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[PIONEER Logo]
Pioneer Europe Fund
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SEMIANNUAL REPORT 4/30/98
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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 4/30/98
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Dear Shareowner,
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I am pleased to introduce this report for Pioneer Europe Fund, covering the
semiannual period ended April 30, 1998. I thank you for your investment with
Pioneer, and appreciate this opportunity to comment briefly on the unique and
exciting developments taking place in Europe today.
European unification has been much discussed over the past decade. We've all
heard and read some extremely colorful commentary over the years - about its
potential pros and cons, probability and likely effects. Today, reality is
starting to replace hyperbole, and we are seeing hints of what the future may
hold - a unified Europe with a single currency, tightly managed fiscal and
economic policies, and a vast consumer and industrial base. Rarely do we have
the opportunity to witness the birth of significant, widespread social and
economic change. The introduction of the Europe Monetary Union presents one of
those rare occasions, and we are delighted to be both a witness and a
participant.
I encourage you to read on to learn more about Pioneer Europe Fund, the
exciting events taking place on the Continent and your investment team's
successful strategy. If you have questions about your Fund, please contact
your investment professional, or call Pioneer at 1-800-225-6292.
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 4/30/98
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[The following information was represented by a pie chart in the printed
materials.]
International Common Stocks - 90.7%
Short-Term Cash Equivalents - 4.9%
Depositary Receipts for International Stocks - 3.0%
International Preferred Stocks - 1.3%
Rights and Warrants - 0.1%
Geographical Distribution
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(As a percentage of equity holdings)
[The following information was represented by a bar graph in the printed
materials.]
United Kingdom - 20.0% Finland - 5.6%
Germany - 14.8% Denmark - 3.8%
France - 13.6% Belgium - 2.6%
Switzerland - 8.0% Portugal - 1.2%
Netherlands - 7.5% Austria - 1.1%
Spain - 7.1% Norway - 1.0%
Italy - 7.0% Czech Republic 0.8%
Sweden - 5.8% Poland - 0.1%
10 Largest Holdings
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(As a percentage of equity holdings)
1. Raisio Group Plc 3.46% 6. Schmalbach Lubeca AG 1.37%
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2. MobilCom AG 2.48 7. Select Appointments
Holdings Plc 1.32
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3. Biora AB 2.34 8. Gehe AG 1.23
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4. Siebe Plc 1.68 9. Hugo Boss AG 1.19
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5. Ashtead Group Plc 1.42 10. Adecco SA 1.19
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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 4/30/98 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/98 10/31/97
$34.42 $27.60
Distributions per Share Income Short-Term Long-Term
(10/31/97 - 4/30/98) Dividends Capital Gains Capital Gains
-- $0.579 $0.970
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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Average Annual Total Returns
(As of April 30, 1998)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 17.93% 16.94%
(4/2/91)
5 Years 24.10 22.63
1 Year 51.24 42.54
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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 information was represented by a line graph in the printed
materials.]
Growth of $10,000+
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Pioneer Europe Fund* MSCI Europe Index
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4/30/91 9425 10000
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9524 10354
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4/92 10320 11139
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9194 10159
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4/93 10265 11309
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11346 12767
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4/94 12423 13775
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13159 14202
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4/95 13568 15050
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15148 16078
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4/96 16447 17451
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17852 18886
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4/97 19974 21109
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22894 23794
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4/98 30208 30712
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+ Index comparison begins April 30, 1991. The Morgan Stanley Capital
International (MSCI) Europe Index is a capitalization-weighted index of the
15 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, Portugal, 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 4/30/98 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/98 10/31/97
$33.32 $26.88
Distributions per Share Income Short-Term Long-Term
(10/31/97 - 4/30/98) Dividends Capital Gains Capital Gains
-- $0.579 $0.970
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, 1998)
If If
Period Held Redeemed*
Life-of-Fund 24.91% 24.66%
(4/4/94)
1 Year 50.07 46.07
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* Reflects deduction of the maximum applicable 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.
[The following information was represented by a line graph in the printed
materials.]
Growth of $10,000+
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Pioneer Europe Fund* MSCI Europe Index
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4/30/94 10000 10000
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10124 9971
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10/94 10539 10310
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9916 9893
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4/95 10838 10925
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12268 11841
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10/95 12060 11671
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12348 12206
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4/96 13048 12668
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13191 12745
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10/96 14089 13710
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15460 14724
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4/97 15707 15324
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17583 17564
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10/97 17943 17273
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19221 18936
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4/98 23371 22295
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+ Index comparison begins April 30, 1994. The Morgan Stanley Capital
International (MSCI) Europe Index is a capitalization-weighted index of the
15 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, Portugal, 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 4/30/98 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 4/30/98 10/31/97
$33.16 $26.73
Distributions per Share Income Short-Term Long-Term
(10/31/97 - 4/30/98) Dividends Capital Gains Capital Gains
-- $0.579 $0.970
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, 1998)
If If
Period Held Redeemed*
Life-of-Fund 33.31% 33.31%
(1/31/96)
1 Year 50.29 50.29
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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 information was represented by a line graph in the printed
materials.]
Growth of $10,000
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Pioneer Europe Fund* MSCI Europe Index
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1/31/96 10000 10000
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4/96 10542 10378
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10678 10441
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10/96 11396 11232
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12505 12063
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4/97 12705 12554
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14226 14389
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10/97 14520 14151
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15559 15513
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4/98 19095 18265
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The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 15 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, Portugal, 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 4/30/98
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Dear Shareowner,
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The road to Euroland is paved with many opportunities, and we are pleased to
report that Pioneer Europe Fund - with its emphasis on "bottom-up" stock
selection - is reaping the rewards. For the six months ended April 30, 1998,
the Fund delivered total returns of 31.95% for Class A Shares, 31.36% for
Class B Shares and 31.51% for Class C Shares - all at net asset value. These
returns were well ahead of the 26.03% average for the 93 European region funds
tracked by Lipper Analytical Services. The unmanaged Morgan Stanley Capital
International (MSCI) Europe Index posted a total return of 29.07% for the same
period.
Moving toward a United States of Europe
In early 1999, most of Western Europe will take the first step toward economic
unification when banks and stock exchanges begin using Europe's new single
currency, the euro. The 11 first-round adoptees - Austria, Belgium, Finland,
France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and
Spain - will replace their currencies with the euro by 2002. Anticipation of
the common currency is yielding many benefits, including corporate
restructurings, lower interest rates and booming stock markets.
European markets performed very well over the past six months, with the
top-performing countries of Italy, Spain and Portugal climbing approximately
50% in U.S. dollars. Holdings from these three countries comprised 15% of the
portfolio at the end of the period. Strong fiscal discipline and
stronger-than-expected economic growth is producing smaller public deficits,
lowering inflation and, ultimately, prompting greater consumer confidence.
Interest rates among these southern countries have also fallen, sparking a
convergence of yields with other, traditionally lower-risk, lower-yielding
European bond markets.
The Fund's holdings in Germany and France climbed from 22% on October 31,
1997, to 28% on April 30. We are encouraged by improving employment statistics
and signs that their economic growth is increas-
6
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Pioneer Europe Fund
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ingly being driven by domestic demand - not just exports. Accordingly, we've
been selectively adding to assets in both countries - including SGS-Thomson
Microelectronics (France) and MobilCom (Germany). Incidentally, MobilCom, the
Fund's second largest holding on April 30, was also the best performing stock
during the period with a return of 392% in U.S. dollars.
Keeping Perspective during Euro Euphoria
As Europe moves closer to the introduction of the euro, the benefits of the
single currency are becoming more pronounced. Now more than ever, navigating
Europe's equity markets requires a keen assessment of the inherent risks and
rewards. Disparate economies and conflicting sentiments about the severe
fiscal and monetary guidelines set by the Maastricht Treaty are still visible.
Thus, the challenge of identifying the potential winners - and avoiding the
losers - requires in-depth research on a company-by-company basis.
Financial stocks have been the chief beneficiaries of the pending monetary
union. The Fund's investments in asset managers Internationale Nederlanden
Groep (Netherlands) and Julius Baer Holding (Switzerland) are profiting from
the popularity of pension- and investment-related products and declining
interest rates. Italian-based Banca Fideuram, which made a nice contribution
to performance over the past six months, may have started to become overvalued
and we took some gains during the period. Within the telecommunications
industry, cellular providers Telecom Italia Mobile (Italy) and
Telecel-Comunicacaoes Pessoais (Portugal) climbed 60% and 115%, respectively.
Mannesmann (Germany), an equipment and telecommunications enterprise, provides
an excellent example of a company's ability to adapt in Europe's more
competitive environment. Five years ago, this heavy equipment manufacturer
purchased a license to offer cellular service. The emerging telecom company
has been so successful that management is divesting its less profitable
divisions and reallocating resources to its telecommunications arm. It has
purchased stakes in Italian, Austrian and French cellular companies in an
effort to build a pan-European cellular network. We think this enterprise
exemplifies the potential a unified Europe offers to alert and astute
companies.
7
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Pioneer Europe Fund
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/98 (continued)
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While Raisio Group (Finland) and Biora (Sweden) continue to rank among the
Fund's larger holdings, several new holdings rotated into the ranks of the 10
largest investments. These range from pharmaceutical-wholesaler Gehe (Germany)
to temporary-help agency Adecco (France). Apparel maker Hugo Boss (Germany) is
an example of a restructured company that's now offering tremendous growth
opportunities. Suffering under poor management, the company was purchased by
an Italian group in the early 1990s. Building on the superb reputation of its
men's clothing, it is currently marketing three lines to business and
advertising professionals and will introduce a more casual line later this
year.
Europe's New World Economy - A Boon for Investors
Prospects for Europe's evolving economy are bright indeed. Companies are
consolidating and restructuring in anticipation of a more level playing field,
one in which creditworthiness rather than exchange-rate risk will be an
important determinant of future growth. Furthermore, government-coddled
monopolies are falling prey to the pressures of a global economy. More and
more, efficiency-driven businesses are demanding lower prices and better
service from monopolies. This is sparking a drive for deregulation of
previously closed industries ranging from energy to air travel to postal
service.
Companies are becoming more accountable to their shareholders, creating a
bonanza of opportunities for investors. In today's environment of declining
interest rates and low inflation, we believe the groundwork is being laid for
Europe's reemergence as one of the world's biggest and most efficient
marketplaces. And we believe Pioneer Europe Fund is well-positioned to
capitalize on this historic event.
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 4/30/98
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Shares Value
INVESTMENT IN SECURITIES - 95.1%
PREFERRED STOCKS - 1.3%
15,280 Bau Holdings AG $ 707,940
55,000 Henkel KGaA (Non-voting) 4,291,846
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Total Preferred Stocks
(Cost $3,852,782) $ 4,999,786
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COMMON STOCKS - 93.7%
Basic Materials - 3.2%
Containers & Packaging (Paper) - 2.1%
21,200 Schmalbach Lubeca AG $ 5,220,534
6,500 Viag AG 3,293,295
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$ 8,513,829
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Paper & Forest Products - 1.1%
160,000 NV Koninklijke KNP BT $ 4,395,822
--------------
Total Basic Materials $ 12,909,651
--------------
Capital Goods - 15.4%
Aerospace/Defense - 1.0%
125,400 British Aerospace Plc $ 4,197,228
--------------
Electrical Equipment - 2.0%
2,340 ABB AG (Bearer Shares) $ 3,835,810
45,000 Phillips Electronics NV 3,965,150
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$ 7,800,960
--------------
Engineering & Construction - 3.3%
1,200,000 Ashtead Group Plc $ 5,419,547
35,000 Technip 4,448,511
24,500 VA Technologies AG 3,521,760
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$ 13,389,818
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Machinery (Diversified) - 4.6%
17,000 IWKA AG $ 4,008,138
50,000 Sidel, SA (Bearer Shares) 3,826,318
282,000 Siebe Plc 6,386,080
247,300 Valmet Corp. 4,181,857
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$ 18,402,393
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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 4/30/98 (continued)
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Shares Value
Manufacturing (Diversified) - 3.6%
135,000 Bodycote International Plc $ 2,705,257
5,000 Mannesmann AG 3,968,564
1,300,000 Powerscreen International Plc 4,022,842
700,000 TT Group Plc 3,828,809
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$ 14,525,472
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Office Equipment & Supplies - 0.9%
96,850 Koninkluke Ahrend NV $ 3,356,022
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Total Capital Goods $ 61,671,893
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Communication Services - 6.1%
Cellular/Wireless Telecommunications - 2.9%
12,750 MobilCom AG $ 9,451,814
12,900 Telecel-Comunicacaoes Pessoais, SA* 2,314,216
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$ 11,766,030
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Telephone - 3.2%
45,000 Portugal Telecom SA (Sponsored A.D.R.) $ 2,418,750
296,666 Telecom Italia SpA 2,218486
620,000 Telecom Italia SpA Di Risp 3,268,223
270,000 Telecom Italia Mobile SpA 1,539,069
72,000 Telefonica de Espana 3,006,697
6,545 Telefonica de Espana (E Shares)* 273,317
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$ 12,724,542
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Total Communication Services $ 24,490,572
--------------
Consumer Cyclicals - 18.2%
Auto Parts & Equipment - 0.5%
21,000 Sylea SA $ 1,904,009
--------------
Consumer (Jewelry, Novelties & Gifts) - 1.0%
72,000 Safilo SpA $ 2,466,574
16,000 TAG Heuer International SA (Registered)* 1,684,547
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$ 4,151,121
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Household Furnishings & Appliances - 2.0%
7,700 Forbo Holding AG $ 3,950,823
140,000 Moulinex* 4,162,036
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$ 8,112,859
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Publishing - 0.8%
214,500 Elsevier NV $ 3,238,577
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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 (Department Stores) - 0.9%
74,400 Metro AG $ 3,674,176
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Retail (Specialty) - 2.7%
420,000 Arriva Plc $ 2,964,693
670,000 Carpetright Plc 3,877,652
22,700 Selecta Group* 3,811,821
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$ 10,654,166
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Services (Commercial & Consumer) - 7.7%
67,500 Falck AS $ 3,936,435
80,000 Hagemeyer NV 3,821,593
182,000 Hays Plc 3,096,066
57,000 ISS International Service System A/S (Class B) 3,082,500
800 Kuoni Reisen Holding AG (Series B) (Registered) 4,291,331
317,311 Prosegur SA 3,958,575
585,000 Rentokil Initial Plc 3,777,123
360,000 Select Appointments Holdings Plc 5,016,091
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$ 30,979,714
--------------
Textiles (Apparel) - 1.6%
70,000 Fila Holding SpA (Sponsored A.D.R.) $ 1,662,500
2,700 Hugo Boss AG 4,516,303
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$ 6,178,803
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Textiles (Home Furnishings) - 1.0%
153,000 Industrie Natuzzi SpA (Sponsored A.D.R.) $ 3,930,188
--------------
Total Consumer Cyclicals $ 72,823,613
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Consumer Staples - 13.3%
Beverages (Non-Alcoholic) - 0.8%
100,000 Louis Dreyfus Citrus $ 3,327,233
--------------
Broadcasting (Television/Radio/Cable) - 1.7%
115,000 Central European Media Enterprises Ltd.* $ 3,212,813
195,000 Schibsted ASA 3,713,514
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$ 6,926,327
--------------
Distributors (Food & Health) - 1.2%
90,000 Gehe AG $ 4,665,292
--------------
Foods - 3.3%
71,700 Raisio Group Plc $ 13,178,815
--------------
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 4/30/98 (continued)
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Shares Value
Household Products (Non-Durables) - 1.1%
85,000 Hunter Douglas NV $ 4,144,597
--------------
Restaurants - 0.8%
180,200 Compass Group Plc $ 3,115,934
--------------
Retail Stores (Food Chains) - 2.2%
6,000 Carrefour SA $ 3,438,696
55,000 Delhaize-Le Lion, SA 3,642,089
37,000 G.I.B. Holdings Ltd. 1,820,098
--------------
$ 8,900,883
--------------
Services (Employment) - 1.1%
10,317 Adecco SA $ 4,514,009
--------------
Services (Facilities & Environment) - 1.1%
498,000 Kwik-Fit Holdings Plc $ 4,331,623
--------------
Total Consumer Staples $ 53,104,713
--------------
Energy - 1.9%
Oil (International Integrated) - 1.0%
30,000 Elf Aquitaine SA $ 3,937,781
--------------
Oil & Gas (Exploration/Production) - 0.9%
54,000 VEBA AG $ 3,569,701
--------------
Total Energy $ 7,507,482
--------------
Financial - 17.1%
Banks (Major Regional) - 8.8%
395,000 Banca Fideuram SpA $ 2,552,558
279,900 Banca Popolare di Milano 2,575,709
72,000 Banco de Santander SA 3,805,647
25,800 Compagnie Financiere de Paribas 2,746,964
50,000 Credit Commercial de France 3,992,680
53,000 DePfa-Bank 4,091,466
120,000 HSBC Holdings Plc 3,642,637
1,500 Julius Baer Holding AG 4,138,069
80,000 Svenska Handelbanken 3,626,970
50,000 Unidanmark A/S 4,202,080
--------------
$ 35,374,780
--------------
Financial (Diversified) - 1.0%
60,000 Internationale Nederlanden Groep NV $ 3,899,807
--------------
Insurance (Life/Health) - 1.8%
75,000 Mapfre Vida Seguros $ 3,742,613
113,000 Mediolanum SpA 3,386,460
--------------
$ 7,129,073
--------------
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
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Shares Value
Insurance (Multi-Line) - 4.6%
35,000 Axa SA $ 4,110,797
30,000 Axa Colonia Konzern AG 3,845,939
59,700 Catalana Occidente SA 4,100,210
16,000 Union Des Assurances Federal 2,504,741
6,000 Zurich Versicherungsgesellschaft (Registered) 3,654,295
--------------
$ 18,215,982
--------------
Investment Management - 0.9%
330,000 Amvescap Plc $ 3,725,938
--------------
Total Financial $ 68,345,580
--------------
Healthcare - 8.7%
Healthcare (Drugs/Major Pharmaceuticals) - 4.5%
178,666 Astra AB $ 3,669,322
70,000 Fabrica Espanola de Productos Quimicos y
Farmaceuticos, SA 4,090,611
6,000 Fabrica Espanola de Productos Quimicos y
Farmaceuticos, SA (E Shares)* 346,684
17,000 Jelfa SA* 470,484
1,700 Novartis AG 2,809,356
210 Roche Holdings AG 2,127,707
910 UCB SA 4,351,019
--------------
$ 17,865,183
--------------
Healthcare (Long-Term Care) - 0.4%
85,000 Marseille-Kliniken AG* $ 1,582,409
--------------
Healthcare (Medical Products/Supplies) - 3.8%
592,200 Biora AB* $ 8,911,302
127,500 Biora AB (A.D.R.)* 4,000,313
800,000 Esaote Biomedica SpA 2,390,722
--------------
$ 15,302,337
--------------
Total Healthcare $ 34,749,929
--------------
Technology - 6.9%
Communications Equipment - 2.1%
23,500 Alcatel Alsthom SA $ 4,359,092
62,000 Nokia AB 4,136,714
--------------
$ 8,495,806
--------------
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Europe Fund
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SCHEDULE OF INVESTMENTS 4/30/98 (continued)
- --------------------------------------------------------------------------------
Shares Value
Computers (Networking) - 0.8%
107,000 Olicom AS* $ 3,290,250
--------------
Computers (Software & Services) - 0.9%
400,000 JBA Holdings Plc $ 3,546,123
--------------
Electronics (Component Distributors) - 1.6%
460,000 Electrocomponents Plc $ 4,474,304
38,000 Telefonaktiebolaget LM Ericsson (Series B) 2,002,583
--------------
$ 6,476,887
--------------
Electronics (Semiconductors) - 1.1%
50,000 SGS - Thomson Microelectronics NV* $ 4,275,495
--------------
Services (Data Processing) - 0.4%
35,000 Getronics NV $ 1,548,933
--------------
Total Technology $ 27,633,494
--------------
Transportation - 2.0%
Airlines - 0.9%
370,000 BAA Plc $ 3,776,830
--------------
Railways - 1.1%
210,000 Stagecoach Holdings Plc $ 4,225,741
--------------
Total Transportation $ 8,002,571
--------------
Utilities - 0.9%
Electric Companies - 0.9%
150,000 Empresa National de Electridad SA $ 3,644,123
--------------
Total Utilities $ 3,644,123
--------------
Total Common Stocks
(Cost $272,468,637) $ 374,883,621
--------------
RIGHTS & WARRANTS - 0.1%
13,548 Stagecoach Holdings Plc, 5/22/98* $ 32,406
60,000 Banca Popolare di Bergamo, 3/31/04* 474,081
--------------
Total Rights & Warrants
(Cost $10,709) $ 506,487
--------------
TOTAL INVESTMENT IN SECURITIES
(Cost $276,332,128) (a) $ 380,389,894
--------------
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Principal
Amount
TEMPORARY CASH INVESTMENTS - 4.9%
Commercial Paper - 4.9%
$10,000,000 Household Finance Corp., 5.51%, 5/1/98 $ 10,000,000
9,479,000 Texaco Inc., 5.51%, 5/4/98 9,479,000
--------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $19,479,000) $ 19,479,000
--------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS - 100%
(Cost $295,811,128) (b) $ 399,868,894
==============
* Non-income producing security.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
United Kingdom 20.0%
Germany 14.8
France 13.6
Switzerland 8.0
Netherlands 7.5
Spain 7.1
Italy 7.0
Sweden 5.8
Finland 5.6
Denmark 3.8
Belgium 2.6
Portugal 1.2
Austria 1.1
Norway 1.0
Others (individually less than 1%) 0.9
------
100.0%
------
(b) At April 30, 1998, the net unrealized gain on investments based on cost
for federal income tax purposes of $295,814,125 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 109,150,303
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (5,095,534)
--------------
Net unrealized gain $ 104,054,769
==============
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended April 30, 1998, aggregated $159,723,611 and $45,173,986,
respectively.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 4/30/98
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investments of $19,479,000) (cost $295,811,128) $ 399,868,894
Foreign currencies, at value 3,024,501
Receivables -
Investment securities sold 4,900,040
Fund shares sold 7,766,701
Dividends, interest and foreign taxes withheld 649,447
Other 859
-------------
Total assets $ 416,210,442
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 13,595,874
Fund shares repurchased 1,900,920
Forward foreign currency settlement hedge contracts - net 31,595
Due to bank 11,748
Due to affiliates 478,110
Accrued expenses 87,775
-------------
Total liabilities $ 16,106,022
-------------
NET ASSETS:
Paid-in capital $ 279,348,586
Accumulated net investment loss (418,025)
Accumulated undistributed net realized gain on
investments and foreign currency transactions 17,120,792
Net unrealized gain on investments 104,057,766
Net unrealized loss on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (4,699)
Total net assets $ 400,104,420
=============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $298,630,336/8,676,422 shares) $ 34.42
=============
Class B (based on $84,427,069/2,533,999 shares) $ 33.32
=============
Class C (based on $17,047,015/514,136 shares) $ 33.16
=============
MAXIMUM OFFERING PRICE:
Class A $ 36.52
=============
</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 4/30/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $200,534) 1,346,291
Interest 456,452
-------------
Total investment income $ 1,802,743
--------------
EXPENSES:
Management fees $ 1,249,236
Transfer agent fees
Class A 156,643
Class B 58,826
Class C 5,827
Distribution fees
Class A 236,005
Class B 271,081
Class C 43,861
Accounting 61,992
Custodian fees 89,216
Registration fees 34,390
Professional fees 30,887
Printing 8,560
Fees and expenses of nonaffiliated trustees 9,039
Miscellaneous 23,169
-------------
Total expenses $ 2,278,732
Less fees paid indirectly (39,000)
--------------
Net expenses $ 2,239,732
--------------
Net investment loss $ (436,989)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Investments $ 17,213,940
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 739 $ 17,214,679
------------- --------------
Change in net unrealized gain from:
Investments $ 55,566,353
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (8,494) $ 55,557,859
------------- --------------
Net gain on investments and foreign currency
transactions $ 72,772,538
--------------
Net increase in net assets resulting from operations $ 72,335,549
==============
</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 4/30/98 and the Year Ended 10/31/97
<TABLE>
<CAPTION>
Six Months Ended Year Ended
4/30/98 10/31/97
FROM OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ (436,989) $ 65,440
Net realized gain on investments
and foreign currency transactions 17,214,679 11,830,813
Change in net unrealized gain on investments
and foreign currency transactions 55,557,859 28,225,699
------------- -------------
Net increase in net assets resulting from operations $ 72,335,549 $ 40,121,952
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.00 and $0.22 per share, respectively) $ -- $ (956,926)
Class B ($0.00 and $0.11 per share, respectively) -- (105,769)
Class C ($0.00 and $0.20 per share, respectively) -- (13,921)
Net realized gain:
Class A ($1.55 and $1.58 per share, respectively) (8,775,703) (6,974,917)
Class B ($1.55 and $1.58 per share, respectively) (2,579,252) (1,552,623)
Class C ($1.55 and $1.58 per share, respectively) (378,222) (110,662)
Total distributions to shareholders $ (11,733,177) $ (9,714,818)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 213,897,044 $ 125,553,018
Reinvestment of distributions 10,774,469 9,105,491
Cost of shares repurchased (86,173,908) (85,380,022)
------------- -------------
Net increase in net assets resulting from
fund share transactions $ 138,497,605 $ 49,278,487
------------- -------------
Net increase in net assets $ 199,099,977 $ 79,685,621
NET ASSETS:
Beginning of period 201,004,443 121,318,822
------------- -------------
End of period (including accumulated net investment
income (loss) of $(418,025) and $18,964,
respectively) $ 400,104,420 $ 201,004,443
============= =============
<CAPTION>
CLASS A '98 Shares '98 Amount '97 Shares '97 Amount
<S> <C> <C> <C> <C>
Shares sold 5,277,211 $ 165,838,275 3,641,336 $ 92,409,000
Reinvestment of distributions 308,496 8,233,759 338,436 7,526,823
Less shares repurchased (2,425,244) (73,141,593) (2,760,613) (71,517,391)
---------- ------------- ---------- ------------
Net increase 3,160,463 $ 100,930,441 1,219,159 $ 28,418,432
========== ============= ========== ============
CLASS B
Shares sold 1,271,960 $ 38,335,892 1,134,352 $ 28,009,864
Reinvestment of distributions 87,112 2,257,942 68,391 1,490,927
Less shares repurchased (405,410) (11,714,483) (511,877) (13,113,393)
---------- ------------- ---------- ------------
Net increase 953,662 $ 28,879,351 690,866 $ 16,387,398
========== ============= ========== ============
------------
CLASS C
Shares sold 312,058 $ 9,722,877 207,616 $ 5,134,154
Reinvestment of distributions 10,969 282,768 4,049 87,741
Less shares repurchased (43,290) (1,317,832) (29,057) (749,238)
---------- ------------- ---------- ------------
Net increase 279,737 $ 8,687,813 182,608 $ 4,472,657
========== ============= ========== ============
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Financial Highlights 4/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended Year Ended
4/30/98 10/31/97 10/31/96
CLASS A
<S> <C> <C> <C>
Net asset value, beginning of period $ 27.60 $ 23.25 $ 21.19
------------- ------------- -------------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.04) $ 0.04 $ 0.11
Net realized and unrealized gain on investments
and foreign currency transactions 8.41 6.11 3.38
------------- ------------- -------------
Net increase from investment operations $ 8.37 $ 6.15 $ 3.49
Distributions to shareholders:
Net investment income -- (0.22) --
Net realized gain (1.55) (1.58) (1.43)
------------- ------------- -------------
Net increase in net asset value $ 6.82 $ 4.35 $ 2.06
------------- ------------- -------------
Net asset value, end of period $ 34.42 $ 27.60 $ 23.25
============= ============= =============
Total return* 31.95% 28.30% 17.80%
Ratio of net expenses to average net assets 1.61%**+ 1.78%+ 1.94%+
Ratio of net investment income (loss) to average net assets (0.19)%**+ 0.19%+ 0.57%+
Portfolio turnover rate 37%** 32% 56%
Average brokerage commission per share $ 0.0095 $ 0.0037 $ 0.0251
Net assets, end of period (in thousands) $ 298,630 $ 152,267 $ 99,915
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction
for fees paid indirectly:
Net expenses 1.61%** 1.78% 2.00%
Net investment income (loss) (0.19)%** 0.19% 0.51%
Ratios assuming waiver of management fees and
reduction for fees paid indirectly:
Net expenses 1.58%** 1.77% 1.93%
Net investment income (loss) (0.16)%** 0.20% 0.58%
</TABLE>
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
10/31/95(a) 10/31/94 10/31/93
CLASS A
<S> <C> <C> <C>
Net asset value, beginning of period $ 19.91 $ 17.73 $ 14.63
------------- ------------- -------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.12 $ 0.10 $ 0.04
Net realized and unrealized gain on investments
and foreign currency transactions 2.57 2.65 3.33
------------- ------------- -------------
Net increase from investment operations $ 2.69 $ 2.75 $ 3.37
Distributions to shareholders:
Net investment income (0.01) (0.31) (0.09)
Net realized gain (1.40) (0.26) (0.18)
------------- ------------- -------------
Net increase in net asset value $ 1.28 $ 2.18 $ 3.10
------------- ------------- -------------
Net asset value, end of period $ 21.19 $ 19.91 $ 17.73
============= ============= =============
Total return* 15.12% 15.97% 23.47%
Ratio of net expenses to average net assets 1.76%+ 1.86% 2.00%
Ratio of net investment income (loss) to average net assets 0.59%+ 0.28% 0.24%
Portfolio turnover rate 62% 100% 69%
Average brokerage commission per share -- -- --
Net assets, end of period (in thousands) $ 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 2.10% 2.48% 2.77%
Net investment income (loss) 0.25% (0.34)% (0.53)%
Ratios assuming waiver of management fees and
reduction for fees paid indirectly:
Net expenses 1.75% -- --
Net investment income (loss) 0.60% -- --
</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.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
Financial Highlights 4/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended Year Ended
4/30/98(a) 10/31/97 10/31/96
CLASS B
<S> <C> <C> <C>
Net asset value, beginning of period $ 26.88 $ 22.74 $ 20.92
------------ ------------ ------------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.13) $ (0.10) $ (0.04)
Net realized and unrealized gain on investments
and foreign currency transactions 8.12 5.93 3.29
------------ ------------ ------------
Net increase from investment operations $ 7.99 $ 5.83 $ 3.25
Distributions to shareholders:
Net investment income -- (0.11) --
Net realized gain (1.55) (1.58) (1.43)
------------ ------------ ------------
Net increase in net asset value $ 6.44 $ 4.14 $ 1.82
------------ ------------ ------------
Net asset value, end of period $ 33.32 $ 26.88 $ 22.74
============ ============ ============
Total return* 31.36% 27.35% 16.82%
Ratio of net expenses to average net assets 2.40%**+ 2.57%+ 2.76%+
Ratio of net investment loss to average net assets (0.96)%**+ (0.55)%+ (0.23)%+
Portfolio turnover rate 37%** 32% 56%
Average brokerage commission per share $ 0.0095 $ 0.0037 $ 0.0251
Net assets, end of period (in thousands) $ 84,427 $ 42,472 $ 20,228
Ratios assuming no waiver of management fees
by PMC and no reduction for fees paid indirectly:
Net expenses 2.40%** 2.57% 2.80%
Net investment loss (0.96)%** (0.55)% (0.27)%
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 2.36%** 2.55% 2.74%
Net investment loss (0.92)%** (0.53)% (0.21)%
</TABLE>
<TABLE>
<CAPTION>
Year Ended 4/4/94 to
10/31/95(a) 10/31/94
CLASS B
<S> <C> <C>
Net asset value, beginning of period $ 19.80 $ 17.96
------------ ------------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.02) $ 0.01
Net realized and unrealized gain on investments
and foreign currency transactions 2.56 1.88
------------ ------------
Net increase from investment operations $ 2.54 $ 1.89
Distributions to shareholders:
Net investment income (0.02) (0.05)
Net realized gain (1.40) --
------------ ------------
Net increase in net asset value $ 1.12 $ 1.84
------------ ------------
Net asset value, end of period $ 20.92 $ 19.80
============ ============
Total return* 14.43% 10.55%
Ratio of net expenses to average net assets 2.49%+ 2.47%**
Ratio of net investment loss to average net assets (0.13)%+ (0.75)%**
Portfolio turnover rate 62% 100%
Average brokerage commission per share -- --
Net assets, end of period (in thousands) $ 8,826 $ 3,037
Ratios assuming no waiver of management fees
by PMC and no reduction for fees paid indirectly:
Net expenses 2.85% 2.95%**
Net investment loss (0.49)% (1.23)%**
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 2.46% --
Net investment loss (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.
The accompanying notes are an integral part of these financial statements. 20
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended 1/31/96 to
4/30/98(a) 10/31/97(a) 10/31/96
CLASS C
<S> <C> <C> <C>
Net asset value, beginning of period $ 26.73 $ 22.69 $ 19.92
------------ ------------ ------------
Increase (decrease) from investment operations:
Net investment loss $ (0.11) $ (0.12) $ --
Net realized and unrealized gain on
investments and foreign currency
transactions 8.09 5.94 2.77
------------ ------------ ------------
Net increase from investment
operations $ 7.98 $ 5.82 $ 2.77
Distributions to shareholders:
Net investment income -- (0.20) --
Net realized gain (1.55) (1.58) --
------------ ------------ ------------
Net increase in net asset value $ 6.43 $ 4.04 $ 2.77
------------ ------------ ------------
Net asset value, end of period $ 33.16 $ 26.73 $ 22.69
------------ ------------ ------------
Total return* 31.51% 27.47% 13.91%
Ratio of net expenses to average
net assets 2.31%**+ 2.49%+ 2.74%**+
Ratio of net investment loss to average
net assets (0.77)%**+ (0.52)%+ 0.00%**+
Portfolio turnover rate 37%** 32% 56%
Average brokerage commission per share $ 0.0095 $ 0.0037 $ 0.0251
Net assets, end of period (in thousands) $ 17,047 $ 6,266 $ 1,175
Ratios assuming no waiver of management
fees by PMC and no reduction for fees
paid indirectly:
Net expenses 2.31%** 2.49% 2.75%**
Net investment loss (0.77)%** (0.52)% (0.01)%**
Ratios assuming waiver of management fees
by PMC and reduction for fees paid indirectly:
Net expenses 2.28%** 2.46% 2.71%**
Net investment income (loss) (0.74)%** (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.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/98
- --------------------------------------------------------------------------------
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
22
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
have passed are recorded as soon as the Fund is informed of the 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
23
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/98 (continued)
- --------------------------------------------------------------------------------
U.S. dollar. As of April 30, 1998, the Fund had no outstanding port folio
hedges. The Fund's gross forward foreign currency settlement contracts
receivable and payable were $5,818,128 and $5,849,723, respectively,
resulting in a net payable of $31,595 as of April 30, 1998.
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 $89,996 in
underwriting commissions on the sale of fund shares during the six months
ended April 30, 1998.
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.
Distributions to shareholders are recorded as of the ex-dividend date.
24
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 the
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, 1998, $314,555 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 $31,740 in transfer agent fees payable to PSC at April 30, 1998.
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 $131,815 in distribution fees payable
to PFD at April 30, 1998.
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
25
<PAGE>
Pioneer Europe Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/98 (continued)
- --------------------------------------------------------------------------------
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 CDSCs are paid to PFD. For the six months ended April 30,
1998, CDSCs in the amount of $47,751 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, 1998,
the Fund's expenses were reduced by $39,000 under such arrangements.
6. Line of Credit Facility
The Fund, along with certain others in the Pioneer Family of Funds (the
"Funds"), collectively participate in a $50 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary or
emergency purposes. The Fund may borrow up to the lesser of $50 million or the
limits set by its prospectus for borrowings. Interest on collective borrowings
of up to $25 million is payable at the Federal Funds Rate plus 3/8% on an
annualized basis, or at the Federal Funds Rate plus 1/2% if the borrowing
exceeds $25 million at any one time. The Funds pay an annual commitment fee for
this facility. The commitment fee is allocated among such Funds based on their
respective borrowing limits. For the six months ended April 30, 1998, there were
no borrowings under this agreement.
26
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Pioneer Europe Fund
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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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, 1998, 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, 1998 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, 1998, 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 5, 1998
27
<PAGE>
Pioneer Europe Fund
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
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Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush 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
28
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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.
29
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HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
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 Pioneer Funds Distributor, Inc. 0698-5289
Logo] 60 State Street
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com
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