OMB APPROVAL
OMB Number: 3235-0570
Expires: January 31, 2014
Estimated average burden
hours per response.....20.6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07870
Pioneer Real Estate Shares
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: December 31
Date of reporting period: January 1, 2013 through December 31, 2013
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Pioneer Real
Estate Shares
--------------------------------------------------------------------------------
Annual Report | December 31, 2013
--------------------------------------------------------------------------------
Ticker Symbols:
Class A PWREX
Class B PBREX
Class C PCREX
Class Y PYREX
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 9
Prices and Distributions 10
Performance Update 11
Comparing Ongoing Fund Expenses 15
Schedule of Investments 17
Financial Statements 20
Notes to Financial Statements 28
Report of Independent Registered Public Accounting Firm 35
Approval of Investment Advisory and Sub-Advisory Agreements 36
Trustees, Officers and Service Providers 41
Pioneer Real Estate Shares | Annual Report | 12/31/13 1
President's Letter
Dear Shareowner,
When we look into 2014, we foresee U.S. economic growth matching or exceeding
2013 levels. While unemployment remains high, employment has been rising
steadily. Consumer incomes, savings, wealth, and debt-servicing capacity have
been solid buttresses for the recovering housing and auto industries. Industrial
activity is growing only moderately, but current corporate profits are generally
solid and balance sheets appear able to support needed capital spending and
dividend* payouts. Tax hikes, spending restraint and a better economy have
meaningfully cut the federal budget deficit. A modestly improving European
economy, continuing economic improvement in Japan, and a "soft landing" of 7%
growth in China appear likely to result in improving global growth in 2014,
further supporting the U.S. economy. In addition, we feel that continuing slack
in labor markets and capacity utilization offers the potential for continuing
growth without bottlenecks and rising inflation, making it possible for the
Federal Reserve (the Fed) to continue its accommodative monetary policies.
After observing the strengthening economic trends, the Fed decided in December
2013 to start scaling back its QE (quantitative easing) program, but also said
that short-term interest rates are likely to remain near zero for some time to
come, given that inflation remains subdued and unemployment remains high.
The U.S. government's partial shutdown in October 2013 rattled the markets to a
degree, but does not appear to have had a significant negative impact on the
economy or capital markets. As the year drew to a close, leaders in Washington
reached a bipartisan budget agreement that establishes top-line government
spending levels for the next two fiscal years, a move which should help to
defuse the threat of another shutdown. That certainly was welcome news for
investors who had grown weary of infighting in Washington and wary of the risks
the policy uncertainty caused.
There are certainly risks and uncertainties facing the global economy as we head
into 2014. The European economy, while improving, remains weak, the Japanese
economy faces a tax hike this spring, and a number of emerging market countries
are experiencing difficulties. There are also geopolitical worries abroad and
the aforementioned political fights at home. While most of the widely recognized
risks we've outlined may already be "priced into" the market, we believe
investors should continue to expect market volatility.
* Dividends are not guaranteed.
2 Pioneer Real Estate Shares | Annual Report | 12/31/13
At Pioneer, we have long advocated the benefits of staying diversified and
investing for the long term. And while diversification does not assure a profit
or protect against loss in a declining market, we believe there are still
opportunities for prudent investors to earn attractive returns. Our advice, as
always, is to work closely with a trusted financial advisor to discuss your
goals and work together to develop an investment strategy that meets your
individual needs, keeping in mind that there is no single best strategy that
works for every investor.
Pioneer's investment teams have, since 1928, sought out attractive opportunities
in global equity and bond markets, using in-depth research to identify
undervalued individual securities, and using thoughtful risk management to
construct portfolios which seek to balance potential risks and reward in an
ever-changing world.
We encourage you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
us.pioneerinvestments.com. We greatly appreciate your trust in us, and we thank
you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Fund's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes. Past performance is no guarantee of
future results, and there is no guarantee that market forecasts discussed will
be realized.
Pioneer Real Estate Shares | Annual Report | 12/31/13 3
Portfolio Management Discussion | 12/31/13
In the following interview, Matthew Troxell of AEW Capital Management, L.P.,
sub-adviser for Pioneer Real Estate Shares, discusses the market environment for
real estate-related investments and the Fund's performance during the 12-month
period ended December 31, 2013.
Q How would you describe the investment environment for real estate
investments in 2013?
A While real estate investment trusts (REITs) turned in positive performance
during the 12-month period, the asset class underwent a significant
correction in the second and third quarters of 2013 as investors began to
once again price risk into the market. The correction was primarily due to
the Federal Reserve's (the Fed's) announcement in May which hinted at an
eventual winding down of its stimulative quantitative easing (QE)
bond-buying program, and the Fed's decision in December to actually begin
tapering QE in January 2014. Interest-rate-sensitive investments, including
REITs, struggled in the aftermath of the Fed's May announcement, as their
prices declined in anticipation of higher rates. Unlike bonds, however,
which saw the end of a five-year rally during the period, the ability of
REITs to grow earnings and dividends in an expanding economy aided their
overall performance.
Q How did Pioneer Real Estate Shares perform during the 12-month period ended
December 31, 2013?
A Class A shares of Pioneer Real Estate Shares returned 1.14% at net asset
value during the 12-month period ended December 31, 2013, while the Fund's
benchmark, the Morgan Stanley Capital International (MSCI) U.S. REIT Index
(the MSCI Index)(1), returned 2.47%. During the same period, the average
return of the 259 mutual funds in Morningstar's Real Estate Funds category
was 1.55%, and the average return of the 242 mutual funds in Lipper's Real
Estate Funds category was 1.72% for the same 12-month period.
(1) The MSCI information may only be used for your internal use, may not be
reproduced or re-disseminated in any form and may not be used as a basis for
or a component of any financial instruments or products or indices. None of
the MSCI information is intended to constitute investment advice or a
recommendation to make (or refrain from making) any kind of investment
decision and may not be relied on as such. Historical data and analysis
should not be taken as an indication or guarantee of any future performance
analysis, forecast or prediction. The MSCI information is provided on an "as
is" basis and the user of this information assumes the entire risk of any
use made of this information. MSCI, each of its affiliates and each other
person involved in or related to compiling, computing or creating any MSCI
information (collectively, the "MSCI Parties") expressly disclaims all
warranties (including, without limitation, any warranties of originality,
accuracy, completeness, timeliness, non-infringement, merchantability and
fitness for a particular purpose) with respect to this information. Without
limiting any of the foregoing, in no event shall any MSCI Party have any
liability for any direct, indirect, special, incidental, punitive,
consequential (including, without limitation, lost profits) or any other
damages.
4 Pioneer Real Estate Shares | Annual Report | 12/31/13
Q Did your search for attractive investment opportunities lead to any notable
shift in the Fund's strategy or sector allocations during the 12-month
period ended December 31, 2013?
A Heading into 2013, the Fund's portfolio was tilted toward undervalued
companies with stronger balance sheets and higher-quality assets in top-tier
markets that we thought were best positioned to grow earnings as the economy
recovered. We also thought that the companies' balance sheets would be
better positioned for a rising interest-rate environment. Consequently, when
the Fed made its announcement in May about a possible QE taper, the Fund's
portfolio already had a more defensive bias than many of its peers, which
was beneficial for performance during the REIT market correction, although
the positioning did hold back performance when the markets were rallying
prior to May event.
Q Which of your investment strategies and/or individual portfolio holdings
detracted most from the Fund's performance during the 12-month period ended
December 31, 2013?
A We attribute the Fund's underperformance relative to the MSCI Index during
the period to negative stock selection results in the industrial, health
care, and, in particular, the apartment REIT sector.
The positions that detracted the most from the Fund's benchmark-relative
performance during the 12-month period included Camden Property Trust,
AvalonBay Communities, and American Campus Communities. The apartment sector
lagged the MSCI Index during the period, turning in negative performance for
2013, as slowing rent growth and the prospect of higher interest rates
weighed on the sector. Our decision to overweight the Fund's portfolio to
these three apartment REITs further detracted from relative performance
during the 12-month period.
Q Which of your investment strategies and/or individual portfolio holdings
benefited the Fund's performance during the 12-month period ended December
31, 2013?
A Sector allocation strategies were positive for the Fund's relative
performance during the period, most notably our decision to hold an
underweight exposure in the portfolio to the underperforming health care
sector, and to overweight the outperforming diversified and storage sectors.
The top individual contributors to the Fund's benchmark-relative performance
during the 12-month period included overweight positions in the
outperforming Forest City Enterprises, Extra Space Storage, and Host Hotels
& Resorts. Forest City Enterprises continued to reduce its debt during the
year, which favorably affected its balance sheet. Toward the end of 2013,
the company announced that it was forming a joint-venture
Pioneer Real Estate Shares | Annual Report | 12/31/13 5
partnership for two large development projects, which removed a great deal
of development risk that had been pressuring the stock. Within the storage
sector, Extra Space Storage posted stronger-than-expected earnings results
throughout 2013. Host Hotels & Resorts benefited during the period from the
continued improvement in hotel market fundamentals.
Q What is your outlook for REITs in 2014?
A During the fourth quarter of 2013, the outlook for REITs firmed
considerably when the political backdrop in Washington improved and better
economic data allowed the Fed to take the first steps toward normalizing
monetary policy by reducing its bond purchases (beginning in January). Thus,
the headline risk has diminished, removing a barrier to business confidence
as well as improving considerably the baseline expectations for U.S.
economic performance going into 2014.
With the overall economic outlook improving, however, higher interest rates
become more of a risk factor. In our experience, how fast and how far
interest rates rise has been a key indicator of where REIT values are
headed. Large, rapid increases in interest rates would clearly be a negative
for REIT values - not to mention for the bond market in general. In our
view, such an outcome is unlikely, given dormant inflation, the likelihood
that such an abrupt shock could lead to a recession, and new leadership at
the Fed, in the person of Janet Yellin, who has been a proponent of the
central bank's stimulative bond-buying campaign aimed at bringing down
interest rates and encouraging economic growth. Rather, we believe a
moderate pace of rate increases to be the more likely scenario, and we think
that has already been priced into the market.
Given the 2013 correction in U.S. REIT prices, valuations have reached fair
levels, in our view, and are more in line with historical averages after
several years of being elevated. Consequently, we think the asset class
appears more appealing than it has since the beginning of 2009, roughly five
years ago. Furthermore, the real estate sector's underlying fundamentals
continue to improve, and we believe that the resulting higher property
incomes should offset any further upward move in capitalization rates, which
represents the ratio of net operating income to the value of the property.
We think that should allow the sector to deliver positive results for
investors in 2014. And finally, vacancy rates declined considerably in 2013,
most notably in the office, industrial, and shopping center markets, while
demand in multi-family markets outpaced supply. Thus, supply risk continues
to be minimal, with only the apartment sector reverting back to long-term
construction averages.
6 Pioneer Real Estate Shares | Annual Report | 12/31/13
As 2014 begins, we are seeing rents moving up in all property types, and some
longer-lease property types should soon transition to an environment where
leases will be signed at higher rents than at current levels - a substantial
positive for net operating income. Thus, with U.S. job growth expected to
continue improving and the Fed transitioning to a more normalized monetary
policy in 2014, we think REIT earnings should continue to grow and contribute to
investment results. This year, those results will likely be driven less by
macroeconomic factors and more by leasing fundamentals, balance sheet quality,
and capital allocation acumen at the individual company and property sector
levels.
Pioneer Real Estate Shares | Annual Report | 12/31/13 7
Please refer to the Schedule of Investments on pages 17-19 for a full listing of
Fund securities.
The Fund invests in REIT securities, the value of which can fall for a variety
of reasons, such as declines in rental income, fluctuating interest rates, poor
property management, environmental liabilities, uninsured damage, increased
competition, or changes in real estate tax laws.
The Fund invests in a limited number of securities and, as a result, the Fund's
performance may be more volatile than the performance of other funds holding
more securities.
When interest rates rise, the prices of fixed-income securities in the Fund will
generally fall. Conversely, when interest rates fall, the prices of fixed-income
securities in the Fund will generally rise.
At times, the Fund's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting those
industries or sectors.
These risks may increase share price volatility.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes.
8 Pioneer Real Estate Shares | Annual Report | 12/31/13
Portfolio Summary | 12/31/13
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
U.S. Common Stocks 100.0%
Sector Distribution
--------------------------------------------------------------------------------
(As a percentage of equity holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Apartment 15.2%
Regional Mall 14.9%
Office 12.8%
Health Care 10.5%
Diversified 9.1%
Shopping Center 8.9%
Storage 8.0%
Industrial 7.8%
Hotel 6.6%
Triple Net Lease 3.3%
Manufactured Home 1.5%
Cash and equivalents 1.4%
10 Largest Holdings*
--------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Simon Property Group, Inc. 9.47%
--------------------------------------------------------------------------------
2. Equity Residential Property Trust, Inc. 6.16
--------------------------------------------------------------------------------
3. Prologis, Inc. 5.32
--------------------------------------------------------------------------------
4. Public Storage, Inc. 5.15
--------------------------------------------------------------------------------
5. Boston Properties, Inc. 5.01
--------------------------------------------------------------------------------
6. AvalonBay Communities, Inc. 4.43
--------------------------------------------------------------------------------
7. Host Hotels & Resorts, Inc. 4.35
--------------------------------------------------------------------------------
8. HCP, Inc. 3.83
--------------------------------------------------------------------------------
9. Ventas, Inc. 3.71
--------------------------------------------------------------------------------
10. Kilroy Realty Corp. 3.36
--------------------------------------------------------------------------------
* This list excludes temporary cash investments and derivative instruments.
The portfolio is actively managed, and current holdings may be different.
The holdings listed should not be considered recommendations to buy or sell
any securities listed.
Pioneer Real Estate Shares | Annual Report | 12/31/13 9
Prices and Distributions | 12/31/13
Net Asset Value per Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class 12/31/13 12/31/12
--------------------------------------------------------------------------------
A $24.56 $24.76
--------------------------------------------------------------------------------
B $24.23 $24.43
--------------------------------------------------------------------------------
C $24.24 $24.45
--------------------------------------------------------------------------------
Y $24.52 $24.74
--------------------------------------------------------------------------------
Distributions per Share: 1/1/13- 12/31/13
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-Term Long-Term
Class Dividends Capital Gains Capital Gains
--------------------------------------------------------------------------------
A $0.2224 $ -- $0.2687
--------------------------------------------------------------------------------
B $ -- $ -- $0.1407
--------------------------------------------------------------------------------
C $0.0151 $ -- $0.2687
--------------------------------------------------------------------------------
Y $0.3611 $ -- $0.2687
--------------------------------------------------------------------------------
Index Definition
--------------------------------------------------------------------------------
The MSCI U.S. REIT Index is an unmanaged, widely used index comprising a broad
representation of the most actively traded real estate trusts, and is designed
to be a measure of real estate equity performance. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. It is not possible to invest
directly in an index.
The index defined here pertains to the "Value of $10,000 Investment" and "Value
of $5 Million Investment" charts on pages 11-14.
10 Pioneer Real Estate Shares | Annual Report | 12/31/13
Performance Update | 12/31/13 Class A Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Class A shares of Pioneer Real Estate Shares at public
offering price during the periods shown, compared to that of the Morgan Stanley
Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2013)
--------------------------------------------------------------------------------
Net Asset Public Offering
Period Value (NAV) Price (POP)
--------------------------------------------------------------------------------
10 Years 8.35% 7.72%
5 Years 16.30 14.94
1 Year 1.14 -4.68
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2013)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
1.52%
--------------------------------------------------------------------------------
Value of $10,000 Investment
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Real
Estate Shares MSCI U.S. REIT Index
12/31/2003 $ 9,425 $ 10,000
12/31/2004 $ 12,750 $ 13,149
12/31/2005 $ 14,636 $ 14,744
12/31/2006 $ 19,873 $ 20,040
12/31/2007 $ 16,019 $ 16,670
12/31/2008 $ 9,883 $ 10,340
12/31/2009 $ 12,863 $ 13,299
12/31/2010 $ 16,497 $ 17,086
12/31/2011 $ 17,965 $ 18,571
12/31/2012 $ 20,793 $ 21,870
12/31/2013 $ 21,029 $ 22,411
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 5.75% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Pioneer Real Estate Shares | Annual Report | 12/31/13 11
Performance Update | 12/31/13 Class B Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Class B shares of Pioneer Real Estate Shares during the
periods shown, compared to that of the Morgan Stanley Capital International
(MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2013)
--------------------------------------------------------------------------------
If If
Period Held Redeemed
--------------------------------------------------------------------------------
10 Years 7.14% 7.14%
5 Years 14.80 14.80
1 Year -0.26 -4.22
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2013)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
2.85%
--------------------------------------------------------------------------------
Value of $10,000 Investment
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Real
Estate Shares MSCI U.S. REIT Index
12/31/2003 $ 10,000 $ 10,000
12/31/2004 $ 13,420 $ 13,149
12/31/2005 $ 15,260 $ 14,744
12/31/2006 $ 20,527 $ 20,040
12/31/2007 $ 16,392 $ 16,670
12/31/2008 $ 9,997 $ 10,340
12/31/2009 $ 12,834 $ 13,299
12/31/2010 $ 16,248 $ 17,086
12/31/2011 $ 17,495 $ 18,571
12/31/2012 $ 19,983 $ 21,870
12/31/2013 $ 19,931 $ 22,411
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"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
(CDSC). The maximum CDSC for Class B shares is 4% and declines over five years.
For more complete information, please see the prospectus.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
12 Pioneer Real Estate Shares | Annual Report | 12/31/13
Performance Update | 12/31/13 Class C Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Class C shares of Pioneer Real Estate Shares during the
periods shown, compared to that of the Morgan Stanley Capital International
(MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2013)
--------------------------------------------------------------------------------
If If
Period Held Redeemed
--------------------------------------------------------------------------------
10 Years 7.43% 7.43%
5 Years 15.28 15.28
1 Year 0.27 0.27
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2013)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
2.37%
--------------------------------------------------------------------------------
Value of $10,000 Investment
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Real
Estate Shares MSCI U.S. REIT Index
12/31/2003 $ 10,000 $ 10,000
12/31/2004 $ 13,427 $ 13,149
12/31/2005 $ 15,287 $ 14,744
12/31/2006 $ 20,577 $ 20,040
12/31/2007 $ 16,447 $ 16,670
12/31/2008 $ 10,058 $ 10,340
12/31/2009 $ 12,962 $ 13,299
12/31/2010 $ 16,472 $ 17,086
12/31/2011 $ 17,800 $ 18,571
12/31/2012 $ 20,426 $ 21,870
12/31/2013 $ 20,482 $ 22,411
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). 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.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Pioneer Real Estate Shares | Annual Report | 12/31/13 13
Performance Update | 12/31/13 Class Y Shares
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $5 million
investment made in Class Y shares of Pioneer Real Estate Shares during the
periods shown, compared to that of the Morgan Stanley Capital International
(MSCI) U.S. REIT Index.
Average Annual Total Returns
(As of December 31, 2013)
--------------------------------------------------------------------------------
If If
Period Held Redeemed
--------------------------------------------------------------------------------
10 Years 8.97% 8.97%
5 Years 17.02 17.02
1 Year 1.61 1.61
--------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated May 1, 2013)
--------------------------------------------------------------------------------
Gross
--------------------------------------------------------------------------------
1.03%
--------------------------------------------------------------------------------
Value of $5 Million Investment
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pioneer Real
Estate Shares MSCI U.S. REIT Index
12/31/2003 $ 5,000,000 $ 5,000,000
12/31/2004 $ 6,798,424 $ 6,574,284
12/31/2005 $ 7,842,903 $ 7,371,935
12/31/2006 $ 10,699,976 $ 10,019,917
12/31/2007 $ 8,664,021 $ 8,334,999
12/31/2008 $ 5,380,616 $ 5,170,220
12/31/2009 $ 7,068,982 $ 6,649,363
12/31/2010 $ 9,117,022 $ 8,542,997
12/31/2011 $ 9,991,793 $ 9,285,624
12/31/2012 $ 11,618,831 $ 10,935,246
12/31/2013 $ 11,805,693 $ 11,205,478
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class Y shares are not subject to sales charges and are available for limited
groups of eligible investors, including institutional investors. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
14 Pioneer Real Estate Shares | Annual Report | 12/31/13
Comparing Ongoing Fund Expenses
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
--------------------------------------------------------------------------------
Actual Expenses
The first table below provides information about actual account values and
actual expenses.You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
(1) Divide your account value by $1,000
Example: an $8,600 account value (divided by) $1,000 = 8.6
(2) Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares
Based on actual returns from July 1, 2013 through December 31, 2013.
--------------------------------------------------------------------------------
Share Class A B C Y
--------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value on 7/1/13
--------------------------------------------------------------------------------
Ending Account $ 959.31 $ 952.63 $ 955.32 $ 961.40
Value on 12/31/13
--------------------------------------------------------------------------------
Expenses Paid $ 7.31 $ 13.98 $ 11.43 $ 4.99
During Period*
--------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.48%, 2.84%,
2.32%, and 1.01% for Class A, Class B, Class C, and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
Pioneer Real Estate Shares | Annual Report | 12/31/13 15
Comparing Ongoing Fund Expenses (continued)
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares
Based on a hypothetical 5% per year return before expenses, reflecting the
period from July 1, 2013 through December 31, 2013.
--------------------------------------------------------------------------------
Share Class A B C Y
--------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value on 7/1/13
--------------------------------------------------------------------------------
Ending Account $1,017.74 $1,010.89 $1,013.51 $1,020.11
Value on 12/31/13
--------------------------------------------------------------------------------
Expenses Paid $ 7.53 $ 14.39 $ 11.77 $ 5.14
During Period*
--------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.48%, 2.84%,
2.32%, and 1.01% for Class A, Class B, Class C, and Class Y shares,
respectively, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
16 Pioneer Real Estate Shares | Annual Report | 12/31/13
Schedule of Investments | 12/31/13
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS -- 98.6%
CONSUMER SERVICES -- 0.9%
Hotels, Resorts & Cruise Lines -- 0.9%
53,400 Hilton Worldwide Holdings, Inc. $ 1,188,150
------------
Total Consumer Services $ 1,188,150
--------------------------------------------------------------------------------
REAL ESTATE -- 97.7%
Diversified REIT -- 8.6%
52,400 American Assets Trust, Inc. $ 1,646,932
45,800 Armada Hoffler Properties, Inc. 425,024
94,200 Empire State Realty Trust, Inc.* 1,441,260
67,400 First Potomac Realty Trust 783,862
74,000 Liberty Property Trust 2,506,380
90,500 Retail Opportunity Investments Corp. 1,332,160
34,100 Vornado Realty Trust 3,027,739
------------
$ 11,163,357
--------------------------------------------------------------------------------
Industrial REIT -- 5.3%
184,700 Prologis, Inc. $ 6,824,665
--------------------------------------------------------------------------------
Office REIT -- 15.0%
35,800 Alexandria Real Estate Equities, Inc. $ 2,277,596
113,600 BioMed Realty Trust, Inc. 2,058,432
64,000 Boston Properties, Inc. 6,423,680
57,400 Douglas Emmett, Inc. 1,336,846
89,300 DuPont Fabros Technology, Inc. 2,206,603
85,900 Kilroy Realty Corp. 4,310,462
52,700 Piedmont Office Realty Trust, Inc. 870,604
------------
$ 19,484,223
--------------------------------------------------------------------------------
Residential REIT -- 16.7%
46,800 American Campus Communities, Inc. $ 1,507,428
45,800 American Homes 4 Rent* 741,960
48,100 AvalonBay Communities, Inc. 5,686,863
27,800 BRE Properties, Inc. 1,520,938
42,200 Camden Property Trust 2,400,336
54,700 Equity Lifestyle Properties, Inc. 1,981,781
152,300 Equity Residential Property Trust, Inc. 7,899,801
------------
$ 21,739,107
--------------------------------------------------------------------------------
Retail REIT -- 23.8%
47,700 Acadia Realty Trust $ 1,184,391
156,900 DDR Corp. 2,411,553
32,600 Federal Realty Investment Trust 3,305,966
43,500 National Retail Properties, Inc. 1,319,355
72,300 Ramco-Gershenson Properties Trust 1,138,002
48,500 Regency Centers Corp. 2,245,550
79,800 Simon Property Group, Inc. 12,142,368
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/13 17
Schedule of Investments | 12/31/13 (continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
Retail REIT -- (continued)
46,700 Taubman Centers, Inc. $ 2,985,064
70,800 The Macerich Co. 4,169,412
------------
$ 30,901,661
--------------------------------------------------------------------------------
Specialized REIT -- 26.5%
70,000 CubeSmart $ 1,115,800
60,200 EPR Properties 2,959,432
63,900 Extra Space Storage, Inc. 2,692,107
135,400 HCP, Inc. 4,917,728
73,000 Health Care Real Estate Investment Trust, Inc. 3,910,610
286,800 Host Hotels & Resorts, Inc. 5,575,392
43,900 Public Storage, Inc. 6,607,828
75,800 RLJ Lodging Trust 1,843,456
83,100 Ventas, Inc. 4,759,968
------------
$ 34,382,321
--------------------------------------------------------------------------------
Diversified Real Estate Activities -- 0.2%
6,800 Alexander & Baldwin, Inc. $ 283,764
--------------------------------------------------------------------------------
Real Estate Operating Companies -- 1.6%
111,900 Forest City Enterprises, Inc.* $ 2,137,290
------------
Total Real Estate $126,916,388
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $71,753,229) $128,104,538
--------------------------------------------------------------------------------
TOTAL INVESTMENT IN SECURITIES -- 98.6%
(Cost $71,293,059) (a) $128,104,538
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES -- 1.4% $ 1,826,505
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $129,931,043
================================================================================
The accompanying notes are an integral part of these financial statements.
18 Pioneer Real Estate Shares | Annual Report | 12/31/13
* Non-income producing security.
REIT Real Estate Investment Trust.
(a) At December 31, 2013, the net unrealized appreciation on investments based
on cost for federal income tax purposes of $74,618,767 was as follows:
Aggregate gross unrealized appreciation for all investments in which
there is an excess of value over tax cost $54,825,360
Aggregate gross unrealized depreciation for all investments in which
there is an excess of tax cost over value (1,339,589)
-----------
Net unrealized appreciation $53,485,771
===========
Purchases and sales of securities (excluding temporary cash investments) for the
year ended December 31, 2013 aggregated $23,574,433 and $25,232,941,
respectively.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below.
Level 1 - quoted prices in active markets for identical securities.
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risk, etc.) See Notes to Financial Statements -- Note 1A.
Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining fair value of investments) See Notes to
Financial Statements -- Note 1A.
Generally, equity securities are categorized as Level 1, fixed income securities
and senior loans as Level 2 and securities valued using fair value methods
(other than prices supplied by independent pricing services) as Level 3.
The following is a summary of the inputs used as of December 31, 2013, in
valuing the Fund's investments:
--------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
--------------------------------------------------------------------------------
Common Stocks $128,104,538 $ -- $ -- $128,104,538
--------------------------------------------------------------------------------
Total $128,104,538 $ -- $ -- $128,104,538
================================================================================
During the year ended December 31, 2013, there were no transfers between Levels
1, 2 and 3.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/13 19
Statement of Assets and Liabilities | 12/31/13
ASSETS:
Investment in securities (cost $71,293,059) $128,104,538
Cash 1,230,372
Receivables --
Fund shares sold 354,903
Dividends 689,839
Other 31,189
-------------------------------------------------------------------------------
Total assets $130,410,841
===============================================================================
LIABILITIES:
Payables --
Investment securities purchased $ 132,650
Fund shares repurchased 244,935
Due to affiliates 49,893
Accrued expenses 52,320
-------------------------------------------------------------------------------
Total liabilities $ 479,798
===============================================================================
NET ASSETS:
Paid-in capital $ 75,205,928
Accumulated net realized loss (2,086,364)
Net unrealized appreciation on investments 56,811,479
-------------------------------------------------------------------------------
Total net assets $129,931,043
===============================================================================
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $80,091,258/3,261,524 shares) $ 24.56
Class B (based on $3,520,222/145,297 shares) $ 24.23
Class C (based on $10,608,680/437,741 shares) $ 24.24
Class Y (based on $35,710,883/1,456,392 shares) $ 24.52
MAXIMUM OFFERING PRICE:
Class A ($24.56 (divided by) 94.25%) $ 26.06
===============================================================================
The accompanying notes are an integral part of these financial statements.
20 Pioneer Real Estate Shares | Annual Report | 12/31/13
Statement of Operations
For the Year Ended 12/31/13
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $2,927) $3,407,892
Interest 2,066
--------------------------------------------------------------------------------
Total investment income $ 3,409,958
--------------------------------------------------------------------------------
EXPENSES:
Management fees $1,147,580
Transfer agent fees
Class A 151,408
Class B 26,675
Class C 28,745
Class Y 1,777
Distribution fees
Class A 222,252
Class B 45,668
Class C 130,312
Shareholder communications expense 133,316
Administrative reimbursements 57,639
Custodian fees 12,882
Registration fees 14,000
Professional fees 47,853
Printing expense 20,037
Fees and expenses of nonaffiliated Trustees 6,018
Miscellaneous 77,415
--------------------------------------------------------------------------------
Total expenses $ 2,123,577
--------------------------------------------------------------------------------
Net investment income $ 1,286,381
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 9,163,065
--------------------------------------------------------------------------------
Change in net unrealized appreciation on investments $ (8,974,246)
--------------------------------------------------------------------------------
Net gain on investments $ 188,819
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,475,200
================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/13 21
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------
Year Ended Year Ended
12/31/13 12/31/12
----------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 1,286,381 $ 995,203
Net realized gain on investments 9,163,065 3,410,598
Change in net unrealized appreciation
on investments (8,974,246) 13,072,842
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,475,200 $ 17,478,643
----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.22 and $0.45 per share, respectively) $ (754,256) $ (1,545,555)
Class B ($0.00 and $0.12 per share, respectively) -- (30,027)
Class C ($0.02 and $0.25 per share, respectively) (7,932) (129,768)
Class Y ($0.36 and $0.57 per share, respectively) (524,193) (619,229)
Net realized gain:
Class A ($0.27 and $0.00 per share, respectively) $ (906,742) $ --
Class B ($0.14 and $0.00 per share, respectively) (22,961) --
Class C ($0.27 and $0.00 per share, respectively) (131,999) --
Class Y ($0.27 and $0.00 per share, respectively) (387,975) --
----------------------------------------------------------------------------------------
Total distributions to shareowners $ (2,736,058) $ (2,324,579)
----------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale or exchange of shares $ 36,227,317 $ 38,896,789
Reinvestment of distributions 2,104,342 1,860,445
Cost of shares repurchased (41,130,187) (30,922,652)
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
Fund share transactions $ (2,798,528) $ 9,834,582
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (4,059,386) $ 24,988,646
NET ASSETS:
Beginning of year 133,990,429 109,001,783
----------------------------------------------------------------------------------------
End of year $129,931,043 $ 133,990,429
========================================================================================
The accompanying notes are an integral part of these financial statements.
22 Pioneer Real Estate Shares | Annual Report | 12/31/13
------------------------------------------------------------------------------------
'13 Shares '13 Amount '12 Shares '12 Amount
------------------------------------------------------------------------------------
Class A
Shares sold 663,832 $ 17,329,001 701,322 $ 17,036,848
Reinvestment of distributions 63,237 1,598,276 61,095 1,476,444
Less shares repurchased (870,384) (22,597,136) (813,560) (19,502,701)
------------------------------------------------------------------------------------
Net decrease (143,315) $ (3,669,859) (51,143) $ (989,409)
====================================================================================
Class B
Shares sold or exchanged 9,788 $ 252,200 45,607 $ 1,086,266
Reinvestment of distributions 911 22,722 1,248 29,825
Less shares repurchased (86,615) (2,201,551) (135,270) (3,172,798)
------------------------------------------------------------------------------------
Net decrease (75,916) $ (1,926,629) (88,415) $ (2,056,707)
====================================================================================
Class C
Shares sold 94,498 $ 2,444,157 129,597 $ 3,110,571
Reinvestment of distributions 5,356 133,782 5,140 123,134
Less shares repurchased (180,295) (4,533,347) (137,583) (3,256,295)
------------------------------------------------------------------------------------
Net decrease (80,441) $ (1,955,408) (2,846) $ (22,590)
====================================================================================
Class Y
Shares sold 627,929 $ 16,201,959 739,079 $ 17,663,104
Reinvestment of distributions 13,872 349,562 9,524 231,042
Less shares repurchased (463,004) (11,798,153) (197,073) (4,990,858)
------------------------------------------------------------------------------------
Net increase 178,797 $ 4,753,368 551,530 $ 12,903,288
====================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/13 23
Financial Highlights
-----------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/13 12/31/12 12/31/11 12/31/10 12/31/09
-----------------------------------------------------------------------------------------------------------
Class A
Net asset value, beginning of year $ 24.76 $ 21.79 $ 20.41 $ 16.24 $ 13.00
-----------------------------------------------------------------------------------------------------------
Increase from investment operations:
Net investment income $ 0.23 $ 0.45 $ 0.42 $ 0.21 $ 0.35
Net realized and unrealized gain (loss) on investments 0.06 2.97 1.37 4.34 3.37
-----------------------------------------------------------------------------------------------------------
Net increase from investment operations $ 0.29 $ 3.42 $ 1.79 $ 4.55 $ 3.72
-----------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ (0.22) $ (0.45) $ (0.41) $ (0.22) $ (0.34)
Net realized gain (0.27) -- -- -- --
Tax return of capital -- -- -- (0.16) (0.14)
-----------------------------------------------------------------------------------------------------------
Total distributions $ (0.49) $ (0.45) $ (0.41) $ (0.38) $ (0.48)
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.20) $ 2.97 $ 1.38 $ 4.17 $ 3.24
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.56 $ 24.76 $ 21.79 $ 20.41 $ 16.24
===========================================================================================================
Total return* 1.14% 15.75% 8.90% 28.25% 30.15%
Ratio of net expenses to average net assets 1.48% 1.52% 1.59% 1.62% 1.85%
Ratio of net investment income to average net assets 0.89% 1.87% 1.94% 1.17% 2.77%
Portfolio turnover rate 17% 8% 8% 14% 23%
Net assets, end of period (in thousands) $80,091 $84,310 $75,318 $75,520 $67,510
===========================================================================================================
* 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.
The accompanying notes are an integral part of these financial statements.
24 Pioneer Real Estate Shares | Annual Report | 12/31/13
----------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/13 12/31/12 12/31/11 12/31/10 12/31/09
----------------------------------------------------------------------------------------------------------------------
Class B
Net asset value, beginning of year $ 24.43 $ 21.50 $ 20.13 $ 16.03 $ 12.84
----------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.17) $ 0.12 $ 0.16 $ (0.04) $ 0.17
Net realized and unrealized gain (loss) on investments 0.11 2.93 1.38 4.29 3.34
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (0.06) $ 3.05 $ 1.54 $ 4.25 $ 3.51
----------------------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ -- $ (0.12)(a) $ (0.17)(a) $ (0.09) $ (0.18)
Net realized gain (0.14)(a) -- -- -- --
Tax return of capital -- -- -- (0.06) (0.14)
----------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.14) $ (0.12) $ (0.17) $ (0.15) $ (0.32)
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.20) $ 2.93 $ 1.37 $ 4.10 $ 3.19
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.23 $ 24.43 $ 21.50 $ 20.13 $ 16.03
======================================================================================================================
Total return* (0.26)% 14.22% 7.67% 26.60% 28.38%
Ratio of net expenses to average net assets 2.84% 2.85% 2.75% 2.90% 3.25%
Ratio of net investment income (loss) to average net assets (0.56)% 0.48% 0.73% (0.13)% 1.41%
Portfolio turnover rate 17% 8% 8% 14% 23%
Net assets, end of period (in thousands) $ 3,520 $ 5,404 $ 6,657 $ 8,484 $ 8,753
======================================================================================================================
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
(a) Dividends and/or capital gain distributions may continue to be reinvested in
Class B shares, and shareholders may exchange their Class B shares for Class
B shares of other Pioneer Funds, as permitted by existing exchange
privileges.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/13 25
Financial Highlights (continued)
-------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/13 12/31/12 12/31/11 12/31/10 12/31/09
-------------------------------------------------------------------------------------------------------------
Class C
Net asset value, beginning of year $ 24.45 $ 21.53 $ 20.15 $ 16.06 $ 12.86
-------------------------------------------------------------------------------------------------------------
Increase from investment operations:
Net investment income $ 0.00(a) $ 0.24 $ 0.23 $ 0.06 $ 0.22
Net realized and unrealized gain (loss) on investments 0.08 2.93 1.38 4.27 3.34
-------------------------------------------------------------------------------------------------------------
Net increase from investment operations $ 0.08 $ 3.17 $ 1.61 $ 4.33 $ 3.56
-------------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ (0.02) $ (0.25) $ (0.23) $ (0.14) $ (0.22)
Net realized gain (0.27) -- -- -- --
Tax return of capital -- -- -- (0.10) (0.14)
-------------------------------------------------------------------------------------------------------------
Total distributions $ (0.29) $ (0.25) $ (0.23) $ (0.24) $ (0.36)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.21) $ 2.92 $ 1.38 $ 4.09 $ 3.20
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.24 $ 24.45 $ 21.53 $ 20.15 $ 16.06
=============================================================================================================
Total return* 0.27% 14.75% 8.07% 27.08% 28.87%
Ratio of net expenses to average net assets 2.32% 2.37% 2.42% 2.50% 2.89%
Ratio of net investment income to average net assets 0.02% 1.03% 1.09% 0.31% 1.76%
Portfolio turnover rate 17% 8% 8% 14% 23%
Net assets, end of period (in thousands) $10,609 $12,667 $11,216 $12,082 $ 9,153
=============================================================================================================
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
(a) Amount rounds to less than $0.00 or $(0.00) per share.
The accompanying notes are an integral part of these financial statements.
26 Pioneer Real Estate Shares | Annual Report | 12/31/13
-----------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/13 12/31/12 12/31/11 12/31/10 12/31/09
-----------------------------------------------------------------------------------------------------------
Class Y
Net asset value, beginning of year $ 24.74 $ 21.78 $ 20.39 $ 16.23 $ 12.98
-----------------------------------------------------------------------------------------------------------
Increase from investment operations:
Net investment income $ 0.36 $ 0.56 $ 0.56 $ 0.33 $ 0.44
Net realized and unrealized gain (loss) on investments 0.05 2.97 1.37 4.32 3.40
-----------------------------------------------------------------------------------------------------------
Net increase from investment operations $ 0.41 $ 3.53 $ 1.93 $ 4.65 $ 3.84
-----------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ (0.36) $ (0.57) $ (0.54) $ (0.28) $ (0.45)
Net realized gain (0.27) -- -- -- --
Tax return of capital -- -- -- (0.21) (0.14)
-----------------------------------------------------------------------------------------------------------
Total distributions $ (0.63) $ (0.57) $ (0.54) $ (0.49) $ (0.59)
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.22) $ 2.96 $ 1.39 $ 4.16 $ 3.25
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.52 $ 24.74 $ 21.78 $ 20.39 $ 16.23
===========================================================================================================
Total return* 1.61% 16.28% 9.60% 28.97% 31.38%
Ratio of net expenses to average net assets 1.01% 1.03% 1.00% 1.00% 1.06%
Ratio of net investment income to average net assets 1.41% 2.48% 2.35% 1.79% 3.49%
Portfolio turnover rate 17% 8% 8% 14% 23%
Net assets, end of period (in thousands) $35,711 $31,610 $15,811 $46,845 $42,533
===========================================================================================================
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at the end of each period.
The accompanying notes are an integral part of these financial statements.
Pioneer Real Estate Shares | Annual Report | 12/31/13 27
Notes to Financial Statements | 12/31/13
1. Organization and Significant Accounting Policies
Pioneer Real Estate Shares (the Fund) is a Delaware statutory trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek long-term
growth of capital. Current income is a secondary objective.
The Fund offers four classes of shares designated as Class A, Class B, Class C
and Class Y shares. Effective as of the close of business on December 31, 2009,
Class B shares are no longer offered to new or existing shareholders, except
that dividends and/or capital gain distributions may continue to be reinvested
in Class B shares, and shareholders may exchange their Class B shares for Class
B shares of other Pioneer funds, as permitted by existing exchange privileges.
Each class of shares represents an interest in the same portfolio of investments
of the Fund and has identical rights (based on relative net asset values) to
assets and liquidation proceeds. Share classes can bear different rates of
class-specific fees and expenses such as transfer agent and distribution fees.
Differences in class-specific fees and expenses will result in differences in
net investment income and, therefore, the payment of different dividends from
net investment income earned by each class. The Amended and Restated Declaration
of Trust of the Fund gives the Board the flexibility to specify either per-share
voting or dollar-weighted voting when submitting matters for shareholder
approval. Under per-share voting, each share of a class of the Fund is entitled
to one vote. Under dollar-weighted voting, a shareholder's voting power is
determined not by the number of shares owned, but by the dollar value of the
shares on the record date. Each share class has exclusive voting rights with
respect to matters affecting only that class, including with respect to the
distribution plan for that class. There is no distribution plan for Class Y
shares. Class B shares convert to Class A shares approximately eight years after
the date of purchase.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
income, expenses and gains and losses on investments during the reporting
period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
28 Pioneer Real Estate Shares | Annual Report | 12/31/13
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 that have traded on an exchange 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 available, generally are valued at the mean
between the last bid and asked prices. Short-term fixed income securities
with remaining maturities of sixty days or less generally are valued at
amortized cost. Shares of money market mutual funds are valued at such
funds' net asset value.
Trading in foreign securities is substantially completed each day at various
times prior to the close of the NYSE. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times.
Securities for which independent pricing services are unable to supply
prices or for which market prices and/or quotations are not readily
available or are considered to be unreliable are valued by a fair valuation
team comprised of certain personnel of Pioneer Investment Management, Inc.
(PIM), the Fund's investment adviser, pursuant to procedures adopted by the
Fund's Board of Trustees. PIM's fair valuation team uses fair value methods
approved by the Valuation Committee of the Board of Trustees. PIM's fair
valuation team is responsible for monitoring developments that may impact
fair valued securities and for discussing and assessing fair values on an
ongoing basis, and at least quarterly, with the Valuation Committee of the
Board of Trustees.
Inputs used when applying fair value methods to value a security may include
credit ratings, the financial condition of the company, current market
conditions and comparable securities. The Fund may use fair value methods if
it is determined that a significant event has occurred after the close of
the exchange or market on which the security trades and prior to the
determination of the Fund's net asset value. Examples of a significant event
might include political or economic news, corporate restructurings, natural
disasters, terrorist activity or trading halts. Thus, the valuation of the
Fund's securities may differ significantly from exchange prices and such
differences could be material.
At December 31, 2013, there were no securities that were valued using fair
value methods (other than securities that were valued using prices supplied
by independent pricing services).
Pioneer Real Estate Shares | Annual Report | 12/31/13 29
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Fund becomes aware of the ex-dividend data in
the exercise of reasonable diligence. Interest income, including interest on
income bearing cash accounts, is recorded on the accrual basis. Dividend and
interest income are reported net of unrecoverable foreign taxes withheld at
the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no provision for federal income taxes is required.
As of December 31, 2013, the Fund did not accrue any interest or penalties
related to uncertain tax positions, which, if applicable, would be recorded
as an income tax expense in the Statement of Operations. Tax returns filed
within the prior three years remain subject to examination by Federal and
State tax authorities.
The amount and character of income and capital gain distributions to
shareowners are determined in accordance with federal income tax rules,
which may differ from U.S. generally accepted accounting principles.
Distributions in excess of net investment income or net realized gains are
temporary overdistributions for financial statement purposes resulting from
differences in the recognition or classification of income or distributions
for financial statement and tax purposes. Capital accounts within the
financial statements are adjusted for permanent book/tax differences to
reflect tax character, but are not adjusted for temporary differences.
During the year ended December 31, 2013, a capital loss carryforward of
$6,306,554 was utilized to offset net realized gains by the Fund.
The tax character of distributions paid during the years ended December 31,
2013 and December 31, 2012 was as follows:
----------------------------------------------------------------------------
2013 2012
----------------------------------------------------------------------------
Distributions paid from:
Ordinary income $1,286,381 $2,324,579
Long-term capital gain 1,449,677 --
----------------------------------------------------------------------------
Total $2,736,058 $2,324,579
============================================================================
30 Pioneer Real Estate Shares | Annual Report | 12/31/13
The following shows the components of distributable earnings on a federal
income tax basis at December 31, 2013:
----------------------------------------------------------------------------
2013
----------------------------------------------------------------------------
Distributable Earnings:
Undistributed long-term capital gain $ 1,239,344
Net unrealized appreciation 53,485,771
----------------------------------------------------------------------------
Total $54,725,115
============================================================================
The difference between book-basis and tax-basis net unrealized appreciation
is attributable to the tax deferral of losses on wash sales.
C. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit),
earned $14,947 in underwriting commissions on the sale of Class A shares
during the year ended December 31, 2013.
D. Class Allocations
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on its respective percentage of adjusted net assets at the beginning
of the day.
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively (see Note 4). Class Y shares do not pay distribution fees. All
expenses and fees paid to the transfer agent, Pioneer Investment Management
Shareholder Services, Inc. (PIMSS), for its services are allocated among the
classes of shares based on the number of accounts in each class and the
ratable allocation of related out-of-pocket expenses (see Note 3).
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner and at the same time, except that net
investment income dividends to Class A, Class B, Class C and Class Y shares
can reflect different transfer agent and distribution expense rates.
Pioneer Real Estate Shares | Annual Report | 12/31/13 31
E. Risks
Because the Fund may invest a substantial portion of its assets in Real
Estate Investment Trusts (REITs), the Fund may be subject to certain risks
associated with direct investments in REITs. REITs may be affected by
changes in the value of their underlying properties and by defaults of their
borrowers or tenants. REITs depend generally on their ability to generate
cash flow to make distributions to shareowners, and certain REITs have self-
liquidation provisions by which mortgages held may be paid in full and
distributions of capital returns may be made at any time. In addition, the
performance of a REIT may be affected by its failure to qualify for tax-free
pass through of income under the Internal Revenue Code or its failure to
maintain exemption from registration under the Investment Company Act of
1940. The Fund's prospectus contains unaudited information regarding the
Fund's principal risks. Please refer to that document when considering the
Fund's principal risks.
F. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest, is
required to be equal to or in excess of the repurchase price. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Fund's custodian or a subcustodian of the Fund. PIM is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit, manages the Fund's
portfolio. Management fees are calculated daily at the annual rate of 0.80% of
the Fund's average daily net assets up to $1 billion and 0.75% on assets over $1
billion. For the year ended December 31, 2013, the effective management fee
(excluding waivers and/or assumption of expenses) was equal to 0.80% of the
Fund's daily net assets. PIM pays a portion of the fee it receives from the Fund
to AEW Capital Management, L.P. as compensation for sub-advisory services to the
Fund.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund as administrative reimbursements. Included in
"Due to affiliates" reflected on the Statement of Assets and Liabilities is
$13,495 in management fees, administrative costs and certain other
reimbursements payable to PIM at December 31, 2013.
32 Pioneer Real Estate Shares | Annual Report | 12/31/13
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredit, provides substantially
all transfer agent and shareowner services to the Fund at negotiated rates.
In addition, the Fund reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareholder communications activities such as proxy and
statement mailings, outgoing phone calls and omnibus relationship contracts. For
the year ended December 31, 2013, such out-of-pocket expenses by class of shares
were as follows:
--------------------------------------------------------------------------------
Shareholder Communications:
--------------------------------------------------------------------------------
Class A $ 88,532
Class B 13,565
Class C 17,548
Class Y 13,671
--------------------------------------------------------------------------------
Total $133,316
================================================================================
Included in "Due to affiliates" reflected on the Statement of Assets and
Liabilities is $32,635 in transfer agent fees and out-of-pocket reimbursements
payable to PIMSS at December 31, 2013.
4. Distribution Plan
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 of the
Investment Company Act of 1940 with respect to its Class A, Class B and Class C
shares. Pursuant to the Plan, the Fund pays PFD 0.25% of the average daily net
assets attributable to Class A shares as compensation for personal services
and/or account maintenance services or distribution services with regard to
Class A shares. Pursuant to the Plan, the Fund also pays PFD 1.00% of the
average daily net assets attributable to Class B and Class C shares. The fee for
Class B and Class C shares consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class C
shares. Included in "Due to affiliates" reflected on the Statement of Assets and
Liabilities is $3,763 in distribution fees payable to PFD at December 31, 2013.
In addition, redemptions of each class of shares (except Class Y shares) may be
subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A shares
within 12 months of purchase. Class B shares that are redeemed within five years
of purchase are subject to a CDSC at declining rates beginning at 4.00%, based
on the lower of cost or market value of shares being redeemed. Redemptions of
Class C shares within 12 months of purchase are subject to a CDSC of 1.00%,
based on the lower of cost or market value of shares being
Pioneer Real Estate Shares | Annual Report | 12/31/13 33
redeemed. Shares purchased as part of an exchange remain subject to any CDSC
that applied to the original purchase of those shares. There is no CDSC for
Class Y shares. Proceeds from the CDSC are paid to PFD. For the year ended
December 31, 2013, CDSC in the amount of $4,343 were paid to PFD.
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS which
may result in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the year ended December 31, 2013, the Fund's expenses
were not reduced under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), participates in a committed, unsecured revolving line of credit
facility. Borrowings are used solely for temporary or emergency purposes. The
Fund may borrow up to the lesser of the amount available under the facility or
the limits set for borrowing by the Fund's prospectus and the 1940 Act. The
credit facility in effect during the fiscal year ended December 31, 2013 was in
the amount of $215 million. Under such facility, depending on the type of loan,
interest on borrowings was payable at LIBOR plus 0.90% on an annualized basis,
or the Alternate Base Rate, which was the greater of (a) the facility's
administrative agent's daily announced prime rate on the borrowing date, (b) 2%
plus the Federal Funds Rate on the borrowing date and (c) 2% plus the overnight
Euro dollar rate on the borrowing date. The Funds pay an annual commitment fee
to participate in a credit facility. The commitment fee is allocated among
participating Funds based on an allocation schedule set forth in the credit
agreement. For the year ended December 31, 2013, the Fund had no borrowings
under a credit facility.
34 Pioneer Real Estate Shares | Annual Report | 12/31/13
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareowners of Pioneer Real Estate Shares:
--------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Pioneer Real Estate Shares (the "Fund"), as of
December 31, 2013, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2013, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Real Estate Shares at December 31, 2013, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and financial highlights for each of the five years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 25, 2014
Pioneer Real Estate Shares | Annual Report | 12/31/13 35
Approval of Investment Advisory and Sub-Advisory Agreements
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Real Estate Shares (the Fund) pursuant to an investment advisory
agreement between PIM and the Fund. PIM has retained AEW Capital Management,
L.P. (the Sub-Adviser) to serve as the sub-adviser to the Fund pursuant to a
sub-advisory agreement between PIM and the sub-adviser. In order for PIM and
the Sub-Adviser to remain the investment adviser and sub-adviser of the Fund,
respectively, the Trustees of the Fund must determine annually whether to renew
the investment advisory agreement and the sub-advisory agreement for the Fund.
The contract review process began in March 2013 as the Trustees of the Fund
agreed on, among other things, an overall approach and timeline for the process.
In July 2013, the Trustees approved the format of the contract review materials
and submitted their formal request to PIM to furnish information necessary to
evaluate the terms of the investment advisory agreement and the sub-advisory
agreement. The contract review materials were provided to the Trustees in July
2013 and September 2013. After reviewing and discussing the materials, the
Trustees submitted a request for additional information to PIM, and materials
were provided in response to this request. Meetings of the Independent Trustees
of the Fund were held in July, September, and November, 2013 to review and
discuss the contract review materials. In addition, the Trustees took into
account the information related to the Fund provided to the Trustees at
regularly scheduled meetings.
At a meeting held on November 12, 2013, based on their evaluation of the
information provided by PIM, the Sub-Adviser and third parties, the Trustees of
the Fund, including the Independent Trustees voting separately, unanimously
approved the renewal of the investment advisory agreement and the sub-advisory
agreement for another year. In considering the renewal of the investment
advisory agreement and the sub-advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. In all quintile rankings referred to throughout this
disclosure, first quintile is most favorable to the Fund's shareowners. Thus,
highest relative performance would be first quintile and lowest relative
expenses would also be first quintile. The Trustees did not identify any single
factor as the controlling factor in determining to approve the renewal of the
agreements.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by each of PIM and the Sub-Adviser to the Fund, taking into
account the investment objective and strategy of the Fund. The Trustees reviewed
the terms of the investment advisory agreement and the sub-advisory agreement.
36 Pioneer Real Estate Shares | Annual Report | 12/31/13
With respect to PIM, the Trustees considered that PIM supervises and monitors
the performance of the Sub-Adviser and the Fund's other service providers and
provides the Fund with personnel (including Fund officers) and other resources
that are necessary for the Fund's business management and operations. The
Trustees considered the non-investment resources and personnel of PIM involved
in PIM's services to the Fund, including PIM's compliance and legal resources
and personnel. The Trustees noted the substantial attention and high priority
given by PIM's senior management to the Pioneer fund complex. The Trustees also
considered that, as administrator, PIM is responsible for the administration of
the Fund's business and other affairs. The Trustees considered the fees paid to
PIM for the provision of administration services.
With respect to the Sub-Adviser, the Trustees considered the Sub-Adviser's
investment approach for the Fund and its research process. The Trustees
considered the resources of the Sub-Adviser and the personnel of the Sub-
Adviser who provide investment management services to the Fund. Based on these
considerations, the Trustees concluded that the nature, extent and quality of
services that had been provided by each of PIM and the Sub-Adviser to the Fund
were satisfactory and consistent with the terms of the investment advisory
agreement and the sub-advisory agreement, respectively.
Performance of the Fund
The Trustees review the Fund's performance on a regular basis, based on analysis
and data prepared by PIM for this purpose and discuss performance issues with
PIM on an ongoing basis. For purposes of their contract renewal deliberations,
the Trustees considered the performance results of the Fund over various time
periods. They reviewed information comparing the Fund's performance with the
performance of its peer group of funds as classified by Morningstar, Inc.
(Morningstar), an independent provider of investment company data, and with the
performance of the Fund's benchmark index. The Trustees considered that the
Fund's annualized total return was in the second quintile of its Morningstar
category for the one, five, and ten year periods ended June 30, 2013, and in the
third quintile of its Morningstar category for the three year period ended June
30, 2013. The Trustees noted the discussions held throughout the year regarding
the Fund's performance and confirmed that those discussions were factored into
the Trustees' deliberations concerning the renewal of the advisory and
sub-advisory agreements. The Trustees concluded that the investment performance
of the Fund was satisfactory.
Management Fee and Expenses
The Trustees considered information showing the fees and expenses of the Fund in
comparison to the management fees and expense ratios of its peer group of funds
as classified by Morningstar and also to the expense ratios of a
Pioneer Real Estate Shares | Annual Report | 12/31/13 37
peer group of funds selected on the basis of criteria determined by the
Independent Trustees for this purpose using data provided by Strategic Insight
Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent
third party. The Trustees also considered that PIM, not the Fund, paid the
Sub-Adviser pursuant to the sub-advisory agreement. The Trustees evaluated the
fee under the sub-advisory agreement and the portion of the fee under the
investment advisory agreement retained by PIM, and the services provided by the
respective parties under such agreements.
The Trustees considered that the Fund's management fee for the twelve months
ended June 30, 2013 was in the third quintile relative to the management fees
paid by other funds in its Morningstar peer group for the comparable period. The
Trustees also considered the breakpoint in the management fee schedule and the
reduced fee rate above a certain asset level.
The Trustees considered that the Fund's expense ratio for the twelve months
ended June 30, 2013 was in the fourth quintile relative to both its Morningstar
peer group and its Strategic Insight peer group, in each case for the comparable
period. The Trustees considered the impact of transfer agency, sub-transfer
agency, and other non-management fee expenses on the expense ratios of the Fund,
and noted the impact of expenses relating to small accounts and omnibus accounts
on transfer and sub-transfer agency expenses generally. The Trustees noted that
they separately review the Fund's transfer agency, sub-transfer agency and
intermediary arrangements.
The Trustees reviewed management fees charged by PIM and PIM's affiliate,
Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to
institutional and other clients, including publicly offered European funds
sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment
companies (in a sub-advisory capacity), and unaffiliated foreign and domestic
separate accounts. The Trustees also considered PIM's costs in providing
services to the Fund and Pioneer's costs in providing services to the other
clients and considered the differences in management fees and profit margins for
Fund and non-Fund services. In evaluating the fees associated with Pioneer's
client accounts, the Trustees took into account the respective demands,
resources and complexity associated with the Fund and client accounts. The
Trustees noted that, in some instances, the fee rates for those clients were
lower than the management fee for the Fund and considered that, under the
investment advisory agreement with the Fund, PIM performs additional services
for the Fund that it does not provide to those other clients or services that
are broader in scope, including oversight of the Sub-Adviser and the Fund's
other service providers and activities related to compliance and the extensive
regulatory and tax regimes to which the Fund is subject. The Trustees also
considered the different entrepreneurial risks associated with PIM's management
of the Fund and Pioneer's management of the other client accounts.
38 Pioneer Real Estate Shares | Annual Report | 12/31/13
The Trustees reviewed management fees charged by the Sub-Adviser to its other
clients. The Trustees noted that the sub-advisory fees paid to the Sub-Adviser
with respect to the Fund were within the range of the fee rates charged by the
Sub-Adviser to its other clients.
The Trustees concluded that the management fee payable by the Fund to PIM, as
well as the fees payable by PIM to the Sub-Adviser, were reasonable in relation
to the nature and quality of the services provided by PIM and the Sub-Adviser to
the Fund.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Fund,
including the methodology used by PIM in allocating certain of its costs to the
management of the Fund. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Fund. The Trustees further
considered the sub-advisory fees received by the Sub-Adviser with respect to the
Fund and the percentage that such fees represented of the Sub-Adviser's overall
revenues. They further reviewed the financial results realized by PIM and its
affiliates from non-fund businesses. The Trustees considered PIM's profit
margins with respect to the Fund in comparison to the limited industry data
available and noted that the profitability of any adviser was affected by
numerous factors, including its organizational structure and method for
allocating expenses. The Trustees concluded that PIM's profitability with
respect to the management of the Fund was not unreasonable and also that the
percentage that sub-advisory fees represented of the Sub-Adviser's overall
revenues was not unreasonable with respect to the sub-advisory services provided
to the Fund.
Economies of Scale
The Trustees considered PIM's views relating to economies of scale in connection
with the Pioneer Funds as fund assets grow and the extent to which any such
economies of scale are shared with funds and fund shareholders. The Trustees
noted the breakpoint in the management fee schedule. The Trustees recognize that
economies of scale are difficult to identify and quantify, rarely identifiable
on a fund-by-fund basis, and that, among other factors that may be relevant, are
the following: fee levels, expense subsidization, investment by PIM in research
and analytical capabilities and PIM's commitment and resource allocation to the
Fund. The Trustees noted that profitability also may be an indicator of the
availability of any economies of scale, although profitability may vary for
other reasons particularly, for example during the recent difficult periods for
financial markets, as the level of
Pioneer Real Estate Shares | Annual Report | 12/31/13 39
services was maintained notwithstanding a significant decline in PIM's fee
revenues from the Fund. Accordingly, the Trustees concluded that economies of
scale, if any, were being appropriately shared with the Fund.
Other Benefits
The Trustees considered the other benefits to each of PIM and the Sub-Adviser
from its relationship with the Fund. The Trustees considered the character and
amount of fees paid by the Fund, other than under the investment advisory
agreement, for services provided by PIM and its affiliates. The Trustees further
considered the revenues and profitability of PIM's businesses other than the
fund business. The Trustees considered the intangible benefits to each of PIM
and the Sub-Adviser by virtue of its relationship with the Fund and the other
Pioneer funds. The Trustees concluded that the receipt of these benefits was
reasonable in the context of the overall relationship between each of PIM and
the Sub-Adviser and the Fund.
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that each of the
investment advisory agreement between PIM and the Fund and the sub-advisory
agreement between PIM and the Sub-Adviser, including, in each case, the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of each of the investment advisory agreement and the sub-advisory
agreement for the Fund.
40 Pioneer Real Estate Shares | Annual Report | 12/31/13
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Investment Sub-Adviser
AEW Capital Management, L.P.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Bingham McCutchen 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 us.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at www.sec.gov.
Trustees and Officers
The Fund's Trustees and officers are listed below, together with their principal
occupations during at least the past five years. Trustees who are interested
persons of the Fund within the meaning of the 1940 Act are referred to as
Interested Trustees. Trustees who are not interested persons of the Fund are
referred to as Independent Trustees. Each of the Trustees, except Mr. West,
serves as a Trustee of each of the 55 U.S. registered investment portfolios for
which Pioneer serves as investment adviser (the "Pioneer Funds"). Mr. West
serves as Trustee of 50 U.S. registered investment portfolios for which Pioneer
serves as investment adviser. The address for all Trustees and all officers of
the Fund is 60 State Street, Boston, Massachusetts 02109.
The Statement of Additional Information of the Fund includes additional
information about the Trustees and is available, without charge, upon request,
by calling 1-800-225-6292.
Pioneer Real Estate Shares | Annual Report | 12/31/13 41
Independent Trustees++
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (63) Trustee since 2006. Private investor (2004 - 2008 and 2013 - Director, Broadridge
Chairman of the Board and Serves until a present); Chairman (2008 - 2013) and Chief Financial Solutions, Inc.
Trustee successor trustee is Executive Officer (2008 - 2012), Quadriserv, (investor communications and
elected or earlier Inc. (technology products for securities lending securities processing
retirement or industry); and Senior Executive Vice President, provider for financial
removal. The Bank of New York (financial and securities services industry) (2009 -
services) (1986 - 2004) present); Director,
Quadriserv, Inc. (2005 -
2013); and Commissioner, New
Jersey State Civil Service
Commission (2011 - present)
------------------------------------------------------------------------------------------------------------------------------------
David R. Bock (70) Trustee since 2005. Managing Partner, Federal City Capital Advisors Director of Enterprise
Trustee Serves until a (corporate advisory services company) (1997 - Community Investment, Inc.
successor trustee is 2004 and 2008 - present); Interim Chief (privately held affordable
elected or earlier Executive Officer, Oxford Analytica, Inc. housing finance company)
retirement or (privately held research and consulting company) (1985 - 2010); Director of
removal. (2010); Executive Vice President and Chief Oxford Analytica, Inc. (2008
Financial Officer, I-trax, Inc. (publicly traded - present); Director of The
health care services company) (2004 - 2007); and Swiss Helvetia Fund, Inc.
Executive Vice President and Chief Financial (closed-end fund) (2010 -
Officer, Pedestal Inc. (internet-based mortgage present); and Director of
trading company) (2000 - 2002) New York Mortgage Trust
(publicly traded mortgage
REIT) (2004 - 2009, 2012 -
present)
------------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (69) Trustee since 2008. William Joseph Maier Professor of Political Trustee, Mellon
Trustee Serves until a Economy, Harvard University (1972 - present) Institutional Funds
successor trustee is Investment Trust and Mellon
elected or earlier Institutional Funds Master
retirement or Portfolio (oversaw 17
removal. portfolios in fund complex)
(1989-2008)
------------------------------------------------------------------------------------------------------------------------------------
42 Pioneer Real Estate Shares | Annual Report | 12/31/13
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (66) Trustee since 1995. Founding Director, Vice President and Corporate None
Trustee Serves until a Secretary, The Winthrop Group, Inc. (consulting
successor trustee is firm) (1982 - present); Desautels Faculty of
elected or earlier Management, McGill University (1999 - present);
retirement or and Manager of Research Operations and
removal. Organizational Learning, Xerox PARC, Xerox's
advance research center (1990-1994)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (65) Trustee since 1995. President and Chief Executive Officer, Newbury, Director of New America High
Trustee Serves until a Piret & Company, Inc. (investment banking firm) Income Fund, Inc.
successor trustee is (1981 - present) (closed-end investment
elected or earlier company) (2004 - present);
retirement or and member, Board of
removal. Governors, Investment
Company Institute (2000 -
2006)
------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (85) Trustee since 1995. Senior Counsel, Sullivan & Cromwell LLP (law Director, The Swiss Helvetia
Trustee Serves until a firm) (1998 - present); and Partner, Sullivan & Fund, Inc. (closed-end
successor trustee is Cromwell LLP (prior to 1998) investment company) (1995 -
elected or earlier 2012); and Director,
retirement or Invesco, Ltd. (formerly
removal. AMVESCAP, PLC) (investment
manager) (1997-2005)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/13 43
Interested Trustee++
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (55)* Trustee since 2007. Chairman 2013 - present), Director, CEO and None
Trustee, President and Chief Serves until a President of PIM-USA (since February 2007); Chairman
Executive Officer successor trustee is (2013 - present), Director and President of Pioneer
elected or earlier and Pioneer Institutional Asset Management,
retirement or removal. Inc.(since February 2007); President and Chief
Executive Officer of all the Pioneer Funds (since
2014); Executive Vice President of all of the
Pioneer Funds (2007 - 2013); Director of PGAM (2007
- 2010); Head of New Europe Division, PGAM (2000 -
2005); and Head of New Markets Division, PGAM (2005
- 2007)
------------------------------------------------------------------------------------------------------------------------------------
* Mr. Kingsbury is an Interested Trustee because he is an officer or director
of the fund's investment adviser and certain of its affiliates.
++ Effective January 28, 2014, Mr. Marc O. Mayer became an Independent Trustee
of the Fund and Mr. Kenneth J. Taubes became an Interested Trustee of the
Fund.
44 Pioneer Real Estate Shares | Annual Report | 12/31/13
Fund Officers+++
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Officer
------------------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Jr. (87)** Since 1995. Serves at President of all of the Pioneer Funds; Non-Executive None
President and Chief Executive the discretion of the Chairman and a Director of Pioneer Investment
Officer*** Board. Management USA Inc. ("PIM-USA") (until November
2013); Chairman and a Director of Pioneer (until
November 2013); Chairman and Director of Pioneer
Institutional Asset Management, Inc. (until November
2013); Director of Pioneer Alternative Investment
Management Limited (Dublin) (until October 2011);
President and a Director of Pioneer Alternative
Investment Management (Bermuda) Limited and
affiliated funds (until November 2013); Deputy
Chairman and a Director of Pioneer Global Asset
Management S.p.A. ("PGAM") (until April 2010);
Director of Nano-C, Inc. (since 2003); Director of
Cole Management Inc. (2004 - 2011); Director of
Fiduciary Counseling, Inc. (until December 2011);
Trustee of all of the Pioneer Funds (until November
2013); and Retired Partner, Wilmer Cutler Pickering
Hale and Dorr LLP
------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (49) Since 2003. Serves at Vice President and Associate General Counsel of None
Secretary and Chief Legal the discretion of the Pioneer since January 2008; Secretary and Chief
Officer Board. Legal Officer of all of the Pioneer Funds since June
2010; Assistant Secretary of all of the Pioneer
Funds from September 2003 to May 2010; and Vice
President and Senior Counsel of Pioneer from July
2002 to December 2007
------------------------------------------------------------------------------------------------------------------------------------
Carol B. Hannigan (52) Since 2010. Serves at Fund Governance Director of Pioneer since December None
Assistant Secretary the discretion of the 2006 and Assistant Secretary of all the Pioneer
Board. Funds since June 2010; Manager - Fund Governance of
Pioneer from December 2003 to November 2006; and
Senior Paralegal of Pioneer from January 2000 to
November 2003.
------------------------------------------------------------------------------------------------------------------------------------
Thomas Reyes (51) Since 2010. Serves at Counsel of Pioneer since June 2007 and Assistant None
Assistant Secretary the discretion of the Secretary of all the Pioneer Funds since June 2010;
Board. and Vice President and Counsel at State Street Bank
from October 2004 to June 2007
------------------------------------------------------------------------------------------------------------------------------------
** Mr. Cogan resigned as a Trustee of the Pioneer Funds effective November 12,
2013.
*** Mr. Cogan resigned as President and Chief Executive Officer of the Fund
effective January 1, 2014.
+++ Mr. Mark D. Goodwin became Executive Vice President of the Fund effective
January 28, 2014.
Pioneer Real Estate Shares | Annual Report | 12/31/13 45
Fund Officers (continued)
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Fund Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (54) Since 2008. Serves at Vice President - Fund Treasury of Pioneer; Treasurer None
Treasurer and Chief Financial the discretion of the of all of the Pioneer Funds since March 2008; Deputy
and Accounting Officer of the Board. Treasurer of Pioneer from March 2004 to February
Fund 2008; and Assistant Treasurer of all of the Pioneer
Funds from March 2004 to February 2008
------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (48) Since 2000. Serves at Director - Fund Treasury of Pioneer; and Assistant None
Assistant Treasurer the discretion of the Treasurer of all of the Pioneer Funds
Board.
------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (55) Since 2002. Serves at Fund Accounting Manager - Fund Treasury of Pioneer; None
Assistant Treasurer the discretion of the and Assistant Treasurer of all of the Pioneer Funds
Board.
------------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (34) Since 2009. Serves at Fund Administration Manager - Fund Treasury of None
Assistant Treasurer the discretion of the Pioneer since November 2008; Assistant Treasurer of
Board. all of the Pioneer Funds since January 2009; and
Client Service Manager - Institutional Investor
Services at State Street Bank from March 2003 to
March 2007
------------------------------------------------------------------------------------------------------------------------------------
Jean M. Bradley (61) Since 2010. Serves at Chief Compliance Officer of Pioneer and of all the None
Chief Compliance Officer the discretion of the Pioneer Funds since March 2010; Director of Adviser
Board. and Portfolio Compliance at Pioneer since October
2005; and Senior Compliance Officer for Columbia
Management Advisers, Inc. from October 2003 to
October 2005
------------------------------------------------------------------------------------------------------------------------------------
Kelly O'Donnell (42) Since 2006. Serves at Director - Transfer Agency Compliance of Pioneer and None
Anti-Money Laundering Officer the discretion of the Anti-Money Laundering Officer of all the Pioneer
Board. funds since 2006
------------------------------------------------------------------------------------------------------------------------------------
46 Pioneer Real Estate Shares | Annual Report | 12/31/13
This page for your notes.
Pioneer Real Estate Shares | Annual Report | 12/31/13 47
This page for your notes.
48 Pioneer Real Estate Shares | Annual Report | 12/31/13
This page for your notes.
Pioneer Real Estate Shares | Annual Report | 12/31/13 49
This page for your notes.
50 Pioneer Real Estate Shares | Annual Report | 12/31/13
This page for your notes.
Pioneer Real Estate Shares | Annual Report | 12/31/13 51
This page for your notes.
52 Pioneer Real Estate Shares | Annual Report | 12/31/13
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
--------------------------------------------------------------------------------
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Write to us:
--------------------------------------------------------------------------------
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@pioneerinvestments.com
(for general questions about Pioneer only)
Visit our web site: us.pioneerinvestments.com
This report must be preceded or accompanied by a prospectus.
The Fund files a complete schedule of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
Securities offered through Pioneer Funds Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2014 Pioneer Investments 18631-08-0214
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 12(a)(1), a copy of
its code of ethics that applies to the registrant's principal
executive officer,principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
as an exhibit to its annual
report on this Form N-CSR (see attachment);
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Pioneer Real Estate Shares:
Fees for audit services provided to the Fund, including fees associated with
the routine and non routine filings of its Form N-1A, totaled approximately
$33,690 in 2013 and $36,742 in 2012.
(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.
Pioneer Real Estate Shares:
Audit-Related Fees
There were no audit-related and other services provided to the Fund during
the fiscal years ended December 31, 2013 and 2012.
(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.
Pioneer Real Estate Shares:
Fees for tax compliance services, primarily for tax returns, totaled $8,131
in 2013 and $8,290 in 2012.
(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.
Pioneer Real Estate Shares:
Other Fees
There were no audit-related and other services provided to the Fund during
the fiscal years ended December 31, 2013 and 2012.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after
May 6, 2003, the effective date of the new SEC pre-approval rules,
the Fund's audit committee is required to pre-approve services to
affiliates defined by SEC rules to the extent that the services are
determined to have a direct impact on the operations or
financial reporting of the Fund.
For the years ended December 31, 2013 and 2012, there were no
services provided to an affiliate that required the Fund's audit
committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountants engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrants accountant
for services rendered to the registrant, and rendered to the registrants
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Fund and affiliates, as previously
defined, totaled $8,131 in 2013 and $8,290 in 2012.
(h) Disclose whether the registrants audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrants investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has considered whether
the provision of non-audit services that were rendered to the Affiliates
(as defined) that were not pre-approved pursuant to paragraph (c)(7)(ii)
of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrant's audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.1212
of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrant's portfolio ("Portfolio Manager"). Also state each Portfolio
Manager's business experience during the past 5 years.
Not applicable to open-end management investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrant's equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781).
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 407(c)(2)(iv) of
Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15))
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrant's board of
directors since the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-R of Schedule 14(A)
in its definitive proxy statement, or this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financials officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR
270.30a-3(c))) as of a date within 90 days of the filing date of the report
that includes the disclosure required by this paragraph,
based on the evaluation of these controls and procedures required by Rule
30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b)
under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on the evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that
occured during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(2) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2(a) under the Act
(17 CFR 270.30a-2(a)) , exactly as set forth below:
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Real Estate Shares
By (Signature and Title)* /s/ Daniel K. Kingsbury
Daniel K. Kingsbury, President
Date February 27, 2014
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/ Daniel K. Kingsbury
Daniel K. Kingsbury, President
Date February 27, 2014
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date February 27, 2014
* Print the name and title of each signing officer under his or her signature.