<PAGE>
[Front cover]
[Pioneer logo]
Pioneer
International
Growth Fund
Semiannual Report
May 31, 1996
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Dear Shareowner,
Pioneer International Growth Fund completed the first half of its fourth
fiscal year on May 31, 1996. It was a much-improved climate for international
investors, particularly for those in emerging markets. While some of the more
established regions, namely Japan and the United Kingdom, remained stagnant,
overall results were good.
How Your Fund Performed
For the six months ended May 31, 1996, Pioneer International Growth Fund
posted the following results:
(bullet) Class A shares -- Net asset value was $24.25 per share on May 31,
versus $21.21 six months earlier. The Fund produced a six-month
total return of 14.33% based on net asset value, and 7.78% based on
maximum public offering price.
(bullet) Class B shares -- Net asset value stood at $23.85 per share on May
31, versus $20.94 six months earlier. Your Fund produced a six-month
total return of 13.90% if shares were held throughout the period,
9.90% if shares were redeemed and the maximum 4.0% contingent
deferred sales charge deducted on May 31.
Pioneer International Growth Fund introduced Class C shares to investors on
January 31, 1996. Since then, they achieved the following results:
(bullet) Net asset value was $23.78 per share on May 31, versus the opening
net asset value of $22.46. Your Fund's total return for the
abbreviated period was 5.88% assuming shares were held throughout,
4.88% assuming shares were redeemed and the 1% contingent deferred
sales charge deducted on May 31.
By comparison, the Morgan Stanley Capital International (MSCI) Europe,
Australia, Far East (EAFE) Index, an unmanaged measure of international stock
markets, returned 8.12% for the six months. Pioneer International Growth Fund
Class A shares total return of 14.33% at net asset value outpaced the Index
for the same period. The accompanying chart shows the Fund's total returns
for longer time periods.
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Average Annual Total Returns
(As of May 31, 1996)
Class A Shares Net Asset
Value Public Offering Price*
- ------------------------- -------------- -----------------------
Life-of-Fund (3/25/93) 20.66% 18.43%
3 Years 19.04 16.70
1 Year 23.47 16.36
Class B Shares If Held If Redeemed**
- ------------------------- -------------- -----------------------
Life-of-Fund (4/4/94) 8.59% 7.32%
1 Year 22.56 18.56
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Pioneer's Approach to International Growth Opportunities
Pioneer International Growth Fund pursues well-valued companies in
established and emerging markets outside the United States. We focus on
attributes such as company operations, cash flows and management. We also
evaluate economic and government conditions that could affect companies and
their long-term growth prospects. Our opportunistic approach helps keep the
portfolio well diversified, offering a mix of established and developing
markets. We remain confident that by identifying promising individual
companies and countries, we can achieve the best results for the Fund over
the long term.
*Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period and assumes reinvestment of all distributions at net asset
value.
**Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of all
distributions. The maximum CDSC is 4.0% and declines over six years.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
<PAGE>
The following chart summarizes the Fund's geographical diversity at the
period's end.
Geographical Distribution
(Percentage of equity holdings as of May 31, 1996)
- ---------------------------------[bar chart]---------------------------------
Argentina 3.2% Japan 12.9%
Australia 2.8% Korea 9.9%
Austria 0.7% Malaysia 2.6%
Belgium 0.3% Mexico 1.2%
Brazil 2.8% Netherlands 1.3%
China 0.9% Peru 0.3%
Denmark 0.5% Philippines 2.2%
Finland 2.5% Poland 0.5%
France 6.4% Portugal 0.9%
Germany 3.2% Singapore 0.6%
Greece 0.8% South Africa 1.6%
Hong Kong 5.1% Spain 1.8%
India 4.9% Sweden 4.4%
Indonesia 3.5% Taiwan 7.2%
Italy 6.1% Thailand 6.0%
United Kingdom 2.9%
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Just as your management considers where opportunities exist, we also keep in
mind investing risks, including currency fluctuations and economic and
political instabilities. For example, your management selectively uses
conservative hedging techniques. As of May 31, 28% of the portfolio's
currency exposure was offset by hedges. Mostly, we hedged against a fall in
the Japanese yen when we expected it would weaken versus the U.S. dollar,
which it did as the period progressed.
The hedges in place over the six months slightly enhanced the Fund's return.
Of course, your management does not view hedging as a strategy for augmenting
the Fund's results; we believe hedges should be used for defensive purposes
only. Instead, we try to achieve strong performance by researching individual
companies and countries. That's one reason why we tend to choose companies
with a healthy export business; when the dollar is strong, these firms can
price their export goods more competitively and profitably. In addition, we
like countries that exhibit a low correlation to U.S. interest rates, such as
Taiwan, Korea and Indonesia.
Emerging Markets on the Rebound
As we've stated before, we believe developing markets offer some of the
world's best long-term investment prospects. We saw this potential during the
six-month period, particularly in 1996 and specifically in Southeast Asian
countries such as Korea, Thailand, Taiwan and Indonesia. In addition to
generally low interest rates and inflation, each of these countries offers
intriguing opportunities for investors. For example, the political
uncertainty stemming from Korea's April elections started to subside late in
the period. We think its stock market offers excellent value, especially
since it lagged other emerging markets over the past year. The Fund's largest
position is in Korea Mobile Telecommunication, a cellular phone company,
which has increased in price impressively in 1996 and, in our view, still
remains well valued. We also expect solid results from Korean banks, namely
Commercial Bank of Korea and Korea First Bank. Taiwan is another region we
think offers excellent potential, despite near-term political tensions. Your
management likes Siliconware Precision Industries, an integrated-circuit
packaging company. Elsewhere in Southeast Asia, your management favors
Thailand and Indonesia, where markets started to bounce back considerably in
early 1996, thanks to renewed investor interest. India, part of the Asian
subcontinent, has played an increasingly important role in your Fund. The
Indian market continued to trade at low prices, while offering earnings
estimated to grow at 20% in fiscal year 1997. After the national elections,
political concerns should subside, which we think will help interest rates
come down and foreign investment pick up. We continue to maintain a position
in Hong Kong, an area that has not experienced the dramatic growth of India,
but nonetheless performed solidly in the six months.
2
<PAGE>
In Latin America, some modest economic improvements were visible,
particularly in Argentina. Your Fund holds some good values there;
specifically, we like Telecom Argentina. Nonetheless, problems did persist
throughout most of the region. In Brazil, for example, budget and election
difficulties continued to hold down markets. Your management kept minimal
exposure to Latin America, since we see similar growth potential with less
risk in emerging Asian markets.
Economic Growth Slowly Building in Europe
The environment for investing in Europe was mixed. While low inflation and
slow economic growth sent interest rates lower across much of the Continent,
we believed many stocks were too expensive. As a result, we kept a fairly low
weighting in many European markets. Notable exceptions were Italy, France and
Sweden. Italy and France are trading below their historical price-to-book
values, indicating some inexpensively priced prospects. In Italy we
especially like Olivetti and Telecom Italia, an information services firm and
telecommunications company, respectively. Chargeurs, France's diversified
conglomerate, also continues to intrigue us, despite a temporary downturn
stemming from concerns regarding government regulation of its associate
British Sky Broadcasting. In Sweden, the market's low prospective
price-to-earnings ratio, coupled with earnings per share growth of 40%,
reflects its growth potential. Sweden also offers many world class,
multinational companies in a variety of industries, such as the
telecommunications firm Telefonaktiebolaget LM Ericcson.
Japan's Troubles Continued
Japan as a whole continued to experience problems. Despite historically low
interest rates, the country's financial markets did not appreciate to any
major extent over the period. While the weaker yen did help some Japanese
exporters, other troubles, namely the continued banking crisis, caused many
investors to look elsewhere. The potential for higher interest rates also
triggered concerns. Your Fund's investments in Japan stood at 13% at May 31.
While we expect to limit exposure to Japan until we see better valuations,
our research did turn up some good values. As mentioned, we chose companies
that have proven to be strong exporters, such as Toyota, Canon, Sony,
Nintendo and Hitachi.
Looking Ahead
Emerging markets are already benefiting from attractive valuations and
economic and governmental initiatives designed to enhance competitiveness.
These markets should continue to offer opportunities, since inflation and
interest rates generally remain under control and, in our view, many
companies are still trading at extremely low price levels. Even developed
markets, while not as strong as a group, offer select values with strong
potential gains.
Recent results demonstrate the benefit of diversifying internationally -- and
the need to remain invested. Clearly, short-term setbacks and volatility will
continue, as they do in the United States. But rather than jump in and out of
international markets, investors should take a longer-term outlook, since the
underperformance of one market often is offset by strong performance in
another and volatility has much less of an impact on an investment over
longer time periods. International investing also demonstrates the benefits
of professional management. By investing in Pioneer International Growth
Fund, you have access to emerging and established countries that are
difficult, if not impossible, for individuals to participate in on their own.
We expect the Fund's assortment of developing and established companies and
countries will offer long-term investors solid results.
The following pages contain your Fund's audited Schedule of Investments and
financial statements as of May 31, 1996. If you have any questions about your
investment in Pioneer International Growth Fund, please contact your
investment representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer International Growth Fund
3
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERNATIONAL GROWTH FUND--May 31, 1996
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
<S> <C> <C>
INVESTMENT IN SECURITIES--94.3%
CONVERTIBLE CORPORATE BONDS--0.8%
$ 44,974 Castorama, 3.15%, 1/1/03 .......................... $ 44,738
123,527 Corporacion Mapfre, 8.5%, 2/27/99 ................. 133,003
1,060,000 Bangkok Land, 4.5%, 10/13/03 ...................... 773,800
1,255,000 Metro International Financial Bank, Ltd., 2.75%,
9/10/00 ......................................... 1,626,794
780,000 United Microelectronics Corp., Ltd., 1.25%, 6/8/04 945,750
----------
TOTAL CONVERTIBLE CORPORATE BONDS (Cost
$3,446,410) .................................. $ 3,524,085
----------
Shares
- -----------
PREFERRED STOCKS--3.1%
96,000,000 Banco Bradesco S.A. (Non-voting) .................. $ 1,115,496
2,500,000 Banco Itau S.A. (Non-voting) ...................... 1,012,972
18,320 Bau Holdings AG ................................... 970,540
3,095,000 Brasmotor S.A. (Non-voting) ....................... 833,973
55,800,000 Companhia Energetica de Minas Gerais .............. 1,478,423
30,000,000 Companhia Energetica de Sao Paulo* ................ 781,028
792,000 Companhia Siderurgica Paulista-Cosipa (Class B)* .. 793,349
2,500 Henkel KGaA (Non-voting) .......................... 1,046,512
6,610 LG Securities Co., Ltd. ........................... 72,983
18,413 Samsung Electronics Co. ........................... 979,643
5,549 Samsung Electronics Co. (New Preferred 1)* ........ 295,228
8,000 SAP AG (Non-voting) ............................... 1,118,899
8,000 Shinwon Corp. ..................................... 144,141
8,300,000 Telecommunicacoes de San Paulo S.A. ............... 1,754,282
18,900,000 Unibanco .......................................... 511,169
----------
TOTAL PREFERRED STOCKS (Cost $12,566,106) ...... $12,908,638
----------
COMMON STOCKS--90.4%
BASIC INDUSTRIES--6.5%
Chemicals--1.3%
59,000 Chemplast Sanmar Ltd.* ............................ $ 202,026
58,000 Grasim Industries Ltd. ............................ 934,256
512,350 Reliance Industries Ltd. .......................... 3,494,126
67,700 Reliance Industries Ltd. (G.D.R.) ................. 1,032,425
1,000 Yizheng Chemical Fibre Company, Ltd. .............. 243
----------
$ 5,663,076
----------
Iron & Steel--4.1%
1,750,000 Australia National Industries Ltd. ................ $ 1,522,567
22,000 Boehler-Uddeholm AG* .............................. 1,771,798
1,300,000 China Steel Corp., Ltd. ........................... 1,235,322
204,000 China Steel Corp., Ltd. (G.D.R.)* ................. 4,488,000
2,649,700 Sahaviriya Steel Industries Public Co.* ........... 2,275,566
176,800 Sahaviriya Steel Industries Public Co. (Local
Shares)* ........................................ 151,836
90,000 Steel Authority of India Ltd. (G.D.S.) ............ 1,282,500
100,850 Tata Iron & Steel Co., Ltd. ....................... 696,410
118,100 Usinor Sacilor* ................................... 1,897,464
249,000 Yodogawa Steel Works .............................. 2,012,191
----------
$17,333,654
----------
Metals and Mining--0.8%
35,000 Free State Consolidated Gold Mine, Ltd. ........... $ 395,582
913,800 HJ Joel Gold Mining Co. Ltd.* ..................... 922,713
78,000 Kloof Gold Mining Co., Ltd. ....................... 993,460
5,300 Vaal Reefs Exploration & Mining Co., Ltd. ......... 543,683
67,000 Vaal Reefs Exploration & Mining Co., Ltd. (A.D.R.) 686,750
----------
$ 3,542,188
----------
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
Shares Value
- ----------- ----------
Tire & Rubber--0.3%
59,450 China Tire Holdings Ltd. .......................... $ 579,638
998,000 PT Andayani Megah ................................. 566,924
----------
$ 1,146,562
----------
TOTAL BASIC INDUSTRIES ......................... $27,685,480
----------
CAPITAL GOODS--8.2%
Construction, Building Materials &
Engineering--4.4%
221,500 Apasco, S.A. de C.V. .............................. $ 1,208,507
400,000 Asia Cement Corp. ................................. 712,505
16,000 Asia Cement Corp. (G.D.R.)* ....................... 327,200
910,000 Compeq Manufacturing Co., Ltd. .................... 2,137,154
21,500 Felten & Guillaume Energietechnik AG .............. 2,901,408
1,500 Heidelberger Zement AG ............................ 984,605
2,300 Hochtief AG ....................................... 1,009,499
33,000 Kinnevik AB (B Shares) ............................ 916,980
15,000 Kone Corp. (Series B) ............................. 1,702,701
2,071,000 Kumagai Gumi Ltd. ................................. 2,061,016
54,000 L.G. Construction Ltd. ............................ 1,367,150
85,000 NTS Steel Groups Co., Ltd. * ...................... 57,056
250,000 Persimmon Plc ..................................... 894,894
18,050 Portland Valderrivas S.A. ......................... 1,097,043
176,000 Powerscreen International Plc ..................... 1,285,920
486,000 Prism Cement Ltd.* ................................ 105,396
1,150 Unitech Ltd. ...................................... 3,282
2,300 Wolseley Plc ...................................... 16,395
----------
$18,788,711
----------
Machinery--1.2%
93,000 Esselte AB (Series B) ............................. $ 1,768,875
45,050 Raymond, Ltd. (G.D.S.) ............................ 878,475
452,000 Sasib SpA Di Risp ................................. 1,011,536
56,600 Stork N.V. ........................................ 1,527,402
----------
$ 5,186,288
----------
Producer Goods--2.6%
98,000 Canon, Inc. ....................................... $ 1,923,169
11,700 Iwka AG ........................................... 2,356,862
5,226,000 M.C. Packaging Ltd. ............................... 1,857,430
47,700 Samas-Groep NV .................................... 1,745,156
252,000 Shanghai Diesel Engine Co., Ltd. (B Shares)* ...... 99,792
12,000 Schmalbach Lubeca AG .............................. 2,208,975
27,000 Toolex Alpha NV* .................................. 681,750
----------
$10,873,134
----------
TOTAL CAPITAL GOODS ............................ $34,848,133
----------
CONSUMER DURABLES--2.6%
Motor Vehicles--2.6%
74,000 Allgon AB ......................................... $ 1,204,066
12,200 Ashok Leyland Ltd. ................................ 42,558
2,057,000 PT Astra International ............................ 3,086,602
158,333 CIADEA S.A.* ...................................... 1,124,614
125,000 Edaran Otomobile Nasional Bhd. .................... 1,116,563
560,000 Magneti Marelli SpA ............................... 810,701
167,000 Suzuki Motor Co., Ltd. ............................ 2,117,838
62,000 Toyota Motor Corp. ................................ 1,417,569
----------
TOTAL CONSUMER DURABLES ........................ $10,920,511
----------
CONSUMER NON-DURABLES--10.3%
Agriculture & Food Manufacturing--1.3%
430,000 Standard Foods Taiwan Ltd.* ....................... $ 1,025,400
390,000 Pioneer International, Ltd. ....................... 1,195,384
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
Shares Value
- ----------- ----------
Agriculture & Food Manufacturing--Continued
835,000 President Enterprises Corp.* ...................... $ 1,167,558
31,000 President Enterprises Corp. (G.D.R.)* ............. 494,061
120,000 Tiger Oats Ltd.* .................................. 1,597,246
----------
$ 5,479,649
----------
Cosmetics--1.4%
1,451,900 McBride Plc ....................................... $ 2,969,821
253,000 Shiseido Co., Ltd. ................................ 3,138,202
----------
$ 6,108,023
----------
Retail Food--2.2%
145,500 Buenos Aires Embotelladora (B Shares) (A.D.R.) .... $ 2,328,000
3,430,000 Dairy Farm International Holding Ltd. ............. 2,915,500
21,300 FamilyMart ........................................ 974,007
270,000 Kwik Save Group Plc ............................... 1,903,684
26,000 Panamerican Beverages, Inc. (Class A) ............. 1,092,000
----------
$ 9,213,191
----------
General Retail--3.3%
41,000 Amway Japan, Ltd. ................................. $ 1,973,526
1,197,620 David Jones Ltd.* ................................. 1,749,371
17,600 Koninklijke Bijenkorf Beheer ...................... 1,380,554
672,000 PT Matahari Putra Prima ........................... 1,476,527
344,800 Merloni Elettrodomestici SpA ...................... 814,066
60,700 Nintendo Corp., Ltd. .............................. 4,472,572
426,000 Siam Makro Public Co. Ltd. ........................ 2,136,224
----------
$14,002,840
----------
Textiles/Clothes--2.1%
7,660 Chargeurs S.A. .................................... $ 2,187,089
160,000 Marzotto & Figli SpA .............................. 1,077,825
100 Precot Mills Ltd.* ................................ 429
26,667 Precot Mills Ltd. (New)* .......................... 114,521
45,750 Shinwon Corp. ..................................... 1,813,743
50 Super Spinning Mills .............................. 207
16 Super Spinning Mills (New) ........................ 66
101,000 Xebio Co., Ltd. ................................... 3,767,750
----------
$ 8,961,630
----------
TOTAL CONSUMER NON-DURABLES .................... $43,765,333
----------
ENERGY--1.3%
Oil & Gas--1.3%
5,900 Elf Gabon ......................................... $ 1,319,106
108,000 Hindustan Petroleum Corp., Ltd. ................... 1,171,066
161,200 Perez Companc S.A. (Class B)* ..................... 1,030,480
13,600 Total S.A. (Class B) .............................. 983,802
57,000 YPF S.A. (Class C) (Sponsored A.D.R.) ............. 1,254,000
----------
TOTAL ENERGY ................................... $ 5,758,454
----------
FINANCIAL--24.5%
Financial Services--3.6%
34,000 Compagnie Financiere de Paribas ................... $ 2,066,589
38,000 Compagnie Bancaire S.A. ........................... 4,163,376
129,000 Credit Foncier de France* ......................... 781,591
2,300,000 Grupo Financiero Bancomer S.A. (B Shares)* ........ 1,053,482
127,000 Korea Housing Bank (New Common 1)* ................ 3,464,354
1,943,000 MBF Capital ....................................... 2,646,185
286,000 National Finance & Securities Co., Ltd. ........... 1,389,007
----------
$15,564,584
----------
Commercial Banks--12.7%
144,000 Aomori Bank Ltd. .................................. $ 891,752
27,000 Argentaria S.A. ................................... 1,131,077
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Shares Value
- ----------- ----------
Commercial Banks--Continued
245,000 Australia & New Zealand Banking Group Ltd. ........ $ 1,126,420
201,625 Bank of Ayudhya Public Co., Ltd. .................. 1,210,101
2,598,636 Bangkok Metropolitan Bank ......................... 2,103,453
37,000 Banco Popolare di Bergamo ......................... 560,806
170,000 Banco Popolare di Milano .......................... 868,802
944,500 PT Bank Dagang Nasional ........................... 936,401
11,000 Bank Przemyslowo Handlowy ......................... 614,914
19,000 Bank Slaski S.A. .................................. 1,391,384
167,400 Banco Wiese, Ltd.(Sponsored A.D.R.) ............... 1,109,025
77,700 BPI-SGPS S.A. ..................................... 1,011,757
43,000 Chiba Bank Ltd. ................................... 373,757
55,000 Chugoku Bank Ltd. ................................. 952,050
691,000 Commercial Bank of Korea .......................... 7,172,649
60,000 Credit National ................................... 4,157,956
42,000 Daegu Bank ........................................ 724,333
304,400 Dah Sing Financial Holdings Ltd. .................. 873,390
65,400 Development Bank of Singapore Ltd. ................ 775,421
1,508,500 First Bangkok City Bank Public Co. Ltd. ........... 2,933,492
1,450,000 Foreningsbanken AB (A Shares) ..................... 4,481,626
75,000 Hanil Bank ........................................ 903,960
559,940 Korea First Bank .................................. 5,186,169
431,000 Krung Thai Bank Public Co., Ltd. .................. 2,195,333
822,000 Merita Bank (Class A)* ............................ 1,726,634
130,000 National Australia Bank Ltd. ...................... 1,219,251
77,000 Shizuoka Bank ..................................... 997,871
2,800,000 Siam City Bank Ltd. ............................... 3,289,110
157,100 State Bank of India Ltd.* ......................... 1,259,669
12,000 State Bank of India Ltd. (New) .................... 96,219
80,000 Sumitomo Trust Bank ............................... 1,110,803
42,000 Svenska Handelbanken .............................. 864,377
----------
$54,249,962
----------
Miscellaneous Finance--1.5%
192,190 Cho Hung Bank ..................................... $ 2,538,630
722,550 Industrial Credit & Investment Corp. of India Ltd. 1,912,299
1,127,000 Peregrine Investment Holdings Ltd. ................ 1,747,897
30,000 SCICI Ltd. ........................................ 41,090
----------
$ 6,239,916
----------
Insurance--5.5%
26,200 Corporacion Mapfre ................................ $ 1,291,012
289,000 Dai-Tokyo Fire & Marine Insurance Co. ............. 2,100,019
358,000 Dowa Fire and Marine Insurance Co. Ltd. ........... 1,971,767
58,000 Groupe des Assurances Nationales* ................. 1,650,407
2,300,000 INA SpA ........................................... 3,448,845
1,199,000 PT Lippo Life Insurance* .......................... 1,799,143
275,000 Malaysia Assurance Alliance Bhd. .................. 1,354,897
54,000 Mediolanum SpA 144A* .............................. 419,730
3,255,000 National Mutual Asia Ltd. ......................... 2,944,826
357,000 Pacific & Orient Bhd.* ............................ 1,051,051
510,000 Reinsurance Australia Corp. ....................... 1,432,929
90,200 Skandia Forsakrings AB ............................ 2,298,661
14,000 Union Des Assurances Federal ...................... 1,826,558
----------
$23,589,845
----------
Investments--0.3%
1,520 Daewoo Securities Company Ltd. .................... $ 42,709
670,000 Lion Land Bhd.* ................................... 794,392
17,120 Ssangyong Investment Securities Co.* .............. 351,982
----------
$ 1,189,083
----------
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Shares Value
- ----------- ----------
Real Estate--0.9%
1,955,000 PT Duta Anggada Realty ............................ $ 1,320,096
100 Housing Development Finance Corp. ................. 8,196
150,000 Property Perfect Public Co., Ltd. (Local Shares) .. 722,578
337,900 Property Perfect Public Co., Ltd. ................. 1,627,726
----------
$ 3,678,596
----------
TOTAL FINANCIAL ................................ $104,511,986
----------
SERVICES--5.3%
Commercial--1.3%
560,000 GVC Corp. ......................................... $ 991,437
165,000 Jardine Matheson Holdings Ltd. .................... 1,270,500
114,000 Loxley Public Co., Ltd. ........................... 1,674,485
61,000 Mitsubishi Corp. .................................. 835,694
96,000 PT Tigaraksa Satria ............................... 485,659
157,500 PT Wicaksana Overseas International* .............. 429,622
----------
$ 5,687,397
----------
Broadcasting & Media--0.5%
125,000 Tokyo Broadcasting System ......................... $ 2,059,613
----------
Health & Personal Care--0.5%
1,015,000 Takare Plc ........................................ $ 2,201,982
----------
Pharmaceuticals--1.0%
390,000 F.H. Faulding & Co., Ltd. ......................... $ 2,443,689
206,000 Skandia Enskilda Banken (Series A) ................ 1,622,361
----------
$ 4,066,050
----------
Hotel/Restaurant--0.7%
8,000 Accor S.A. ........................................ $ 1,153,697
325,000 Overseas Union Enterprise Ltd. .................... 1,776,713
----------
$ 2,930,410
----------
Publishing--0.5%
692,000 Star Publications* ................................ $ 2,023,473
----------
Services/Other--0.8%
107,000 ISS International Service System A/S (Class B) .... $ 2,087,539
120,000 Ssangyong Corp. ................................... 1,401,104
----------
$ 3,488,643
----------
TOTAL SERVICES ................................. $ 22,457,568
----------
TECHNOLOGY--8.7%
Electronics--6.8%
153,000 Advanced Semiconductors Engineering (G.D.R.)* ..... $ 1,315,800
13,000 Alcatel Alsthom S.A. .............................. 1,185,250
298,000 Hitachi, Ltd. ..................................... 2,758,493
23,100 K.R. Precision Public Co., Ltd. ................... 165,547
1,487 Samsung Electronics Co. ........................... 130,215
448 Samsung Electronics Co. (New Common 1)* ........... 39,231
300 Samtel Color Ltd. ................................. 302
34,000 Secom Co. ......................................... 2,203,092
54,500 SGS--Thomson Microelectronics NV* ................. 2,320,945
1,472,000 Siliconware Precision Industries Co., Ltd. ........ 2,217,813
726,960 Siliconware Precision Industries Co., Ltd.
(G.D.R.)* ....................................... 5,797,506
29,000 Sony Corp. ........................................ 1,844,210
850,000 Tatung Co. Ltd. ................................... 1,643,061
60,000 TDK Corp. ......................................... 3,415,718
515,857 Yageo Corp. (G.D.R.)* ............................. 4,030,130
----------
$ 29,067,313
----------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Shares Value
- ----------- ----------
Telephone Networks--1.9%
91,800 Nokia Corp. (Class A) ............................. $ 3,992,913
188,060 Telefonaktiebolaget LM Ericsson (Series B) ........ 4,205,690
----------
$ 8,198,603
----------
TOTAL TECHNOLOGY ............................... $37,265,916
----------
TRANSPORTATION--2.0%
Air Transport--0.4%
118,000 Mitsubishi Heavy Industries, Ltd. ................. $ 1,014,737
250,000 Modi Luft, Ltd. ................................... 89,171
185,500 Modi Luft, Ltd. (New)* ............................ 66,164
40,000 Qantas Airways Ltd. (A.D.S.) 144A* ................ 715,408
----------
$ 1,885,480
----------
Ships & Shipping--1.3%
440,000 China Merchants Shekou Port Service Co. (B Shares) $ 176,289
1,470,050 Great Eastern Shipping Co. ........................ 1,982,019
400 Great Eastern Shipping Co. (New) .................. 542
42,000 Great Eastern Shipping Co. (G.D.R.) ............... 341,250
116,000 Finnlines OY ...................................... 2,399,694
270,000 Shanghai Lianhua Fibre Corp. (B Shares)* .......... 43,740
9,596,000 Shanghai Haixing Shipping Co. ..................... 694,527
----------
$ 5,638,061
----------
Rail--0.3%
368,000 Railtrack Group Plc 144A+* ........................ $ 1,237,449
----------
TOTAL TRANSPORTATION ........................... $ 8,760,990
----------
UTILITIES--16.9%
Electric Utility--3.6%
275,200 CESC, Ltd. (G.D.R.)* .............................. $ 825,600
100,000 Centrais Electricas Brasileiras S.A. (A.D.R.) ..... 1,250,250
1,200,000 Consolidated Electric Power Asia Ltd. ............. 2,062,735
30,500 Huaneng Power International, Inc. (A.D.R.)* ....... 499,438
278,500 Iberdrola S.A. .................................... 2,824,719
291,000 Nichicon Corp. .................................... 4,256,040
346,000 Shandong Huaneng Power Co., Ltd. (A.D.R.) ......... 2,897,750
149,300 Union Electrica Fenosa S.A. ....................... 906,255
----------
$15,522,787
----------
Telecommunications--13.3%
24,613,568 Champion Technology Holdings Ltd. ................. $ 2,863,042
394 DDI Corp. ......................................... 3,413,718
153,000 Hellenic Telecommunications Organization S.A. ..... 2,548,204
20,080 Intracom S.A. ..................................... 508,302
8,325 Korea Mobile Telecommunication Corp. .............. 11,677,864
177,000 L.G. Electronics Inc. (G.D.R.)* ................... 1,646,100
510,000 Mahanagar Telephone Nigam Ltd.* ................... 3,168,854
33,000 NetCom Systems AB (Class B)* ...................... 382,484
9,920,000 Olivetti SpA* ..................................... 6,213,453
112,500 Portugal Telecom S.A. (A.D.R.)* ................... 2,728,125
1,044,000 Stet Societa Finanziaria Telefonica SpA ........... 3,742,941
98,000 Telecom Argentina Stet-France S.A. (A.D.R.) ....... 4,557,000
2,778,400 Telecom Italia SpA ................................ 5,560,939
25,000 Telecomunications Brasileiras S.A. (A.D.R.) ....... 1,609,375
94,000 Telefonica de Argentina S.A. (Class B) (Sponsored
A.D.R.) ......................................... 2,737,750
25,000 Telephonos de Mexico S.A. (A.D.R.) ................ 825,000
567,000 Thai Telephone & Communications Public Co., Ltd.* . 1,388,060
260,000 Vodafone Group Plc ................................ 1,029,399
----------
$56,600,610
----------
TOTAL UTILITIES ................................ $72,123,397
----------
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Shares Value
- ----------- ----------
MISCELLANEOUS--4.1%
Conglomerates & Holding Companies--4.1%
1,504,000 ABC Communications Holdings, Ltd. ................. $ 268,249
831,000 Benpres Holdings (G.D.R.)* ........................ 7,063,500
2,718,500 PT Bimantara Citra* ............................... 3,904,384
186,000 Cafe de Coral Holdings Ltd. ....................... 57,094
25,100 Desc S.A. de CV (Class C) (Sponsored A.D.R.)* ..... 536,513
42,000 Fastighets AB Naeckebro* .......................... 58,353
28,000 G.I.B. Holdings, Ltd. ............................. 1,241,071
70,700 Impala Platinum Holdings, Ltd. .................... 1,119,517
3,100 Kaufhof Holdings AG ............................... 1,071,241
462,000 Technology Resources Industries Bhd.* ............. 1,535,990
243,000 Want Want Holdings Ltd. 144A* ..................... 566,190
----------
TOTAL MISCELLANEOUS ............................ $ 17,422,102
----------
TOTAL COMMON STOCKS (Cost $366,800,895) ........ $385,519,870
----------
Units
- -----------
WARRANTS--0.0%
149,750 Jardine Strategic Holdings, Ltd., 5/2/98* ......... $ 47,920
112,700 Peregrine Investment Holdings, Ltd., 5/15/98* ..... 32,322
----------
TOTAL WARRANTS (Cost $32,340) .................. $ 80,242
----------
TOTAL INVESTMENT IN SECURITIES (Cost
$382,845,751) ................................ $402,032,835
----------
Principal
Amount TEMPORARY CASH INVESTMENTS--5.7%
- -----------
Commerical Paper--5.7%
$11,832,000 Exxon Credit Corp., 5.20%, 06/03/96 ............... $ 11,832,000
12,620,000 Ford Motor Credit Co., 5.29%, 06/04/96 ............ 12,620,000
----------
TOTAL TEMPORARY CASH INVESTMENTS (Cost
$24,452,000) ................................. $ 24,452,000
----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS--100%
(COST $407,297,751) (a)(b) .................... $426,484,835
==========
</TABLE>
* Non-income producing security.
+ Security purchased on an installment basis. Market value reflects only
those payments made through May 31, 1996. Additional subscription payment
GBP 1.90/share will be required on June 3, 1997.
144A Security exempted from registration under Rule 144A of Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At May 31, 1996,
the value of these securities amounted to $2,938,777 or 0.7% of total net
assets.
(a) At May 31, 1996, the net unrealized gain on investments based on cost for
federal income tax purposes of $408,329,620 was as follows:
Aggregate gross unrealized gain for the investments
in which there is an excess of value over
tax cost .............................................. $ 35,414,099
Aggregate gross unrealized loss for the investments
in which there is an excess of tax cost over value ..... (17,258,884)
-----------
Net unrealized gain $ 18,155,215
===========
(b) Distribution of investments by country of issue, as a percentage of
total equity holdings in securities, is as follows:
Japan 12.9% Sweden 4.4% Finland 2.5%
South Korea 9.9 Indonesia 3.5 Philippines 2.2
Taiwan 7.2 Argentina 3.2 Spain 1.8
France 6.4 Germany 3.2 South Africa 1.6
Italy 6.1 United Kingdom 2.9 Netherlands 1.3
Thailand 6.0 Australia 2.8 Mexico 1.2
Hong Kong 5.1 Brazil 2.8 Others (individually
India 4.9 Malaysia 2.6 less than 1%) 5.5
-----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended May 31, 1996 aggregated $388,454,281 and $347,160,242,
respectively.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PIONEER INTERNATIONAL GROWTH FUND
BALANCE SHEET--May 31, 1996
ASSETS:
Investment in securities, at value (including temporary cash
investments of $24,452,000) (cost $407,297,751; see Schedule
of Investments and Note 1) .............................. $426,484,835
Cash ....................................................... 25,094
Foreign currencies, at value (Note 1) ...................... 8,401,581
Receivables--
Investment securities sold .............................. 1,474,458
Forward foreign currency portfolio hedge contracts,
open--net (Notes 1 and 6) ............................. 5,676,751
Forward foreign currency portfolio hedge contracts,
closed--net (Notes 1 and 6) .......................... 953,306
Fund shares sold ........................................ 2,387,234
Dividends, interest and foreign taxes withheld (Note 1) . 1,376,156
Other ...................................................... 67,529
-----------
Total assets ............................................. $446,846,944
-----------
LIABILITIES:
Payables--
Investment securities purchased ........................... $ 9,411,356
Forward foreign currency settlement contracts--net
(Notes 1 and 6) ......................................... 424
Fund shares repurchased ................................... 144,305
Due to affiliates (Notes 2, 3 and 4) ....................... 366,726
Accrued expenses (Note 1) .................................. 554,491
-----------
Total liabilities ........................................ $ 10,477,302
-----------
NET ASSETS:
Paid-in capital (Note 1) ................................... $383,229,358
Accumulated net investment loss (Note 1) ................... (6,413,916)
Accumulated undistributed net realized gain on investments
and foreign currency transactions (Notes 1 and 6) ......... 35,017,811
Net unrealized gain on investments (Note 1) ................ 18,888,358
Net unrealized gain on forward foreign currency contracts
and other assets and liabilities denominated in
foreign currencies (Notes 1 and 6) ...................... 5,648,031
-----------
Total net assets ......................................... $436,369,642
===========
Net Asset Value Per Share:
Class A--(based on $375,602,278/15,486,715 shares of
beneficial interest outstanding--unlimited number of
shares authorized) ..................................... $24.25
======
Class B--(based on $59,162,065/2,480,842 shares of
beneficial interest outstanding--unlimited number of
shares authorized) ...................................... $23.85
======
Class C--(based on $1,605,299/67,512 shares of beneficial
interest outstanding--unlimited number of shares
authorized) ..................................... $23.78
======
Maximum Offering Price:
Class A ................................................... $25.73
======
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PIONEER INTERNATIONAL GROWTH FUND
STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 1996
Investment Income (Note 1):
Dividends (net of foreign taxes withheld of
$352,700) .................................. $ 3,384,389
Interest ..................................... 556,740
--------
Total investment income ..................... $ 3,941,129
----------
Expenses:
Management fees (Note 2) ..................... $ 1,865,882
Distribution fees (Note 4)
Class A ..................................... 426,650
Class B ..................................... 221,776
Class C ..................................... 1,548
Transfer fees (Note 3)
Class A ..................................... 437,212
Class B ..................................... 75,895
Class C ..................................... 409
Registration fees ............................ 73,200
Professional fees ............................ 43,920
Accounting (Note 2) .......................... 12,480
Custodian fees ............................... 367,491
Printing ..................................... 12,711
Fees and expenses of nonaffiliated trustees .. 8,709
Miscellaneous ................................ 62,817
--------
Total expenses .............................. $ 3,610,700
Less fees paid indirectly (Note 5) .......... (22,666)
----------
Net expenses ................................ $ 3,588,034
----------
Net investment income ...................... $ 353,095
----------
Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency
Transactions:
Net realized gain from:
Investments (net of reserve for capital gains
taxes of $37,644) (Note 1) ................. $25,627,259
Forward foreign currency contracts and other
assets and liabilities denominated
in foreign currencies (Notes 1 and 6) .... 5,976,102 $31,603,361
--------
Net unrealized gain from:
Change in net unrealized gain on investments
(net of reserve for capital gains taxes
of $298,726) (Note 1) .................... $19,810,578
Change in net unrealized gain on forward
foreign currency contracts and other
assets and liabilities denominated in
foreign currencies (Notes 1 and 6) ....... (1,141,325) 18,669,253
-------- ----------
Net gain on investments and foreign currency
transactions .............................. $50,272,614
----------
Net increase in net assets resulting from
operations ................................ $50,625,709
==========
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
PIONEER INTERNATIONAL GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended May 31, 1996 and the Year Ended November 30, 1995
Six Months
Ended Year Ended
May 31, November 30,
1996 1995
------------ --------------
From Operations:
Net investment income (loss) ............ $ 353,095 $ (888,658)
Net realized gain (loss) on investments
and foreign currency transactions ....... 31,603,361 (107,596)
Change in net unrealized gain/loss on
investments and forward currency
transactions ............................ 18,669,253 13,826,869
---------- ------------
Net increase in net assets resulting
from operations ...................... $ 50,625,709 $ 12,830,615
---------- ------------
Distributions to Shareholders From:
Net investment income:
Class A ($0.00 and $0.00 per share,
respectively) ......................... $ -- $ --
Net realized gain:
Class A ($0.00 and $1.10 per share,
respectively) ......................... -- (14,551,013)
Class B ($0.00 and $1.10 per share,
respectively) ......................... -- (1,141,813)
---------- ------------
Decrease in net assets resulting from
distributions to shareholders ......... $ -- $ (15,692,826)
---------- ------------
From Fund Share Transactions:
Net proceeds from sale of shares ........ $103,199,154 $ 157,292,002
Net asset value of shares issued to
shareholders in reinvestment of
distributions ........................... -- 13,573,797
Cost of shares repurchased .............. (60,328,289) (128,399,426)
---------- ------------
Net increase in net assets resulting
from fund share transactions .......... $ 42,870,865 $ 42,466,373
---------- ------------
Net increase in net assets ............ $ 93,496,574 $ 39,604,162
Net Assets:
Beginning of period ..................... 342,873,068 303,268,906
---------- ------------
End of period (including accumulated net
investment loss of $6,413,916 and
$6,767,011, respectively) ............. $436,369,642 $ 342,873,068
========== ============
Six Months Ended May 31, Year Ended November 30,
1996 1995
------------------------ --------------------------
Shares Amount Shares Amount
---------- ---------- ---------- ------------
CLASS A
Shares sold ...... 3,404,275 $ 78,219,443 6,826,057 $ 138,243,337
Shares issued to
shareholders in
reinvestment of
distributions ... -- -- 629,149 12,633,315
Less shares
repurchased ..... (2,464,860) (56,234,155) (5,994,269) (121,564,361)
-------- -------- -------- ----------
Net increase ..... 939,415 $ 21,985,288 1,460,937 $ 29,312,291
======== ======== ======== ==========
CLASS B
Shares sold ...... 1,018,624 $ 23,374,088 944,288 $ 19,048,665
Shares issued to
shareholders in
reinvestment of
distributions ... -- -- 47,077 940,482
Less shares
repurchased ..... (180,143) (4,071,301) (339,062) (6,835,065)
-------- -------- -------- ----------
Net increase ..... 838,481 $ 19,302,787 652,303 $ 13,154,082
======== ======== ======== ==========
CLASS C*
Shares sold ...... 68,470 $ 1,605,623
Shares issued to
shareholders in
reinvestment of
distributions ... -- --
Less shares
repurchased ..... (958) (22,833)
-------- --------
Net increase ..... 67,512 $ 1,582,790
======== ========
*Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
PIONEER INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented
Six Year Year
Months Ended Ended April 1, 1993
Ended November November to
May 31, 30, 30, November 30,
1996++ 1995 1994++ 1993(a)
-------- ---------- ---------- -------------
CLASS A
Net asset value,
beginning of
period $21.21 $21.55 $20.91 $15.00
------ -------- -------- -----------
Increase
(decrease) from
investment
operations:
Net investment
income (loss) $0.03 $(0.04) $0.19 $(0.03)
Net realized and
unrealized gain
on investments
and foreign
currency
transactions 3.01 0.80 1.87 5.94
------ -------- -------- -----------
Net increase from
investment
operations $3.04 $0.76 $2.06 $5.91
Distributions to
shareholders
from:
Net investment
income -- -- (0.03) --
Net realized gain -- (1.10) (1.39) --
------ -------- -------- -----------
Net increase
(decrease) in net
asset value $3.04 $(0.34) $0.64 $5.91
------ -------- -------- -----------
Net asset value,
end of period $24.25 $21.21 $21.55 $20.91
====== ======== ======== ===========
Total return* 14.33% 3.81% 10.03% 39.40%
Ratio of net
expenses to
average net
assets 1.78%**+ 2.00%+ 1.95% 1.73% **
Ratio of net
investment income
(loss) to average
net assets 0.25%**+ (0.23%)+ 0.84% (0.48%)**
Portfolio turnover
rate 197.01%** 219.26% 274.89% 184.69% **
Average commission
rate paid per
exchange listed
transaction+++ $0.0108 -- -- --
Net assets, end of
period (in
thousands) 375,602 $308,488 $282,033 $86,923
Ratios assuming no
waiver of
management fees
and assumption
of expenses by
PMC:
Net operating
expenses -- -- -- 2.88% **
Net investment
loss -- -- -- (1.63%)**
Ratios assuming
reduction for
fees paid
indirectly:
Net operating
expenses 1.77%** 1.98% -- --
Net investmen
income (loss) 0.26%** (0.21%) -- --
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data presented above is based upon average shares
outstanding for the periods presented.
+++ Amount may fluctuate from period to period as a result of portfolio
transactions executed in different markets where trading practices and
commission rate structures may vary.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of
the investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
(a) Certain reclassifications have been made to the 1993 balances to conform
with the 1994 presentation.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
PIONEER INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS (continued)
Selected Data for a Share Outstanding for the Periods Presented
April 4,
Six Year 1994
Months Ended to
Ended November November
May 31, 30, 30,
1996++ 1995 1994++
--------- ---------- ----------
CLASS B
Net asset value, beginning of
period ...................... $20.94 $21.45 $21.06
------- -------- --------
Increase (decrease) from
investment operations:
Net investment income (loss) . $(0.06) $(0.17) $ 0.06
Net realized and unrealized
gain on investments and
foreign currency
transactions ................ 2.97 0.76 0.33
------- -------- --------
Net increase from investment
operations ................ $2.91 $0.59 $ 0.39
Distributions to shareholders
from net realized gain ...... -- (1.10) --
------- -------- --------
Net increase (decrease) in net
asset value ................. $ 2.91 $(0.51) $ 0.39
------- -------- --------
Net asset value, end of period $23.85 $20.94 $21.45
======= ======== ========
Total return* ................. 13.90% 3.00% 1.85%
Ratio of net expenses to
average net assets .......... 2.63%**+ 2.80%+ 3.02%**
Ratio of net investment income
(loss) to average net assets (0.53%)**+ (1.04%)+ 0.72%**
Portfolio turnover rate ....... 197.01%** 219.26% 274.89%
Average commission rate paid
per exchange listed
transaction+++ ............... $0.0108 -- --
Net assets, end of period (in
thousands) .................. $59,162 $34,385 $21,236
Ratios assuming reduction for
fees paid indirectly:
Net expenses .............. 2.62%** 2.77% --
Net investment loss ....... --
(0.52%)** (1.01%)
January
31,1996
to
May 31,
1996++
-------------
CLASS C***
Net asset value, beginning of
period .......................... $ 22.46
-----------
Increase from investment
operations:
Net investment income ............ $ 0.01
Net realized and unrealized gain
on investments and foreign
currency transactions .......... 1.31
-----------
Net increase (decrease) in net
asset value ..................... $ 1.32
-----------
Net asset value, end of period .... $ 23.78
===========
Total return* ..................... 5.88%
Ratio of net expenses to average
net assets ...................... 2.53%**+
Ratio of net investment income to
average net assets .............. 0.11%**+
Portfolio turnover rate ........... 197.01%**
Average commission rate paid per
exchange listed transaction++++ . $0.0108
Net assets, end of period (in
thousands) ...................... $1,605
Ratios assuming reduction for fees
paid indirectly:
Net expenses ................... 2.49%**
Net investment income .......... 0.15%**
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data presented above is based upon average shares
outstanding for the periods presented.
+++ Amount may fluctuate from period to period as a result of portfolio
transactions executed in different markets where trading practices and
commission rate structures may vary.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of
the investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
*** Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Notes to Financial Statements--May 31, 1996
1. Pioneer International Growth Fund (the Fund) is a Massachusetts business
trust registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The investment objective of the Fund
is to seek long-term growth of capital by investing in a portfolio consisting
primarily of foreign equity securities and in Depository Receipts for such
securities.
The Board of Trustees (the Trustees) has authorized the issuance of three
share classes of the Fund, designated as Class A, Class B and Class C shares.
Class C shares were first publicly offered on January 31, 1996. The shares of
Class A, Class B and Class C represent an interest in the same portfolio of
investments of the Fund and have equal rights to voting, redemptions,
dividends and liquidation, except that each class of shares can bear
different transfer agent and distribution fees, and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class
A, Class B and Class C shareholders, respectively.
The Fund's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the
Fund to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates. The following is a summary
of significant accounting policies consistently followed by the Fund, which
are in conformity with those generally accepted in the investment company
industry:
A. Security Valuation--Security transactions are recorded on trade date.
Each day, securities are valued at the last sale price on the principal
exchange where they are traded. Securities that have not traded on the
date of valuation, or securities for which sales prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available are
valued at their fair value as determined by, or under the direction of,
the Trustees. Trading in foreign securities is substantially completed
each day at various times prior to the close of the New York Stock
Exchange. The values of such securities used in computing the net asset
value of the Fund's shares are determined as of such times. Temporary
cash investments are valued at amortized cost. Dividend income is
recorded on the ex-dividend date, except that certain dividends from
foreign securities where the ex-dividend date may have passed are
recorded as soon as the Fund is informed of the dividends. Interest
income is recorded on the accrual basis, net of unrecoverable foreign
taxes withheld at the applicable country rates.
Gains and losses on sales of investments are calculated on the
"identified cost" method for both financial reporting and federal income
tax purposes. It is the Fund's practice to first select for sale those
securities that have the highest cost and also qualify for long-term
capital gain or loss treatment for tax purposes.
The Fund's investments in emerging markets or countries with limited or
developing markets may subject the Fund to greater degree of risk than in
a developed market. Risks associated with these developing markets,
attributable to political, social or economic factors, may affect the
price of the fund's investments and income generated by these
investments, as well as the Fund's ability to repatriate such amounts.
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.
16
<PAGE>
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 or losses at the time a
portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to
meet the terms of the contract and from unanticipated movements in the
value of foreign currencies relative to the U.S. dollar (see Note 6).
D. 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.
In addition to the requirements of the Internal Revenue Code, the Fund
may also be required to pay local taxes on net realized capital gains in
certain countries. The required capital gains taxes, if any, are
determined in accordance with local tax laws. In determining daily net
asset value, the Fund estimates the reserve for capital gains taxes, if
any, associated with net unrealized gains on certain portfolio
securities. The estimated reserve for capital gains taxes, if any, is
based on the holding periods of such securities and the related tax
rates, tax loss carryforwards (if applicable) and other such factors.
Included in accrued expenses is $336,370 in reserve for capital gains
taxes at May 31, 1996. During the six months ended May 31, 1996, the Fund
paid no capital gains taxes on the sale of certain foreign securities.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or
from paid-in capital, depending on the type of book/tax differences that
may exist.
E. Fund Shares--The Fund records sales and repurchases of its shares on
the trade date. Net losses, if any, as a result of cancellations are
absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal
underwriter for the Fund and an indirect wholly owned subsidiary of The
Pioneer Group, Inc. (PGI). PFD earned $200,418 in underwriting
commissions on the sale of fund shares during the six months ended May
31, 1996. Distributions to shareholders are recorded as of the
ex-dividend date. Distributions paid by the Fund, if any, with respect to
each class of shares are calculated in the same manner, at the same time,
on the same day and in the same amount, except that Class A, Class B and
Class C shares bear different transfer agent and distribution fees.
F. Class Allocations--Distribution 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 expenses (see Note 3). Income, common expenses and realized
and unrealized gains (losses) are calculated at the Fund level and
allocated daily to each class of shares based on the respective
percentage of adjusted net assets at the beginning of the day.
G. Repurchase Agreements--The Fund may enter into repurchase agreements.
At the time the Fund enters into a repurchase agreement, the value of the
underlying security (collateral), including accrued interest, will be
equal to or exceed the value of the repurchase agreement, and in the case
of repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement.
The underlying securities for all repurchase agreements are held in
safekeeping in the customer-only account of the Fund's custodian, or at
the Federal Reserve Bank. If the seller defaults and the value of the
collateral declines, or if bankruptcy proceedings commence with respect
to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
17
<PAGE>
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 1.00% of the
Fund's average daily net assets up to $300 million; 0.85% of the next $200
million; and 0.75% of excess over $500 million.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in due to affiliates is $33,928 and $23,235 in
management fees and accounting fees, respectively, payable to PMC at May 31,
1996.
3. PSC, a wholly owned subsidiary of PGI, provides substantially all
transfer agent and shareholder services to the Fund at negotiated rates.
Included in due to affiliates is $58,496 in transfer agent fees payable to
PSC at May 31, 1996.
4. The Fund adopted a Plan of Distribution for each class of shares (Class A
Plan, Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. Pursuant to the Class A Plan, the Fund pays
PFD a service fee of up to 0.25% of the Fund's average daily net assets in
reimbursement of its actual expenditures to finance activities primarily
intended to result in the sale of Class A shares. Pursuant to the Class B
Plan and Class C Plan, the Fund pays PFD 1.00% of the average daily net
assets attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for personal
services and/or account maintenance services or distribution services with
regard to Class B and Class C shares. Included in due to affiliates is
$251,067 in distribution fees payable to PFD at May 31, 1996.
In addition, redemptions of each class of shares may be subject to a
contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on
certain net asset value purchases of Class A shares that are redeemed within
one year of purchase. Class B shares that are redeemed within six years of
purchase are subject to a CDSC at declining rates beginning at 4.0% based on
the lower of cost or market value of shares being redeemed. Redemptions of
Class C shares within one year of purchase are subject to a CDSC of 1.00%.
Proceeds from the CDSC are paid to PFD. For the six months ended May 31,
1996, CDSCs in the amount of $40,572 were paid to PFD.
5. The Fund has entered into certain expense offset arrangements resulting
in the reduction of the Fund's total expenses. For the six months ended May
31, 1996, the Fund's expenses were reduced by $22,666 under such
arrangements.
6. At May 31, 1996, the Fund had entered into various contracts that
obligate the Fund to deliver currencies at specified future dates. At the
maturity of a contract, the Fund must make delivery of the foreign currency.
Alternatively, prior to the settlement date of a portfolio hedge, the Fund
may close out such contracts by entering into an offsetting hedge contract.
Open portfolio hedges at May 31, 1996 were as follows:
In Net
Contracts Exchange Settlement Unrealized
Currency to Deliver For Date Value Gain (Loss)
------- ----------- ---------- ------- ---------- -------------
DEM 22,659,000 $ 15,000,000 5/30/97 $ 15,249,395 $ (249,395)
DEM 9,560,800 6,800,000 12/4/96 6,351,847 448,153
DEM 7,208,000 5,000,000 11/21/96 4,784,476 215,524
DEM 21,763,500 15,000,000 11/18/96 14,443,072 556,928
DEM 7,738,940 5,347,526 8/21/96 5,105,178 242,348
FRF 128,562,500 25,000,000 5/30/97 25,401,605 (401,605)
JPY 1,150,976,500 11,544,398 3/7/97 11,106,584 437,814
JPY 1,045,300,000 10,000,000 1/17/97 10,016,058 (16,058)
JPY 1,019,350,000 10,000,000 11/7/96 9,668,986 331,014
JPY 1,636,390,000 19,400,000 7/22/96 15,287,972 4,112,028
-------- -------- -----------
$123,091,924 $117,415,173 $5,676,751
======== ======== ===========
Included in accumulated net realized gain on investments and foreign currency
transactions is $953,306, which represents the realized gain on closed but
unsettled portfolio hedges totaling approximately $65,500,000.
At May 31, 1996, the gross forward foreign currency settlement contracts
receivable and payable were $1,489,801 and $1,490,225, respectively,
resulting in a net payable of $424.
18
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER
INTERNATIONAL GROWTH FUND:
We have audited the accompanying balance sheet of Pioneer International
Growth Fund, including the schedule of investments, as of May 31, 1996, and
the related statement of operations, statements of changes in net assets and
financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of May 31, 1996, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer International Growth Fund as of May 31, 1996, the results of its
operations, the changes in its net assets and financial highlights for the
periods presented, in conformity with generally accepted accounting
principles.
Boston, Massachusetts ARTHUR ANDERSEN LLP
July 1, 1996
19
<PAGE>
[Back cover]
PIONEER INTERNATIONAL GROWTH FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
NORMAN KURLAND, Senior Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B.W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
INVESTMENT ADVISER
PIONEERING MANAGEMENT
CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS
DISTRIBUTOR, INC.
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
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Please call Pioneer for information on:
Existing accounts, new accounts,
prospectuses, applications,
and service forms ......................................... 1-800-225-6292
Fund yields and prices .................................... 1-800-225-4321
Toll-free fax ............................................. 1-800-225-4240
Retirement plans .......................................... 1-800-622-0176
Telecommunications Device for the Deaf (TDD) .............. 1-800-225-1997
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When distributed to persons who are not shareowners of the Fund, this report
must be accompanied by a current prospectus, which discusses the objectives,
policies, sales charges, and other information about the Fund.
0796-3535
(c)Pioneer Funds Distributor, Inc.
