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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 811-02864
Pioneer Europe Select Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: August 31
Date of reporting period: September 1, 2003 through August 31, 2004
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1.REPORTS TO SHAREOWNERS.
PIONEER
-------
EUROPE
SELECT
FUND
Annual
Report
8/31/04
[PIONEER INVESTMENTS LOGO]
Table of Contents
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Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Comparing Ongoing Fund Expenses 6
Portfolio Management Discussion 8
Schedule of Investments 11
Financial Statements 15
Notes to Financial Statements 22
Report of Independent Registered Public Accounting Firm 28
Trustees, Officers and Service Providers 29
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
LETTER TO SHAREOWNERS 8/31/04
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
After strong performances in 2003, equity markets in both the United States and
Europe traced a jagged course through the first eight months of 2004. While
economies continued to expand and corporate profitability improved, economic
growth often was less than had been earlier predicted. In addition, investors
were concerned that the global recovery could be affected by factors such as
rising oil prices and a tightening of monetary policy in the United States. The
threat of terrorist attacks and concerns about continued violence in Iraq also
hung heavy over the markets.
In the United States, the economy continued to show impressive gains, despite
concerns about the employment market. The "jobless" recovery became a
job-generating machine for a few months, followed by a brief slump and a partial
rebound. But strong boosts in employment quickly triggered fears of economic
overheating: too much demand for goods and services, the reasons for aggressive
corporate hiring, might trigger inflation. That would lead to higher interest
rates that could choke off the recovery by causing consumers and businesses to
hold back on outlays. In fact, the Federal Reserve Board raised short-term
interest rates by one-quarter of one percent twice between June 30 and August
31, and once again in September, after the period covered by this report. Growth
was more restrained in Europe, but corporate earnings continued to rise. In
general, interest rates remained low on the Continent, although they did rise in
the United Kingdom.
During the 12 months ended August 31, 2004, U.S.-based investors in Europe
benefited from the continued strengthening of the euro against the dollar.
More growth choices from Pioneer
The possibility of higher interest rates and the economy's direction could have
important implications for the way your portfolio is balanced, so an appointment
with your professional financial advisor may well be in order.
When you talk to your advisor, ask to hear about the Pioneer Oak Ridge and
Pioneer Papp Funds. These six additions to our product lineup are designed to
broaden your opportunities to pursue growth. Please consider the Funds'
investment objectives, risks, charges and expenses carefully before investing.
The prospectus contains this and other information about the Fund and should be
read carefully before you invest or send money. To obtain a prospectus and for
other information on any Pioneer fund, contact your investment advisor, call
1-800-225-6292 or visit our web site at www.pioneerfunds.com.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood
President
Pioneer Investment Management, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1
Pioneer Europe Select Fund
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PORTFOLIO SUMMARY 8/31/04
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Sector Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
Financials 26.3%
Materials 12.1%
Industrials 12.0%
Health Care 11.9%
Energy 10.6%
Consumer Staples 10.5%
Telecommunication Services 8.9%
Consumer Discretionary 5.4%
Information Technology 2.3%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
United Kingdom 28.0%
France 21.2%
Germany 14.2%
Switzerland 10.6%
Ireland 6.7%
Italy 4.5%
Netherlands 3.8%
Belgium 3.6%
Spain 2.7%
Sweden 2.5%
Denmark 2.2%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)*
1. BP Amoco Plc 6.17%
2. Vodafone Group Plc 5.29
3. Eni S.p.A. 4.47
4. Sanofi-Aventis 4.25
5. Nestle SA (Registered Shares) 4.16
6. BNP Paribas SA 4.07
7. UBS AG 4.03
8. GlaxoSmithKline Plc 4.00
9. Barclays Plc 3.85
10. Societe Generale 3.64
*This list excludes money market and derivative investments. The portfolio is
actively managed, and current holdings may be different.
2
Pioneer Europe Select Fund
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PERFORMANCE UPDATE 8/31/04 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 8/31/04 8/31/03
$11.05 $8.68
Net
Distributions per Share Investment Short-Term Long-Term
(9/1/03 - 8/31/04) Income Capital Gains Capital Gains
$0.1018 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Fund at public offering price, compared
to that of the Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of August 31, 2004)
Net Asset Public Offering
Period Value Price
Life-of-Class
(12/29/00) 3.37% 1.72%
1-Year 28.56 21.16
[TABULAR REPRESENTATION OF LINE CHART]
Value of $10,000 Investment+
Pioneer
Europe MSCI
Select Europe
Fund Index
12/00 $9,425 $10,000
8/01 $7,681 $8,084
8/02 $7,546 $6,789
8/03 $8,281 $7,375
8/04 $10,646 $9,082
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
POP returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during
the periods shown. Without such waivers fund performance would be lower.
Waivers may not be in effect for all funds and can be rescinded at any time.
See the prospectus and financial statements for complete details. 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.
+ 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.
3
Pioneer Europe Select Fund
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PERFORMANCE UPDATE 8/31/04 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 8/31/04 8/31/03
$10.90 $8.62
Net
Distributions per Share Investment Short-Term Long-Term
(9/1/03 - 8/31/04) Income Capital Gains Capital Gains
$0.0502 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Fund, compared to that of the Morgan
Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of August 31, 2004)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 2.51% 1.74%
1-Year 27.07 23.07
[TABULAR REPRESENTATION OF LINE CHART]
Value of $10,000 Investment+
Pioneer
Europe MSCI
Select Europe
Fund Index
12/00 $10,000 $10,000
8/01 $8,130 $8,084
8/02 $7,940 $6,789
8/03 $8,620 $7,375
8/04 $10,653 $9,082
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
If Redeemed returns reflect deduction of applicable CDSC. The maximum CDSC is
4% and declines over six years. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during
the periods shown. Without such waivers fund performance would be lower.
Waivers may not be in effect for all funds and can be rescinded at any time.
See the prospectus and financial statements for complete details.
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.
+ 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.
4
Pioneer Europe Select Fund
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PERFORMANCE UPDATE 8/31/04 CLASS C SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 8/31/04 8/31/03
$10.98 $8.69
Net
Distributions per Share Investment Short-Term Long-Term
(9/1/03 - 8/31/04) Income Capital Gains Capital Gains
$0.1072 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Fund at public offering price, compared
to that of the Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of August 31, 2004)
If If
Period Held Redeemed
Life-of-Class
(12/29/00) 2.87% 2.87%
1-Year 27.67 27.67
[TABULAR REPRESENTATION OF LINE CHART]
Value of $10,000 Investment+
Pioneer
Europe MSCI
Select Europe
Fund Index
12/00 $10,000 $10,000
8/01 $8,140 $8,084
8/02 $7,960 $6,789
8/03 $8,690 $7,375
8/04 $11,094 $9,082
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Class C shares held for less than one year are also subject to a 1%
contingent deferred sales charge (CDSC). The performance of Class C shares
does not reflect the 1% front-end sales charge in effect prior to February 1,
2004. If you paid a 1% sales charge, your returns would be lower than those
shown above. All results are historical and assume the reinvestment of
dividends and capital gains. Other share classes are available for which
performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during
the periods shown. Without such waivers fund performance would be lower.
Waivers may not be in effect for all funds and can be rescinded at any time.
See the prospectus and financial statements for complete details.
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.
+ 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.
5
Pioneer Europe Select Fund
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COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments and
redemption fees.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 invested at the Fund's last six month period ended August 31, 2004.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Europe Select Fund
Based on actual returns from March 1, 2004 through August 31, 2004
Share Class A B C
- ------------------------------------------------------------------------
Beginning Account Value
On 3/1/04 $1,000.00 $1,000.00 $1,000.00
Ending Account Value
On 8/31/04 $1,014.68 $1,010.18 $1,011.97
Expenses Paid During Period* $ 6.29 $ 10.05 $ 8.83
* Expenses are equal to the Fund's annualized expense ratio of 1.24%, 1.99%,
and 1.74%, for Class A, Class B and Class C shares, respectively, multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period).
6
Pioneer Europe Select Fund
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Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads), or redemption fees. Therefore, the table below is useful in
comparing ongoing costs only and will not help you determine the relative total
costs of owning different funds. In addition, if these transaction costs were
included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Europe Select Fund
Based on a hypothetical 5% return before expenses, reflecting the period from
March 1, 2004 through August 31, 2004
Share Class A B C
- ------------------------------------------------------------------------
Beginning Account Value
On 3/1/04 $1,000.00 $1,000.00 $1,000.00
Ending Account Value
On 8/31/04 $1,018.85 $1,014.23 $1,016.49
Expenses Paid During Period* $ 6.30 $ 10.07 $ 8.84
* Expenses are equal to the Fund's annualized expense ratio of 1.24%, 1.99%,
and 1.74%, for Class A, Class B and Class C shares, respectively, multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period).
7
Pioneer Europe Select Fund
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PORTFOLIO MANAGEMENT DISCUSSION 8/31/04
- --------------------------------------------------------------------------------
Optimistic expectations for a global economic recovery continued to drive major
European stock averages higher in the final months of 2003, but the outlook
became more cautious during the first eight months of 2004 as questions grew
about the sustainability of any economic revival. Over the full 12 months,
U.S.-based investors in European stocks benefited as the value of the euro
appreciated by more than 10% relative to the U.S. dollar. In the following
interview, Andrew Arbuthnott discusses the events and factors that affected your
Fund's performance during the 12 months. Mr. Arbuthnott is the lead portfolio
manager of the Fund and a member of the European investment team at Pioneer
Investment Management in Dublin, Ireland.
Q: How did the Pioneer Europe Select Fund perform during the 12 months that
ended August 31, 2004?
A: The Fund did very well, outperforming its benchmark for European equities.
Pioneer Europe Select Fund's Class A shares had a total return of 28.56%,
while Class B and Class C shares had returns of 27.07% and 27.67%,
respectively. All performance figures are at net asset value. During the
same 12-month period, the MSCI Europe Index returned 23.13%.
Q: What was the investment environment like during the period?
A: Widespread confidence about a global economic recovery helped support
European stock prices early in the period. Within Europe, national
economies grew modestly. Among the larger countries, the United Kingdom
benefited from brisk growth, while the economy of France showed some signs
of improvement. Germany, however, continued to lag other nations. Monetary
policy remained generally accommodative across European nations, although
interest rates were raised in the United Kingdom. Rising world oil prices
added volatility to the markets, however, as higher energy costs posed a
potential constraint on future economic growth and corporate profitability.
With this general economic environment as a backdrop, stocks continued to
post strong gains in the first months of the fiscal year, continuing the
market recovery that began early in 2003. However, after the first two
months of 2004, new worries unsettled investors and led to more muted
returns in the equity markets for the remaining months of the fiscal year.
Concerns
8
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
about a deceleration in the pace of economic growth in the United States,
the prospect of continued acceleration in world oil prices, and fears about
new terrorist attacks all added to a general anxiety among investors.
For the full 12 months, stocks in the healthcare equipment and services,
real estate, utility and energy sectors tended to have the best returns. In
contrast, technology, including both hardware and software companies,
lagged the overall market, as did stocks in the insurance sector.
The strengthening of the euro currency substantially aided U.S.-based
investors in European stocks. For the 12-month period, the euro appreciated
10.9% against the U.S. dollar.
Q: What were some of the investments that helped performance?
A: Anglo-Irish Bank, a company focused on corporate lending and a long-term
Fund holding, was a leading contributor to performance before we finally
took profits and liquidated our position early in 2004. Several other
banking companies also helped support performance. Barclay's (3.85% of
portfolio on August 31, 2004) of the United Kingdom, benefited from
speculation that it might be an acquisition candidate and helped Fund
performance, as did investments in Societe Generale (3.64%) and BNP Paribas
(4.07%), two French banking institutions that appreciated significantly.
Our investment in the French pharmaceutical company Aventis also aided
performance substantially. During the first half of the year, Aventis was
acquired by another French company, Sanofi, at a substantial premium to its
stock price. We eventually sold the Fund's Aventis shares and took profits.
However, later in the period, Sanofi shares suffered a correction and
became very attractive. We re-established a position in the company in time
for the stock to begin rising again.
We also had strong performance from several telecommunications services
companies, including Portugal Telecom, which we have sold, the British
company Vodafone (5.29%), and a relatively new position in Belgacom
(3.59%), a Belgian company.
Other investments that had outstanding performance during the 12 months
included: Celesio (1.39%), a German pharmaceutical
9
Pioneer Europe Select Fund
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PORTFOLIO MANAGEMENT DISCUSSION 8/31/04 (continued)
- --------------------------------------------------------------------------------
wholesale and retail company; British American Tobacco (3.32%), a long-term
holding; and Dixon's (2.27%), a retailer of electronic products based in
the United Kingdom.
Q: What were some of the disappointments?
A: Performance suffered because we did not have any positions in two sectors
that were among the best-performing areas during the period: utilities and
real estate. Two stocks in the diversified financial services sector proved
disappointing. Deutsche Boerse (2.48%), the operator of the German stock
exchange, lost ground when a new subsidiary had a slow start in its effort
to compete with the Chicago Futures Exchange in trading of derivatives. UBS
(4.03%), a major Swiss institution, also underperformed during the period.
Q: What is your investment outlook?
A: We believe the European economies should continue to grow at modest rates
in the coming months, and the equity markets should offer the potential for
positive results. However, we do not believe stocks are likely to rise as
dramatically as they did during 2003.
In general, European corporations are in a healthy state, with reasonable
stock valuations and attractive dividend yields. Companies have improved
their balance sheets, reduced their debt, and are able to deploy their
rising earnings either to pay higher dividends, buy back shares or invest
for future growth.
We are cautiously optimistic about opportunities investing on the Continent
and plan to continue to emphasize long-term opportunities in fundamentally
strong companies with attractive valuations. We expect to continue to
maintain a select portfolio of not more than 30 different companies.
Investments in the Fund may offer above-average reward potential, but are
subject to risks of international investing, including currency
fluctuations and political instability.
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.
10
Pioneer Europe Select Fund
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SCHEDULE OF INVESTMENTS 8/31/04
- --------------------------------------------------------------------------------
Shares Value
PREFERRED STOCK - 3.1%
Automobiles & Components - 3.1%
Automobile Manufacturers - 3.1%
315 Porsche AG $ 192,197
----------
Total Automobiles & Components $ 192,197
----------
TOTAL PREFERRED STOCK
(Cost $157,055) $ 192,197
----------
COMMON STOCKS - 94.2%
Energy - 10.4%
Integrated Oil & Gas - 10.4%
41,485 BP Amoco Plc $ 370,414
13,080 Eni S.p.A. 268,490
----------
Total Energy $ 638,904
----------
Materials - 11.7%
Commodity Chemicals - 3.0%
3,432 BASF India, Ltd. $ 185,749
----------
Construction Materials - 6.3%
8,194 CRH Plc $ 186,449
2,340 Lafarge BR* 201,651
----------
$ 388,100
----------
Diversified Metals & Mining - 2.4%
4,401 Sandvik AB $ 150,954
----------
Total Materials $ 724,803
----------
Capital Goods - 8.3%
Construction & Engineering - 6.0%
9,366 ACS, Actividades de Construccion y Servicios, SA $ 160,304
4,105 Compagnie de Saint Gobain 207,370
----------
$ 367,674
----------
Electrical Component & Equipment - 2.3%
2,285 Schneider Electric SA $ 143,600
----------
Total Capital Goods $ 511,274
----------
Commercial Services & Supplies - 3.4%
Diversified Commercial Services - 3.4%
8,914 TNT Post Group NV $ 207,037
----------
Total Commercial Services & Supplies $ 207,037
----------
The accompanying notes are an integral part of these financial statements. 11
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/04 (continued)
- --------------------------------------------------------------------------------
Shares Value
Automobiles & Components - 1.8%
Automobile Manufacturers - 1.8%
2,673 Bayerische Motoren Werke AG $ 110,602
----------
Total Automobiles & Components $ 110,602
----------
Media - 0.4%
Publishing - 0.4%
1,764 Elsevier NV $ 22,654
----------
Total Media $ 22,654
----------
Food & Drug Retailing - 7.0%
Drug Retail - 3.0%
14,997 Boots Co., Plc* $ 183,455
----------
Food Retail - 4.0%
1,054 Nestle SA (Registered Shares) $ 249,715
----------
Total Food & Drug Retailing $ 433,170
----------
Food, Beverage & Tobacco - 3.2%
Tobacco - 3.2%
13,181 British American Tobacco Plc $ 198,960
----------
Total Food, Beverage & Tobacco $ 198,960
----------
Health Care Equipment & Services - 1.4%
Health Care Distributors - 1.4%
1,260 Celesio AG $ 83,458
----------
Total Health Care Equipment & Services $ 83,458
----------
Pharmaceuticals & Biotechnology - 10.2%
Pharmaceuticals - 10.2%
11,728 GlaxoSmithKline Plc $ 240,314
3,591 Sanofi-Aventis 255,273
2,394 Schering AG 133,238
----------
Total Pharmaceuticals & Biotechnology $ 628,825
----------
Banks - 13.4%
Diversified Banks - 13.4%
13,559 Allied Irish Banks Plc $ 214,335
24,793 Barclays Plc 231,098
4,005 BNP Paribas SA 244,427
5,697 Danske Bank 137,872
----------
Total Banks $ 827,732
----------
12 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
Diversified Financials - 9.9%
Diversified Financial Services - 7.5%
2,543 Societe Generale $ 218,448
3,599 UBS AG 241,965
----------
$ 460,413
----------
Specialized Finance - 2.4%
3,076 Deutsche Boerse AG $ 148,825
----------
Total Diversified Financials $ 609,238
----------
Insurance - 2.3%
Multi-Line Insurance - 2.3%
1,026 Zurich Financial Services* $ 143,832
----------
Total Insurance $ 143,832
----------
Technology Hardware & Equipment - 2.2%
Computer Hardware - 2.2%
48,177 Dixons Group Plc $ 136,436
----------
Total Technology Hardware & Equipment $ 136,436
----------
Telecommunication Services - 8.6%
Integrated Telecommunication Services - 3.5%
6,435 Belgacom SA* $ 215,168
----------
Wireless Telecommunication Services - 5.1%
139,147 Vodafone Group Plc $ 317,372
----------
Total Telecommunication Services $ 532,540
----------
TOTAL COMMON STOCKS
(Cost $5,388,598) $5,809,465
----------
TOTAL INVESTMENT IN SECURITIES - 97.3%
(Cost $5,545,653)(a)(b)(c) $6,001,662
----------
OTHER ASSETS AND LIABILITIES - 2.7% $ 168,818
----------
TOTAL NET ASSETS - 100.0% $6,170,480
==========
The accompanying notes are an integral part of these financial statements. 13
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 8/31/04 (continued)
- --------------------------------------------------------------------------------
* Non-income producing security
(a) At August 31, 2004, the net unrealized gain on investments based on cost for
federal income tax purposes of $5,558,377 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $493,613
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (50,328)
--------
Net unrealized gain $443,285
========
(b) Distributions of investments by country of issue (excluding temporary cash
investments), as a percentage of total investment in securities, is as
follows:
United Kingdom 28.0%
France 21.2
Germany 14.2
Switzerland 10.6
Ireland 6.7
Italy 4.5
Netherlands 3.8
Belgium 3.6
Spain 2.7
Sweden 2.5
Denmark 2.2
-----
100.0%
=====
(c) The Fund has elected to defer approximately $15,856 of capital losses
recognized between November 1, 2003 and August 31, 2004 to its fiscal year
ending August 31, 2005.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended August 31, 2004 aggregated $5,332,562 and $1,667,348, respectively.
14 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 8/31/04
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (cost $5,545,653) $6,001,662
Cash 295,084
Receivables -
Fund shares sold 65,343
Dividends, interest and foreign taxes withheld 18,816
Forward foreign currency settlement hedges, net 1,297
Due from Pioneer Investment Management, Inc. 24,641
Other 3,083
----------
Total assets $6,409,926
==========
LIABILITIES:
Payables -
Investment securities purchased $ 159,974
Fund shares repurchased 18,418
Due to affiliates 10,448
Accrued expenses 50,606
----------
Total liabilities $ 239,446
==========
NET ASSETS:
Paid-in capital $5,536,802
Accumulated net investment income 24,348
Accumulated net realized gain on investments and foreign
currency transactions 152,709
Net unrealized gain on investments 456,009
Net unrealized gain on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies 612
----------
Total net assets $6,170,480
==========
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $3,108,289/281,322 shares) $ 11.05
==========
Class B (based on $1,505,499/138,109 shares) $ 10.90
==========
Class C (based on $1,556,692/141,761 shares) $ 10.98
==========
MAXIMUM OFFERING PRICE:
Class A ($11.05 [divided by] 94.25%) $ 11.72
==========
Class C ($10.98 [divided by] 99.00%) $ 11.09
==========
The accompanying notes are an integral part of these financial statements. 15
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 8/31/04
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $13,987) $100,339
Interest 547
---------
Total investment income $100,886
--------
EXPENSES:
Management fees $ 35,573
Transfer agent fees
Class A 13,467
Class B 7,904
Class C 4,500
Distribution fees
Class A 4,404
Class B 8,543
Class C 9,414
Administrative fees 24,825
Custodian fees 55,307
Registration fees 44,141
Professional fees 72,347
Printing 4,402
Fees and expenses of nonaffiliated trustees 3,788
Miscellaneous 6,244
---------
Total expenses $294,859
--------
Less management fees waived and expenses reimbursed
by Pioneer Investment Management, Inc. (237,958)
Less fees paid indirectly (176)
--------
Net expenses $ 56,725
--------
Net investment income $ 44,161
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $299,212
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies (19,948) $279,264
--------- --------
Change in net unrealized gain on:
Investments $306,552
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 1,258 $307,810
--------- --------
Net gain on investments and foreign currency transactions $587,074
--------
Net increase in net assets resulting from operations $631,235
========
16 The accompanying notes are an integral part of these financial statements.
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 8/31/04 and 8/31/03, respectively
Year Year
Ended Ended
8/31/04 8/31/03
FROM OPERATIONS:
Net investment income $ 44,161 $ 8,305
Net realized gain (loss) on investments and foreign currency
transactions 279,264 (36,987)
Change in net unrealized gain on investments and foreign
currency transactions 307,810 176,249
----------- ----------
Net increase in net assets resulting from operations $ 631,235 $ 147,567
----------- ----------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.10 and $0.00 per share, respectively) $ (12,726) $ -
Class B ($0.05 and $0.00 per share, respectively) (3,245) -
Class C ($0.11 and $0.00 per share, respectively) (8,506) -
----------- ----------
Total distributions to shareowners $ (24,477) $ -
----------- ----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $5,025,100 $1,275,823
Reinvestment of distributions 17,543 -
Cost of shares repurchased (1,254,026) (710,875)
----------- ----------
Net increase in net assets resulting from fund share
transactions $3,788,617 $ 564,948
----------- ----------
Net increase in net assets $4,395,375 $ 712,515
NET ASSETS:
Beginning of year 1,775,105 1,062,590
----------- ----------
End of year (including accumulated net investment income
of $24,348 and $24,612, respectively) $6,170,480 $1,775,105
========== ==========
The accompanying notes are an integral part of these financial statements. 17
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
For the Years Ended 8/31/04 and 8/31/03, respectively
'04 Shares '04 Amount '03 Shares '03 Amount
CLASS A
Shares sold 245,070 $2,609,406 103,178 $ 816,563
Reinvestment of distributions 1,103 11,406 - -
Less shares repurchased (70,054) (729,581) (69,582) (551,452)
------- ---------- ------- ----------
Net increase 176,119 $1,891,231 33,596 $ 265,111
======= ========== ======= ==========
CLASS B
Shares sold 108,067 $1,145,432 27,825 $ 225,223
Reinvestment of distributions 252 2,586 - -
Less shares repurchased (23,309) (244,413) (11,896) (91,084)
------- ---------- ------- ----------
Net increase 85,010 $ 903,605 15,929 $ 134,139
======= ========== ======= ==========
CLASS C
Shares sold 121,015 $1,270,262 30,317 $ 234,037
Reinvestment of distributions 344 3,551 - -
Less shares repurchased (26,116) (280,032) (8,980) (68,339)
------- ---------- ------- ----------
Net increase 95,243 $ 993,781 21,337 $ 165,698
======= ========== ======= ==========
18 The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
Year Year Year 12/29/00 (a)
Ended Ended Ended to
CLASS A 8/31/04 8/31/03 8/31/02 8/31/01
Net asset value, beginning of period $ 8.68 $ 7.91 $ 8.15 $ 10.00
------ ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.08 $ 0.07 $ 0.04 $ 0.05
Net realized and unrealized gain (loss) on investments and foreign
currency transactions 2.39 0.70 (0.18) (1.90)
------ ------- ------- -------
Net increase (decrease) from investment operations $ 2.47 $ 0.77 $ (0.14) $ (1.85)
Distributions to shareowners:
Net investment income (0.10) - (0.10) -
------ ------- ------- -------
Net increase (decrease) in net asset value $ 2.37 $ 0.77 $ (0.24) $ (1.85)
------ ------- ------- -------
Net asset value, end of period $11.05 $ 8.68 $ 7.91 $ 8.15
====== ======= ======= =======
Total return* 28.56% 9.73% (1.76)% (18.50)%
Ratio of net expenses to average net assets+ 1.25% 1.62% 1.75% 1.76%**
Ratio of net investment income to average net assets+ 1.58% 1.02% 0.17% 0.92%**
Portfolio turnover rate 48% 67% 68% 135%**
Net assets, end of period (in thousands) $3,108 $ 914 $ 567 $ 266
Ratios with no waiver of management fees and assumption of expenses
by PIM and no reduction for fees paid indirectly:
Net expenses 8.30% 16.15% 31.21% 39.42%**
Net investment loss (5.47)% (13.51)% (29.29)% (36.74)%**
Ratios with waiver of management fees and assumption of expenses
by PIM and reduction for fees paid indirectly:
Net expenses 1.25% 1.62% 1.75% 1.75%**
Net investment income 1.58% 1.02% 0.17% 0.93%**
(a) Class A shares were first publicly offered on January 2, 2001.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
19
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
Year Year Year 12/29/00 (a)
Ended Ended Ended to
CLASS B 8/31/04 8/31/03 8/31/02 8/31/01
Net asset value, beginning of period $ 8.62 $ 7.94 $ 8.13 $ 10.00
------ ------ ------ -------
Increase (decrease) from investment operations:
Net investment income (loss) $(0.01) $(0.01) $(0.05) $ 0.02
Net realized and unrealized gain (loss) on investments and foreign
currency transactions 2.34 0.69 (0.14) (1.89)
------ ------ ------ -------
Net increase (decrease) from investment operations $ 2.33 $ 0.68 $(0.19) $ (1.87)
Distributions to shareowners:
Net investment income (0.05) - - -
------ ------ ------ -------
Net increase (decrease) in net asset value $ 2.28 $ 0.68 $(0.19) $ (1.87)
------ ------ ------ -------
Net asset value, end of period $10.90 $ 8.62 $ 7.94 $ 8.13
====== ====== ====== =======
Total return* 27.07% 8.57% (2.34)% (18.70)%
Ratio of net expenses to average net assets+ 2.17% 2.78% 2.33% 2.34%**
Ratio of net investment income (loss) to average net assets+ 0.65% (0.10)% (0.52)% 0.29%**
Portfolio turnover rate 48% 67% 68% 135%**
Net assets, end of period (in thousands) $1,505 $ 457 $ 295 $ 158
Ratios with no waiver of management fees and assumption of expenses
by PIM and no reduction for fees paid indirectly:
Net expenses 9.20% 17.41% 31.81% 40.08%**
Net investment loss (6.38)% (14.73)% (30.00)% (37.45)%**
Ratios with waiver of management fees and assumption of expenses
by PIM and reduction for fees paid indirectly:
Net expenses 2.17% 2.78% 2.33% 2.33%**
Net investment income (loss) 0.65% (0.10)% (0.52)% 0.30%**
(a) Class B shares were first publicly offered on January 2, 2001.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
20
FINANCIAL HIGHLIGHTS
Pioneer Europe Select Fund
Year Year Year 12/29/00 (a)
Ended Ended Ended to
CLASS C 8/31/04 8/31/03 8/31/02 8/31/01
Net asset value, beginning of period $ 8.69 $ 7.96 $ 8.14 $ 10.00
------ ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.04 $ 0.03 $ (0.04) $ 0.02
Net realized and unrealized gain (loss) on investments and foreign
currency transactions 2.36 0.70 (0.14) (1.88)
------ ------- ------- -------
Net increase (decrease) from investment operations $ 2.40 $ 0.73 $ (0.18) $ (1.86)
Distributions to shareowners:
Net investment income (0.11) - - -
------ ------- ------- -------
Net increase (decrease) in net asset value $ 2.29 $ 0.73 $ (0.18) $ (1.86)
------ ------- ------- -------
Net asset value, end of period $10.98 $ 8.69 $ 7.96 $ 8.14
====== ======= ======= =======
Total return* 27.67% 9.17% (2.21)% (18.60)%
Ratio of net expenses to average net assets+ 1.72% 2.27% 2.22% 2.08%**
Ratio of net investment income (loss) to average net assets+ 1.14% 0.54% (0.35)% 0.45%**
Portfolio turnover rate 48% 67% 68% 135%**
Net assets, end of period (in thousands) $1,557 $ 404 $ 201 $ 105
Ratios with no waiver of management fees and assumption of expenses
by PIM and no reduction for fees paid indirectly:
Net expenses 8.75% 17.02% 31.70% 40.11%**
Net investment loss (5.89)% (14.21)% (29.83)% (37.58)%**
Ratios with waiver of management fees and assumption of expenses
by PIM and reduction for fees paid indirectly:
Net expenses 1.72% 2.27% 2.22% 2.07%**
Net investment income (loss) 1.14% 0.54% (0.35)% 0.46%**
(a) Class C shares were first publicly offered on January 2, 2001.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
21
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/04
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Europe Select Fund (the Fund) is a Delaware statutory trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek capital
growth by investing primarily in European equity securities.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
In addition, the Fund has authorized but not yet offered Class Y Shares. Fund
Shares were first publicly offered on January 2, 2001. Shares of Class A, Class
B and Class C each represent an interest in the same portfolio of investments of
the Fund and have equal rights to voting, redemptions, dividends and
liquidation, except that each class of shares can bear different transfer agent
and distribution fees and have exclusive voting rights with respect to the
distribution plans that have been adopted by Class A, Class B and Class C
shareowners, respectively.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
income, expenses and gains and losses on investments during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies 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 ("NYSE") is
open, as of the close of regular trading on the NYSE. In computing the net
asset value, securities are valued at the last sale price on the principal
exchange where they are traded. Securities that have not traded on the date
of valuation, or securities for which sale prices are not generally reported,
are valued at the mean between the last bid and asked prices. At August 31,
2004, all securities that trade in foreign markets whose closing prices are
as of times prior to the close of the NYSE are fair valued using
vendor-supplied pricing updates for each security to
22
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the time of the close of the NYSE. 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. Dividend income is recorded on
the ex-dividend date, except that certain dividends where the ex-dividend
date may have passed are recorded as soon as the Fund becomes aware of the
ex-dividend data in the exercise of reasonable diligence. Dividend and
interest income, including interest on income bearing cash accounts, is
recorded on the accrual basis, net of unrecoverable foreign taxes withheld at
the applicable country rates. 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.
Investing in the securities of European issuers involves unique risks
compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent the Fund invests a significant portion of its
investments in any one European region.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated in to U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency translations represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollars actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates and
any resulting unrealized
23
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/04 (continued)
- --------------------------------------------------------------------------------
gains or losses are recorded in the Fund's financial statements. The Fund
records realized gains and losses at the time a portfolio hedge is offset by
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.
At August 31, 2004, the Fund had no outstanding portfolio hedges. The Funds
gross forward currency settlement contracts receivable and payable were
$159,974 and $158,677, respectively, resulting in a net receivable of $1,297.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investments companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with 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 transactions, or from
paid-in-capital, depending on the type of book/tax differences that may
exist.
The tax character of distributions during the years ended August 31, 2004 and
2003 were as follows:
- --------------------------------------------------------------------------------
2004 2003
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $24,477 $ -
Long-term capital gain - -
------- ---
Total $24,477 $ -
======= ===
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at August 31, 2004.
24
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2004
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 38,834
Undistributed long-term gain 152,244
Unrealized appreciation 442,600
--------
Total $633,678
========
The difference between book-basis and tax-basis unrealized appre ciation is
attributable to the tax deferral of losses on wash sales.
At August 31, 2004, the Fund has reclassified $19,948 to decrease accumulated
net investment income and $19,948 to increase accumulated net realized gain
on investments and foreign currency transactions. The reclassification has no
impact on the net assets of the Fund and presents the Fund's capital accounts
on a tax basis.
E. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund
and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano) earned $4,832 in underwriting commissions on the sale
of Fund shares during the year ended August 31, 2004.
F. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareowners of each class share all expenses and fees paid to
the transfer agent, Pioneer Investment Management Shareholder Services, Inc.
(PIMSS), for its services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expenses (see Note 3). Income, common expenses and realized and unrealized
gains and losses are calculated at the Fund level and allocated daily to each
class of shares based on 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 and Class C shares can bear different transfer
agent and distribution fees.
25
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 8/31/04 (continued)
- --------------------------------------------------------------------------------
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
$200 million; and 0.75% of the excess over $500 million.
PIM has voluntarily agreed not to impose all or portion of its management fee
and to assume other operating expenses of the Fund to the extent necessary to
limit Class A expenses to 1.75% of the average daily net assets attributable to
Class A shares through the fiscal year ended August 31, 2004. This
waiver/subsidy is voluntary and may be revised or terminated at any time by PIM.
The portion of the Fund-wide expenses attributable to Class B and Class C shares
will be reduced only to the extent that such expenses are reduced for Class A
shares. PIM may subsequently recover reimbursed expenses (within three years of
being incurred) from the Fund if the expense ratio of Class A is less than
1.25%. For the period ended August 31, 2005, $645,284 is subject to such
potential reimbursement by the Fund. At August 31, 2004, there were no
management fees payable by the Fund.
In addition, under the management and administrative agreement, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At August 31, 2004, $1,542 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 $5,661 in transfer agent fees
payable to PIMSS at August 31, 2004.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 under the
Investment Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD
a service fee of up to 0.25% of the average daily net assets attributable to
Class A shares in reimbursement of its actual expenditures to finance activities
primarily intended to result in the sale of Class A shares. Pursuant to the
26
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of the average daily
net assets attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for personal
services and/or account maintenance services or distribution services with
regard to Class B and Class C shares. Included in due to affiliates is $3,245 in
distribution fees payable to PFD at August 31, 2004.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within 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%. Proceeds from the CDSCs are paid to
PFD. For the year ended August 31, 2004 CDSCs in the amount of $2,470 were paid
to PFD.
The Fund charges a 2.0% redemption fee on Class A shares sold within 30 days of
purchase. The fee does not apply to certain types of transactions as described
in the Fund's prospectus. For the year ended August 31, 2004, the Fund collected
$220 in redemption fees for the redemption of Class A Shares, which are included
in the Fund's capital account.
5. Expense Offset Arrangments
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 the year ended August 31, 2004, the Fund's expenses were
reduced by $176 under such arrangements.
6. Additional Information
The Fund's Board of Trustees have approved the merger of the Fund into Pioneer
Europe Fund. The plans include renaming the merged entity the Pioneer Europe
Select Equity Fund. This transaction would be subject to the approval of the
Fund's shareholders in early 2005. There can be no assurance that this
transaction will be completed.
27
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareowners of
Pioneer Europe Select Fund:
We have audited the statement of assets and liabilities, including the schedule
of investments, of Pioneer Europe Select Fund (the "Fund") as of August 31,
2004, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the three years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the period ended August 31, 2001 were
audited by other auditors who have ceased operations and whose report, dated
October 5, 2001, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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 owned as of August 31, 2004, by
correspondence with the custodian and broker. 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 Select Fund at August 31, 2004, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the three years
in the period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
October 1, 2004
28
Pioneer Europe Select Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's affairs.
The officers of the Fund are responsible for the Fund's operations. The Fund's
Trustees and officers are listed below, together with their principal
occupations during the past five years. Trustees who are interested persons of
the Fund within the meaning of the Investment Company Act of 1940 are referred
to as Interested Trustees. Trustees who are not interested persons of the Fund
are referred to as Independent Trustees. Each of the Trustees serves as a
trustee of each of the 65 U.S. registered investment portfolios for which
Pioneer Investment Management, Inc. ("Pioneer") serves as investment adviser
(the "Pioneer Funds"). The address for all Interested Trustees and all officers
of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Fund's statement of additional information provides more detailed
information regarding the Fund's Trustees and is available upon request, without
charge, by calling 1-800-225-6292.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292).
Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is publicly
available to shareowners at www.pioneerfunds.com. This information is also
available at pioneerfunds.com and the SEC's website at http://www.sec.gov.
29
- --------------------------------------------------------------------------------
INTERESTED TRUSTEES
- --------------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service
John F. Cogan, Jr. (78)* Chairman of the Board, Since September, 2000.
Trustee and President Serves until 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 (52)** Trustee and Since June, 2003.
Executive Vice President Serves until 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 (56) Trustee Since September, 2000.
3509 Woodbine Street, Serves until retirement or removal
Chevy Chase, MD 20815
- --------------------------------------------------------------------------------------------------
Richard H. Egdahl, M.D. (77) Trustee Since September, 2000.
Boston University Healthcare Serves until retirement or removal
Entrepreneurship Program,
53 Bay State Road,
Boston, MA 02215
- --------------------------------------------------------------------------------------------------
30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Principal Occupation During Past Five Years Other Directorships Held by this Trustee
Deputy Chairman and a Director of Pioneer Global Asset Director of Harbor Global Company,
Management S.p.A. ("PGAM"); Non-Executive Chairman Ltd.
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), Wilmer Cutler Pickering 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
- ------------------------------------------------------------------------------------------------------
31
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service
Margaret B.W. Graham (57) Trustee Since September, 2000.
1001 Sherbrooke Street West, Serves until retirement or removal
Montreal, Quebec, Canada
H3A 1G5
- ----------------------------------------------------------------------------------------------------
Marguerite A. Piret (56) Trustee Since September, 2000.
One Boston Place, 28th Floor, Serves until retirement or removal
Boston, MA 02108
- ----------------------------------------------------------------------------------------------------
Stephen K. West (76) Trustee Since September, 2000.
125 Broad Street, Serves until retirement or removal
New York, NY 10004
- ----------------------------------------------------------------------------------------------------
John Winthrop (68) Trustee Since September, 2000.
One North Adgers Wharf, Serves until retirement or removal
Charleston, SC 29401
- ----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUST OFFICERS
- --------------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service
Dorothy E. Bourassa (56) Secretary Since September, 2003.
Serves at the discretion of board.
- ------------------------------------------------------------------------------------------------
Christopher J. Kelley (39) Assistant Secretary Since September, 2003.
Serves at the discretion of board.
- ------------------------------------------------------------------------------------------------
David C. Phelan (47) Assistant Secretary Since September, 2003.
Serves at the discretion of board.
- ------------------------------------------------------------------------------------------------
Vincent Nave (59) Treasurer Since November, 2000.
Serves at the discretion of board.
- ------------------------------------------------------------------------------------------------
Luis I. Presutti (39) Assistant Treasurer Since November, 2000.
Serves at the discretion of board.
- ------------------------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other Directorships Held by this
Principal Occupation During Past Five Years Trustee
Founding Director, The Winthrop Group, Inc. (consulting firm); None
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 since None
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
- --------------------------------------------------------------------------------------------------
33
- --------------------------------------------------------------------------------
TRUST OFFICERS
- --------------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service
Gary Sullivan (46) Assistant Treasurer Since May, 2002.
Serves at the discretion of board.
- --------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (30) Assistant Treasurer Since September, 2003.
Serves at the discretion of board.
- --------------------------------------------------------------------------------------------------
34
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------
35
This page for your notes.
36
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our Internet e-mail address ask.pioneer@pioneerinvest.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
Please consider the fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about the fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
[PIONEER INVESTMENTS LOGO]
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
www.pioneerfunds.com
16097-00-1004
(C) 2004 Pioneer Funds Distributor, Inc.
Underwriter of Pioneer mutual funds
Member SIPC
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund,
including fees associated with the routine and
non-routine filings of its Form N-1A, totaled
approximately $37,400 in 2004 and
approximately $21,500 in 2003.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
Fees for the Fund's audit-related service,
which were for a review of the semi annual
financial statements, totaled $10,000 in 2004
and in 2003.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for
tax returns, totaled $3,600 in 2004 and $6,000
in 2003. Additionally, there were fees for tax
compliance services in 2003 that totaled
approximately $1,500 for the 2002 tax
returns.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
Other Fees
There were no other services provided to the
Fund during the fiscal years ended August 31,
2004 and 2003.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognizes the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognizes that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
Aggregate Non-Audit Fees
The aggregate non-audit fees for the Fund and
affiliates, as previously defined, totaled
$16,000 in 2004 and $36,900 in 2003. These
fees include services provided prior to May 6,
2003, the effective date of the pre-approval
process.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's independent auditor, Ernst & Young
LLP ("E&Y"), recently has advised the Securities
and Exchange Commission, the Public Company
Accounting Oversight Board, and the Audit
Committee of the Fund's Board of Trustees that
certain non-audit work performed by E&Y's China
affiliate has raised questions regarding E&Y's
independence with respect to its performance of
audit services for the Fund. In July 2004, E&Y
became aware that member firms in China ("E&Y
China") provided certain tax services to offices of
UniCredito Italiano, S.p.A. ("UCI"), a member of
the Fund's Investment Company Complex. The
services included receipt and disbursement of
monies transferred to E&Y China by UCI in
payment of individual expatriate income taxes due
on returns prepared by E&Y China for certain UCI
employees located in China from October 1998 to
May 2003. E&Y became auditors of the Fund in
May 2002. These expatriate tax services were
discontinued in May 2003. The fees received by
E&Y China for all such services totaled $3,685.
The Fund's Audit Committee and E&Y have
discussed the matter, including the nature of the
services provided, the personnel involved in
providing the services and the fees received by
E&Y for performing the services. The Committee
continues to review the facts and circumstances
surrounding the matter, including the issue of
whether the monies transferred for employees' taxes
were de facto monies due the employees for tax
payments rather than monies belonging to UCI.
E&Y has informed the Audit Committee that based
on its internal reviews and the de minimis nature of
the services provided and fees received, it does not
believe its independence with respect to the Fund
has been impaired.
Non-Audit Services
Beginning with non-audit service contracts
entered into on or after May 6, 2003, the
effective date of the new SEC pre-approval
rules, the Fund's audit committee is required
to pre-approve services to affiliates defined by
SEC rules to the extent that the services are
determined to have a direct impact on the
operations or financial reporting of the Fund.
For the years ended August 31, 2003 and
2004, there were no services provided to an
affiliate that required the Fund's audit
committee pre-approval.
The Fund's audit committee of the Board of Trustees
has considered whether the provision of non-audit
services that were rendered to the Affiliates (as
defined) that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is
compatible with maintaining the principal accountant's
independence.
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer and principal financial
officer have concluded, that the registrant's disclosure controls and
procedures are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Europe Select Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date October 28, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date October 28, 2004
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date October 28, 2004
* Print the name and title of each signing officer under his or her signature.