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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06151
Pioneer Europe Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: October 31
Date of reporting period: November 1, 2002 through October 31, 2003
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
================================================================================
PIONEER
-------
EUROPE
FUND
Annual
Report
10/31/03
[LOGO] PIONEER
Investments
Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 8
Schedule of Investments 12
Financial Statements 18
Notes to Financial Statements 27
Report of Independent Auditors 34
Trustees, Officers and Service Providers 35
Programs and Services for Pioneer Shareowners 42
Retirement Plans for Pioneer 44
Pioneer Europe Fund
- --------------------------------------------------------------------------------
LETTER TO SHAREOWNERS 10/31/03
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
The stock market rally that began last spring extended into late summer as signs
of an economic recovery accumulated. Gross domestic product, a tally of all
goods and services produced in the United States, expanded, thanks to increased
personal consumption, housing and business spending, low short-term interest
rates and lower taxes on individuals. While broader market indicators managed
small gains, the NASDAQ Composite rose sharply in the third quarter as investors
sensed that companies might soon boost technology outlays. September's dip in
consumer expectations linked to slow job creation, plus cutbacks in OPEC oil
production, drove markets off their highest levels. Investors also kept an eye
on the news, as U.S. troops came under daily fire in Iraq and tensions elsewhere
remained.
As the economy appeared to strengthen, investors who had sought safety in U.S.
Treasury issues grew less risk-averse. As a result, corporate bonds moved
broadly higher and the Treasury bond rally stalled. Some of the biggest gains
were recorded among lower-- rated, high-yield bonds whose issuers often depend
on a strong economy to boost earnings. Bonds in emerging and developed markets
also did well, as economies stabilized and currencies rose against the slumping
U.S. dollar.
Stocks and bonds, bonds and stocks
Over the past few years, investor sentiment has swung from stocks to bonds and
back again, from U.S. government securities to corporate and international
issues. Each sector has spent time in the spotlight or backstage, delivering
periods of stronger or weaker performance relative to one another.
With sectors constantly moving in and out of favor, how can you increase your
chances of holding investments that are performing well? By owning several kinds
of securities, not just one or two. Through a process called asset allocation,
you can create an investment mix that reflects your needs, taking into account
such factors as your age, your financial goals and their timing, and, of course,
your comfort level where risk is concerned.
Asset allocation is only one area in which a qualified investment professional
can serve you well. Ask your advisor to review how shifting markets may have
affected your asset allocation recently. And if you've never thought about asset
allocation before, now is the best time to start.
Like everyone at Pioneer, I appreciate your continued confidence in our products
and services.
[BEGINNING CALLOUT]
Pioneer's new president
Osbert Hood was recently named Chief Executive Officer and President of Pioneer
Investments U.S.A. Mr. Hood, formerly Pioneer's Chief Operating Officer and a
key member of the senior management committee, joined Pioneer in 2000 from John
Hancock Financial Services, where he had held senior financial positions. "I am
excited and honored to have the opportunity to lead Pioneer as it continues to
grow," Mr. Hood said. "As CEO I look forward to furthering Pioneer's strategic
goals, including developing new products that can meet the wider needs of
investors and the advisers who serve them."
[END CALLOUT]
Respectfully,
/s/ Osbert Hood
- ---------------
Osbert Hood, President and Chief Executive Officer
Pioneer Investment Management, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 10/31/03
- --------------------------------------------------------------------------------
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[BEGINNING PIE CHART]
International Common Stocks 99%
Preferred International Stocks 1%
[END PIE CHART]
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[BEGINNING LINE CHART]
United Kingdom 34.8% Italy 2.6%
France 17.6% Finland 2.5%
Germany 12.0% Sweden 2.1%
Switzerland 11.6% Ireland 1.7%
Netherlands 10.7% Portugal 1.0%
Spain 2.8% Belgium 0.6%
[END LINE CHART]
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)*
1. HSBC Holding Plc 4.90%
2. Vodafone Group Plc 3.93
3. BNP Paribas SA 3.06
4. Royal Dutch Petroleum Co. 3.04
5. GalaxoSmithKline Plc 2.88
6. Nestle SA (Registered Shares) 2.76
7. Royal Bank of Scotland Group Plc. 2.59
8. Nokia Oyj 2.50
9. Total SA 2.39
10 BP Amoco Plc 2.33
*This list excludes temporary cash and derivative investments. Fund holdings
will vary for other periods.
2
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/03 CLASS A SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 10/31/03 10/31/02
$22.66 $19.40
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/02 - 10/31/03) Income Capital Gains Capital Gains
$ - $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund at public offering price, compared to
that of the Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2003)
Net Asset Public Offering
Period Value Price*
10 Years 6.41 5.78
5 Years -4.23 -5.35
1 Year 16.80 10.11
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period.
[BEGINNING MOUNTAIN CHART]
Value of $10,000 Investment
Pioneer Europe Fund* MSCI Europe Index
"10/93" 9425 10000
10926 11124
"10/95" 12577 12594
14817 14792
"10/97" 19009 18637
21767 22935
"10/99" 23728 25808
25348 26051
"10/01" 17685 20100
15015 17307
"10/03" 17538 21491
[END MOUNTAIN CHART]
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 15 European country indexes included in the
MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria,
Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
3
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/03 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 10/31/03 10/31/02
$20.85 $18.04
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/02 - 10/31/03) Income Capital Gains Capital Gains
$ - $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2003)
If If
Period Held Redeemed*
Life-of-Class
(4/4/94) 5.31% 5.31%
5 Years -5.13 -5.31
1 Year 15.58 11.58
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period. The maximum CDSC of 4% declines to
zero over six years.
[BEGINNING MOUNTAIN CHART]
Value of $10,000+ Investment
Pioneer Europe Fund* MSCI Europe Index
"4/94" 10000 10000
10539 10309
"10/95" 12060 11672
14089 13709
"10/97" 17493 17272
20367 21256
"10/99" 22021 23919
23322 24143
"10/01" 16106 18628
13545 16040
"10/03" 15655 19917
[END MOUNTAIN CHART]
+ Index comparison begins April 30, 1994. The Morgan Stanley Capital
International (MSCI) Europe Index is a capitalization-weighted index of the
15 European country indexes included in the MSCI EAFE (Europe, Australasia,
Far East) Index. These countries are: Austria, Belgium, Denmark, Finland,
France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland and the United Kingdom. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
4
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/03 CLASS C SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 10/31/03 10/31/02
$20.79 $17.98
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/02 - 10/31/03) Income Capital Gains Capital Gains
$ - $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund at public offering price, compared to
that of the Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2003)
Net Asset Public Offering
Period Value Price/CDSC*
Life-of-Class
(1/31/96) 3.14% 3.01%
5 Years -5.10 -5.29
1 Year 15.63 14.48
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of the 1% sales charge at the beginning of the period. The
1% contingent deferred sales charge (CDSC) applies to investments sold
within one year of purchase.
[BEGINNING MOUNTAIN CHART]
Value of $10,000 Investment
Pioneer Europe Fund* MSCI Europe Index
"1/96" 9900 10000
11277 11232
"10/97" 14375 14151
16345 17414
"10/99" 17685 19596
18733 19780
"10/01" 12947 15262
10883 13142
"10/03" 12584 16317
[END MOUNTAIN CHART]
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 15 European country indexes included in the
MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria,
Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
5
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/03 CLASS R SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 10/31/03 4/1/03**
$22.67 $17.92
Net
Distributions per Share Investment Short-Term Long-Term
(4/1/03 - 10/31/03) Income Capital Gains Capital Gains
$ - $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
Average Annual Total Returns+
(As of October 31, 2003)
If If
Period Held Redeemed*
10 Years 6.03 6.03
5 Years -4.37 -4.37
1 Year 16.85 15.85
All returns reflect reinvestment of distributions at net asset value.
* Reflects deduction of 1% CDSC. Shares sold within 18 months of purchase may
be subject to CDSC.
[BEGINNING MOUNTAIN CHART]
Value of $10,000 Investment
Pioneer Europe Fund* MSCI Europe Index
"10/93" 10000 10000
11506 11124
"10/95" 13177 12594
15412 14792
"10/97" 19731 18637
22456 22935
"10/99" 24287 25808
25951 26051
"10/01" 18106 20100
15372 17307
"10/03" 17964 21491
[END MOUNTAIN CHART]
** Class R shares were first publicly offered on April 1, 2003.
+ Class R shares have no front-end load, may be subject to a back-end load and
are available to certain retirement plans. The performance of Class R shares
for the period prior to the commencement of operations of Class R shares on
April 1, 2003 is based on the performance of Class A shares, reduced to
reflect the higher distribution and service fees of Class R shares. You do
not pay a sales charge on purchases of Class R shares, but will pay a CDSC
if you sell your shares within 18 months of purchase, unless you qualify for
a waiver. The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 15 European country indexes included in
the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or
sales charges. You cannot invest directly in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
6
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/03 CLASS Y SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 10/31/03 10/31/02
$23.40 $19.88
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/02 - 10/31/03) Income Capital Gains Capital Gains
$ - $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
Average Annual Total Returns*
(As of October 31, 2003)
If If
Period Held Redeemed
Life-of-Class
(7/2/98) -6.07% -6.07%
5 Year -3.67 -3.67
1 Year 17.71 17.71
* All returns reflect reinvestment of distributions at net asset value.
[BEGINNING MOUNTAIN CHART]
Value of $10,000 Investment+
Pioneer Europe Fund* MSCI Europe Index
"7/98" 10000 10000
8458 9064
"10/99" 9269 10199
9950 10295
"10/01" 6973 7943
5960 6840
"10/03" 7015 8494
[END MOUNTAIN CHART]
+ Index comparison begins July 31, 1998. The Morgan Stanley Capital
International (MSCI) Europe Index is a capitalization-weighted index of the
15 European country indexes included in the MSCI EAFE (Europe, Australasia,
Far East) Index. These countries are: Austria, Belgium, Denmark, Finland,
France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland and the United Kingdom. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
7
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 10/31/03
- --------------------------------------------------------------------------------
European stocks made strong gains during the 12 months ended October 31, 2003.
Improving corporate fundamentals and rising investor optimism helped push stock
prices higher. As the year progressed, however, investors turned increasingly
to higher-risk stocks that outperformed during Pioneer Europe Fund's fiscal
year. In the following interview, Stan Pearson, a member of the Fund's
management team, discusses the equity market's recovery, its impact on your
portfolio and his outlook for the months ahead.
Q: What contributed to the rally in European markets?
A: Rising investor confidence in a nutshell. The rather swift conclusion of
the war in Iraq last spring encouraged many investors to reallocate
investments into stocks. Prior to that time, the heightened awareness of
terrorism, the risks associated with potential war and rising energy
prices had curbed investors' appetite for riskier investments. The more
conservative tone meant that investors preferred higher-quality stocks to
lower-quality or less proven equity investments. As the Fund's fiscal year
progressed and geopolitical uncertainties eased, investors began to
reassess their risk tolerance, focusing increasingly on higher-risk
investments that had dramatically underperformed in the multi-year
correction. Evidence of an economic recovery in the United States and the
prospect of a U.S.-led global recovery further elevated prospects for
European stocks.
Q: How did the Fund perform in this more favorable environment?
A: The Fund turned in strong double-digit returns for its fiscal year. For the
12 months ended October 31, 2003, the Fund's Class A shares returned
16.80% at net asset value. While the gains were considerable, the Fund
underperformed the Morgan Stanley Capital International (MSCI) Europe
Index, which posted a return of 24.16% for the same period. Several of the
portfolio's more stable, high quality holdings, which had served the Fund
so well during more uncertain times, lagged relatively riskier,
lower-quality investments during the second half of the fiscal year.
Investors perceived lower quality stocks as offering better value since
they had not appreciated as strongly in the months preceding the rally.
Incidentally, this realignment of investors' risk tolerance was also
evident in the bond markets.
8
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Q: Corporate earnings are improving. Are you encouraged?
A: Certainly. Several years of cost-cutting, debt reduction and restructuring
have created more efficient, streamlined companies that are better
positioned to profit from an improving economic outlook. The quality of
corporate balance sheets has vastly improved.
During the course of 2003, we've seen the global economy move out of a
recession. The U.S. economy has led the way, but toward the end of the
Fund's fiscal year, we began to see some tentative signs of an upturn in
the Euro-zone. Business confidence in Germany, Europe's largest economy,
showed a notable increase. Given businesses' improving assessment of their
operating environment, we expect to see the re-emergence of growth in
Germany and the rest of continental Europe.
Q: Has the Fund's strategy changed in response to the improving economic
environment?
A: Despite the positive developments, we don't believe the answer lies in the
portfolio's taking on a riskier profile. Rather, we think it's more
prudent to remain focused on our bottom-up investment approach to stock
selection, which is based on the individual merits of single companies.
This approach is designed to uncover European companies with strong
balance sheets, a competitive advantage in the market they operate, a well
defined strategy and the ability to implement that strategy. Many times,
we find high quality companies with stock prices that we think are
undervalued and don't reflect the underlying companies' intrinsic value.
As their value is recognized, prices should increase to reflect their
future growth potential.
Q: Could you mention some companies that support your strategy?
A: Given the changing demographics of an aging population throughout much of
the world, demand for drugs is on the rise. Furthermore, stock price
valuations in the health care sector are attractive, especially given that
the sector is somewhat out of favor currently. In addition, we believe the
markets have generally priced in the risks from generic competition on
patented drugs and from pressure by governments to lower drug prices.
Lastly, new, exciting drugs are on the horizon, which should contribute to
9
Pioneer Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 10/31/03 (continued)
- --------------------------------------------------------------------------------
future profits. On October 31, the Fund held large positions in
AstraZeneca (United Kingdom) and Schering (Germany).
In the capital goods sector, many companies have implemented considerable
cost reduction strategies, which should contribute to improving profit
margins. We think these more efficient, streamlined companies will be more
likely to prosper as economic growth strengthens. In keeping with that
thinking, we increased the Fund's exposure to German-based Siemens and
Schneider during the fiscal year. The Fund's investments in the
diversified financials sector also proved rewarding, particularly Deutsche
Boerse (Germany) and ING Groep (Netherlands).
In the technology sector, we believe companies are fully valued following
the strong gains of the past year and have trimmed positions accordingly.
Our decision to underweight the troubled insurance sector hurt the Fund
during recent months. However, we remain confident in our decision to keep
the Fund's exposure limited until we see improvement within the industry,
which is still feeling the effects of low capital-adequacy ratios.
Q: Was the strong euro a factor in the Fund's performance?
A: Yes. The euro's ongoing strength relative to the dollar played a favorable
role in your Fund's performance. In fact, the dollar fell 14.5 percent
against the euro for the 12 months that ended October 31, 2003. When the
Fund's gains or losses in more expensive foreign currencies are converted
back into a weaker U.S. dollar, the dollar-based returns become more
favorable.
During the reporting period, the strength of the euro versus the U.S.
dollar raised some investor concerns regarding the prospects for
European-export-related companies and their growth in the Euro-zone. The
rise in the euro relative to the dollar makes European products more
expensive in the United States and erodes the value of European companies'
export sales. However, the assumption that the U.S.-led global recovery
will create sufficient demand to compensate for the euro's strength served
to ease such investor concerns.
10
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Q: What is your outlook?
A: The upturn in the business cycle is creating a favorable investment
environment for the earnings potential of European companies. Furthermore,
corporate restructuring has contributed to a more solid overall position
from which a sustained recovery in corporate profits can occur.
We believe that equity valuations across Europe are not excessive and
remain supported by historically high dividend yields. (A high dividend
yield is usually indicative of a low stock price valuation; as a stock's
price rises, its dividend yield decreases.) As the global economy
continues to improve, we believe European equities offer further
appreciation potential. We feel confident that our bottom-up investment
approach is the most reliable way to take advantage of such growth
opportunities going forward.
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.
11
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/03
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 1.0%
Automobiles & Components - 1.0%
Automobile Manufacturers - 1.0%
3,303 Porsche AG Designs* $ 1,613,657
-----------
TOTAL PREFERRED STOCK
(Cost $951,737) $ 1,613,657
-----------
COMMON STOCKS - 98.4%
Energy - 10.9%
Integrated Oil & Gas - 5.5%
575,762 BP Amoco Plc $ 3,985,831
160,888 Eni S.p.A. 2,552,006
473,591 Shell Transport & Trading Co. 2,949,273
-----------
$ 9,487,110
-----------
Oil & Gas Refining Marketing &
Transportation - 5.4%
117,776 Royal Dutch Petroleum Co. $ 5,216,371
26,445 Total SA 4,102,650
-----------
$ 9,319,021
-----------
Total Energy $18,806,131
-----------
Materials - 5.6%
Commodity Chemicals - 0.9%
35,420 BASF India Ltd. $ 1,620,970
-----------
Construction Materials - 2.3%
96,536 CRH Plc $ 1,732,882
30,856 Lafarge SA 2,205,514
-----------
$ 3,938,396
-----------
Diversified Metals & Mining - 1.5%
65,671 Rio Tinto Plc $ 1,593,540
35,492 Sandvik AB 1,054,315
-----------
$ 2,647,855
-----------
Specialty Chemicals - 0.9%
10,331 Air Liquide SA $ 1,528,418
-----------
Total Materials $ 9,735,639
-----------
Capital Goods - 6.3%
Aerospace & Defense - 0.8%
113,663 Smiths Industries $ 1,349,074
-----------
The accompanying notes are an integral part of these financial statements.
12
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Shares Value
Construction & Engineering - 2.9%
79,691 Grupo Dragados SA $ 1,624,690
80,953 Compagnie de Saint Gobain 3,408,862
-----------
$ 5,033,552
-----------
Electrical Component & Equipment - 0.9%
25,459 Schneider Electric SA* $ 1,487,409
-----------
Industrial Machinery - 1.7%
40,970 SKF AB* $ 1,447,861
266,724 Scottish Power Plc 1,587,519
-----------
$ 3,035,380
-----------
Total Capital Goods $10,905,415
-----------
Commercial Services & Supplies - 2.1%
Diversified Commercial Services - 2.1%
883,298 Hays Plc $ 1,827,329
85,486 TNT Post Group NV 1,840,045
-----------
$ 3,667,374
-----------
Total Commercial Services & Supplies $ 3,667,374
-----------
Automobiles & Components - 1.1%
Automobile Manufacturers - 1.1%
46,414 Bayerische Motoren Werke AG $ 1,858,051
-----------
Total Automobiles & Components $ 1,858,051
-----------
Hotels, Restaurants & Leisure - 1.6%
Restaurants - 1.6%
241,297 Compass Group Plc $ 1,397,309
114,010 GUS Plc 1,392,922
-----------
$ 2,790,231
-----------
Total Hotels, Restaurants & Leisure $ 2,790,231
-----------
Media - 3.4%
Advertising - 0.8%
40,357 Publicis SA $ 1,259,681
-----------
Broadcasting & Cable T.V. - 0.0%
375 Antena 3 Television SA* $ 12,227
-----------
The accompanying notes are an integral part of these financial statements.
13
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/03 (continued)
- --------------------------------------------------------------------------------
Shares Value
Publishing - 2.6%
205,295 Elsevier NV $ 2,282,093
32,786 VNU NV 996,734
87,280 Wolters Kluwer NV* 1,224,420
-----------
$ 4,503,247
-----------
Total Media $ 5,775,155
-----------
Retailing - 1.9%
Department Stores - 1.2%
49,893 Metro AG $ 2,022,217
-----------
Home Improvement Retail - 0.7%
98,688 Wolseley $ 1,208,235
-----------
Total Retailing $ 3,230,452
-----------
Food & Drug Retailing - 7.1%
Food Retail - 7.1%
36,961 Carrefour Supermarch $ 1,936,810
21,540 Nestle SA (Registered Shares) 4,732,120
220,780 Tomkins Plc 1,045,448
750,328 Tesco Plc 3,015,430
26,324 Unilever NV 1,526,338
-----------
$12,256,146
-----------
Total Food & Drug Retailing $12,256,146
-----------
Food, Beverage & Tobacco - 2.5%
Distillers & Vintners - 0.9%
133,665 Diageo Plc $ 1,572,993
-----------
Tobacco - 1.6%
232,357 British American Tobacco Plc $ 2,811,250
-----------
Total Food, Beverage & Tobacco $ 4,384,243
-----------
Health Care Equipment & Services - 1.3%
Health Care Equipment - 1.3%
24,310 Celesio AG* $ 1,014,929
31,474 Getinge AB (B Shares) 1,150,561
-----------
$ 2,165,490
-----------
Total Health Care Equipment & Services $ 2,165,490
-----------
The accompanying notes are an integral part of these financial statements.
14
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Shares Value
Pharmaceuticals & Biotechnology - 11.7%
Pharmaceuticals - 11.7%
78,497 AstraZeneca Plc $ 3,699,060
231,091 GlaxoSmithKline Plc 4,929,619
83,709 Novartis AG 3,183,851
44,664 Roche Holdings AG 3,687,930
23,872 Sanofi-Synthelabo SA* 1,475,020
68,765 Schering AG 3,226,770
-----------
$20,202,250
-----------
Total Pharmaceuticals & Biotechnology $20,202,250
-----------
Banks - 16.7%
Diversified Banks - 16.7%
77,239 Allied Irish Banks Plc $ 1,127,475
388,377 Barclays Plc 3,276,395
157,436 Banco Bilbao Vizcaya Argentaria SA 1,803,062
99,903 BNP Paribas SA 5,239,700
68,932 Credit Agricole SA* 1,461,332
57,131 CS Group 2,008,603
66,887 Dexia* 1,050,872
557,273 HSBC Holding Plc 8,391,328
164,862 Royal Bank of Scotland Group Plc 4,436,569
-----------
$28,795,336
-----------
Total Banks $28,795,336
-----------
Diversified Financials - 7.1%
Diversified Financial Services - 7.1%
45,593 Deutsche Boerse AG $ 2,530,922
26,431 Deutsche Bank AG 1,737,719
32,840 Societe Generale AG 2,434,969
98,705 ING Groep NV 2,045,550
58,324 UBS AG 3,573,748
-----------
$12,322,908
-----------
Total Diversified Financials $12,322,908
-----------
Insurance - 4.2%
Life & Health Insurance - 1.1%
136,551 Aegon NV $ 1,787,284
-----------
The accompanying notes are an integral part of these financial statements.
15
Pioneer Europe Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/03 (continued)
- --------------------------------------------------------------------------------
Shares Value
Multi-Line Insurance - 3.1%
138,886 AXA SA $ 2,626,852
21,627 Zurich Financial Services* 2,763,472
------------
$ 5,390,324
------------
Total Insurance $ 7,177,608
------------
Technology Hardware & Equipment - 4.7%
Semiconductors - 0.8%
52,250 Philips Electronics NV $ 1,405,972
------------
Communications Equipment - 2.5%
252,449 Nokia Oyj $ 4,288,488
------------
Electronic Equipment & Instruments - 1.4%
36,498 Siemens AG $ 2,447,859
------------
Total Technology Hardware & Equipment $ 8,142,319
------------
Telecommunication Services - 8.1%
Integrated Telecommunications Services - 4.2%
112,874 British Sky Broadcasting Plc* $ 1,225,922
40,465 France Telecom* 977,574
201,038 Portugal Telecom SGPS SA 1,686,576
111,107 Telefonica SA 1,379,478
242,058 Telecom Italia Mobile S.p.A. 1,109,446
304,857 Telecom Italia S.p.A.* 794,149
------------
$ 7,173,145
------------
Wireless Telecommunications Services - 3.9%
3,213,197 Vodafone Group Plc $ 6,729,054
------------
Total Telecommunication Services $ 13,902,199
------------
Utilities - 2.1%
Electric Utilities - 2.1%
48,974 E.On AG $ 2,461,747
182,876 National Grid Transco Plc 1,168,125
------------
$ 3,629,872
------------
Total Utilities $ 3,629,872
------------
TOTAL COMMON STOCKS
(Cost $153,136,533) $169,746,819
------------
The accompanying notes are an integral part of these financial statements.
16
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Shares Value
RIGHTS/WARRANTS - 0.0%
Miscellaneous - 0.0%
68,932 Credit Agricole SA (Rights)* $ 15,998
------------
TOTAL RIGHTS/WARRANTS
(Cost $10,434) $ 15,998
------------
TOTAL INVESTMENT IN SECURITIES - 99.4%
(Cost $154,098,704) (a)(b)(c) $171,376,474
------------
OTHER ASSETS AND LIABILITIES - 0.6% $ 1,113,498
------------
TOTAL NET ASSETS - 100.0% $172,489,972
============
* Non-income producing security.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings (excluding temporary cash investments) is as follows:
United Kingdom 34.8%
France 17.6
Germany 12.0
Switzerland 11.6
Netherlands 10.7
Spain 2.8
Italy 2.6
Finland 2.5
Sweden 2.1
Ireland 1.7
Portugal 1.0
Belgium 0.6
----
Total 100.0%
=====
(b) At October 31, 2003, the net unrealized gain on investments based on cost
for federal income tax purposes of $156,769,478 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $20,570,923
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (5,963,927)
-----------
Net unrealized gain $14,606,996
===========
(c) At October 31, 2003, the Fund had a net capital loss carryforward of
$70,123,211 of which the following amounts will expire between 2008 and
2011, if not utilized.
$5,276,444 in 2008
$27,419,760 in 2009
$23,790,437 in 2010
$13,636,570 in 2011
Purchases and sales of securities (excluding temporary cash investments)
for the year ended October 31, 2003 aggregated $89,240,438 and
$119,140,030, respectively.
The accompanying notes are an integral part of these financial statements.
17
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 10/31/03
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (cost $154,098,704) $171,376,474
Cash 1,002,547
Foreign currency, at value (cost $1,295) 1,295
Receivables -
Fund shares sold 220,130
Dividends, interest and foreign taxes withheld 577,365
Other 5,362
-------------
Total assets $173,183,173
-------------
LIABILITIES:
Payables -
Fund shares repurchased $ 189,630
Due to affiliates 336,321
Accrued expenses 167,250
-------------
Total liabilities $ 693,201
-------------
NET ASSETS:
Paid-in capital $227,479,112
Accumulated undistributed net investment income 472,241
Accumulated net realized loss on investments, futures
contracts, and foreign currency transactions (72,793,985)
Net unrealized gain on investments 17,277,770
Net unrealized gain on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies 54,834
-------------
Total net assets $172,489,972
=============
NET ASSET VALUE PER SHARE:
Class A (based on $112,159,701/4,949,304 shares) $ 22.66
=============
Class B (based on $46,358,155/2,223,708 shares) $ 20.85
=============
Class C (based on $11,801,485/567,599 shares) $ 20.79
=============
Class R (based on $632.66/27.902 shares) $ 22.67
=============
Class Y (based on $2,169,998/92,735 shares) $ 23.40
=============
MAXIMUM OFFERING PRICE:
Class A ($22.66 [divided by] 94.25%) $ 24.04
=============
Class C ($20.79 [divided by] 99.00%) $ 21.00
=============
The accompanying notes are an integral part of these financial statements.
18
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 10/31/03
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $716,033) $ 4,673,867
Interest 51,948
------------
Total investment income $ 4,725,815
------------
EXPENSES:
Management fees $ 1,729,369
Transfer agent fees
Class A 600,932
Class B 389,672
Class C 90,563
Class Y 23
Distribution fees
Class A 280,463
Class B 470,056
Class C 117,409
Class R 2
Administrative Fees 27,146
Custodian fees 86,685
Registration fees 94,924
Professional fees 31,607
Printing 71,748
Fees and expenses of nonaffiliated trustees 7,709
Miscellaneous 19,273
------------
Total expenses $ 4,017,581
Less fees paid indirectly (8,973)
------------
Net expenses $ 4,008,608
------------
Net investment income $ 717,207
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $(13,001,885)
Futures contracts 77,226
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (244,966) $(13,169,625)
------------ ------------
Change in net unrealized gain (loss) from:
Investments $ 39,950,585
Futures contracts (305,156)
Other assets and liabilities denominated in
foreign currencies (29,972) $ 39,615,457
------------ ------------
Net gain on investments, futures contracts and
foreign currency transactions $ 26,445,832
------------
Net increase in net assets resulting from operations $ 27,163,039
============
The accompanying notes are an integral part of these financial statements.
19
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 10/31/03 and 10/31/02, respectively
Year Ended Year Ended
10/31/03 10/31/02
FROM OPERATIONS:
Net investment income (loss) $ 717,207 $ (448,297)
Net realized loss on investments, futures contracts
and foreign currency transactions (13,169,625) (25,082,839)
Change in net unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 39,615,457 (5,397,104)
------------ ------------
Net increase (decrease) in net assets resulting
from operations $ 27,163,039 $(30,928,240)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $189,080,988 $198,272,236
Cost of shares repurchased (226,348,321) (258,730,533)
------------ ------------
Net decrease in net assets resulting from fund
share transactions $(37,267,333) $(60,458,297)
------------ ------------
Net increase (decrease) in net assets $ 10,104,294 $(91,386,537)
NET ASSETS:
Beginning year 182,594,266 273,980,803
------------ ------------
End of year (including accumulated undistributed
net investment income of $472,241 and $0,
respectively) $172,489,972 $182,594,266
============ ============
The accompanying notes are an integral part of these financial statements.
20
Pioneer Europe Fund
- --------------------------------------------------------------------------------
For the Years Ended 10/31/03 and 10/31/02, respectively
'03 Shares '03 Amount '02 Shares '02 Amount
CLASS A
Shares sold 8,641,097 $167,590,556 7,647,990 $161,453,853
Less shares repurchased (9,673,429) (190,142,083) (9,000,673) (194,461,375)
---------- ------------ ---------- ------------
Net decrease (1,032,332) $(22,551,527) (1,352,683) $(33,007,522)
========== ============ ========== ============
CLASS B
Shares sold 185,386 $ 3,518,231 438,959 $ 9,257,799
Less shares repurchased (844,268) (15,582,369) (1,428,876) (29,996,573)
---------- ------------ ---------- ------------
Net decrease (658,882) $(12,064,138) (989,917) $(20,738,774)
========== ============ ========== ============
CLASS C
Shares sold 943,312 $ 17,383,577 524,672 $ 10,712,190
Less shares repurchased (1,063,578) (19,709,696) (841,956) (17,464,179)
---------- ------------ ---------- ------------
Net decrease (120,266) $ (2,326,119) (317,284) $ (6,751,989)
========== ============ ========== ============
CLASS R*
Shares sold 28 $ 500
Less shares repurchased - -
---------- ------------
Net increase 28 $ 500
========== ============
CLASS Y
Shares sold 30,059 $ 588,124 845,869 $ 16,848,394
Less shares repurchased (46,183) (914,173) (815,867) (16,808,406)
---------- ------------ ---------- ------------
Net increase (decrease) (16,124) $ (326,049) 30,002 $ 39,988
========== ============ ========== ============
*Class R shares were first publicly offered on April 1,2003.
The accompanying notes are an integral part of these financial statements.
21
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended
CLASS A 10/31/03 10/31/02
Net asset value, beginning of period $ 19.40 $ 22.85
-------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.17 $ 0.06
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 3.09 (3.51)
-------- ---------
Net increase (decrease) from investment operations $ 3.26 $ (3.45)
Distributions to shareowners:
Net investment income - -
Net realized gain - -
-------- ---------
Net increase (decrease) in net asset value $ 3.26 $ (3.45)
-------- ---------
Net asset value, end of period $ 22.66 $ 19.40
======== =========
Total return* 16.80% (15.10)%
Ratio of net expenses to average net assets+ 1.98% 1.89%
Ratio of net investment income (loss) to average net assets+ 0.76% 0.14%
Portfolio turnover rate 53% 38%
Net assets, end of period (in thousands) $112,160 116,051
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.98% 1.89%
Net investment income (loss) 0.76% 0.14%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.98% 1.89%
Net investment income (loss) 0.76% 0.14%
FINANCIAL HIGHLIGHTS
Pioneer Europe Fund
22
Year Ended Year Ended Year Ended
CLASS A 10/31/01 10/31/00 10/31/99
Net asset value, beginning of period $ 32.75 $ 31.71 $ 29.87
-------- --------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.07 $ (0.15) $ 0.12
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (9.97) 2.30 2.54
-------- --------- --------
Net increase (decrease) from investment operations $ (9.90) $ 2.15 $ 2.66
Distributions to shareowners:
Net investment income - (0.00)(a) (0.09)
Net realized gain - (1.11) (0.73)
-------- --------- --------
Net increase (decrease) in net asset value $ (9.90) $ 1.04 $ 1.84
-------- --------- --------
Net asset value, end of period $ 22.85 $ 32.75 $ 31.71
======== ========= ========
Total return* (30.23)% 6.83% 9.01%
Ratio of net expenses to average net assets+ 1.76% 1.54% 1.63%
Ratio of net investment income (loss) to average net assets+ (0.07)% (0.39)% 0.29%
Portfolio turnover rate 116% 46% 60%
Net assets, end of period (in thousands) $167,568 $ 314,781 $268,446
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.76% 1.54% 1.63%
Net investment income (loss) (0.07)% (0.39)% 0.29%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.74% 1.52% 1.62%
Net investment income (loss) (0.05)% (0.37)% 0.30%
(a) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
22
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS B 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
Net asset value, beginning of period $ 18.04 $ 21.45 $ 31.06 $ 30.38 $ 28.79
------- -------- -------- ------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.06) $ (0.40) $ (0.38) $ (0.40) $ (0.18)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 2.87 (3.01) (9.23) 2.19 2.50
------- -------- -------- ------- -------
Net increase (decrease) from investment operations $ 2.81 $ (3.41) $ (9.61) $ 1.79 $ 2.32
Distributions to shareowners:
Net realized gain - - - (1.11) (0.73)
------- -------- -------- ------- -------
Net increase (decrease) in net asset value $ 2.81 $ (3.41) $ (9.61) $ 0.68 $ 1.59
------- -------- -------- ------- -------
Net asset value, end of period $ 20.85 $ 18.04 $ 21.45 $ 31.06 $ 30.38
======= ======== ======== ======= =======
Total return* 15.58% (15.90)% (30.94)% 5.90% 8.12%
Ratio of net expenses to average net assets+ 3.02% 2.81% 2.64% 2.37% 2.48%
Ratio of net investment loss to average net assets+ (0.31)% (0.78)% (0.94)% (1.21)% (0.52)%
Portfolio turnover rate 53% 38% 116% 46% 60%
Net assets, end of period (in thousands) $46,358 $ 52,009 $ 83,075 $150,436 $129,336
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 3.02% 2.81% 2.64% 2.37% 2.48%
Net investment loss (0.31)% (0.78)% (0.94)% (1.21)% (0.52)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 3.01% 2.81% 2.63% 2.36% 2.47%
Net investment loss (0.30)% (0.78)% (0.93)% (1.20)% (0.51)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
23
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS C 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99
24
Net asset value, beginning of period $ 17.98 $ 21.39 $ 30.95 $ 30.27 $ 28.67
------- -------- -------- ------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.05) $ (0.45) $ (0.44) $ (0.39) $ (0.13)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 2.86 (2.96) (9.12) 2.18 2.46
------- -------- -------- ------- -------
Net increase (decrease) from investment operations $ 2.81 $ (3.41) $ (9.56) $ 1.79 $ 2.33
Distributions to shareowners:
Net realized gain - - - (1.11) (0.73)
------- -------- -------- ------- -------
Net increase (decrease) in net asset value $ 2.81 $ (3.41) $ (9.56) $ 0.68 $ 1.60
------- -------- -------- ------- -------
Net asset value, end of period $ 20.79 $ 17.98 $ 21.39 $ 30.95 $ 30.27
======= ======== ======== ======= =======
Total return* 15.63% (15.94)% (30.89)% 5.93% 8.19%
Ratio of net expenses to average net assets+ 2.97% 2.82% 2.60% 2.34% 2.42%
Ratio of net investment loss to average net assets+ (0.24)% (0.80)% (0.93)% (1.19)% (0.44)%
Portfolio turnover rate 53% 38% 116% 46% 60%
Net assets, end of period (in thousands) $11,801 $ 12,391 $ 21,503 $46,544 $43,559
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.97% 2.82% 2.60% 2.34% 2.42%
Net investment loss (0.24)% (0.80)% (0.93)% (1.19)% (0.44)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 2.96% 2.82% 2.58% 2.33% 2.40%
Net investment loss (0.23)% (0.80)% (0.91)% (1.18)% (0.42)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
24
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
4/1/03
to
10/31/03
CLASS R (a)
Net asset value, beginning of period $ 17.92
-------
Increase from investment operations:
Net investment income $ 0.18
Net realized and unrealized gain on investments, futures
contracts and foreign currency transactions 4.57
-------
Net increase from investment operations $ 4.75
-------
Net increase in net asset value $ 4.75
-------
Net asset value, end of period $ 22.67
=======
Total return* 26.51%
Ratio of net expenses to average net assets+ 1.75%**
Ratio of net investment income to average net assets+ 1.46%**
Portfolio turnover rate 53%
Net assets, end of period (in thousands) $ 1
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 1.75%**
Net investment income 1.46%**
(a) Class R shares were first publicly offered on April 1, 2003.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of distributions, and the complete redemption of the
investment at net asset value at the end of the period.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
25
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS Y 10/31/03 10/31/02 10/31/01 10/31/00(a) 10/31/99
Net asset value, beginning of period $ 19.88 $ 23.26 $ 33.19 $ 31.97 $ 29.90
-------- --------- --------- --------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.33 $ 0.11 $ (0.25) $ - $ 0.35
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 3.19 (3.49) (9.68) 2.33 2.49
-------- --------- --------- --------- -------
Net increase (decrease) from investment operations $ 3.52 $ (3.38) $ (9.93) $ 2.33 $ 2.84
Distributions to shareowners:
Net investment income - - - (0.00)(b) (0.04)
Net realized gain - - - (1.11) (0.73)
-------- --------- --------- --------- -------
Net increase (decrease) in net asset value $ 3.52 $ (3.38) $ (9.93) $ 1.22 $ 2.07
-------- --------- --------- --------- -------
Net asset value, end of period $ 23.40 $ 19.88 $ 23.26 $ 33.19 $ 31.97
======== ========= ========= ========= =======
Total return* 17.71% (14.53)% (29.92)% 7.35% 9.59%
Ratio of net expenses to average net assets+ 1.20% 1.19% 1.20% 1.08% 1.12%
Ratio of net investment income (loss) to average net assets+ 1.52% 0.87% 0.53% (0.01)% 0.90%
Portfolio turnover rate 53% 38% 116% 46% 60%
Net assets, end of period (in thousands) $ 2,170 $ 2,164 $ 1,834 $ 2,953 $ 6,252
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.20% 1.19% 1.20% 1.08% 1.12%
Net investment income (loss) 1.52% 0.87% 0.53% (0.01)% 0.90%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.20% 1.16% 1.19% 1.07% 1.12%
Net investment income 1.52% 0.90% 0.54% 0.00% 0.90%
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
(b) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of distributions, and the complete redemption of the
investment at net asset value at the end of the period.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
26
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/03
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Europe Fund (the Fund) is a Massachusetts business trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek long-term
growth of capital.
The Fund offers five classes of shares - Class A, Class B, Class C, Class R and
Class Y shares. Each class of shares represents an interest in the same
portfolio of investments of the Fund and has equal rights to voting,
redemptions, dividends and liquidation, except that the level of transfer agent
and distribution fees may differ among classes. Class A, Class B, Class C and
Class R shareowners have exclusive voting rights with respect to the
distribution plan for each class. There is no distribution plan for Class Y
shares.
The Fund's financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America that
require the management of the Fund to, among other things, make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of income, expenses and gains and losses
on investments during the reporting year. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
consistently followed by the Fund, which are in conformity with those generally
accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value
is computed once daily, on each day the New York Stock Exchange is open,
as of the close of regular trading on the Exchange. 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. Trading in foreign securities is substantially
completed each day at various times prior to the close of the New York
Stock Exchange. The values of such securities used in computing the net
asset value
27
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/03 (continued)
- --------------------------------------------------------------------------------
of the Fund's shares are determined as of such times. The Fund also may
use the fair value of a security, including a non-U.S. security, when the
closing market price on the primary exchange where the security is traded
no longer accurately reflects the value of the security. Dividend income
is recorded on the ex-dividend date, except that certain dividends from
foreign securities where the ex-dividend date may have passed are recorded
as soon as the Fund becomes aware of the ex-dividend data in the exercise
of reasonable diligence. Interest income, including interest on income
bearing cash accounts, is recorded on the accrual basis. Dividend and
interest income from foreign securities are reported net of unrecoverable
foreign taxes withheld at the applicable country rates. Temporary cash
investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between
the amount of income accrued and the U.S. dollars actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the statement of operations from the
effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio
hedges). All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized gains or losses are recorded
in the Fund's financial statements. The Fund
28
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
records realized gains and losses at the time a portfolio hedge is offset
by entry into a closing transaction or extinguished by delivery of the
currency. Risks may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of the contract
and from unanticipated movements in the value of foreign currencies
relative to the U.S. dollar. As of October 31, 2003, the Fund had no
outstanding portfolio or settlement hedges.
D. Futures Contracts
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices and currency rates or to seek to
increase total return. Upon entering into a futures contract, the Fund is
required to deposit with a broker an amount of cash or securities equal to
the minimum "initial margin" requirements of the associated futures
exchange. Subsequent payments for futures contracts ("variation margin")
are paid or received by the Fund, depending on the daily fluctuation in
the value of the contracts, and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund realizes a gain or
loss equal to the difference between the opening and closing value of the
contract. The use of futures contracts involves, to varying degrees,
elements of market and counterparty risks which may exceed the amounts
recognized by the Fund. Changes in value of the contracts may not directly
correlate to the changes in value of the underlying securities. These
risks may decrease the effectiveness of the Fund's hedging strategies and
potentially result in a loss. As of October 31, 2003, the Fund had no open
futures contracts.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareowners. Therefore, no federal income tax provision is
required.
The characterization of distributions to shareowners for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source 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
29
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/03 (continued)
- --------------------------------------------------------------------------------
transactions, or from paid-in capital, depending on the type of book/
tax differences that may exist.
There were no distributions paid during the years ended October 31, 2003
and 2002, respectively.
The following shows components of distributable earnings on a federal
income tax basis at October 31, 2003.
- ------------------------------------------------------------
2003
- ------------------------------------------------------------
Undistributed ordinary income $ 472,241
Capital loss carryforward (70,123,211)
Unrealized appreciation 14,661,830
------------
Total $(54,989,140)
============
- ------------------------------------------------------------
The difference between book basis and tax-basis unrealized appre
ciation is attributable to the tax deferral of losses on wash sales.
At October 31, 2003, The Fund reclassified $244,966 to decrease
accumulated net realized loss on investments, futures contracts and
foreign currency transactions and $244,966 to decrease accumulated
undistributed net investment income. This reclassification has no impact
on the net assets of the Fund and presents the Fund's capital accounts on
a tax basis.
F. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano), earned $17,009 in underwriting commissions on the
sale of Fund shares during the year ended October 31,2003.
G. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B, Class C and Class R shares of the
Fund, respectively. Class Y shares are not subject to a distribution plan.
Shareowners of each class share all expenses and fees paid to the transfer
agent, Pioneering Investment Management Shareholder Services (PIMSS), for
its services, which are
30
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
allocated based on the number of accounts in each class and the ratable
allocation of related out-of-pocket expenses (see Note 3). Income, common
expenses and realized and unrealized gains and losses are calculated at
the Fund level and allocated daily to each class of shares based on the
respective percentage of adjusted net assets at the beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time and in the same amount,
except that Class A, Class B, Class C, Class Y and Class R shares can bear
different transfer agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned indirect subsidiary of
UniCredito Italiano. Management fees are calculated daily at the annual rate of
1.00% of the Fund's average daily net assets up to $300 million; 0.85% of the
next $200 million; and 0.75% of the excess over $500 million.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At October 31, 2003, $156,127 was payable to
PIM related to management fees, administrative fees 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 $105,020 in transfer agent
fees payable to PIMSS at October 31, 2003.
4. Distribution and Service Plans
The Fund adopted Plans of Distribution with respect to Class A, Class B, Class
C, and Class R shares (Class A Plan, Class B Plan, Class C Plan and Class R
Plan) in accordance with Rule 12b-1 of the Investment Company Act of 1940.
Pursuant to the Class A Plan, the Fund pays PFD a service fee of up to 0.25% of
the average daily net assets attributable to Class A shares in reimbursement of
its actual expenditures to finance
31
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/03 (continued)
- --------------------------------------------------------------------------------
activities primarily intended to result in the sale of Class A shares. Pursuant
to the Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of the
average daily net assets attributable to each class of shares. The fee consists
of a 0.25% service fee and a 0.75% distribution fee paid as compensation for
personal services and/or account maintenance services or distribution services
with regard to Class B and Class C shares. Pursuant to the Class R Plan, the
Fund pays PFD 0.50% of the average daily net assets attributable to Class R
shares for distribution services. Included in due to affiliates is $75,174 in
distribution fees payable to PFD at October 31, 2003. The Fund also has adopted
a separate service plan for Class R shares (Service Plan). The Service Plan
authorizes the Fund to pay securities dealers, plan administrators or other
service organizations that agree to provide certain services to retirement
plans or plan participants holding shares of the Fund a service fee of up to
0.25% of the Fund's average daily net assets attributable to Class R shares
held by such plans.
In addition, redemptions of each class of shares (except Class Y shares) may be
subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A shares
within one year of purchase. Class B shares that are redeemed within six years
of purchase are subject to a CDSC at declining rates beginning at 4.00%, based
on the lower of cost or market value of shares being redeemed. Redemptions of
Class C shares within one year of purchase are subject to a CDSC of 1.00%.
Redemptions of Class R shares within 18 months of purchase may be subject to a
CDSC of 1.00%. Proceeds from the CDSCs are paid to PFD. For the year ended
October 31, 2003, CDSCs in the amount of $193,442 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses, due to interest earned
on cash held by PIMSS. For year ended October 31, 2003, the Fund's expenses
were reduced by $8,973 under such arrangements.
32
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Line of Credit Facility
The Fund, along with certain other Funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary or
emergency purposes. The Fund may borrow up to the lesser of $50 million or the
limits set by its prospectus for borrowings. Interest on collective borrowings
is payable at the Federal Funds Rate plus 1/2% on an annualized basis. The
Funds pay an annual commitment fee for this facility. The commitment fee is
allocated among such Funds based on their respective borrowing limits. For the
year ended October 31, 2003, the Fund had no borrowings under this agreement.
7. Tax Information (Unaudited)
For the fiscal year ended October 31, 2003, the Fund has elected to pass through
foreign taxes credits of $716,033.
33
Pioneer Europe Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareowners of
Pioneer Europe Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Pioneer Europe Fund (the "Fund") as of October
31, 2003, and the related statement of operations for the year then ended, and
the statements of changes in net assets and the financial highlights for each
of the two years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each of
the three years in the period ended October 31, 2001 were audited by other
auditors who have ceased operations and whose report, dated December 7, 2001,
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities as of October 31, 2003, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Europe Fund at October 31, 2003, the results of its operations for the
year then ended, and the changes in its net assets and the financial highlights
for each of the two years in the period then ended in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 12, 2003
34
Pioneer Europe Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Auditors
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's
affairs. The officers of the Fund are responsible for the Fund's operations.
The Fund's Trustees and officers are listed below, together with their
principal occupations during the past five years. Trustees who are interested
persons of the Fund within the meaning of the Investment Company Act of 1940
are referred to as Interested Trustees. Trustees who are not interested persons
of the Fund are referred to as Independent Trustees. Each of the Trustees
serves as a trustee of each of the 50 U.S. registered investment portfolios for
which Pioneer Investment Management, Inc. ("Pioneer") serves as investment
adviser (the "Pioneer Funds"). The address for all Interested Trustees and all
officers of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Fund's statement of additional information provides more detailed
information regarding the Fund's Trustees and is available upon request,
without charge, by calling 1-800-225-6292.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). This
information is also available at pioneerfunds.com.
35
- --------------------------------------------------------------------------------
INTERESTED TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service
John F. Cogan, Jr. (77)* Chairman of the Board, Serves until a successor trustee is
Trustee and President elected or earlier retirement or removal.
*Mr. Cogan is an Interested Trustee because he is an officer or director of
Pioneer and certain of its affiliates.
=========================================================================================================
Osbert M. Hood (51)** Trustee and Since June, 2003
Executive Vice President Serves until a successor trustee is
elected or earlier retirement or removal.
**Mr. Hood is an Interested Trustee because he is an officer or director of
Pioneer and certain of its affiliates.
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service
Mary K. Bush (55) Trustee Since 1997.
3509 Woodbine Street, Serves until a successor trustee is
Chevy Chase, MD 20815 elected or earlier retirement or removal.
=========================================================================================================
Richard H. Egdahl, M.D. (76) Trustee Since 1992.
Boston University Healthcare Serves until a successor trustee is
Entrepreneurship Program, elected or earlier retirement or removal.
53 Bay State Road,
Boston, MA 02215
=========================================================================================================
36
- --------------------------------------------------------------------------------
Principal Occupation During Past Five Years Other Directorships Held by this Trustee
Deputy Chairman and a Director of Pioneer Global Director of Harbor Global Company,
Asset Management S.p.A. ("PGAM"); Non-Executive Ltd.
Chairman and a Director of Pioneer Investment
Management USA Inc. ("PIM-USA"); Chairman and a
Director of Pioneer; Director of Pioneer Alternative
Investment Management Limited (Dublin); President
and a Director of Pioneer Alternative Investment
Management (Bermuda) Limited and affiliated funds;
President and Director of Pioneer Funds Distributor, Inc.
("PFD"); President of all of the Pioneer Funds; and Of
Counsel (since 2000, partner prior to 2000), Hale and
Dorr LLP (counsel to PIM-USA and the Pioneer Funds)
========================================================================================================
President and Chief Executive Officer, PIM-USA since None
May, 2003 (Director since January, 2001); President
and Director of Pioneer since May, 2003; Chairman
and Director of Pioneer Investment Management
Shareholder Services, Inc. ("PIMSS") since May, 2003;
Executive Vice President of all of the Pioneer Funds
since June, 2003; Executive Vice President and Chief
Operating Officer of PIM-USA, November 2000 to May
2003; Executive Vice President, Chief Financial Officer
and Treasurer, John Hancock Advisers, L.L.C., Boston,
MA, November 1999 to November 2000; Senior Vice
President and Chief Financial Officer, John Hancock
Advisers, L.L.C., April 1997 to November 1999
- --------------------------------------------------------------------------------
Principal Occupation During Past Five Years Other Directorships Held by this Trustee
President, Bush International (international financial Director of Brady Corporation
advisory firm) (industrial identification and
specialty coated material products
manufacturer), Millennium Chemicals,
Inc. (commodity chemicals), Mortgage
Guaranty Insurance Corporation, and
R.J. Reynolds Tobacco Holdings, Inc.
(tobacco)
=========================================================================================================
Alexander Graham Bell Professor of Health Care None
Entrepreneurship, Boston University; Professor
of Management, Boston University School of
Management; Professor of Public Health, Boston
University School of Public Health; Professor of Surgery,
Boston University School of Medicine; and University
Professor, Boston University
=========================================================================================================
37
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service
Margaret B.W. Graham (56) Trustee Since 1990.
1001 Sherbrooke Street West, Serves until a successor trustee is
Montreal, Quebec, Canada elected or earlier retirement or removal.
H3A 1G5
======================================================================================================
Marguerite A. Piret (55) Trustee Since 1990.
One Boston Place, 28th Floor, Serves until a successor trustee is
Boston, MA 02108 elected or earlier retirement or removal.
======================================================================================================
Stephen K. West (75) Trustee Since 1993.
125 Broad Street, Serves until a successor trustee is
New York, NY 10004 elected or earlier retirement or removal.
======================================================================================================
John Winthrop (47) Trustee Since 1990.
One North Adgers Wharf, Serves until a successor trustee is
Charleston, SC 29401 elected or earlier retirement or removal.
- -----------------------------------------------------------------------------
FUND OFFICERS
- -----------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service
Dorothy E. Bourassa (55) Secretary Serves at the discretion of board.
=========================================================================================================
Christopher J. Kelley (38) Assistant Secretary Serves at the discretion of board.
=========================================================================================================
David C. Phelan (46) Assistant Secretary Serves at the discretion of board.
=========================================================================================================
Vincent Nave (58) Treasurer Serves at the discretion of board.
=========================================================================================================
Luis I. Presutti (38) Assistant Treasurer Serves at the discretion of board.
=========================================================================================================
38
- --------------------------------------------------------------------------------
Other Directorships Held by
Principal Occupation During Past Five Years this Trustee
Founding Director, The Winthrop Group, Inc. (consulting None
firm); Professor of Management, Faculty of Management,
McGill University
=========================================================================================================
President and Chief Executive Officer, Newbury, Piret & None
Company, Inc. (investment banking firm)
=========================================================================================================
Senior Counsel, Sullivan & Cromwell (law firm) Director, The Swiss Helvetia Fund,
Inc. (closed-end investment
company) and AMVESCAP PLC
(investment managers)
=========================================================================================================
President, John Winthrop & Co., Inc. None
(private investment firm)
=========================================================================================================
Other Directorships Held by this
Principal Occupation During Past Five Years Officer
Secretary of PIM-USA: Senior Vice President-Legal of None
Pioneer; and Secretary/Clerk of most of PIM-USA's
subsidiaries since October 2000; Secretary of all of the
Pioneer Funds since September 2003 (Assistant
Secretary from November 2000 to September 2003);
and Senior Counsel, Assistant Vice President and Director
of Compliance of PIM-USA from April 1998 through
October 2000
=========================================================================================================
Assistant Vice President and Senior Counsel of Pioneer None
since July 2002; Vice President and Senior Counsel of
BISYS Fund Services, Inc. (April 2001 to June 2002);
Senior Vice President and Deputy General Counsel of
Funds Distributor, Inc. (July 2000 to April 2001; Vice
President and Associate General Counsel from July 1996
to July 2000); Assistant Secretary of all of the Pioneer
Funds since September 2003
=========================================================================================================
Partner, Hale and Dorr LLP; Assistant Secretary of all of None
Pioneer Funds since September 2003
=========================================================================================================
Vice President-Fund Accounting, Administration and Custody None
Services of Pioneer (Manager from September 1996 to
February 1999); and Treasurer of all of the Pioneer Funds
(Assistant Treasurer from June 1999 to November 2000)
=========================================================================================================
Assistant Vice President-Fund Accounting, Administration None
and Custody Services of Pioneer (Fund Accounting Manager
from 1994 to 1999); and Assistant Treasurer of all of the
Pioneer Funds since November 2000
=========================================================================================================
39
- --------------------------------------------------------------------------------
FUND OFFICERS
- --------------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service
Gary Sullivan (45) Assistant Treasurer Serves at the discretion of board.
=========================================================================================================
Katherine Kim Sullivan (29) Assistant Treasurer Serves at the discretion of board.
=========================================================================================================
40
- --------------------------------------------------------------------------------
Other Directorships Held by this
Principal Occupation During Past Five Years Officer
Fund Accounting Manager-Fund Accounting, Administration None
and Custody Services of Pioneer; and Assistant Treasurer of
all of the Pioneer Funds since May 2002
=========================================================================================================
Fund Administration Manager-Fund Accounting, None
Administration and Custody Services since June 2003;
Assistant Vice President-Mutual Fund Operations of
State Street Corporation from June 2002 to June 2003
(formerly Deutsche Bank Asset Management); Pioneer
Fund Accounting, Administration and Custody Services
(Fund Accounting Manager from August 1999 to May 2002,
Fund Accounting Supervisor from 1997 to July 1999);
Assistant Treasurer of all of the Pioneer Funds since
September 2003
=========================================================================================================
41
- --------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 10-digit account number, your three-digit fund number and your four-digit
personal identification number at hand.
6-Month Reinstatement Privilege (for Class A and Class B Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 6 months of your
redemption. You have the choice of investing in any Pioneer fund provided the
account has the exact same registration and meets the fund's minimum investment
requirement. Reinstated accounts may only purchase Class A fund shares.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
42
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds
you wish to invest in. You choose the amounts and dates for Pioneer to sell
shares of your original fund and use the proceeds to buy shares of the other
funds you have chosen. Over time, your investment will be shifted out of the
original fund. (Automatic Exchange is available for originating accounts with a
balance of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or
more.)
43
- --------------------------------------------------------------------------------
RETIREMENT PLANS FROM PIONEER
- --------------------------------------------------------------------------------
Pioneer has a long history of helping people work toward their retirement
goals, offering plans suited to the individual investor and businesses of all
sizes. For more information on Pioneer retirement plans, contact your
investment professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Accounts (IRAs)
Traditional IRA*
For anyone under age 70 1/2 earning income. Individuals can contribute up to
$3,000 annually. Earnings are tax-deferred, and contributions may be
tax-deductible.
Roth IRA*
Available to single individuals earning less than $110,000 in income annually,
and married couples with joint income less than $160,000. Contributions of up
to $3,000 a year are not tax-deductible, but all earnings are tax-free for
qualified withdrawals. Distributions are tax and penalty-free if certain
conditions are met.
Employer-Sponsored Plans
Uni-K Plan*
A 401(k) plan designed specifically for any business that employs only owners
and their spouses. Participants can make salary deferral contributions up to
$11,000 per year. In addition, each year the business may contribute up to 25%
of pay.
401(k) Plan*
Allows employees to make pre-tax contributions through payroll deduction, up to
$11,000 per year. Employers' contributions are discretionary. The 401(k) offers
companies maximum flexibility.
SIMPLE IRA Plan*
The Savings Incentive Match PLan for Employees (SIMPLE) is designed for
employers with 100 or fewer eligible employees. Employees can decide whether to
contribute. Employers must contribute.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
* Special Catch-Up Provisions are available to individuals age 50 and older
to contribute additional amounts to their retirement accounts. For more
information, call our Retirement Plans Information line at 1-800-622-0176.
44
- --------------------------------------------------------------------------------
403(b) Plan*
Also known as a Tax-Sheltered Account (TSA), this plan lets employees of public
schools, non-profit hospitals and other tax-exempt organizations make pre-tax
contributions through payroll deduction.
SEP-IRA
The Simplified Employee Pension (SEP) plan lets self-employed people and
small-business owners make tax-deductible contributions of up to 25% of income,
while maintaining complete contribution flexibility each year.
Profit Sharing Plan
Companies can decide each year whether - and how much - to contribute to
participants, up to 25% of each participant's pay. Can include vesting
schedules that are not available with a SEP-IRA.
Age-Based Profit Sharing Plan
Employer contributions are flexible, but are based on a formula using age and
salary. Each year, a business can contribute up to 25% of the total eligible
payroll.
Money Purchase Pension Plan (MPP)
Allows employer contributions, up to 25% of pay annually. Companies must
contribute a fixed percentage of pay each year.
Defined Benefit Pension Plan
Requires a business to contribute enough each year to fund a specific future
benefit. Most beneficial to older employees who need to accumulate assets
rapidly.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
* Special Catch-Up Provisions are available to individuals age 50 and older
to contribute additional amounts to their retirement accounts. For more
information, call our Retirement Plans Information line at 1-800-622-0176.
45
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HOW TO CONTACT PIONEER
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We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@piog.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
Pioneer Investment Management, Inc. 14479-00-1203
60 State Street (Copyright) 2003 Pioneer Funds Distributor, Inc.
Boston, Massachusetts 02109 Underwriter of Pioneer mutual funds, Member SIPC
www.pioneerfunds.com
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.
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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
Not applicable; to be answered on annual submissions after December 15, 2003.
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation of
these controls and procedures as of a date within 90 days prior to the filing
date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the registrant's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
Filed herewith.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Europe Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date December XX, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date December XX, 2003
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date December XX, 2003
* Print the name and title of each signing officer under his or her signature.