<PAGE>
PIONEER
EMERGING
MARKETS
FUND
SEMIANNUAL REPORT
MAY 31, 1996
<PAGE>
PIONEER EMERGING MARKETS FUND
Dear Shareowner,
Pioneer Emerging Markets Fund reached the midpoint of its third fiscal year on
May 31, 1996. The past six months were exciting as developing markets rebounded
in late 1995 and through early 1996 when investors began to appreciate the value
and growth potential present in emerging economies.
HOW YOUR FUND PERFORMED
We are pleased to report that your Fund achieved excellent performance over the
six months ended May 31, 1996. In fact, your Fund handily outperformed the
average emerging markets fund for the semiannual period. According to Lipper
Analytical Services, the 81 funds in this category posted an average total
return of 17.71% over the six months.
Your Fund also outpaced emerging markets as a group. The unmanaged Morgan
Stanley Capital International (MSCI) Emerging Markets Free Index showed a total
return of 14.86% for the six months through May 31. The Index reflects the
progress of 22 developing stock markets.
Your Fund achieved the following results:
CLASS A SHARES -- Net asset value stood at $14.52 per share on May 31, 1996,
versus $11.56 on November 30, 1995. The increase in share value translated into
a six-month total return of 25.60% at net asset value and 18.34% at maximum
public offering price.
CLASS B SHARES -- Net asset value was $14.36 per share on May 31, 1996, versus
$11.47 per share on November 30, 1995. The increase in share value resulted in a
total return of 25.20% for the six months, assuming shares were held the entire
period. If shares were sold on May 31, and the maximum 4% contingent deferred
sales charge deducted, total return would have been 21.20%.
The Fund introduced CLASS C SHARES on January 31, 1996. Net asset value was
$14.35 per share on May 31, versus the introductory $13.22. The increase in
share value created a total return of 8.55% for the abbreviated period, assuming
shares were held throughout. If shares were sold and the 1% contingent deferred
sales charge deducted on May 31, total return would have been 7.55%.
The accompanying table shows the Fund's results over its relatively brief life,
and illustrates how performance can vary widely in emerging markets over the
short term.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(AS OF MAY 31, 1996)
<S> <C> <C>
PUBLIC
CLASS A SHARES NET ASSET VALUE OFFERING PRICE*
- -------------- --------------- ---------------
Life of Fund (6/23/94) 8.90% 5.64%
1 Year 25.79 18.53
CLASS B SHARES IF HELD IF REDEEMED**
- -------------- ------- -------------
Life of Fund (6/23/94) 8.17% 6.24%
1 Year 25.05 21.05
</TABLE>
A PERIOD OF FAST-PACED CHANGE
For investors in emerging markets, the semiannual period was something of a
roller coaster ride. Stock prices were volatile, swinging both ways before
settling higher as global investors, drawn by exceptionally low prices,
reentered smaller markets with a vengeance. It was a time that rewarded
disciplined investors, including your Fund, for their perseverance.
A main driver in emerging markets is the direction of U.S. interest rates. The
differential, or "spread," between interest rates in emerging markets and the
U.S. can make it either more or less expensive for companies in developing
nations to attract investors. Generally, higher U.S. rates hurt stocks prices in
emerging markets, while falling U.S. rates help them make their potential yields
and returns attractive enough to compensate for the risks investors may face.
The fact that U.S. rates both rose and fell during the period contributed to
price swings in emerging stock markets.
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
** Reflects deduction of the maximum 4.0% contingent deferred sales charge at
the end of the period and assumes reinvestment of distributions.
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>
Anxiety over elections also influenced stock prices in a number of nations over
the past six months -- India, Russia and Israel to name a few. Without
exception, these financial markets became more volatile as still-evolving
political systems put themselves to the test. Even with the uncertainty
surrounding U.S. rates and shifting political powers, however, emerging markets
staged a tremendous rally, more than recouping losses incurred in 1995.
PORTFOLIO DIVERSIFICATION
During the past six months, we maintained a broadly diversified portfolio. As of
May 31, the Fund had holdings in 121 companies from 26 nations. The following
chart shows the wide variety of countries represented at the period's end.
GEOGRAPHIC DISTRIBUTION
(Percentage of equity investments as of May 31, 1996)
LINE GRAPH SHOWN using the following figures:
<TABLE>
<S> <C>
Argentina 2.3%
Belize 0.3%
Brazil 15.1%
Chile 0.4%
China 3.1%
Finland 0.9%
Greece 2.0%
Hong Kong 9.1%
India 9.9%
Indonesia 3.6%
Korea 8.0%
Malaysia 0.6%
Mexico 8.6%
Pakistan 2.0%
Peru 1.5%
Philippines 1.7%
Poland 1.9%
Portugal 0.9%
Russia 9.6%
Singapore 0.7%
South Africa 1.1%
Sweden 0.7%
Taiwan 0.1%
Thailand 11.4%
Turkey 3.9%
United States 0.5%
Venezuela 0.1%
</TABLE>
The Fund's diversification helped offset price declines in markets particularly
sensitive to changes in U.S. rates. For example, holdings in Brazil, India,
Korea and Russia tended to react more to other, internal factors. Regardless of
the locale, however, we view a price decline as a chance to buy stocks we like
at prices we think offer good value. Often, special events like elections create
just such a situation. On the other side of the coin, we will sell if valuations
seem high after either strong gains in a specific stock or a run-up in an entire
market.
PORTFOLIO ACTIVITY
During the period, we increased holdings in Latin America outside of Mexico.
These stocks came on strong early in the period, although they later retreated
when U.S. interest rates popped up. Across the board, we focused on
infrastructure and consumer goods companies. We still see excellent values and
growth potential throughout the region. Brazil in particular played an
increasingly important role with holdings such as Telecommunications
Brasileiras, a leading phone provider. Argentine companies in the portfolio
include Telefonica de Argentina.
We also added holdings in Hong Kong and Russia, in part because of the
relatively small effect U.S. rates have on prices there. Investments in Hong
Kong focused on companies positioned to benefit from China's development,
including Ek Chor China Motorcycle and China Tire Holdings. In Russia, we found
some terrific bargains as elections approached. We believed Boris Yeltsin would
prevail and that many investors who were selling before the election would want
to return to Russia's market once the election was resolved. So far, this
strategy has been successful. In fact, by the end of the period we were
beginning to reduce the Fund's position in Russian investments to lock-in gains.
Interestingly, the Fund's Russian investments are in Russian depositary trust
certificates (RDCs), which trade instead of the underlying stocks they
represent.
2
<PAGE>
We moved away from holdings in Malaysia and Mexico, since those markets move
sharply with changes in U.S. rates. We also reduced holdings in Poland and Korea
after seeing strong gains. In Korea, the Fund still owns shares of industry
leaders such as Commercial Bank of Korea and Korea Mobile Telecommunication.
MOVING FORWARD
Going into the second half of 1996, we expect to see emerging markets continue
to perform well, but still with significant volatility. By and large, the
economic growth rates and the potential for corporate gains in emerging markets
still far outstrip that of developed nations such as the Unites States, Japan
and Germany. Rising U.S. interest rates could constrain gains in emerging
markets; however, they could also lead investors away from U.S. stocks and into
other markets.
Politics should also calm down, although they remain a risk factor as always. We
firmly believe that economic and market reforms in emerging nations will
continue, although their pace and focus may vary. We have already seen
developing countries act to preserve the benefits and growth potential that
economic liberalization has unveiled. While you should be prepared to see the
Fund's price move up or down from day to day, we are confident that Pioneer
Emerging Markets Fund is positioned to offer strong long- term growth.
One final note. We are pleased to announce that we will be providing you with
quarterly reports on your Fund, beginning with the fiscal quarter ended August
31, 1996. In addition, we are giving semiannual and annual reports a facelift,
including easy-to-find and use graphic summaries. Your annual report dated
November 30, 1996, will reflect these improvements. We wish to thank all of you
who took the time to respond to our questions about what you want to see in fund
reports.
The following pages contain the Fund's audited Schedule of Investments and
financial statements as of May 31, 1996. If you have any questions about your
investment in Pioneer Emerging Markets Fund, please contact your investment
representative, or call Pioneer directly at 1-800-225-6292. We appreciate your
support.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Emerging Markets Fund
3
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
INVESTMENT IN SECURITIES -- 96.0%
PREFFERED STOCKS -- 9.6%
155,299,950 Acesita S.A. $ 637,814
49,000,000 Banco Bradesco S.A. 569,368
580,000 Banco Itau S.A. 235,010
949,600 Brasmotor S.A. 255,877
1,410,000 Cia Cimento Portland Itau 399,709
85,000 COFAP -- Cia Fabricadora de Pecas* 481,068
27,000 Companhia Vale Do Rio Doce 566,613
30,010 L.G. Securities Co. Ltd.* 331,350
50,600,000 Metal Leve S.A.* 466,313
60,900,000 OSA S.A.* 579,535
999,900,000 Randon Participacoes S.A. 620,994
371,400 Sadia-Concordia S.A. 264,143
24,440 Shinwon Corp* 440,351
52,000,000 Usinas Siderurgicas de Minas Gerais S.A. 56,776
-----------
TOTAL PREFFERED STOCKS (Cost $5,947,904) $ 5,904,921
-----------
COMMON STOCKS -- 76.8%
BASIC INDUSTRIES -- 13.8%
CHEMICALS -- 1.8%
325,800 Corimon S.A.C.A. (Sponsored A.D.R.)* $ 40,725
164,500 Indo Gulf Fertilizers and Chemicals Corp. Ltd. (G.D.R.) 279,650
90,000 Reliance Industries Ltd. 613,782
13,600 Reliance Industries Ltd. (G.D.R.) 207,400
-----------
$ 1,141,557
-----------
CONTAINERS -- 1.1%
1,900,000 M.C. Packaging Ltd. $ 675,300
-----------
FOREST PRODUCTS -- 1.5%
190,000 ITC Bhadrachalam Paperboard Ltd. $ 574,690
380,000 PT Inti Indorayon Utama 342,122
-----------
$ 916,812
-----------
INDUSTRIAL MATERIALS -- 0.1%
1,588,000 EGE Seramik Sanayi Ve Ticare* $ 59,608
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS (continued)
IRON & STEEL -- 4.2%
118,000 Malayawata Steel Bhd. $ 201,354
23,800 Sahaviriya Steel Industries Public Co. Ltd. (Local Shares)* 20,440
945,500 Sahaviriya Steel Industries Public Co. Ltd.* 811,996
38,000 Steel Authority of India Ltd. (G.D.R.) 541,500
76,800 Tata Iron & Steel Company Ltd. 530,335
46,600 Usinas Siderurgicas de Minas Gerais S.A. (Sponsored A.D.R.) 504,152
-----------
$ 2,609,777
-----------
NON-FERROUS METALS -- 1.0%
7,600 Hindalco Industries Ltd. $ 285,230
300,000 National Aluminum Co. Ltd. 340,277
-----------
$ 625,507
-----------
PAPER PRODUCTS -- 2.3%
79,233 Aracruz Cellulose S.A. (Sponsored A.D.R.) $ 713,097
85,000 Asia Pacific Resources International Holding Ltd.* 584,375
140,000 PT Indah Kiat Pulp & Paper Corp. (New)* 133,548
-----------
$ 1,431,020
-----------
TIRE AND RUBBER -- 1.8%
115,000 China Tire Holdings Ltd. $ 1,121,250
-----------
TOTAL BASIC INDUSTRIES $ 8,580,831
-----------
CAPITAL GOODS -- 2.7%
CONSTRUCTION, BUILDING MATERIALS & ENGINEERING -- 2.7%
75,000 Apasco, S.A. de C.V. $ 409,201
28,000 Dahl International AB 144A* 386,941
29,000 Empresas ICA S.A. De C.V. (Sponsored A.D.R.)* 416,875
265,000 NTS Steel Groups Co., Ltd.* 177,880
13,000 Siam City Cement (Local Shares) 171,444
7,000 Siam City Cement 76,285
9,660 TPI Polene Public Co., Ltd. 49,585
-----------
TOTAL CAPITAL GOODS $ 1,688,211
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS (continued)
CONSUMER DURABLES -- 3.9%
MOTOR VEHICLES -- 3.9%
16,000 Bajaj Auto Ltd. $ 436,011
75,600 Ek Chor China Motorcycle Co. Ltd. 1,077,300
100,000 Mirgor Sacifia (A.D.R.)* 280,000
410,000 PT Astra International 615,220
-----------
TOTAL CONSUMER DURABLES $ 2,408,531
-----------
CONSUMER NON-DURABLES -- 8.1%
AGRICULTURE & FOOD -- 0.7%
74,600 Charoen Pokphand Feedmill Public Co. Ltd. $ 453,621
-----------
CONSUMER LUXURIES -- 0.3%
560,000 Golden Harvest Entertainment Ltd. $ 206,274
-----------
RETAIL & FOOD -- 1.0%
645,000 Dairy Farm International Holdings Ltd. $ 548,250
28,000 Want Want Holdings Ltd. 144A* 65,240
-----------
$ 613,490
-----------
RETAIL NON-FOOD -- 1.3%
536,300 Cifra, S.A de C.V. (Series B)* $ 816,407
-----------
SOFT DRINKS -- 3.8%
485,000 Embotelladores del Valle de Anahuac S.A. (B Shares)* $ 424,694
245,000 Jugos de Valle S.A. (B Series)* 429,072
28,000 Panamerican Beverages, Inc. (Class A) 1,176,000
32,900 Pepsi-Cola Puerto Rico Bottling Co. (Class B) 312,550
-----------
$ 2,342,316
-----------
TEXTILES/CLOTHES -- 1.0%
317,300 Asia Fiber Company Ltd. $ 128,418
15,900 Grasim Industries Ltd. 256,115
10,000 Raymond Ltd. (G.D.R.) 195,000
-----------
$ 579,533
-----------
TOTAL CONSUMER NON-DURABLES $ 5,011,641
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS (continued)
FINANCIAL -- 16.6%
COMMERCIAL BANK -- 11.9%
4,562,000 Akbank T.A.S. $ 522,433
900,000 Akbank T.A.S.*+ 69,041
15,200 Banco Osorno y La Union (Sponsored A.D.R.) 212,800
13,000 Banco Totta & Acores (B Shares) 255,033
138,000 Banco Wiese Ltd. (Sponsored A.D.R.) 914,250
25,000 Bank Gdanski S.A. (G.D.R.)* 268,750
307,800 Bank Inicjatyw Gospodarczych S.A. 309,716
8,550 Bank Rozwoju Eksportu S.A. 208,708
2,600 Bank Slaski S.A. 190,400
39,000 CIADEA S.A.* 284,814
140,000 Commercial Bank of Korea 1,453,214
155,575 Grupo Financiero Banamex, Accival S.A. de C.V. (Class L)* 327,791
870,000 Grupo Financiero Bancomer, Accival S.A. de C.V. (B Shares)* 398,491
168,000 Korea First Bank 1,556,019
96,000 Siam City Bank Ltd. 112,769
36,000 State Bank of India Ltd. 288,657
-----------
$ 7,372,886
-----------
INSURANCE -- 0.3%
9,000 Warta S.A. $ 179,443
-----------
INVESTMENTS -- 1.2%
81,000 CMIC Finance and Securities Co., Ltd. $ 260,661
343 Daewoo Securities Company Ltd. 9,638
3,400,000 Global Menkul Degerler A.S. 123,298
54,000 Grupo Financiero Inbursa, S.A. de C.V. (B Shares) 217,513
80,000 Peregrine Investment Holdings Ltd. 124,074
-----------
$ 735,184
-----------
MISCELLANEOUS FINANCE -- 2.3%
13,000 BHI Corp. $ 190,125
182,700 Pakistan Investment Fund Inc. 1,210,388
-----------
$ 1,400,513
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS (continued)
REAL ESTATE -- 0.9%
605,000 PT Duta Anggada Realty $ 408,521
240,300 Somprasong Land Public Co. Ltd.* 180,277
-----------
$ 588,798
-----------
TOTAL FINANCIAL $10,276,824
-----------
SERVICES -- 2.6%
BROADCASTING & MEDIA -- 0.7%
102,000 Television Broadcasting Ltd. $ 403,397
-----------
HEALTH SERVICE AND PERSONAL CARE -- 0.5%
888,000 Moulin International Holdings Ltd. $ 327,091
-----------
HOTEL/RESTAURANT -- 0.9%
1,114,000 Cafe de Coral Holdings Ltd. $ 341,947
40,000 Overseas Union Enterprise Ltd. 218,672
-----------
$ 560,619
-----------
PUBLISHING -- 0.5%
7,250,000 Hurriyet Gazetecilik ve Matbaacilik AS $ 295,203
-----------
TOTAL SERVICES $ 1,586,310
-----------
TECHNOLOGY -- 1.9%
COMPUTER SERVICES -- 0.8%
25,000 Nucleus Software Exports Ltd.* $ 21,401
19,200 Shinawatra Computer Co., Plc 460,933
-----------
$ 482,334
-----------
ELECTRONICS -- 1.1%
62,300 Muramoto Electron Plc $ 186,954
12,200 Nokia Corp. (A Shares) (A.D.R.) 530,700
-----------
$ 717,654
-----------
TOTAL TECHNOLOGY $ 1,199,988
-----------
TRANSPORTATION -- 1.0%
SHIPS & SHIPPING -- 1.0%
14,000 Great Eastern Shipping Co. Ltd. (G.D.R.) $ 113,750
66,700 Transportacion Maritima Mexicana S.A. de C.V. (Series L)
(A.D.R.) 525,263
-----------
TOTAL TRANSPORTATION $ 639,013
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS (continued)
UTILITIES -- 24.3%
ELECTRIC UTILITY -- 5.5%
35,000 BSES Ltd. (G.D.R.) $ 694,400
62,450 Centrais Electricas Brasileiras S.A (Sponsored A.D.R.) 796,394
23,000 CESC Ltd. (G.D.R.) 69,000
71,000 Huaneng Power International, Inc. (Sponsored A.D.R.)* 1,162,625
81,100 Shandong Huaneng Power Co. Ltd. (A.D.R.) 679,213
-----------
$ 3,401,632
-----------
TELECOMMUNICATIONS -- 18.8%
1,768,000 ABC Communications Holdings Ltd. $ 315,335
88,000 Benpres Holdings Corp. (G.D.R.)* 748,000
2,516,946 Champion Technology Holdings Ltd. 292,770
72,000 Hellenic Telecommunications Organization S.A.* 1,199,155
690 Korea Mobile Telecommunication Corp. 967,895
71,000 Mahanagar Telephone Nigam Ltd. 441,154
3,200,000 Netas Telekomunik 641,303
4,500 Philippine Long Distance Telephone Co. (Sponsored A.D.R.) 258,750
12,000 Portugal Telecom S.A. (Sponsored A.D.R.) 291,000
310,000 Shinawatra Satellite Public Co. Ltd. 630,380
8,950 Telecom Argentina Stet-France Telecom S.A. (Sponsored
A.D.R.) 416,175
455,000 TelecomAsia Corp. Public Co. Ltd. (Local Shares)* 997,098
217,000 TelecomAsia Corp. Public Co. Ltd.* 475,539
28,200 Telecommunications Brasileiras S.A. (Sponsored A.D.R.) 1,815,375
14,000 Telefonica de Argentina S.A. (Class B) (Sponsored A.D.R.) 407,750
910,000 Teletas Telekomunikasyon Endustri ve Ticaret AS* 295,267
552,000 Thai Telephone & Communication Public Co. Ltd. (Local
Shares)* 1,351,339
53,000 Thai Telephone & Communication Public Co. Ltd.* 129,748
-----------
$11,674,033
-----------
TOTAL UTILITES $15,075,665
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS (continued)
MISCELLANEOUS -- 1.9%
CONGLOMERATES & HOLDINGS -- 1.9%
76,000 Renong Bhd. $ 126,641
5,500 Loxley Public Company Ltd. 80,787
1,360,000 Koc Holdings AS* 289,859
150,000 Murray & Roberts Holdings 662,651
-----------
TOTAL MISCELLANEOUS $ 1,159,938
-----------
TOTAL COMMON STOCKS (Cost $46,554,638) $47,626,952
-----------
Units
- -----
RUSSIAN DEPOSITARY TRUST CERTIFICATES** -- 9.2%
11 Chernogorneft Sub-Trust (1 unit representing 10,000 shares
of Chernogorneft)* $ 1,012,000
8 Irkutskenergo Sub-Trust (1 unit representing 200,000 shares
of Irkutskenegro)* 588,000
6 Lenonergo Sub-Trust (1 unit representing 100,000 shares of
Lenenergo)* 74,400
47 Megionneftegaz Sub-Trust (1 unit representing 10,000 shares
of Megionneftegaz) 144A* 1,118,600
121 Mosenergo Sub-Trust (1 unit representing 10,000 shares of
Mosenergo)* 895,400
43 Moscow City Telephone Network (MGTS) Sub-Trust (1 unit
representing 50 shares of Moscow City Telephone Network
(MGTS)* 537,500
43 Nizhny Novgorod Sviazinform Sub-Trust (1 unit representing
10,000 shares of Nizhny Novgorod Sviazinform) 144A* 956,750
30 Rostelecom Sub-Trust (1 unit representing 10,000 shares of
Rosetelecom)* 522,000
-----------
TOTAL RUSSIAN DEPOSITARY TRUST CERTIFICATES (Cost
$3,493,770) $ 5,704,650
-----------
WARRANTS -- 0.4%
84,000 PT Indah Kiat Pulp & Paper Corp.* $ 36,553
8,000 Peregrine Investment Holdings Ltd.* 2,629
114,000 Overseas Union Enterprises Ltd.* 218,530
-----------
TOTAL WARRANTS (Cost $243,302) $ 257,712
-----------
TOTAL INVESTMENT IN SECURITIES (Cost $56,239,614) $59,494,235
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------ -----
<S> <C> <C>
TEMPORARY CASH INVESTMENT -- 4.0%
REPURCHASE AGREEMENT -- 4.0%
$ 2,500,000 Chase Manhattan Bank, 5/31/96, 5.30%, repurchase price of
$2,500,000 plus accrued interest on 6/3/96, collateralized
by $2,520,000 U.S. Treasury Note, 6.75%, 4/30/00 $ 2,500,000
-----------
TOTAL TEMPORARY CASH INVESTMENT (Cost $2,500,000) $ 2,500,000
-----------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH INVESTMENT
-- 100.0% (Cost $58,739,614)(a)(b)(c) $61,994,235
===========
</TABLE>
+ Restricted from re-sale until a later date to be determined by the company.
At May 31, 1996, the value of this security amounted to $69,041 or 0.1% of
total net assets.
* Non-income producing security.
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At May 31, 1996, the
value of these securities amounted to $2,527,531 or 4.1% of total net
assets.
** The Russian Depositary Trust Certificates represent fractional undivided
interests in Sub-Trusts of The Russian Depositary Trust, a unit trust
established under the laws of the Cayman Islands. Each Sub-Trust has a
specific number of shares of stock of a designated company organized under
the laws of the Russian Federation. The accompanying portfolio designates
the shares of stock in each Sub-Trust whose values are based upon the
closing prices of the underlying shares in such Sub-Trust.
(a) At May 31, 1996, the net unrealized gain on investments based on cost for
federal income tax purposes of $58,775,668 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 6,682,603
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (3,464,036)
------------
Net unrealized gain $ 3,218,567
============
</TABLE>
(b) At November 30, 1995, the Fund had a capital loss carryforward of
$1,016,450 which will expire in 2003 if not utilized.
(c) Summary of investments by country of issue, as a percentage of total equity
holdings, is as follows:
<TABLE>
<S> <C>
Brazil 15.1%
Thailand 11.4
India 9.9
Russia 9.6
Hong Kong 9.1
Mexico 8.6
South Korea 8.0
Turkey 3.9
Indonesia 3.6
China 3.1
Argentina 2.3
Pakistan 2.0
Greece 2.0
Poland 1.9
Philippines 1.7
Peru 1.5
South Africa 1.1
Others (Individually less than 1%) 5.2
-----
100.0%
=====
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended May 31, 1996 aggregated $59,536,193 and $24,775,521,
respectively.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PIONEER EMERGING MARKETS FUND
BALANCE SHEET
May 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investments of $2,500,000) (cost $58,739,614; see Schedule of
Investments and Note 1) $61,994,235
Foreign currencies, at value (Note 1) 238,719
Cash 565,804
Receivables --
Forward foreign currency settlement contracts -- net (Note 1) 2,218
Investment securities sold 358,864
Trust shares sold 1,046,106
Dividends, interest and foreign taxes withheld (Note 1) 160,222
Other 119
-----------
Total assets $64,366,287
-----------
LIABILITIES:
Payables --
Investment securities purchased $ 2,891,888
Fund shares repurchased 41,913
Due to affiliates (Notes 2, 3 and 4) 91,233
Accrued expenses (Note 1) 282,563
-----------
Total liabilities $ 3,307,597
-----------
NET ASSETS:
Paid-in capital (Note 1) $56,620,952
Accumulated undistributed net investment income (Note 1) 58,268
Accumulated undistributed net realized gain on investments and foreign
currency transactions (Note 1) 1,367,460
Net unrealized gain on investments (Note 1) 3,015,088
Net unrealized loss on other assets and liabilities denominated in
foreign currencies (Note 1) (3,078)
-----------
Total net assets $61,058,690
===========
NET ASSET VALUE PER SHARE:
Class A -- (based on $37,899,249 / 2,609,553 shares of beneficial interest
outstanding -- unlimited number of shares authorized) $ 14.52
===========
Class B -- (based on $20,838,321 / 1,451,039 shares of beneficial interest
outstanding -- unlimited number of shares authorized) $ 14.36
===========
Class C -- (based on 2,321,120 / 161,751 shares of beneficial interest
outstanding -- unlimited number of shares authorized) $ 14.35
===========
MAXIMUM OFFERING PRICE:
Class A $ 15.41
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
PIONEER EMERGING MARKETS FUND
STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME (NOTE 1):
Dividends (net of foreign taxes withheld of $41,136) $ 429,997
Interest 76,516
Other (Note 6) 14,845
----------
Total investment income $ 521,338
----------
EXPENSES:
Management fees (Note 2) $ 227,305
Distribution fees (Note 4)
Class A 25,503
Class B 55,640
Class C 4,762
Transfer agent fees (Note 3)
Class A 38,472
Class B 19,067
Class C 802
Registration fees 30,906
Professional fees 99,549
Accounting (Note 2) 53,016
Custodian fees 79,185
Printing 12,126
Fees and expenses of nonaffiliated trustees 8,248
Miscellaneous 15,399
----------
Total expenses $ 669,980
Less fees paid indirectly (Note 5) (4,641)
Less management fees waived by Pioneering Management Corporation (Note
2) (206,253)
----------
Net expenses $ 459,086
----------
Net investment income $ 62,252
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Investments (Note 1) $2,480,915
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies (Note 1) (63,825) $2,417,090
----------
Net unrealized gain from:
Change in net unrealized gain on investments (net of reserve of capital
gains taxes of $239,533) (Note 1) $4,884,926
Change in net unrealized gain on other assets and liabilities denominated
in foreign currencies (Note 1) 22,310 4,907,236
---------- ----------
Net gain on investments and foreign currency transactions $7,324,326
----------
Net increase in net assets resulting from operations $7,386,578
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
PIONEER EMERGING MARKETS FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended May 31, 1996 and the Year Ended November 30, 1995
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1996 November 30, 1995
------------ -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 62,252 $ 19,075
Net realized gain (loss) on investments and forward foreign currency
transactions 2,417,090 (1,124,331)
Change in net unrealized gain/loss on investments and foreign currency
transactions 4,907,236 372,226
------------ ------------
Net increase (decrease) in net assets resulting from operations $ 7,386,578 $ (733,030)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A ($0.00 and $0.06 per share, respectively) $ -- $ (74,851)
Class B ($0.00 and $0.03 per share, respectively) -- (11,716)
Net realized gain on investments:
Class A ($0.00 and $0.13 per share, respectively) -- (175,464)
Class B ($0.00 and $0.13 per share, respectively) -- (52,148)
------------ ------------
Decrease in net assets resulting from distributions to shareholders $ -- $ (314,179)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 48,330,580 $ 21,995,056
Net asset value of shares issued to shareholders in reinvestment of
distributions -- 273,812
Cost of shares repurchased (15,727,731) (21,538,201)
------------ ------------
Increase in net assets resulting from fund share transactions $ 32,602,849 $ 730,667
------------ ------------
Net increase (decrease) in net assets $ 39,989,427 $ (316,542)
NET ASSETS:
Beginning of period 21,069,263 21,385,805
------------ ------------
End of period (including accumulated net investment income (loss) of
$58,268 and ($3,984), respectively) $ 61,058,690 $ 21,069,263
======= ======= ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
PIONEER EMERGING MARKETS FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended May 31, 1996 and the Year Ended November 30, 1995
(continued)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1996 November 30, 1995
------------ -----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 2,159,599 $ 29,031,587 1,402,890 $ 15,895,702
Shares issued to shareholders in reinvestment of
distributions -- -- 18,565 217,663
Less shares repurchased (883,628) (11,648,288) (1,482,458) (16,889,924)
--------- ------------ ------- ------------
Net increase (decrease) 1,275,970 $ 17,383,299 (61,003) $ (776,559)
========= ============ ======= ============
CLASS B
Shares sold 1,249,613 $ 16,841,752 539,792 $ 6,099,354
Shares issued to shareholders in reinvestment of
distributions -- -- 4,819 56,149
Less shares repurchased (292,084) (3,819,230) (405,299) (4,648,277)
-------- ---------- -------- ----------
Net increase 957,529 $ 13,022,522 139,312 $ 1,507,226
======= ============ ======= ============
CLASS C*
Shares sold 181,647 $ 2,457,241 -- $ --
Shares issued to shareholders in reinvestment of
distributions -- -- -- --
Less shares repurchased (19,896) (260,213) -- --
--------- ------------ ------- ------------
Net increase 161,751 $ 2,197,028 -- $ --
======= ============ ======= ============
</TABLE>
* Class C Shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
Six Months Ended Year Ended June 23, 1994 to
May 31, 1996++ November 30, 1995 November 30, 1994++
-------------- ----------------- -------------------
<S> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 11.56 $ 12.24 $ 12.50
------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.04 $ 0.04 $ 0.08
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions 2.92 (0.53) (0.34)
------- ------- -------
Net increase (decrease) from investment operations $ 2.96 $ (0.49) $ (0.26)
Distributions to shareholders from:
Net investment income -- (0.06) --
Net realized gain -- (0.13) --
------- ------- -------
Net increase (decrease) in net asset value $ 2.96 $ (0.68) $ (0.26)
------- ------- -------
Net asset value, end of period $ 14.52 $ 11.56 $ 12.24
======= ======= =======
Total return* 25.61% 4.07% (2.08%)
Ratio of net expenses to average net assets 2.27%**+ 2.27%+ 2.25%**
Ratio of net investment income to average net assets 0.57%**+ 0.24%+ 1.85%**
Portfolio turnover rate 146.56%** 246.68% 259.22%**
Average commission rate paid per exchange listed
transaction+++ $0.0002 -- --
Net assets, end of period (in thousands) $37,900 $15,411 $17,067
Ratios assuming no waiver of management fees and assumption of expenses by PMC
and no reduction for fees paid indirectly:
Net expenses 3.46%** 3.95% 4.13%**
Net investment loss (0.62%)** (1.44%) (0.03%)**
Ratios assuming waiver of management fees and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.25%** 2.25% --
Net investment income 0.59%** 0.27% --
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data 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.
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented
(continued)
<TABLE>
<CAPTION>
Six Months Ended Year Ended June 23, 1994 to
May 31, 1996++ November 30, 1995 November 30, 1994++
-------------- ----------------- -------------------
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 11.47 $ 12.19 $ 12.50
------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.01) $ (0.04) $ 0.02
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions 2.90 (0.52) (0.33)
------- ------- -------
Net increase (decrease) from investment operations $ 2.89 $ (0.56) $ (0.31)
Distributions to shareholders from:
Net investment income -- (0.03) --
Net realized gain -- (0.13) --
------- ------- -------
Net increase (decrease) in net asset value $ 2.89 $ (0.72) $ (0.31)
------- ------- -------
Net asset value, end of period $ 14.36 $ 11.47 $ 12.19
======= ======= =======
Total return* 25.20% (4.62%) (2.48%)
Ratio of net expenses to average net assets 3.01%**+ 3.00%+ 3.33%**
Ratio of net investment income (loss) to average net assets (0.15%)**+ 0.47%+ 0.77%**
Portfolio turnover rate 146.56% 246.68% 259.22%**
Average commission rate paid per exchange listed
transaction+++ $0.0002 -- --
Net assets, end of period (in thousands) $20,838 $ 5,658 $ 4,319
Ratios assuming no waiver of management fees and assumption of expenses by PMC
and no reduction for fees paid indirectly:
Net expenses 4.04%** 4.57% 5.21%**
Net investment loss (1.18%)** (2.05%) (1.11%)**
Ratios assuming waiver of management fees and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.98%** 2.96% --
Net investment loss (0.12%)** (0.43%) --
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data presented above is based upon average shares
outstanding for the period 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.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented
(continued)
<TABLE>
<CAPTION>
January 31, 1996
to
May 31, 1996++
--------------
<S> <C>
CLASS C***
Net asset value, beginning of period $ 13.22
-------
Increase from investment operations:
Net investment income $ 0.01
Net realized and unrealized gain on investments and foreign
currency related transactions 1.12
-------
Net increase in net asset value $ 1.13
-------
Net asset value, end of period $ 14.35
=======
Total return* 8.55%
Ratio of net expenses to average net assets 2.92%**+
Ratio of net investment income to average net assets 0.04%**+
Portfolio turnover rate 146.56%**
Average commission rate paid per exchange listed
transaction+++ $0.0002
Net assets, end of period (in thousands) $ 2,321
Ratios assuming no waiver of management fees by PMC and
no reduction for fees paid indirectly:
Net expenses 3.74%**
Net investment loss (0.78%)**
Ratios assuming waiver of management fees by PMC and reduction for fees paid
indirectly:
Net expenses 2.85%**
Net investment income 0.11%**
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data presented above is based upon average shares
outstanding for the period 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.
18
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1996
1. Pioneer Emerging Markets Fund (the Fund) is a Delaware 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 primarily in securities of issuers in
countries with emerging economies or securities markets.
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 ex-dividend date. Interest income is recorded on the
accrual basis, net of unrecoverable foreign taxes withheld at the applicable
country rates.
Gains and losses from 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 a 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 de-
19
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1996 (continued)
nominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent, among
other things, the net realized gains and losses on foreign currency contracts,
disposition of foreign currencies and the difference between the amount of
income accrued and the U.S. dollar actually received. Further, the effects of
changes in foreign currency exchange rates on investments are not segregated in
the statement of operations from the effects of changes in market price of those
securities but are included with the net realized and unrealized gain or loss on
investments.
C. Forward Foreign Currency Contracts -- The Fund enters into forward foreign
currency contracts (contracts) for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific investment transactions (settlement hedges) or portfolio
positions (portfolio hedges). All contracts are marked to market daily at the
applicable exchange rates, and any resulting unrealized gains or losses are
recorded in the Fund's financial statements. The Fund records realized gains and
losses at the time a portfolio hedge is offset by entry into a closing
transaction or extinguished by delivery of the currency. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of the contract and from unanticipated movements in the value of
foreign currency relative to the U.S. dollar. As of May 31, 1996, the Fund had
no outstanding portfolio hedges. The Fund's gross forward foreign currency
settlement contracts receivable and payable were $1,721,444 and $1,719,226,
respectively, resulting in a net receivable of $2,218.
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 $239,533 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 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 fund
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 $38,919 in underwriting commissions on the sale of
fund shares during the six months ended May
20
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1996 (continued)
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 are 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 Class A, Class B and Class C 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 and losses
are calculated at the Fund level and allocated daily to each class of share
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.
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 1.25% of the Fund's average
daily net assets.
PMC has agreed not to impose a portion of its management fee and to assume other
operating expenses of the Fund to the extent necessary to limit Class A expenses
to 2.25% of the average daily net assets attributable to Class A shares; the
portion of the Fund-wide expenses attributable to Class B and Class C shares
will be reduced only to the extent that such expenses are reduced for Class A
shares. PMC's agreement is voluntary and temporary and may be revised or
terminated at any time.
In addition, under the management agreement, certain services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. Included in due to affiliates are $37,581 in management fees and
$6,622 in accounting fees payable to PSC 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 $17,944 in transfer 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 under 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 expen-
21
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1996 (continued)
ditures 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 a
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 $29,086 in distribution fees payable to PFD at May 31, 1996.
In addition, Class B shares that are redeemed within six years of purchase are
subject to a contingent deferred sales charge (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 $13,991 were paid to PFD.
5. The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended May 31, 1996,
the Fund's expenses were reduced by $4,641 under such arrangements.
6. During the six months ended May 31, 1996, PMC reimbursed the Fund $14,845 in
connection with costs incurred on certain portfolio transactions.
22
<PAGE>
PIONEER EMERGING MARKETS FUND
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER EMERGING MARKETS
FUND:
We have audited the accompanying balance sheet of Pioneer Emerging Markets 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 Emerging Markets 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
July 1, 1996 ARTHUR ANDERSEN LLP
23
<PAGE>
PIONEER EMERGING MARKETS 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.
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
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
Please call Pioneer for information on:
Existing accounts, new accounts, prospectuses,
applications, and services 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
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.
0796-2592
(C)Pioneer Funds Distributor, Inc.
