<PAGE>
[PIONEER logo]
Pioneer Europe Fund
SEMIANNUAL REPORT 4/30/99
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 7
Schedule of Investments 10
Financial Statements 17
Notes to Financial Statements 25
Report of Independent Public Accountants 31
Trustees, Officers and Service Providers 32
Retirement Plans From Pioneer 33
Programs and Services for Pioneer Shareowners 35
The Pioneer Family of Mutual Funds 37
</TABLE>
<PAGE>
Pioneer Europe Fund
LETTER FROM THE CHAIRMAN 4/30/99
Dear Shareowner,
- --------------------------------------------------------------------------------
I am pleased to introduce this semiannual report for Pioneer Europe Fund
covering the six months ended April 30, 1999. Thank you for your investment with
Pioneer and this opportunity to speak to you briefly about the overseas
investment environment.
While the performance of European stocks in the last six months has been
sluggish overall, there are positive signs on the horizon for Europe. Recent
events involving mergers and acquisitions on the continent, as well as strong
cost cutting measures by companies throughout the region, are proving to the
world that European companies are getting serious about market competitiveness
and shareholder value. Another positive sign is the resurgent Asian markets such
as Singapore, Taiwan and South Korea. All three reported positive economic
numbers for the first quarter of 1999. A recovery in Asia could mean greater
demand for European goods and services. Investing in international markets -
especially emerging markets - comes with special risks and volatility, but we
believe, with the proper discipline, the international marketplace holds promise
for investors in the coming years.
Of course extracting the potential reward from overseas investments, which can
be inherently more risky, takes hard work. It requires time and experience.
Nowhere are the fundamentals of long-term investing more important than
overseas. At Pioneer, we invest from the ground up. It means talking face to
face with management - wherever they live and work - to garner concrete facts,
facts that tell us about a company's balance sheet, management's commitment to
excellence and any competitive edge the company might have. These are the
elements that define a successful company over time and, we believe, a
successful investment as well.
I encourage you to read on and learn more about Pioneer Europe Fund. If you have
any 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
<PAGE>
Pioneer Europe Fund
PORTFOLIO SUMMARY 4/30/99
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[PIE CHART]
International Common Stocks 96.0%
Depositary Receipts for International Stocks 2.0%
International Preferred Stocks 1.9%
Rights and Warrants 0.1%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[BAR CHART]
United Kingdom 26.8%
France 16.1%
Germany 13.8%
Switzerland 10.3%
Italy 8.5%
Netherlands 6.8%
Spain 6.3%
Finland 4.0%
Sweden 3.2%
Portugal 1.3%
Belgium 1.1%
Norway 0.6%
Austria 0.6%
Denmark 0.6%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Sidel SA (Bearer Shares) 2.24%
2. Nokia AB 1.75
3. Mannesmann AG 1.72
4. British Telecom Plc 1.69
5. Unilever Plc 1.68
6. Julius Baer Holding AG 1.63%
7. Glaxo Wellcome Plc 1.48
8. Hoechst AG 1.48
9. Elf Aquitaine SA 1.47
10. Biora AB 1.43
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Europe Fund
PERFORMANCE UPDATE 4/30/99 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 4/30/99 10/31/98
<S> <C> <C>
$30.68 $29.87
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(10/31/98 - 4/30/99) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$0.094 - $0.731
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
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, 1999)
<TABLE>
<CAPTION>
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
Life-of-Fund 14.29% 13.45%
(4/2/91)
5 Years 17.35 15.97
1 Year -8.47 -13.74
</TABLE>
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[MOUNTAIN CHART]
Growth of $10,000+
<TABLE>
<CAPTION>
Pioneer Europe Fund* MSCI Europe Index
<S> <C> <C>
4/30/91 9424 10000
9524 10353
4/92 10320 11139
9194 10159
4/93 10265 11308
11353 12766
4/94 12423 13775
13159 14201
4/95 13568 15051
15148 16078
4/96 16448 17450
17845 18885
4/97 19974 21107
22894 23793
4/98 30209 30709
26215 29280
4/99 27649 32445
</TABLE>
+ 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
<PAGE>
Pioneer Europe Fund
PERFORMANCE UPDATE 4/30/99 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 4/30/99 10/31/98
<S> <C> <C>
$29.52 $28.79
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(10/31/98 - 4/30/99) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
- - $0.731
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
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, 1999)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund 17.29% 17.19%
(4/4/94)
5 Years 16.43 16.32
1 Year -9.22 -12.76
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
[MOUNTAIN CHART]
Growth of $10,000+
<TABLE>
<CAPTION>
Pioneer Europe Fund* MSCI Europe Index
<S> <C> <C>
4/30/94 10000 10000
10124 9971
10539 10309
9916 9893
4/95 10838 10926
12268 11841
12060 11672
12348 12206
4/96 13048 12668
13191 12744
14089 13709
15460 14723
4/97 15707 15323
17583 17563
17943 17272
19221 18935
4/98 23571 22293
24151 23451
20367 21256
22021 23215
4/99 21298 23554
</TABLE>
+ 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
<PAGE>
Pioneer Europe Fund
PERFORMANCE UPDATE 4/30/99 CLASS C SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 4/30/99 10/31/98
<S> <C> <C>
$29.39 $28.67
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(10/31/98 - 4/30/99) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
- - $0.731
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
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, 1999)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund 18.46% 18.46%
(1/31/96)
1 Year -9.17 -9.17
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to investments sold within one year of purchase.
[MOUNTAIN CHART]
Growth of $10,000+
<TABLE>
<CAPTION>
Pioneer Europe Fund* MSCI Europe Index
<S> <C> <C>
1/31/96 10000 10000
4/30/96 10542 10378
10678 10441
11391 11232
12505 12063
4/97 12705 12553
14226 14389
14520 14151
15559 15513
4/98 19095 18264
19567 19213
16509 17414
17850 19020
4/99 17343 19297
</TABLE>
+ 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
<PAGE>
Pioneer Europe Fund
PERFORMANCE UPDATE 4/30/99 CLASS Y SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 4/30/99 10/31/98
<S> <C> <C>
$30.84 $29.90
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(10/31/98 - 4/30/99) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$0.037 - $0.731
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
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.
Cumulative Total Returns*
(As of April 30, 1999)
<TABLE>
<CAPTION>
If If
Period Held Redeemed
<S> <C> <C>
Life-of-Fund -8.73% -8.73%
(7/2/98)
</TABLE>
*Assumes reinvestment of distributions.
[MOUNTAIN CHART]
Growth of $10,000+
<TABLE>
<CAPTION>
Pioneer Europe Fund* MSCI Europe Index
<S> <C> <C>
7/31/98 10000 10000
8/98 8436 8742
7822 8392
10/98 8458 9064
8778 9546
12/98 9133 9963
9173 9899
2/99 8733 9648
8744 9753
4/99 8942 10044
</TABLE>
+ Index comparison begins July 31, 1998. 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.
6
<PAGE>
Pioneer Europe Fund
PORTFOLIO MANAGEMENT DISCUSSION 4/30/99
Surprising weakness among the economies of Continental Europe and
stronger-than-expected growth in the United Kingdom contributed to mixed results
for European stocks. The following discussion with your Fund's portfolio
manager, Patrick M. Smith, explains the factors and events that influenced your
Fund's performance during the six months ended April 30, 1999.
Q: European stock markets performed disparately this period. How did the Fund do
overall?
A: In the aftermath of last fall's sharp market correction, European stock
prices generally rose. Their recovery was not as dramatic as in other parts
of the world, and fears of recession contributed to uneven gains on a
country-by-country basis. In U.S. dollars, the top performing United Kingdom
climbed 16.8%, while Germany only rose 4.2%. Overall, Europe advanced 10.81%,
as measured by the Morgan Stanley Capital International (MSCI) Europe Index.
The Fund generated modest gains, even though its small-company stocks
underperformed bigger companies. Class A, B and C Shares rose 5.47%, 5.06%
and 5.05%, respectively, at net asset value for the period. The 142 European
funds tracked by Lipper Inc., on average, rose 8.95% at net asset value for
the six months. (Lipper is an independent firm that measures the performance
of mutual funds.)
Q: Are large-company stocks still leading the market?
A: Absolutely. Smaller companies continued to underperform their larger,
blue-chip brethren. The Dow Jones Europe 50, which is comprised of Europe's
50 largest companies, outperformed the broader-based Dow Jones Europe Stock
Index, which is comprised of 600 companies of all market capitalizations. To
take advantage of this trend, we increased the Fund's average market
capitalization. Even so, we remain interested in selected smaller companies.
Deregulation is creating opportunities for smaller start-ups, which we think
will be vital in the creation of new jobs and sustained economic growth.
Q: What accounts for the strong performance of U.K. stocks?
A: In the United Kingdom, stocks are benefiting from several positive factors,
especially falling interest rates. The Bank of England cut short-term
interest rates six times from September to April, lowering them from 7.5% to
5.25%. Given the surprising rebound in the British economy, there may not be
any further cuts in interest rates despite the gap
7
<PAGE>
Pioneer Europe Fund
PORTFOLIO MANAGEMENT DISCUSSION 4/30/99 (continued)
between Britain's rates and the European Central Bank's policy rate of 2.5%.
The lower rates have already brought improvements in the housing, auto and
service sectors. The Fund benefited - with more than 25% of the portfolio in
U.K. stocks.
Q: How are the economies in the rest of Europe faring?
A: Expectations for continental Europe have been revised down, due to sluggish
job growth and high unemployment. While the Pacific Rim is starting to
recover, Asian demand for European goods remains weak - suppressing factory
production and business confidence. The euro, which has weakened about 10%
against the U.S. dollar since its launch on January 1, should provide
European exporters with a competitive edge. The trend toward lower interest
rates is positive, but more structural reforms are needed to ignite economic
growth.
Germany was the biggest disappointment for the period. Aside from general
concerns about the strength of the economy, we sold a 3% weighting in
MobilCom (Germany) when competitor Deutsche Telecom drastically lowered
telephone rates by more than 70%. We questioned MobilCom's ability to
maintain the level of growth it has enjoyed in recent years. We sold and
secured attractive gains.
Q. Financial stocks are considered attractive in Europe right now. Why is that?
A: The creation of the euro has changed Europe's economic landscape, and nowhere
is this more obvious than in the financial sector. Innovative banking
products are being developed and offered to customers, and banks are
consolidating or joining forces to create more globally competitive
institutions. Lower interest rates are also boosting their stock prices. At
22% of equity assets, financial and insurance companies now comprise the
biggest portion of the portfolio. Over the past six months, we added Lloyds
TSB Group, Royal Bank of Scotland Group and insurer Prudential - all based in
the United Kingdom.
Q: What other business sectors are doing well?
A: Technology and telecommunication are two more noteworthy sectors. Personal
computer use, communications technology and internet use are revolutionizing
business and consumer behavior - providing growth. The drive to become
technologically proficient also is boosting productivity and helping
economies grow faster, without triggering inflation. British
8
<PAGE>
Telecom (UK), Sonera Group (Finland) and GFI Informatique (France) are some
of the holdings that reflect our strategy here.
Q: Are companies still committed to building shareholder value?
A: Yes. We've seen a continuing shift in the corporate value system that focuses
on shareholders and profitability. This new culture is underscored by a
series of mergers and restructurings designed to increase global
competitiveness. Many of the Fund's holdings illustrate this phenomenon.
Siemens (Germany) closed a semiconductor plant in Scotland as part of a
restructuring plan. Elf Aquitaine (France) is attractive for its oil business
as well as its strong management and dedication to enhancing returns on its
assets. Fund holding Hoechst (Germany) is divesting itself of its less
profitable chemical business and focusing on health care. The company is
teaming up with Rhone Poulenc (France) under the name of Aventis to form one
of the largest and most undervalued pharmaceutical companies in Europe.
Q: What is your outlook?
A: On the whole, consumer confidence in Europe remains strong. We expect the
weak corporate outlook to be temporary and think it will improve in the
second half of 1999. Given the wholesale shift of assets into Japanese and
U.S. stocks in recent months, European markets appear to be out-of-favor at
the moment, making them a good value. Coordinated interest rates cuts, a
weaker euro and more structural reforms aimed at tax and labor reform are key
ingredients of a broad recovery.
9
<PAGE>
Pioneer Europe Fund
SCHEDULE OF INVESTMENTS 4/30/99
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
PREFERRED STOCKS - 1.9%
42,000 Henkel KGaA $ 3,322,908
16,000 SAP AG 5,999,782
--------------
TOTAL PREFERRED STOCKS
(Cost $8,985,347) $ 9,322,690
--------------
COMMON STOCKS - 98.0%
Basic Materials - 3.3%
Chemicals - 0.9%
100,000 BASF AG $ 4,378,362
--------------
Chemicals (Diversified) - 1.5%
155,750 Hoechst AG $ 7,378,663
--------------
Containers & Packaging (Paper) - 0.9%
15,200 Schmalbach Lubeca AG $ 2,092,065
5,350 Viag AG 2,718,229
--------------
$ 4,810,294
--------------
Total Basic Materials $ 16,567,319
--------------
Capital Goods - 12.6%
Aerospace/Defense - 1.1%
746,600 British Aerospace Plc $ 5,573,027
--------------
Engineering & Construction - 4.1%
1,450,000 Ashtead Group Plc $ 5,306,366
95,500 IHC Caland NV 4,327,607
30,000 Suez Lyonnaise des Eaux 5,101,928
22,500 Technip 2,711,785
29,000 VA Technologies AG 2,756,942
--------------
$ 20,204,628
--------------
Machinery (Diversified) - 3.3%
1,058,000 Invensys Plc $ 5,446,073
92,801 Sidel SA (Bearer Shares) 11,174,927
--------------
$ 16,621,000
--------------
Manufacturing (Diversified) - 2.4%
203,000 Bodycote International Plc $ 3,151,165
65,000 Mannesmann AG 8,554,971
--------------
$ 11,706,136
--------------
Office Equipment & Supplies - 0.7%
176,850 Koninklijke Ahrend NV $ 3,437,242
--------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Trucks & Parts - 1.0%
60,000 Valeo $ 5,070,239
--------------
Total Capital Goods $ 62,612,272
--------------
Communication Services - 9.5%
Cellular/Wireless Telecommunications - 3.6%
200,000 Sonera Group Plc* $ 3,961,124
20,500 Telecel-Comunicacaoes Pessoais, SA 2,739,249
270,000 Telecom Italia Mobile SpA 1,608,533
850,000 Telecom Italia Mobile SpA Di Risp 2,846,200
360,000 Vodafone Group Plc 6,673,787
--------------
$ 17,828,893
--------------
Telephone - 5.9%
500,000 British Telecom Plc $ 8,396,886
90,000 Portugal Telecom SA (A.D.R.) 3,796,875
8,700 Swisscom AG* 3,193,079
296,666 Telecom Italia SpA 3,155,618
920,000 Telecom Italia SpA Di Risp 4,946,440
125,715 Telefonica SA 5,889,357
--------------
$ 29,378,255
--------------
Total Communication Services $ 47,207,148
--------------
Consumer Cyclicals - 15.2%
Automobiles - 1.0%
53,300 DaimlerChrysler AG (NY Shares)* $ 5,261,307
--------------
Consumer (Jewelry, Novelties & Gifts) - 1.6%
568,000 Safilo SpA $ 2,825,898
53,000 TAG Heuer International SA (Registered) 5,305,905
--------------
$ 8,131,803
--------------
Distributors (Durables) - 1.2%
328,000 Buhrmann NV $ 6,011,190
--------------
Household Furnishings & Appliances - 0.4%
4,687 Forbo Holding AG $ 1,950,613
--------------
Publishing - 0.7%
250,000 Reuters Group Plc $ 3,394,144
--------------
Retail (Department Stores) - 0.8%
53,280 Metro AG $ 3,849,528
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Europe Fund
SCHEDULE OF INVESTMENTS 4/30/99 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Retail (Specialty) - 1.1%
16,700 Selecta Group $ 5,527,264
--------------
Services (Commercial & Consumer) - 6.6%
80,000 Hagemeyer NV $ 2,704,127
520,000 Hays Plc 5,780,018
1,206 Kuoni Reisen Holding AG (Series B) (Registered) 4,268,187
442,011 Prosegur, CIA de Seguridad SA 5,112,512
280,000 Rentokil Initial Plc 1,631,422
525,000 Select Appointments Holdings Plc 6,688,554
70,000 TNT Post Group NV 1,885,495
20,000 Vivendi 4,670,957
--------------
$ 32,741,272
--------------
Textiles (Apparel) - 0.9%
3,268 Hugo Boss AG $ 4,377,120
--------------
Textiles (Home Furnishings) - 0.9%
243,000 Industrie Natuzzi SpA (A.D.R.) $ 4,647,375
--------------
Total Consumer Cyclicals $ 75,891,616
--------------
Consumer Staples - 9.7%
Broadcasting (Television/Radio/Cable) - 0.8%
75,200 United Pan-Europe Communications NV* $ 3,888,282
--------------
Distributors (Food & Health) - 0.8%
85,000 Gehe AG $ 3,905,668
--------------
Entertainment - 1.4%
300,000 Pearson Plc $ 6,852,631
--------------
Foods - 3.0%
24,000 Groupe Danone $ 6,413,852
943,000 Unilever Plc 8,389,567
--------------
$ 14,803,419
--------------
Restaurants - 1.0%
520,400 Compass Group Plc $ 5,298,937
--------------
Retail Stores (Food Chains) - 1.7%
7,000 Carrefour Supermarche SA $ 5,545,574
32,000 Delhaize-Le Lion, SA 2,798,772
--------------
$ 8,344,346
--------------
Services (Employment) - 1.0%
10,629 Adecco SA $ 5,322,915
--------------
Total Consumer Staples $ 48,416,198
--------------
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Energy - 4.7%
Oil (International Integrated) - 3.4%
47,000 Elf Aquitaine SA $ 7,297,975
950,300 Fortum OYJ 5,069,198
600,000 Shell Transport & Trading Co. 4,507,294
--------------
$ 16,874,467
--------------
Oil & Gas (Refining & Marketing) - 1.3%
625,000 ENI SpA $ 4,112,967
150,000 Repsol SA 2,440,052
--------------
$ 6,553,019
--------------
Total Energy $ 23,427,486
--------------
Financial - 22.3%
Banks (Major Regional) - 9.5%
895,000 Banca Fideuram SpA $ 5,076,735
80,000 Banca Popolare di Brescia 2,750,604
579,900 Banca Popolare di Milano 4,931,013
197,880 Banco Santander Central Hispano SA 4,297,463
45,000 Banque Paribas 4,781,869
50,000 Credit Commercial de France 5,281,499
57,520 Deutsche Pfandbriefbank AG 4,799,910
2,500 Julius Baer Holding AG 8,135,077
115,000 Svenska Handelbanken 4,307,218
40,000 Unidanmark A/S 2,746,191
--------------
$ 47,107,579
--------------
Banks (Money Center) - 3.1%
200,000 Lloyds TSB Group Plc $ 3,218,806
288,100 Royal Bank of Scotland Group 6,760,300
16,000 UBS AG 5,431,905
--------------
$ 15,411,011
--------------
Banks (Regional) - 0.7%
250,000 Halifax Plc $ 3,522,832
--------------
Financial (Diversified) - 0.9%
70,000 Internationale Nederlanden Groep NV $ 4,310,759
--------------
Insurance (Life/Health) - 1.7%
815,000 Mediolanum SpA $ 5,380,527
200,000 Prudential Corp. Plc 2,852,046
--------------
$ 8,232,573
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Europe Fund
SCHEDULE OF INVESTMENTS 4/30/99 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Insurance (Multi-Line) - 5.2%
11,000 Allianz AG $ 3,503,218
45,000 Axa SA 5,808,592
53,000 Axa Colonia Konzern AG 5,038,550
700,000 Royal & Sun Alliance Group Plc 6,035,463
9,000 Zurich Allied AG 5,798,270
--------------
$ 26,184,093
--------------
Investment Management - 1.2%
572,000 Amvescap Plc $ 6,091,185
--------------
Total Financial $ 110,860,032
--------------
Healthcare - 8.4%
Biotechnology - 0.4%
25,237 Qiagen NV* $ 1,847,388
--------------
Healthcare (Drugs/Major Pharmaceuticals) - 6.3%
173,886 Fabrica Espanola de Productos Quimicos y
Farmaceutical, SA $ 2,257,375
250,000 Glaxo Wellcome Plc 7,391,512
3,200 Novartis AG 4,683,183
600 Roche Holdings AG 7,054,660
540,000 Smithkline Beecham Plc 7,104,808
61,000 UCB SA 2,835,108
--------------
$ 31,326,646
--------------
Healthcare (Medical Products/Supplies) - 1.7%
1,155,200 Biora AB * $ 7,119,877
130,000 Biora AB (A.D.R.) * 1,633,125
--------------
$ 8,753,002
--------------
Total Healthcare $ 41,927,036
--------------
Technology - 7.4%
Communications Equipment - 2.3%
113,000 Nokia AB $ 8,713,416
110,000 Telefonaktiebolaget LMEricsson (Series B) 2,887,875
--------------
$ 11,601,291
--------------
Computers (Software & Services) - 2.1%
144,091 Dassault Systemes SA $ 5,301,240
20,000 GFI Informatique* 2,554,133
60,000 Tieto Corp. (B Shares) 2,414,701
--------------
$ 10,270,074
--------------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Electronics (Component Distributors) - 0.7%
45,000 Siemens AG $ 3,327,344
--------------
Electronics (Semiconductors) - 0.6%
30,000 STMicroelectronics NV* $ 3,124,535
--------------
Services (Computer Systems) - 1.1%
135,000 Getronics NV $ 5,540,028
--------------
Services (Data Processing) - 0.6%
310,500 Merkantildata ASA $ 3,100,826
--------------
Total Technology $ 36,964,098
--------------
Transportation - 0.8%
Railways - 0.8%
1,167,740 Stagecoach Holdings Plc $ 4,019,830
--------------
Total Transportation $ 4,019,830
--------------
Utilities - 4.1%
Electric Companies - 2.6%
210,000 Endesa SA $ 4,667,155
650,000 Scottish Power Plc 5,384,785
200,000 Union Electrica Fenosa SA 2,659,763
--------------
$ 12,711,703
--------------
Water Utilities - 1.5%
63,000 Aguas De Barcelona $ 3,560,258
1,050 Aguas De Barcelona (New Shares)* 58,971
350,000 United Utilities Plc 3,946,697
--------------
$ 7,565,926
--------------
Total Utilities $ 20,277,629
--------------
TOTAL COMMON STOCKS
(Cost $434,745,613) $ 488,170,664
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Europe Fund
SCHEDULE OF INVESTMENTS 4/30/99 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
RIGHTS & WARRANTS - 0.1%
60,000 Banca Popolare di Bergamo, 3/31/04* $ 54,505
229,000 Fabrica Espanola de Productos Quimicos y
Farmaceutical, SA, 5/14/99* 295,109
125,715 Telefonica SA, 5/20/99* 116,858
--------------
TOTAL RIGHTS & WARRANTS
(Cost $302,991) $ 466,472
--------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $444,033,951)(a)(b) $ 497,959,826
==============
</TABLE>
* Non-income producing security.
+ Investment held by Fund representing 5% or more of the outstanding voting
stock of such company.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
<TABLE>
<S> <C>
United Kingdom 26.8%
France 16.1
Germany 13.8
Switzerland 10.3
Italy 8.5
Netherlands 6.8
Spain 6.3
Finland 4.0
Sweden 3.2
Portugal 1.3
Belgium 1.1
Norway 0.6
Austria 0.6
Denmark 0.6
-----
100.0%
======
</TABLE>
(b) At April 30, 1999, the net unrealized gain on investments based on cost for
federal income tax purposes of $444,033,951 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 85,582,337
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (31,656,462)
------------
Net unrealized gain $ 53,925,875
============
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended April 30, 1999, aggregated $174,501,910 and $178,550,467,
respectively.
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
BALANCE SHEET 4/30/99
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $444,033,951) $497,959,826
Cash 38,903
Foreign currencies, at value 541,948
Receivables -
Investment securities sold 12,223,825
Fund shares sold 1,774,128
Dividends, interest and foreign taxes withheld 1,790,932
Other 3,509
-------------
Total assets $514,333,071
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 8,793,992
Fund shares repurchased 4,598,270
Forward foreign currency settlement hedge contracts - net 5,621
Due to affiliates 632,057
Accrued expenses 88,434
Line of credit 7,100,000
-------------
Total liabilities $ 21,218,374
-------------
NET ASSETS:
Paid-in capital $434,480,410
Accumulated net investment loss (1,295,073)
Accumulated undistributed net realized gain on
investments and foreign currency transactions 6,024,955
Net unrealized gain on investments 53,925,875
Net unrealized loss on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (21,470)
-------------
Total net assets $493,114,697
=============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $295,945,387/9,646,498 shares) $ 30.68
=============
Class B (based on $144,568,189/4,897,877 shares) $ 29.52
=============
Class C (based on $44,645,245/1,519,169 shares) $ 29.39
=============
Class Y (based on $7,955,876/257,952 shares) $ 30.84
=============
MAXIMUM OFFERING PRICE:
Class A $ 32.55
=============
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Europe Fund
STATEMENT OF OPERATIONS
For the Six Months Ended 4/30/99
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld
of $424,165) $ 3,034,825
Interest 459,065
-------------
Total investment income $ 3,493,890
-------------
EXPENSES:
Management fees $ 2,324,599
Transfer agent fees
Class A 364,869
Class B 222,200
Class C 53,759
Class Y 191
Distribution fees
Class A 407,275
Class B 748,243
Class C 221,119
Administrative fees 44,908
Custodian fees 174,727
Registration fees 169,020
Professional fees 42,171
Printing 16,099
Fees and expenses of nonaffiliated trustees 16,062
Miscellaneous 22,827
-------------
Total expenses $ 4,828,069
Less fees paid indirectly (38,899)
-------------
Net expenses $ 4,789,170
-------------
Net investment loss $ (1,295,280)
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ 6,711,056
Forward foreign currency contracts and
other assets and liabilities denominated
in foreign currencies (20,960) $ 6,690,096
------------- -------------
Change in net unrealized gain from:
Investments $ 21,943,182
Forward foreign currency contracts and
other assets and liabilities denominated
in foreign currencies (52,312) $ 21,890,870
------------- -------------
Net gain on investments and foreign currency
transactions $ 28,580,966
-------------
Net increase in net assets resulting from operations $ 27,285,686
=============
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended 4/30/99 and the Year Ended 10/31/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
4/30/99 10/31/98
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (1,295,280) $ 1,050,444
Net realized gain on investments
and foreign currency transactions 6,690,096 12,154,351
Change in net unrealized gain on investments
and foreign currency transactions 21,890,870 (16,481,673)
------------- -------------
Net increase (decrease) in net assets resulting
from operations $ 27,285,686 $ (3,276,878)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.09 and $0.00 per share, respectively) $ (1,013,258) $ -
Class Y ($0.04 and $0.00 per share, respectively) (9,758) -
Net realized gain:
Class A ($0.73 and $1.55 per share, respectively) (7,894,261) (8,775,752)
Class B ($0.73 and $1.55 per share, respectively) (3,614,648) (2,579,252)
Class C ($0.73 and $1.55 per share, respectively) (1,071,144) (378,222)
Class Y ($0.73 and $0.00 per share, respectively) (191,688) -
------------- -------------
Total distributions to shareholders $ (13,794,757) $ (11,733,226)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 440,792,895 $ 643,617,168
Reinvestment of distributions 10,819,145 10,774,515
Cost of shares repurchased (469,830,739) (342,543,555)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions $ (18,218,699) $ 311,848,128
------------- -------------
Net increase (decrease) in net assets $ (4,727,770) $ 296,838,024
NET ASSETS:
Beginning of period 497,842,467 201,004,443
------------- -------------
End of period (including accumulated undistributed net
investment income (loss) of $(1,295,073) and
$1,023,223, respectively) $ 493,114,697 $ 497,842,467
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Europe Fund
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
CLASS A '99 Shares '99 Amount '98 Shares '98 Amount
<S> <C> <C> <C> <C>
Shares sold 10,416,616 $318,264,107 13,160,674 $422,013,822
Reinvestment of distributions 224,353 6,892,132 308,498 8,233,806
Less shares repurchased (11,551,337) (353,659,332) (8,428,265) (264,240,423)
----------- ------------ ---------- ------------
Net increase (decrease) (910,368) $(28,503,093) 5,040,907 $166,007,205
=========== ============ ========== ============
CLASS B
Shares sold 1,483,707 $ 43,954,683 4,459,295 $140,928,732
Reinvestment of distributions 102,589 3,040,747 87,112 2,257,941
Less shares repurchased (1,396,017) (40,839,364) (1,419,146) (42,296,605)
----------- ------------ ---------- ------------
Net increase 190,279 $ 6,156,066 3,127,261 $100,890,068
=========== ============ ========== ============
CLASS C
Shares sold 2,659,883 $ 78,035,245 2,318,898 $ 72,082,438
Reinvestment of distributions 23,198 684,820 10,969 282,768
Less shares repurchased (2,533,432) (74,575,887) (1,194,746) (35,901,342)
----------- ------------ ---------- ------------
Net increase 149,649 $ 4,144,178 1,135,121 $ 36,463,864
=========== ============ ========== ============
CLASS Y*
Shares sold 17,444 $ 538,860 262,130 $ 8,592,176
Reinvestment of distributions 6,534 201,446 - -
Less shares repurchased (24,811) (756,156) (3,345) (105,185)
----------- ------------ ---------- ------------
Net increase (decrease) (833) $ (15,850) 258,785 $ 8,486,991
=========== ============ ========== ============
</TABLE>
* Class Y shares were first publicly offered on July 2, 1998.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
FINANCIAL HIGHLIGHTS 4/30/99
<TABLE>
<CAPTION>
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 4/30/99 10/31/98 10/31/97 10/31/96 10/31/95(a) 10/31/94
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 29.87 $ 27.60 $ 23.25 $ 21.19 $ 19.91 $ 17.73
-------- -------- -------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.04) $ 0.10 $ 0.04 $ 0.11 $ 0.12 $ 0.10
Net realized and unrealized gain on investments
and foreign currency transactions 1.67 3.72 6.11 3.38 2.57 2.65
-------- -------- -------- ------- ------- -------
Net increase from investment operations $ 1.63 $ 3.82 $ 6.15 $ 3.49 $ 2.69 $ 2.75
Distributions to shareholders:
Net investment income (0.09) - (0.22) - (0.01) (0.31)
Net realized gain (0.73) (1.55) (1.58) (1.43) (1.40) (0.26)
-------- -------- -------- ------- ------- -------
Net increase in net asset value $ 0.81 $ 2.27 $ 4.35 $ 2.06 $ 1.28 $ 2.18
-------- -------- -------- ------- ------- -------
Net asset value, end of period $ 30.68 $ 29.87 $ 27.60 $ 23.25 $ 21.19 $ 19.91
======== ======== ======== ======= ======= =======
Total return* 5.47% 14.51% 28.30% 17.80% 15.12% 15.97%
Ratio of net expenses to average net assets 1.54%**+ 1.54%+ 1.78%+ 1.94%+ 1.76%+ 1.86%
Ratio of net investment income (loss) to
average net assets (0.23)%**+ 0.47%+ 0.19%+ 0.57%+ 0.59%+ 0.28%
Portfolio turnover rate 69%** 39% 32% 56% 62% 100%
Net assets, end of period (in thousands) $295,945 $315,309 $152,267 $99,915 $78,505 $67,375
Ratios assuming no waiver of management fees
and assumption of expenses by PIM
and no reduction for fees paid indirectly:
Net expenses 1.54%** 1.54% 1.78% 2.00% 2.10% 2.48%
Net investment income (loss) (0.23)%** 0.47% 0.19% 0.51% 0.25% (0.34)%
Ratios assuming waiver of management fees by PIM
and reduction for fees paid
indirectly:
Net expenses 1.52%** 1.49% 1.77% 1.93% 1.75% -
Net investment income (loss) (0.21)%** 0.52% 0.20% 0.58% 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. 21
<PAGE>
Pioneer Europe Fund
FINANCIAL HIGHLIGHTS 4/30/99
<TABLE>
<CAPTION>
Six Months Year Ended Year Ended Year Ended Year Ended 4/4/94 to
Ended 4/30/99 10/31/98(a) 10/31/97 10/31/96 10/31/95(a) 10/31/94
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 28.79 $ 26.88 $ 22.74 $ 20.92 $19.80 $17.96
-------- -------- -------- ------- ------ ------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.15) $ (0.09) $ (0.10) $ (0.04) $(0.02) $ 0.01
Net realized and unrealized gain on investments
and foreign currency transactions 1.61 3.55 5.93 3.29 2.56 1.88
-------- -------- -------- ------- ------ ------
Net increase from investment operations $ 1.46 $ 3.46 $ 5.83 $ 3.25 $ 2.54 $ 1.89
Distributions to shareholders:
Net investment income - - (0.11) - (0.02) (0.05)
Net realized gain (0.73) (1.55) (1.58) (1.43) (1.40) -
-------- -------- -------- ------- ------ ------
Net increase in net asset value $ 0.73 $ 1.91 $ 4.14 $ 1.82 $ 1.12 $ 1.84
-------- -------- -------- ------- ------ ------
Net asset value, end of period $ 29.52 $ 28.79 $ 26.88 $ 22.74 $20.92 $19.80
======== ======== ======== ======= ====== ======
Total return* 5.06% 13.50% 27.35% 16.82% 14.43% 10.55%
Ratio of net expenses to average net assets 2.37%**+ 2.35%+ 2.57%+ 2.76% + 2.49%+ 2.47%**
Ratio of net investment loss to average net assets (1.02)%**+ (0.34)%+ (0.55)%+ (0.23)%+ (0.13)%+ (0.75)%**
Portfolio turnover rate 69%** 39% 32% 56% 62% 100%
Net assets, end of period (in thousands) $144,568 $135,535 $42,472 $20,228 $8,826 $3,037
Ratios assuming no waiver of management fees
by PIM and no reduction for fees
paid indirectly:
Net expenses 2.37%** 2.35% 2.57% 2.80% 2.85% 2.95%**
Net investment loss (1.02)%** (0.34)% (0.55)% (0.27)% (0.49)% (1.23)%**
Ratios assuming waiver of management fees
by PIM and reduction for fees paid
indirectly:
Net expenses 2.35%** 2.31% 2.55% 2.74% 2.46% -
Net investment loss (1.00)%** (0.30)% (0.53)% (0.21)% (0.10)% -
</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.
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe
FINANCIAL HIGHLIGHTS 4/30/99
<TABLE>
<CAPTION>
Six Months Year Ended Year Ended 1/31/96 to
Ended 4/30/99 10/31/98(a) 10/31/97(a) 10/31/96
<S> <C> <C> <C> <C>
CLASS C
Net asset value, beginning of period $ 28.67 $ 26.73 $22.69 $19.92
------- ------- ------ ------
Increase (decrease) from investment
operations:
Net investment loss $ (0.13) $ (0.04) $(0.12) $ -
Net realized and unrealized gain on
investments and foreign currency
transactions 1.58 3.53 5.94 2.77
------- ------- ------ ------
Net increase from investment
operations $ 1.45 $ 3.49 $ 5.82 $ 2.77
Distributions to shareholders:
Net investment income - - (0.20) -
Net realized gain (0.73) (1.55) (1.58) -
------- ------- ------ ------
Net increase in net asset value $ 0.72 $ 1.94 $ 4.04 $ 2.77
------- ------- ------ ------
Net asset value, end of period $ 29.39 $ 28.67 $26.73 $22.69
======= ======= ====== ======
Total return* 5.05% 13.70% 27.47% 13.91%
Ratio of net expenses to average
net assets 2.31%**+ 2.28%+ 2.49%+ 2.74%**+
Ratio of net investment loss to average
net assets (0.94)%**+ (0.20)%+ (0.52)%+ 0.00%**+
Portfolio turnover rate 69%** 39% 32% 56%
Net assets, end of period (in thousands) $44,645 $39,261 $6,266 $1,175
Ratios assuming no waiver of
management fees by PIM and
no reduction for fees paid indirectly:
Net expenses 2.31%** 2.28% 2.49% 2.75%**
Net investment loss (0.94)%** (0.20)% (0.52)% (0.01)%**
Ratios assuming waiver of
management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.29%** 2.22% 2.46% 2.71%**
Net investment income (loss) (0.92)%** (0.14)% (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. 23
<PAGE>
Pioneer Europe
FINANCIAL HIGHLIGHTS 4/30/99
<TABLE>
<CAPTION>
Six Months 7/2/98 to
Ended 4/30/99 10/31/98
<S> <C> <C>
CLASS Y
Net asset value, beginning of period $29.90 $34.63
------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.11 $ 0.07
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 1.60 (4.80)
------ ------
Net increase (decrease) from investment operations $ 1.71 $(4.73)
Distributions to shareholders:
Net investment income (0.04) -
------ ------
Net realized gain (0.73) -
------ ------
Net increase (decrease) in net asset value $ 0.94 $(4.73)
====== ======
Net asset value, end of period $30.84 $29.90
Total return* 5.71% (13.66)%
Ratio of net expenses to average net assets 1.07%**+ 1.12%**+
Ratio of net investment income to average net assets 0.27%**+ 0.95%**+
Portfolio turnover rate 69%** 39%
Net assets, end of period (in thousands) $7,956 $7,738
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.07%** 1.11%**
Net investment income 0.27%** 0.96%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
24 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Europe Fund
NOTES TO FINANCIAL STATEMENTS 4/30/99
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 four classes of shares - Class A, Class B, Class C, and Class Y
shares. Each class of shares represent an interest in the same portfolio of
investments of the Fund and have equal rights to voting, redemptions, dividends
and liquidation, except that the level of transfer agent and distribution fees
may differ among classes. Class A, Class B and Class C shareholders have
exclusive voting rights with respect to the distribution plan for each class.
There is no distribution plan for Class Y shares.
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. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the Exchange. In computing the net asset
value, 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
25
<PAGE>
Pioneer Europe Fund
NOTES TO FINANCIAL STATEMENTS 4/30/99 (continued)
the direction of, the Board of Trustees. Trading in foreign securities is
substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values of such securities used in computing the
net asset value of the Fund's shares are determined as of such times.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Fund is informed of the ex-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
26
<PAGE>
Pioneer Europe Fund
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 April 30, 1999, the Fund had no outstanding portfolio hedges. The
Fund's gross forward foreign currency settlement contracts receivable and
payable were $2,445,143 and $2,450,764, respectively, resulting in a net
payable of $5,621.
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
27
<PAGE>
Pioneer Europe Fund
NOTES TO FINANCIAL STATEMENTS 4/30/99 (continued)
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund
and an indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned
$115,746 in underwriting commissions on the sale of fund shares during the
six months ended April 30, 1999.
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. Class Y shares are not subject to a distribution plan.
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.
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, Class C, and Class Y shares can bear different
transfer agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), 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 and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At April 30, 1999, $395,264 was payable to PIM
related to management fees, administrative, and certain other services.
28
<PAGE>
Pioneer Europe Fund
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 $19,187 in transfer agent fees payable to PSC at April 30, 1999.
4. Distribution Plans
The Fund adopted a Plan of Distribution with respect to Class A, Class B, and
Class C 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 $217,606
distribution fees payable to PFD at April 30, 1999.
In addition, redemptions of each class of shares (except Class Y 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 CDSCs are paid to PFD. For the six months ended April 30, 1999, CDSCs
in the amount of $366,437 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
29
<PAGE>
Pioneer Europe Fund
NOTES TO FINANCIAL STATEMENTS 4/30/99 (continued)
April 30, 1999, the Fund's expenses were reduced by $38,899 under such
arrangements.
6. Line of Credit Facility
The Fund, along with certain other funds 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.
The average daily amount of borrowings outstanding during the six months ended
April 30, 1999 was $722,707. The average daily shares outstanding during the
period were 17,625,893 resulting in an average borrowing per share of $0.04. The
related weighted average annualized interest rate for the period was 5.3%, and
the total interest expense on such borrowings was $19,079.
7. Affiliated Companies
The Fund's investments in certain companies exceed 5% of the outstanding voting
stock. Such companies are deemed affiliates of the Fund for financial reporting
purposes. The following summarizes transactions with affiliates of the Fund as
of April 30, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Dividend
Affiliates Purchases Sales Income Value
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Biora AB - - - $8,753,002
- --------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
Pioneer Europe Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners 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 (the Fund) as of April 30, 1999, 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, 1999 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, 1999, 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 4, 1999
31
<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
Officers
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Patrick M. Smith, Vice President
John A. Boynton, Treasurer
Joseph P. Barri, Secretary
Investment Adviser
Pioneer Investment Management, Inc.
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
32
<PAGE>
RETIREMENT PLANS FROM PIONEER
Pioneer has a long history of helping people work toward their retirement goals,
offering plans suited to the individual investor and businesses of all sizes.
For more information on Pioneer retirement plans, contact your investment
professional, or call Pioneer at 1-800-622-0176.
Individual Plans
Individual Retirement Account (IRA)
An IRA is a tax-favored account that allows anyone under age 70-1/2 with earned
income to contribute up to $2,000 annually. Spouses may contribute up to $2,000
annually into a separate IRA, for a total of $4,000 per year for a married
couple. Earnings are tax-deferred, and contributions may be tax-deductible.
Roth IRA
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and is
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $40,000 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees) IRA Plan
Businesses with 100 or fewer eligible employees can establish a plan; it
resembles a traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and an
employer contribution is required.
Most retirement plan withdrawals must meet specific
conditions to avoid penalties.
33
<PAGE>
RETIREMENT PLANS FROM PIONEER (continued)
403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their salary,
before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must contribute
the same percentage of pay for themselves and any eligible employees;
contributions are made directly to employees' IRAs. SEPs are easy to administer
and can be an especially good choice for firms with few or no employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and vesting
schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are flexible, but
age-weighted plans allocate contributions based on both age and salary.
Age-weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit-sharing plans, but allow for higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific
conditions to avoid penalties.
34
<PAGE>
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(TM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
35
<PAGE>
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the other funds you
have chosen. Over time, your investment will be shifted out of the original
fund. (Automatic Exchange is available for originating accounts with a balance
of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFTmoves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month you want. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or more.)
36
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
Global/International Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust
Pioneer International Growth Fund Pioneer Strategic Income Fund
Pioneer World Equity Fund
Tax-Exempt
United States Pioneer Tax-Free Income Fund
Pioneer Capital Growth Fund
Pioneer Growth Shares Money Market Fund
Pioneer Micro-Cap Fund Pioneer Cash Reserves Fund
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
37
<PAGE>
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
FactFoneSM 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.
[logo]PIONEER
Pioneer Investment Management, Inc.
60 State Street 0699-6557
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com (recycle) Printed on Recycled Paper
