<PAGE>
[Pioneer logo]
Pioneer
World Equity
Fund
ANNUAL REPORT 3/31/98
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 18
Notes to Financial Statements 24
Report of Independent Public Accountants 30
Trustees, Officers and Service Providers 31
Programs and Services for Pioneer Shareowners 32
Retirement Plans from Pioneer 34
The Pioneer Family of Mutual Funds 36
</TABLE>
<PAGE>
Pioneer World Equity Fund
LETTER FROM THE CHAIRMAN 3/31/98
Dear Shareowner,
- --------------------------------------------------------------------------------
I am pleased to introduce this annual report for Pioneer World Equity Fund,
covering the 12 months ended March 31, 1998. On behalf of your investment team,
I thank you for your interest and this opportunity to discuss today's global
investing arena.
The Fund's fiscal year was a whirlwind of record-setting events. Good economic
news propelled U.S. stocks to a string of all-time highs, even after October's
correction. Europe turned in fine results, with Italy and Spain producing their
strongest stock market results in recent memory. The shadow over these bright
developments was Asia. From late 1997 through early 1998, Pacific Rim
economies, financial markets and currencies plunged to new depths. The
difficulties rippled into other markets, especially Latin America, although
there are signs of improvement. In the final analysis, the powerful advances in
the United States and Europe offset losses in Asia and Latin America, although
emerging markets were a drag on the year's return. Perversely, diversification
helped those who invest primarily in Asia, but hurt investors with a broader
strategy.
We're doing business in exciting times. The longest U.S. bull market in history
continues. Europe's Economic Union and single currency are taking shape, and
have brought greater economic stability and growth opportunities. Economic
reforms and help from the International Monetary Fund are reshaping Asia, and
Latin America is still on a growth track. We are excited by the potential, and
well aware of the risks, the world's stock markets offer, and remain convinced
that diversification is the best way to take advantage of those opportunities.
I hope you share our enthusiasm, and I encourage you to read on to learn more
about Pioneer World Equity Fund. If you have questions, please contact your
investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
[signature of John F. Cogan Jr.]
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer World Equity Fund
PORTFOLIO SUMMARY 3/31/98
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[pie chart data begins]
International Common Stocks 65%
U.S. Common Stocks 22%
Depositary Receipts for International Stocks 6%
Short-Term Cash Equivalents 4%
International Preferred Stocks 3%
[pie chart data ends]
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[bar chart data begins]
United States 22.8%
Japan 7.8%
Italy 5.7%
Germany 5.5%
France 5.0%
Netherlands 5.0%
Brazil 4.3%
Great Britain 4.1%
Switzerland 3.9%
Spain 3.5%
Hong Kong 3.4%
Canada 3.0%
Australia 2.8%
Finland 2.6%
Sweden 2.4%
Malaysia 2.3%
South Korea 2.3%
India 2.2%
Belgium 1.9%
Mexico 1.8%
Austria 1.5%
Argentina 1.4%
Norway 1.2%
Singapore 1.2%
Denmark 1.1%
Chile 0.5%
Thailand 0.5%
Indonesia 0.3%
[bar chart data ends]
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<S> <C> <C> <C>
1. SK Telecom Co. Ltd. 1.36% 6. BCE, Inc. 1.16%
2. Alcatel Alsthom SA 1.30 7. Hunter Douglas NV 1.15
3. Biora AB 1.23 8. IOI Corporation Bhd. 1.14
4. First Data Corp. 1.18 9. Ascend Communications, 1.13
Inc.
5. Raisio Group Plc 1.17 10. SunGard Data Systems Inc. 1.12
</TABLE>
Fund holdings will vary for other periods.
2
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Pioneer World Equity Fund
PERFORMANCE UPDATE 3/31/98 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 3/31/98 3/31/97
$ 20.03 $ 16.67
Distributions per Share Income Short-Term Long-Term
(3/31/97-3/31/98) Dividends Capital Gains Capital Gains
- $0.169 -
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer World Equity Fund at public offering price, compared to the growth
of the Morgan Stanley Capital International (MSCI) World Index.
[boxed text]
<TABLE>
<S> <C> <C>
Average Annual Total Returns
(As of March 31, 1998)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 23.59% 18.52%
(10/31/96)
1 Year 21.36 14.36
</TABLE>
* Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset
value.
[mountain chart]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer
World MSCI
Equity World
Fund* Index
<S> <C> <C>
10/96 9425 10000
10101 10558
12/96 10174 10387
10413 10511
10627 10629
3/97 10488 10417
10482 10756
11401 11418
6/97 11784 11985
12174 12535
11224 11695
9/97 11841 12328
10809 11677
10658 11882
12/97 10765 12025
11159 12358
12068 13192
3/98 12728 13747
</TABLE>
The MSCI World Index is an unmanaged, capitalization-weighted measure of stocks
traded in 23 markets. It includes the United States, Canada and all countries in
the MSCI EAFE (Europe, Australasia, Far East) Index. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
<PAGE>
Pioneer World Equity Fund
PERFORMANCE UPDATE 3/31/98 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 3/31/98 3/31/97
$ 19.75 $ 16.59
Distributions per Share Income Short-Term Long-Term
(3/31/97-3/31/98) Dividends Capital Gains Capital Gains
- $0.169 -
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer World Equity Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) World Index.
[boxed text]
<TABLE>
<S> <C> <C>
Average Annual Total Returns
(As of March 31, 1998)
If If
Period Held Redeemed*
Life-of-Fund 22.24% 19.64%
(10/31/96)
1 Year 20.25 16.25
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment
of distributions. The maximum CDSC of 4% declines over six years.
[mountain chart]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer
World MSCI
Equity World
Fund* Index
<S> <C> <C>
10/96 10000 10000
10680 10558
12/96 10747 10387
10987 10511
11207 10629
3/97 11053 10417
11040 10756
12000 11418
6/97 12393 11985
12793 12535
11787 11695
9/97 12427 12328
11333 11677
11167 11882
12/97 11273 12025
11670 12358
12620 13192
3/98 12900 13747
</TABLE>
The MSCI World Index is an unmanaged, capitalization-weighted measure of stocks
traded in 23 markets. It includes the United States, Canada and all countries in
the MSCI EAFE (Europe, Australasia, Far East) Index. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
Pioneer World Equity Fund
PERFORMANCE UPDATE 3/31/98 CLASS C SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 3/31/98 3/31/97
$ 19.77 $ 16.62
Distributions per Share Income Short-Term Long-Term
(3/31/97-3/31/98) Dividends Capital Gains Capital Gains
- $ 0.169 -
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer World Equity Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) World Index.
[boxed text]
<TABLE>
<S> <C> <C>
Average Annual Total Returns
(As of March 31, 1998)
If If
Period Held Redeemed*
Life-of-Fund 22.33% 22.33%
(10/31/96)
1 Year 20.16 20.16
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to shares sold within one year of purchase.
[mountain chart]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer
World MSCI
Equity World
Fund* Index
<S> <C> <C>
10/96 10000 10000
10733 10558
12/96 10773 10387
11020 10511
11233 10629
3/97 11080 10417
11060 10756
12020 11418
6/97 12413 11985
12813 12535
11807 11695
9/97 12447 12328
11353 11677
11187 11882
12/97 11286 12025
11690 12358
12633 13192
3/98 13313 13747
</TABLE>
The MSCI World Index is an unmanaged, capitalization-weighted measure of stocks
traded in 23 markets. It includes the United States, Canada and all countries
in the MSCI EAFE (Europe, Australasia, Far East) Index. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
<PAGE>
Pioneer World Equity Fund
PORTFOLIO MANAGEMENT DISCUSSION 3/31/98
Dear Shareowner,
- --------------------------------------------------------------------------------
In a year marked by dramatic changes in the financial markets, I'm pleased to
report that Pioneer World Equity Fund returned more than 20% at net asset value
for the 12 months ended March 31, 1998. At the center of the activity was the
meltdown of Asia's currency and equity markets and the soaring U.S. stock
market, which continued to amaze investors and analysts alike in its breadth
and staying power.
Diversification is a proven method to improve long-term returns and reduce
volatility. Your Fund invests in a wide array of developed and emerging markets
and, normally, limits U.S. holdings to 30% of equity holdings. We believe this
is the best route to finding fairly valued, long-term growth opportunities in
all corners of the globe. For this fiscal year, however, diversification held
the Fund's performance short of its benchmark, the Morgan Stanley Capital
International (MSCI) World Index, which had approximately 50% invested in U.S.
stocks.
Boom Times on Wall Street and Main Street
The past 12 months encapsulated one of the most exciting and rewarding U.S.
bull markets ever. Throughout the period, even as economists warned that a
slowdown was around the corner, the U.S. economy continued to grow. Corporate
profits generally rose, and the stock market climbed ever higher - the Standard
& Poor's 500 Index returned 47.88% for the year.
The Fund's largest allocation to any one country was to the United States,
22.8% of equity holdings by March 31. Three of the Fund's 10 largest holdings
are based in the United States. All are technology-related stocks; First Data
Corp. provides computer services, Ascend Communications offers computer
networking and SunGard Data Systems develops and operates disaster recovery
software.
Italy and Spain Lead European Rally
While noteworthy for the magnitude of its performance, the United States was
not the only booming market. European stocks, as measured by the MSCI Europe
Index, climbed 42.01% for the year. Anticipation of the European Economic Union
is bringing greater economic stability to the
6
<PAGE>
Pioneer World Equity Fund
region by opening borders and improving trade. The result is a bonanza of
corporate restructurings, lower interest rates and rising stock markets.
The Fund's overweighting of Italy and Spain - two of the best performing
countries - made a strong contribution. In Italy, fiscal austerity and a
better-than-expected economy helped push its deficit and inflation below the
target set by the Maastricht Treaty. Holdings in Banca Fideuram and insurance
conglomerate Mediolanum rose 190% and 270%, respectively, in U.S. dollars.
Spain is at the forefront of Europe's economic recovery, powered by improving
labor markets, declining interest rates and, ultimately, stronger consumer
demand. Banco de Santander benefited as Spain's interest rates declined to less
than half of what they were two years ago.
We kept weightings light in the rest of Europe, where economic recovery
continues to evolve. Two of the Fund's largest holdings, Raisio Group (Finland)
and Biora (Sweden), highlight our preference for picking stocks of companies
with one-of-a-kind growth opportunities. Raisio uses a patented process to
manufacture a cholesterol-reducing food additive. The product has been
well-received in Finland, and management is eyeing distribution worldwide.
Biora, a biotechnology firm, makes a protein gel that is applied after gum
surgery to promote reconstructive bone and tissue growth. With the gel approved
for distribution in the United States, Canada, Europe and Japan, we are very
upbeat about the prospects for the rollout of this novel product.
Emerging Markets of Asia and Latin America Struggle, then Strengthen
After more than a decade of record growth for Asia's "tiger" economies,
calendar 1997 marked a turning point for the region. In fact, many of the risks
new investors tend to overlook when selecting overseas markets - currency
fluctuations, liquidity, differences in accounting standards - became apparent.
Last July, Thailand's currency was devalued - sparking stock and currency
declines throughout Southeast Asia. Thankfully, beginning last spring, we'd
scaled back holdings in anticipation of slower growth. We sold holdings such as
newspaper publisher Starr (Malaysia), but retained companies poised to benefit
from devaluations, such as palm oil-producer IOI (Malaysia). Considerable
economic reforms put South Korea on the road to recovery and boosted stock
prices in recent months, including Samsung Display
7
<PAGE>
Pioneer World Equity Fund
PORTFOLIO MANAGEMENT DISCUSSION 3/31/98 (continued)
Devices and SK Telecom, the Fund's largest holding on March 31. Japan proved
disappointing, and we scaled back holdings steadily from 13% to 7.8%. As long
as Asia remains mired in economic turmoil, we expect to limit holdings to the
bottom of our range per country and favor well-valued companies with an export
orientation.
Uncertainty over the Pacific Rim crisis overshadowed Latin America during the
past six months. Brazil was hard hit, but its currency proved resilient as the
government doubled interest rates and initiated austerity measures. The higher
rates are stagnating economic growth but, if Asia remains calm, could be
reduced later this year to improve recovery prospects. We continue to favor
companies in the telecommunications, petroleum and electricity industries,
which we expect to realize long-term benefits from deregulation. Mexico, with
its heavy reliance on petroleum revenues, will likely suffer
slower-than-expected growth in the near term.
Compelling Reasons for Global Investing
Just following the close of the fiscal year, the Dow Jones Industrial Average
crossed the 9000 mark, adding to investors' euphoria over U.S. stocks. Despite
this market's temptation, a more global perspective reveals that many overseas
markets may be poised for a strong upturn. In Europe, restructuring and the
march toward a single currency are transforming the economic landscape and
improving shareholder value. Latin American companies are becoming more
competitive. In Asia, well-managed companies are rising above rivals that
diversified and grew unwisely. As always, opportunities abound, but it will
fall to in-depth, bottom-up research to pinpoint the strongest and most dynamic
companies.
Respectfully,
[signature of Patrick M. Smith]
Patrick M. Smith,
Portfolio Manager
8
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 3/31/98
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INVESTMENT IN SECURITIES - 96.2%
PREFERRED STOCKS - 4.5%
480,000 Banco Itau SA $ 308,180
2,150 Bell Canada International Inc.* 48,106
3,500,000 Centrais Electricas Brasileiras SA (Class B) 172,999
2,100 Henkel KGaA 152,599
1,520,000 Petroleo Brasileiro SA 362,287
3,500 Telecomunicacoes Brasileiras SA (Sponsored A.D.R.) 454,344
1,380,504 Telecomunicacoes de Sao Paulo SA 448,026
-----------
Total Preferred Stocks
(Cost $1,457,880) $ 1,946,541
-----------
COMMON STOCKS - 91.7%
Basic Materials - 6.6%
Agricultural Products - 1.1%
620,000 IOI Corporation Bhd. $ 475,616
-----------
Chemicals - 0.6%
5,600 BASF AG $ 249,034
-----------
Chemicals (Specialty) - 0.4%
3,500 Norsk Hydro AS $ 173,517
-----------
Construction (Cement & Aggregates) - 0.2%
6,000 Siam Cement Public Co., Ltd. $ 82,948
-----------
Containers & Packaging (Paper) - 1.9%
2,000 Schmalbach Lubeca AG $ 431,456
750 Viag AG 408,748
-----------
$ 840,204
-----------
Iron & Steel - 0.8%
2,800 Boehler-Uddeholm AG $ 189,787
2,580 Pohang Iron & Steel Co.* 143,213
-----------
$ 333,000
-----------
Paper & Forest Products - 1.6%
17,000 NV Koninklijke KNP BT $ 446,821
10,000 UPM-Kymmene Corp. 254,700
-----------
$ 701,521
-----------
Total Basic Materials $ 2,855,840
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 3/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Capital Goods - 8.3%
Electrical Equipment - 1.8%
200 ABB AG (Bearer Shares) $ 298,852
7,000 Mabuchi Motor Co., Ltd. 388,816
2,400 Samsung Display Devices Co.* 112,635
-----------
$ 800,303
-----------
Engineering & Construction - 3.3%
70,000 Cheung Kong Infrastructure Holdings $ 208,677
15,000 Larsen & Toubro (G.D.R.) 196,875
112,000 Leighton Holdings Ltd. 444,427
2,800 Technip 338,846
1,600 VA Technologies AG 252,065
-----------
$ 1,440,890
-----------
Machinery (Diversified) - 2.6%
13,500 AGCO Corp. $ 400,781
600 IWKA AG 131,383
2,000 Sidel, SA 145,220
10,000 Siebe Plc 218,122
15,000 Valmet Corp. 240,451
-----------
$ 1,135,957
-----------
Manufacturing (Diversified) - 0.6%
42,000 ALFA, SA de CV $ 237,224
-----------
Total Capital Goods $ 3,614,374
-----------
Communication Services - 7.6%
Cellular/Wireless Telecommunications - 2.8%
15,000 Advanced Information Service, Plc $ 116,645
58,000 China Telecom (Hong Kong) Ltd. * 117,515
36,000 Hutchinson Whampoa Ltd. 253,201
999 SK Telecom Co. Ltd. 568,324
40,000 Telecom Italia Mobile SpA 154,690
-----------
$ 1,210,375
-----------
Telephone - 4.8%
11,500 BCE, Inc. $ 482,938
17,000 Mahanagar Telephone Nigam Ltd. (G.D.R)* 291,975
70,000 PT Indosat 112,486
3,400 Telecom Argentina Stet-France Telecom SA
(Sponsored A.D.R.) 121,763
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Telephone - (continued)
40,000 Telecom Italia SpA $ 315,195
40,000 Telecom Italia SpA Di Risp. 245,091
7,000 Telefonica de Espana SA 308,692
17,000 Videsh Sanchar Nigam Ltd. (G.D.R.) 208,250
-----------
$ 2,086,390
-----------
Total Communication Services $ 3,296,765
-----------
Consumer Cyclicals - 13.5%
Auto Parts & Equipment - 0.6%
2,250 Sylea $ 243,969
-----------
Automobiles - 0.6%
27,000 Suzuki Motor Co., Ltd. $ 253,331
-----------
Building Materials - 0.5%
38,000 Cemex, SA (Class B)* $ 205,484
-----------
Consumer (Jewelry, Novelties & Gifts) - 0.8%
10,000 Safilo SpA $ 348,327
-----------
Household Furnishings & Appliances - 0.9%
4,800 Sony Corp. $ 407,131
-----------
Lodging (Hotels) - 0.2%
39,000 Overseas Union Enterprise Ltd. $ 93,228
-----------
Publishing - 0.9%
23,000 Elsevier NV $ 378,378
-----------
Retail (Building Supplies) - 2.0%
9,700 Fastenal Co. $ 420,738
6,500 Home Depot, Inc. 438,344
-----------
$ 859,082
-----------
Retail (Department Stores) - 0.3%
3,600 Metro AG $ 158,828
-----------
Retail (Specialty) - 2.5%
185,000 Cifra, SA de CV (Series C) $ 328,030
11,000 Toys "R" Us, Inc.* 330,688
16,900 Woolworth Corp.* 422,500
-----------
$ 1,081,218
-----------
Services (Commercial & Consumer) - 3.8%
27,000 Electrocomponents Plc $ 238,419
3,500 Hagemeyer NV 169,548
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 3/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Services (Commercial & Consumer) - (continued)
13,000 Hays Plc $ 233,506
3,000 ISS International Service System AS (Class B) * 143,384
70 Kuoni Reisen Holding AG (Series B) (Registered) 351,263
43,000 Rentokil Initial Plc 264,534
6,500 Stork NV 236,001
-----------
$ 1,636,655
-----------
Textiles (Apparel) - 0.4%
8,000 Fila Holding SpA (Sponsored A.D.R.) $ 187,500
-----------
Total Consumer Cyclicals $ 5,853,131
-----------
Consumer Staples - 11.1%
Beverages (Non-Alcoholic) - 1.1%
9,000 Embotelladora Andina SA (A.D.R.) $ 207,000
8,000 Louis Dreyfus Citrus 271,077
-----------
$ 478,077
-----------
Broadcasting (Cable/Television/Radio) - 0.8%
19,000 Schibsted ASA $ 336,411
-----------
Distributors (Food & Health) - 1.3%
7,000 Gehe AG $ 389,446
15,000 Metro-Richelieu, Inc. 177,330
-----------
$ 566,776
-----------
Foods - 2.1%
3,400 Raisio Group Plc $ 489,309
5,000 Wrigley (Wm.) Jr. Co. 408,750
-----------
$ 898,059
-----------
Household Products (Non-Durables) - 1.1%
10,500 Hunter Douglas NV $ 478,429
-----------
Restaurants - 1.7%
17,000 Compass Group Plc $ 290,271
7,500 McDonald's Corp. 450,000
-----------
$ 740,271
-----------
Retail Stores (Food Chains) - 2.6%
4,300 Delhaize-Le Lion, SA $ 276,281
34,000 Food Lion, Inc. (Class A) 363,375
13,000 Food Lion, Inc. (Class B) 142,594
5,000 G.I.B. Holdings Ltd. 250,449
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Retail Stores (Food Chains) - (continued)
7,000 Kesko $ 112,210
-----------
$ 1,144,909
-----------
Specialty Printing - 0.4%
14,000 Toppan Forms Co. Ltd.* $ 150,272
-----------
Total Consumer Staples $ 4,793,204
-----------
Energy - 2.3%
Oil (International Integrated) - 1.2%
2,400 Elf Aquitaine SA $ 314,449
6,000 YPF SA (Class D) (Sponsored A.D.R.) 204,000
-----------
$ 518,449
-----------
Oil & Gas (Exploration/Production) - 0.6%
13,200 Canadian Natural Resources Ltd.* $ 274,835
-----------
Oil & Gas (Refining & Marketing) - 0.5%
1,500 OMV AG $ 193,314
-----------
Total Energy $ 986,598
-----------
Financial - 20.5%
Banks (Major Regional) - 9.5%
60,000 Banca Fideuram SpA $ 417,663
9,210 Banco Frances Del Rio Plata SA (A.D.R.) 277,451
37,000 Banco Popolare di Milano 335,902
9,000 Banco de Santander SA 448,509
4,700 DePfa-Bank 355,635
15,000 Industrial Credit & Investment Corp. of India Ltd. (G.D.R.) 228,750
130 Julius Baer Holding AG 315,513
13,985 Kookmin Bank 106,023
5,000 Mellon Bank Corp. 317,500
28,600 Overseas-Chinese Banking Corp., Ltd. 161,177
6,000 State Street Corp. 408,375
28,000 Sumitomo Trust Banking 180,957
2,500 Svenska Handelsbanken 115,690
7,000 Toronto-Dominion Bank 302,361
1,700 Unidanmark A/S 135,016
-----------
$ 4,106,522
-----------
Consumer Finance - 0.9%
9,100 SLM Holdings Corp. $ 396,988
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 3/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Financial (Diversified) - 3.3%
7,900 Ambac Financial Group, Inc. $ 461,656
7,100 HSBC Holdings Plc 217,156
6,300 Internationale Nederlanden Groep NV 357,462
1,200 Shohkoh Fund & Co., Ltd. 400,826
-----------
$ 1,437,100
-----------
Insurance (Life/Health) - 1.2%
13,000 Mediolanum SpA $ 390,071
52,600 Reinsurance Australia Corp. 140,539
-----------
$ 530,610
-----------
Insurance (Multi-Line) - 2.8%
125,600 Malaysian Assurance Alliance Bhd. $ 259,803
170,000 National Mutual Holdings Ltd. 369,893
1,300 Union Des Assurances Federal 213,538
650 Zurich Versicherungsgesellschaft (Registered) 377,337
-----------
$ 1,220,571
-----------
Insurance (Property-Casualty) - 1.0%
11,000 Corporacion Mapfre $ 412,185
-----------
Investment Bank/Brokerage - 1.1%
40,000 Daiwa Securities Co. Ltd. $ 168,137
25,000 Nomura Securites Co., Ltd. 294,614
-----------
$ 462,751
-----------
Investment Management - 0.7%
6,000 Franklin Resources, Inc. $ 318,000
-----------
Total Financial $ 8,884,727
-----------
Healthcare - 4.8%
Healthcare (Drugs/Major Pharmaceuticals) - 2.8%
5,333 Astra AB $ 110,055
3,300 Merck & Co., Inc. 423,637
75 Novartis AG 132,732
1,000 Novo Nordisk A/S (Class B) 170,189
16 Roche Holdings AG 173,172
10,000 Yamanouchi Pharmaceutical Co., Ltd. 229,687
-----------
$ 1,239,472
-----------
Healthcare (Medical Products/Supplies) - 2.0%
40,000 Biora AB* $ 512,788
5,000 Biora AB (A.D.R.)* 125,000
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Healthcare (Medical Products/Supplies) - (continued)
45,750 F.H. Faulding & Co., Ltd. $ 229,951
-----------
$ 867,739
-----------
Total Healthcare $ 2,107,211
-----------
Technology - 13.5%
Communications Equipment - 3.2%
2,900 Alcatel Alsthom SA $ 544,203
32,000 Glenayre Technologies, Inc.* 400,000
3,500 Lucent Technologies, Inc. 447,563
-----------
$ 1,391,766
-----------
Computers (Networking) - 2.1%
12,500 Ascend Communications, Inc.* $ 473,437
6,250 Cisco Systems, Inc.* 427,344
-----------
$ 900,781
-----------
Electronics (Component Distribution) - 2.4%
1,000 Barco Industries $ 258,579
2,000 Hoya Corp. 57,046
2,500 Telefonaktiebolaget LM Ericsson (Series B) 118,817
7,000 Kyocera Corp. 367,799
118,000 Varitronix International Ltd. 236,798
-----------
$ 1,039,039
-----------
Electronics (Instrumentation) - 0.5%
40,000 Elec & Eltek International Co. Ltd. $ 238,000
-----------
Electronics (Semiconductors) - 1.6%
13,000 LSI Logic Corp.* $ 328,250
4,000 Rohm Co., Ltd. 366,298
-----------
$ 694,548
-----------
Equipment (Semiconductor) - 0.5%
6,000 Applied Materials, Inc.* $ 211,875
-----------
Services (Computer Systems) - 1.1%
12,700 SunGard Data Systems Inc.* $ 467,519
-----------
Services (Data Processing) - 2.1%
6,150 Automatic Data Processing, Inc. $ 418,584
15,200 First Data Corp. 494,000
-----------
$ 912,584
-----------
Total Technology $ 5,856,112
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 3/31/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Transportation - 1.6%
Airlines - 0.5%
22,000 BAA Plc $ 215,075
-----------
Railways - 0.6%
15,000 Stagecoach Holdings Plc $ 249,091
-----------
Shipping - 0.5%
125,000 Malaysia International Shipping Bhd. $ 239,726
-----------
Total Transportation $ 703,892
-----------
Utilities - 1.9%
Electric Companies - 0.8%
1,000,000 Centrais Electricas Brasileira SA $ 46,438
12,000 Endesa SA 288,682
-----------
$ 335,120
-----------
Natural Gas - 1.1%
1,700 Consolidated Natural Gas Co. $ 98,069
229,000 Hong Kong and China Gas Co., Ltd. 384,189
-----------
$ 482,258
-----------
Total Utilities $ 817,378
-----------
TOTAL COMMON STOCKS
(Cost $32,801,887) $39,769,232
-----------
RIGHTS - 0.0%
5,115 Kookmin Bank, 4/23/98 $ 8,864
-----------
TOTAL RIGHTS
(Cost $12,521) $ 8,864
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $34,272,288) (a) $41,724,637
-----------
Principal
Amount
TEMPORARY CASH INVESTMENT - 3.8%
Commercial Paper - 3.8%
$1,667,000 Prudential Funding Corp., 5.9%, 4/1/98 $ 1,667,000
-----------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $1,667,000) $ 1,667,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $35,939,288) (b) $43,391,637
===========
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
* Non-income producing security.
(a) Distribution of investments by country of issue, as a percentage of total
investment in securities, is as follows:
<TABLE>
<S> <C>
United States 22.8%
Japan 7.8
Italy 5.7
Germany 5.5
France 5.0
Netherlands 5.0
Brazil 4.3
Great Britain 4.1
Switzerland 3.9
Spain 3.5
Hong Kong 3.4
Canada 3.0
Australia 2.8
Finland 2.6
Sweden 2.4
Malaysia 2.3
South Korea 2.3
India 2.2
Belgium 1.9
Mexico 1.8
Austria 1.5
Argentina 1.4
Norway 1.2
Singapore 1.2
Denmark 1.1
Other (individually less than 1%) 1.3
-----
100.0%
=====
</TABLE>
(b) At March 31, 1998, the net unrealized gain on investments based on cost
for federal income tax purposes of $35,995,669 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $8,675,567
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (1,279,599)
----------
Net unrealized gain $7,395,968
==========
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the year ended March 31, 1998 aggregated $27,095,461 and $13,737,250,
respectively.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer World Equity Fund
BALANCE SHEET 3/31/98
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $1,667,000) (cost $35,939,288) $43,391,637
Cash 937
Receivables -
Fund shares sold 1,382,479
Dividends, interest and foreign taxes withheld 100,890
Forward foreign currency portfolio hedge contracts, closed-net 1,154
Other 3,034
-----------
Total assets $44,880,131
-----------
LIABILITIES:
Payables -
Investment securities purchased $ 196,595
Fund shares repurchased 41,387
Forward foreign currency portfolio hedge contracts, open-net 30,402
Due to affiliates 59,605
Accrued expenses 88,283
-----------
Total liabilities $ 416,272
-----------
NET ASSETS:
Paid-in capital $38,238,873
Accumulated net investment loss (149,813)
Accumulated net realized loss on investments and foreign currency
transactions (1,046,418)
Net unrealized gain on investments 7,452,349
Net unrealized loss on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (31,132)
-----------
Total net assets $44,463,859
===========
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $32,087,514/1,601,616 shares) $ 20.03
===========
Class B (based on $11,112,400/562,569 shares) $ 19.75
===========
Class C (based on $1,263,945/63,921 shares) $ 19.77
===========
MAXIMUM OFFERING PRICE:
Class A $ 21.25
===========
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
STATEMENT OF OPERATIONS
For the Year Ended 3/31/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $42,431) $ 542,652
Interest 87,575
----------
Total investment income $ 630,227
----------
EXPENSES:
Management fees $ 366,876
Transfer agent fees
Class A 79,716
Class B 33,936
Class C 3,921
Distribution fees
Class A 49,429
Class B 89,848
Class C 9,035
Accounting 80,549
Custodian fees 94,705
Registration fees 63,658
Professional fees 74,336
Printing 34,369
Fees and expenses of nonaffiliated trustees 17,394
Miscellaneous 42,248
----------
Total expenses $1,040,020
Less management fees waived by Pioneering
Management Corporation (294,131)
Less fees paid indirectly (14,138)
----------
Net expenses $ 731,751
----------
Net investment loss $ (101,524)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss from:
Investments $ (827,750)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (3,293) $ (831,043)
---------- ----------
Change in net unrealized gain from:
Investments $7,153,355
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (31,180) $7,122,175
---------- ----------
Net gain on investments and foreign currency transactions $6,291,132
----------
Net increase in net assets resulting from operations $6,189,608
==========
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer World Equity Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended 3/31/98 and the Period Ended 3/31/97
<TABLE>
<CAPTION>
Year Ended 10/31/96 to
3/31/98 3/31/97
<S> <C> <C>
FROM OPERATIONS:
Net investment loss $ (101,524) $ (6,243)
Net realized gain (loss) on investments and foreign
currency transactions (831,043) 114,446
Change in net unrealized gain on investments and foreign
currency transactions 7,122,175 299,042
------------ ------------
Net increase in net assets resulting from operations $ 6,189,608 $ 407,245
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.00 and $0.00 per share, respectively) $ - $ (1,226)
Net realized gain:
Class A ($0.17 and $0.03 per share, respectively) (265,943) (7,460)
Class B ($0.17 and $0.00 per share, respectively) (93,843) -
Class C ($0.17 and $0.00 per share, respectively) (10,299) -
------------ ------------
Total distributions to shareholders $ (370,085) $ (8,686)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $43,789,534 $25,408,485
Reinvestment of distributions 332,203 8,577
Cost of shares repurchased (28,871,231) (2,721,791)
------------ ------------
Net increase in net assets resulting from fund share
transactions $15,250,506 $22,695,271
------------ ------------
Net increase in net assets $21,070,029 $23,093,830
NET ASSETS:
Beginning of period 23,393,830 300,000
------------ ------------
End of period (including accumulated net investment loss
of $149,813 and $2,598, respectively) $44,463,859 $23,393,830
============ ============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '98 Shares '98 Amount '97 Shares '97 Amount
Shares sold 1,857,525 $34,023,409 1,164,983 $19,052,048
Reinvestment of distributions 14,054 237,233 542 8,577
Less shares repurchased (1,333,146) (24,222,246) (109,009) (1,752,377)
---------- ----------- --------- ------------
Net increase 538,433 $10,038,396 1,056,516 $17,308,248
========== =========== ========= ============
CLASS B
Shares sold 495,433 $ 8,901,081 373,327 $ 6,095,061
Reinvestment of distributions 5,185 86,542 - -
Less shares repurchased (257,947) (4,532,692) (60,096) (961,072)
---------- ----------- --------- ------------
Net increase 242,671 $ 4,454,931 313,231 $ 5,133,989
========== =========== ========= ============
CLASS C
Shares sold 48,281 $ 865,044 15,778 $ 261,376
Reinvestment of distributions 504 8,428 - -
Less shares repurchased (6,798) (116,293) (511) (8,342)
---------- ----------- --------- ------------
Net increase 41,987 $ 757,179 15,267 $ 253,034
========== =========== ========= ============
</TABLE>
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
FINANCIAL HIGHLIGHTS 3/31/98
<TABLE>
<CAPTION>
Year Ended 10/31/96 to
3/31/98 3/31/97
<S> <C> <C>
CLASS A
Net asset value, beginning of period $16.67 $15.00
------ -------
Increase (decrease) from investment operations:
Net investment income (loss) $(0.01) $0.01
Net realized and unrealized gain on
investments and foreign currency
transactions 3.54 1.69
------- -------
Net increase from investment operations $ 3.53 $1.70
Distributions to shareholders:
Net realized gain (0.17) (0.03)
------- -------
Net increase in net asset value $ 3.36 $1.67
------- -------
Net asset value, end of period $20.03 $16.67
======= =======
Total return* 21.36% 11.32%
Ratio of net expenses to average net assets 1.79%+ 1.80%**+
Ratio of net investment income (loss) to
average net assets (0.07)%+ 0.08%**+
Portfolio turnover rate 39% 18%**
Average brokerage commission per share $0.0086 $0.0128
Net assets, end of period (in thousands) $32,088 $17,723
Ratios assuming no waiver of management fees
and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 2.59% 3.70%**
Net investment loss (0.87)% ( 1.82)%**
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 1.75% 1.75%**
Net investment income (loss) (0.03)% 0.13%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer World Equity Fund
FINANCIAL HIGHLIGHTS 3/31/98
<TABLE>
<CAPTION>
Year Ended 10/31/96 to
3/31/98 3/31/97
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 16.59 $ 15.00
------- --------
Increase (decrease) from investment
operations:
Net investment loss $ (0.14) $ (0.03)
Net realized and unrealized gain on
investments and foreign currency
transactions 3.47 1.62
------- --------
Net increase from investment operations $ 3.33 $ 1.59
Distributions to shareholders:
Net realized gain (0.17) -
------- --------
Net increase in net asset value $ 3.16 $ 1.59
------- --------
Net asset value, end of period $ 19.75 $ 16.59
======= ========
Total return* 20.25% 10.60%
Ratio of net expenses to average net assets 2.68%+ 2.85%**+
Ratio of net investment loss to average net
assets (0.97)%+ (0.99)%**+
Portfolio turnover rate 39% 18%**
Average brokerage commission per share $0.0086 $0.0128
Net assets, end of period (in thousands) $11,112 $ 5,306
Ratios assuming no waiver of management fees
and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 3.48% 4.51%**
Net investment loss (1.77)% (2.65)%**
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.64% 2.77%**
Net investment loss (0.93)% (0.91)%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
FINANCIAL HIGHLIGHTS 3/31/98
<TABLE>
<CAPTION>
Year Ended 10/31/96 to
3/31/98 3/31/97
<S> <C> <C>
CLASS C
Net asset value, beginning of period $ 16.62 $ 15.00
------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.11) $ (0.07)
Net realized and unrealized gain on
investments and foreign currency
transactions 3.43 1.69
------- -------
Net increase from investment operations $ 3.32 $ 1.62
Distributions to shareholders:
Net realized gain ( 0.17) -
------- -------
Net increase in net asset value $ 3.15 $ 1.62
------- -------
Net asset value, end of period $ 19.77 $ 16.62
------- -------
Total return* 20.16% 10.80 %
Ratio of net expenses to average net assets 2.73%+ 3.74%**+
Ratio of net investment loss to average net
assets ( 1.11)%+ (1.77)%**+
Portfolio turnover rate 39% 18%**
Average brokerage commission per share $0.0086 $0.0128
Net assets, end of period (in thousands) $ 1,264 $ 365
Ratios assuming no waiver of management fees
and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 3.53% 4.91%**
Net investment loss (1.91)% (2.94)%**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction
for fees paid indirectly:
Net expenses 2.67% 3.69%**
Net investment loss (1.05)% (1.72)%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
Pioneer World Equity Fund
NOTES TO FINANCIAL STATEMENTS 3/31/98
1. Organization and Significant Accounting Policies
Pioneer World Equity Fund (the Fund) is a Delaware business trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek long-term
growth of capital.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
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 shareholders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. 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 on trade date. Each day, securities are
valued at the last sale price on the principal exchange where they are
traded. Securities that have not traded on the date of valuation, or
securities for which sale prices are not generally reported, are valued at
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. Trading in
foreign securities is substantially completed each day at various times
prior to the close of the New York Stock Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities where the
ex-dividend date may have passed are recorded as soon as the Fund is
informed of the ex-dividend data in the exercise of reasonable diligence.
Interest income is recorded on the accrual basis,
24
<PAGE>
Pioneer World Equity Fund
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. It
is the Fund's practice to first select for sale those securities that have
the highest cost and qualify for long-term capital gain or loss treatment
for tax purposes.
The Fund's investments in emerging markets or countries with limited or
developing markets may subject the Fund to greater degree of risk than in a
developed market. Risks associated with these developing markets include
political, social or economic factors and may affect the price of the Fund's
investments and income generated by these investments, as well as the Fund's
ability to repatriate such amounts.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the time
a portfolio hedge is offset by 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 unantici-
25
<PAGE>
Pioneer World Equity Fund
NOTES TO FINANCIAL STATEMENTS 3/31/98 (continued)
pated movements in the value of foreign currencies relative to the U.S.
dollar (see Note 6).
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
In addition to the requirements of the Internal Revenue Code, the Fund may
also be required to pay local taxes on net realized capital gains in certain
countries. The required capital gains taxes, if any, are determined in
accordance with local tax laws. In determining daily net asset value, the
Fund estimates the reserve for capital gains taxes, if any, associated with
net unrealized gains on certain portfolio securities. The estimated reserve
for capital gains taxes, if any, is based on the holding periods of such
securities and the related tax rates, tax loss carryforward (if applicable)
and other such factors. During the year ended March 31, 1998, the Fund paid
no capital gains taxes on the sale of certain foreign securities.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
At March 31, 1998, the Fund reclassified $45,691 from accumulated net
realized loss on investments and foreign currency transactions to accumulated
net investment loss. The reclassification has no impact on the net asset
value of the Fund and is designed to present the Fund's capital accounts on a
tax basis.
E. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $26,361 in
underwriting commissions on the sale of fund shares during the year ended
March 31, 1998.
26
<PAGE>
Pioneer World Equity Fund
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. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expense (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 shareholders 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.
G. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest received
from counterparties, is required to be at least equal to or in excess of the
value of the repurchase agreement at the time of purchase. The collateral for
all repurchase agreements is held in safekeeping in the customer-only account
of the Fund's custodian, or subcustodians. The Fund's investment adviser,
Pioneering Management Corporation (PMC), is responsible for determining that
the value of the collateral remains at least equal to the repurchase price.
2. Management Agreement
PMC manages the Fund's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 1.00% of the Fund's
average daily net assets up to $300 million; 0.85% of the next $200 million;
and 0.75% of the excess over $500 million.
PMC has agreed not to impose a 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; 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. PMC's agreement is voluntary and temporary and may be revised
or terminated at any time.
27
<PAGE>
Pioneer World Equity Fund
NOTES TO FINANCIAL STATEMENTS 3/31/98 (continued)
In addition, under the management agreement, certain other services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. At March 31, 1998, $19,495 was payable to PMC related to management
fees and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Fund at negotiated rates. Included in due
to affiliates is $11,294 in transfer agent fees payable to PSC at March 31,
1998.
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 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class
C shares. Included in due to affiliates is $28,816 in distribution fees payable
to PFD at March 31, 1998.
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 4.0%, 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
CDSC are paid to PFD. For the year ended March 31, 1998, CDSCs in the amount of
$42,646 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended March 31, 1998, the
Fund's expenses were reduced by $14,138 under such arrangements.
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<PAGE>
Pioneer World Equity Fund
6. Forward Foreign Currency Contracts
At March 31, 1998, the Fund had entered into various contracts that obligate
the Fund to deliver currencies at specified future dates. At the maturity of a
contract, the Fund must make delivery of the foreign currency. Alternatively,
prior to the settlement date of a portfolio hedge, the Fund may close out such
contracts by entering into an offsetting hedge contract. Open portfolio hedges
at March 31, 1998 were as follows:
<TABLE>
<CAPTION>
Contracts In Exchange Settlement Net Unrealized
Currency to Deliver For Date Value Gain/(Loss)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
HKD 9,785,250 $1,199,173 10/26/98 $1,247,425 $(48,252)
MYR 1,251,075 350,000 10/29/98 332,150 17,850
---------- ---------- ---------
$1,549,173 $1,579,575 $(30,402)
========== ========== =========
</TABLE>
Included in accumulated net realized gain on forward foreign currency contracts
and other assets and liabilities denominated in foreign currencies is $1,154,
which represents the realized gain on closed but unsettled portfolio hedges
totaling $600,827. At March 31, 1998, the Fund had no outstanding forward
foreign currency settlement contracts.
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<PAGE>
Pioneer World Equity Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the Board of Trustees of Pioneer World Equity Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer World Equity Fund as of March 31, 1998, and the related
statement of operations, the statements of changes in net assets, and the
financial highlights for the periods presented. These financial statements and
the financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
March 31, 1998 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer World Equity Fund as of March 31, 1998, the results of its operations,
the changes in its net assets, and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
May 1, 1998
30
<PAGE>
Pioneer World Equity Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Officers Trustees
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Patrick M. Smith, Vice President
John W. Kendrick William H. Keough, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
31
<PAGE>
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1 - 800 - 225 - 6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1 - 800 - 225 - 4321. For specific account
information, have your 13 - digit account number and four-digit personal
identification number at hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as
you meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
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<PAGE>
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds
you wish to invest in. You choose the amounts and dates for Pioneer to sell
shares of your original fund and use the proceeds to buy shares of the other
funds you have chosen. Over time, your investment will be shifted out of the
original fund. (Automatic Exchange is available for originating accounts with a
balance of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month you want. Pioneer will send
the proceeds by check to the address you designate, or electronically to your
bank account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available only for accounts with a value of $10,000 or
more.)
33
<PAGE>
RETIREMENT PLANS FROM PIONEER
Pioneer has a long history of helping people work toward their retirement
goals, offering plans suited to the individual investor and businesses of all
sizes. For more information on Pioneer retirement plans, contact your
investment professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Account (IRA)
An IRA is a tax-favored account that allows anyone under age 701/2 with earned
income to contribute up to $2,000 annually. Spouses may contribute up to $2,000
annually into a separate IRA, for a total of $4,000 per year for a married
couple. Earnings are tax-deferred, and contributions may be tax-deductible.
Roth IRA
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and is
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $9,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees)
401(k) or IRA Plan
Businesses with 100 or fewer eligible employees can establish either plan; both
resemble the traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and
an employer contribution is required.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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<PAGE>
403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their
salary, before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must
contribute the same percentage of pay for themselves and any eligible
employees; contributions are made directly to employees' IRAs. SEPs are easy to
administer and can be an especially good choice for firms with few or no
employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and
vesting schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are flexible, but
age-weighted plans allocate contributions based on both age and salary. Age-
weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit-sharing plans, but allow for higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
35
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
Global/International Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust*
Pioneer International Growth Fund
Pioneer World Equity Fund Tax-Exempt
Pioneer Intermediate Tax-Free Fund
Pioneer Tax-Free Income Fund
United States
Pioneer Capital Growth Fund Money Market Fund
Pioneer Growth Shares Pioneer Cash Reserves Fund
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
*Offers Class A and B Shares only
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This page for your notes.
37
<PAGE>
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:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[Pioneer Logo]
Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109 0598-5106
www.pioneerfunds.com [Copywrite Symbol] Pioneer Funds Distributor, Inc.
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