<PAGE>
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[LOGO]
PIONEER
REAL ESTATE
SHARES
SEMIANNUAL REPORT 6/30/99
<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 12
Notes to Financial Statements 20
Report of Independent Public Accountants 25
Trustees, Officers and Service Providers 26
The Pioneer Family of Mutual Funds 27
Programs and Services for Pioneer Shareowners 28
</TABLE>
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
LETTER FROM THE CHAIRMAN 6/30/99
DEAR SHAREOWNER,
- ---------------------------------------------------------------
I am pleased to introduce this semiannual report for Pioneer Real Estate Shares,
covering the six months ended June 30, 1999. On behalf of your investment team,
I thank you for your interest and this opportunity to comment on today's
investing environment. I would also like to take a moment to welcome Matthew
Ostrower, the Fund's new portfolio manager and leader of the Fund's management
team.
Matt is a three-year veteran of your Fund's management team. He assumed the
day-to-day responsibility for Pioneer Real Estate Shares on March 31 of this
year when Robert Benson stepped down. I would like to thank Bob for his years of
service at Pioneer and wish Matt the best as he leads Pioneer Real Estate
Shares' management team into the new millennium.
With six months left in the twentieth century, it was refreshing to see the
stock market broadening once again. Smaller-company stocks handily outperformed
large-company stocks in the last quarter of the period. Real Estate Investment
Trusts (REITs) returned to investors' radar screens and value stocks
outperformed growth in the Standard & Poor's 500 over the last six months.
The change is, I believe, an indication of the inherent good sense of the open
marketplace. The large "blue chip" stocks that have dominated the marketplace
for several years have reached such high price levels that investors are finally
looking elsewhere. What they're seeing is a variety of stocks with strong
fundamentals, low prices and some real potential. Of course some of the stocks
they are discovering are the REITs that your Fund invests in. As we move forward
with new management, I am excited by the potential for Pioneer Real Estate
Shares.
I encourage you to read on to learn more about Pioneer Real Estate Shares. If
you have questions, please contact your investment professional, or Pioneer at
1-800-225-6292. You can also reach us for information or service at our website,
www.pioneerfunds.com.
Respectfully,
[SIG]
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
PORTFOLIO SUMMARY 6/30/99
PORTFOLIO DIVERSIFICATION
- ---------------------------------------------------------------
(As a percentage of total investment portfolio)
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C>
Real Estate Investment Trust Common Stocks 90%
Real-Estate Related Common Stocks 8%
Short-Term Cash Equivalents 2%
</TABLE>
SECTOR ALLOCATION
- ---------------------------------------------------------------
(As a percentage of equity holdings)
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C>
Office/Industrial 31%
Apartment 28%
Retail 12%
Diversified 12%
Hotel 10%
Self-Storage 4%
Triple-Net 3%
</TABLE>
10 LARGEST HOLDINGS
- ---------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Equity Residential Property Trust 4.86% 6. AvalonBay Communities, Inc. 4.19%
2. Equity Office Properties Trust 4.77 7. Public Storage, Inc. 4.14
3. Trizec Hahn Corp. 4.53 8. Mack-Cali Realty Corp. 4.04
4. The Macerich Co. 4.20 9. Cousins Properties, Inc. 3.99
5. Developers Diversified Realty Corp. 4.19 10. Charles E. Smith Residential 3.91
Realty, Inc.
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
PERFORMANCE UPDATE 6/30/99 CLASS A SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C> <C>
$13.80 $13.46
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.300 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Real Estate Shares at public offering price, compared
to the growth of the Standard & Poor's (S&P) 500 Index and the Wilshire Real
Estate Securities Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
<S> <C> <C>
Life-of-Fund 7.22% 6.12%
(10/25/93)
5 Years 8.57 7.29
1 Year -10.08 -15.25
</TABLE>
* Reflects deduction of the maximum 5.75% sales charge at the beginning of
the period and assumes reinvest-
ment of distributions at net asset value.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C> <C> <C>
GROWTH OF $10,000+
Pioneer Real Estate Shares* S&P 500 Index Wilshire Real Estate Securities Index
10/31/93 9425 10000 10000
9184 10025 9553
6/30/94 9409 9686 9884
9206 10156 9709
6/30/95 9558 12206 10170
10321 13967 11034
6/30/96 10858 15374 12046
14083 17168 15103
6/30/97 14839 20704 16088
16863 22892 18093
6/30/98 15773 26947 17133
13528 29435 14941
6/30/99 14191 33082 15954
</TABLE>
+ Index comparison begins 10/31/93. The S&P 500 Index is an unmanaged measure
of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the over-the-counter market. The Wilshire Real
Estate Securities Index is a market-capitalization weighted measure of the
performance of 120 real estate securities. The Index is 91.7% REITs (equity
and hybrid) and 8.3% real estate operating companies, and its returns are
calculated monthly. Index returns assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees or expenses. You cannot invest
directly in the Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
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 REAL ESTATE SHARES
- -------------------------------------------
PERFORMANCE UPDATE 6/30/99 CLASS B SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C> <C>
$13.72 $13.38
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.240 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Real Estate Shares, compared to the growth of the Standard & Poor's
(S&P) 500 Index and the Wilshire Real Estate Securities Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund 8.79% 8.07%
(1/31/96)
1 Year -10.82 -14.19
</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.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C> <C> <C>
GROWTH OF $10,000
Pioneer Real Estate Shares* S&P 500 Index Wilshire Real Estate Securities Index
1/31/96 10000 10000 10000
10108 10190 10281
6/30/96 10427 10646 10768
11555 10974 11404
13481 11888 13501
13628 12208 13749
6/30/97 14156 14336 14381
16260 15408 16198
16023 15851 16174
15872 18061 16052
6/30/98 14945 18659 15315
12844 16806 13484
12761 20382 13356
11903 21635 12893
6/30/99 13029 22913 14261
</TABLE>
The S&P 500 Index is an unmanaged measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange and the
over-the-counter market. The Wilshire Real Estate Securities Index is a
market-capitalization weighted measure of the performance of 120 real
estate securities. The Index is 91.7% REITs (equity and hybrid) and 8.3%
real estate operating companies, and its returns are calculated monthly.
Index returns assume reinvestment of dividends and, unlike Fund returns, do
not reflect any fees or expenses. You cannot invest directly in the
Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
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 REAL ESTATE SHARES
- -------------------------------------------
PERFORMANCE UPDATE 6/30/99 CLASS C SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C> <C>
$13.72 $13.37
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.220 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Real Estate Shares, compared to the growth of the Standard & Poor's
(S&P) 500 Index and the Wilshire Real Estate Securities Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund 8.75% 8.75%
(1/31/96)
1 Year -10.91 -10.91
</TABLE>
* Assumes reinvestment of distributions.
The 1% contingent deferred sales charge (CDSC) applies to redemp-
tions made within one year of purchase.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C> <C> <C>
GROWTH OF 10,000
Pioneer Real Estate Shares* S&P 500 Index Wilshire Real Estate Securities Index
1/31/96 10000 10000 10000
10108 10190 10281
6/30/96 10418 10646 10768
11545 10974 11404
13476 11888 13501
13613 12208 13749
6/30/97 14150 14336 14381
16252 15408 16198
16019 15851 16174
15867 18061 16052
6/30/98 14941 18659 15315
12840 16806 13484
12754 20382 13356
11897 21635 12893
6/30/99 13312 22913 14261
</TABLE>
The S&P 500 Index is an unmanaged measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange and the
over-the-counter market. The Wilshire Real Estate Securities Index is a
market-capitalization weighted measure of the performance of 120 real
estate securities. The Index is 91.7% REITs (equity and hybrid) and 8.3%
real estate operating companies, and its returns are calculated monthly.
Index returns assume reinvestment of dividends and, unlike Fund returns, do
not reflect any fees or expenses. You cannot invest directly in the
Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
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 REAL ESTATE SHARES
- -------------------------------------------
PERFORMANCE UPDATE 6/30/99 CLASS Y SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 12/31/98
<S> <C> <C> <C>
$13.79 $13.46
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.340 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Real Estate Shares, compared to the growth of the Standard & Poor's
(S&P) 500 Index and the Wilshire Real Estate Securities Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund -12.04% -12.04%
(4/9/98)
1 Year -9.56 -9.56
</TABLE>
* Assumes reinvestment of distributions.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C> <C> <C>
GROWTH OF $10,000+
Pioneer Real Estate Shares* S&P 500 Index Wilshire Real Estate Securities Index
4/30/98 10000 10000 10000
9929 9828 9904
6/30/98 9720 10227 9852
9121 10119 9166
8011 8656 8214
9/30/98 8383 9211 8673
8227 9959 8555
8299 10563 8715
12/31/98 8361 11171 8591
8106 11638 8404
8063 11276 8338
3/31/99 7828 11858 8293
8741 12317 9177
8967 12026 9332
6/30/99 8791 12562 9173
</TABLE>
+ Index comparison begins 4/30/98. The S&P 500 Index is an unmanaged measure
of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the over-the-counter market. The Wilshire Real
Estate Securities Index is a market-capitalization weighted measure of the
performance of 120 real estate securities. The Index is 91.7% REITs (equity
and hybrid) and 8.3% real estate operating companies, and its returns are
calculated monthly. Index returns assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees or expenses. You cannot invest
directly in the Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
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 REAL ESTATE SHARES
- -------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99
The outlook for real estate investments brightened this spring, as fears of the
broader stock market's lofty price valuations sent value-conscious investors in
search of out-of-favor stocks. Real estate investment trusts (REITs) rallied as
a result of this renewed interest. In the interview that follows, portfolio
manager Matthew Ostrower, leader of the Fund's investment team, discusses the
real estate market's improving prospects and their impact on Pioneer Real Estate
Shares' performance during the last six months.
Q: WHAT FACTORS CONTRIBUTED TO THE TURNAROUND IN REIT STOCKS DURING THE SIX
MONTHS ENDED JUNE 30?
A: REITs and real estate-related investments recovered nicely during the period
- sparked by a rising tide of optimism about the sector and, at last,
investors' penchant for undervalued stocks. The last three months of the
period were particularly rewarding, with the Fund achieving double-digit
gains. This more sanguine environment contrasts sharply with the first half
of the period, which was overshadowed by fears of recession and higher
interest rates. All tolled, the Fund generated total returns at net asset
value of 4.90% for Class A shares, 4.45% for Class B shares, 4.37% for Class
C shares and 5.15% for Class Y shares for the six months ended June 30. The
Wilshire Real Estate Securities Index rose 6.78%. The 133 real estate funds
tracked by Lipper, Inc. delivered an average return of 6.64% for the same
period. (Lipper is an independent firm that measures mutual fund
performance.)
Q: HAS THE FUND'S STRATEGY CHANGED SINCE YOU ASSUMED MANAGEMENT
RESPONSIBILITIES IN APRIL?
A: The Fund's heavy concentration in REITs has not changed. As a matter of fact,
the portfolio's allocation of REIT stocks versus real estate-related common
stocks increased to 90% and 8%, respectively. We remain committed to buying
stocks that are selling at prices below their true worth. However, we are not
going to avoid dominant, high-quality companies with good management track
records and earnings potential even though they may not be selected using a
pure value approach. You could say that we're adding marquee companies that
aim to be the Coca-Cola or Microsoft of the real estate market.
7
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99 (CONTINUED)
Q: HOW HAVE YOU IMPLEMENTED THIS SHIFT IN INVESTING PHILOSOPHY?
A: Three new holdings exemplify this broader investment outlook. RECKSON
ASSOCIATES REALTY is an office and industrial REIT geographically focused in
and around New York City. VORNADO REALTY owns a variety of property types
nationally, but is particularly well-positioned in Manhattan, including the
busy Madison Square Garden area. Another crown jewel in its real estate
portfolio is Merchandise Mart in Chicago - one of the largest commercial
properties in the world. AVALONBAY COMMUNITIES is regarded as one of the best
developers of top-quality apartments on both the East and West Coasts.
Q: WILL THIS SHIFT IN PHILOSOPHY AFFECT THE FUND'S YIELD?
A: We do not foresee any significant impact on the Fund's yield. REITs pay out
95% of their taxable earnings in dividends in return for their corporate
tax-free status - helping them to maintain relatively high yields for stocks
as an asset class. On June 30, 1999, the Fund's annualized distribution yield
of 4.74% compared favorably with the 3.95% average for its Lipper category
and the 1.22% yield for the Standard & Poor's 500 Index. The Fund's 30-day
current yield as of June 30, 1999 was 4.56%.
Q: WHICH REAL ESTATE SECTORS CURRENTLY OFFER THE GREATEST PROMISE?
A: I'm drawn to high-quality, well-capitalized companies in all sectors of the
real estate market with strong prospects for internal growth. I believe the
outlook for the apartment, office and diversified sectors is particularly
promising. Since apartment REITs have relatively short-term leases -
typically one year - rental increases can be adjusted quickly to account for
inflation. We raised the weighting early in the period, when a temporary
increase in supply pressured prices. The imbalance passed, and the sector
outperformed the real estate market as a whole during the rest of the period
- including fund holding CHARLES E. SMITH RESIDENTIAL REALTY, which owns
high-rise apartment buildings in Boston, Chicago and Washington, D.C.
Office REITs are another sector that contributed to the Fund's performance.
Our holdings tend to be geographically focused in central business districts
(CBDs), with high barriers to entry for new competitors.
8
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
MACK-CALI REALTY manages high-quality office properties throughout the
Northeast, where rising rental rates are supported by ever-increasingdemand.
WE also have high expectations for TRIZEC HAHN. a non-REIT with a large
portfolio of office towers across the nation.
The diversified sector includes REITs that invest in multiple property types
and are not limited to a single geographic region. COUSINS PROPERTIES, with
its strong management team focuses on office and retail while DEVELOPERS
DIVERSIFIED REALTY is best known for its retail properties across the United
States. These two companies build power centers, which are comprised of a
few major tenants that possess the ability to attract destination shoppers
rather than browsers. Their developments offer popular retailers, such as
Costco, Wal-mart, Home Depot or Best Buys, the opportunity to negotiate one
lease contract for multiple locations. We believe these companies are poised
to beat market expectations.
Q: ANY SECTORS CAUSING CONCERN?
A: We have some trepidation about the hotel sector. After four years of strong
increases in room rates, hotels are meeting some resistance from corporate
America, which is expressing concern over large year-over-year rent
increases. There is also concern about overbuilding in some locations. We
trimmed positions in FELCOR SUITE HOTELS and PATRIOT AMERICAN HOSPITALITY
(later acquired by WYNDHAM INTERNATIONAL) during the spring rally and
continue to monitor the sector closely.
Q: WHAT IS YOUR OUTLOOK?
A: I'm optimistic about REITs in the months ahead. In 1998, investors overly
discounted the impact of overbuilding, tighter credit and a potential
economic slowdown. REIT share prices suffered unfairly, making it difficult
for companies to raise capital for acquisition or development. Our research
efforts will likely continue to focus on the more dominant REITs, which can
generate internal growth from effective management of the properties they
own. These larger companies have powerful advantages, including immediate
access to capital and the ability to boost occupancy or rents.
9
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS - 98.2%
REAL ESTATE INVESTMENT TRUSTS - 90.3%
100,800 Apartment Investment & Management Co. $ 4,309,200
127,800 AvalonBay Communities, Inc. 4,728,600
98,000 Brandywine Realty Trust 1,941,625
116,900 Camden Propery Trust 3,243,975
130,000 Charles E. Smith Residential Realty, Inc. 4,411,875
133,200 Cousins Properties, Inc. 4,503,825
106,700 Crescent Real Estate Equities, Inc. 2,534,125
284,600 Developers Diversified Realty Corp. 4,731,475
36,000 Duke Realty Investments, Inc. 812,250
35,000 Entertainment Properties Trust 616,875
210,182 Equity Office Properties Trust 5,385,914
121,900 Equity Residential Property Trust 5,493,120
106,300 Essex Property Trust, Inc. 3,760,362
143,800 FelCor Suite Hotels, Inc. 2,983,850
98,600 Franchise Finance Corporation of America 2,169,200
76,500 Highwoods Properties, Inc. 2,098,969
144,700 Home Properties of New York, Inc. 3,997,337
285,450 Host Marriott Corp. 3,389,719
180,700 The Macerich Co. 4,743,375
147,400 Mack-Cali Realty Corp. 4,560,187
163,100 Mission West Properties, Inc. 1,345,575
59,300 Pacific Gulf Properties, Inc. 1,341,662
60,500 Parkway Properties, Inc. 2,004,062
159,100 Prentiss Properties Trust 3,738,850
114,000 ProLogis Trust 2,308,500
167,000 Public Storage, Inc. 4,676,000
149,000 Reckson Associates Realty Corp. 3,501,500
170,000 Simon Property Group, Inc. 4,313,750
81,000 Spieker Properties, Inc. 3,148,875
120,000 Starwood Hotels & Resorts Trust 3,667,500
61,000 Vornado Realty Trust 2,154,063
60,000 Walden Residential Properties, Inc. 1,290,000
------------
TOTAL REAL ESTATE INVESTMENT TRUSTS $103,906,195
------------
REAL ESTATE SERVICES - 7.0%
187,000 Catellus Development Corp.* $ 2,898,500
251,100 Trizec Hahn Corp. 5,116,162
------------
TOTAL REAL ESTATE SERVICES $ 8,014,662
------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
SERVICES - 0.9%
5 Interstate Hotels Corp.* $ 21
223,675 Wyndham International Corp.* 1,006,538
------------
TOTAL SERVICES $ 1,006,559
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $107,726,054) $112,927,416
------------
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
TEMPORARY CASH INVESTMENT 1.8%
COMMERCIAL PAPER - 1.8%
$2,059,000 American Express Credit Corp., 5.5%, 7/1/99 $ 2,059,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $2,059,000) $ 2,059,000
------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH INVESTMENT
-100%
(Cost $109,785,054) (a) $114,986,416
------------
</TABLE>
* Non-income producing security.
(a)At June 30, 1999, the net unrealized gain on investments based on cost for
federal income tax purposes of $110,009,275 was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $ 12,030,244
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (7,053,103)
------------
Net unrealized gain $ 4,977,141
------------
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended June 30, 1999 aggregated $26,647,648 and $51,312,844,
respectively.
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
BALANCE SHEET 6/30/99
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $2,059,000) (cost $109,785,054) $114,986,416
Cash 963
Receivables -
Investment securities sold 942,327
Fund shares sold 175,867
Dividends and interest 733,469
------------
Total assets $116,839,042
------------
LIABILITIES:
Payables -
Investment securities purchased $ 1,345,575
Fund shares repurchased 179,153
Dividends 2,681
Due to affiliates 196,637
Accrued expenses 89,356
------------
Total liabilities $ 1,813,402
------------
NET ASSETS:
Paid-in capital $121,007,001
Accumulated undistributed net investment income 333,604
Accumulated net realized loss on investments (11,516,327)
Net unrealized gain on investments 5,201,362
------------
Total net assets $115,025,640
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $57,286,329 / 4,151,877 shares) $ 13.80
------------
Class B (based on $46,459,781 / 3,386,075 shares) $ 13.72
------------
Class C (based on $10,238,576 / 746,212 shares) $ 13.72
------------
Class Y (based on $1,040,954 / 75,473 shares) $ 13.79
------------
MAXIMUM OFFERING PRICE:
Class A $ 14.64
------------
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED 6/30/99
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $6,591) $ 3,547,996
Interest 30,195
-----------
Total investment income $ 3,578,191
------------
EXPENSES:
Management fees $ 597,405
Transfer agent fees
Class A 97,965
Class B 89,247
Class C 31,317
Class Y 113
Distribution fees
Class A 66,748
Class B 240,784
Class C 53,507
Administrative fees 38,553
Custodian fees 27,551
Registration fees 43,741
Professional fees 25,281
Printing 5,973
Fees and expenses of nonaffiliated trustees 10,200
Miscellaneous 7,462
-----------
Total expenses $ 1,335,847
Less management fees waived by Pioneer Investment
Management, Inc. (54,623)
Less fees paid indirectly (5,608)
------------
Net expenses $ 1,275,616
------------
Net investment income $ 2,302,575
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $(11,516,327)
Change in net unrealized loss on investments 13,721,991
------------
Net gain on investments $ 2,205,664
------------
Net increase in net assets resulting from operations $ 4,508,239
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED 6/30/99 AND THE YEAR ENDED 12/31/98
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FROM OPERATIONS: 6/30/99 12/31/98
<S> <C> <C>
Net investment income $ 2,302,575 $ 5,645,694
Net realized gain (loss) on investments (11,516,327) 2,677,399
Change in net unrealized gain or loss on investments 13,721,991 (50,906,919)
----------------- --------------
Net increase (decrease) in net assets resulting from
operations $ 4,508,239 $ (42,583,826)
----------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.30 and $0.51 per share, respectively) $ (1,287,387) $ (2,854,293)
Class B ($0.24 and $0.42 per share, respectively) (834,708) (1,878,714)
Class C ($0.22 and $0.42 per share, respectively) (168,052) (480,177)
Class Y ($0.34 and $0.44 per share, respectively) (28,723) (46,919)
Net realized gain:
Class A ($0.00 and $0.27 per share, respectively) - (1,358,104)
Class B ($0.00 and $0.27 per share, respectively) - (1,129,556)
Class C ($0.00 and $0.27 per share, respectively) - (261,168)
Class Y ($0.00 and $0.27 per share, respectively) - (26,854)
Tax return of capital:
Class A ($0.00 and $0.08 per share, respectively) - (458,088)
Class B ($0.00 and $0.05 per share, respectively) - (217,538)
Class C ($0.00 and $0.05 per share, respectively) - (55,170)
Class Y ($0.00 and $0.06 per share, respectively) - (6,641)
----------------- --------------
Total distributions to shareholders $ (2,318,870) $ (8,773,222)
----------------- --------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 12,740,608 $ 42,387,508
Reinvestment of distributions 1,774,074 6,654,714
Cost of shares repurchased (38,800,969) (83,257,141)
----------------- --------------
Net decrease in net assets resulting from fund share
transactions $(24,286,287) $ (34,214,919)
----------------- --------------
Net decrease in net assets $(22,096,918) $ (85,571,967)
NET ASSETS:
Beginning of period 137,122,558 222,694,525
----------------- --------------
End of period (including accumulated undistributed net
investment income of $333,604 and $349,899 respectively) $115,025,640 $ 137,122,558
----------------- --------------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE SIX MONTHS ENDED 6/30/99 AND THE YEAR ENDED 12/31/98
<TABLE>
<CAPTION>
CLASS A '99 SHARES '99 AMOUNT '98 SHARES '98 AMOUNT
<S> <C> <C> <C> <C>
Shares sold 498,123 $ 6,847,296 1,181,291 $ 19,016,383
Reinvestment of distributions 84,409 1,096,871 279,733 4,023,577
Less shares repurchased (1,453,375) (19,468,904) (2,940,201) (45,729,358)
---------- ------------ ---------- ------------
Net decrease (870,843 ) $(11,524,737) (1,479,177) $(22,689,398)
---------- ------------ ---------- ------------
CLASS B
Shares sold 355,729 $ 4,837,882 1,004,622 $ 16,386,086
Reinvestment of distributions 41,539 536,836 144,220 2,032,031
Less shares repurchased (1,151,131) (15,135,939) (1,680,658) (25,450,815)
---------- ------------ ---------- ------------
Net decrease (753,863 ) $ (9,761,221) (531,816 ) $ (7,032,698)
---------- ------------ ---------- ------------
CLASS C
Shares sold 64,531 $ 872,008 308,128 $ 4,957,748
Reinvestment of distributions 8,638 111,644 36,667 518,692
Less shares repurchased (279,146 ) (3,669,671) (761,505 ) (11,790,559)
---------- ------------ ---------- ------------
Net decrease (205,977 ) $ (2,686,019) (416,710 ) $ (6,314,119)
---------- ------------ ---------- ------------
CLASS Y*
Shares sold 13,905 $ 183,422 116,914 $ 2,027,291
Reinvestment of distributions 2,223 28,723 5,786 80,414
Less shares repurchased (41,828 ) (526,455) (21,527 ) (286,409)
---------- ------------ ---------- ------------
Net increase (decrease) (25,700 ) $ (314,310) 101,173 $ 1,821,296
---------- ------------ ---------- ------------
</TABLE>
*Class Y shares were first publicly offered on April 9, 1998.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER REAL ESTATE SHARES
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 13.46 $ 17.81 $ 15.52 $ 12.02 $ 11.38
----------- ----------- ------------ ----------- -----------
Increase (decrease) from investment operations:
Net investment income $ 0.31 $ 0.56 $ 0.41 $ 0.42 $ 0.32
Net realized and unrealized gain (loss) on investments 0.33 (4.05) 2.61 3.82 1.01
----------- ----------- ------------ ----------- -----------
Net increase (decrease) from investment operations $ 0.64 $ (3.49) $ 3.02 $ 4.24 $ 1.33
Distributions to shareholders:
Net investment income (0.30) (0.51) (0.36) (0.40) (0.33)
In excess of net investment income - - - - (0.02)
Net realized gain - (0.27) (0.23) (0.34) -
Tax return of capital - (0.08) (0.14) - (0.34)
----------- ----------- ------------ ----------- -----------
Net increase (decrease) in net asset value $ 0.34 $ (4.35) $ 2.29 $ 3.50 $ 0.64
----------- ----------- ------------ ----------- -----------
Net asset value, end of period $ 13.80 $ 13.46 $ 17.81 $ 15.52 $ 12.02
----------- ----------- ------------ ----------- -----------
Total return* 4.90% (19.77)% 19.74% 36.45% 12.11%
Ratio of net expenses to average net assets 1.73%**(+) 1.69%(+) 1.65%(+) 1.71%(+) 1.77%(+)
Ratio of net investment income to average net assets 4.27%**(+) 3.29%(+) 2.51%(+) 3.52%(+) 2.73%(+)
Portfolio turnover rate 45%** 11% 28% 47% 10%
Net assets, end of period (in thousands) $57,286 $67,619 $115,772 $72,572 $27,491
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid
indirectly:
Net expenses 1.81%** 1.69% 1.65% 2.09% 2.59%
Net investment income 4.19%** 3.29% 2.51% 3.14% 1.91%
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.72%** 1.67% 1.63% 1.69% 1.75%
Net investment income 4.28%** 3.31% 2.53% 3.54% 2.75%
<CAPTION>
SIX MONTHS
ENDED
12/31/94(A)
<S> <C>
CLASS A
Net asset value, beginning of period $ 12.02
-----------
Increase (decrease) from investment operations:
Net investment income $ 0.21
Net realized and unrealized gain (loss) on investments (0.48)
-----------
Net increase (decrease) from investment operations $ (0.27)
Distributions to shareholders:
Net investment income (0.20)
In excess of net investment income -
Net realized gain (0.02)
Tax return of capital (0.15)
-----------
Net increase (decrease) in net asset value $ (0.64)
-----------
Net asset value, end of period $ 11.38
-----------
Total return* (2.16)%
Ratio of net expenses to average net assets 1.75%**
Ratio of net investment income to average net assets 3.72%**
Portfolio turnover rate 17%**
Net assets, end of period (in thousands) $28,068
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid
indirectly:
Net expenses 2.27%**
Net investment income 3.20%**
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses -
Net investment income -
</TABLE>
(a) Subsequent to December 31, 1994, the Fund's year end was changed to
December 31.
* 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.
16
<PAGE>
PIONEER REAL ESTATE SHARES
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED 1/31/96 TO
6/30/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 13.38 $ 17.70 $ 15.45 $ 12.09
----------- ----------- ------------ -----------
Increase (decrease) from investment operations:
Net investment income $ 0.24 $ 0.45 $ 0.28 $ 0.35
Net realized and unrealized gain (loss) on investments 0.34 (4.03) 2.60 3.73
----------- ----------- ------------ -----------
Net increase (decrease) from investment operations $ 0.58 $ (3.58) $ 2.88 $ 4.08
Distributions to shareholders:
Net investment income (0.24) (0.42) (0.29) (0.35)
In excess of net investment income - - - (0.03)
Net realized gain - (0.27) (0.23) (0.34)
Tax return of capital - (0.05) (0.11) -
----------- ----------- ------------ -----------
Net increase (decrease) in net asset value $ 0.34 $ (4.32) $ 2.25 $ 3.36
----------- ----------- ------------ -----------
Net asset value, end of period $ 13.72 $ 13.38 $ 17.70 $ 15.45
----------- ----------- ------------ -----------
Total return* 4.45% (20.36)% 18.85% 34.81%
Ratio of net expenses to average net assets 2.55%**(+) 2.45%(+) 2.39%(+) 2.33%**(+)
Ratio of net investment income to average net assets 3.44%**(+) 2.77%(+) 1.82%(+) 3.73%**(+)
Portfolio turnover rate 45%** 11% 28% 47%
Net assets, end of period (in thousands) $46,460 $55,407 $ 82,695 $26,379
Ratios assuming no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.64%** 2.45% 2.39% 2.45%**
Net investment income 3.35%** 2.77% 1.82% 3.61%**
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.54%** 2.44% 2.36% 2.30%**
Net investment income 3.45%** 2.78% 1.85% 3.76%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
PIONEER REAL ESTATE SHARES
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED 1/31/96 TO
6/30/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C>
CLASS C
Net asset value, beginning of period $ 13.37 $ 17.70 $ 15.46 $ 12.09
----------- ----------- ------------ -----------
Increase (decrease) from investment operations:
Net investment income $ 0.22 $ 0.45 $ 0.29 $ 0.34
Net realized and unrealized gain (loss) on investments 0.35 (4.04) 2.59 3.73
----------- ----------- ------------ -----------
Net increase (decrease) from investment operations $ 0.57 $ (3.59) $ 2.88 $ 4.07
Distributions to shareholders:
Net investment income (0.22) (0.42) (0.30) (0.34)
In excess of net investment income - - - (0.02)
Net realized gain - (0.27) (0.23) (0.34)
Tax return of capital - (0.05) (0.11) -
----------- ----------- ------------ -----------
Net increase (decrease) in net asset value $ 0.35 $ (4.33) $ 2.24 $ 3.37
----------- ----------- ------------ -----------
Net asset value, end of period $ 13.72 $ 13.37 $ 17.70 $ 15.46
----------- ----------- ------------ -----------
Total return* 4.37% (20.38)% 18.86% 34.76%
Ratio of net expenses to average net assets 2.76%**(+) 2.41%(+) 2.35%(+) 2.35%**(+)
Ratio of net investment income to average net assets 3.20%**(+) 2.67%(+) 1.88%(+) 3.66%**(+)
Portfolio turnover rate 45%** 11% 28% 47%
Net assets, end of period (in thousands) $10,239 $12,735 $ 24,227 $ 6,699
Ratios assuming no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.86%** 2.41% 2.35% 2.48%**
Net investment income 3.10%** 2.67% 1.88% 3.53%**
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.75%** 2.40% 2.32% 2.32%**
Net investment income 3.21%** 2.68% 1.91% 3.69%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
SIX MONTHS ENDED 4/9/98 TO
6/30/99 12/31/98
<S> <C> <C>
CLASS Y
Net asset value, beginning of period $13.46 $17.52
------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.34 $ 0.47
Net realized and unrealized gain (loss) on
investments 0.33 (3.76)
------- ----------
Net increase (decrease) from investment
operations $ 0.67 $(3.29)
Distributions to shareholders:
Net investment income (0.34) (0.44)
Net realized gain - (0.27)
Tax return of capital - (0.06)
------- ----------
Net increase (decrease) in net asset value $ 0.33 $(4.06)
------- ----------
Net asset value, end of period $13.79 $13.46
------- ----------
Total return* 5.15% (18.78)%
Ratio of net expenses to average net assets 1.21%**(+) 1.21%**(+)
Ratio of net investment income to average net assets 4.93%**(+) 4.31%**(+)
Portfolio turnover rate 45%** 11%
Net assets, end of period (in thousands) $1,041 $1,362
Ratios assuming no waiver of management fees by PIM and
no reduction for fees paid indirectly
Net expenses 1.30% 1.21%**
Net investment income 4.84% 4.31%**
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.20%** 1.21%**
Net investment income 4.94%** 4.31%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of distributions, and the complete redemption of the
investment at net asset value at the end of the period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Real Estate Shares (the Fund) is a Delaware business trust registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The investment objective of the Fund is to seek
long-term growth of capital. Current income is a secondary objective.
The Fund offers four classes of shares - Class A, Class B, Class C, and Class Y
shares. Each class of shares represents an interest in the same portfolio of
investments of the Fund and has 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 the direction of, the Board of Trustees. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis. Temporary cash investments are valued at amortized cost.
Because the Fund may invest a substantial portion of its assets in Real Estate
Investment Trusts (REITs), the Fund may be subject to certain
20
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
risks associated with direct investments in REITs. REITs may be affected by
changes in teh value of their underlying properties and bydefaults by
borrowers or tenants. REITs depend generally on their ability to generate
cash flow to make distributions to shareowners, and certain REITs have
self-liquidation provisions by which mortgages held may be paid in full
and distributions of capital returns may be made at any time. In addition, the
performance of a REIT may be affected by its failure to qualify for tax-free
pass-through of income under the Internal Revenue Code or its failure to
maintain exemption from registration under the Investment Company Act of 1940.
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. 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.
A portion of the dividend income recorded by the Fund is from distributions by
publicly traded REITs, and such distributions for tax purposes may also
consist of capital gains and return of capital. The actual return of capital
and capital gains portions of such distributions will be determined by formal
notifications from the REITs subsequent to the calendar year-end.
Distributions received from the REITs that are determined to be a return of
capital, are recorded by the Fund as a reduction of the cost basis of the
securities held.
21
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99 (CONTINUED)
C. FUND SHARES
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned
$9,443 in underwriting commissions on the sale of fund shares during the six
months ended June 30, 1999.
D. 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 all classes of shares based on their respective percentage of
adjusted net assets at the beginning of the day.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, and Class C 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. PIM has appointed Boston Financial Securities, Inc. (BFS) as
the Fund's subadviser. As compensation for its subadvisory services, PIM pays
BFS a management fee at the annual rate of 0.25% of the Fund's average daily net
assets up to $27 million and 0.50% of excess over $27 million. Effective April
1, 1999, PIM has agreed not to impose a portion of its management fee to the
extent necessary to reduce the fee from 1.00% to 0.80% of the Fund's average
daily net assets. This agreement is voluntary and temporary and may be revised
or terminated at any time.
22
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
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 June 30, 1999, $92,640 was payable to PIM
related to management fees, administrative and certain other services.
3. TRANSFER AGENT
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Fund at negotiated rates. Included in due to
affiliates is $40,136 in transfer agent fees payable to PSC at June 30, 1999.
4. DISTRIBUTION PLANS
The Fund adopted a Plans 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 $63,861
in distribution fees payable to PFD at June 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 June 30, 1999, CDSCs in
the amount of $181,925 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
23
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99 (CONTINUED)
June 30, 1999, the Fund's expenses were reduced by $5,608 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
June 30, 1999, was approximately $53,564. The average daily shares outstanding
during the period were 9,009,984 resulting in an average borrowing per share of
$0.01. The related weighted average annualized interest rate for the period was
5.29%, and the total interest expense on such borrowings was $1,338.
24
<PAGE>
PIONEER REAL ESTATE SHARES
- -------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREOWNERS AND THE BOARD OF TRUSTEES OF PIONEER REAL ESTATE SHARES:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Real Estate Shares as of June 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
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 June
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 Real Estate Shares as of June 30, 1999, 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
August 6, 1999
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PIONEER REAL ESTATE SHARES
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees
John F. Cogan, Jr.
Mary K. Bush
Blake Eagle
Richard H. Egdahl, M.D.
Margaret B.W. Graham
Stephen G. Kasnet
John W. Kendrick
Marguerite A. Piret
Fred N. Pratt, Jr.
David D. Tripple
Stephen K. West
John Winthrop
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
Officers
John F. Cogan, Jr., Chairman and
President
David D. Tripple, Executive Vice President
Stephen G. Kasnet, Vice President
Eric W. Reckard, Treasurer
Joseph P. Barri, Secretary
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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
UNITED STATES
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
INTERNATIONAL / GLOBAL
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
Income Funds
TAXABLE
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust
Pioneer Strategic Income Fund
TAX-FREE
Pioneer Tax-Free Income Fund
Money Market Fund
Pioneer Cash Reserves Fund
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PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment professional 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 1-800-225-6292.
FactFone-SM-
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.
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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). EFT moves 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.)
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HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone-SM- for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
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<S> <C>
Pioneer Investment Management, Inc.
60 State Street 0799 - 6653
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com [recycle logo] Printed on Recycled Paper
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