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Pioneer Europe Fund
SEMIANNUAL REPORT 4/30/97
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Table of Contents
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Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 27
Trustees, Officers and Service Providers 28
The Pioneer Family of Funds 29
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Pioneer Europe Fund
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LETTER FROM THE CHAIRMAN 4/30/97
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Dear Shareowner,
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I am pleased to introduce this semiannual report for Pioneer Europe Fund,
reviewing the six months from October 31, 1996, through April 30, 1997. On
behalf of the Fund's investment management team, I welcome our many new
investors and thank you for your interest in the Fund.
Europe again proved to be a fruitful hunting ground for your Fund's
value-oriented investment management team. Your investment team's strategy
continued to be effective, and your Fund again outperformed the overall markets
and most similar funds.
European countries and companies are undergoing an exciting transition. (The
Portfolio Management Discussion that appears later in this report details
several important developments.) The stage is being set for a more competitive
and profitable business environment across the Continent. What we find
especially exciting is that the Fund gives shareowners the opportunity to
participate in these developments from their earliest phases.
I encourage you to read on to learn more about Pioneer Europe Fund and our
efforts to build a solid foundation for long-term investment success. Please
contact your investment representative, or call us at 1-800-225-6292, if you
have questions about your Fund. Thank you for your support.
Respectfully,
/s/ John F. Cogan, Jr.,
John F. Cogan, Jr.,
Chairman and President
1
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Pioneer Europe Fund
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PORTFOLIO SUMMARY 4/30/97
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[The following table was represented as a pie graph in the printed material]
International Common Stocks 89%
Short-Term Cash Equivalents 5%
Depositary Receipts for International Stocks 5%
International Preferred Stocks 1%
Geographical Distribution
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(As a percentage of equity holdings)
[The following table was represented as a bar graph in the printed material]
United Kingdom 19%
France 12%
Italy 11%
Germany 10%
Netherlands 8%
Spain 7%
Switzerland 7%
Sweden 5%
Denmark 4%
Finland 4%
Belgium 3%
Portugal 3%
Austria 2%
Norway 2%
Bermuda 1%
Poland 1%
Turkey 1%
10 Largest Holdings
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(As a percentage of equity holdings)
1. Raision Tehtaat Oy 1.59%
2. Mediolanum SpA 1.56
3. Alcatel Alsthom SA 1.31
4. Philips Electronics NV 1.30
5. Schibsted ASA 1.27
6. Glaxo Wellcome Plc 1.26
7. Forbo Holdings AG 1.21
8. Banca Popolare di Milano 1.19
9. Central European 1.18
Media Enterprises
10. Pohjola Insurance Group 1.16
(Series B)
Fund holdings will vary for other periods.
2
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Pioneer Europe Fund
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PERFORMANCE UPDATE 4/30/97 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/97 10/31/96
$24.08 $23.25
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 4/30/97) Dividends Capital Gains Capital Gains
$0.217 $0.266 $1.314
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Europe Fund at public offering price, compared to the growth of the
Morgan Stanley Capital International (MSCI) Europe Index.
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Average Annual Total Returns
(As of April 30, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 13.20% 12.10%
(4/2/91)
5 Years 14.12 12.78
1 Year 21.44 14.44
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* Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
[The following table was represented as a mountain chart in the printed
material]
Growth of $10,000
Pioneer
Date Europe Fund MSCI Europe
4/30/91 9,425 10,000
10/31/91 9,524 10,378
4/30/92 10,320 11,192
10/31/92 9,194 10,233
4/30/93 10,265 11,417
10/31/93 11,346 12,913
4/30/94 12,423 13,957
10/31/94 13,159 14,417
4/30/95 13,568 15,309
10/31/95 15,148 16,389
4/30/96 16,447 17,824
10/31/96 17,852 19,330
4/30/97 19,974 21,642
+ Index comparison begins April 30, 1991. The Morgan Stanley Capital
International (MSCI) Europe Index is a capitalization-weighted index of
the 14 European country indexes included in the MSCI EAFE (Europe,
Australasia, Far East) 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.
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.
3
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Pioneer Europe Fund
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PERFORMANCE UPDATE 4/30/97 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/97 10/31/96
$23.53 $22.74
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 4/30/97) Dividends Capital Gains Capital Gains
$0.108 $0.266 $1.314
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Europe Fund, compared to the growth of the Morgan Stanley Capital
International (MSCI) Europe Index.
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Average Annual Total Returns
(As of April 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 17.66% 16.96%
(4/4/94)
1 Year 20.38 16.38
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* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of
distributions. The maximum CDSC of 4% declines over six years.
[The following table was represented as a mountain chart in the printed
material]
Growth of $10,000
Pioneer
Date Europe Fund MSCI Europe
4/30/94 10,000 10,000
7/31/94 10,124 9,980
10/31/94 10,539 10,329
1/31/95 9,916 9,922
4/30/95 10,838 10,969
7/31/95 12,268 11,900
10/31/95 12,060 11,742
1/31/96 12,348 12,293
4/30/96 13,048 12,771
7/31/96 13,191 12,861
10/31/96 14,095 13,849
1/31/97 15,460 14,887
4/30/97 15,407 15,506
+ Index comparison begins April 30, 1994. The Morgan Stanley Capital
International (MSCI) Europe Index is a capitalization-weighted index of
the 14 European country indexes included in the MSCI EAFE (Europe,
Australasia, Far East) 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.
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.
4
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Pioneer Europe Fund
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PERFORMANCE UPDATE 4/30/97 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/97 10/31/96
$23.39 $22.69
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 4/30/97) Dividends Capital Gains Capital Gains
$0.199 $0.266 $1.314
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Europe Fund, compared to the growth of the Morgan Stanley Capital
International (MSCI) Europe Index.
- ----------------------------------
Average Annual Total Returns
(As of April 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 21.11% 21.11%
(1/31/96)
1 Year 20.52 20.52
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* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to investments sold within one year of purchase.
[The following table was represented as a mountain chart in the printed
material]
Growth of $10,000
Pioneer
Date Europe Fund MSCI Europe
1/31/96 10,000 10,000
2/28/96 10,246 10,186
3/31/96 10,412 10,311
4/30/96 10,542 10,389
5/31/96 10,823 10,473
6/30/96 10,954 10,592
7/31/96 10,678 10,463
8/31/96 11,069 10,777
9/30/96 11,215 11,007
10/31/96 11,396 11,266
11/30/96 11,948 11,841
12/31/96 12,293 12,074
1/31/97 12,505 12,110
2/28/97 12,613 12,274
3/31/97 12,955 12,674
4/30/97 12,705 12,614
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 14 European country indexes included
in the MSCI EAFE (Europe, Australasia, Far East) 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.
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.
5
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Pioneer Europe Fund
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/97
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Dear Shareowner,
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It's my pleasure to report that Pioneer Europe Fund finished the first half of
fiscal 1997 with double-digit performance - in line with its comparative
benchmark, the Morgan Stanley Capital International (MSCI) Europe Index. The
major economies of Europe continued to show signs of strengthening, driven in
part by stronger corporate earnings and improving consumer confidence. In the
currency markets, investor expectations of an interest rate hike lifted the
British pound, diminishing some of the gains the Fund made early on.
For the six months ended April 30, 1997, Pioneer Europe Fund delivered total
returns of 11.94% for Class A Shares, 11.48% for Class B Shares and 11.54% for
Class C Shares at net asset value. The Fund's Class A Shares continued to place
in the top third of European region funds tracked by Lipper Analytical Services,
most recently for the one-, three- and five-year periods ended April 30, 1997.*
Europe Restructuring for Long-Term Global Competitiveness
As Europe moves toward a monetary union, nations are under tremendous pressure
to put their financial houses in order. A single currency should make Europe
more competitive globally, but the steps required to meet the Maastricht Treaty
for monetary union in 1999 are proving painful as centuries-old traditions of
social welfare give way to the free-market concepts of a world economy.
Ironically, business leaders firmly committed to the concept of creating
shareholder value are taking steps that breed competition but risk increasing
unemployment in the short run, further complicating governments' work to make
the transition.
Efforts to increase shareholder value are reminiscent of those that helped set
the stage for the United States' ongoing economic expansion. Scores of European
companies are enjoying a renaissance, as the rewards of restructuring and
increased competitiveness boost their bottom line. For example, the Fund's
third-largest holding, industrial giant
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* Lipper Analytical Services, an independent research organization, ranks
funds according to total return performance. Rankings vary over time and
do not reflect the effects of sales charges. For the one-, three- and
five-year periods, the Fund's Class A Shares ranked 8, 3 and 5 of 60, 29
and 17 European region funds, respectively. Past performance does not
guarantee future results.
6
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Pioneer Europe Fund
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Alcatel Alsthom (France), saw its stock price rise some 50% during the period on
surprisingly strong year-end earnings - the result of a new, dynamic management
style that is just beginning to refocus the energy of this sprawling
conglomerate.
The United Kingdom is at the forefront of European efforts to restore global
competitiveness. After years of restructuring, Britain's 3%-plus growth in
annual gross domestic product, 6% unemployment rate and low 2.7% inflation rate
are the envy of Continental Europe. Such a favorable environment helps explain
why British holdings continued to dominate the portfolio and were 19% of equity
holdings on April 30.
In anticipation of higher interest rates and the May 1 election in which Labor
Party leader Tony Blair replaced John Major as Prime Minister, the British pound
rose approximately 12% relative to the rest of Europe's currencies during the
semiannual period. The Fund did not have as large a position in sterling-based
investments as did the MSCI Europe Index, and this decision may have detracted
from performance somewhat. However, going forward, your Fund should continue to
benefit from holdings in some of England's fastest growing companies,
particularly in the services, pharmaceutical and finance industries.
Targeting the Best Growth Europe Has to Offer
During the semiannual period, the Fund's net assets increased 36% to $164
million. Some of this positive momentum was due to the appreciation of portfolio
holdings. A significant portion, however, was the result of new investments into
the Fund. As we put the new assets to work, the list of the Fund's 10 largest
holdings changed. As of April 30, the Fund's largest position was Raision
Tehtaat (Finland), which has patented a process to make a cholesterol-eating
food additive.
The pharmaceutical industry is benefiting from solid earnings growth, positive
investor sentiment and new approaches to products and services. Stock prices of
Britain's Glaxo Wellcome and Belgium's UCB, as
7
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Pioneer Europe Fund
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/97 (continued)
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well as Novo Nordisk (Denmark) climbed an average of 33% in U.S. dollars during
the period. These all have a strong commitment to research and development, and
a solid pipeline of proprietary products.
Technology stocks showed surprising strength late in the period, buttressed by
the turnaround in U.S. technology companies. Strong sales of personal computers
are increasing profits, helping stocks of companies like SGS-Thomson
Microelectronics (France). Meanwhile, financial stocks are benefiting from niche
growth strategies, mergers and cost savings arising out of technologically
driven productivity gains. Stocks of banks were among the portfolio's best
performers, with Banca Fideuram (Italy) and Julius Baer (Switzerland) rising
more than 30% during the period. Asset manager Amvesco Holding (U.K.), and life
insurer Aegon (Netherlands) also prospered as a result of the heightened
popularity of pension- and investment-related products.
Other portfolio holdings, while lackluster recently, remain well-positioned to
benefit from Continental Europe's strengthening economies. Tarkett, a German
construction and engineering company, and Forbo Holding, a Swiss flooring
company among the Fund's largest positions, have struggled in the current
environment. But they are well-managed companies in relatively mature
industries, and we believe their stocks are selling at prices significantly
below their long-term worth.
Looking Ahead
We remain convinced of the favorable long-term prospects for Europe's financial
markets. The road to Europe's economic union will be bumpy in the short term,
but we believe it should be tremendously rewarding over the long run. Most
certainly, our investment team's ability to respond to changing market
conditions should be an important and strategic advantage for Pioneer Europe
Fund as time passes.
Respectfully,
/s/ Patrick M. Smith,
Patrick M. Smith,
Portfolio Manager
8
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Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 4/30/97
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<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
INVESTMENT IN SECURITIES - 95.4%
PREFERRED STOCKS - 1.4%
17,000 Bau Holdings AG $ 913,716
25,000 Henkel KGaA (Non-voting) 1,357,205
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TOTAL PREFERRED STOCKS
(Cost $ 1,859,772) $ 2,270,921
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COMMON STOCKS - 94.0%
Basic Industries - 2.0%
Chemicals - 0.1%
1,000 Ciba Specialty Chemicals AG* $ 86,189
--------------
Containers - 1.5%
50,000 N.V. Koninklijke KNP BT $ 985,778
7,000 Schmalbach Lubeca AG 1,536,240
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$ 2,522,018
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Iron & Steel - 0.4%
4,400 Acerniox SA $ 642,824
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Total Basic Industries $ 3,251,031
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Capital Goods - 12.9%
Aerospace - 0.9%
67,000 British Aerospace Plc $ 1,423,383
--------------
Construction & Engineering - 6.2%
770 ABB AG (Bearer Shares) $ 932,779
390,000 Ashtead Group Plc 1,750,608
25,000 Cardo AB 748,760
3,100 Mannesmann AG 1,219,232
150,000 Powerscreen International Plc 1,476,665
86,885 Tarkett AG 1,480,281
11,000 VA Technologies AG 1,708,784
7,829 Zardoya-Otis SA 840,705
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$ 10,157,814
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Producer Goods - 3.8%
5,500 IWKA AG $ 1,450,043
25,000 Sidel, SA (Bearer Shares) 1,795,597
92,000 Siebe Plc 1,361,141
280,000 Wassall Plc 1,597,148
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$ 6,203,929
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</TABLE>
The accompanying notes are an integral part of these financial statements. 9
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Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 4/30/97 (continued)
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<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Telecommunications - 2.0%
18,500 Alcatel Alsthom SA $ 2,057,141
40,000 Telefonaktiebolaget LM Ericsson (Series B) 1,264,290
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$ 3,321,431
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Total Capital Goods $ 21,106,557
--------------
Consumer Durables - 2.2%
Motor Vehicles - 2.2%
250,000 Cowie Group Plc $ 1,494,896
344,000 Magneti Marelli SpA 523,022
18,000 Sylea SA 1,538,936
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Total Consumer Durables $ 3,556,854
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Consumer Non-Durables - 13.8%
Agriculture & Food - 2.6%
48,000 Louis Dreyfus Citrus $ 1,724,595
30,000 Raision Tehtaat Oy 2,486,778
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$ 4,211,373
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Consumer Luxuries - 0.6%
7,000 TAG Heuer International SA (Registered)* $ 983,373
--------------
Cosmetics - 0.3%
280,000 McBride Plc $ 567,169
--------------
Home Products - 2.7%
75,000 Industrie Natuzzi SpA (Sponsored A.D.R.) $ 1,668,750
72,000 Safilo SpA 1,367,847
310,000 Tompkins Plc 1,336,250
--------------
$ 4,372,847
--------------
Retail Food - 3.1%
2,600 Carrefour SA $ 1,623,302
50,000 Centro Comerciales Pryca SA 868,643
20,000 Delhaize-Le Lion, SA 1,004,196
37,000 G.I.B. Holdings Ltd. 1,604,196
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$ 5,100,337
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</TABLE>
10 The accompanying notes are an integral part of these financial statements.
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Pioneer Europe Fund
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<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Retail Non-Food - 3.0%
4,000 AVA Allgemeine Handelsgesellschaft der Verbraucher AG* $ 1,081,143
4,700 Forbo Holding AG 1,894,672
6,000 Metro AG* 582,154
28,000 Stockmann AB (B Shares) 1,453,986
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$ 5,011,955
--------------
Textiles/Clothes - 1.5%
30,000 Fila Holding SpA (Sponsored A.D.R.) $ 1,297,500
1,000 Hugo Boss AG 1,189,720
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$ 2,487,220
--------------
Total Consumer Non-Durables $ 22,734,274
--------------
Energy - 3.3%
Oil & Gas Extraction - 1.0%
17,000 Elf Aquitaine SA $ 1,648,591
--------------
Oil Services - 1.7%
115,000 Bouygues Offshore SA (Sponsored A.D.R.)* $ 1,437,500
27,000 VEBA AG 1,390,933
--------------
$ 2,828,433
--------------
Misc. Energy - 0.6%
18,500 Nordtank Energy Group A/S $ 996,480
--------------
Total Energy $ 5,473,504
--------------
Financial - 22.7%
Commerical Banks - 9.1%
60,000 Banca Popolare di Bergamo $ 875,478
379,900 Banca Popolare di Milano 1,869,178
24,000 Banco de Santander SA 1,805,684
25,000 Bank Gdanski SA (G.D.R.) 334,375
104,369 BPI-SGPS SA 1,575,472
28,000 Credit Commercial de France 1,242,526
28,000 DePfa-Bank 1,523,304
60,000 HSBC Holdings Plc 1,510,452
1,300 Julius Baer Holding AG (Bearer Shares) 1,627,757
50,000 Svenska Handelbanken 1,376,445
24,000 Unidanmark A/S 1,187,127
--------------
$ 14,927,798
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
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Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 4/30/97 (continued)
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<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Misc. Finance - 1.7%
660,000 Banca Fideuram SpA $ 1,656,404
9,000 Cetelem SA 1,048,574
--------------
$ 2,704,978
--------------
Insurance - 6.3%
24,200 Catalana Occidente* $ 1,271,201
40,000 Internationale Nederlanden Groep NV 1,571,084
255,000 Mediolanum SpA* 2,440,832
63,900 Pohjola Insurance Group (Series B) 1,823,783
230,000 Storebrand ASA* 1,405,434
5,535 Zurich Versicherungsgesellschaft (Registered) 1,818,079
--------------
$ 10,330,413
--------------
Investments - 1.8%
270,000 Amvesco Plc $ 1,461,351
2,800 Liechtenstein Global Trust (Participating Certificates) 1,539,192
--------------
$ 3,000,543
--------------
Life Insurance - 2.9%
23,000 Aegon NV $ 1,629,614
25,000 Mapfre Vida Seguros 1,609,042
13,000 Union Des Assurances Federal 1,548,017
--------------
$ 4,786,673
--------------
Savings & Loans - 0.9%
110,000 Abbey National Plc $ 1,532,977
--------------
Total Financial $ 37,283,382
--------------
Miscellaneous - 1.7%
50,000,000 Dogan Sirketler Grubu Holding AS* $ 1,216,994
3,700 Viag AG 1,645,394
--------------
Total Miscellaneous $ 2,862,388
--------------
Services - 20.7%
Broadcasting & Media - 1.1%
65,000 Central European Media Enterprises Ltd.* $ 1,844,375
--------------
Health & Personal Care - 0.9%
550,000 Esaote Biomedica SpA* $ 1,547,261
--------------
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
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Pioneer Europe Fund
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<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Pharmaceuticals - 8.7%
75,000 Amersham International Plc $ 1,537,433
22,000 Astra AB (Series A) 900,042
90,000 Biora AB* 848,808
80,000 Biora AB (A.D.R.)* 1,475,000
13,000 Gehe AG 864,915
100,000 Glaxo Wellcome Plc 1,965,646
30,000 Jelfa SA* 644,957
1,000 Novartis AG 1,317,951
17,000 Novo Nordisk A/S (Class B) 1,681,764
185 Roche Holdings AG 1,563,115
510 UCB SA 1,399,469
--------------
$ 14,199,100
--------------
Publishing - 2.2%
99,000 Elsevier NV $ 1,585,871
115,000 Schibsted ASA 1,986,992
--------------
$ 3,572,863
--------------
Misc.-Services - 7.8%
4,317 Adecco SA* $ 1,441,589
125,200 Compass Group Plc 1,371,499
210,000 Electrocomponents Plc 1,344,191
14,500 Hagemeyer NV 1,261,873
170,000 Hays Plc 1,501,377
24,925 Koninkluke Ahrend NV 1,510,063
57,000 ISS International Service System A/S (Class B) 1,686,467
18,000 Prosegur, CIA de Seguridad SA 195,137
11,000 Randstad Holdings NV 988,345
240,000 Rentokil Initial Plc 1,573,165
--------------
$ 12,873,706
--------------
Total Services $ 34,037,305
--------------
Technology - 5.7%
Business Machines - 1.0%
70,000 Esselte AB (Series B) $ 1,596,931
--------------
Computer Services - 0.6%
35,000 Getronics NV $ 1,060,225
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 4/30/97 (continued)
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<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Electronics - 4.1%
290,000 Amstrad Plc $ 1,010,371
11,000 Austria Micro Systeme International AG 830,427
20,000 Nokia AB (Series A) 1,236,657
39,000 Phillips Electronics NV 2,036,402
20,000 SGS - Thomson Microelectronics NV* 1,542,020
--------------
$ 6,655,877
--------------
Photo/Instrumentation - 0.0%
100,000 Anagen Plc* $ 16
--------------
Total Technology $ 9,313,049
--------------
Transportation - 0.9%
170,000 BAA Plc $ 1,409,091
--------------
Total Transportation $ 1,409,091
--------------
Utilities - 8.1%
Electric Utility - 1.7%
16,000 Endesa (Empresa Nacional de Electridad SA) $ 1,118,430
97,000 Iberdrola SA 1,094,696
77,261 Southern Electric Plc 545,872
83,700 Southern Electric Plc (B Shares)* 40,690
--------------
$ 2,799,688
--------------
Telecommunications - 5.6%
45,000 Portugal Telecom SA (Sponsored A.D.R.) $ 1,665,000
420,000 Stet Societa' Finanziaria Telefonica SpA (Non-voting) 1,556,600
660,000 Telecom Italia SpA 1,735,372
270,000 Telecom Italia Mobile SpA 848,601
19,200 Telecel-Comunicacaoes Pessoais SA* 1,653,477
66,000 Telefonica de Espana 1,690,571
--------------
$ 9,149,621
--------------
Water Utility - 0.8%
120,000 Anglian Water Plc $ 1,304,813
--------------
Total Utilities $ 13,254,122
--------------
TOTAL COMMON STOCKS
(Cost $121,573,905) $ 154,281,557
--------------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<C> <S> <C>
Warrants-0.0%
3,400 British Aerospace Plc, 11/15/00* $ 42,645
--------------
TOTAL WARRANTS
(Cost $5,505) $ 42,645
--------------
TOTAL INVESTMENT IN SECURITIES
(Cost $123,439,182)(a) $ 156,595,123
--------------
Principal
Amount
TEMPORARY CASH INVESTMENT - 4.6%
Commercial Paper - 4.6%
$ 7,527,000 Exxon Management Corp., 5.60%, 5/1/97 $ 7,527,000
--------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $ 7,527,000) $ 7,527,000
--------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $130,966,182)(b) $ 164,122,123
--------------
</TABLE>
* Non-income producing security.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
United Kingdom 18.6%
France 11.9
Italy 11.1
Germany 9.8
Netherlands 8.1
Switzerland 7.5
Spain 7.1
Sweden 5.2
Finland 4.5
Denmark 3.5
Portugal 3.1
Belgium 2.6
Norway 2.2
Austria 2.2
Bermuda 1.2
Others (individually less than 1%) 1.4
-----
100.0%
-----
(b) At April 30, 1997, the net unrealized gain on investments based on cost
for federal income tax purposes of $130,966,182 was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 36,464,949
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (3,309,008)
------------
Net unrealized gain $ 33,155,941
------------
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended April 30, 1997 aggregated $42,878,342 and $17,421,030,
respectively.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 4/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $7,527,000)(cost $130,966,182) $ 164,122,123
Cash 679,063
Receivables -
Fund shares sold 742,883
Dividends, interest and foreign taxes withheld 745,669
Other 1,895
-------------
Total assets $ 166,291,633
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 1,575,221
Fund shares repurchased 250,751
Forward foreign currency settlement contracts - net 4,826
Due to affiliates 229,390
Accrued expenses 128,866
-------------
Total liabilities $ 2,189,054
-------------
NET ASSETS:
Paid-in capital $ 128,700,475
Accumulated net investment loss (28,871)
Accumulated undistributed net realized gain on
investments and foreign currency transactions 2,291,032
Net unrealized gain on investments 33,155,941
Net unrealized loss on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (15,998)
-------------
Total net assets $ 164,102,579
-------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $127,350,856/5,289,612 shares) $ 24.08
-------------
Class B (based on $33,419,067/1,420,427 shares) $ 23.53
-------------
Class C (based on $3,332,656/142,475 shares) $ 23.39
-------------
MAXIMUM OFFERING PRICE:
Class A $ 25.55
-------------
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/97
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $168,360) $ 1,170,524
Interest 229,449
------------
Total investment income $ 1,399,973
------------
EXPENSES:
Management fees $ 722,371
Transfer agent fees
Class A 134,346
Class B 36,477
Class C 2,244
Distribution fees
Class A 140,693
Class B 134,189
Class C 10,777
Accounting 81,464
Custodian fees 68,145
Registration fees 66,915
Professional fees 44,959
Printing 11,540
Fees and expenses of nonaffiliated trustees 7,469
Miscellaneous 20,764
------------
Total expenses $ 1,482,353
Less fees paid indirectly (9,954)
------------
Net expenses $ 1,472,399
------------
Net investment loss $ (72,426)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ 2,577,583
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (4,994) $ 2,572,589
------------ ------------
Change in net unrealized gain from:
Investments $ 12,889,587
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (19,153) $ 12,870,434
------------ ------------
Net gain on investments and foreign currency
transactions $ 15,443,023
------------
Net increase in net assets resulting from operations $ 15,370,597
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 4/30/97 and the Year Ended 10/31/96
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
FROM OPERATIONS: 4/30/97 10/31/96
<S> <C> <C>
Net investment income (loss) $ (72,426) $ 481,808
Net realized gain on investments
and foreign currency transactions 2,572,589 9,058,285
Change in net unrealized gain on investments
and foreign currency transactions 12,870,434 6,998,959
------------- -------------
Net increase in net assets resulting from operations $ 15,370,597 $ 16,539,052
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.22 and $0.00 per share, respectively) $ (956,925) $ --
Class B ($0.11 and $0.00 per share, respectively) (105,770) --
Class C ($0.20 and $0.00 per share, respectively) (13,921) --
Net realized gain:
Class A ($1.58 and $1.43 per share, respectively) (6,974,914) (5,330,480)
Class B ($1.58 and $1.43 per share, respectively) (1,552,629) (622,721)
Class C ($1.58 and $0.00 per share, respectively) (110,662) --
------------- -------------
Total distributions to shareholders $ (9,714,821) $ (5,953,201)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 54,592,833 $ 53,717,473
Reinvestment of distributions 9,105,495 5,647,032
Cost of shares repurchased (26,570,347) (35,962,316)
------------- -------------
Net increase in net assets resulting from
fund share transactions $ 37,127,981 $ 23,402,189
------------- -------------
Net increase in net assets $ 42,783,757 $ 33,988,040
NET ASSETS:
Beginning of period 121,318,822 87,330,782
------------- -------------
End of period (including accumulated net investment
income (loss) of $(28,871) and $1,120,171,
respectively) $ 164,102,579 $ 121,318,822
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
<S> <C> <C> <C> <C>
Shares sold 1,664,961 $ 39,386,904 1,739,083 $ 37,427,960
Reinvestment of distributions 338,436 7,526,821 261,914 5,070,664
Less shares repurchased (1,010,585) (24,119,400) (1,408,516) (30,180,014)
---------- ------------ ---------- ------------
Net increase 992,812 $ 22,794,325 592,481 $ 12,318,610
---------- ------------ ---------- ------------
CLASS B
Shares sold 563,332 $ 13,097,481 703,595 $ 15,026,838
Reinvestment of distributions 68,391 1,490,933 30,224 576,368
Less shares repurchased (100,767) (2,350,233) (266,274) (5,637,583)
---------- ------------ ---------- ------------
Net increase 530,956 $ 12,238,181 467,545 $ 9,965,623
---------- ------------ ---------- ------------
CLASS C*
Shares sold 91,005 $ 2,108,448 58,406 $ 1,262,675
Reinvestment of distributions 4,049 87,741 -- --
Less shares repurchased (4,370) (100,714) (6,615) (144,719)
---------- ------------ ---------- ------------
Net increase 90,684 $ 2,095,475 51,791 $ 1,117,956
---------- ------------ ---------- ------------
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
CLASS A 4/30/97 10/31/96 10/31/95(a) 10/31/94 10/31/93 10/31/92
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.25 $ 21.19 $ 19.91 $ 17.73 $ 14.63 $ 15.20
-------- -------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.01) $ 0.11 $ 0.12 $ 0.10 $ 0.04 $ 0.10
Net realized and unrealized gain on investments
and foreign currency transactions 2.64 3.38 2.57 2.65 3.33 (0.62)
-------- -------- -------- -------- -------- --------
Net increase from investment operations $ 2.63 $ 3.49 $ 2.69 $ 2.75 $ 3.37 $ (0.52)
Distributions to shareholders:
Net investment income (0.22) -- (0.01) (0.31) (0.09) (0.05)
Net realized gain (1.58) (1.43) (1.40) (0.26) (0.18) --
-------- -------- -------- -------- --------
Net increase in net asset value $ 0.83 $ 2.06 $ 1.28 $ 2.18 $ 3.10 $ (0.57)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 24.08 $ 23.25 $ 21.19 $ 19.91 $ 17.73 $ 14.63
-------- -------- -------- -------- -------- --------
Total return* 11.94% 17.80% 15.12% 15.97% 23.47% (3.46)%
Ratio of net expenses to average net assets 1.89%**+ 1.94%+ 1.76%+ 1.86% 2.00% 2.00%
Ratio of net investment income to average net assets 0.02%**+ 0.57%+ 0.59%+ 0.28% 0.24% 0.74%
Portfolio turnover rate 25%** 56% 62% 100% 69% 50%
Average commission rate paid (1) $ 0.0268 $ 0.0251 -- -- -- --
Net assets, end of period (in thousands) $127,351 $ 99,915 $ 78,505 $ 67,375 $ 48,827 $ 35,205
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction
for fees paid indirectly:
Net expenses -- 2.00% 2.10% 2.48% 2.77% 3.46%
Net investment income (loss) -- 0.51% 0.25% (0.34)% (0.53)% (0.72)%
Ratios assuming waiver of management fees and
reduction for fees paid indirectly:
Net expenses 1.88%** 1.93% 1.75% -- -- --
Net investment income 0.03%** 0.58% 0.60% -- -- --
</TABLE>
(a) The per share data is based upon average shares outstanding for the period
presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount may fluctuate from period to period as a result of portfolio
transactions executed in different markets where trading practices and
commission rate structures may vary.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year
Ended Ended Ended 4/4/94 to
CLASS B 4/30/97 10/31/96 10/31/95(a) 10/31/94
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.74 $ 20.92 $ 19.80 $ 17.96
--------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.05) $ (0.04) $ (0.02) $ 0.01
Net realized and unrealized gain on investments
and foreign currency transactions 2.53 3.29 2.56 1.88
--------- --------- --------- ---------
Net increase from investment operations $ 2.48 $ 3.25 $ 2.54 $ 1.89
Distributions to shareholders:
Net investment income (0.11) -- (0.02) (0.05)
Net realized gain (1.58) (1.43) (1.40) --
--------- --------- --------- ---------
Net increase in net asset value $ 0.79 $ 1.82 $ 1.12 $ 1.84
--------- --------- --------- ---------
Net asset value, end of period $ 23.53 $ 22.74 $ 20.92 $ 19.80
--------- --------- --------- ---------
Total return* 11.48% 16.82% 14.43% 10.55%
Ratio of net expenses to average net assets 2.68%**+ 2.76%+ 2.49%+ 2.47%**
Ratio of net investment loss to average net assets (0.67)%**+ (0.23)%+ (0.13)%+ (0.75)%**
Portfolio turnover rate 25%** 56% 62% 100%
Average commission rate paid (1) $ 0.0268 $ 0.0251 -- --
Net assets, end of period (in thousands) $ 33,419 $ 20,228 $ 8,826 $ 3,037
Ratios assuming no waiver of management fees by PMC
and no reduction for fees paid indirectly:
Net expenses -- 2.80% 2.85% 2.95%**
Net investment loss -- (0.27)% (0.49)% (1.23)%**
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 2.66%** 2.74% 2.46% --
Net investment loss (0.65)%** (0.21)% (0.10)% --
</TABLE>
(a) The per share data is based upon average shares outstanding for the period
presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount may fluctuate from period to period as a result of portfolio
transactions executed in different markets where trading practices and
commission rate structures may vary.
The accompanying notes are an integral part of these financial statements. 20
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended 1/31/96 to
CLASS C 4/30/97 10/31/96
<S> <C> <C>
Net asset value, beginning of period $ 22.69 $ 19.92
--------- ---------
Increase from investment operations:
Net investment income $ 0.02 $ --
Net realized and unrealized gain on investments
and foreign currency transactions 2.46 2.77
--------- ---------
Net increase from investment operations $ 2.48 $ 2.77
Distributions to shareholders:
Net investment income (0.20) --
Net realized gain (1.58) --
--------- ---------
Net increase in net asset value $ 0.70 $ 2.77
--------- ---------
Net asset value, end of period $ 23.39 $ 22.69
--------- ---------
Total return* 11.54% 13.91%
Ratio of net expenses to average net assets 2.62%**+ 2.74%**+
Ratio of net investment loss to average net assets (0.40)%**+ --
Portfolio turnover rate 25%** 56%
Average commission rate paid (1) $ 0.0268 $ 0.0251
Net assets, end of period (in thousands) $ 3,333 $ 1,175
Ratios assuming no waiver of management fees by
PMC and no reduction for fees paid indirectly:
Net expenses -- 2.75%**
Net investment loss -- (0.01)%**
Ratios assuming waiver of management fees by PMC
and reduction for fees paid indirectly:
Net expenses 2.58%** 2.71%**
Net investment income(loss) (0.36)%** 0.03%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount may fluctuate from period to period as a result of portfolio
transactions executed in different markets where trading practices and
commission rate structures may vary.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/97
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
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.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Shares of Class A, Class B and Class C each represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B and Class C shareholders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to, among
other things, make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund, which are in conformity with those generally
accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Each day, securities are
valued at the last sale price on the principal exchange where they are
traded. Securities that have not traded on the date of valuation, or
securities for which sale prices are not generally reported, are valued at
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. Trading in
foreign securities is substantially completed each day at various times prior
to the close of the New York Stock Exchange. The values of such securities
used in computing the net asset value of the Fund's shares are determined as
of such times. Dividend income is recorded on the ex-dividend date, except
that certain dividends from foreign securities where the ex-dividend date may
have passed are recorded as soon as the Fund is informed of the ex-
22
<PAGE>
Pioneer Europe Fund
dividend data in the exercise of reasonable diligence. Interest income is
recorded on the accrual basis, net of unrecoverable foreign taxes withheld at
the applicable country rates. Temporary cash investments are valued at
amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the time
a portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of the contract and from unanticipated movements in the value of
foreign currencies relative to
23
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/97 (continued)
- --------------------------------------------------------------------------------
the U.S. dollar. As of April 30, 1997, the Fund had no outstanding portfolio
hedges. The Fund's gross forward foreign currency settlement contracts
receivable and payable were $636,458 and $641,284, respectively, resulting in
a net payable of $4,826 as of April 30, 1997.
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 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 $44,366 in
underwriting commissions on the sale of fund shares during the six months
ended April 30, 1997.
F. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expense (see Note 3).
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning of
the day.
24
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different transfer
agent and distribution fees.
2. Management Agreement
Pioneering Management Corporation (PMC), the Fund's investment adviser, manages
the Fund's portfolio and is a wholly owned subsidiary of PGI. Management fees
are calculated daily at the annual rate of 1.00% of the Fund's average daily net
assets up to $300 million; 0.85% of the next $200 million; and 0.75% of excess
over $500 million.
In addition, under the management agreement, certain other services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. At April 30, 1997, $144,332 was payable to PMC related to management
fees and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Fund at negotiated rates. Included in due to
affiliates is $31,908 in transfer agent fees payable to PSC at April 30, 1997.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class C
shares. Included in due to affiliates is $53,150 in distribution fees payable to
PFD at April 30, 1997.
25
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/97 (continued)
- --------------------------------------------------------------------------------
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 4.0%, based on the lower of cost or market
value of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSC are paid to PFD.
For the six months ended April 30, 1997, CDSCs in the amount of $18,153 were
paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended April 30, 1997,
the Fund's expenses were reduced by $9,954 under such arrangements.
26
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
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, 1997, and the related
statement of operations, the statements of changes in net assets, and the
financial highlights for the periods presented. These financial statements and
the financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1997 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, 1997, the results of its operations, the
changes in its net assets, and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 2, 1997
27
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Patrick M. Smith, Vice President
John W. Kendrick William H. Keough, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
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Pioneer Europe Fund
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THE PIONEER FAMILY OF MUTUAL FUNDS
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For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
Global/International Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust*
Pioneer India Fund
Pioneer International Growth Fund Tax-Exempt
Pioneer World Equity Fund Pioneer Intermediate Tax-Free Fund
Pioneer Tax-Free Income Fund
United States
Pioneer Capital Growth Fund Money Market Fund
Pioneer Growth Shares Pioneer Cash Reserves Fund
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
*0ffers Class A and B Shares only
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HOW TO CONTACT PIONEER
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We are pleased to offer a variety of convenient ways for you to contact us
for assistance or information.
You can call us for:
Account Information, including existing accounts,
new accounts, propectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Or write to us at:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our internet e-mail address [email protected]
(for general questions about Pioneer only)
Or visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current Fund prospectus.
[Logo] Pioneer Funds Distributor, Inc. 0697-4222
60 State Street (C) Pioneer Funds Distributor, Inc.
Boston, Massachusetts 02109 [Logo] Printed on Recycled Paper
