<PAGE>
[Pioneer Logo]
Pioneer
World Equity
Fund
SEMIANNUAL REPORT 9/30/98
<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
Pioneer Fund Story 37
</TABLE>
<PAGE>
Pioneer World Equity Fund
LETTER FROM THE CHAIRMAN 9/30/98
D e a r S h a r e o w n e r ,
- --------------------------------------------------------------------------------
Thank you for your interest in Pioneer World Equity Fund and this opportunity to
discuss the global investing environment for the six-month period ended
September 30, 1998.
Investor bias was a true force in global investing throughout the period. The
very real troubles of Japan's banking system, followed by Russia's default on
billions of dollars in loans, deservedly shook investor confidence. However, the
subsequent flight from equities in almost every market around the globe, while
justified in Russia and parts of Asia, was an overreaction in many other
markets. At Pioneer, we are well aware of the inherent risks in the world's
stock markets, especially in the volatile emerging markets. But, as long-term
investors, we remain convinced that extensive research and experienced
professional management can help find values among the world's many equity
markets, even in these turbulent times. While our research shows that the
valuations of many stocks in some markets are at historic lows, the price of a
stock by itself does not make an investment opportunity. It's only after further
analysis and careful consideration of the underlying company and its business
environment that we label a stock an "opportunity." We believe these steps are
critical to investment decisions anywhere in the world - as a buyer or a seller
of equities.
For 70 years, across many bull and bear markets, Pioneer has searched for values
and we continue to do so today, with more than 75 professionals worldwide.
Pioneer invests for the long term with companies we think will ride out market
fluctuations with strong management and other competitive advantages. This type
of clear thinking and careful research has never been more important in the
financial world. They pave the way for another prerequisite of long-term
investors - patience.
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,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer World Equity Fund
PORTFOLIO SUMMARY 9/30/98
P o r t f o l i o D i v e r s i f i c a t i o n
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[Pie Chart]
<TABLE>
<S> <C>
International Common Stocks 62%
U.S. Common Stocks 25%
Short-Term Cash Equivalents 9%
Depositary Receipts for International Stocks 3%
International Preferred Stocks 1%
</TABLE>
G e o g r a p h i c a l D i s t r i b u t i o n
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[Bar Chart]
<TABLE>
<S> <C>
United States 27.1%
Japan 9.3%
United Kingdom 7.8%
Germany 7.2%
Italy 6.3%
France 5.3%
Switzerland 4.7%
Netherlands 4.0%
Canada 3.6%
Spain 3.5%
Finland 3.2%
Australia 3.1%
Sweden 2.3%
India 2.1%
Austria 1.7%
Belgium 1.7%
Singapore 1.6%
Malaysia 1.3%
Mexico 0.8%
Thailand 0.8%
Hong Kong 0.7%
Chile 0.6%
Argentina 0.4%
Denmark 0.4%
Norway 0.4%
Brazil 0.1%
</TABLE>
1 0 L a r g e s t H o l d i n g s
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<S> <C> <C> <C>
1. Gehe AG 1.50% 6. Home Depot, Inc. 1.29%
2. Raisio Group Plc 1.44 7. Daimler-Benz AG 1.25
3. Shohkoh Fund & Co., Ltd. 1.37 8. Canadian Natural 1.22
Resources Ltd.
4. Automatic Data 1.37 9. Conseco, Inc. 1.18
Processing, Inc.
5. Cisco Systems, Inc. 1.31 10. Elec & Eltek International 1.18
Co. Ltd.
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer World Equity Fund
PERFORMANCE UPDATE 9/30/98 CLASS A SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 9/30/98 3/31/98
$ 15.45 $ 20.03
Distributions per Share Income Short-Term Long-Term
(3/31/98-9/30/98) Dividends Capital Gains Capital Gains
- - -
</TABLE>
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of September 30, 1998)
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
Life-of-Fund 2.17% -0.95%
(10/31/96)
1 Year -17.08 -21.86
</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.
[Class A Shares Mountain Chart]
<TABLE>
<CAPTION>
Pioneer
World Equity MSCI
Fund* World Index
<S> <C>
9425 10000
10101 10558
10174 10387
10413 10511
10627 10629
10488 10417
10482 10756
11401 11418
11784 11985
12174 12535
11224 11695
11841 12328
10809 11677
10658 11882
10765 12025
11159 12358
12068 13192
12728 13747
13008 13879
12659 13703
12347 14026
12353 14002
10072 12132
9818 12345
</TABLE>
[End Class A Shares Mountain Chart]
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 9/30/98 CLASS B SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 9/30/98 3/31/98
$ 15.15 $ 19.75
Distributions per Share Income Short-Term Long-Term
(3/31/98-9/30/98) Dividends Capital Gains Capital Gains
- - -
</TABLE>
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of September 30, 1998)
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund 1.05% -1.03%
(10/31/96)
1 Year -17.90 -21.15
</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.
[Class B Shares Mountain Chart]
<TABLE>
<CAPTION>
Pioneer
World Equity MSCI
Fund* World Index
<S> <C>
10000 10000
10680 10558
10747 10387
10987 10511
11207 10629
11053 10417
11040 10756
12000 11418
12393 11985
12793 12535
11787 11695
12427 12328
11333 11677
11167 11882
11273 12025
11670 12358
12620 13192
13300 13747
13583 13879
13206 13703
12869 14026
12869 14002
10485 12132
9802 12345
</TABLE>
[End Class B Shares Mountain Chart]
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 9/30/98 CLASS C SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 9/30/98 3/31/98
$ 15.15 $ 19.77
Distributions per Share Income Short-Term Long-Term
(3/31/98-9/30/98) Dividends Capital Gains Capital Gains
- - -
</TABLE>
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of September 30, 1998)
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund 1.05% 1.05%
(10/31/96)
1 Year -18.03 -18.03
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to shares sold within one year of purchase.
[Class C Shares Mountain Chart]
<TABLE>
<CAPTION>
Pioneer
World Equity MSCI
Fund* World Index
<S> <C>
10000 10000
10733 10558
10773 10387
11020 10511
11233 10269
11080 10417
11060 10756
12020 11418
12413 11985
12813 12535
11807 11695
12447 12328
11353 11677
11187 11882
12286 12025
11690 12358
12633 13192
13313 13747
13596 13879
13219 13703
12876 14026
12876 14002
10485 12132
10202 12345
</TABLE>
[End Class C Shares Mountain Chart]
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 9/30/98
After several years of record-setting stock market performance, the world's
equity markets appear to be in retreat. The following discussion with your
Fund's portfolio manager, Patrick M. Smith, explains the factors and events in
this environment that influenced your Fund's performance over the past six
months.
Q: How did the Fund perform during the six months ended
September 30?
A: It was a very challenging market environment. The strength of U.S. and
European markets provided a welcome buffer to declining stock prices in
Latin America and Southeast Asia well into summer. But in early August,
even these markets witnessed a dramatic sell-off in response to
developments in emerging markets. What began as a ripple in Thailand nearly
18 months ago has become a global concern. The Fund's performance reflects
this with Class A Shares, Class B Shares and Class C Shares returning
-22.87%, -23.29% and -23.37%, respectively, at net asset value for the six
months ended September 30, 1998. The Morgan Stanley Capital International
(MSCI) World Index, which holds twice the Fund's weighting in U.S. stocks,
dropped 10.20%.
Q: How have economic troubles in Asia and other emerging markets affected the
global economy and the Fund?
A: Asia struggled throughout the period. Stock and currency values declined,
plunging the economies further into recession. So far, it seems that
politicians are either too weak or too closely tied to businesses to
implement the kinds of reform that will speed recovery. We're also
concerned about Malaysia's decision to impose strict controls on the inflow
of foreign investment to protect its currency. The free flow of capital has
been instrumental to the development and prosperity of all emerging
nations.
6
<PAGE>
Pioneer World Equity Fund
Southeast Asia was also overshadowed by Japan's inability to implement
pro-growth policies and restructure its banking system. As the world's
second largest economy, Japan will be key to any recovery in the region and
beyond.
Investors already uncertain about prospects for developing countries, were
unnerved when Russia defaulted on its foreign debt and devalued the ruble
in August. Although the Fund was not invested in Russia, it could not avoid
the ripple effect this nuclear superpower's fortunes had on global equity
markets. Now there is concern that Brazil and the rest of Latin America may
be forced to devalue local currencies in the face of continued selling of
stocks and slowing exports.
Q: Were you able to soften the impact of these events on the Fund?
A: Yes, to some degree. In addition to avoiding Russia altogether, we reduced
the Fund's weighting in other emerging markets across August and September.
In the process, we eliminated holdings in the most volatile markets - South
Korea and Indonesia - while scaling back holdings in the remaining Asian
and Latin American countries. Current holdings in the portfolio include the
well-run Coca-Cola bottler Embotelladora Andina (Chile) and Thai Union
Frozen Products (Thailand) which denominates its earnings in the more
stable U.S. dollar. We also kept Elec & Eltek International (Singapore), an
electronics company that has performed well for us in the past.
Q: Where did you find new investment opportunities?
A: We expect the global recovery to be slow, but the correction is creating
some very attractive, well-valued opportunities in the more mature,
well-established markets. Armed with proceeds from the sale of Asian and
Latin American holdings, we've been selectively increasing current holdings
and adding some new companies in the United States, Canada and Europe.
Newer U.S. holdings include utilities Bell Atlantic, SBC Communications,
Williams Companies and insurance provider Conseco. Petroleum prices
strengthened somewhat late in the period, helping acquisitions in the oil
and gas industry, such as Texaco.
7
<PAGE>
Pioneer World Equity Fund
PORTFOLIO MANAGEMENT DISCUSSION 9/30/98 (continued)
In Europe, we added Kwik-Fit (United Kingdom), an automobile-service
provider, and Royal & Sun Alliance (United Kingdom), a multi-product
insurance company. We also bought Amvescap (United Kingdom), but like many
in the financial services industry, this company struggled in an atmosphere
of economic uncertainty and growing concerns over loans to Asia. Auto
conglomerate Daimler-Benz (Germany), one of the Fund's largest holdings, is
profiting from its efforts to reduce cost and restructure. Its merger with
Chrysler makes it the fifth-largest carmaker in the world and Europe's
largest industrial company outside the oil industry. Utility holdings,
which tend to play a defensive role in low-interest rate environments,
climbed with the addition of independent power producer AEM (Italy).
Q: What is your outlook for the balance of the fiscal year?
A: The financial markets will likely be unsettled in the coming months.
Investors will be looking for leadership to confront the growing economic
malaise. Already, financial leaders from many developing nations, the seven
major industrialized nations, the International Monetary Fund and the World
Bank are discussing sound, pro-growth policies.
Japan will be an important player in any recovery, and we think market
psychology will greatly improve if the Japanese government takes the
necessary steps to stimulate domestic growth and reorganize its banking
system. Investors will also be watching Brazil as a barometer of Latin
American strength. In the United States, all eyes are on the Federal
Reserve, which may lower U.S. interest rates again later this year to help
cushion the effects of foreign weakness.
Markets move in cycles, and today's markets are reacting to lower
expectations about the near future. While any investor would find the
day-to-day gyrations unsettling, there are many positive economic and
demographic trends that should dictate the general direction of the world
economy and its stock markets over the long term. We believe Pioneer World
Equity Fund is invested in the right kind of companies to weather today's
market environment, as well as prosper over the longer term.
8
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 9/30/98
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INVESTMENT IN SECURITIES - 90.6%
PREFERRED STOCKS - 0.7%
3,100 Henkel KGaA $ 234,934
107,178 Telecomunicacoes de Sao Paulo SA* 14,790
-----------
TOTAL PREFERRED STOCKS
(Cost $217,618) $ 249,724
-----------
COMMON STOCKS - 89.9%
Basic Materials - 5.1%
Agricultural Product - 0.6%
620,000 IOI Corporation Bhd. $ 231,380
-----------
Chemicals - 0.6%
5,600 BASF AG $ 212,283
-----------
Chemicals (Specialty) - 1.1%
3,500 Norsk Hydro AS $ 127,570
6,000 Minerals Technologies, Inc. 264,375
-----------
$ 391,945
-----------
Containers & Packaging (Paper) - 1.2%
2,500 Schmalbach Lubeca AG $ 282,211
250 Viag AG 171,872
-----------
$ 454,083
-----------
Iron & Steel - 0.3%
2,800 Boehler-Uddeholm AG $ 121,547
-----------
Paper & Forest Products - 1.3%
13,600 Buhrmann NV $ 253,463
10,000 UPM-Kymmene Corp. 228,167
-----------
$ 481,630
-----------
Total Basic Materials $ 1,892,868
-----------
Capital Goods - 10.2%
Electrical Equipment - 2.6%
200 ABB AG (Bearer Shares) $ 203,564
5,000 Mabuchi Motor Co., Ltd. 312,946
3,200 Phillips Electronics NV 172,459
75,000 TT Group Plc 255,015
-----------
$ 943,984
-----------
Engineering & Construction - 4.3%
15,000 Larsen & Toubro (G.D.R.) $ 127,125
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 9/30/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Engineering & Construction - (continued)
87,000 Leighton Holdings Ltd. $ 284,051
70,000 Saipem SpA 296,853
2,000 Suez Lyonnaise Des Eaux 340,726
2,800 Technip 231,008
3,400 VA Technologies AG 308,499
-----------
$ 1,588,262
-----------
Machinery (Diversified) - 2.5%
21,500 AGCO Corp. $ 139,750
4,000 Sidel, SA 274,296
108,000 Siebe Plc 348,861
15,000 Valmet Corp. 177,026
-----------
$ 939,933
-----------
Metal Fabricators - 0.8%
9,000 Hunter Douglas NV $ 305,360
-----------
Total Capital Goods $ 3,777,539
-----------
Communication Services - 6.7%
Cellular/Wireless Telecommunications - 0.5%
13,700 Grupo Iusacell SA (Series L) (A.D.R.)* $ 67,644
40,000 Telecom Italia Mobile SpA 128,677
-----------
$ 196,321
-----------
Telecommunications (Long Distance) - 0.2%
7,850 Bell Canada International* $ 72,559
-----------
Telephone - 6.0%
11,500 BCE, Inc. $ 321,905
7,500 Bell Atlantic Corp. 363,281
2,150 Bell Canada International, Inc.* 20,089
14,000 Mahanagar Telephone Nigam Ltd. (G.D.R) 166,250
8,000 SBC Communications, Inc. 355,500
40,000 Telecom Italia SpA 275,649
40,000 Telecom Italia SpA Di Risp. 191,319
8,636 Telefonica SA 315,176
17,000 Videsh Sanchar Nigam Ltd. (G.D.R.) 186,575
-----------
$ 2,195,744
-----------
Total Communication Services $ 2,464,624
-----------
</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>
Consumer Cyclicals - 9.4%
Auto Parts & Equipment - 0.8%
40,000 Kwik-Fit Holdings Plc $ 277,457
-----------
Automobiles - 1.1%
5,000 Daimler-Benz AG $ 418,600
-----------
Building Materials - 0.8%
12,200 Fastenal Co. $ 305,000
-----------
Consumer (Jewelry, Novelties & Gifts) - 0.4%
35,000 Safilo SpA $ 162,209
-----------
Household Furniture & Appliances - 0.9%
4,800 Sony Corp. $ 333,458
-----------
Retail (Building Supplies) - 1.2%
11,000 Home Depot, Inc. $ 434,500
-----------
Retail (Department Stores) - 0.7%
3,600 Metro AG $ 250,729
-----------
Retail (Specialty) - 0.6%
185,000 Cifra, SA de CV (Series C) $ 214,062
-----------
Services (Commercial & Consumer) - 2.9%
6,500 Hagemeyer NV $ 174,636
13,000 Hays Plc 194,602
100 Kuoni Reisen Holding AG (Series B) (Registered) 304,260
43,000 Rentokil Initial Plc 260,179
6,500 Stork NV 149,786
-----------
$ 1,083,463
-----------
Total Consumer Cyclicals $ 3,479,478
-----------
Consumer Staples - 10.9%
Beverages (Non-Alcoholic) - 1.1%
14,000 Embotelladora Andina SA (A.D.R.) $ 192,500
8,000 Louis Dreyfus Citrus 221,436
-----------
$ 413,936
-----------
Distributors (Food & Health) - 2.0%
8,000 Gehe AG $ 503,039
20,000 Metro-Richelieu, Inc. 238,618
-----------
$ 741,657
-----------
Foods - 3.0%
33,000 Raisio Group Plc $ 483,576
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 9/30/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Foods - (continued)
75,000 Thai Union Frozen Products Public Co., Ltd. $ 263,590
5,000 Wrigley (Wm.) Jr. Co. 379,688
-----------
$ 1,126,854
-----------
Restaurants - 1.6%
24,000 Compass Group Plc $ 219,925
6,500 McDonald's Corp. 387,969
-----------
$ 607,894
-----------
Retail Stores (Food Chains) - 1.9%
4,300 Delhaize-Le Lion, SA $ 325,058
24,000 Food Lion, Inc. (Class A) 255,000
13,000 Food Lion, Inc. (Class B) 126,750
-----------
$ 706,808
-----------
Services (Employment) - 0.5%
4,000 Robert Half International, Inc.* $ 172,750
-----------
Specialty Printing - 0.8%
21,000 Toppan Forms Co., Ltd. $ 284,397
-----------
Total Consumer Staples $ 4,054,296
-----------
Energy - 3.7%
Oil & Gas (Exploration/Production) - 1.1%
25,000 Canadian Natural Resources Ltd.* $ 409,715
-----------
Oil & Gas (Refining & Marketing) - 0.4%
1,500 OMV AG $ 134,455
-----------
Oil (International Integrated) - 2.2%
2,400 Elf Aquitaine SA $ 296,153
6,000 Texaco, Inc. 376,125
6,000 YPF SA (Class D) (A.D.R.) 156,000
-----------
$ 828,278
-----------
Total Energy $ 1,372,448
-----------
Financial - 20.2%
Banks (Major Regional) - 7.4%
60,000 Banca Fideuram SpA $ 255,899
37,000 Banco Popolare di Milano 266,743
18,000 Banco de Santander SA 272,660
360 Banco de Santander SA (New) 9/98 5,410
4,700 DePfa-Bank 337,755
10,000 Industrial Credit & Investment Corp. of India
Ltd. (G.D.R.) 83,750
</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>
Banks (Major Regional) - (continued)
130 Julius Baer Holding AG $ 306,071
5,000 Mellon Bank Corp. 275,313
58,600 Overseas-Chinese Banking Corp., Ltd. 147,194
6,000 State Street Corp. 327,375
5,500 Svenska Handelsbanken 206,316
5,000 Toronto-Dominion Bank 133,567
1,700 Unidanmark A/S 123,159
-----------
$ 2,741,212
-----------
Consumer Finance - 1.0%
11,100 SLM Holdings Corp. $ 360,056
-----------
Financial (Diversified) - 3.4%
8,000 Ambac Financial Group, Inc. $ 384,000
10,000 Amp Ltd.* 121,177
6,300 Internationale Nederlanden Groep NV 283,999
1,800 Shohkoh Fund & Co., Ltd. 460,525
-----------
$ 1,249,701
-----------
Insurance (Life/Health) - 2.5%
13,000 Conseco, Inc. $ 397,313
11,000 Corporacion Mapfre 218,938
13,000 Mediolanum SpA 298,488
-----------
$ 914,739
-----------
Insurance (Multi-Line) - 3.0%
125,600 Malaysian Assurance Alliance Bhd. $ 86,154
170,000 National Mutual Holdings Ltd. 341,487
42,000 Royal & Sun Alliance Group Plc 364,162
650 Zurich Allied AG (New Shares)* 323,493
-----------
$ 1,115,296
-----------
Insurance (Property/Casualty) - 0.3%
52,600 Reinsurance Australia Corp. $ 124,673
-----------
Investment Banking/Brokerage - 1.0%
90,000 Daiwa Securities Co., Ltd. $ 210,827
25,000 Nomura Securities Co., Ltd. 179,349
-----------
$ 390,176
-----------
Investment Management - 1.6%
41,000 Amvescap Plc $ 237,691
12,000 Franklin Resources, Inc. 360,000
-----------
$ 597,691
-----------
Total Financial $ 7,493,544
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 9/30/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Healthcare - 4.7%
Healthcare (Drugs-Generic & Other) - 0.7%
12,000 Sankyo Co., Ltd. $ 265,290
----------
Healthcare (Drugs/Major Pharmaceuticals) - 2.2%
3,000 Merck & Co., Inc. $ 388,688
125 Novartis AG 200,938
21 Roche Holdings AG 226,673
----------
$ 816,299
----------
Healthcare (Medical Products/Supplies) - 1.8%
35,000 Biora AB* $ 357,257
5,000 Biora AB (A.D.R.)* 104,375
45,750 F.H. Faulding & Co., Ltd. 181,360
----------
$ 642,992
----------
Total Healthcare $1,724,581
----------
Technology - 15.2%
Communications Equipment - 2.0%
2,500 Alcatel SA $ 222,329
4,500 Lucent Technologies, Inc. 310,781
2,500 Nokia AB 199,154
----------
$ 732,264
----------
Computers (Networking) - 2.4%
8,000 Ascend Communications, Inc.* $ 364,000
7,125 Cisco Systems, Inc.* 440,414
2,000 Fujitsu Support and Service* 76,132
----------
$ 880,546
----------
Computers (Software & Services) - 0.4%
8,000 Pentafour Software & Exports Ltd. (G.D.R.) $ 135,234
----------
Electronics (Component Distributors) - 3.3%
1,000 Barco Industries $ 235,055
27,000 Electrocomponents Plc 150,676
10,000 Hoya Corp. 358,698
5,000 Telefonaktiebolaget LM Ericsson (Series B) 94,418
50,000 Toshiba Corp. 179,715
118,000 Varitronix International Ltd. 229,184
----------
$1,247,746
----------
</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>
Electronics (Instrumentation) - 1.1%
80,000 Elec & Eltek International Co. Ltd. $ 396,800
-----------
Electronics (Semiconductors) - 2.2%
3,000 Rohm Co., Ltd. 285,495
4,000 STMicroelectronics* 185,721
3,300 Texas Instruments, Inc. 174,075
8,000 Tokyo Electron Ltd. 195,015
-----------
$ 840,306
-----------
Equipment (Semiconductors) - 0.8%
12,000 Applied Materials, Inc.* $ 303,000
-----------
Services (Computer Systems) - 0.8%
9,000 SunGard Data Systems Inc.* $ 283,500
-----------
Services (Data Processing) - 2.2%
6,150 Automatic Data Processing, Inc. $ 459,712
15,200 First Data Corp. 357,200
-----------
$ 816,912
-----------
Total Technology $ 5,636,308
-----------
Transportation - 1.2%
Shipping - 0.3%
125,000 Malaysia International Shipping Bhd. $ 125,493
-----------
Railways - 0.9%
15,967 Stagecoach Holdings Plc $ 308,916
-----------
Total Transportation $ 434,409
-----------
Utilities - 2.6%
Electric Companies - 0.9%
16,000 Endesa SA $ 360,729
-----------
Natural Gas - 1.0%
13,000 Williams Companies, Inc. $ 364,780
-----------
Power Producers (Independent) - 0.7%
187,000 AEM SpA* $ 252,634
-----------
Total Utilities $ 978,143
-----------
TOTAL COMMON STOCKS
(Cost $34,314,516) $33,308,238
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer World Equity Fund
SCHEDULE OF INVESTMENTS 9/30/98 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
WARRANTS - 0.0%
11,450 Hong Kong and China Gas Co., Ltd., 9/30/99* $ 517
-----------
TOTAL WARRANTS
(Cost $0) $ 517
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $34,532,134) (a) $33,558,479
-----------
Principal
Amount
TEMPORARY CASH INVESTMENT - 9.4%
Repurchase Agreement - 9.4
$3,500,000 Chase Manhattan, 5.0%, 9/30/98, repurchase price of
$3,500,000 plus accrued interest on 10/1/98,
collateralized by $3,404,000 U.S. Treasury Notes, 5.5%,
2/28/03 $ 3,500,000
-----------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $3,500,000) $ 3,500,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $38,032,134) (b) $37,058,479
===========
</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 27.1%
Japan 9.3
United Kingdom 7.8
Germany 7.2
Italy 6.3
France 5.3
Switzerland 4.7
Netherlands 4.0
Canada 3.6
Spain 3.5
Finland 3.2
Australia 3.1
Sweden 2.3
India 2.1
Austria 1.7
Belgium 1.7
Singapore 1.6
Malaysia 1.3
Other (Individually less than 1%) 4.2
-----
100.0%
-----
</TABLE>
(b) At September 30, 1998, the net unrealized loss on investments based on cost
for federal income tax purposes of $38,034,027 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $4,668,804
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (5,644,352)
----------
Net unrealized loss $ (975,548)
==========
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended September 30, 1998 aggregated $13,838,278 and $11,466,749,
respectively.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer World Equity Fund
BALANCE SHEET 9/30/98
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $3,500,000)(cost $38,032,134) $37,058,479
Foreign currencies, at value 86
Receivables -
Investment securities sold 965,093
Fund shares sold 37,461
Dividends, interest and foreign taxes withheld 79,867
------------
Total assets $38,140,986
------------
LIABILITIES:
Payables -
Investment securities purchased $ 1,753,565
Fund shares repurchased 1,350,268
Forward foreign currency portfolio hedge contracts, open-net 143,352
Forward foreign currency portfolio hedge contracts, closed-net 42,792
Forward foreign currency settlement contracts, open-net 417
Due to bank 330
Due to affiliates 50,044
Accrued expenses 95,750
------------
Total liabilities $ 3,436,518
------------
NET ASSETS:
Paid-in capital $39,091,316
Accumulated net investment loss (101,983)
Accumulated net realized loss on investments and foreign currency
transactions (3,169,152)
Net unrealized loss on investments (973,655)
Net unrealized loss on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (142,058)
------------
Total net assets $34,704,468
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $22,865,227/1,479,716 shares) $ 15.45
============
Class B (based on $10,434,427/688,517 shares) $ 15.15
============
Class C (based on $1,404,814/92,701 shares) $ 15.15
============
MAXIMUM OFFERING PRICE:
Class A $ 16.39
============
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
STATEMENT OF OPERATIONS
For the Six Months Ended 9/30/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $28,479) $ 432,368
Interest 48,645
------------
Total investment income $ 481,013
------------
EXPENSES:
Management fees $ 215,567
Transfer agent fees
Class A 40,821
Class B 20,574
Class C 3,272
Distribution fees
Class A 37,074
Class B 59,436
Class C 7,837
Accounting 34,494
Custodian fees 28,634
Registration fees 27,450
Professional fees 27,430
Printing 18,358
Fees and expenses of nonaffiliated trustees 8,136
Miscellaneous 18,081
------------
Total expenses $ 547,164
Less management fees waived by Pioneering
Management Corporation (112,725)
Less fees paid indirectly (1,256)
------------
Net expenses $ 433,183
------------
Net investment income $ 47,830
------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss from:
Investments $ (2,114,813)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (7,921) $ (2,122,734)
------------ ------------
Change in net unrealized gain or loss from:
Investments $ (8,426,004)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (110,926) $ (8,536,930)
------------ ------------
Net loss on investments and foreign currency transactions $(10,659,664)
------------
Net decrease in net assets resulting from operations $(10,611,834)
============
</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 Six Months Ended 9/30/98 and the Year Ended 3/31/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
9/30/98 3/31/98
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 47,830 $ (101,524)
Net realized loss on investments and foreign currency
transactions (2,122,734) (831,043)
Change in net unrealized gain on investments and foreign
currency transactions (8,536,930) 7,122,175
------------ ------------
Net increase (decrease) in net assets resulting
from operations $(10,611,834) $ 6,189,608
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain:
Class A ($0.00 and $0.17 per share, respectively) $ - $ (265,943)
Class B ($0.00 and $0.17 per share, respectively) - (93,843)
Class C ($0.00 and $0.17 per share, respectively) - (10,299)
------------ ------------
Total distributions to shareholders $ - $ (370,085)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 40,656,313 $43,789,534
Reinvestment of distributions - 332,203
Cost of shares repurchased (39,803,870) (28,871,231)
------------ ------------
Net increase in net assets resulting from fund share
transactions $ 852,443 $15,250,506
------------ ------------
Net increase (decrease) in net assets $ (9,759,391) $21,070,029
NET ASSETS:
Beginning of period 44,463,859 23,393,830
------------ ------------
End of period (including accumulated net investment loss
of $101,983 and $149,813, respectively) $ 34,704,468 $44,463,859
============ ============
</TABLE>
<TABLE>
<CAPTION>
CLASS A 9/98 Shares 9/98 Amount 3/98 Shares 3/98 Amount
<S> <C> <C> <C> <C>
Shares sold 1,304,613 $25,170,029 1,857,525 $34,023,409
Reinvestment of distributions - - 14,054 237,233
Less shares repurchased (1,426,513) (27,325,035) (1,333,146) (24,222,246)
---------- ----------- ---------- -----------
Net increase (decrease) (121,900) $(2,155,006) 538,433 $10,038,396
========== =========== ========== ===========
CLASS B
Shares sold 230,264 $ 4,377,719 495,433 $ 8,901,081
Reinvestment of distributions - - 5,185 86,542
Less shares repurchased (104,316) (1,893,588) (257,947) (4,532,692)
---------- ----------- ---------- -----------
Net increase 125,948 $ 2,484,131 242,671 $ 4,454,931
========== =========== ========== ===========
CLASS C
Shares sold 575,402 $11,108,565 48,281 $ 865,044
Reinvestment of distributions - - 504 8,428
Less shares repurchased (546,622) (10,585,247) (6,798) (116,293)
---------- ----------- ---------- -----------
Net increase 28,780 $ 523,318 41,987 $ 757,179
========== =========== ========== ===========
</TABLE>
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer World Equity Fund
FINANCIAL HIGHLIGHTS 9/30/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended 10/31/96 to
9/30/98 3/31/98 3/31/97
<S> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 20.03 $ 16.67 $ 15.00
------- -------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.05 $ (0.01) $ 0.01
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (4.63) 3.54 1.69
------- -------- -------
Net increase (decrease) from investment
operations $ (4.58) $ 3.53 $ 1.70
Distributions to shareholders:
Net realized gain - (0.17) (0.03)
------- -------- -------
Net increase (decrease) in net asset value $ 4.58) $ 3.36 $ 1.67
------- -------- -------
Net asset value, end of period $ 15.45 $ 20.03 $ 16.67
======= ======== =======
Total return* (22.87)% 21.36% 11.32%
Ratio of net expenses to average net assets 1.76%**+ 1.79%+ 1.80%**+
Ratio of net investment income (loss) to average
net assets 0.46%**+ (0.07)%+ 0.08%**+
Portfolio turnover rate 56%** 39% 18%**
Net assets, end of period (in thousands) $22,865 $ 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 2.28%** 2.59% 3.70%**
Net investment loss (0.06)%** (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% 1.75%**
Net investment income (loss) 0.47%** (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 9/30/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended 10/31/96 to
9/30/98(a) 3/31/98 3/31/97
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 19.75 $ 16.59 $15.00
------- ------- ------
Increase (decrease) from investment operations:
Net investment loss $ (0.03) $ (0.14) $(0.03)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (4.57) 3.47 1.62
------- ------- ------
Net increase (decrease) from investment
operations $ (4.60) $ 3.33 $ 1.59
Distributions to shareholders:
Net realized gain - (0.17) -
------- ------- ------
Net increase (decrease) in net asset value $ (4.60) $ 3.16 $ 1.59
------- ------- ------
Net asset value, end of period $ 15.15 $ 19.75 $16.59
======= ======= ======
Total return* (23.29)% 20.25% 10.60%
Ratio of net expenses to average net assets 2.58%**+ 2.68%+ 2.85%**+
Ratio of net investment loss to average net
assets (0.33)%**+ (0.97)%+ (0.99)%**+
Portfolio turnover rate 56%** 39% 18%**
Net assets, end of period (in thousands) $10,434 $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 3.10%** 3.48% 4.51%**
Net investment loss (0.85)%** (1.77)% (2.65)%**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction
for fees paid indirectly:
Net expenses 2.58%** 2.64% 2.77%**
Net investment loss (0.33)%** (0.93)% 0.91)%**
</TABLE>
(a) The per share data presented above is based upon average shares outstanding
for the period presented.
* 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 9/30/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended 10/31/96 to
9/30/98(a) 3/31/98 3/31/97
<S> <C> <C> <C>
CLASS C
Net asset value, beginning of period $ 19.77 $16.62 $15.00
------- ------ ------
Increase (decrease) from investment operations:
Net investment loss $ (0.03) $(0.11) $(0.07)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (4.59) 3.43 1.69
------- ------ ------
Net increase (decrease) from investment
operations $ (4.62) $ 3.32 $ 1.62
Distributions to shareholders:
Net realized gain - (0.17) -
------- ------ ------
Net increase (decrease) in net asset value $ (4.62) $ 3.15 $ 1.62
------- ------ ------
Net asset value, end of period $ 15.15 $19.77 $16.62
======== ====== ======
Total return* (23.37)% 20.16% 10.80%
Ratio of net expenses to average net assets 2.65%**+ 2.73%+ 3.74%**+
Ratio of net investment loss to average net
assets (0.37)%**+ (1.11)%+ (1.77)%**+
Portfolio turnover rate 56%** 39% 18%**
Net assets, end of period (in thousands) $ 1,405 $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 3.17%** 3.53% 4.91%**
Net investment loss (0.89)%** (1.91)% (2.94)%**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction
for fees paid indirectly:
Net expenses 2.63%** 2.67% 3.69%**
Net investment loss 0.35)%** (1.05)% (1.72)%**
</TABLE>
(a) The per share data presented above is based upon average shares outstanding
for the period presented.
* 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 9/30/98
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. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the exchange. In computing the net asset
value, securities are valued at the last sale price on the principal exchange
where they are traded. Securities that have not traded on the date of
valuation, or securities for which sale prices are not generally reported,
are valued at the mean between the last bid and asked prices. Securities for
which market quotations are not readily available are valued at their fair
values as determined by, or under the direction of, the Board of Trustees.
Trading in foreign securities is substantially completed each day at various
times prior to the close of the New York Stock Exchange. The values of such
securities used in computing the net asset value 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
24
<PAGE>
Pioneer World Equity Fund
data in the exercise of reasonable diligence. Interest income 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. It
is the Fund's practice to first select for sale those securities that have
the highest cost and also 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. In addition, delays are common in
registering transfers of securities in India, and the Fund may be unable to
sell portfolio securities until the registration process is completed.
At September 30, 1998, the Fund also had investments in certain securities
with a market value of $443,027 which, if sold, cannot be repatriated until
one year after sale.
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
25
<PAGE>
Pioneer World Equity Fund
NOTES TO FINANCIAL STATEMENTS 9/30/98 (continued)
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 unanticipated 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 six months ended September 30, 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.
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 PFD, the
principal underwriter for the Fund and an indirect subsidiary of The Pioneer
Group, Inc. (PGI). PFD earned $9,891 in underwriting commissions on the sale
of fund shares during the six months ended September 30, 1998.
26
<PAGE>
Pioneer World Equity Fund
F. Class Allocation
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 Agreement
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
Pioneering Management Corporation (PMC), the Fund's investment adviser, 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 9/30/98 (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 September 30, 1998, $19,615 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 $14,542 in transfer agent fees payable to PSC at September 30,
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 $15,887 in distribution fees payable to
PFD at September 30, 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 six months ended September 30, 1998, CDSCs in the amount of $575 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 six months ended September 30,
1998, the Fund's expenses were reduced by $1,256 under such arrangements.
28
<PAGE>
Pioneer World Equity Fund
6. Forward Foreign Currency Contracts
At September 30, 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 September 30, 1998 were as follows:
<TABLE>
<CAPTION>
Contracts In Exchange Settlement Net Unrealized
Currency to Deliver For Date Value Loss
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
HKD 778,420 $ 95,395 10/26/98 $ 100,289 $ (4,894)
JPY 425,106,000 3,100,000 7/29/99 3,238,458 (138,458)
---------- ---------- ----------
$3,149,505 $3,338,747 $ (143,352)
========== ========== ==========
</TABLE>
- -------------------------------------------------------------------------------
Included in accumulated net realized loss on forward foreign currency contracts
and other assets and liabilities denominated in foreign currencies is $42,792,
which represents the realized loss on closed but unsettled portfolio hedges
totaling $2,852,691.
At September 30, 1998, the gross forward currency settlement contracts
receivable and payable were $424,392 and $424,809 respectively, resulting in a
net payable of $417.
7. Line of Credit Facility
Effective April 14, 1998, the Fund, along with certain other funds in the
Pioneer Family of Funds (the "Funds"), collectively participate in a $50 million
committed, unsecured revolving line of credit facility. Borrowings are used
solely for temporary or emergency purposes. The Fund may borrow up to the lesser
of $50 million or the limits set by its prospectus for borrowings. Interest on
collective borrowings of up to $25 million is payable at the Federal Funds Rate
plus 3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowing exceeds $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated among such
Funds based on their respective borrowing limits. For the period ended September
30, 1998, the Fund had no borrowings under this agreement.
29
<PAGE>
Pioneer World Equity Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners 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 September 30, 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
September 30, 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 September 30, 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
November 6, 1998
30
<PAGE>
Pioneer World Equity Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
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 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 70-1/2 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 lets investors contribute up to $2,000 a year. Contributions 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.
34
<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.
<TABLE>
<CAPTION>
Growth Funds Income Funds
<S> <C>
International/Global Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust
Pioneer Indo-Asia Fund
Pioneer International Growth Fund Tax-Free
Pioneer World Equity Fund 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
</TABLE>
36
<PAGE>
PIONEER FUND STORY
[Pioneer Fund "Happy 70th Birthday" Logo]
This year, 1998, marks a special anniversary for the Pioneer family of mutual
funds and an important milestone for the entire mutual fund industry. In the mid
1920s, a group of forward thinking financial professionals started the first
"open-end" investment companies, known today as mutual funds. They provided a
way for small investors to benefit from professional financial management.
In 1928, Pioneer Fund became the fourth mutual fund created. Since then, Pioneer
Fund has gone to work for its shareowners every day for 70 years. Through 15
bear markets, 16 bull markets and even the Great Depression, Pioneer Fund has
stayed true to an investment ethic that relies on the rewards of hard work.
Rather than follow trends, the financial professionals at Pioneer roll-up their
sleeves and research. We look for value in an investment: companies that might
not be the current rage on Wall Street, but that we believe have the business
smarts on Main Street to keep their earnings strong. The Fund's investment
objective continues to be growth and income.
For 70 years, Pioneer Fund has made investments based on experience, our own
investment ethic, and the needs of our shareowners. Every day, the financial
professionals at Pioneer Fund come to work, aware of the job at hand. We know
shareowners are investing their hard-earned money to provide for the future.
In 1928 there were four mutual funds. Today there are 11,000. Only one can tell
the Pioneer Fund story.
For the complete Pioneer Fund story call your investment professional, or
Pioneer at 1-800-225-6292, for a prospectus. Please read it carefully before you
invest or send money.
Past performance does not guarantee future results.
*Class B and C Shares have been available since 7/1/96.
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 1198-5695
www.pioneerfunds.com (Copyright) Pioneer Funds Distributor, Inc.
(Recycle Logo) Printed on Recycled Paper
