[Pioneer LOGO]
Pioneer Europe Fund
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ANNUAL REPORT 10/31/97
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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
Retirement Plans From Pioneer 29
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Pioneer Europe Fund
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LETTER FROM THE CHAIRMAN 10/31/97
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Dear Shareowner,
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I am pleased to introduce this report for Pioneer Europe Fund, covering its
fiscal year ended October 31, 1997. I thank you for your interest and this
opportunity to comment briefly on today's investing environment.
At the close of October, the world's stock markets demonstrated unprecedented
volatility. Asian markets plunged after languishing for several months as they
digested currency and economic changes. In the United States, the Dow Jones
Industrial Average took a break from its exhilarating upward climb to experience
- - in the space of two days - both its biggest one-day point drop and its biggest
one-day point gain. European markets bounced around, shaken by the drop in Asia
and then heartened by the speedy U.S. rebound. Even Latin America was affected
in a chain reaction from nervous investors.
The whirlwind of market activity was a powerful reminder that emotions can
significantly move markets, and investors often treat broad groups of stocks as
if they offered the same level of risk and reward, in this case whether or not
they have significant business interests in Asia. It also demonstrated how
difficult, if not impossible, it is to "time the market" - to buy only when
prices are lowest and sell only when prices are highest. We have always
advocated buying a stock because we want to invest in a business, at a price
that makes sense given a realistic outlook for the company's prospects. We also
believe in holding a stock until its price rises to what we think is its full
value, or we have reason to believe it won't meet our expectations. Market
swings are always unnerving but they don't distract us, and shouldn't distract
you, from long-term strategies designed to meet long-term goals.
I encourage you to read on to learn more about Pioneer Europe Fund. Please
contact your investment professional, or Pioneer at 1-800-225-6292, if you have
questions about your Fund.
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 10/31/97
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[pie chart]
International Common Stock 91%
Depositary Receipts for International Stocks 5%
Short-Term Cash Equivalents 3%
International Preferred Stocks 1%
Geographical Distribution
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(As a percentage of equity holdings)
[bar graph]
United Kingdom 19%
Germany 11%
France 10%
Italy 10%
Netherlands 8%
Switzerland 8%
Finland 6%
Spain 6%
Sweden 6%
Denmark 4%
Belgium 3%
Portugal 3%
Norway 2%
Austria 1%
Bermuda 1%
Poland 1%
Turkey 1%
10 Largest Holdings
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(As a percentage of equity holdings)
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1. Raisio Group Plc 2.89% 6. Ashtead Group Plc 1.33%
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2. Biora AB 2.35 7. JBA Holdings Plc 1.23
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3. Schibsted ASA 1.59 8. Stagecoach Holdings Plc 1.20
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4. Banca Fideuram SpA 1.37 9. Kuoni Reisen Holding AG
(Series B) (Registered) 1.17
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5. Compass Group Plc 1.36 10. Nycomed Amersham Plc 1.17
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Fund holdings will vary for other periods.
2
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Pioneer Europe Fund
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PERFORMANCE UPDATE 10/31/97 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 10/31/97 10/31/96
$27.60 $23.25
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 10/31/97) 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 invest ment 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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[boxed text]
Average Annual Total Returns
(As of October 31, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 14.49% 13.46%
(4/2/91)
5 Years 20.02 18.61
1 Year 28.30 20.92
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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.
Growth of $10,000+
Pioneer Europe MSCI Europe
Date Fund* Index
4/30/91 9,425 10,000
10/31/91 9,524 10,378
10,320 11,192
10/31/92 9,914 10,233
10,265 11,417
10/31/93 11,346 12,913
12,423 13,957
10/31/94 13,159 14,417
13,568 15,309
10/31/95 15,148 16,389
16,447 17,824
10/31/96 17,844 19,330
19,974 21,642
10/31/97 22,894 24,433
+ 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 10/31/97 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 10/31/97 10/31/96
$26.88 $22.74
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 10/31/97) 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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[boxed text]
Average Annual Total Returns
(As of October 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 19.32% 18.79%
(4/4/94)
1 Year 27.35 23.35
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* Reflects deduction of the maximum appli cable contingent deferred sales
charge (CDSC) at the end of the period and assumes rein vestment of
distributions. The maximum CDSC of 4% declines over six years.
Growth of $10,000+
Pioneer Europe MSCI Europe
Date Fund* Index
4/30/94 10,000 10,000
10,124 9,980
10/31/94 10,539 10,329
9,916 9,922
4/30/95 10,838 10,969
12,268 11,900
10/31/95 12,060 11,742
12,348 12,293
4/30/96 13,048 12,771
13,191 12,861
10/31/96 14,089 13,849
15,460 14,887
4/30/97 15,707 15,506
17,583 17,787
10/31/97 17,643 17,506
+ 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 10/31/97 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 10/31/97 10/31/96
$26.73 $22.69
Distributions per Share Income Short-Term Long-Term
(10/31/96 - 10/31/97) 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.
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[boxed text]
Average Annual Total Returns
(As of October 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 23.75% 23.75%
(1/31/96)
1 Year 27.47 27.47
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* Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to investments sold within one year of purchase.
Growth of $10,000
Pioneer Europe MSCI Europe
Date Fund* Index
1/31/96 10,000 10,000
10,246 10,186
10,412 10,311
4/30/96 10,542 10,389
10,823 10,473
10,954 10,592
7/31/96 10,678 10,463
11,069 10,777
11,215 11,007
10/31/96 11,391 11,266
11,948 11,841
12,293 12,074
1/31/97 12,505 12,110
12,613 12,274
12,955 12,674
4/30/97 12,705 12,614
13,292 13,157
13,917 13,819
7/31/97 14,226 14,470
13,824 13,646
14,965 14,973
10/31/97 14,520 14,241
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 10/31/97
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Dear Shareowner,
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We are pleased to report that Pioneer Europe Fund completed its seventh year of
operations with flying colors - despite increased market volatility toward the
end of the period. The Fund delivered total returns of 28.30% for Class A
shares, 27.35% for Class B shares and 27.47% for Class C shares, all at net
asset value, for the 12 months ended October 31, 1997. These returns all placed
in the top 20 percent of the 68 European region funds tracked by Lipper
Analytical Services, an independent mutual fund research firm, and were well
ahead of the category's average return of 20.38%.* The Morgan Stanley Capital
International (MSCI) Europe Index posted a total return of 25.98% for the same
period.
Moving toward Europe Inc.
Economic growth across Europe continued at a moderate pace, as nations struggled
with the tough fiscal and monetary guidelines mandated by the Maastricht Treaty
for entry into the European Monetary Union (EMU) in 1999. Two of the
top-performing countries for the period - Italy and Spain - made great strides
in meeting the 3% budgetary deficit limit for 1997.
In Italy, Prime Minister Prodi achieved deep cuts in the budget deficit during
October, assuring Italy's first-round participation with Europe's single
currency, the euro. Modest growth and low inflation should enable the Bank of
Italy to reduce interest rates next year to bring them further in line with
those of other European nations. Spain's prospects for entry into the EMU are
strong, supported by revitalized domestic demand and its continued export boom.
Low inflation and tight fiscal control have resulted in low interest rates,
sparking consumer and business spending. On October 31, the Fund's equity
holdings in Italy and Spain were 10% and 6%, respectively.
More signs of the pending union are evident. Local currencies are improving, and
the yields in most European bond markets have drawn closer
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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 7, 3 and 4 out of 68,
37 and 18 European region funds, respectively. Past performance does not
guarantee future results.
6
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Pioneer Europe Fund
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together. Corporate Europe is starting to restructure in anticipation of a more
level playing field - one that will reveal inefficiencies once hidden by
exchange rate differentials. As companies contemplate strategies to increase
their competitiveness, they'll be under pressure to reduce costs and focus on
what they do best. Already, efforts to ensure competitiveness on a European, if
not global, scale have resulted in a bonanza of mergers and acquisitions. All of
this financial integration had a favorable impact on Europe's markets, resulting
in solid gains in stock prices.
Large-Cap Stocks Lead the Rally
The 12 months ended October 31 proved to be a good year for
large-capitalization, blue-chip stocks. Investors, preferring liquidity, bought
stocks of big companies with steady, predictable growth. Only one-third of your
Fund's portfolio is invested in these well-established companies, but the Fund's
strong showing reflect its large-cap winners. Pharma ceutical giants Glaxo
Wellcome (Britain) and Novo Nordisk (Denmark) made good gains. In the
telecommunications industry, Telecom Italia, Portugal Telecom and Alcatel
Alsthom (France) performed well, as did Nokia (Finland).
The finance industry, particularly asset management and life insurance
companies, performed very well and comprised 20% of equity assets at the end of
the period. One of our perennial favorites for your Fund, Banca Fideuram
(Italy), rose 100% over the 12 months. Two insurance holdings, Mediolanum
(Italy) and Pohjola Insurance Group (Finland), appreciated noticeably and
continue to offer solid value in today's market.
As we stated in your semiannual report, the Fund's net assets rose by more than
one-third during the first half of the fiscal year. While appreciation of
portfolio holdings explains some of the increase, new cash investments into the
Fund account for the bulk of the asset growth. Investing new money changed the
list of the Fund's largest holdings almost completely. Five of the current "top
10" companies are based in the United Kingdom. These include businesses focused
on services, such as Compass Group (catering) and Stagecoach Holdings
(transporta-
7
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Pioneer Europe Fund
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PORTFOLIO MANAGEMENT DISCUSSION 10/31/97 (continued)
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tion), and product-oriented companies, such as Nycomed Amersham (pharmaceutical)
and JBA Holdings (software).
Disciplined Stock Picking Uncovers Gems
In the day-to-day management of your Fund, we use bottom-up, company-specific
research to uncover high-quality investments selling at fairly valued prices. We
scrutinize companies of all sizes, but in the end, we only select those offering
a unique product or service that promises dynamic growth opportunities over the
next three to five years.
The Fund's two largest holdings, Raisio Group (Finland) and Biora (Sweden),
highlight our preference for stocks of companies with one-of-a-kind growth
opportunities. Raisio uses a patented process to manufacture a
cholesterol-eating food additive. The product has been well-received in Finland,
and management is eyeing distribution worldwide. Biora, a biotechnology firm,
makes a protein gel that is applied after gum surgery to promote reconstructive
bone and tissue growth. With the gel approved for distribution in the United
States, Canada, Europe and Japan, we are very upbeat about the prospects for
this novel product.
A Bright Future
European markets are destined for tremendous change as restructuring and the
march toward a single market transform the economic landscape. The lifting of
arcane regulations and ongoing efforts by corpor ations to improve stockholder
value are also helping create a culture of investing much like that in the
United States. The environment is attracting new, sophisticated investors, and
that is increasing both the number and quality of offerings coming to market.
Rest assured, our dedication to finding one-of-a-kind opportunities before the
rest of the market will be key to assuring premier growth and solid value going
forward.
Respectfully yours,
/s/ Patrick M. Smith
Patrick M. Smith,
Portfolio Manager
8
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Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 10/31/97
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Shares Value
INVESTMENT IN SECURITIES - 96.6%
PREFERRED STOCKS - 1.1%
17,000 Bau Holdings AG $ 842,118
25,000 Henkel KGaA (Non-voting) 1,297,628
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Total Preferred Stocks
(Cost $1,859,772) $2,139,746
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COMMON STOCKS - 95.5%
BASIC INDUSTRIES - 2.0%
Containers - 1.0%
11,000 Schmalbach Lubeca AG $2,041,408
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Paper Products - 1.0%
85,000 N.V. Koninklijke KNP BT $1,935,102
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Total Basic Industries $3,976,510
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CAPITAL GOODS - 10.7%
Aerospace - 0.9%
70,400 British Aerospace Plc $1,870,673
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Construction & Engineering - 5.4%
770 ABB AG (Bearer Shares) $1,003,177
440,000 Ashtead Group Plc 2,582,580
25,000 Cardo AB 676,838
4,200 Mannesmann AG 1,773,241
170,000 Powerscreen International Plc 1,991,354
9,500 VA Technologies AG 1,685,844
7,829 Zardoya-Otis SA 941,288
783 Zardoya-Otis SA (New Shares)* 94,129
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$10,748,451
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Producer Goods - 2.4%
5,500 IWKA AG $1,368,381
25,000 Sidel, SA (Bearer Shares) 1,404,239
107,000 Siebe Plc 2,054,576
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$ 4,827,196
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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 10/31/97 (continued)
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Shares Value
Telecommunications - 2.0%
18,500 Alcatel Alsthom SA $ 2,232,219
40,000 Telefonaktiebolaget LM Ericsson (Series B) 1,760,446
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$ 3,992,665
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Total Capital Goods $21,438,985
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CONSUMER DURABLES - 1.9%
Motor Vehicles - 1.9%
5,100 BERU AG (144A)* $ 107,957
320,000 Cowie Group Plc 1,915,805
21,000 Sylea SA 1,856,716
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Total Consumer Durables $ 3,880,478
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CONSUMER NON-DURABLES - 16.7%
Agriculture & Food - 3.7%
58,000 Louis Dreyfus Citrus* $ 1,729,467
52,700 Raisio Group Plc 5,596,424
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$ 7,325,891
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Consumer Luxuries - 0.6%
11,000 TAG Heuer International SA (Registered)* $ 1,256,425
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Cosmetics - 0.4%
280,000 McBride Plc $ 812,339
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Home Products - 5.5%
250,000 Carpetright Plc $ 2,238,795
4,700 Forbo Holding AG 1,845,374
90,000 Industrie Natuzzi SpA (Sponsored A.D.R.) 2,013,750
72,000 Safilo SpA 1,829,085
11,700 Selecta Group* 1,637,065
56,885 Tarkett AG 1,510,951
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$11,075,020
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Retail Food - 2.8%
2,600 Carrefour SA $ 1,356,737
50,000 Centro Comerciales Pryca SA 793,978
35,000 Delhaize-Le Lion, SA 1,660,800
37,000 G.I.B. Holdings Ltd. 1,875,528
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$ 5,687,043
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10 The accompanying notes are an integral part of these financial statements.
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Pioneer Europe Fund
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Shares Value
Retail Non-Food - 1.8%
4,000 AVA Allgemeine Handelsgesellschaft der Verbraucher AG* $ 1,020,704
14,400 Metro AG 633,022
33,000 Stockmann AB (B Shares) 1,956,094
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$ 3,609,820
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Textiles/Clothes - 1.9%
70,000 Fila Holding SpA (Sponsored A.D.R.) $ 1,758,750
1,500 Hugo Boss AG 1,931,218
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$ 3,689,968
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Total Consumer Non-Durables $33,456,506
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ENERGY - 2.1%
Oil & Gas Extraction - 1.1%
17,000 Elf Aquitaine SA $ 2,104,278
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Oil Services - 1.0%
84,900 Bouygues Offshore SA (Sponsored A.D.R.) $ 2,058,825
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Total Energy $ 4,163,103
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FINANCIAL - 19.3%
Commerical Banks - 8.7%
379,900 Banca Popolare di Milano $ 2,098,523
72,000 Banco de Santander SA 2,016,911
65,500 Bank Handlowy W. Warszawie* 879,598
16,667 Big Bank Gdanski SA (G.D.R.)* 235,417
89,369 BPI-SGPS SA 2,009,977
28,000 Credit Commercial de France 1,586,339
35,000 DePfa-Bank 1,975,004
60,000 HSBC Holdings Plc 1,395,599
1,300 Julius Baer Holding AG (Bearer Shares) 1,939,606
50,000 Svenska Handelbanken 1,580,400
24,000 Unidanmark A/S 1,620,435
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$17,337,809
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Misc. Finance - 2.8%
300,000 Amvescap Plc $ 1,987,245
695,000 Banca Fideuram SpA 2,648,362
9,000 Cetelem SA 998,570
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$ 5,634,177
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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 10/31/97 (continued)
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Shares Value
Insurance-General - 3.6%
32,200 Catalana Occidente $ 1,633,574
40,000 Internationale Nederlanden Groep NV 1,679,114
48,900 Pohjola Insurance Group (Series B) 1,888,323
5,000 Zurich Versicherungsgesellschaft (Registered) 2,063,107
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$ 7,264,118
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Investments - 0.7%
2,800 Liechtenstein Global Trust (Participating
Certificates) $ 1,399,200
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Life Insurance - 3.5%
23,000 Aegon NV $ 1,812,516
25,000 Mapfre Vida Seguros 1,529,525
113,000 Mediolanum SpA 1,895,962
16,000 Union Des Assurances Federal 1,789,104
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$ 7,027,107
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Total Financial $38,662,411
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SERVICES - 27.0%
Broadcasting & Media - 0.9%
65,000 Central European Media Enterprises Ltd.* $ 1,901,250
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Health & Personal Care - 1.8%
800,000 Esaote Biomedica SpA $ 2,178,832
80,000 Marseille-Kliniken AG* 1,345,474
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$ 3,524,306
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Pharmaceuticals - 11.6%
58,666 Astra AB $ 946,718
458,000 Biora AB* 4,550,619
100,000 Biora AB (A.D.R.)* 1,962,500
45,000 Fabrica Espanola de Productos
Quimicos y Farmaceuticos, SA 2,057,125
37,000 Gehe AG 1,931,218
90,000 Glaxo Wellcome Plc 1,916,811
30,000 Jelfa SA* 619,799
1,000 Novartis AG 1,565,534
17,000 Novo Nordisk A/S (Class B) 1,839,603
59,000 Nycomed Amersham Plc 2,268,268
210 Roche Holdings AG 1,844,696
510 UCB SA 1,762,236
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$23,265,127
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12 The accompanying notes are an integral part of these financial statements.
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Pioneer Europe Fund
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Shares Value
Publishing - 3.2%
30,000,000 Dogan Sirketier Grubu Holdings AS* $ 1,192,810
139,500 Elsevier NV 2,191,476
165,000 Schibsted ASA 3,082,001
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$ 6,466,287
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Misc. Services - 9.5%
4,317 Adecco SA $ 1,401,018
250,200 Compass Group Plc 2,637,094
260,000 Electrocomponents Plc 2,016,592
29,000 Hagemeyer NV 1,277,105
182,000 Hays Plc 2,127,341
57,000 ISS International Service System A/S (Class B)* 1,728,800
61,850 Koninkluke Ahrend NV 2,061,136
600 Kuoni Reisen Holding AG (Series B) (Registered)* 2,270,131
42,150 Munters AB 427,228
27,500 Randstad Holdings NV 1,097,734
505,000 Rentokil Initial Plc 1,990,179
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$19,034,358
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Total Services $54,191,328
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TECHNOLOGY - 4.6%
Computer Services - 2.8%
35,000 Getronics NV $ 1,155,550
150,000 JBA Holdings Plc 2,377,147
70,000 Olicom AS* 2,012,500
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$ 5,545,197
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Electronics - 1.8%
20,000 Nokia AB 1,745,443
24,000 Phillips Electronics NV 1,878,960
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$ 3,624,403
-----------
Total Technology $ 9,169,600
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Transportation - 2.1%
210,000 BAA Plc $ 1,922,848
190,000 Stagecoach Holdings Plc 2,322,812
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Total Transportation $ 4,245,660
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The accompanying notes are an integral part of these financial statements. 13
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Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 10/31/97 (continued)
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Shares Value
UTILITIES - 9.1%
Electric Utility - 2.4%
64,000 Endesa (Empresa Nacional de Electridad SA) $ 1,205,472
27,000 VEBA AG 1,504,785
4,300 Viag AG 1,996,259
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$ 4,706,516
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Telecommunications - 6.7%
27,400 France Telecom SA* $ 1,036,956
12,000 MobilCom AG* 2,028,649
45,000 Portugal Telecom SA (Sponsored A.D.R.) 1,856,250
296,666 Telecom Italia SpA 1,859,585
420,000 Telecom Italia SpA Di Risp 1,697,220
270,000 Telecom Italia Mobile SpA 1,001,743
21,900 Telecel-Comunicacaoes Pessoais, SA * 1,980,154
72,000 Telefonica de Espana 1,964,941
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$ 13,425,498
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Total Utilities $ 18,132,014
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Total Common Stocks
(Cost $143,105,156) $191,316,595
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Warrants-0.0%
60,000 Banca Popolare di Bergamo, 3/31/04* $ 0
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Total Warrants
(Cost $0) $ 0
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TOTAL INVESTMENT IN SECURITIES
(Cost $144,964,928) $193,456,341
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Principal
Amount
TEMPORARY CASH INVESTMENT - 3.4%
Commercial Paper - 3.4%
$6,910,000 Household Finance Corp., 5.68%, 11/03/97 $ 6,910,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $ 6,910,000) $ 6,910,000
------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $151,874,928) $200,366,341
============
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* 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 October 31, 1997, the
value of this security was $107,957 or 0.05% of total net assets.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
United Kingdom 18.8%
Germany 11.6
France 10.1
Italy 9.8
Switzerland 8.7
Netherlands 7.8
Spain 6.3
Sweden 6.2
Finland 5.8
Denmark 3.7
Portugal 3.0
Belgium 2.8
Norway 1.6
Austria 1.3
Bermuda 1.0
Others (individually less than 1%) 1.5
-----
100.0%
=====
(b) At October 31, 1997, the net unrealized gain on investments based on cost
for federal income tax purposes of $151,874,928 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $52,457,627
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (3,966,214)
-----------
Net unrealized gain $48,491,413
===========
Purchases and sales of securities (excluding temporary cash investments) for the
year ended October 31, 1997 aggregated $88,825,591 and $51,083,736,
respectively.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 10/31/97
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $6,910,000) (cost $151,874,928) $200,366,341
Cash 569,749
Receivables -
Fund shares sold 1,188,839
Dividends, interest and foreign taxes withheld 249,983
Other 5,867
------------
Total assets $202,380,779
------------
LIABILITIES:
Payables -
Investment securities purchased $ 569,400
Fund shares repurchased 377,891
Due to affiliates 297,901
Accrued expenses 131,144
------------
Total liabilities $ 1,376,336
------------
NET ASSETS:
Paid-in capital $140,850,981
Accumulated undistributed net investment income 18,964
Accumulated undistributed net realized gain on
investments and foreign currency transactions 11,639,290
Net unrealized gain on investments 48,491,413
Net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies 3,795
------------
Total net assets $201,004,443
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $152,266,523/5,515,959 shares) $ 27.60
============
Class B (based on $42,471,785/1,580,337 shares) $ 26.88
============
Class C (based on $6,266,135/234,399 shares) $ 26.73
============
MAXIMUM OFFERING PRICE:
Class A $ 29.28
============
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 10/31/97
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $321,165) $ 2,933,765
Interest (net of foreign taxes withheld of $171) 404,669
------------
Total investment income $ 3,338,434
------------
EXPENSES:
Management fees $ 1,681,417
Transfer agent fees
Class A 278,253
Class B 84,390
Class C 6,829
Distribution fees
Class A 322,466
Class B 334,923
Class C 36,516
Accounting 118,321
Custodian fees 161,991
Registration fees 85,190
Professional fees 83,039
Printing 18,365
Fees and expenses of nonaffiliated trustees 13,569
Miscellaneous 70,154
------------
Total expenses $ 3,295,423
Less fees paid indirectly (22,429)
------------
Net expenses $ 3,272,994
------------
Net investment income $ 65,440
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ 11,862,850
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (32,037) $ 11,830,813
------------ ------------
Change in net unrealized gain from:
Investments $ 28,225,059
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 640 $ 28,225,699
------------ ------------
Net gain on investments and foreign currency
transactions $ 40,056,512
------------
Net increase in net assets resulting from operations $ 40,121,952
============
</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 Years Ended 10/31/97 and 10/31/96
<TABLE>
<CAPTION>
Year Ended Year Ended
FROM OPERATIONS: 10/31/97 10/31/96
<S> <C> <C>
Net investment income $ 65,440 $ 481,808
Net realized gain on investments
and foreign currency transactions 11,830,813 9,058,285
Change in net unrealized gain on investments
and foreign currency transactions 28,225,699 6,998,959
------------- -------------
Net increase in net assets resulting from operations $ 40,121,952 $ 16,539,052
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.22 and $0.00 per share, respectively) $ (956,926) $ --
Class B ($0.11 and $0.00 per share, respectively) (105,769) --
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) (6,974,917) (5,330,480)
Class B ($1.58 and $1.43 per share, respectively) (1,552,623) (622,721)
Class C ($1.58 and $0.00 per share, respectively) (110,662) --
------------- -------------
Total distributions to shareholders $ (9,714,818) $ (5,953,201)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 125,553,018 $ 53,717,473
Reinvestment of distributions 9,105,491 5,647,032
Cost of shares repurchased (85,380,022) (35,962,316)
------------- -------------
Net increase in net assets resulting from
fund share transactions $ 49,278,487 $ 23,402,189
------------- -------------
Net increase in net assets $ 79,685,621 $ 33,988,040
NET ASSETS:
Beginning of year 121,318,822 87,330,782
------------- -------------
End of year (including accumulated undistributed net
investment income of $18,964 and $1,120,171,
respectively) $ 201,004,443 $ 121,318,822
============= =============
<CAPTION>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
<S> <C> <C> <C> <C>
Shares sold 3,641,336 $ 92,409,000 1,739,083 $ 37,427,960
Reinvestment of distributions 338,436 7,526,823 261,914 5,070,664
Less shares repurchased (2,760,613) (71,517,391) (1,408,516) (30,180,014)
---------- ------------ ---------- ------------
Net increase 1,219,159 $ 28,418,432 592,481 $ 12,318,610
---------- ------------ ---------- ------------
CLASS B
Shares sold 1,134,352 $ 28,009,864 703,595 $ 15,026,838
Reinvestment of distributions 68,391 1,490,927 30,224 576,368
Less shares repurchased (511,877) (13,113,393) (266,274) (5,637,583)
---------- ------------ ---------- ------------
Net increase 690,866 $ 16,387,398 467,545 $ 9,965,623
---------- ------------ ---------- ------------
CLASS C*
Shares sold 207,616 $ 5,134,154 58,406 $ 1,262,675
Reinvestment of distributions 4,049 87,741 -- --
Less shares repurchased (29,057) (749,238) (6,615) (144,719)
---------- ------------ ---------- ------------
Net increase 182,608 $ 4,472,657 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 10/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
CLASS A 10/31/97 10/31/96 10/31/95(a) 10/31/94 10/31/93
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 23.25 $ 21.19 $ 19.91 $ 17.73 $ 14.63
-------- -------- -------- -------- --------
Increase from investment operations:
Net investment income $ 0.04 $ 0.11 $ 0.12 $ 0.10 $ 0.04
Net realized and unrealized gain on investments
and foreign currency transactions 6.11 3.38 2.57 2.65 3.33
-------- -------- -------- -------- --------
Net increase from investment operations $ 6.15 $ 3.49 $ 2.69 $ 2.75 $ 3.37
Distributions to shareholders:
Net investment income (0.22) -- (0.01) (0.31) (0.09)
Net realized gain (1.58) (1.43) (1.40) (0.26) (0.18)
-------- -------- -------- -------- --------
Net increase in net asset value $ 4.35 $ 2.06 $ 1.28 $ 2.18 $ 3.10
-------- -------- -------- -------- --------
Net asset value, end of year $ 27.60 $ 23.25 $ 21.19 $ 19.91 $ 17.73
======== ======== ======== ======== ========
Total return* 28.30% 17.80% 15.12% 15.97% 23.47%
Ratio of net expenses to average net assets 1.78%+ 1.94%+ 1.76%+ 1.86% 2.00%
Ratio of net investment income to average net assets 0.19%+ 0.57%+ 0.59%+ 0.28% 0.24%
Portfolio turnover rate 32% 56% 62% 100% 69%
Average commission rate paid (1) $ 0.0037 $ 0.0251 -- -- --
Net assets, end of year (in thousands) $152,267 $ 99,915 $ 78,505 $ 67,375 $ 48,827
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%
Net investment income (loss) -- 0.51% 0.25% (0.34)% (0.53)%
Ratios assuming waiver of management fees and
reduction for fees paid indirectly:
Net expenses 1.77% 1.93% 1.75% -- --
Net investment income 0.20% 0.58% 0.60% -- --
</TABLE>
(a) The per share data presented above is based upon average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ 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 10/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended 4/4/94 to
CLASS B 10/31/97 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) $ (0.10) $ (0.04) $ (0.02) $ 0.01
Net realized and unrealized gain on investments
and foreign currency transactions 5.93 3.29 2.56 1.88
-------- -------- -------- --------
Net increase from investment operations $ 5.83 $ 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 $ 4.14 $ 1.82 $ 1.12 $ 1.84
-------- -------- -------- --------
Net asset value, end of period $ 26.88 $ 22.74 $ 20.92 $ 19.80
======== ======== ======== ========
Total return* 27.35% 16.82% 14.43% 10.55%
Ratio of net expenses to average net assets 2.57%+ 2.76%+ 2.49%+ 2.47%**
Ratio of net investment loss to average net assets (0.55)%+ (0.23)%+ (0.13)%+ (0.75)%**
Portfolio turnover rate 32% 56% 62% 100%
Average commission rate paid (1) $ 0.0037 $ 0.0251 -- --
Net assets, end of period (in thousands) $ 42,472 $ 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 2.55% 2.74% 2.46% --
Net investment loss (0.53)% (0.21)% (0.10)% --
</TABLE>
(a) The per share data presented above is based upon average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(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.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 10/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended 1/31/96 to
CLASS C 10/31/97(a) 10/31/96
<S> <C> <C>
Net asset value, beginning of period $ 22.69 $ 19.92
-------- --------
Increase (decrease) from investment operations:
Net investment loss $ (0.12) $ --
Net realized and unrealized gain on investments
and foreign currency transactions 5.94 2.77
-------- --------
Net increase from investment operations $ 5.82 $ 2.77
Distributions to shareholders:
Net investment income (0.20) --
Net realized gain (1.58) --
-------- --------
Net increase in net asset value $ 4.04 $ 2.77
-------- --------
Net asset value, end of period $ 26.73 $ 22.69
======== ========
Total return* 27.47% 13.91%
Ratio of net expenses to average net assets 2.49%+ 2.74%**+
Ratio of net investment loss to average net assets (0.52)%+ 0.00%**+
Portfolio turnover rate 32% 56%
Average commission rate paid (1) $ 0.0037 $ 0.0251
Net assets, end of period (in thousands) $ 6,266 $ 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 2.46% 2.71%**
Net investment income (loss) (0.49)% 0.03%**
</TABLE>
(a) The per share data presented above is based upon the 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. 21
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/97
- --------------------------------------------------------------------------------
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
22
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ex-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 the U.S. dollar. As of October 31, 1997, the
Fund had no outstanding settlement or portfolio hedges.
23
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/97 (continued)
- --------------------------------------------------------------------------------
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.
At October 31, 1997, the Fund reclassified $90,031 from accumulated
undistributed net investment income to accumulated undistributed net realized
gain on investments. The reclassification has no impact on the net asset
value of the Fund and is designed to present the Fund's capital accounts on a
tax basis.
In order to comply with federal income tax regulations, the Fund has
designated $7,344,502 as a capital gain dividend for the purposes of the
dividend paid deduction.
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 $70,604 in
underwriting commissions on the sale of fund shares during the year ended
October 31, 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 allo-
24
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
cated daily to each class of shares based on the respective percentage of
adjusted net assets at the beginning of the day.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different transfer
agent and distribution fees.
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 October 31, 1997, $188,837 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 $36,155 in transfer agent fees payable to PSC at October 31, 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 $72,909 in distribution fees payable to
PFD at October 31, 1997.
25
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/97 (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 year ended October 31, 1997, CDSCs in the amount of $59,624 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 year ended October 31, 1997, the
Fund's expenses were reduced by $22,429 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 October 31, 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
October 31, 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 October 31, 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
December 3, 1997
27
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees
John F. Cogan, Jr.
Mary K. Bush
Richard H. Egdahl, M.D.
Margaret B.W. Graham
John W. Kendrick
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
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
Officers
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Patrick M. Smith, Vice President
William H. Keough, Treasurer
Joseph P. Barri, Secretary
28
<PAGE>
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RETIREMENT PLANS FROM PIONEER
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Pioneer offers retirement plans suited to the individual investor and businesses
of all sizes. For information, contact your investment professional, or call
Pioneer at 1-800-622-0176.
Individual Plans
Individual Retirement Account (IRA) The $2,000 maximum annual contribution may
be tax-deductible; earnings are tax-deferred.
Roth IRA New in 1998, $2,000 maximum annual contributions are not
tax-deductible. Earnings are tax-free for qualified withdrawals.
Plans for Small Businesses or the Self-Employed
SIMPLE (Savings Incentive Match PLan for Employees)
IRA or 401(k) Plan For firms with 100 or fewer employees. Employees can make
pre-tax contributions of up to $6,000 annually, and an employer contribution is
required.
Simplified Employee Pension Plan (SEP) Self-employed people and small-business
owners can make tax-deductible contributions of up to 15% of their income.
Employer-Sponsored Plans
401(k) Plan Allows employees to make pre-tax contributions. Also allows for
employer contributions.
403(b) Plan Lets employees of tax-exempt organizations set aside part of their
salary, before taxes, through payroll deduction.
Profit Sharing Plan Employers contribute on a discretionary basis, usually based
on profits.
Age-Weighted Profit Sharing Plan Employer makes discretionary contributions
based on employees' age and salary.
Money Purchase Pension Plan (MPP) Employers contribute based on a fixed formula.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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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.
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
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current Fund prospectus.
[Pioneer LOGO] Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
1297-4648
(C) Pioneer Funds Distributor, Inc.
[Recycle LOGO] Printed on Recycled Paper
