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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06151
Pioneer Europe Select Equity Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: August 31
Date of reporting period: September 1, 2006 through August 31, 2007
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
-------
EUROPE
SELECT EQUITY
FUND
PERAX
Ticker Symbol
Annual
Report
8/31/07
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Comparing Ongoing Fund Expenses 14
Schedule of Investments 16
Financial Statements 21
Notes to Financial Statements 30
Report of Independent Registered Public Accounting Firm 38
Trustees, Officers and Service Providers 39
President's
Dear Shareowner,
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Staying diversified and keeping your portfolio invested in the markets are two
general investment principles that have served investors well over time. They
were particularly useful guides during the past year, when an otherwise healthy
long-term bull market was buffeted by problems in the mortgage and banking
industries.
Since mid-year, issues tied to poor underwriting practices in the subprime
sector of the mortgage industry, and to problems with risk management by banks
and hedge funds, have resulted in increased market volatility and rising
concern about risks to U.S. economic growth.
Even against this backdrop, the long-term performance of major asset classes
remained positive. In the 12 months ending August 31, 2007, equity investors
were generally rewarded as, despite a late-July decline, the Standard & Poor's
500 Index returned 15%, the Dow Jones Industrial Average returned 20%, and the
NASDAQ Composite Index returned 19%. International developed and emerging
markets equities performed well also, with the MSCI EAFE Developed Market Index
returning 19% and the MSCI Emerging Markets Index returning 44% over the
12-month period. The U.S. bond market, as measured by the Lehman Aggregate Bond
Index, returned 5% in the 12 months ending August 31, 2007. The U.S. high-yield
bond market, as measured by the Merrill Lynch High Yield Bond Master II Index,
returned 7% for the same period, reflecting its higher coupon yield.
U.S. economic growth has slowed in the past year, but this was due as much to
the natural maturation of the cyclical expansion, as U.S. factories approached
full utilization and the labor market approached full employment, as it was to
rising commodity prices and short-term interest rates. This slowdown was,
therefore, not entirely unwelcome, as it reduced the threat of higher
inflation. More recently, however, there has been increasing concern that
falling home prices and/or banks' unwillingness to lend pose a larger and more
imminent threat to the economy.
In Europe, solid GDP growth driven by a positive operating environment for
European companies, especially exporters, has driven unemployment lower and
supported growing consumption. Japanese economic growth also continues to make
progress, and the country's deflationary problems are gradually receding.
Economic growth in emerging market countries remains faster than in the
developed world as they persist in "catching up," led by China, which continues
its rise as a world economic power.
2
Letter
The U.S. Federal Reserve and the world's other central banks have pursued
policies aimed at producing low and stable inflation, believed to be the best
backdrop for steady economic growth and low average unemployment over the long
term. Keeping inflation low is also an important support for stock and bond
valuations, and so central bank policies have also been "investor friendly."
The central banks have responded to this past summer's liquidity squeeze in the
inter-bank and commercial paper markets by acting as the "lenders of last
resort" to limit the risk of problems spreading to the broader economy. Looking
forward, the economic outlook and equity valuations appear generally positive,
although the current environment is plagued by fears that subprime mortgage
problems will result in a systemic liquidity/credit crunch. While falling risk
tolerances may depress asset prices in the short term, valuations look
reasonable if credit market problems do not spread to the broader economy.
Sudden swings in the markets are always to be expected. Just as staying
diversified and invested are important investment principles, it is also
important to pay attention to asset allocation. As always, we encourage
shareholders to work closely with their financial advisor to find the mix of
stocks, bonds and money market assets that is aligned to your particular risk
tolerance and investment objective.
Respectfully,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
3
Pioneer Europe Select Equity Fund
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PORTFOLIO MANAGEMENT DISCUSSION 8/31/07
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European equities produced solid returns over the 12 months ending August 31,
2007, supported by the broadening of the economic recovery in the region.
Returns enjoyed by U.S. investors received an added boost by the strengthening
of the euro relative to the U.S. dollar on international currency markets. In
the following interview, Andrew Arbuthnott discusses the events and factors that
affected the performance of Pioneer Europe Select Equity Fund over the 12
months. Mr. Arbuthnott is a member of the team at Pioneer Investment Management
in Dublin, Ireland, that is responsible for the Fund's day-to-day management.
Q: How did the Fund perform during the 12 months ending August 31, 2007?
A: The Fund did well in absolute terms, but trailed its benchmark. For the 12
months ending August 31, 2007, Pioneer Europe Select Equity Fund's Class A
shares had a total return of 15.61%, at net asset value. During the same
period, the MSCI Europe Index returned 22.98%, while the average return of
the 103 funds in Lipper's European Region Funds category was 22.24%.
Call 1-800-225-6292 or visit www.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.
Q: What was the investment environment like in Europe during the 12 months?
A: The environment for equities was quite positive in Europe over the period
as the region's general economic resurgence widened, especially in the core
economies of Germany, France and Italy. Corporations continued to make
capital expenditures, while private consumer spending improved, following
gains in the job market in Europe. Helped by rising international sales,
corporate earnings continued to gain during the fiscal period, while steady
merger-and-acquisition and private equity investment activity helped
support stock values. In this environment, many companies were more
4
Pioneer Europe Select Equity Fund
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shareholder-friendly, using their improving cash flows to increase
dividends and buy back shares.
European stocks on average increased in value by about 15% in local
currency during the 12 months ending August 31, 2007. However, the
potential gains of American investors increased by another 6.5% during the
period as the euro rose in value relative to the U.S. dollar. Automobile
industry stocks recorded the greatest gains, returning on average 59% in
local currencies, followed by capital goods (38% average gain), materials
(36%), telecommunication services (32%) and utilities (27%). In general,
industrial-related stocks turned in superior performance. Auto stocks
received a boost as several companies restructured, most notably Daimler
Chrysler, which sold most of its stake in Chrysler Motors to private equity
investors in the United States. Capital goods and basic materials
corporations were helped by the global economic expansion, while
telecommunication services companies recovered from earlier difficulties
and increasing merger-and-acquisition activity supported the stock
performance of utilities companies.
The pharmaceuticals industry was the worst-performing area of the market,
with average returns of -11%. Other underperforming industries were
diversified financials, real estate, banks and energy. The stock
performance of pharmaceuticals companies was affected by expiration of
patent protection on several profitable drugs, concerns about new drugs
being developed, and difficulties in getting new drugs approved by
regulatory authorities. A slump in the housing industry affected the
financials and real estate industries, and some European banks were exposed
to problems in the subprime mortgage market in the United States. Although
oil prices kept climbing, European energy companies faced increased capital
costs in developing resources at the same time that they were forced to pay
higher taxes to extract oil in many countries.
Q: What were the principal factors affecting Fund performance relative to the
MSCI Europe Index?
A: Two main factors were responsible for the Fund's underperformance relative
to its benchmark, which was most evident in the latter months of the
period. The first was our underweighting of utilities stocks, where we
thought stock valuations were too high.
5
Pioneer Europe Select Equity Fund
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PORTFOLIO MANAGEMENT DISCUSSION 8/31/07 (continued)
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The second was our investment in homebuilding companies in the United
Kingdom, whose share prices fell victim to declining home prices and rising
interest rates. Much of the damage came from our investment in Persimmon, a
leading homebuilder with an attractive share price that we believed was
well positioned to take advantage of a shortage of housing supply in the
United Kingdom. Despite the setback in this period, we continue to have a
favorable view of the prospects of several of the home building companies
in the United Kingdom. Several financial companies in which we had
investments also turned in disappointing performance. The Royal Bank of
Scotland's share price struggled as the company entered into a bidding war
for the Dutch banking firm, ABN Amro. BNP Paribas of France and Danske Bank
of Denmark also underperformed. Conversely, we held shares of ABN Amro
early in the period and sold them at a healthy profit, contributing
positively to Fund performance. Also holding back results was our
investment in TNT, a Netherlands-based postal and delivery service, which
underperformed in 2007 after doing well in 2006. Our lack of exposure to
several capital goods companies did not help, although our investment in
the German engineering corporation Siemens was a positive contributor.
Q: What types of investments helped support Fund performance?
A: In addition to our investments in Siemens and ABN Amro, we had excellent
performance from auto-related holdings. Porsche, the German sports car
company and a long-term holding, was a major positive for the Fund. Another
German company, tire manufacturer Continental also helped support results
substantially before we sold the position. The investment in Next, a
clothing retailer in the United Kingdom was a major positive during the
period. Our underweighted positions in the real estate and insurance
industries also helped relative performance.
Q: What is your investment outlook?
A: We remain committed to our basic strategy, which is to focus on a
relatively concentrated portfolio of companies in which we have confidence.
We believe prospects in Europe remain favorable. The European economy is
expanding steadily, with gross domestic product (GDP) growing at an
annualized rate of about 2.5%, while stock valuations are reasonable,
earnings growth remains solid
6
Pioneer Europe Select Equity Fund
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and stocks are paying relatively high dividend yields. European companies
have access to healthy cash flows, which should enable them to continue to
follow policies such as share buy-backs and dividend increases that enhance
shareholder value. While the remainder of 2007 may not be as strong in
European equity markets as were 2005 and 2006, we think the conditions are
in place for favorable investment opportunities.
Investing in foreign and/or emerging markets securities involves certain risks,
including risks relating to interest rates, currency exchange rates, economic,
and political conditions. The Fund may invest a substantial amount of its assets
in issuers located in a limited number of countries and, therefore, is
susceptible to adverse economic, political or regulatory developments affecting
those countries. The Fund invests in a limited number of securities and, as a
result, the Fund's performance may be more volatile than the performance of
funds holding more securities. At times, the Fund's investments may represent
industries or industry sectors that are interrelated or have common risks,
making it more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
7
Pioneer Europe Select Equity Fund
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PORTFOLIO SUMMARY 8/31/07
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Sector Distribution
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(As a percentage of equity holdings)
[The following data was represented as a pie chart in the printed material]
Financials 22.0%
Consumer Discretionary 18.0%
Industrials 12.9%
Energy 11.2%
Health Care 11.1%
Materials 9.2%
Telecommunication Services 5.1%
Information Technology 4.2%
Utilities 4.1%
Consumer Staples 2.2%
Geographical Distribution
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(As a percentage of equity holdings)
[The following data was represented as a line graph in the printed material]
United Kingdom 33.6%
Switzerland 13.0%
Germany 11.5%
United States 5.1%
Spain 5.1%
Netherlands 4.9%
Sweden 4.8%
Greece 4.6%
Ireland 3.8%
Italy 3.6%
France 3.3%
Denmark 3.0%
Norway 1.9%
Panama 1.8%
10 Largest Holdings
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(As a percentage of equity holdings)*
1. BP Amoco Plc 5.28%
2. Royal Bank of Scotland Group Plc 5.02
3. Siemens 4.18
4. National Grid Plc 4.08
5. CRH Plc 3.74
6. Persimmon Plc 3.73
7. Roche Holdings AG 3.69
8. CS Group 3.65
9. Eni S.p.A. 3.63
10. TNT NV 3.20
* This list excludes temporary cash 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 security
listed.
8
Pioneer Europe Select Equity Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
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Class 8/31/07 8/31/06
- ------- --------- --------
A $43.23 $37.83
B $39.18 $34.26
C $38.95 $34.16
Y $44.64 $39.06
Class 1/31/07 8/31/06
- ------- --------- --------
R* $42.03 $37.32
Distributions Per Share
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9/1/06 - 8/31/07
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ------------ --------------- --------------
A $0.4887 $ - $ -
B $0.0257 $ - $ -
C $0.2133 $ - $ -
Y $0.6953 $ - $ -
9/1/06 - 1/31/07
-------------------------------------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
- ------- ------------ --------------- --------------
R* $0.2543 $ - $ -
* Class R Shares were liquidated on 1/31/07.
9
Pioneer Europe Select Equity Fund
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PERFORMANCE UPDATE 8/31/07 CLASS A SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) Europe
Index.
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Average Annual Total Returns
(As of August 31, 2007)
Net Asset Public Offering
Period Value (NAV) Price (POP)
Life-of-Class
(12/29/00) 10.66% 9.68%
5 Years 19.67 18.27
1 Year 15.61 8.97
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Expense Ratio
(Per prospectus dated January 1, 2007)
Gross Net
1.66% 1.66%
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[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
Pioneer Europe Select MSCI Europe
Equity Fund Index
12/31/2000 $9,425 $10,000
$7,681 $8,111
8/31/2002 $7,546 $6,834
$8,281 $7,457
8/31/2004 $10,646 $9,218
$13,258 $11,700
8/31/2006 $16,019 $14,601
8/31/2007 $18,521 $17,955
Call 1-800-225-6292 or visit www.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.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. Returns prior to June 24, 2005 reflect the
performance of the predecessor fund, which has not been restated to reflect any
differences in expenses.
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 net expense ratio reflects contractual expense limitations (to the extent
applicable) currently in effect through 1/1/09 for Class A shares. There can be
no assurance that Pioneer will extend the expense limitations beyond such time.
Please see the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
10
Pioneer Europe Select Equity Fund
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PERFORMANCE UPDATE 8/31/07 CLASS B SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of August 31, 2007)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 9.65% 9.65%
5 Years 18.42 18.42
1 Year 14.44 10.44
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Expense Ratio
(Per prospectus dated January 1, 2007)
Gross Net
2.74% 2.65%
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[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
Pioneer Europe Select MSCI Europe
Equity Fund Index
12/31/2000 $10,000 $10,000
$8,130 $8,111
8/31/2002 $7,940 $6,834
$8,620 $7,457
8/31/2004 $10,953 $9,218
$13,501 $11,700
8/31/2006 $16,156 $14,601
8/31/2007 $18,488 $17,955
Call 1-800-225-6292 or visit www.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
(CSDC). Effective December 1, 2004, the period during which a CDSC is applied to
withdrawals was shortened to 5 years. The maximum CDSC for class B shares
continues to be 4%. For more complete information, please see the prospectus for
details. Note: Shares purchased prior to December 1, 2004 remain subject to the
CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com/ bshares. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. Returns prior to June 24, 2005 reflect the
performance of the predecessor fund, which has not been restated to reflect any
differences in expenses.
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 net expense ratio reflects contractual expense limitations (to the extent
applicable) currently in effect through 1/1/08 for Class B shares. There can be
no assurance that Pioneer will extend the expense limitations beyond such time.
Please see the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
11
Pioneer Europe Select Equity Fund
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PERFORMANCE UPDATE 8/31/07 CLASS C SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of August 31, 2007)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 9.94% 9.94%
5 Years 18.78 18.78
1 Year 14.67 14.67
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Expense Ratio
(Per prospectus dated January 1, 2007)
Gross Net
2.59% 2.59%
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[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
Pioneer Europe Select MSCI Europe
Equity Fund Index
12/31/2000 $10,000 $10,000
12/31/2000 $8,140 $8,111
8/31/2002 $7,960 $6,834
$8,690 $7,457
8/31/2004 $11,094 $9,218
$13,709 $11,700
8/31/2006 $16,415 $14,601
8/31/2007 $18,822 $17,955
Call 1-800-225-6292 or visit www.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.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. Returns prior to June 24, 2005 reflect the
performance of the predecessor fund, which has not been restated to reflect any
differences in expenses.
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 net expense ratio reflects contractual expense limitations (to the extent
applicable) currently in effect through 1/1/08 for Class C shares. There can be
no assurance that Pioneer will extend the expense limitations beyond such time.
Please see the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
12
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 8/31/07 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Equity Fund, compared to that of the
Morgan Stanley Capital International (MSCI) Europe Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of August 31, 2007)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 10.85% 10.85%
5 Years 19.94 19.94
1 Year 16.14 16.14
- --------------------------------------------------------------------------------
Expense Ratio
(Per prospectus dated January 1, 2007)
Gross Net
1.10% 1.10%
- --------------------------------------------------------------------------------
[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
Pioneer Europe Select MSCI Europe
Equity Fund Index
12/31/2000 $10,000 $10,000
$8,150 $8,111
8/31/2002 $8,007 $6,834
$8,786 $7,457
8/31/2004 $11,295 $9,218
$14,085 $11,700
8/31/2006 $17,113 $14,601
8/31/2007 $19,876 $17,955
Call 1-800-225-6292 or visit www.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.
Pioneer Europe Fund acquired the assets and liabilities of Pioneer Europe Select
Fund (the predecessor fund) on June 24, 2005 and changed its name to Pioneer
Europe Select Equity Fund. The predecessor fund did not offer Class Y shares.
Returns prior to June 24, 2005 are based on the net asset value performance of
the predecessor fund's Class A shares, which has not been restated to reflect
any differences in expenses, including Rule 12b-1 fees applicable to Class A
shares.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
13
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period"
to estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Europe Select Equity Fund
Based on actual returns from March 1, 2007 through August 31, 2007
Share Class A B C Y
- -------------------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 3/1/07
Ending Account Value $1,042.19 $1,037.35 $1,038.11 $1,044.24
(after expenses)
On 8/31/07*
Expenses Paid During Period* $ 7.57 $ 12.68 $ 11.71 $ 5.05
* Expenses are equal to the Fund's annualized expense ratio of 1.47%, 2.47%,
2.28% and 0.98%, 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 partial year period).
14
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Europe Select Equity Fund
Based on a hypothetical 5% return per year before expenses, reflecting the
period from March 1, 2007 through August 31, 2007
Share Class A B C Y
- -------------------------------------------------------------------------------------------
Beginning Account Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
On 3/1/07
Ending Account Value $1,017.80 $1,012.75 $1,013.71 $1,020.27
(after expenses)
On 8/31/07*
Expenses Paid During Period* $ 7.48 $ 12.53 $ 11.57 $ 4.99
* Expenses are equal to the Fund's annualized expense ratio of 1.47%, 2.47%,
2.28% and 0.98%, 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 partial year period).
15
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/07
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 2.0%
Automobiles & Components - 2.0%
Automobile Manufacturers - 2.0%
3,123 Porsche AG $ 5,584,153
------------
Total Automobiles & Components $ 5,584,153
------------
TOTAL PREFERRED STOCK
(Cost $1,851,684) $ 5,584,153
------------
COMMON STOCKS - 96.9%
Energy - 11.1%
Integrated Oil & Gas - 11.1%
1,295,133 BP Amoco Plc $ 14,529,891
289,823 Eni S.p.A. 9,997,520
178,074 Repsol SA 6,440,018
------------
$ 30,967,429
------------
Total Energy $ 30,967,429
------------
Materials - 9.1%
Construction Materials - 6.8%
237,526 CRH Plc $ 10,303,757
78,876 Holcim, Ltd. 8,550,252
------------
$ 18,854,009
------------
Diversified Metals & Mining - 2.3%
111,349 Anglo American Plc $ 6,386,459
------------
Total Materials $ 25,240,468
------------
Capital Goods - 9.6%
Construction & Farm Machinery & Heavy Trucks - 2.3%
364,457 Volvo AB (Class B) $ 6,297,735
------------
Industrial Conglomerates - 4.1%
91,428 Siemens $ 11,516,993
------------
Trading Companies & Distributors - 3.2%
418,933 Wolsely $ 8,813,359
------------
Total Capital Goods $ 26,628,087
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Transportation - 3.2%
Air Freight & Couriers - 3.2%
208,492 TNT NV $ 8,820,784
------------
Total Transportation $ 8,820,784
------------
Automobiles & Components - 4.5%
Auto Parts & Equipment - 1.7%
81,442 Autoliv, Inc. $ 4,672,328
------------
Automobile Manufacturers - 2.8%
88,548 Daimlerchrysler AG* $ 7,901,898
------------
Total Automobiles & Components $ 12,574,226
------------
Consumer Durables & Apparel - 7.3%
Apparel, Accessories & Luxury Goods - 0.9%
41,889 Adidas-Salomon AG $ 2,466,142
------------
Homebuilding - 6.4%
436,596 Persimmon Plc $ 10,257,752
1,072,517 Taylor Wimpey Plc* 7,511,819
------------
$ 17,769,571
------------
Total Consumer Durables & Apparel $ 20,235,713
------------
Consumer Services - 4.0%
Casinos & Gaming - 2.2%
170,654 Opap SA $ 6,251,036
------------
Hotels, Resorts & Cruise Lines - 1.8%
109,605 Carnival Corp. $ 4,996,892
------------
Total Consumer Services $ 11,247,928
------------
Food, Beverage & Tobacco - 2.2%
Tobacco - 2.2%
184,595 British American Tobacco Plc $ 6,128,618
------------
Total Food, Beverage & Tobacco $ 6,128,618
------------
Health Care Equipment & Services - 3.1%
Health Care Equipment - 1.6%
39,793 Synthes, Inc. $ 4,556,041
------------
Health Care Services - 1.5%
83,994 Fresenius Medical Care AG $ 4,131,635
------------
Total Health Care Equipment & Services $ 8,687,676
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/07 (continued)
- --------------------------------------------------------------------------------
Shares Value
Pharmaceuticals & Biotechnology - 7.9%
Pharmaceuticals - 7.9%
137,598 Astrazeneca Plc $ 6,791,521
168,123 Bristol-Myers Squibb Co. 4,900,785
58,314 Roche Holdings AG 10,155,863
------------
$ 21,848,169
------------
Total Pharmaceuticals & Biotechnology $ 21,848,169
------------
Banks - 15.6%
Diversified Banks - 15.6%
574,001 Barclays Plc $ 7,110,867
62,851 BNP Paribas SA 6,649,422
199,636 Danske Bank 8,204,154
384,923 Dnb Nor Asa 5,279,551
1,191,010 Royal Bank of Scotland Group Plc 13,827,445
15,160 Societe Generale 2,452,335
------------
$ 43,523,774
------------
Total Banks $ 43,523,774
------------
Diversified Financials - 6.2%
Diversified Capital Markets - 6.2%
153,261 CS Group $ 10,047,256
136,351 UBS AG 7,130,700
------------
$ 17,177,956
------------
Total Diversified Financials $ 17,177,956
------------
Technology Hardware & Equipment - 2.4%
Communications Equipment - 2.4%
1,821,235 Ericsson LM $ 6,785,038
------------
Total Technology Hardware & Equipment $ 6,785,038
------------
Semiconductors - 1.7%
Semiconductor Equipment - 1.7%
160,003 ASM Lithography Holding N.V.* $ 4,758,174
------------
Total Semiconductors $ 4,758,174
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Telecommunication Services - 5.0%
Integrated Telecommunication Services - 5.0%
196,099 Hellenic Telekom Organization* $ 6,402,622
302,243 Telefonica SA* 7,529,265
------------
$ 13,931,887
------------
Total Telecommunication Services $ 13,931,887
------------
Utilities - 4.0%
Multi-Utilities - 4.0%
749,006 National Grid Plc $ 11,228,056
------------
Total Utilities $ 11,228,056
------------
TOTAL COMMON STOCKS
(Cost $240,454,423) $269,783,983
------------
TOTAL INVESTMENT IN SECURITIES - 98.9%
(Cost $242,306,107) (a) (b) $275,368,136
------------
OTHER ASSETS AND LIABILITIES - 1.1% $ 3,032,876
------------
TOTAL NET ASSETS - 100.0% $278,401,012
============
* Non-income producing security.
(a) At August 31, 2007, the net unrealized gain on investments based on cost
for federal income tax purposes of $242,519,179 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $37,211,750
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (4,362,793)
-----------
Net unrealized gain $32,848,957
===========
The accompanying notes are an integral part of these financial statements. 19
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/07 (continued)
- --------------------------------------------------------------------------------
(b) Distributions of investments by country of issue, as percentage of total
equity holdings (excluding temporary cash investments) is as follows:
United Kingdom 33.6%
Switzerland 13.0
Germany 11.5
United States 5.1
Spain 5.1
Netherlands 4.9
Sweden 4.8
Greece 4.6
Ireland 3.8
Italy 3.6
France 3.3
Denmark 3.0
Norway 1.9
Panama 1.8
----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments) for the
year ended August 31, 2007 aggregated $199,414,206 and $156,636,420,
respectively.
20 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 8/31/07
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (cost $242,306,107) $275,368,136
Foreign currencies, at value (cost $1,886,701) 1,889,256
Receivables -
Fund shares sold 358,968
Dividends, interest and foreign taxes withheld 1,496,342
Other 43,868
------------
Total assets $279,156,570
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 247,397
Due to bank 313,288
Due to affiliates 79,509
Accrued expenses 115,364
------------
Total liabilities $ 755,558
------------
NET ASSETS:
Paid-in capital $208,040,871
Undistributed net investment income 2,893,500
Accumulated net realized gain on investments and foreign
currency transactions 34,390,780
Net unrealized gain on investments 33,062,029
Net unrealized gain on forward foreign currency contracts
and other assets and liabilities denominated in foreign
currencies 13,832
------------
Total net assets $278,401,012
============
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $183,332,799/4,241,111 shares) $ 43.23
============
Class B (based on $26,673,135/680,703 shares) $ 39.18
============
Class C (based on $18,120,065/465,231 shares) $ 38.95
============
Class Y (based on $50,275,013/1,126,106 shares) $ 44.64
============
MAXIMUM OFFERING PRICE:
Class A ($43.23 [divided by] 94.25%) $ 45.87
============
The accompanying notes are an integral part of these financial statements. 21
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 8/31/07
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $1,064,240) $ 7,386,874
Interest 240,868
-------------
Total investment income $ 7,627,742
-------------
EXPENSES:
Management fees $ 2,232,920
Transfer agent fees and expenses
Class A 517,784
Class B 166,864
Class C 60,757
Class R 1,475
Class Y 444
Distribution fees
Class A 433,608
Class B 314,440
Class C 189,673
Class R 286
Administrative reimbursements 58,343
Custodian fees 103,707
Registration fees 30,266
Professional fees 42,038
Printing expense 63,832
Fees and expenses of nonaffiliated trustees 5,459
Miscellaneous 19,335
-------------
Total expenses $ 4,241,231
Less management fees waived and
expenses reimbursed by Pioneer Investment
Management, Inc. (1,132)
Less fees paid indirectly (36,687)
-------------
Net expenses $ 4,203,412
-------------
Net investment income $ 3,424,330
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $ 42,774,580
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (201,385) $ 42,573,195
------------- -------------
Change in net unrealized gain (loss) on:
Investments $ (12,930,566)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 11,231 $ (12,919,335)
------------- -------------
Net gain on investments and foreign currency
transactions $ 29,653,860
=============
Net increase in net assets resulting from operations $ 33,078,190
=============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 8/31/07 and 8/31/06, respectively
Year Ended Year Ended
8/31/07 8/31/06
FROM OPERATIONS:
Net investment income $ 3,424,330 $ 2,263,512
Net realized gain on investments and foreign currency
transactions 42,573,195 17,268,753
Change in net unrealized gain (loss) on investments
and foreign currency transactions (12,919,335) 15,925,768
------------- -------------
Net increase in net assets resulting from
operations $ 33,078,190 $ 35,458,033
------------- -------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.49 and $0.24 per share, respectively) $ (2,128,405) $ (928,894)
Class B ($0.03 and $0.00 per share, respectively) (22,431) -
Class C ($0.21 and $0.07 per share, respectively) (104,920) (35,655)
Class R ($0.25 and $0.30 per share, respectively) (746) (952)
Class Y ($0.70 and $0.41 per share, respectively) (71,612) (42,073)
------------- -------------
Total distributions to shareowners $ (2,328,114) $ (1,007,574)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 116,343,158 $ 39,982,365
Reinvestment of distributions 2,024,983 901,560
Cost of shares repurchased (76,555,407) (59,171,619)
Redemption fees - 3,147
------------- -------------
Net increase (decrease) in net assets resulting
from Fund share transactions $ 41,812,734 $ (18,284,547)
------------- -------------
Net increase in net assets $ 72,562,810 $ 16,165,912
NET ASSETS:
Beginning of year 205,838,202 189,672,290
------------- -------------
End of year $ 278,401,012 $ 205,838,202
============= =============
Undistributed net investment income $ 2,893,500 $ 1,998,669
============= =============
The accompanying notes are an integral part of these financial statements. 23
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
'07 Shares '07 Amount '06 Shares '06 Amount
CLASS A
Shares sold 1,253,028 $ 52,767,998 903,475 $ 31,809,911
Reinvestment of distributions 45,383 1,888,910 26,478 858,693
Less shares repurchased (1,168,617) (49,777,643) (914,893) (30,897,558)
---------- ------------- -------- -------------
Net increase 129,794 $ 4,879,265 15,060 $ 1,771,046
========== ============= ======== =============
CLASS B
Shares sold 271,524 $ 10,332,496 141,314 $ 4,486,916
Reinvestment of distributions 587 22,308 - -
Less shares repurchased (495,006) (18,997,460) (713,065) (22,404,853)
---------- ------------- -------- -------------
Net decrease (222,895) $ (8,642,656) (571,751) $ (17,917,937)
========== ============= ======== =============
CLASS C
Shares sold 181,764 $ 6,905,173 91,123 $ 2,897,861
Reinvestment of distributions 2,420 91,199 995 29,333
Less shares repurchased (165,948) (6,470,838) (157,692) (4,893,772)
---------- ------------- -------- -------------
Net increase (decrease) 18,236 $ 525,534 (65,574) $ (1,966,578)
========== ============= ======== =============
CLASS R
Shares sold 522 $ 20,824 2,272 $ 73,397
Reinvestment of distributions 18 746 29 943
Less shares repurchased (4,038) (168,760) (511) (17,620)
---------- ------------- -------- -------------
Net increase (decrease) (3,498) $ (147,190) 1,790 $ 56,720
========== ============= ======== =============
CLASS Y
Shares sold 1,051,106 $ 46,316,667 20,160 $ 717,280
Reinvestment of distributions 509 21,820 378 12,591
Less shares repurchased (26,042) (1,140,706) (27,398) (957,816)
---------- ------------- -------- -------------
Net increase (decrease) 1,025,573 $ 45,197,781 (6,860) $ (227,945)
========== ============= ======== =============
24 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
CLASS A 8/31/07 8/31/06 8/31/05 (a) 8/31/04 (a) 8/31/03 (a)
Net asset value, beginning of period $ 37.83 $ 31.54 $ 27.25 $ 21.41 $ 19.51
--------- --------- --------- --------- ---------
Increase from investment operations:
Net investment income $ 0.58 $ 0.50 $ 0.11 $ 0.20 $ 0.17
Net realized and unrealized gain on
investments and foreign currency
transactions 5.31 6.03 5.09 5.89 1.73
--------- --------- --------- --------- ---------
Net increase from investment operations $ 5.89 $ 6.53 $ 5.20 $ 6.09 $ 1.90
--------- --------- --------- --------- ---------
Distributions to shareowners:
Net investment income $ (0.49) $ (0.24) $ (0.19) $ (0.25) $ -
Net realized gain - - (0.72) - -
--------- --------- --------- --------- ---------
Total distributions $ (0.49) $ (0.24) $ (0.91) $ (0.25) $ -
--------- --------- --------- --------- ---------
Redemption fee $ - $ 0.00(b) $ 0.00(b) $ - $ -
--------- --------- --------- --------- ---------
Net increase in net asset value $ 5.40 $ 6.29 $ 4.29 $ 5.84 $ 1.90
--------- --------- --------- --------- ---------
Net asset value, end of period $ 43.23 $ 37.83 $ 31.54 $ 27.25 $ 21.41
========= ========= ========= ========= =========
Total return* 15.61% 20.83% 24.53% 28.56% 9.73%
Ratio of net expenses to average net assets+ 1.48% 1.66% 1.71% 1.25% 1.62%
Ratio of net investment income to average
net assets+ 1.35% 1.47% 0.72% 1.58% 1.02%
Portfolio turnover rate 62% 43% 149% 48% 67%
Net assets, end of period (in thousands) $ 183,333 $ 155,550 $ 129,215 $ 3,108 $ 914
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 1.48% 1.66% 2.21% 8.30% 16.15%
Net investment income (loss) 1.35% 1.47% 0.22% (5.47)% (13.51)%
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 1.47% 1.66% 1.69% 1.25% 1.62%
Net investment income 1.36% 1.47% 0.74% 1.58% 1.02%
(a) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(b) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
25
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
CLASS B 8/31/07 8/31/06 8/31/05 (a) 8/31/04 (a) 8/31/03 (a)
Net asset value, beginning of period $ 34.26 $ 28.63 $ 24.85 $ 19.65 $ 18.10
--------- --------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.22 $ 0.24 $ (0.03) $ (0.02) $ (0.02)
Net realized and unrealized gain on
investments and foreign currency
transactions 4.73 5.39 4.62 5.33 1.57
--------- --------- --------- --------- ---------
Net increase from investment operations $ 4.95 $ 5.63 $ 4.59 $ 5.31 $ 1.55
--------- --------- --------- --------- ---------
Distributions to shareowners:
Net investment income $ (0.03) $ - $ (0.09) $ (0.11) $ -
Net realized gain - - (0.72) - -
--------- --------- --------- --------- ---------
Total distributions $ (0.03) $ - $ (0.81) $ (0.11) $ -
--------- --------- --------- --------- ---------
Redemption fee $ - $ 0.00(b) $ 0.00(b) $ - $ -
--------- --------- --------- --------- ---------
Net increase in net asset value $ 4.92 $ 5.63 $ 3.78 $ 5.20 $ 1.55
--------- --------- --------- --------- ---------
Net asset value, end of period $ 39.18 $ 34.26 $ 28.63 $ 24.85 $ 19.65
========= ========= ========= ========= =========
Total return* 14.44% 19.66% 23.19% 27.07% 8.57%
Ratio of net expenses to average net assets+ 2.50% 2.65% 2.69% 2.17% 2.78%
Ratio of net investment income (loss) to average
net assets+ 0.23% 0.36% (0.27)% 0.65% (0.01)%
Portfolio turnover rate 62% 43% 149% 48% 67%
Net assets, end of period (in thousands) $ 26,673 $ 30,960 $ 42,249 $ 1,505 $ 457
Ratios with no waiver of management fees and
assumption of expenses by PIM and no reduction
for fees paid indirectly:
Net expenses 2.50% 2.74% 3.32% 9.20% 17.41%
Net investment income (loss) 0.23% 0.27% (0.90)% (6.38)% (14.73)%
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 2.47% 2.65% 2.65% 2.17% 2.78%
Net investment income (loss) 0.26% 0.36% (0.23)% 0.65% (0.01)%
(a) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(b) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
26
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
CLASS C 8/31/07 8/31/06 8/31/05 (a) 8/31/04 (a) 8/31/03 (a)
Net asset value, beginning of period $ 34.16 $ 28.60 $ 24.81 $ 19.63 $ 17.98
------- ------- ------- ------- --------
Increase from investment operations:
Net investment income $ 0.22 $ 0.19 $ 0.01 $ 0.09 $ 0.07
Net realized and unrealized gain on investments and foreign
currency transactions 4.78 5.44 4.61 5.34 1.58
------- ------- ------- ------- --------
Net increase from investment operations $ 5.00 $ 5.63 $ 4.62 $ 5.43 $ 1.65
------- ------- ------- ------- --------
Distributions to shareowners:
Net investment income $ (0.21) $ (0.07) $ (0.13) $ (0.25) $ -
Net realized gain - - (0.72) - -
------- ------- ------- ------- --------
Total distributions $ (0.21) $ (0.07) $ (0.85) $ (0.25) $ -
------- ------- ------- ------- --------
Redemption fee $ - $ 0.00(b) $ 0.02 $ - $ -
------- ------- ------- ------- --------
Net increase in net asset value $ 4.79 $ 5.56 $ 3.79 $ 5.18 $ 1.65
------- ------- ------- ------- --------
Net asset value, end of period $ 38.95 $ 34.16 $ 28.60 $ 24.81 $ 19.63
======= ======= ======= ======= ========
Total return* 14.67% 19.73% 23.53% 27.67% 9.17%
Ratio of net expenses to average net assets+ 2.29% 2.59% 2.41% 1.72% 2.27%
Ratio of net investment income to average net assets+ 0.60% 0.52% 0.35% 1.14% 0.54%
Portfolio turnover rate 62% 43% 149% 48% 67%
Net assets, end of period (in thousands) $18,120 $15,270 $14,661 $ 1,557 $ 404
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.29% 2.59% 3.72% 8.75% 17.02%
Net investment income (loss) 0.60% 0.52% (0.96)% (5.89)% (14.21)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.28% 2.59% 2.39% 1.72% 2.27%
Net investment income 0.61% 0.52% 0.37% 1.14% 0.54%
(a) Historical per-share amounts prior to June 24, 2005 have been adjusted to
reflect the conversion ratios utilized for the merger of the Europe Fund
and Europe Select Fund.
(b) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
27
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
9/1/06 Year 6/24/05 (a)
to Ended to
1/31/07 (c) 8/31/06 8/31/05
CLASS R
Net asset value, beginning of period $ 37.32 $ 31.27 $ 29.45
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.36) $ 0.49 $ 0.01
Net realized and unrealized gain on
investments and foreign currency
transactions 5.32 5.86 1.81
-------- -------- --------
Net increase from investment operations $ 4.96 $ 6.35 $ 1.82
Distributions to shareowners:
Net investment income (0.25) (0.30) -
-------- -------- --------
Net increase in net asset value $ 4.71 $ 6.05 $ 1.82
-------- -------- --------
Net asset value, end of period $ 42.03 $ 37.32 $ 31.27
======== ======== ========
Total return* 13.32% 20.46% 6.19%(b)
Ratio of net expenses to average net assets+ 2.05%** 2.00% 2.14%**
Ratio of net investment income (loss) to average
net assets+ (1.05)%** 1.37% 0.08%**
Portfolio turnover rate 62% 43% 149%
Net assets, end of period (in thousands) $ - $ 131 $ 53
Ratios with no waiver of management fees and
assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 4.03%** 6.27% 2.14%**
Net investment income (loss) (3.03)%** 5.63% 0.08%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 2.00%** 2.00% 2.00%**
Net investment income (loss) (1.00)%** 1.37% 0.22%**
(a) Class R shares were first publicly offered on June 24, 2005.
(b) Not annualized.
(c) Class R shares were liquidated on January 31, 2007.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
28 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year 6/24/05 (a)
Ended Ended to
8/31/07 8/31/06 8/31/05
CLASS Y
Net asset value, beginning of period $ 39.06 $ 32.54 $ 30.59
-------- -------- --------
Increase from investment operations:
Net investment income $ 0.89 $ 0.89 $ 0.07
Net realized and unrealized gain on
investments and foreign currency
transactions 5.39 6.04 1.88
-------- -------- --------
Net increase from investment operations $ 6.28 $ 6.93 $ 1.95
Distributions to shareowners:
Net investment income (0.70) (0.41) -
-------- -------- --------
Net increase in net asset value $ 5.58 $ 6.52 $ 1.95
-------- -------- --------
Net asset value, end of period $ 44.64 $ 39.06 $ 32.54
======== ======== ========
Total return* 16.14% 21.50% 6.36%(b)
Ratio of net expenses to average net assets+ 0.98% 1.10% 1.18%**
Ratio of net investment income to average
net assets+ 2.73% 2.00% 1.05%**
Portfolio turnover rate 62% 43% 149%
Net assets, end of period (in thousands) $ 50,275 $ 3,927 $ 3,495
Ratios with no waiver of management fees and
assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 0.98% 1.10% 1.18%**
Net investment income 2.73% 2.00% 1.05%**
Ratios with waiver of management fees and
assumption of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 0.98% 1.10% 1.18%**
Net investment income 2.73% 2.00% 1.05%**
(a) Class Y shares were first publicly offered on June 24, 2005.
(b) Not annualized.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 29
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/07
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Europe Select Equity Fund (the Fund) is a Massachusetts business trust
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The investment objective of the Fund is long-term
growth of capital.
The Fund offers four classes of shares - Class A, Class B, Class C, and Class Y
shares. Class A, Class B and Class C Shares were first publicly offered on
December 29, 2000. Class R and Class Y shares were first publicly offered on
June 24, 2005. All Class R shares were liquidated on January 31, 2007. Each
class of shares represents an interest in the same portfolio of investments of
the Fund and have equal rights to voting, redemptions, dividends and
liquidation, except that each class of shares can bear different transfer agent
and distribution fees and have exclusive voting rights with respect to the
distribution plans that have been adopted by Class A, Class B and Class C
shareowners, respectively. There is no distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Investing in the securities of European issuers involves unique risks compared
to investing in securities of U.S. issuers. These risks are more pronounced to
the extent the Fund invests a significant portion of its investments in any one
European region. Information regarding the Fund's principal investment risks is
contained in the Fund's prospectus(es). Please refer to those documents when
considering the Fund's risks.
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:
30
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value of
the Fund is computed once daily, on each day the New York Stock Exchange
(NYSE) is open, as of the close of regular trading on the NYSE. In
computing the net asset value, securities are valued at the last sale price
on the principal exchange where they are traded. Securities that have not
traded on the date of valuation, or securities for which sale prices are
not generally reported, are valued at the mean between the last bid and
asked prices. Securities for which market quotations are not readily
available are valued at their fair values as determined by, or under the
direction of, the Board of Trustees. The Fund invests primarily in
securities of non-U.S. issuers. The principal exchanges and markets for
such securities have closing times prior to the close of the NYSE. However,
the value of these securities may be influenced by changes in global
markets occurring after the closing times of the local exchanges and
markets up to the time the Fund determines its net asset value.
Consequently, the Board of Trustees of the Fund has determined that the use
of daily fair valuations as provided by a pricing service is appropriate
for the Fund. The Fund may also take into consideration other significant
events in determining the fair value of these securities. Thus, the Fund's
securities valuations may differ from prices reported by the various local
exchanges and markets. Temporary cash investments are valued at cost which
approximates market value.
Dividend income is recorded on the ex-dividend date, except that certain
dividends where the ex-dividend date may have passed are recorded as soon
as the Fund becomes aware of the ex-dividend data in the exercise of
reasonable diligence. Interest income, including interest on income bearing
cash accounts, is recorded on the accrual basis, net of unrecoverable
foreign taxes withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
31
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/07 (continued)
- --------------------------------------------------------------------------------
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on foreign
currency contracts, disposition of foreign currencies and the difference
between the amount of income accrued and the U.S. dollars actually
received. Further, the effects of changes in foreign currency exchange
rates on investments are not segregated in the statement of operations from
the effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the
time a portfolio hedge is offset by entering into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to meet
the terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar.
At August 31, 2007, the Fund had no outstanding portfolio hedges or
settlement hedges.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investments companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareowners. Therefore, no federal income tax provision is
required.
32
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the Fund's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain on investment transactions,
or from paid-in-capital, depending on the type of book/tax differences that
may exist.
At August 31, 2007, the Fund has reclassified $201,385 to decrease
undistributed net investment income and $201,385 to increase accumulated
net realized gain on investments and foreign currency transactions to
reflect permanent book/tax differences. The reclassification has no impact
on the net asset value of the Fund and is designed to present the Fund's
capital accounts on a tax basis.
The tax character of distributions paid during the years ended August 31,
2007 and August 31, 2006, respectively, was as follows:
- --------------------------------------------------------------------------------
2007 2006
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary Income $ 2,328,114 $ 1,007,574
----------- -----------
Total $ 2,328,114 $ 1,007,574
=========== ===========
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at August 31, 2007.
- --------------------------------------------------------------------------------
2007
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 3,660,112
Undistributed long-term gain 33,837,240
Unrealized appreciation 32,862,789
-----------
Total $70,360,141
===========
- --------------------------------------------------------------------------------
For the fiscal year ending August 31, 2007, the Fund has elected to pass
through foreign tax credits of $743,762.
The difference between book-basis and tax-basis unrealized appreciation is
attributable to the tax deferral of losses on wash sales.
33
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/07 (continued)
- --------------------------------------------------------------------------------
E. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano) earned $36,984 in underwriting commissions on the
sale of Class A shares during the year ended August 31, 2007.
F. Class Allocations
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 are not subject to a distribution
plan. Shareowners of each class share all expenses and fees paid to the
transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expenses (see Note 3). Income, common expenses and realized and unrealized
gains and losses are calculated at the Fund level and allocated daily to
each class of shares based on their respective percentage of adjusted net
assets at the beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, Class C and Class Y shares can bear different
transfer agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary of
UniCredito Italiano, manages the Trust's portfolio. Management fees are
calculated daily at the annual rate of 0.85% of the Fund's average daily nets
assets up to $500 million; and 0.75% of the excess over $500 million. For the
year ended August 31, 2007, the management fee was equivalent to a rate of 0.85%
of the average daily net assets for the period.
Effective June 24, 2005, PIM has contractually agreed to limit ordinary
operating expenses to the extent required to reduce Fund expenses to 1.75%,
2.65% and 2.65% of the average daily net assets
34
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
attributable to Class A, Class B and Class C shares, respectively. Class Y
shares do not have an expense limitation. These expense limitations are in
effect through January 1, 2009 for Class A shares and through January 1, 2008
for Class B and Class C shares.
In addition, under the management agreement, management fees, administrative
costs and fees for certain other services, including accounting, regulatory
reporting and insurance, are paid by the Fund. At August 31, 2007, $6,546 was
payable to PIM related to management fees, administrative costs and certain
other services and is included in due to affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due to affiliates is $70,616 in transfer agent
fees payable to PIMSS at August 31, 2007.
4. Distribution Plans
The Fund adopted Plans of Distribution with respect Class A, Class B and Class C
shares (Class A Plan, Class B Plan and Class C Plan) in accordance with Rule
12b-1 under the Investment Company Act of 1940. Pursuant to the Class A Plan,
the Fund pays PFD a service fee of up to 0.25% of the average daily net assets
attributable to Class A shares in reimbursement of its actual expenditures to
finance activities primarily intended to result in the sale of Class A shares.
Pursuant to the Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of
the average daily net assets attributable to each class of shares. The fee
consists of a 0.25% service fee and a 0.75% distribution fee paid as
compensation for personal services and/or account maintenance services or
distribution services with regard to Class B and Class C shares. Included in due
to affiliates is $2,347 in distribution fees payable to PFD at August 31, 2007.
In addition, redemptions of each class of 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 18 months of
purchase. Class B shares 2004 that are redeemed within five years of purchase
are subject to a CDSC at declining rates beginning at 4.00%, based on the lower
of cost or market value of shares being redeemed. Redemptions of Class C shares
within one year of purchase are subject to a CDSC of
35
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/07 (continued)
- --------------------------------------------------------------------------------
1.00%. There are no CDSCs for Class R shares. Proceeds from the CDSCs are paid
to PFD. For the year ended August 31, 2007 CDSCs in the amount of $30,209 were
paid to PFD.
5. Expense Offset Arrangements
The Fund can enter into certain expense offset arrangements with PIMSS resulting
in a reduction in the Fund's total expenses due to interest earned on cash held
by PIMSS. For the year ended August 31, 2007 the Fund's expenses were reduced by
$36,687 under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $200 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary or
emergency purposes. The Fund may borrow up to the lesser of $200 million or the
limits set by its prospectus for borrowings. Interest on collective borrowings
is payable at the Federal Funds Rate plus 1/2% on an annualized basis. The Funds
pay an annual commitment fee for this facility. The commitment fee is allocated
among such Funds based on their respective borrowing limits. For the year ended
August 31, 2007, the Fund had no borrowings under this agreement.
7. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions have a
"more-likely-than-not" probability of being sustained by the applicable tax
authority. Tax positions deemed to not meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the reporting period in which
they are realized. Adoption of FIN 48 is required for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of no
later than February 29, 2008. At this time, management is evaluating the
implications of FIN
36
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
48 and any impact in the financial statements has not yet been determined.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal
years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
37
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Pioneer Europe Select Equity Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Pioneer Europe Select Equity Fund (the Fund) as
of August 31, 2007, 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 periods
indicated therein. 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 August 31, 2007, by correspondence with the custodian. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Europe Select Equity Fund at August 31, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods indicated therein, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
October 12, 2007
38
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Bingham McCutchen LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's affairs.
The officers of the Fund are responsible for the Fund's operations. The Fund's
Trustees and officers are listed below, together with their principal
occupations during the past five years. Trustees who are interested persons of
the Fund within the meaning of the 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. Kingsbury, Mr. West and
Mr. Bock) serves as a Trustee of each of the 82 U.S. registered investment
portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds").
Mr. Kingsbury serves as Trustee of 34 of the 82 Pioneer Funds, Mr. West serves
as Trustee of 33 of the 82 Pioneer Funds, and Mr. Bock serves as Trustee of 81
of the 82 Pioneer Funds. The address for all Interested Trustees and all
officers of the fund is 60 State Street, Boston, Massachusetts 02109.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is publicly available to shareowners
at www.pioneerfunds.com and on the SEC's web site at http://www.sec.gov.
39
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
INTERESTED TRUSTEES
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation Other Directorships
Name and Age With the Fund and Term of Office During Past Five Years Held by this Trustee
John F. Cogan, Jr. (81)* Chairman of the Trustee since 1990. Deputy Chairman and a Director of None
Board, Trustee Serves until a Pioneer Global Asset Management S.p.A.
and President successor trustee ("PGAM"); Non-Executive Chairman and a
is elected or earlier Director of Pioneer Investment
retirement or removal. Management USA Inc. ("PIM-USA");
Chairman and a Director of Pioneer;
Chairman and Director of Pioneer
Institutional Asset Management, Inc.
(since 2006); Director of Pioneer
Alternative Investment Management
Limited (Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda)
Limited and affiliated funds; Director
of PIOGLOBAL Real Estate Investment
Fund (Russia) (until June 2006);
Director of Nano-C, Inc. (since 2003);
Director of Cole Management Inc.
(since 2004); Director of Fiduciary
Counseling, Inc.; President and
Director of Pioneer Funds Distributor,
Inc. ("PFD") (until May 2006);
President of all of the Pioneer Funds;
and Of Counsel, Wilmer Cutler
Pickering Hale and Dorr LLP
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (49)* Trustee and Trustee since March Director, CEO and President of Pioneer None
Executive Vice 2007. Serves until a Investment Management USA Inc.;
President successor trustee is Pioneer Investment Management, Inc.
elected or earlier and Pioneer Institutional Asset
retirement or removal. Management, Inc. (since March 2007);
Executive Vice President of all of the
Pioneer Funds (since March 2007);
Director of Pioneer Global Asset
Management S.p.A. (since March 2007);
Head of New Markets Division, Pioneer
Global Asset Management S.p.A. (2000 -
2007)
- ------------------------------------------------------------------------------------------------------------------------------------
40
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Positions Held Length of Service Principal Occupation Other Directorships
Address With the Fund and Term of Office During Past Five Years Held by this Trustee
David R. Bock (63) Trustee Trustee since 2005. Executive Vice President and Chief Director of The
3050 K Street NW, Serves until a Financial Officer, I-trax, Inc. Enterprise Social
Washington, DC 20007 successor trustee (publicly traded health care services Investment Company
is elected or earlier company) (2004 - present); Partner, (privately-held
retirement or removal. Federal City Capital Advisors affordable housing
(boutique merchant bank) (1997 to finance company);
2004); and Executive Vice President and Director of New
and Chief Financial Officer, Pedestal York Mortgage Trust
Inc. (internet-based mortgage trading (publicly traded
company) (2000 - 2002) mortgage REIT)
- ------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (59) Trustee Trustee since 1997. President, Bush International, LLC Director of Brady
3509 Woodbine Street Serves until a (international financial advisory Corporation
Chevy Chase, MD 20815 successor trustee firm) (industrial
is elected or earlier identification and
retirement or removal. specialty coated
material products
manufacturer);
Director of Briggs &
Stratton Co. (engine
manufacturer);
Director of UAL
Corporation (airline
holding company);
and Director of
Mantech
International
Corporation
(national security,
defense, and
intelligence
technology firm)
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (60) Trustee Trustee since 1990. Founding Director, Vice-President and None
1001 Sherbrooke Street West, Serves until a Corporate Secretary, The Winthrop
Montreal, Quebec, Canada successor trustee Group, Inc. (consulting firm); and
H3A 1G5 is elected or earlier Desautels Faculty of Management,
retirement or removal. McGill University
- ------------------------------------------------------------------------------------------------------------------------------------
41
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Positions Held Length of Service Principal Occupation Other Directorships
Address With the Fund and Term of Office During Past Five Years Held by this Trustee
Thomas J. Perna (56) Trustee Trustee since 2006. Private investor (2004 - present); and Director of
89 Robbins Avenue, Serves until a Senior Executive Vice President, The Quadriserv Inc.
Berkeley Heights, NJ 07922 successor trustee Bank of New York (financial and (technology products
is elected or earlier securities services) (1986 - 2004) for securities
retirement or removal. lending industry)
- ------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (59) Trustee Trustee since 1990. President and Chief Executive Officer, Director of New
200 State Street, 12th Floor, Serves until a Newbury, Piret & Company, Inc. America High Income
Boston, MA 02109 successor trustee (investment banking firm) Fund, Inc. (closed-
is elected or earlier end investment
retirement or removal. company)
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (78) Trustee Trustee since 1993. Senior Counsel, Sullivan & Cromwell Director, The Swiss
125 Broad Street, Serves until a (law firm) Helvetia Fund, Inc.
New York, NY 10004 successor trustee (closed-end
is elected or earlier investment company)
retirement or removal.
- ------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (71) Trustee Trustee since 1990. President, John Winthrop & Co., Inc. None
One North Adgers Wharf, Serves until a (private investment firm)
Charleston, SC 29401 successor trustee
is elected or earlier
retirement or removal.
- ------------------------------------------------------------------------------------------------------------------------------------
42
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FUND OFFICERS
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation Other Directorships
Name and Age With the Fund and Term of Office During Past Five Years Held by this Officer
Dorothy E. Bourassa (59) Secretary Since 2003. Serves at Secretary of PIM-USA; Senior Vice None
the discretion of the President - Legal of Pioneer;
Board Secretary/Clerk of most of PIM-USA's
subsidiaries; and Secretary of all
of the Pioneer Funds since September
2003 (Assistant Secretary from
November 2000 to September 2003)
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (42) Assistant Since 2003. Serves at Vice President and Senior Counsel of None
Secretary the discretion of the Pioneer since July 2002; Vice
Board President and Senior Counsel of
BISYS Fund Services, Inc. (April
2001 to June 2002); Senior Vice
President and Deputy General Counsel
of Funds Distributor, Inc. (July
2000 to April 2001), and Assistant
Secretary of all of the Pioneer
Funds since September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (62) Treasurer Since 2000. Serves at Vice President - Fund Accounting, None
the discretion of the Administration and Controllership
Board Services of Pioneer; and Treasurer
of all of the Pioneer Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (47) Assistant Since 2004. Serves at Deputy Treasurer of Pioneer since None
Treasurer the discretion of the 2004; Treasurer and Senior Vice
Board President, CDC IXIS Asset Management
Services from 2002 to 2003; and
Assistant Treasurer of all of the
Pioneer Funds since November 2004
- ------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (42) Assistant Since 2000. Serves at Assistant Vice President - Fund None
Treasurer the discretion of the Accounting, Administration and
Board Controllership Services of Pioneer;
and Assistant Treasurer of all of
the Pioneer Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (49) Assistant Since 2002. Serves at Fund Accounting Manager - Fund None
Treasurer the discretion of the Accounting, Administration and
Board Controllership Services of Pioneer;
and Assistant Treasurer of all of
the Pioneer Funds
- ------------------------------------------------------------------------------------------------------------------------------------
43
Pioneer Europe Select Equity Fund
- --------------------------------------------------------------------------------
FUND OFFICERS
- --------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation Other Directorships
Name and Age With the Fund and Term of Office During Past Five Years Held by this Officer
Katherine Kim Sullivan (33) Assistant Since 2003. Serves at Fund Administration Manager - Fund None
Treasurer the discretion of the Accounting, Administration and
Board Controllership Services since June
2003; Assistant Vice President -
Mutual Fund Operations of State
Street Corporation from June 2002 to
June 2003 (formerly Deutsche Bank
Asset Management); and Assistant
Treasurer of all of the Pioneer
Funds since September 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (48) Chief Compliance Since January 2007. Chief Compliance Officer of Pioneer None
Officer Serves at the since December 2006 and of all the
discretion of the Board Pioneer Funds since January 2007;
Vice President and Compliance
Officer, MFS Investment Management
(August 2005 to December 2006);
Consultant, Fidelity Investments
(February 2005 to July 2005);
Independent Consultant (July 1997 to
February 2005)
- ------------------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the fund's investment
adviser and certain of its affiliates.
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly
owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest
banking groups in Italy. Pioneer, the fund's investment adviser, provides
investment management and financial services to mutual funds, institutional and
other clients.
44
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@pioneerinvestments.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerinvestments.com
Before investing consider the Fund's investment objectives, risks, charges and
expenses. Contact your advisor or Pioneer Investments for a prospectus
containing this information. Read it carefully.
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.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund, including fees associated
with the annual filing of its Form N-1A, totaled approximately $34,175
in 2007 and $32,860 in 2006.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
There were no fees for audit-related services provided to the Fund during
the fiscal years ended August 31, 2007 and 2006.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns, totaled
approximately $7,820 and $7,515 in 2007 and 2006, respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
Other Fees
There were no fees for other services provided to the Fund during the
fiscal years ended August 31, 2007 and 2006.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after May 6,
2003, the effective date of the new SEC pre-approval rules, the Fund's audit
committee is required to pre-approve services to affiliates defined by SEC
rules to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Fund. For the years ended
August 31, 2007 and 2006, there were no services provided to an affiliate
that required the Fund's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Fund and affiliates, as previously
defined, totaled approximately $7,820 in 2007 and $7,515 in 2006.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has considered
whether the provision of non-audit services that were rendered to
the Affiliates (as defined) that were not pre- approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal 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.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Europe Select Equity Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date october 29, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date October 29, 2007
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date October 29, 2007
* Print the name and title of each signing officer under his or her signature.