Pioneer Europe Fund
Dear Fellow Shareowners,
Pioneer Europe Fund ended the first six months of its fifth fiscal year on
April 30, 1995. This semiannual report details your Fund's performance for the
period, and discusses Europe's encouraging investing climate in light of its
continued slow economic growth and low interest rates.
How Your Fund Performed
For the six months ended April 30, 1995, Pioneer Europe Fund generated the
following results:
[bullet] Class A shares -- Shareowners received an income dividend of $0.006 per
share, and a capital gains distribution of $1.40. Net asset value was $18.98 per
share on April 30, versus $19.91 six months earlier, reflecting the payment of
distributions. Together, the price change and the reinvestment of distributions
produced a total return of 3.11% at net asset value, and -2.80% based on maximum
public offering price. The Fund performed solidly in comparison to its peers;
the average Europe fund (as tracked by Lipper Analytical Services, an
independent mutual fund research firm), returned 2.38% over the same period.
[bullet] Class B shares -- Shareowners received an income dividend of $0.02 per
share, and a capital gains distribution of $1.40. On April 30, net asset value
was $18.80 per share, versus $19.80 per share on October 31, reflecting the
payment of distributions. The Fund's six-month total return was 2.84% assuming
shares were held throughout the period, and -0.96% if shares were redeemed.
Both figures include the reinvestment of distributions.
The accompanying chart provides your Fund's results over longer time
periods.
<TABLE>
<CAPTION>
Average Annual Total Returns
(as of April 30, 1995)
Class A Shares Net Asset Value Public Offering Price*
<S> <C> <C>
Life-of-Fund (4/2/91) 9.42% 7.83%
3 Years 9.55 7.42
1 Year 9.21 2.93
Class B Shares Return If Not Redeemed Return If Redeemed**
Life-of-Fund (4/4/94) 12.61% 8.94%
1 Year 8.38 4.39
</TABLE>
*Reflects deduction of the maximum 5.75% sales charge and assumes reinvestment
of all distributions at net asset value.
**Reflects deduction of the maximum 4.0% contingent deferred sales charge and
assumes reinvestment of all distributions.
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.
<PAGE>
Currencies Mixed; Interest Rates Trend Lower
Performance in European markets generally was solid during the six-month
period; the Morgan Stanley Capital International (MSCI) Europe Index, an
unmanaged measure of European stock markets, posted a total return of 5.97% for
the period. Of course, results varied among individual countries. For example,
Italy's market declined throughout most of the period due primarily to lack of
confidence in its government. Political instability existed there during much
of the period, causing the lira to weaken and inflation to creep upward.
France's market, after experiencing lackluster results at the beginning of the
six-month period, moved higher as 1995 progressed in anticipation of May's
elections, where job creation and economic growth were the candidates' primary
focus. Switzerland performed strongly, as did its currency, which appreciated
against the currencies of its European neighbors, including the German
deutschemark. Germany's market also was strong, thanks in large part to its low
deficit and inflation. Germany's Bundesbank, the major decision maker of
interest rate changes for the Continent, continued to hold down interest rates
- -- causing rates to remain low throughout most of Europe. The deutschemark also
appreciated against most other currencies, notably the U.S. dollar.
Strong results within European markets stemmed, in part, from stronger European
currencies. In response to changing monetary exchange rates, your management
hedged the Fund's portfolio against the deutschemark and Swedish krona. We had
kept the Fund unhedged throughout 1994 when European currencies appreciated
strongly. In March 1995, however, we initiated hedges in response to the
growing strength of the deutschemark and Swiss franc versus the U.S. dollar. We
expect your Fund to benefit from this strategy, since we believe the U.S.
dollar's recent decline was overdone, and that the dollar will appreciate over
the coming year.
Identifying Opportunities throughout Europe
To pursue the Fund's objective of long-term capital growth, your management
looks for companies trading below what we think is their fair market value. Over
the period, we identified a number of companies -- many of them within emerging
areas -- that had suffered from the impact of rising U.S. interest rates.
Despite recent poor performance, your management believes these companies
represent sound value. We also are encouraged by the long-term growth potential
that exists in many developing markets. For example, your management established
the Fund's first position in Eastern Europe (specifically, Poland) in January.
Our decision to diversify into this region stemmed from the area's overall
market decline, which we think presented some good long-term opportunities for
your Fund. We bought four securities at a time when the Polish market appeared
to be at an historic low. Although the market proceeded to fall another 15%,
your management considers the investments to be solid, and so we augmented three
of the four holdings. As of April 30, this strategy had paid off; the Fund's
Polish holdings recovered and, together, currently are up 27% over our initial
cost. These companies are: Jelfa, a pharmaceutical company; Polifarb Wroclaw
S.A., a company involved in capital goods; Wielkopolski Bank Kredytowy S.A., a
commercial bank; and Elektrim Towarzystwo Handlowe S.A., a construction-related
conglomerate.
2
<PAGE>
This movement to other areas of Europe is reflected in the Fund's geographical
weighting versus that of the MSCI Europe Index. The Index remains heavily
influenced by well-established markets like the United Kingdom, while the
Fund's country weighting is more diverse.
<TABLE>
<CAPTION>
Geographical Distributions (Unaudited)
(Percentage of equity investments as of April 30, 1995)
Morgan Stanley Capital International
Pioneer Europe Fund (MSCI) Europe Index
<S> <C> <C>
Austria 4% 1%
Belgium 1% 2%
Denmark 1% 2%
Finland 6% 1%
France 13% 13%
Germany 15% 14%
Ireland 0% 1%
Italy 11% 5%
Netherlands 9% 8%
NOrway 2% 1%
Poland 3% 0%
Portugal 1% 0%
Spain 7% 3%
Sweden 8% 4%
Switzerland 5% 11%
United Kingdom 14% 34%
</TABLE>
Cyclical stocks in Europe generally have become more attractive due to a
sell-off that started last September. While cyclical products such as
machinery, chemicals and steel may experience greater volatility than basic-
necessity items, they also tend to perform well in an improving economic
climate, providing the potential for sizable rewards. The last few months of
the semiannual period reflect this; the Fund's holdings in this area rebounded
nicely. We recently added Sidel S.A., based in France, to your Fund's
portfolio. This highly competitive company is a dominant producer of machinery
that is used to make plastic bottles, and has an impressive global operation.
Your management will continue the Fund's strong push into specific cyclical
stocks while European economies gather strength. We will look for
cost-conscious companies with a global perspective since this focus should
benefit the Fund over the long term, despite any short-term market volatility.
The automobile industry was one cyclical area your management moved away from
during the period. While we continue to hold a few auto stocks, namely Fiat SpA
(Italy) and Bayerische Motoren Werke AG (Germany's BMW), we sold the Fund's
positions in Volkswagen AG (Germany) and Renault (France). In our view, the
prospects for many overseas, large-volume auto producers have become less
favorable because of reluctant consumer spending.
3
<PAGE>
An area where we see potential is the technology/telecommunications industry.
We held and acquired stocks in this sector to augment the Fund's exposure to
the strong upturn in telecommunications spending we expect. Your Fund's largest
holding, SAP AG, a German software firm, continues to benefit from its dominant
position in the client-server segment of corporate information systems. Sales
have grown at over 50%, with earnings growth slightly better. The Fund also has
benefited from its holdings in Austria Mikro Systems International (Austria), a
provider of semiconductors to the cellular phone industry, and Nokia Oy
(Finland), a manufacturer of cellular handsets. We expect solid growth from
these companies as they continue to benefit from strong global demand for their
products. In addition, we recently added Telefonaktiebolaget LM Ericcson to
your Fund's portfolio; the Swedish company dominates the cellular equipment
market.
Looking Ahead
Your management remains optimistic about the future of European investing. We
expect companies will continue to streamline and restructure (similar to what
has occurred with U.S. businesses over the past five years). While downsizing
probably will keep unemployment high, we think the overall results will lead to
stronger corporate earnings. We also expect that low interest rates and low
inflation, coupled with improving economies, will help drive prices higher in
Europe's financial markets over the next few years.
As the U.S. dollar begins to gain strength, we believe investors will show even
more optimism about European markets. The opportunities present in Eastern
Europe should add to your Fund's long-term results. While risks such as
currency fluctuations and political and economic uncertainties remain
inevitable, no matter what the foreign market, we think the long-term rewards
for investors will be well worthwhile.
Please refer to the following pages for audited portfolio holdings and
financial statements as of April 30, 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,
[signature of John F. Cogan, Jr.]
John F. Cogan, Jr.
Chairman and President,
Pioneer Europe Fund
June 8, 1995
4
<PAGE>
PLEASE TURN PAGE FOR THE SCHEDULE OF INVESTMENTS
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1995
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INVESTMENT IN SECURITIES--91.4%
PREFERRED STOCKS--4.3%
13,500 Baumax Vertriebs AG* $ 618,776
700 Hornbach Holding AG 838,859
1,800 SAP AG 1,779,157
TOTAL PREFERRED STOCKS (Cost $1,958,444) $ 3,236,792
COMMON STOCKS--87.0%
BASIC INDUSTRIES--7.9%
Chemicals--1.9%
6,000 Akzo-Nobel NV Ord $ 695,739
16,000 European Vinyls Corp. International NV* 702,954
$ 1,398,693
Forest Products--1.5%
67,000 Bowater Industries $ 482,882
150,000 Field Group 656,370
$ 1,139,252
Iron & Steel--2.0%
4,400 Acerinox S.A. (Registered) $ 503,859
40,000 Hoganas AB (Series B Free) 676,447
9,000 Koninklijke Nederlandsche Hoogovens en
Staalfabrieken NV, CVA 346,710
$ 1,527,016
Metals & Mining--2.5%
52,000 Elkem (Series A Free)* $ 671,654
10,100 Eramet* 700,343
30,000 Outokumpu Oy (Class A) 535,832
$ 1,907,829
TOTAL BASIC INDUSTRIES $ 5,972,790
CAPITAL GOODS--14.6%
Aerospace Manufacturing--1.0%
85,000 British Aerospace Plc $ 732,946
Construction, Building Materials & Engineering--6.6%
1,350 Buderus AG $ 727,571
110,000 Elektrim Towarzystwo Handlowe S.A. 420,317
3,520 Fomento de Construcciones y Contratas
S.A. 323,041
870 Holderbank Financiere Glaris AG 698,277
10,000 Legris Industries* 755,560
200,000 Polifarb Wroclaw S.A.* 574,215
180,000 Powerscreen International Plc 810,810
118,000 Wolseley Plc 664,413
$ 4,974,204
Machinery--7.0%
225,000 Danieli & C. SpA, Di Risp $ 722,813
2,700 Mannesmann AG 732,441
3,400 Sidel S.A. 992,343
36,000 S.K.F. AB (Series B Free) 725,118
5,500 Traub AG 666,643
7,500 VA Technologie AG* 827,496
5,500 Zardoya Otis 578,455
$ 5,245,309
TOTAL CAPITAL GOODS $10,952,459
CONSUMER DURABLES--7.8%
Motor Vehicles--7.8%
45,000 Autoliv AB Free $ 2,035,528
1,400 Bayerische Motoren Werke AG 717,146
175,000 Fiat SpA Priv.* 450,792
200,000 Fiat SpA Di Risp (Non-Conv.) 499,128
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1995 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Motor Vehicles (continued)
270,000 Magnetti Marelli, Fabb Italy* $ 716,388
1,800 Sommer Allibert 686,585
13,000 Valeo 739,311
TOTAL CONSUMER DURABLES $5,844,878
CONSUMER NON-DURABLES--6.2%
Home Products--1.0%
20,000 Industrie Natuzzi SpA (A.D.R.) $ 747,500
Retail Food--2.9%
1,600 Carrefour Supermarche S.A. $ 801,056
32,000 Centros Comerciales Continente S.A.* 690,004
250,000 Iceland Group Plc 711,871
$2,202,931
Retail Non-Food--0.2%
1,500 Interdiscount Holding PC $ 138,713
Textiles/Clothes--2.1%
1,000 Hugo Boss AG $ 829,696
100,000 Marzotto & Figli SpA 713,890
$1,543,586
TOTAL CONSUMER NON-DURABLES $4,632,730
ENERGY--1.9%
Oil Refining & Drilling--1.9%
9,000 Societe Nationale Elf Aquitaine $ 717,843
23,000 Repsol S.A. 732,236
TOTAL ENERGY $1,450,079
FINANCIAL--11.2%
Commercial Banks--4.6%
5,000 Banco Popular ESP (Registered) $ 683,019
34,750 Banco Portugese de Investime 610,068
17,000 Unidanmark A/S (Class A Registered) 777,694
280,000 Unitas Bank, Ltd. 'A' * 826,953
200,000 Wielkopolski Bank Kredytowy S.A.* 574,215
$3,471,949
Finance-Misc.--2.6%
530,000 Banca Fideuram SpA $ 641,638
3,400 Cetelem 717,498
200,000 Finanzia & Futuro Holding SpA* 583,010
$1,942,146
Insurance--General--3.1%
9,000 Aegon NV $ 698,638
8,200 Inter. Nederlanden Groep NV, CVA 432,105
15,000 Societe Centrale des Assurances Generales
de France 495,379
500 Zurich Versicherungs BR 530,425
200 Zurich Versicherungs 213,217
$2,369,764
Savings & Loan--0.9%
95,000 Abbey National Plc $ 712,193
TOTAL FINANCIAL $8,496,052
SERVICES--8.5%
Health Services & Personal Care--1.1%
250,000 Takare Plc $ 804,375
Hotel/Restaurant--0.9%
125,200 Compass Group $ 672,727
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1995 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Pharmaceuticals--3.7%
25,000 Astra AB (Series A Free) $ 728,693
1,150 Fresenius AG (Bearer) 750,875
15,000 Jelfa* 186,831
125 Roche Holding AG, Genuss DRC 750,818
55,000 Whatman Plc 387,548
$2,804,765
Publishing--1.1%
74,000 Elsevier NV, CVA $ 810,407
Miscellaneous Services--1.7%
1,750 Chargeurs $ 348,329
5,625 ECCO S.A. 767,747
75,000 Leigh Interests 166,506
$1,282,582
TOTAL SERVICES $6,374,856
TECHNOLOGY--11.9%
Electronics--8.8%
8,000 Alcatel Alsthom Cie Generale D'Electric
S.A. $ 740,936
9,900 Austria Mikro Systeme International 982,659
3,000 Felten & Guilleaume AG 651,492
18,268 Getronics NV 747,286
22,000 Philips Electronics NV 839,009
1,800 SAP AG 1,857,075
9,000 Sligos S.A. 776,886
$6,595,343
Telephone Networks--3.1%
50,000 Nokia Oy AB (Class A) $2,039,256
8,000 Nokia Oy (Class A) (A.D.R.) 328,000
$2,367,256
TOTAL TECHNOLOGY $8,962,599
TRANSPORTATION--2.7%
Ships & Shipping--2.7%
7,000 CMB Cie Maritime Belge NPV $ 539,774
30,000 Finnlines Oy 608,261
48,000 Leif Hoegh & Co. 677,751
43,500 Stena Line AB (Series B Free) 219,495
TOTAL TRANSPORTATION $2,045,281
UTILITIES--11.3%
Electric Utility--3.2%
16,000 Empresa Nacional de Electricidad, S.A. $ 756,275
55,000 National Power Plc 400,820
41,500 National Power Plc+* 120,174
150,000 Union Electrica Fenosa 628,605
45,000 Southern Electric Plc 478,522
$2,384,396
Utilities Other--0.9%
1,900 Veba AG $ 707,334
Telecommunications--6.2%
20,000 Koninklijke PTT Nederland NV $ 697,027
185,000 Stet Societa' Finanziaria Telfonica SpA 526,077
600,000 Telecom Italia SpA 1,597,327
17,000 Telefonaktiebolaget LM Ericsson (Series B
Free) 1,124,249
220,000 Vodafone Group Plc 686,614
$4,631,294
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1995 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Water--1.0%
85,000 Yorkshire Water Plc $ 746,620
TOTAL UTILITIES $ 8,469,644
MISCELLANEOUS--3.0%
Conglomerates & Holdings--3.0%
680 BBC Brown Boveri AG $ 670,953
1,700 Otra NV 343,328
3,000 Rentsch Holdings AG 575,791
183,000 Tomkins Plc 688,899
TOTAL MISCELLANEOUS $ 2,278,971
TOTAL COMMON STOCKS (Cost $54,485,142) $65,480,339
UNITS--0.0%
3,400 British Aerospace Plc++* $ 39,929
TOTAL UNITS (Cost $35,538) $ 39,929
WARRANTS--0.1%
43,750 Danieli & Co., 11/30/99 $ 35,137
25,000 Interdiscount Holding, 11/15/96 9,815
350 Zurich International, 11/15/96 107
TOTAL WARRANTS (Cost $40,436) $ 45,059
TOTAL INVESTMENT IN SECURITIES (Cost
$56,519,560) (a) $68,802,119
Principal
Amount
TEMPORARY CASH INVESTMENTS--8.6%
$3,072,000 Beneficial Corp., 5.90%, 5/03/95 $ 3,073,512
1,670,000 Commercial Credit Corp., 5.93%, 5/02/95 1,671,101
1,742,000 Exxon Asset Management, 5.93%, 5/01/95 1,743,436
TOTAL TEMPORARY CASH INVESTMENTS (Cost
$6,484,000) $ 6,488,049
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS--100.0%
(Cost $63,003,560) $75,290,168
</TABLE>
* Non-income producing security.
+ Partly-paid security--additional subscription payment of (pound)1.70/share
and (pound)1.36/share will be required on February 6, 1996 and September
17, 1996, respectively.
++ Partly-paid security--additional subscription payment of (pound)16.00/share
may be required upon company's discretion.
(a) At April 30, 1995, the net unrealized appreciation on investments based on
cost for federal income tax purposes of $56,519,560 was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value
over tax cost $13,222,979
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value (940,420)
Net unrealized appreciation $12,282,559
</TABLE>
Purchases and sales of investment securities (excluding temporary cash
investments) for the six months ended April 30, 1995, aggregated $22,518,603
and $22,262,395, respectively.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Europe Fund
Balance Sheet
April 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investment in securities, at value (including temporary cash investments of $6,488,049)
(cost $63,003,560; see Schedule of Investments and Note 1) $75,290,168
Cash 1,315
Receivables--
Investment securities sold 197,852
Trust shares sold 88,682
Dividends, interest and foreign taxes withheld (Note 1) 386,851
Due from Pioneering Management Corporation (Note 2) 30,787
Other 948
Total assets $75,996,603
Liabilities:
Payables--
Investment securities purchased $ 2,346,161
Forward foreign currency settlement contracts--net (Notes 1, 5 and 6) 21,722
Forward foreign currency hedge contracts, open--net (Notes 1, 5 and 6) 856,290
Trust shares repurchased 27,595
Accrued expenses (Notes 2, 3 and 4) 133,961
Total liabilities $ 3,385,729
Net Assets:
Paid--in capital (Note 1) $62,017,304
Distribution in excess of net investment income (Note 1) (208,705)
Accumulated net realized loss on investments and foreign currency transactions (Notes 1, 5 and 6) (642,985)
Net unrealized gain on investments (Note 1) 12,282,559
Net unrealized loss on forward foreign currency contracts and other assets and liabilities denominated in
foreign currencies (Notes 1, 5 and 6) (837,299)
Total net assets $72,610,874
Net Asset Value Per Share:
Class A--(based on $67,230,069/3,542,804 shares of beneficial interest outstanding--unlimited
number of shares authorized) $18.98
Class B--(based on $5,380,805/286,219 shares of beneficial interest outstanding--unlimited number
of shares authorized) $18.80
Maximum Offering Price:
Class A $20.13
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
Pioneer Europe Fund
Statement of Operations
For the Six Months Ended April 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income (Note 1):
Dividends (net of foreign taxes withheld of $80,056) $ 452,280
Interest 140,198
Total investment income $ 592,478
Expenses:
Management fees (Note 2) $ 335,083
Distribution fees (Note 4)
Class A 66,148
Class B 20,095
Transfer fees (Note 3)
Class A 97,250
Class B 6,013
Registration fees 47,910
Professional fees 40,565
Accounting (Note 2) 61,900
Custodian fees 68,360
Printing 5,430
Fees and expenses of nonaffiliated trustees 7,240
Miscellaneous expenses 12,501
Total expenses $ 768,495
Less management fees waived and expenses assumed by Pioneering Management
Corporation (Note 2) (168,978)
Net expenses $ 599,517
Net investment loss $ (7,039)
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions:
Net realized loss from:
Investments (Note 1) $ (383,404)
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies (Notes 1, 5 and 6) (114,860) $ (498,264)
Net unrealized gain (loss) from:
Increase in net unrealized gain on investments (Note 1) $3,455,038
Decrease in net unrealized gain on forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (Notes 1, 5 and 6) (849,598) 2,605,440
Net gain on investments and foreign currency transactions $2,107,176
Net increase in net assets resulting from operations $2,100,137
</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 Six Months Ended April 30, 1995 and Year Ended October 31, 1994
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
April 30, October 31,
1995 1994
<S> <C> <C>
From Operations:
Net investment income (loss) $ (7,039) $ 152,693
Net realized gain (loss) on investments and forward foreign currency transactions (498,264) 4,872,420
Increase in net unrealized gain on investments and forward foreign currency transactions 2,605,440 3,399,428
Net increase in net assets resulting from operations $ 2,100,137 $ 8,424,541
Distributions to Shareholders From:
Investment Income:
Class A--net ($0.01 and $0.31 per share, respectively) $ (19,784) $ (865,930)
Class B--net ($0.02 and $0.05 per share, respectively) (3,800) (1,368)
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 $ 14,759,769 $ 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 (14,371,989) (21,298,761)
Increase in net assets resulting from trust share transactions $ 5,000,294 $ 14,740,553
Net increase in net assets $ 2,198,916 $ 21,585,453
Net Assets:
Beginning of period 70,411,958 48,826,505
End of period (including (distribution in excess of) accumulated undistributed net investment
income of $(208,705) and $93,471, respectively) $ 72,610,874 $ 70,411,958
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended April 30, Year Ended October 31,
1995 1994
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold 649,598 $ 11,748,232 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 (743,768) (13,497,490) (1,131,119) (21,035,267)
Net Increase 158,690 $ 2,602,455 630,891 $ 11,826,817
CLASS B*
Shares sold 165,458 $ 3,011,537 167,481 $ 3,176,025
Shares issued to shareholders in reinvestment of
distributions 15,269 260,801 67 1,205
Less shares repurchased (47,857) (874,499) (14,199) (263,494)
Net increase 132,870 $ 2,397,839 153,349 $ 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>
For the Six April 2, 1991 to
Months Ended For the Years Ended October 31, October 31,
April 30, 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 $ 0.01 $ 0.10 $ 0.04 $ 0.10 $ --
Net realized and unrealized gain (loss) on investments,
forward currency contracts and other foreign currency
related transactions 0.47 2.65 3.33 (0.62) 0.20
Total increase (decrease) from investment operations $ 0.48 $ 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 $ (0.93) $ 2.18 $ 3.10 $ (0.57) $ 0.20
Net asset value, end of period $ 18.98 $ 19.91 $ 17.73 $ 14.63 $ 15.20
Total return* 3.11% 15.97% 23.47% (3.46%) 1.33%
Ratio of net operating expenses to average net assets 1.75%** 1.86% 2.00% 2.00% 2.00%**
Ratio of net investment income to average net assets 0.01%** 0.28% 0.24% 0.74% 0.10%**
Portfolio turnover rate 70.98%** 99.92% 68.58% 49.79% 7.34%**
Net assets, end of period (in thousands) $67,230 $67,375 $48,827 $35,205 $23,993
Ratios assuming no waiver of management fees or assumption
of expenses by PMC:
Net operating expenses 2.25%** 2.48% 2.77% 3.46% 4.93%**
Net investment loss (0.49%)** (0.34%) (0.53%) (0.72%) (2.83%)**
</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 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>
April 4, 1994
For the Six to
Months Ended October 31,
April 30, 1995 1994
<S> <C> <C>
CLASS B***
Net asset value, beginning of period $19.80 $17.96
Increase (decrease) from investment operations:
Net investment income (loss) $(0.01) $ 0.01
Net realized and unrealized gain on investments, forward
foreign currency contracts and other foreign currency
related transactions 0.43 1.88
Total increase from investment operations $ 0.42 $ 1.89
Distribution to shareholders from:
Net investment income (0.02) (0.05)
Net realized gain (1.40) --
Net increase (decrease) in net asset value $(1.00) $ 1.84
Net asset value, end of period $18.80 $19.80
Total return* 2.84% 10.55%
Ratio of net operating expenses to average net assets 2.40%** 2.47%**
Ratio of net investment loss to average net assets (0.51%)** (0.75%)**
Porfolio turnover rate . 70.98%** 99.92%
Net assets, end of period (in thousands) $5,381 $3,037
Ratios assuming no waiver of management fees or assumption
of expenses by PMC:
Net operating expenses 3.05%** 2.95%**
Net investment loss (1.16%)** (1.23%)**
</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.
*** Class B shares were publicly offered on April 4, 1994.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
April 30, 1995
1. Pioneer Europe Fund (the Fund), a Massachusetts business trust, is
registered under the Investment Company Act of 1940 as a diversified, open-end
management 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 voting, redemption, dividend and liquidation rights, 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 holders 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. Investment Securities--Security transactions are recorded on the date the
securities are purchased or sold. Each day, investments in 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 will be valued at their fair value 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 value 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 stated at cost plus accrued interest, which approximates
market value. Dividend income is recorded on the ex-dividend date, except that
certain dividends from foreign securities that are not known on the ex-
dividend date are recorded as soon as the Fund is informed of the dividends.
Interest income is recorded on the accrual basis net of unrecoverable foreign
taxes withheld at the applicable country rates.
Gains and losses from 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. In addition, net realized capital gains on securities in certain
countries give rise to capital gains taxes. It is the Fund's policy to provide
a reserve against net unrealized capital gains on certain foreign securities
held by the Fund.
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 (see Note 6).
C. Forward Foreign Currency Contracts--The Fund is authorized to enter 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 translation rates, and any resulting unrealized
gains or losses are recorded in the Fund's financial statements. The Fund
records realized gains or 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 provisions are required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with income tax rules. Therefore, the
source of a portfolio'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 capital, depending on
the type of book/tax differences that may exist.
At April 30, 1995, the Fund has reclassified $271,553 from Accumulated
undistributed net investment income to Accumulated net realized loss on
investments and foreign currency transactions.
E. Trust Shares--The Fund records sales and repurchases of its shares on the
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 a wholly owned subsidiary of The Pioneer Group, Inc. (PGI). PFD retained
$25,118 in underwriting commissions on the sale of trust shares during the six
months ended April 30, 1995. Dividends and 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 and on the same day and are 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 service organization, 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
expenses (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.
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.
In addition, under the management agreement, certain services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. Included in Accrued expenses is $4,234 in accounting fees payable to
PMC at April 30, 1995.
PMC has agreed to waive its management fees and to assume other operating
expenses for the Fund to the extent necessary to limit expenses of the Fund to
2.00% of average daily net assets. Effective April 30, 1994, under the
Contract, PMC agreed to change the voluntary expense limitation from 2.00% to
1.75%, further limiting the Fund's expenses. PMC's agreement to waive its
management fees and to assume certain expenses of the Fund is temporary and
voluntary.
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 $20,538 in transfer fees payable to PSC at April 30, 1995.
4. The Fund has adopted a Plan of Distribution for both Class A shares ("Class
A Plan") and Class B shares ("Class B Plan") in accordance with Rule 12b-1
under the Investment Company Act of 1940.
16
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
(Continued)
The Class A Plan generally provides that the Fund will reimburse PFD for its
actual expenditures to finance activities intended to result in the sale of
Class A shares or to provide services to holders of Class A shares or to
provide services to the Fund's shareholders. Expenditures of the Fund pursuant
to the Class A Plan may not exceed 0.25% of the Fund's average annual net
assets attributable to Class A shares. The Class B Plan provides that the Fund
may pay a distribution fee at an annual rate of 0.75% of the Fund's average
annual net assetsattributable to Class B shares and may pay PFD a service fee
at the annual rate of 0.25% of the Fund's average daily net assets attributable
to Class B shares. Included in Accrued expenses is $16,029 in distribution fees
payable to PFD at April 30, 1995.
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%
of the lesser of the current market value at the time of redemption or the
original purchase cost of the shares being redeemed. Proceeds from the CDSC are
paid to PFD. For the six months ended April 30, 1995, CDSC in the amount of
$1,646 was paid to PFD.
5. At April 30, 1995, the Fund had entered into various contracts that
contractually obligate the Fund to deliver currencies at specified future
dates. At the maturity of a portfolio hedge, the Fund must take delivery of the
foreign currency. Alternatively, prior to the settlement date of a portfolio
hedge, the Fund may close out such contract by entering into an offsetting
hedge contract. Open portfolio hedges at April 30, 1995 were as follows:
<TABLE>
<CAPTION>
Net
Contracts In Exchange Settlement Unrealized
Currency to Deliver For Date Value Loss
<S> <C> <C> <C> <C> <C>
DEM 4,560,000 $ 3,000,000 7/17/95 $ 3,300,521 $(300,521)
DEM 4,396,800 3,000,000 2/21/96 3,214,740 (214,740)
DEM 8,535,000 6,000,000 3/6/96 6,244,513 (244,513)
DEM 2,775,000 2,000,000 3/8/96 2,030,438 (30,438)
SEK 30,104,000 4,020,031 10/10/95 4,086,109 (66,078)
$18,020,031 $18,876,321 $(856,290)
</TABLE>
Included in Accumulated net realized loss on investments and foreign currency
transactions is $74,164, which represents the realized loss on contracts
totalling approximately $4,000,000, which have been closed prior to the
settlement dates with offsetting contracts.
At April 30, 1995, the gross forward foreign currency settlement contracts
receivable and payable were $2,148,164 and $2,169,886 respectively, resulting
in net payable of $21,722.
6. Effective November 1, 1994, the Fund adopted Statement of Position 93-4 (SOP
93-4): Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with SOP 93-4, net realized gains and
losses on forward foreign currency transactions and other assets and
liabilities denominated in foreign currencies 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 amount actually received. Further, as permitted under SOP 93-4,
the effects of changes in foreign currency exchange rates on investments in
securities 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 in securities.
17
<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, including the schedule of
investments, of Pioneer Europe Fund, as of April 30, 1995, and the related
statement of operations, the 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
April 30, 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 April 30, 1995, and 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
May 26, 1995
18
<PAGE>
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
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
INVESTMENT
ADVISER
Pioneering Management
Corporation
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
PIONEERING SERVICES
CORPORATION
60 State Street
Boston, Massachusetts 02109
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.
0695-2523
(C) Pioneer Funds Distributor, Inc.
[Pioneer logo]
Pioneer
Europe
Fund
Semiannual Report
April 30, 1995
