net assets, end of period (in thousands) $ 1,505 $ 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 9.20% 17.41% 31.81% 40.08%**
Net investment loss (6.38)% (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 2.17% 2.78% 2.33% 2.33%**
Net investment income (loss) 0.65% (0.10)% (0.52)% 0.30%**
The accompanying notes are an integral part of these financial statements.
(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.
27
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months Ended Year
2/28/06 Ended
CLASS C (unaudited) 8/31/05 (b)
Net asset value, beginning of period $ 28.60 $ 24.81
--------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.09) $ 0.01
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 2.97 4.61
--------- -------
Net increase (decrease) from investment operations $ 2.88 $ 4.62
Distributions to shareowners:
Net investment income (0.07) (0.13)
Net realized gain - (0.72)
--------- -------
Total distributions $ (0.07) $ (0.85)
--------- -------
Redemption fee $ -(c) $ 0.02
--------- -------
Net increase (decrease) in net asset value $ 2.81 $ 3.79
--------- -------
Net asset value, end of period $ 31.41 $ 28.60
========= =======
Total return* 10.10% 23.53%
Ratio of net expenses to average net assets+ 2.65%** 2.41%
Ratio of net investment income (loss) to average net assets+ (0.64)%** 0.35%
Portfolio turnover rate 53%** 149%
Net assets, end of period (in thousands) $ 14,864 $14,661
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.79%** 3.72%
Net investment loss (0.78)%** (0.96)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.65%** 2.39%
Net investment income (loss) (0.64)%** 0.37%
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year Year 12/29/00 (a)
Ended Ended Ended to
CLASS C 8/31/04 (b) 8/31/03 (b) 8/31/02 (b) 8/31/01 (b)
Net asset value, beginning of period $ 19.63 $ 17.98 $ 18.39 $ 22.59
------- --------- --------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.09 $ 0.07 $ (0.09) $ 0.05
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 5.34 1.58 (0.32) (4.25)
------- --------- --------- ----------
Net increase (decrease) from investment operations $ 5.43 $ 1.65 $ (0.41) $ (4.20)
Distributions to shareowners:
Net investment income (0.25) - - -
Net realized gain - - - -
------- --------- --------- ----------
Total distributions $ (0.25) $ - $ - $ -
------- --------- --------- ----------
Redemption fee $ - $ - $ - $ -
------- --------- --------- ----------
Net increase (decrease) in net asset value $ 5.18 $ 1.65 $ (0.41) $ (4.20)
------- --------- --------- ----------
Net asset value, end of period $ 24.81 $ 19.63 $ 17.98 $ 18.39
======= ========= ========= ==========
Total return* 27.67% 9.17% (2.21)% (18.60)%
Ratio of net expenses to average net assets+ 1.72% 2.27% 2.22% 2.08%**
Ratio of net investment income (loss) to average net assets+ 1.14% 0.54% (0.35)% 0.45%**
Portfolio turnover rate 48% 67% 68% 135%**
Net assets, end of period (in thousands) $ 1,557 $ 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 8.75% 17.02% 31.70% 40.11%**
Net investment loss (5.89)% (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 1.72% 2.27% 2.22% 2.07%**
Net investment income (loss) 1.14% 0.54% (0.35)% 0.46%**
The accompanying notes are an integral part of these financial statements.
(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.
(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.
28
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months 6/24/05 (a)
Ended to
2/28/06 8/31/05
CLASS R (unaudited)
Net asset value, beginning of period $ 31.27 $ 29.45
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.04) $ 0.01
Net realized and unrealized gain on investments
and foreign currency transactions 3.28 1.81
------- -------
Net increase from investment operations $ 3.24 $ 1.82
Distributions to shareowners:
Net investment income (0.30) -
------- -------
Net increase in net asset value $ 2.94 $ 1.82
------- -------
Net asset value, end of period $ 34.21 $ 31.27
======= =======
Total return* 10.42% 6.19%(b)
Ratio of net expenses to average net assets+ 2.00%** 2.14%**
Ratio of net investment income to average
net assets+ 0.36%** 0.08%**
Portfolio turnover rate 53%** 149%
Net assets, end of period (in thousands) $ 102 $ 53
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 2.03%** 2.14%**
Net investment income 0.33%** 0.08%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction for
fees paid indirectly:
Net expenses 2.00%** 2.00%**
Net investment income 0.36%** 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.
The accompanying notes are an integral part of these financial statements. 29
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months 6/24/05 (a)
Ended to
2/28/06 8/31/05
CLASS Y (unaudited)
Net asset value, beginning of period $ 32.54 $ 30.59
------- -------
Increase from investment operations:
Net investment income $ 0.13 $ 0.07
Net realized and unrealized gain on investments
and foreign currency transactions 3.37 1.88
------- -------
Net increase from investment operations $ 3.50 $ 1.95
Distributions to shareowners:
Net investment income (0.41) -
------- -------
Net increase in net asset value $ 3.09 $ 1.95
------- -------
Net asset value, end of period $ 35.63 $ 32.54
======= =======
Total return* 10.83% 6.36%(b)
Ratio of net expenses to average net assets+ 1.27%** 1.18%**
Ratio of net investment income to average
net assets+ 0.76%** 1.05%**
Portfolio turnover rate 53%** 149%
Net assets, end of period (in thousands) $ 3,631 $ 3,495
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 1.27%** 1.18%**
Net investment income 0.76%** 1.05%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction for
fees paid indirectly:
Net expenses 1.27%** 1.18%**
Net investment income 0.76%** 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.
30 The accompanying notes are an integral part of these financial
statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/06 (unaudited)
- --------------------------------------------------------------------------------
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:
31
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
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. Information regarding the Fund's
principal investment risks is contained
32
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
in the Fund's prospectus(es). Please refer to those documents when
considering the Fund's risks.
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.
The Fund's gross forward currency settlement contracts receivable and
payable at February 28, 2006 were $518,974 and $515,983, respectively,
resulting in a net payable of $2,991.
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
33
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
gains, if any, to its shareowners. Therefore, no federal income tax
provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the 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.
The tax character of current year distributions will be determined at the
end of the current fiscal year.
For federal income tax purposes, Pioneer Europe Select Fund ceased to exist
on June 24, 2005 and has filed 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 during the year ended August 31, 2005
was:
- --------------------------------------------------------------------------------
2005
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary Income $403,585
Long-term capital gain 415,597
--------
Total $819,182
========
- --------------------------------------------------------------------------------
For federal income tax purposes, Pioneer Europe Fund (now Pioneer Europe
Select Equity Fund) is the tax survivor of the merger and has filed 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.
The following shows the components of distributable earnings on a federal
income tax basis at August 31, 2005.
34
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 $8,522 in underwriting commissions on the sale
of Class A shares during the six months ended February 28, 2006.
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.
35
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary of
UniCredito Italiano, manages the Trust's portfolio. Effective January 1, 2006,
management fees are calculated daily at the annual rate of 0.85% of the Fund's
average daily nets assets up to $500 million; and 0.75% of the excess over $500
million. Prior to January 1, 2006, management fees were calculated daily at the
annual rate of 1.00% of the Fund's average daily net assets up to $300 million;
0.85% of the next $200 million; and 0.75% of the excess over $500 million. The
management fee was equivalent to 0.95% of the average daily net assets for the
period.
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 January 1, 2009 for
Class A shares and through January 1, 2007 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.
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 February 28, 2006, $16,229 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 $179,125 in transfer agent
fees payable to PIMSS at February 28, 2006.
36
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 $2,333 in distribution fees payable to PFD at February 28, 2006.
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 six months ended February 28, 2006 CDSCs in the
amount of $20,993 were paid to PFD.
37
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 2/28/06 (unaudited) (continued)
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 six months ended February 28,
2006, the Fund collected $213 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 six months ended February 28, 2006 the Fund's expenses were
reduced by $2,896 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"):
38
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
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.
39
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT
- --------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees") vote
separately annually to approve the Fund's management contract (the "Management
Contract"). The Trustees have determined that the terms of the Management
Contract are fair and reasonable and that renewal of the contract will enable
the Fund to receive quality investment advisory services at a cost deemed
reasonable and is in the best interests of the Fund and its shareholders. In
making such determinations, the Independent Trustees relied upon the assistance
of counsel to the Independent Trustees and counsel to the Fund.
Throughout the year, the Independent Trustees regularly met in executive
session separately from the Interested Trustees of the Fund and any officer of
Pioneer Investment Management, Inc., the Fund's adviser (the "Investment
Adviser"), or its affiliates. While the Trustees, including the Independent
Trustees, act on all major matters relating to the Fund, a significant portion
of the activities of the Board of Trustees (including certain of those
described herein) is conducted through committees, the members of which are
comprised exclusively of Independent Trustees. Such committee meetings are
attended by officers of the Fund or the Investment Adviser to the extent
requested by the members of the committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract, and relied
upon their knowledge, resulting from their meetings throughout the year, of the
Investment Adviser, its services and the Fund. Both in meetings specifically
dedicated to renewal of the Management Contract and at other meetings during
the course of the year, the Trustees, including the Independent Trustees,
received materials relating to the Investment Adviser's investment and
management services under the Management Contract. These materials included (i)
information on the investment performance of the Fund, a peer group of funds
and an index, in each case selected by the Independent Trustees for this
purpose, (ii) sales and redemption data in respect to the Fund, (iii) the
general investment outlook in the markets in which the Fund invests, (iv)
arrangements in respect of the distribution of the Fund's shares, (v) the
procedures employed to determine the value of each of the Fund's assets, (vi)
the Investment Adviser's management of the relationships with the Fund's
unaffiliated service providers, (vii) the record of compliance with the Fund's
investment policies and restrictions and with the Fund's Code of
40
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Ethics and the structure and responsibilities of the Investment Adviser's
compliance department, (viii) the nature, cost and character of non-investment
management services provided by the Investment Adviser and its affiliates and
(ix) the disclosures included in the Fund's prospectuses and reports to
shareholders.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested and the Investment
Adviser provided additional information in order to evaluate the quality of the
Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one and three-year periods for the
Fund and a peer group selected by the Independent Trustees for this purpose,
(2) management fees incurred by a peer group of funds selected by the
Independent Trustees for this purpose, (3) the advisory fees of comparable
portfolios of other clients of the Investment Adviser, (4) expense ratios for
the Fund and a peer group of funds selected by the Independent Trustees for
this purpose, (5) the overall organization of the Investment Adviser, (6) the
Investment Adviser's financial results and condition, including its and certain
of its affiliates profitability from services performed for the Fund, (7)
transfer agency fees and administrative reimbursements paid to the Investment
Adviser or affiliates, (8) investment management staffing, and (9) operating
expenses paid to third parties. The Trustees also reviewed information
regarding the potential for the Fund and the Investment Adviser to benefit from
further economies of scale in the management of the Fund in light of reasonable
growth expectations for the Fund, break points in the management fee and
certain of the Fund's expenses that are not incurred as fees based on a
percentage of net assets.
The following summarizes factors considered by the Trustees in connection with
reviewing the information described above and their renewal of the Fund's
Management Contract. The Trustees did not identify any single factor as
all-important or controlling, and the summary does not detail all the matters
that were considered.
A. Ancillary Benefits to Shareholders. The Trustees considered the benefits to
shareholders of investing in a Fund that is part of a large number of
investment companies offering a variety of investment disciplines and
providing for a large variety of Fund and shareholder services.
41
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Fund's investment objective and regulatory
requirements. The Trustees also reviewed the Fund's investment performance,
as well as the Fund's performance based upon total return compared to both
the performance of a peer group and the results of an index, in each case
selected by the Independent Trustees for this purpose. The Fund's
performance, based on total return, was in the third quintile of the peer
group for the 12 months ended June 30, 2005 and the second quintile for the
three years ended June 30, 2005. (In all quintile rankings referred to
throughout this discussion first quintile is most favorable to the Fund's
shareholders. Thus, highest relative performance would be first quintile
and lowest relative expenses also would be first quintile.) The Trustees
concluded that the performance of the Fund supported the continuation of
the Management Contract.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of
the Fund and the Fund's investment objective and discipline. The
Independent Trustees also have had discussions with senior management of
the Investment Adviser responsible for investment operations and the senior
management of the Investment Adviser's equities group. Among other things,
the Trustees considered the number, education and experience of the
Investment Adviser's investment staff and their use of technology and
emphasis on analytics in view of the risk profile of securities in which
the Fund invests. The Trustees concluded that the Investment Adviser had
the quality and depth of personnel and the well-developed methods essential
to performing its duties under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality, cost and extent of other services provided to shareholders of the
Fund, including administrative and shareholder services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness of the arrangements for reimbursement of the
Investment Adviser's out-of-pocket costs and expenses, including overhead,
for certain administrative services that the Investment Adviser is not
required to provide under the Management Contract.
42
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Trustees also considered the nature and extent of the other services
provided by the Investment Adviser's affiliates under other contracts and
its super vision of third party service providers. Based on these
considerations, the Trustees concluded that the nature, quality, cost and
extent of such services are satisfactory and reliable and serve the
shareholders of the Fund well.
E. Management Fee and Expenses. The Trustees considered the Investment
Adviser's fee under the Management Contract relative to the management fees
charged by a peer group of funds selected by the Independent Trustees for
this purpose using data provided by an independent third party. The Fund's
management fee for the 12 months ended June 30, 2005 was in the fourth
quintile relative to the management fees paid by the other funds in that
peer group for the comparable period. Pioneer agreed to a reduction of the
management fee from 1.00% of average daily nets assets to 0.85% of average
daily net assets. The Trustees determined that the fee under the Management
Contract was reasonable and fair in light of both the overall nature and
quality of services provided by the Investment Advisor and the fees charged
by the funds in the peer group. The Trustees also considered the Fund's
expense ratio for the 12 months ended June 30, 2005 and expense ratios for
the comparable period of a peer group of funds selected by the Independent
Trustees for this purpose. The Fund's expense ratio was in the third
quintile of this peer group for the most recent fiscal year. The Trustees
concluded that the Fund's overall expense ratio was reasonable compared to
that of most of the comparable funds.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer Funds,
including details with respect to the Fund. This consideration included a
review of the Investment Adviser's methodology in allocating certain of its
costs to the management of each Fund. The Trustees also considered the
financial results realized by the Investment Adviser in connection with the
operation of the Fund. They further considered the profits realized by the
Investment Adviser and its affiliates from non-fund businesses that may
benefit from or be related to the Fund's business. The Trustees considered
the Investment Adviser's profit margins in comparison with the limited
available industry data. The Trustees concluded that the Investment
Adviser's profits from management of the
43
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
Pioneer Funds, including the financial results derived from the Fund, bear
a reasonable relationship to the services rendered and are fair for the
management of the Fund.
G. Economies of Scale. The Trustees considered whether the Fund has
appropriately benefited from any economies of scale, and whether there was
potential for realization of any further economies of scale. Because of
break points in the management fee, the Trustees concluded that any
perceived or potential economies of scale would be shared at future asset
levels in a reasonable manner as the Fund grows in size between the Fund's
shareholders and the Investment Advisor.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Fund, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates, including fees for services such as shareholder services. The
Trustees also considered the receipt of sales loads and payments under Rule
12b-1 plans in respect to the Pioneer Funds (including the Fund), and
benefits to the Investment Adviser from the use of "soft" commission
dollars to pay for research services. The Trustees further considered the
revenues and profitability of the Investment Adviser's businesses other
than the fund business, including the Investment Adviser's institutional
investment advisory business. The Trustees considered the intangible
benefits that accrue to the Investment Adviser and its affiliates by virtue
of its relationship with the Fund and the Pioneer Funds as a group. The
Trustees concluded that all these types of benefits accruing to the
Investment Adviser were reasonable in the context of the overall
relationship between the Investment Adviser and the Fund.
Conclusion. The Trustees, in light of the Investment Adviser's overall
performance, considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their evaluation of all material
factors deemed relevant and the advice of independent counsel, the Trustees
concluded that the Management Contract with the Fund is fair and reasonable and
voted to approve the continuation of the Management Contract for another year.
44
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Osbert M. Hood, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood Dorothy E. Bourassa, Secretary
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser and Administrator
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is publicly available to shareowners
at www.pioneerfunds.com. This information is also available on our web site at
www.pioneerfunds.com and on the Securities and Exchange Commission's web site at
http://www.sec.gov.
45
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
46
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
47
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
48
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
49
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
51
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
52
- --------------------------------------------------------------------------------
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
FactFoneSM 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.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
N/A
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's independent auditor, Ernst &
Young LLP ("E&Y"), has advised the Audit
Committee of the Fund's Board of Trustees that
E&Ys Spanish affiliate (E&Y Spain) performed
certain non-audit work for Pioneer Global
Investments Limited ("PGIL"), an affiliate of the
Funds investment adviser. The services involved
the receipt and disbursement of monies transferred
to E&Y Spain by PGIL in payment of individual
payroll and related income tax withholdings due on
returns prepared by E&Y Spain for certain PGIL
employees located in Spain from February 2001 to
October 2005. E&Y became auditors of the Fund in
May 2002. These payroll and tax services were
discontinued in November 2005. The annual fee
received by E&Y Spain for all such services totaled
approximately 9,000 Euro per year. E&Y has informed
the Audit Committee that based on its internal
reviews and the de minimus nature of the services
provided and fees received, E&Y does not believe
its independence with respect to the Fund has been
impaired or that it is disqualified from acting as
independent auditors to the Fund.
N/A
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive 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 12. 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 April 30, 2006
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 April 30, 2006
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date April 30, 2006
* Print the name and title of each signing officer under his or her signature.