<PAGE>
[Pioneer Ship Logo]
Pioneer
Europe
Fund
Semiannual Report
April 30, 1996
<PAGE>
Pioneer Europe Fund
Dear Fellow Shareowner,
Pioneer Europe Fund completed the first half of its sixth fiscal year on April
30, 1996. Results for European financial markets varied, with the strongest
performance coming from some of the region's developing countries, including
Poland. European markets as a group posted a six-month total return of 7.36%,
based on the unmanaged Morgan Stanley Capital International (MSCI) Europe Index.
We are pleased to report that Pioneer Europe Fund outpaced the Index for the
same period.
How Your Fund Performed
For the six months ended April 30, 1996, Pioneer Europe Fund achieved the
following results:
[bullet] Class A shares --Shareowners received a capital gains distribution of
$1.43, paid in December. Net asset value was $21.43 per share on April 30,
versus $21.19 on October 31, 1995, in part reflecting the payout. Together, the
price change and reinvestment of the distribution produced a total return of
8.58% at net asset value, and 2.35% based on maximum public offering price.
[bullet] Class B shares --Shareowners received a capital gains distribution of
$1.43 in December. On April 30, net asset value was $21.06 per share, versus
$20.92 per share six months earlier, in part reflecting the payout. The Fund's
total return for the period was 8.19% assuming shares were held throughout the
period, and 4.19% if shares were redeemed and the 4% contingent deferred sales
charge deducted. Both figures include the reinvestment of the distribution.
Pioneer Europe Fund introduced Class C shares to investors on January 31,
1996. Since then, Class C shares achieved the following results:
[bullet] Net asset value was $21.00 per share on April 30, versus its opening
net asset value of $19.92. Your Fund's total return for the abbreviated period
was 5.42% assuming shares were held throughout, and 4.42% assuming shares were
redeemed on April 30 and the 1% contingent deferred sales charge deducted.
The accompanying chart shows the Fund's total returns for longer time
periods.
Average Annual Total Returns
(As of April 30, 1996)
Class A Shares Net Asset Value Public Offering Price*
- ----------------------- -------------------- -----------------------
Life-of-Fund (4/2/91) 11.65% 10.34 %
5 Years 11.78 10.46
1 Year 21.22 14.24
Class B Shares If Held If Redeemed**
- ----------------------- -------------------- -----------------------
Life-of-Fund (4/4/94) 16.29% 15.06%
1 Year 20.39 16.39
*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.
**Reflects deduction of the maximum 4.0% contingent deferred sales charge at the
end of the period and assumes reinvestment of all distributions.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
<PAGE>
A Favorable Investing Climate
The environment for investing in Europe was generally favorable over the past
six months, as low inflation and slow economic growth sent interest rates lower
throughout much of the Continent. In Germany, for example, inflation hovered
around 2% --lower than in the United States --signaling the potential for
interest rates to come down even more. At the same time, many European companies
continued the process of rationalizing and restructuring their businesses to
enhance competitiveness.
The U.S. dollar strengthened against Germany's deutschemark as the period
progressed, as did a number of other European currencies, including the Italian
lira. While a stronger U.S. dollar can erode gains for U.S. investors in foreign
assets, it enhances the returns in local markets by allowing European companies
to price export goods more competitively and profitably. Your management
carefully monitors currencies and looks to minimize their impact on the
portfolio through currency hedges. For example, we had placed hedges on a
portion of the Fund's holdings beginning last March; this benefited the Fund
when the U.S. dollar appreciated against the deutschemark for part of the
semiannual period. We removed the currency hedges in the first quarter of 1996
when we believed the dollar had reached a fair value range. We do not expect the
gap between the dollar and deutschemark to widen much more, given the
appreciation that the dollar has recently experienced, and so we are comfortable
keeping the portfolio unhedged as we move forward.
Uncovering Value in European Companies and Countries
Pioneer Europe Fund pursues long-term capital growth by investing in companies
that exhibit sound operations, management and cash flows. Specifically, we look
for companies our research shows are undervalued in comparison to their current
stock prices. To that end, we also review broader events, such as economic and
government reforms, that could have an impact on individual companies. This
bottom-up --and top-down --approach, in our view, should produce the best
results for the Fund over the long term.
Consider, for example, Holland and Poland. In Holland, macroeconomic events did
not play a significant role in our investment decisions; for the most part, we
chose companies based strictly on their individual merits. Two companies we
especially like there are Getronics and Hagemeyer, a computer services firm and
a wholesaler, respectively. Poland, on the other hand, has undergone an
ambitious and strenuous economic restructuring. The results are becoming evident
- --Poland is currently the fastest growing economy in Europe. With this economic
growth has come individual opportunities; for example, your management considers
Electrim Spolka Akcyjna, a conglomerate, and Wielkopolski Bank Kredytowy, a
bank, to offer excellent prospects. Of course, strong performance tends to lead
to robust investor activity. Poland has become increasingly popular over the
past few months, which has driven some stock prices above the levels your
management thinks are reasonable or sustainable. As a result, we took gains on
some of your Fund's holdings, bringing the portfolio's weighting in Poland to
2.3% as of April 30, down from a high of 3.5%.
2
<PAGE>
The accompanying chart shows the variety of countries represented in the
portfolio at the close of the period.
Geographical Distributions
(Percentage of equity investments as of April 30, 1996)
Austria 3.0%
Belgium 3.3%
Denmark 3.6%
Finland 4.7%
France 8.2%
Germany 7.3%
Greece 1.8%
Italy 11.8%
Netherlands 9.0%
Norway 3.0%
Poland 2.3%
Portugal 1.5%
Spain 9.2%
Sweden 6.9%
Switzerland 7.3%
United Kingdom 17.1%
Country weightings for other periods will vary.
As European economies and companies begin to gather strength, it makes sense
that certain industries see an increase in opportunities and demand. One we
think stands to benefit is the service sector, specifically temporary help. In
France, for example, temporary help agencies have become an increasingly
important business, given the country's recent worker strikes and slow economic
growth. We especially like the temporary help agency Ecco, which entered into a
merger agreement with Adia of Switzerland after the close of your Fund's
semiannual period. We expect the resulting entity will perform well as global
companies look across Europe for solutions to meet expanding job demands. We
plan to keep the Fund's position in the merged company, barring any major
changes in its fundamental strengths. We see similar growth potential in another
agency, Randstad Holdings, based in the Netherlands and operating throughout
Europe and in the United States.
3
<PAGE>
Financial service companies, specifically asset management and life insurance,
continued to offer significant value, thanks to the growing need to fund pension
plans and Europe's favorable interest rate environment. Your management likes
Aegon (Netherlands), Cetelem (France) and Banca Fideuram (Italy). We expect they
will perform well given the need for their financial products and, even more
importantly, their individual company strengths.
When it came to technology, European-based stocks were highly volatile over the
period. Companies that enjoyed impressive growth for most of 1995 experienced
sizable declines when the group fell out of favor with investors. As was the
case with many U.S. technology issues, few companies were spared in the
sell-off, even when individual company performance remained strong. Consider,
for example, two of your Fund's long-time technology holdings: Ericsson
(Finland) and Nokia (Sweden), producers of cellular equipment. Each company's
stock price appreciated significantly when demand for technology issues was
high. More recently, however, each experienced a downturn, in part because of
the market's negative momentum against the sector as a group. While Nokia's
results of late have weakened, Ericsson's performance has remained solid,
indicating that its price decline is not a reflection of its individual merits.
Despite its short-term results, we think Nokia also remains strong. We expect
both companies will successfully weather near-term market moodiness and will
achieve the impressive results they already have proven they can deliver.
Looking Ahead
Your management continues to see many investing opportunities across European
markets. Favorable interest rates and inflation, coupled with many companies'
efforts to improve their competitive positions in today's global market, should
lead to increased corporate earnings and higher stock prices. In addition, we
think consumers are ready to start playing an increasing role in Europe's
economy, which should drive markets higher over the next few years.
While we continue to uncover individual opportunities, we remain mindful of the
risks of international investing, such as currency fluctuations and economic and
political instabilities. We expect our combination of stock picking and country
analysis will prove rewarding over the long term. Please refer to the following
pages for the audited Schedule of Investments and financial statements as of
April 30, 1996. 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/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Europe Fund
4
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Pioneer Europe Fund
Schedule of Investments
April 30, 1996
Shares Value
- --------- ------------
INVESTMENT IN SECURITIES--95.2%
PREFERRED STOCKS--1.7%
17,000 Bau Holdings AG $ 800,613
7,000 SAP AG (non-voting) 930,131
----------
TOTAL PREFERRED STOCKS (Cost $1,052,891) $ 1,730,744
----------
COMMON STOCKS--93.4%
BASIC INDUSTRIES--5.8%
Forest Products--0.9%
150,000 Field Group Plc $ 846,000
----------
Iron & Steel--0.7%
4,400 Acerinox S.A. (Registered) $ 497,226
2,700 Boehler-Uddeholm AG* 220,454
----------
$ 717,680
----------
Manufacturing--1.5%
76,000 Safilo SpA $ 1,541,103
----------
Metals & Mining--2.7%
62,000 Elkem (Series A) $ 816,348
12,000 Eramet S.A. 915,435
15,000 Hoganas AB (Series B Free) 497,604
30,000 Outokumpu Oy (Series A) 523,977
----------
$ 2,753,364
----------
TOTAL BASIC INDUSTRIES $ 5,858,147
----------
CAPITAL GOODS--10.5%
Aerospace Manufacuring--0.9%
67,000 British Aerospace Plc $ 877,185
----------
Construction, Building Materials & Engineering--2.8%
25,000 Cardo AB* $ 545,522
100,000 Polifarb Wroclaw S.A. 451,043
150,000 Powerscreen International Plc 1,030,992
35,000 Tarkett AG 800,654
----------
$ 2,828,211
----------
Machinery--6.8%
600 Bobst S.A. $ 918,244
235,000 Danieli & Co. SpA, Di Risp 846,152
2,700 Mannesmann AG 922,941
12,500 Nordtank Energy Group A/S* 815,678
77,000 Siebe Plc 994,791
4,000 Sidel, S.A. 951,644
6,500 VA Technologie AG 864,010
6,050 Zardoya-Otis, S.A. 599,057
----------
$ 6,912,517
----------
TOTAL CAPITAL GOODS $10,617,913
----------
CONSUMER DURABLES--0.5%
Motor Vehicles--0.5%
344,000 Magneti Marelli, SpA $ 522,337
----------
TOTAL CONSUMER DURABLES $ 522,337
----------
CONSUMER NON-DURABLES--8.9%
Retail Food--3.8%
1,400 Carrefour, S.A. $ 1,093,462
10,000 Delhaize-Le Lion 492,376
12,000 G. I. B. Holdings 531,385
280,000 McBride Plc 547,456
50,000 Centro Comerciales Pryca S.A. 1,153,242
----------
$ 3,817,921
----------
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1996 (continued)
Retail Non-Food--3.4%
30,000 Esselte $ 601,548
15,000 Industrie Natuzzi SpA (A.D.R.) 781,875
1,500 Kaufhof Holding AG 465,686
18,000 Stockmann AB (Class B Free) 881,769
183,000 Tomkins Plc 754,136
----------
$ 3,485,014
----------
Textiles/Clothes--1.7%
1,000 Hugo Boss AG $ 1,000,000
100,000 Marzotto & Figli SpA 711,160
----------
$ 1,711,160
----------
TOTAL CONSUMER NON-DURABLES $ 9,014,095
----------
ENERGY--1.0%
Oil Refining & Drilling--1.0%
14,000 Elf Aquitaine $ 1,040,658
----------
TOTAL ENERGY $ 1,040,658
----------
FINANCIAL--22.3%
Commercial Banks--9.5%
22,000 Argentaria S.A. $ 890,373
20,000 Banco De Santander S.A. 928,880
60,000 Banca Popolare di Bergamo 980,248
2,000 Banco Popular Espanol S.A. 331,316
25,000 Bank Gdanski S.A. (G.D.R.) 144A* 262,500
75,630 BPI-SGPS S.A. 942,710
14,000 Depfa Bank 477,190
106,000 Fokus Bank A/S 571,185
60,000 HSBC Holdings Plc 886,157
390,000 Merita Bank (Class A)* 838,363
50,000 Svenska Handelbanken (Class A) 1,024,696
19,000 Unidanmark A/S (Class A Registered) 846,949
130,000 Wielkopolski Bank Kredytowy S.A. 557,038
----------
$ 9,537,605
----------
Insurance--7.4%
20,000 Aegon NV $ 952,437
13,000 International Nederlanden Groep NV 1,003,735
368,000 INA SpA 565,853
16,000 Mapfre Vida Seguros 888,959
20,900 Pohjola Insurance Co. (Series B) 330,477
88,000 Riunione Adriatica di Sicurta SpA 982,426
160,000 Uni-Storebrand AS (Class A)* 762,311
8,100 Union Des Assurances Federales 983,907
3,500 Zurich Versicherungsgesellschaft (Registered) 978,252
----------
$ 7,448,357
----------
Miscellaneous/Financial--4.5%
750,000 Banca Fideuram SpA $ 1,297,387
910 Baer Holding AG 1,018,848
4,500 Cetelem S.A. 965,280
2,550 Lichtenstein Global Trust (Participating
Certificates) 1,302,215
----------
$ 4,583,730
----------
Savings & Loan--0.9%
110,000 Abbey National Plc $ 939,699
----------
TOTAL FINANCIAL $22,509,391
----------
SERVICES--15.7%
Health Services & Personal Care--0.9%
400,000 Takare Plc $ 896,384
----------
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1996 (continued)
Pharmaceuticals--6.5%
100,000 Anagen Plc* $ 75,200
22,000 Astra AB (Series A Free) 977,958
1,000 Gehe AG 580,392
65,000 Glaxo Wellcome Plc 787,457
30,000 Jelfa* 383,387
7,000 Novo Nordisk A/S (Class B) 910,000
125 Roche Holding AG 983,186
850 Sandoz AG (Registered) 928,393
580 UCB S.A. 979,257
----------
$ 6,605,230
----------
Medical Equipment--0.5%
6,000 Elekta Instrument AB (B Shares) $ 207,003
55,000 Whatman Plc 335,016
----------
$ 542,019
----------
Publishing--1.0%
66,000 Elsevier NV $ 993,755
----------
Miscellaneous/Services--6.8%
22,500 Ahrend Groep NV $ 980,887
125,200 Compass Group Plc 1,031,888
4,200 Ecco S.A. 943,172
14,500 Hagemeyer NV 992,617
30,000 ISS International Service System A/S (Class B) 849,153
175,000 Rentokil Group Plc 1,008,056
16,000 Randstand Holdings NV 1,025,270
----------
$ 6,831,043
----------
TOTAL SERVICES $15,868,431
----------
TECHNOLOGY--12.0%
Electronics--7.3%
11,000 Alcatel Alsthom S.A. $ 1,034,043
290,000 Amstrad Plc 850,512
8,360 Austria Micro Systeme International AG* 1,016,510
7,200 Barco Industries 1,135,578
170,000 Electrocomponents Plc 1,016,328
80,000 Elektrim Spolka Akcyjna S.A. (Bearer Shares) 511,182
26,000 Philips Electronics NV 918,004
1,600 Siemens AG 874,771
----------
$ 7,356,928
----------
Software--0.9%
13,000 Getronics NV $ 902,830
----------
Telephone Networks--3.8%
20,000 Nokia Corp. (Class A) $ 714,758
10,000 Nokia Corp. (Sponsored A.D.R.) 363,750
15,000 Telefonaktiebolaget LM Ericsson (Series B New) 305,625
123,600 Telefonaktiebolaget LM Ericsson (Series B
Free) 2,505,713
----------
$ 3,889,846
----------
TOTAL TECHNOLOGY $12,149,604
----------
TRANSPORTATION--2.6%
Ships & Shipping--1.6%
50,100 Finnlines Oy $ 869,864
48,000 Leif Hoegh & Co. A/S 694,117
----------
$ 1,563,981
----------
Miscellaneous Transportation--1.0%
120,000 BAA Plc $ 985,421
----------
TOTAL TRANSPORTATION $ 2,549,402
----------
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1996 (continued)
UTILITIES--13.2%
Electric Utility--3.6%
16,000 Empresa Nacional de Electricidad S.A. $ 1,004,637
110,000 Iberdrola S.A. 1,076,228
29,700 National Grid Group Plc* 91,348
41,850 Southern Electric Plc 527,143
165,000 Union Electrica Fenosa S.A. 986,758
----------
$ 3,686,114
----------
Utilities Other--1.0%
20,000 Veba AG $ 994,771
----------
Telecommunications--6.7%
105,500 Hellenic Telecommunications Organizations S.A.* $ 1,770,672
23,000 Royal PTT Nederland NV (Orders) 863,087
23,000 Portugal Telecom S.A. (Sponsored A.D.R.) 497,375
400,000 STET Societa' Finanziaria Telefonica SpA 1,049,442
710,000 Telecom Italia SpA 1,448,812
270,000 Telecom Italia Mobile SpA* 596,798
30,000 Telefonica de Espana 533,988
----------
$ 6,760,174
----------
Water--1.9%
55,000 Anglian Water Plc $ 481,430
45,000 Southern Water Plc 516,398
90,000 Yorkshire Water Plc 908,266
----------
$ 1,906,094
----------
TOTAL UTILITIES $ 13,347,153
----------
MISCELLANEOUS--0.9%
Conglomerates & Holdings--0.9%
770 BBC Brown Boveri AG $ 927,845
----------
TOTAL MISCELLANEOUS $ 927,845
----------
TOTAL COMMON STOCKS (Cost $78,792,936) $ 94,404,976
----------
WARRANTS--0.1%
3,400 British Aerospace, 11/15/00 $ 18,920
43,750 Danieli & Co. SpA, 11/30/99 39,494
25,000 Interdiscount Holding, 11/15/96 4,027
350 Zurich International, 11/15/96 863
----------
TOTAL WARRANTS (Cost $45,945) $ 63,304
----------
TOTAL INVESTMENT IN SECURITIES
(Cost $79,891,772) $ 96,199,024
----------
Principal
Amount
- ---------
TEMPORARY CASH INVESTMENT--4.8%
Commercial Paper--4.8%
$4,893,000 Exxon Asset Management Co., 5.34%, 5/1/96 $ 4,893,000
----------
TOTAL TEMPORARY CASH INVESTMENT (Cost
$4,893,000) $ 4,893,000
----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT--100%
(Cost $84,784,772) (a)(b) $101,092,024
==========
* Non-income producing security.
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At April 30, 1996, the
value of these securities amounted to $262,500 or 0.3% of total net assets.
(a) At April 30, 1996, the net unrealized gain on investments based on cost
for federal income tax purposes of $84,784,772 was as follows:
Aggregate gross unrealized gain for all investments in which there
is an excess of value over tax cost $18,858,505
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (2,551,253)
----------
Net unrealized gain $16,307,252
==========
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Pioneer Europe Fund
Schedule of Investments
April 30, 1996 (continued)
(b) Summary of investments by country, as a percentage of total equity
holdings, is as follows:
United Kingdom 17.1%
Italy 11.8%
Spain 9.2%
Netherlands 9.0%
France 8.2%
Switzerland 7.3%
Germany 7.3%
Sweden 6.9%
Finland 4.7%
Denmark 3.6%
Belgium 3.3%
Austria 3.0%
Norway 3.0%
Poland 2.3%
Greece 1.8%
Portugal 1.5%
------
100.0%
======
Purchases and sales of investment securities (excluding temporary cash
investments) for the six months ended April 30, 1996 aggregated $40,405,322 and
$34,978,409, respectively.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Europe Fund
Balance Sheet
April 30, 1996
Assets:
Investment in securities, at value (including temporary
cash investments of $4,893,000) (cost $84,784,772; see
Schedule of Investments and Note 1) $101,092,024
Foreign currencies, at value (Note 1) 17,318
Cash 457
Receivables--
Investment securities sold 1,778,165
Fund shares sold 567,428
Dividends, interest and foreign taxes withheld (Note 1) 326,531
Other 4,110
----------
Total assets $103,786,033
----------
Liabilities:
Payables--
Investment securities purchased $ 2,936,032
Forward foreign currency settlement contracts--net
(Note 1) 5,037
Fund shares repurchased 51,267
Due to affiliates (Notes 2, 3 and 4) 186,846
Accrued expenses 47,978
----------
Total liabilities $ 3,227,160
----------
Net Assets:
Paid-in capital (Note 1) $ 79,613,328
Accumulated undistributed net investment income (Note 1) 149,229
Accumulated undistributed net realized gain on investments
and foreign currency transactions (Note 1) 4,494,556
Net unrealized gain on investments (Note 1) 16,307,252
Net unrealized loss on forward foreign currency contracts
and other assets and liabilities denominated in foreign
currencies (Note 1) (5,492)
----------
Total net assets $100,558,873
==========
Net Asset Value Per Share:
Class A--(based on $87,305,828/4,073,547 shares of
beneficial interest outstanding--unlimited number of
shares authorized) $21.43
==========
Class B--(based on $12,872,407/611,320 shares of
beneficial interest outstanding--unlimited number of
shares authorized) $21.06
==========
Class C--(based on $380,638/18,128 shares of beneficial
interest outstanding--unlimited number of shares
authorized) $21.00
==========
Maximum Offering Price:
Class A $22.74
==========
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, 1996
Investment Income (Note 1):
Dividends (net of foreign taxes withheld of $123,064) $ 721,921
Interest 130,953
---------
Total investment income $ 852,874
---------
Expenses:
Management fees (Note 2) $ 460,248
Distribution fees (Note 4)
Class A 102,999
Class B 51,841
Class C 331
Transfer agent fees (Note 3)
Class A 120,108
Class B 14,705
Class C 283
Registration fees 35,366
Professional fees 23,152
Accounting (Note 2) 57,378
Custodian fees 81,100
Printing 15,398
Fees and expenses of nonaffiliated trustees 11,198
Miscellaneous 13,357
---------
Total expenses $ 987,464
Less fees paid indirectly (Note 5) (6,966)
Less management fees waived by Pioneering
Management Corporation (Note 2) (59,315)
---------
Net expenses $ 921,183
---------
Net investment loss $ (68,309)
---------
Realized and Unrealized Gain on Investments and
Foreign Currency Transactions:
Net realized gain from:
Investments (Note 1) $4,346,126
Forward foreign currency contracts and other
assets and liabilities denominated in foreign
currencies (Note 1) 429,242 $4,775,368
-------
Net unrealized gain from:
Change in net unrealized gain on investments
(Note 1) $2,817,830
Change in net unrealized loss on forward
foreign currency contracts and other assets
and liabilities denominated in foreign
currencies (Note 1) 213,380 3,031,210
------- ---------
Net gain on investments and foreign currency
transactions $7,806,578
---------
Net increase in net assets resulting from
operations $7,738,269
=========
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, 1996 and the Year Ended October 31, 1995
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
4/30/96 10/31/95
------------ -----------
<S> <C> <C>
From Operations:
Net investment income (loss) $ (68,309) $ 416,511
Net realized gain on investments and forward foreign
currency transactions 4,775,368 5,819,824
Change in net unrealized gain on investments and forward
foreign currency transactions 3,031,210 4,430,730
---------- ---------
Net increase in net assets resulting from operations $ 7,738,269 $ 10,667,065
---------- ---------
Distributions to Shareholders From:
Net investment income:
Class A ($0.00 and $0.01 per share, respectively) $ -- $ (19,784)
Class B ($0.00 and $0.02 per share, respectively) -- (3,800)
Net realized gain on investments:
Class A ($1.43 and $1.40 per share, respectively) (5,330,480) (4,612,153)
Class B ($1.43 and $1.40 per share, respectively) (622,721) (265,778)
---------- ---------
Decrease in net assets resulting from distributions to
shareholders $ (5,953,201) $ (4,901,515)
---------- ---------
From Fund Share Transactions:
Net proceeds from sale of shares $ 23,039,263 $ 44,624,316
Net asset value of shares issued to shareholders in
reinvestment of dividends 5,647,033 4,612,514
Cost of shares repurchased (17,243,273) (38,083,556)
---------- ---------
Net increase in net assets resulting from fund share
transactions $ 11,443,023 $ 11,153,274
---------- ---------
Net increase in net assets $ 13,228,091 $ 16,918,824
Net Assets:
Beginning of period 87,330,782 70,411,958
---------- ---------
End of period (including accumulated undistributed net
investment income of $149,229 and $217,538, respectively) $100,558,873 $ 87,330,782
========== =========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
4/30/96 Year Ended 10/31/95
----------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 863,104 $ 17,853,448 1,851,392 $ 36,748,396
Shares issued to shareholders in reinvestment of
distributions 261,914 5,070,665 252,860 4,351,713
Less shares repurchased (755,790) (15,645,243) (1,784,047) (35,190,480)
------ --------- -------- -----------
Net increase 369,228 $ 7,278,870 320,205 $ 5,909,629
====== ========= ======== ===========
CLASS B
Shares sold 236,421 $ 4,801,998 402,070 $ 7,875,920
Shares issued to shareholders in reinvestment of
distributions 30,224 576,368 15,269 260,801
Less shares repurchased (77,251) (1,586,553) (148,762) (2,893,076)
------ --------- -------- -----------
Net increase 189,394 $ 3,791,813 268,577 $ 5,243,645
====== ========= ======== ===========
CLASS C *
Shares sold 18,686 $ 383,817
Shares issued to shareholders in reinvestment of
distributions -- --
Less shares repurchased (558) (11,477)
------ ---------
Net increase 18,128 $ 372,340
====== =========
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
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>
Six Months For the Years Ended October 31, April 2, 1991 to
Ended ------------------------------------- October 31,
April 30, 1996 1995(a) 1994 1993 1992 1991
--------------- ------- ------ ------ ------ ------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $21.19 $19.91 $17.73 $14.63 $15.20 $15.00
------------- ---- ---- ---- ---- ----------------
Increase (decrease) from investment operations:
Net investment income
(loss) $(0.01) $0.12 $0.10 $0.04 $0.10 $ --
Net realized and unrealized
gain (loss) on investments
and other foreign currency
transactions 1.68 2.57 2.65 3.33 (0.62) 0.20
------------- ---- ---- ---- ---- ----------------
Total increase (decrease)
from investment
operations $1.67 $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 (1.43) (1.40) (0.26) (0.18) -- --
------------- ---- ---- ---- ---- ----------------
Net increase (decrease) in
net asset value $0.24 $1.28 $2.18 $3.10 $(0.57) $0.20
------------- ---- ---- ---- ---- ----------------
Net asset value, end of
period $21.43 $21.19 $19.91 $17.73 $14.63 $15.20
============= ==== ==== ==== ==== ================
Total return * 8.58% 15.12% 15.97% 23.47% (3.46%) 1.33%
Ratio of net expenses to
average net assets 1.93%**+ 1.76%+ 1.86% 2.00% 2.00% 2.00%**
Ratio of net investment
income (loss) to average
net assets (0.09%) **+ 0.59%+ 0.28% 0.24% 0.74% 0.10%**
Portfolio turnover rate 80.25%** 61.51% 99.92% 68.58% 49.79% 7.34%**
Average commission rate paid
per exchange listed
transaction $0.0311 -- -- -- -- --
Net assets, end of period
(in thousands) $87,306 $78,505 $67,375 $48,827 $35,205 $23,993
Ratios assuming no waiver of
management fees by
PMC and no reduction for
fees paid indirectly:
Net expenses 2.06%** 2.10% 2.48% 2.77% 3.46% 4.93%**
Net investment income
(loss) (0.22%)** 0.25% (0.34%) (0.53%) (0.72%) (2.83%)**
Ratios assuming waiver of
management fees by
PMC and reduction for fees
paid indirectly:
Net expenses 1.91%** 1.75% -- -- -- --
Net investment loss --
(0.07%)** 0.60% -- -- --
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
* 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.
(a) The per share data is based upon average shares outstanding for the period
presented.
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>
Six Months April 4, 1994
Ended Year Ended to
April 30, October 31, October 31,
1996 1995(a) 1994
------------- ------------- ---------------
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $20.92 $19.80 $17.96
----------- ----------- -------------
Increase (decrease) from investment operations:
Net investment income (loss) $(0.07) $(0.02) $0.01
Net realized and unrealized gain on investments
and other foreign currency transactions 1.64 2.56 1.88
----------- ----------- -------------
Total increase from investment operations $1.57 $2.54 $1.89
Distribution to shareholders from:
Net investment income -- (0.02) (0.05)
Net realized gain (1.43) (1.40) --
----------- ----------- -------------
Net increase in net asset value $0.14 $1.12 $1.84
----------- ----------- -------------
Net asset value, end of period $21.06 $20.92 $19.80
=========== =========== =============
Total return * 8.19% 14.43% 10.55%
Ratio of net expenses to average net assets 2.65%**+ 2.49%+ 2.47%**
Ratio of net investment loss to average net assets (0.74%) **+ (0.13%) + (0.75%) **
Portfolio turnover rate 80.25%** 61.51% 99.92%
Average commission rate paid per exchange listed
transaction $0.0311 -- --
Net assets, end of period (in thousands) $12,872 $8,826 $3,037
Ratios assuming no waiver of management fees by PMC
and no reduction for fees paid indirectly:
Net expenses 2.77%** 2.85% 2.95%**
Net investment loss (0.86%) ** (0.49%) (1.23%) **
Ratios assuming waiver of management fees by PMC
and reduction for fees paid indirectly:
Net expenses 2.64%** 2.46% --
Net investment loss --
(0.73%) ** (0.10%)
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
* 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.
(a) The per share data is based upon average shares outstanding for the period
presented.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Financial Highlights
Selected Data for a Share Outstanding for the Periods Presented (continued)
January 31,
1996 to
April 30, 1996
---------------
CLASS C***
Net asset value, beginning of period $19.92
-------------
Increase (decrease) from investment operations:
Net investment loss $(0.01)
Net realized and unrealized gain on investments and other
foreign currency transactions 1.09
-------------
Net increase in net asset value $1.08
-------------
Net asset value, end of period $21.00
=============
Total return * 5.42%
Ratio of net expenses to average net assets 3.35%**+
Ratio of net investment loss to average net assets (0.47%)**+
Portfolio turnover rate 80.25%**
Average commission rate paid per exchange listed transaction $0.0311
Net assets, end of period (in thousands) $381
Ratios assuming no waiver of management fees by PMC and no
reduction for fees paid indirectly:
Net expenses 3.40%**
Net investment loss (0.52%)**
Ratios assuming waiver of management fees by PMC and
reduction for fees paid indirectly:
Net expenses 3.29%**
Net investment loss (0.41%)**
+ Ratios assuming no reduction for fees paid indirectly.
* 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 C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
April 30, 1996
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 investment objective of the Fund is to seek long-term
growth of capital by investment in securities of European companies and in
Depository Receipts for such securities.
The Board of Trustees (the Trustees) has authorized the issuance of three
share classes of the Fund, designated as Class A, Class B and Class C shares.
Class C shares were first publicly offered on January 31, 1996. The shares of
Class A, Class B and Class C represent an interest in the same portfolio of
investments of the Fund and have equal rights to voting, redemptions, dividends
and liquidation, except that each class of shares can bear different transfer
agent and distribution fees, and have exclusive voting rights with respect to
the distribution plans that have been adopted by Class A, Class B and Class C
shareholders, respectively.
The Fund's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies consistently followed by the Fund, which are in conformity with those
generally accepted in the investment company industry:
A. Security Valuation--Security transactions are recorded on trade date. Each
day, securities are valued at the last sale price on the principal exchange
where they are traded. Securities that have not traded on the date of valuation,
or securities for which 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 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 values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times. Temporary cash investments are valued at amortized cost. 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 dividends. Interest income is recorded on the
accrual basis, net of unrecoverable foreign taxes withheld at the applicable
country tax 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 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.
B. Foreign Currency Translation--The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars using current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in market
price of those securities but are included with the net realized and unrealized
gain or loss on investments.
C. Forward Foreign Currency Contracts--The Fund enters into forward foreign
currency contracts (contracts) for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific investment transactions (settlement hedges) or portfolio
positions (portfolio hedges). All contracts are marked to market daily at the
applicable foreign exchange rates, and any resulting unrealized gains or losses
are recorded in the Fund's
16
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
(Continued)
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 contract
and from unanticipated movements in the value of foreign currencies relative to
the U.S. dollar. As of April 30, 1996, the Fund had no outstanding portfolio
hedges. The Fund's gross forward foreign currency settlement contracts
receivable and payable were $1,157,866 and $1,162,903, respectively, resulting
in a net payable of $5,037.
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.
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 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 an indirect wholly owned subsidiary of The Pioneer Group, Inc. (PGI). PFD
earned $33,215 in underwriting commissions on the sale of fund shares during the
six months ended April 30, 1996. Distributions to shareholders are recorded as
of the ex-dividend date. Distributions 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, Class B and Class
C shares 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, 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 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.
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
April 30, 1996.
2. 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 average daily net
assets up to $300 million; 0.85% of the next $200 million; and 0.75% of the
excess over $500 million.
Until March 1, 1996, PMC 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
17
<PAGE>
Pioneer Europe Fund
Notes to Financial Statements
(Continued)
attributable to Class B and Class C shares were reduced only to the extent that
such expenses were reduced for Class A shares.
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 due to affiliates are $108,590 in management fees
and $7,567 in accounting fees payable to PMC at April 30, 1996.
3. 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 $43,147 in transfer agent fees payable to PSC at April 30,
1996.
4. 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 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 $27,542 in distribution fees
payable to PFD at April 30, 1996.
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
certain net asset value purchases of Class A shares that are redeemed 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 April 30, 1996, CDSC in the
amount of $10,250 was paid to PFD.
5. The Fund has entered into certain expense offset arrangements resulting in
the reduction of the Fund's total expenses. For the six months ended April
30, 1996, the Fund's expenses were reduced by $6,966 under such arrangements.
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 April 30, 1996, 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 April
30, 1996 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, 1996, 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.
Boston, Massachusetts ARTHUR ANDERSEN LLP
May 31, 1996
19
<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
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
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
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
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.
0696-3429
(c)Pioneer Funds Distributor, Inc.
