PIONEER EUROPE FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
John F. Cogan, Jr.
Chairman and President
David D. Tripple
Executive Vice President
Patrick Smith
Vice President
William H. Keough
Treasurer
Joseph P. Barri
Secretary
INVESTMENT
ADVISER
Pioneering Management
Corporation
CUSTODIAN
Brown Brothers
Harriman & Co.
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
Pioneering Services
Corporation
60 State Street
Boston, Massachusetts 02109
TRUSTEES
John F. Cogan, Jr.
Richard H. Egdahl, M.D.
Margaret B. W. Graham
John W. Kendrick
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
PRINCIPAL
UNDERWRITER
Pioneer Funds
Distributor, Inc.
LEGAL COUNSEL
Hale and Dorr
INDEPENDENT PUBLIC
ACCOUNTANTS
Arthur Andersen LLP
Please call Pioneer for information on:
Existing accounts, new accounts, prospectuses,
applications, and service forms 1-800-225-6292
Fund yields and prices 1-800-225-4321
Toll-free fax 1-800-225-4240
Retirement plans 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
When distributed to persons who are not shareowners of the Fund, this report
must be accompanied by an official prospectus, which discusses the
objectives, policies, sales charges and other information about the Fund.
(Pioneer Logo)
Pioneer
Europe
Fund
Annual Report
October 31, 1995
<PAGE>
Pioneer Europe Fund
Dear Fellow Shareowners,
Pioneer Europe Fund closed its fifth fiscal year on October 31, 1995. Your
portfolio managers found abundant opportunities in European markets during
the period, enabling your Fund to select from many attractively priced
securities. These endeavors proved rewarding; Pioneer Europe Fund's 12-month
total return through October 31, 1995, placed it third among the 41 European
region funds tracked by Lipper Analytical Services, an independent mutual
fund research firm.(1) While we are quite pleased with the Fund's recent
shorter-term results, we encourage you to look at the Fund as a long-term
investment.
How Your Fund Performed
For the year ended October 31, 1995, Pioneer Europe Fund generated the
following results:
* Class A shares -- Shareowners received a dividend of $0.006 per share, and
a capital gains distribution of $1.399 per share. Net asset value was
$21.19 per share on October 31, versus $19.91 one year earlier. Together,
the price change and the reinvestment of distributions produced a total
return of 15.12% at net asset value, and 8.52% based on maximum public
offering price.
* Class B shares -- Shareowners received a dividend of $0.02 per share, and a
capital gains distribution of $1.399 per share. On October 31, net asset
value was $20.92 per share, versus $19.80 one year earlier. The Fund's
12-month total return was 14.43% assuming shares were held throughout the
period, and 10.43% if shares were redeemed. Both figures include the
reinvestment of distributions.
For additional performance information, please turn to page 4.
European Market Conditions Favorable Despite Slow Economic Growth
European stocks as a whole were rewarding for U.S. investors over the year;
the Morgan Stanley Capital International (MSCI) Europe Index, an unmanaged
measure of European stock markets, posted a total return of 13.68% for the
period. Of course, results varied from country to country, and some market
returns were augmented by the weakness of the U.S. dollar. (Remember that
returns generally increase for U.S. investors in foreign securities when the
dollar declines.) In fact, since Europe's economic recovery began almost two
years ago, a few major markets, namely Germany, France and Italy, have not
seen stock prices themselves increase. Rather, gains have been fueled by
changes in the relationship among currencies.
Individual markets improved late in the fiscal year as the dollar started to
rebound. Many European companies became able to price goods for export more
competitively and profitably than their U.S. counterparts. In addition,
Germany's Bundesbank, the major driver of interest rate changes for the
Continent, lowered short- term interest rates during the summer, giving other
countries latitude to lower their rates and help enhance economic growth.
Identifying Opportunities throughout Europe
To pursue your Fund's objective of long-term capital growth, your management
looks for individual companies that exhibit the potential for superior
returns when measured against their peers. Of course,
(1)Ranking is based on Class A shares; it does not account for sales charges
or fee waivers. Past performance does not guarantee future results.
<PAGE>
we do consider broader events that could have a major effect on a country's
stock market. The United Kingdom offers a good example; its institutional
investors have been overweighted in U.K. equities, relative to bonds and cash,
due to tax incentives associated with the country's 15-year privatization
program. With that program coming to a close, the U.K. government is encouraging
bond ownership as a means to balance the budget. This has caused investors to
shift their assets toward bonds and away from equities. As a result, your
management kept the Fund underweighted in the United Kingdom during the year.
The accompanying chart compares the country weightings of your Fund to those
of the MSCI Europe Index.
Country weightings for other periods will vary.
[Bar Chart]
Geographical Distributions
(Percentage of equity investments as of October 31, 1995)
Morgan Stanley
Capital International
Pioneer Europe Fund (MSCI) Europe Index
------------------- -------------------
Austria 4% 1%
Belgium 1% 2%
Denmark 2% 2%
Finland 6% 1%
France 10% 13%
Germany 11% 14%
Ireland 0% 1%
Italy 10% 5%
Netherlands 12% 8%
Norway 3% 1%
Poland 2% 0%
Portugal 2% 0%
Spain 7% 3%
Sweden 7% 4%
Switzerland 7% 12%
United Kingdom 16% 33%
Over the year, your management identified a number of companies that, based
on our research, represented sound value. Several holdings in the portfolio
come from technology and technology-related cellular products, areas where we
have seen solid growth due to strong global demand. Your Fund has profited
from its holdings in Austria Mikro Systeme (Austria), a provider of
semiconductors to the cellular phone industry; Nokia (Finland) and Ericsson
(Sweden), producers of cellular equipment; and Mannesmann (Germany) and
Telecom Italia Mobile, operators of cellular networks. Your Fund's largest
holding, SAP, a German software firm, continues to benefit from its dominant
position in the client-server segment of corporate information systems.
2
<PAGE>
Another area where we see significant value is the finance industry,
specifically asset management and life insurance. The ongoing concern about
the funding of pension plans in Europe, coupled with favorable interest
rates, is expected to strengthen demand for companies involved in these
areas. The Fund's positions in Wielkopolski Bank Kredytowy (Poland) and Banca
Fideuram (Italy) have been particularly solid, and we expect they will
continue to perform well moving forward.
European cyclical stocks were mixed over the past year; reluctant consumers
dampened areas such as automobiles, retail, machinery, and steel. While we
generally reduced the Fund's exposure in these areas over the 12-month
period, our focus remains on individual companies; where we see value we buy,
and typically hold, securities. For example, we added Sidel (France), to your
Fund's portfolio during the year. The company is a dominant producer of
machinery that is used to make plastic bottles, and it has a highly
competitive global operation. We also took a position in Carrefour, a French
hypermarket retailer. While the retail industry lagged due to low consumer
spending, we recognized Carrefour's solid fundamentals and have seen the
stock appreciate significantly. Your management will continue to select
specific cyclical stocks as European economies gather strength, pursuing
cost-conscious companies with a global perspective. We expect stock prices
ultimately will reflect the gradual improvement in the U.S. dollar and
ongoing economic recovery in Europe.
Looking Ahead
In the United States, rising stock prices have been fueled in part by economic
growth; in Europe, as a whole, this has not yet occurred. Now in the second year
of the region's economic recovery, many European companies expect earnings and
profits to grow at a faster pace, following the pattern seen already in the
United States. Companies that continue to streamline and restructure their
businesses -- a growing necessity given the increase in global competition --
should enhance their earnings. We also expect that continued low interest rates
and low inflation will be effective in encouraging investors and will help push
prices higher in Europe's financial markets over the next few years. These
events, coupled with the many individual opportunities present throughout
Europe, should translate into strong long-term performance for your Fund. While
risks such as currency fluctuations and political and economic uncertainties are
inevitable with overseas investments, we think long-term investors should be
well rewarded.
Please refer to the following pages for the audited list of portfolio
holdings and financial statements as of October 31, 1995. If you have any
questions about your investment in Pioneer Europe Fund, contact your
investment representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/s John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Europe Fund
December 8, 1995
3
<PAGE>
Growth of a $10,000 Investment*
This chart shows the growth of a $10,000 investment made in Pioneer Europe
Fund Class A shares at public offering price, compared with the growth of the
MSCI Europe Index.+
PIONEER EUROPE FUND CLASS A:
Average Annual Total Returns
(as of October 31, 1995)
- ----------------------------------------------------
Life of Fund
1 Year 3 Years (4/2/91)
------ ------- --------
Offering Price* 8.52% 15.81% 9.55%
Net Asset Value 15.12 18.11 10.98
- ----------------------------------------------------
Pioneer Europe Fund Class A MSCI Europe Index
4/30/91 $ 9,910 $10,823
$10,453 $11,280
10/31/91 $11,025 $11,507
$11,239 $12,073
4/30/92 $11,947 $12,344
$12,733 $12,719
10/31/92 $12,848 $12,649
$13,800 $13,349
4/30/93 $14,510 $13,481
$14,870 $13,824
10/31/93 $15,500 $14,533
$15,630 $15,060
4/30/94 $15,110 $14,199
$15,600 $14,541
10/31/94 $15,520 $15,095
$15,310 $15,143
4/30/95 $16,230 $16,672
$17,780 $18,326
10/31/95 $18,550 $19,074
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 14 European country indexes included in
the MSCI Europe, Australia, Far East (EAFE) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees, expenses or sales charges. You
cannot invest directly in the Index.
*Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
+Index comparisons begin April 30, 1991.
Past performance does not guarantee future results. Return and share price
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
4
<PAGE>
Growth of a $10,000 Investment*
This chart shows the growth of a $10,000 investment made in Pioneer Europe
Fund Class B shares, compared with the growth of the MSCI Europe Index.+
PIONEER EUROPE FUND CLASS B:
Average Annual Total Returns
(as of October 31, 1995)
- -------------------------------------
Life of Fund
1 Year (4/4/94)
------ --------
If Redeemed* 10.43% 13.71%
If Held 14.43% 16.05
- -------------------------------------
Pioneer Europe Fund Class B MSCI Europe Index
--------------------------- -----------------
4/30/94 $10,000 $10,000
5/31/94 $10,160 $10,124
6/30/94 $ 9,000 $ 9,928
7/31/94 $10,310 $10,241
8/31/94 $10,500 $10,626
9/30/94 $10,230 $10,414
10/31/94 $10,240 $10,630
11/30/94 $ 9,000 $10,211
12/31/94 $ 9,000 $10,412
1/31/95 $10,090 $10,665
2/28/95 $10,380 $11,049
3/31/95 $10,490 $11,422
4/30/95 $10,670 $11,742
5/31/95 $10,970 $12,168
6/30/95 $11,210 $12,509
7/31/95 $11,670 $12,907
8/31/95 $11,890 $12,903
9/30/95 $12,230 $13,500
10/31/95 $11,750 $13,433
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 14 European country indexes included in
the MSCI Europe, Australia, Far East (EAFE) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees, expenses or sales charges. You
cannot invest directly in the Index.
*Reflects deduction of the maximum 4.0% contingent deferred sales charge at
the end of the period and assumes reinvestment of all distributions.
+Index comparisons begin April 30, 1994.
Past performance does not guarantee future results. Return and share price
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
5
<PAGE>
Pioneer Europe Fund
Schedule of Investments
October 31, 1995
<TABLE>
<CAPTION>
Shares Value
---------- -------------
<S> <C> <C>
INVESTMENTS IN SECURITIES--95.1%
PREFERRED STOCKS--4.9%
13,500 Baumax Vertriebs AG $ 549,487
17,000 Bau Holdings AG 789,815
800 Hornbach Holdings (non-voting) 804,577
14,000 SAP AG 2,149,330
-----------
TOTAL PREFERRED STOCKS (Cost $2,705,966) $ 4,293,209
-----------
COMMON STOCKS--90.1%
BASIC INDUSTRIES--9.0%
Chemicals--1.6%
6,500 Akzo-Nobel NV $ 740,515
21,400 European Vinyls Corp. International NV* 671,570
-----------
$ 1,412,085
-----------
Forest Products--0.9%
150,000 Field Group $ 739,861
-----------
Iron & Steel--0.5%
4,400 Acerinox S.A. (Registered) $ 463,616
-----------
Manufacturing--2.6%
1,700 Buderus AG* $ 729,806
90,000 Safilo SpA 954,896
2,500 Sommer-Allibert 660,908
-----------
$ 2,345,610
-----------
Metals & Mining--3.4%
62,000 Elkem (Series A Free) $ 672,360
12,500 Eramet (Series A Free) 843,386
30,000 Outokumpu Oy (Class A) 477,135
36,000 Hoeganaes AB (Series B Free) 970,673
-----------
$ 2,963,554
-----------
TOTAL BASIC INDUSTRIES $ 7,924,726
-----------
CAPITAL GOODS--15.0%
Aerospace Manufacturing--1.0%
77,000 British Aerospace Plc $ 863,061
-----------
Construction, Building Materials--6.5%
160,000 Elektrim Towarzystwo Handlowe S.A.* $ 534,855
1,050 Holderbank Financiere Glaris AG 843,403
20,000 Legris Industries* 580,658
200,000 Polifarb Wroclaw S.A.* 521,810
130,000 Powerscreen International Plc 793,296
35,000 Tarkett AG* 835,851
125,000 Wolseley Plc 774,641
4,200 Otra NV 865,376
-----------
$ 5,749,890
-----------
Machinery--7.5%
550 Bobst AG $ 833,187
265,000 Danieli & C. SpA Di Risp 732,024
2,700 Mannesmann AG 889,093
77,000 Siebe Plc 916,013
3,300 Sidel S.A. 1,145,655
32,000 S.K.F. AB (Series B Free) 607,348
7,500 VA Technologie AG 869,604
6,050 Zardoya-Otis* 591,336
-----------
$ 6,584,260
-----------
TOTAL CAPITAL GOODS $13,197,211
-----------
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Pioneer Europe Fund
Schedule of Investments
October 31, 1995 (continued)
Shares Value
---------- -------------
CONSUMER DURABLES--3.0%
Motor Vehicles--3.0%
175,000 Fiat SpA $ 346,079
300,000 Fiat SpA Di Risp 566,911
440,000 Magnetti Marelli, Fabb Italy 842,519
18,500 Valeo S.A. 835,544
-----------
TOTAL CONSUMER DURABLES $2,591,053
-----------
CONSUMER NON-DURABLES--9.0%
Retail Food--2.9%
1,400 Carrefour Supermarche S.A. $ 822,081
32,000 Centros Comerciales Continente S.A. 801,611
280,000 McBride Plc* 931,783
-----------
$2,555,475
-----------
Retail Non-Food--4.4%
23,000 Stockmann AB (Class B Free) $1,181,415
20,400 Samas Group CVA 892,383
32,700 Vendex International NV 943,260
20,000 Industrie Natuzzi SpA (A.D.R.) 800,000
-----------
$3,817,058
-----------
Textiles/Clothes--1.7%
1,000 Hugo Boss AG $ 881,339
100,000 Marzotto & Figli SpA 637,225
-----------
$1,518,564
-----------
TOTAL CONSUMER NON-DURABLES $7,891,097
-----------
ENERGY--1.5%
Oil Refining & Drilling--1.5%
10,000 Elf Aquitaine $ 680,842
23,000 Repsol S.A. 687,429
-----------
TOTAL ENERGY $1,368,271
-----------
FINANCIAL--16%
Commercial Banks--6.4%
800 Baer Holding AG $ 968,822
5,000 Banco Popular ESP (Registered) 794,969
54,000 Banco Portugese de Investime (Registered) 831,401
1,350 Bil GT Gruppe AG 832,306
19,000 Unidanmark A/S (Class A Registered) 873,203
330,000 Unitas Bank Ltd. (Class A)* 800,883
200,000 Wielkopolski Bank Kredytowy S.A.* 448,431
-----------
$5,550,015
-----------
Finance-Miscellaneous--2.0%
750,000 Banca Fideuram SpA $ 800,455
6,000 Cetelem 956,860
-----------
$1,757,315
-----------
Insurance--General--6.6%
22,500 Aegon NV $ 854,440
34,000 Assur Gen De France 980,168
600,000 Instituto Nazionale Delle Assicuraz 789,155
8,374 International Nederlanden Groep NV, CVA 499,568
16,000 Mapfre Vida Sa De Seguros 846,218
37,000 Skandia Forsakrings AB (Free) 939,115
3,150 Zurich Versicherungs 901,664
-----------
$5,810,328
-----------
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Pioneer Europe Fund
Schedule of Investments
October 31, 1995 (continued)
Shares Value
---------- -------------
Savings & Loan--1.0%
105,000 Abbey National Plc $ 888,901
-----------
TOTAL FINANCIAL $14,006,559
-----------
SERVICES--10.4%
Health Services & Personal Care--1.0%
275,000 Takare Plc $ 891,232
-----------
Pharmaceuticals--2.5%
100,000 Anagen Plc* $ 102,759
25,000 AB Astra (Series A Free) 918,855
30,000 Jelfa* 346,107
125 Roche Holding AG 908,270
-----------
$ 2,275,991
-----------
Medical Equipment--1.8%
6,000 Elekta AB (B Shares) $ 248,543
1,000 Fresenius AG (Bearer) 903,373
55,000 Whatman Plc 392,577
-----------
$ 1,544,493
-----------
Publishing--1.0%
66,000 Elsevier NV, CVA $ 853,584
-----------
Services--Miscellaneous--4.1%
5,000 ECCO S.A. $ 774,893
185,000 Rentokil Group 921,270
20,000 Randstand Holdings 902,780
145,200 Compass Group 987,051
-----------
$ 3,585,994
-----------
TOTAL SERVICES $ 9,151,294
-----------
TECHNOLOGY--10.4%
Electronics--4.4%
5,000 Alcatel Alsthom Cie Generale D'Electric S.A. $ 426,907
6,300 Austria Mikro Systeme International 1,167,602
170,000 Electrocomponents Plc 870,760
3,000 Felten & Guilleaume AG 479,761
24,000 Philips Electronics NV 928,140
-----------
$ 3,873,170
-----------
Software--1.3%
16,500 Getronics NV $ 787,682
2,000 SAP AG 317,282
-----------
$ 1,104,964
-----------
Telephone Networks--4.7%
27,000 Nera A/S $ 967,330
25,000 Nokia Oy (Class A) (A.D.R.) 1,431,411
7,600 Telefonaktiebolaget LM Ericsson (New B)* 161,417
76,000 Telefonaktiebolaget LM Ericsson (Series B Free) 1,614,173
-----------
$ 4,174,331
-----------
TOTAL TECHNOLOGY $ 9,152,465
-----------
TRANSPORTATION--2.4%
Ships & Shipping--2.4%
7,000 CMB Cie Maritime Belge NPV $ 510,560
50,100 Finnlines Oy 914,866
48,000 Leif Hoegh & Co. 694,049
-----------
TOTAL TRANSPORTATION $ 2,119,475
-----------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Pioneer Europe Fund
Schedule of Investments
October 31, 1995 (continued)
Shares Value
---------- -------------
UTILITIES--11.6%
Electric Utility--3.3%
16,000 Empresa Nacional de Electricidad, S.A. $ 796,363
55,000 National Power Plc 428,661
41,500 National Power Plc+ 132,527
45,000 Southern Electric Plc 677,613
185,000 Union Electrica Fenosa 861,633
-----------
$ 2,896,797
-----------
Utilities Other--1.0%
22,000 Veba AG $ 903,643
-----------
Telecommunications--6.4%
23,000 Koninklijke PTT Nederland NV $ 809,269
46,000 Portugal Telecom (A.D.R.)* 862,500
240,000 Stet Societa' Finanziaria Telfonica SpA 680,293
530,000 Telecom Italia SpA 805,227
480,000 Telecom Italia Mobile SpA* 806,106
10,000 Tele Danmark A/S (Class B) 521,835
12,000 Tele Danmark A/S (A.D.R.) 313,500
200,000 Vodafone Group Plc 826,811
-----------
$ 5,625,541
-----------
Water--0.9%
85,000 Yorkshire Water Plc $ 823,056
-----------
TOTAL UTILITIES $10,249,037
-----------
MISCELLANEOUS--1.8%
Conglomerates & Holdings--1.8%
770 BBC Brown Boveri AG $ 893,157
183,000 Tomkins Plc 721,815
-----------
TOTAL MISCELLANEOUS $ 1,614,972
-----------
TOTAL COMMON STOCKS (Cost $67,361,549) $79,266,160
-----------
WARRANTS--0.1%
3,400 British Aerospace, 11/15/00 $ 13,814
43,750 Danieli & C. SpA Di Risp 11/30/99 21,369
4,350 Holderbank Financier, 12/20/95 5,172
25,000 Interdiscount Holding, 11/15/96 7,707
350 Zurich International, 11/15/96 724
-----------
TOTAL WARRANTS (Cost $51,218) $ 48,786
-----------
TOTAL INVESTMENT IN SECURITIES (Cost $70,118,733) (a) $83,608,155
-----------
Principal
Amount
----------
TEMPORARY CASH INVESTMENTS--4.9%
$1,387,000 Ford Motor Credit Co., 5.71%, 11/01/95 $ 1,387,440
2,928,000 Prudential Funding, 5.72%, 11/02/95 2,928,465
-----------
TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,315,000) $ 4,315,905
-----------
TOTAL INVESTMENTS IN SECURITIES AND TEMPORARY CASH
INVESTMENTS--100.0% (Cost $74,433,733) $87,924,060
===========
</TABLE>
* Non-income producing security.
+ Partly paid security--additional subscription payments of (pound)1.70/share
and (pound)1.36/share will be required on February 6, 1996 and September
17, 1996, respectively.
(a) At October 31, 1995, the net unrealized gain on investments based on cost
for federal income tax purposes of $70,118,733 was as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Aggregate gross unrealized gain for all investments in which there
is an excess of value over tax cost $16,092,545
Aggregate gross unrealized loss for all investments in which there
is an excess of tax cost over value (2,603,123)
------------
Net unrealized gain $13,489,422
============
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the year ended October 31, 1995 aggregated $50,878,827 and $43,748,183,
respectively.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Europe Fund
Balance Sheet
October 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investment in securities, at value (including temporary cash investments of $4,315,905)
(cost $74,433,733; see Schedule of Investments and Note 1) $87,924,060
Foreign currencies, at value (Note 1) 449,453
Cash 649
Receivables--
Investment securities sold 204,282
Trust shares sold 211,234
Dividends, interest and foreign taxes withheld (Note 1) 145,995
Other 9,342
-----------
Total assets $88,945,015
-----------
Liabilities:
Payables--
Investment securities purchased $ 1,133,771
Forward foreign currency settlement contracts--net (Notes 1 and 6) 5,195
Forward foreign currency hedge contracts, open--net (Notes 1 and 6) 217,538
Trust shares repurchased 17,260
Accrued expenses (Notes 2, 3 and 4) 240,469
-----------
Total liabilities $ 1,614,233
-----------
Net Assets:
Paid-in capital (Note 1) $68,170,305
Accumulated undistributed net investment income (Note 1) 217,538
Accumulated undistributed net realized gain on investments and foreign currency transactions
(Notes 1 and 6) 5,672,389
Net unrealized gain on investments (Note 1 ) 13,489,422
Net unrealized loss on forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies (Notes 1 and 6) (218,872)
-----------
Total net assets $87,330,782
===========
Net Asset Value Per Share:
Class A--(based on $ 78,505,187/3,704,319 shares of beneficial interest outstanding--unlimited
number of shares authorized) $21.19
===========
Class B--(based on $ 8,825,595/421,926 shares of beneficial interest outstanding--unlimited
number of shares authorized) $20.92
===========
Maximum Offering Price:
Class A $22.48
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
Pioneer Europe Fund
Statement of Operations
For the Year Ended October 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income (Note 1):
Dividends (net of foreign taxes withheld of $217,172) $ 1,475,667
Interest 308,888
-----------
Total investment income $ 1,784,555
-----------
Expenses:
Management fees (Note 2) $ 758,700
Distribution fees (Note 4)
Class A 147,374
Class B 56,924
Transfer fees (Note 3)
Class A 212,828
Class B 16,260
Registration fees 68,150
Professional fees 69,725
Accounting (Note 2) 125,481
Custodian fees 134,600
Printing 13,670
Fees and expenses of nonaffiliated trustees 14,600
Miscellaneous 18,266
-----------
Total expenses $ 1,636,578
Less fees paid indirectly (Note 5) (9,588)
Less management fees waived by Pioneering Management Corporation (Note 2) (258,946)
-----------
Net expenses $ 1,368,044
-----------
Net investment income $ 416,511
-----------
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency
Transactions:
Net realized gain (loss) from:
Investments (Note 1) $6,306,986
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies (Notes 1 and 6) (487,162) $ 5,819,824
----------
Net unrealized gain (loss) from:
Change in net unrealized gain on investments (Note 1) $4,661,901
Change in net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (Notes 1 and 6) (231,171) 4,430,730
---------- -----------
Net gain on investments and foreign currency transactions $10,250,554
-----------
Net increase in net assets resulting from operations $10,667,065
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Pioneer Europe Fund
Statements of Changes in Net Assets
For the Years Ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
------------- --------------
<S> <C> <C>
From Operations:
Net investment income $ 416,511 $ 152,693
Net realized gain on investments and forward foreign currency transactions 5,819,824 4,872,420
Change in net unrealized gain on investments and forward foreign currency
transactions 4,430,730 3,399,428
------------ ------------
Net increase in net assets resulting from operations $ 10,667,065 $ 8,424,541
------------ ------------
Distributions to Shareholders From:
Net investment Income:
Class A ($0.01 and $0.31 per share, respectively) $ (19,784) $ (865,930)
Class B ($0.02 and $0.05 per share, respectively) (3,800) (1,368)
Net realized gain on investments:
Class A ($1.40 and $0.26 per share, respectively) (4,612,153) (712,343)
Class B ($1.40 and $0.00 per share, respectively) (265,778) --
------------ ------------
Decrease in net assets resulting from distributions to shareholders $ (4,901,515) $ (1,579,641)
------------ ------------
From Trust Share Transactions:
Net proceeds from sale of shares $ 44,624,316 $ 34,561,670
Net asset value of shares issued to shareholders in reinvestment of dividends 4,612,514 1,477,644
Cost of shares repurchased (38,083,556) (21,298,761)
------------ ------------
Increase in net assets resulting from trust share transactions $ 11,153,274 $ 14,740,553
------------ ------------
Net increase in net assets $ 16,918,824 $ 21,585,453
Net Assets:
Beginning of year 70,411,958 48,826,505
------------ ------------
End of year (including accumulated undistributed net investment income of
$217,538 and $93,471, respectively) $ 87,330,782 $ 70,411,958
============ ============
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31, Year Ended October 31,
1995 1994
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,851,392 $ 36,748,396 1,677,415 $ 31,385,645
Shares issued to shareholders in reinvestment of
distributions 252,860 4,351,713 84,595 1,476,439
Less shares repurchased (1,784,047) (35,190,480) (1,131,119) (21,035,267)
----------- ----------- ----------- -----------
Net Increase 320,205 $ 5,909,629 630,891 $ 11,826,817
=========== =========== =========== ===========
CLASS B*
Shares sold 402,070 $ 7,875,920 167,481 $ 3,176,025
Shares issued to shareholders in reinvestment of
distributions 15,269 260,801 67 1,205
Less shares repurchased (148,762) (2,893,076) (14,199) (263,494)
----------- ----------- ----------- -----------
Net increase 268,577 $ 5,243,645 153,349 $ 2,913,736
=========== =========== =========== ===========
</TABLE>
* Class B shares were first publicly offered on April 4, 1994.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
Pioneer Europe Fund
Financial Highlights
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
April 2,
1991 to
For the Year Ended October 31, October 31,
-------------------------------------- -------------
1995+ 1994 1993 1992 1991
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 19.91 $ 17.73 $ 14.63 $ 15.20 $ 15.00
------- ------- ------- ------- -----------
Increase (decrease) from investment operations:
Net investment income $ 0.12 $ 0.10 $ 0.04 $ 0.10 $--
Net realized and unrealized gain (loss) on investments
and other foreign currency transactions 2.57 2.65 3.33 (0.62) 0.20
------- ------- ------- ------- -----------
Total increase (decrease) from investment operations $ 2.69 $ 2.75 $ 3.37 $ (0.52) $ 0.20
Distribution to shareholders from:
Net investment income (0.01) (0.31) (0.09) (0.05) --
Net realized gain (1.40) (0.26) (0.18) -- --
------- ------- ------- ------- -----------
Net increase (decrease) in net asset value $ 1.28 $ 2.18 $ 3.10 $ (0.57) $ 0.20
------- ------- ------- ------- -----------
Net asset value, end of period $ 21.19 $ 19.91 $ 17.73 $ 14.63 $ 15.20
======= ======= ======= ======= ===========
Total return* 15.12% 15.97% 23.47% (3.46%) 1.33%
Ratio of net operating expenses to average net assets 1.76%++ 1.86% 2.00% 2.00% 2.00%**
Ratio of net investment income to average net assets 0.59%++ 0.28% 0.24% 0.74% 0.10%**
Portfolio turnover rate 61.51% 99.92% 68.58% 49.79% 7.34%**
Net assets, end of period (in thousands) $78,505 $67,375 $48,827 $35,205 $ 23,993
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for
fees paid indirectly:
Net operating expenses 2.10% 2.48% 2.77% 3.46% 4.93%**
Net investment income (loss) 0.25% (0.34%) (0.53%) (0.72%) (2.83%) **
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction for fees
paid indirectly:
Net operating expenses 1.75%
Net investment income 0.60%
</TABLE>
*Assumes initial investment at net asset value at the beginning of each period,
reinvestment of all distributions, the complete redemption of the investment at
net asset value at the end of each period and no sales charges. Total return
would be reduced if sales charges were taken into account.
**Annualized.
+The per share data is based upon average shares outstanding for the period
presented.
++Ratios include fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
Pioneer Europe Fund
Financial Highlights
Selected Data for a Share Outstanding for the Periods Presented (continued)
<TABLE>
<CAPTION>
For the April 4, 1994
Year Ended to
October 31, 1995+ October 31, 1994
------------------- -----------------
<S> <C> <C>
CLASS B
Net asset value, beginning of period $19.80 $17.96
----------------- ---------------
Increase from investment operations:
Net investment income (loss) $(0.02) $ 0.01
Net realized and unrealized gain (loss) on investments
and other foreign currency transactions 2.56 1.88
----------------- ---------------
Total increase from investment operations $ 2.54 $ 1.89
Distribution to shareholders from:
Net investment income (0.02) (0.05)
Net realized gain (1.40) --
----------------- ---------------
Net increase in net asset value $ 1.12 $ 1.84
----------------- ---------------
Net asset value, end of period $20.92 $19.80
================= ===============
Total return* 14.43% 10.55%
Ratio of net operating expenses to average net assets 2.49%++ 2.47%**
Ratio of net investment loss to average net assets (0.13%)++ (0.75%)**
Portfolio turnover rate 61.51% 99.92%
Net assets, end of period (in thousands) $8,826 $3,037
Ratios assuming no waiver of management fees and assumption
of expenses by PMC and no reduction for fees paid indirectly:
Net operating expenses 2.85% 2.95%**
Net investment loss (0.49%) (1.23%)**
Ratios assuming waiver of management fees and assumption of
expenses by PMC and reduction for fees paid indirectly:
Net operating expenses 2.46%
Net investment loss (0.10%)
</TABLE>
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
+The per share data is based upon average shares outstanding for the period
presented.
++Ratios include fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
October 31, 1995
1.Pioneer Europe Fund (the Fund) is a Massachusetts business trust,
registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company.
The Board of Trustees (the Trustees) has authorized the issuance of two
classes of the Fund, designated as Class A and Class B shares. Class B shares
were first publicly offered on April 4, 1994. Shares issued and outstanding
prior to April 4, 1994 were designated as Class A shares. The shares of each
class 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 shareholders of Class A and
Class B shares, respectively.
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 sales 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
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 is determined as of such times. Temporary cash investments are valued
at amortized cost plus accrued interest, which approximates market value.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend may have passed are
recorded as soon as the Fund is informed of the ex-dividend date. Interest
income is recorded on the accrual basis, net of unrecoverable foreign taxes
withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Fund's practice first to select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B.Foreign Currency Translation--The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars using current exchange rates.
Net realized gains and losses on foreign currency transactions represents,
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 contracts and from unanticipated movements in the
value of foreign currencies relative to the U.S. dollar (see Note 5).
15
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
(Continued)
D.Federal 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.
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.
The Fund has reclassified from accumulated undistributed net investment
income $268,839 and $21 to accumulated undistributed net realized gain on
investments and foreign currency transactions and paid-in capital,
respectively. This 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.Trust Shares--The Fund records sales and repurchases of its trust 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
$55,999 in underwriting commissions on the sale of the Fund's trust shares
during the year ended October 31, 1995. Distributions to shareholders are
recorded as of the ex-dividend date. Dividends paid by the Fund, if any, with
respect to each class of shares are calculated in the same manner, at the
same time, on the same day and in the same amount, except that Class A and
Class B shares can bear different transfer agent and distribution fees.
F.Class Allocations--Distribution expenses are calculated based on the
average daily net asset value attributable to Class A and Class B shares of
the Fund, respectively. Shareholders of Class A and Class B share all
expenses and fees paid to the transfer agent, Pioneering Services Corpora-
tion (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 (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.
G.Repurchase Agreements--The Fund may enter into repurchase agreements. At
the time the Fund enters into a repurchase agreement, the value of the
underlying security (collateral), including accrued interest, will be equal
to or exceed the value of the repurchase agreement, and in the case of
repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in safekeeping
in the customer-only account of the Fund's custodian, or at the Federal
Reserve Bank. If the seller defaults and the value of the collateral
declines, or if bankruptcy proceedings commence with respect to the seller of
the security, realization of the collateral by the Fund may be delayed or
limited. The Fund had no outstanding repurchase agreements at October 31,
1995.
2.Pioneering Management Corporation (PMC), is 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
average daily net assets up to $300,000,000, 0.85% of the next $200,000,000
and 0.75% of the excess over $500,000,000.
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 average daily net assets attributable to Class A shares;
the portion of the Fund-wide expenses attributable to Class B 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.
16
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
(Continued)
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in accrued expenses is $14,338 in accounting fees
payable to PMC at October 31, 1995.
3.PSC, a wholly owned subsidiary of PGI, provides substantially all
transfer agent and shareholder services to the Fund at negotiated rates.
Included in accrued expenses is $32,824 in transfer agent fees payable to PSC
at October 31, 1995.
4.The Fund adopted a Plan of Distribution for Class A shares (Class A
Plan) and Class B shares (Class B Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. These plans allow for Class A shares and
Class B shares to reimburse and compensate PFD for providing varying levels
of distribution services and other account maintenance services. The Class A
Plan and Class B Plan provide for reimbursement of PFD's distribution
services in an amount up to 0.25% and 0.75%, respectively, of the average
daily net assets of the respective classes of shares. The Fund may also
compensate PFD for additional services in an amount up to 0.25% of the Fund's
average daily net assets attributable to Class B shares. Included in accrued
expenses is $12,783 in distribution fees payable to PFD at October 31, 1995.
In addition, Class B shares that are redeemed within six years of purchase
are subject to a contingent deferred sales charge (CDSC) at declining rates
beginning at 4.0% based on the lower of cost or market value of shares being
redeemed. Proceeds from the CDSC are paid to PFD. For the year ended October
31, 1995, CDSC in the amount of $6,902 was paid to PFD.
5.The Fund has entered into certain expense offset arrangements resulting
in a reduction in the Fund's total expenses. For the year ended October 31,
1995, fees paid indirectly through such offset arrangements were $9,588
6.At October 31, 1995, 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 October 31, 1995 were as follows:
<TABLE>
<CAPTION>
Net
Contracts In Exchange Settlement Unrealized
Currency to Deliver For Date Value Gain (Loss)
- ---------- ----------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
DEM 2,775,000 $ 2,000,000 3/08/96 $ 1,982,568 $ 17,432
DEM 4,396,800 3,000,000 2/21/96 3,138,106 (138,106)
DEM 8,535,000 6,000,000 3/06/96 6,096,864 (96,864)
----------- ----------- ----------
$11,000,000 $11,217,538 $(217,538)
=========== =========== ==========
</TABLE>
Included in accumulated undistributed net realized gain on investments and
foreign currency transactions is $401,014, which represents the net realized
loss on contracts totaling approximately $14,300,000, which have been closed
prior to the settlement dates with offsetting contracts.
At October 31, 1995, the gross forward foreign currency settlement
contracts receivable and payable were $883,800 and $888,995, respectively,
resulting in a net payable of $5,195.
17
<PAGE>
Trustees' Fees, Principal Shareholders and Share Ownership
of Trustees and Officers (Unaudited)
The aggregate direct remuneration paid by the Fund to nonaffiliated trustees
and officers during the period ended October 31, 1995 was approximately
$10,700 plus expenses incurred in attending trustees meetings of
approximately $1,800. Fees of trustees who are affiliated with or "interested
persons" of Pioneering Management Corporation and Pioneer Funds Distributor,
Inc., investment adviser and principal underwriter, respectively, of the Fund
($1,000 in 1995), are reimbursed to the Fund by Pioneering Management
Corporation in accordance with the management contract with the Fund. At
October 31, 1995, the trustees and officers of the Fund owned beneficially
15,987 Class A shares of the Fund (approximately 0.43% of the outstanding
Class A shares). The Pioneer Group, Inc., the parent company of Pioneering
Management Corporation and Pioneer Funds Distributor, Inc., is a publicly
held corporation of which Mr. Cogan, Chairman and President of the Fund,
owned approximately 15% of the outstanding shares of capital stock at October
31, 1995.
Tax Treatment of Distributions
Made During the Year Ended October 31, 1995
During the year ended October 31, 1995, the Fund paid the following
distributions:
<TABLE>
<CAPTION>
Distribution Per Share
----------------------
From Net
Realized Gain
-------------
From Net
To Shareholders Investment
of Record Payment Date Income Short-term Long-term
--------------- ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C>
Class A Shares
12/20/94 12/28/94 $ 0.01 $ 0.34 $ 1.06
Class B Shares
12/20/94 12/28/94 $ 0.02 $ 0.34 $ 1.06
</TABLE>
On a per share basis, the distributions to Class A and Class B shareholders
from net realized gain include $1.06, which should be reported as long-term
capital gain. The remaining $0.34 should be combined with the $0.01 and $0.02
distributions from net investment income for a total of $0.35 and $0.36 for
Class A and Class B shares, respectively, which represent ordinary income.
Shareholders who elected to take the Capital Gain Distribution in additional
shares of the Fund should report the distribution as explained above. The tax
cost of the shares received is $17.21 and $17.08 per share for Class A and
Class B shares, respectively.
The Fund hereby designates $8,954,285 as a capital gain dividend for the
purposes of the dividend paid deduction.
18
<PAGE>
Report of Independent Public Accountants
To the Shareholders and the Board of Trustees of Pioneer Europe Fund:
We have audited the accompanying balance sheet of Pioneer Europe Fund,
including the schedule of investments, as of October 31, 1995, and the
related statement of operations, statements of changes in net assets and
financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with 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 October 31, 1995 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Pioneer Europe Fund as of October 31, 1995, the results of its operations,
the changes in its net assets and financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 27, 1995
19
