[PIONEER LOGO]
Pioneer
Emerging Markets
Fund
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SEMIANNUAL REPORT 5/31/97
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Table of Contents
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Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 28
Trustees, Officers and Service Providers 29
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Pioneer Emerging Markets Fund
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LETTER FROM THE CHAIRMAN 5/31/97
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Dear Shareowner,
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I am pleased to introduce this semiannual report for Pioneer Emerging Markets
Fund, reviewing the six months from November 30, 1996, through May 31, 1997. On
behalf of the Fund's investment management team, I welcome our many new
investors and thank you for your interest in the Fund.
The world's developing nations again proved fruitful hunting ground for your
Fund's value-oriented management team. Their strategy continues to be
effective. For the semiannual period, your Fund again outperformed emerging
markets as a whole. It also bested the average gain posted by emerging markets
funds, as reported by Lipper Analytical Services.
As we move further into 1997, emerging markets are undergoing a number of
interesting transitions. In many areas of the world, the stage is being set for
a more competitive and profitable business environment. What we find especially
exciting is that the Fund gives shareowners the opportunity to participate in
these developments from their earliest phases. I encourage you to read on to
learn more about Pioneer Emerging Markets Fund and our efforts to build a solid
foundation for long-term investment success.
Please contact your investment representative, or us at 1-800-225-6292, if you
have questions about your Fund. Thank you for your support.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
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Pioneer Emerging Markets Fund
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PORTFOLIO SUMMARY 5/31/97
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[DESCRIPTION OF PIE CHART]
International Common Stocks 55.3%
Depositary Receipts for International Stocks 26.5%
International Preferred Stocks 13.0%
Short-Term Cash Equivalents 3.3%
U.S. Common Stocks 1.7%
Other International Securities 0.2%
Geographical Distribution
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(As a percentage of equity holdings)
[DESCRIPTION OF BAR CHART]
Brazil 23.3%
Mexico 17.1%
Israel 14.1%
Hong Kong 10.4%
South Korea 6.5%
Turkey 4.4%
Czech Republic 3.2%
Australia 3.1%
Argentina 2.5%
Peru 2.3%
India 2.1%
China 1.9%
Pakistan 1.8%
Thailand 1.8%
Indonesia 1.2%
Philippines 0.9%
Malaysia 0.8%
Canada 0.7%
Portugal 0.5%
Singapore 0.5%
South Africa 0.4%
Ghana 0.3%
Colombia 0.2%
10 Largest Holdings
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(As a percentage of equity holdings)
1. Teva Pharmaceutical 4.58% 6. Telecomunicacoes 3.04%
Industries Ltd. Brasileiras SA
(Sponsored A.D.R.) (Sponsored A.D.R.)
2. Grupo Iusacell SA (Series L) 3.86 7. Ericsson 3.01
(Sponsored A.D.R.) Telecomunicacoes SA
3. Petroleo Brasileiro SA 3.66 8. Supersol Ltd. 2.62
4. Compania Energetica de 3.38 9. ECI Telecommunications 2.41
Minas Gerais Ltd.
5. Central European Media 3.24 10. SK Telecom Co., Ltd. 2.40
Enterprises Ltd.
Fund holdings will vary for other periods.
2
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Pioneer Emerging Markets Fund
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PERFORMANCE UPDATE 5/31/97 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 5/31/97 11/30/96
$ 15.44 $ 13.94
Distributions per Share Income Short-Term Long-Term
(11/30/96 - 5/31/97) Dividends Capital Gains Capital Gains
- $ 0.773 -
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund at public offering price, compared to the
growth of the Morgan Stanley Capital International (MSCI) Emerging Markets Free
Index.
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Average Annual Total Returns
(As of May 31, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 10.20% 8.01%
(6/23/94)
1 Year 12.76 6.25
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[DESCRIPTION OF MOUNTAIN CHART]
Growth of $10,000+
Pioneer Emerging Markets Fund MSCI Emerging Markets Free Index
6/94 9425 10000
10483 11940
11/94 9231 11242
7896 9002
5/95 8842 9970
9031 9983
11/95 8847 9385
10241 10332
5/96 11137 10780
10509 10365
11/96 10678 10347
12102 10577
5/97 12541 11616
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
+ Index comparison begins June 30, 1994. The MSCI Emerging Markets Free Index is
an unmanaged, capitalization-weighted measure of 1,009 securities trading in
26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
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Pioneer Emerging Markets Fund
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PERFORMANCE UPDATE 5/31/97 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 5/31/97 11/30/96
$ 15.14 $ 13.73
Distributions per Share Income Short-Term Long-Term
(11/30/96 - 5/31/97) Dividends Capital Gains Capital Gains
- $ 0.773 -
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) Emerging Markets Free Index.
[DESCRIPTION OF MOUNTAIN CHART]
Growth of $10,000+
Pioneer Emerging Markets Fund MSCI Emerging Markets Free Index
6/94 10000 10000
11112 11940
11/94 9752 11242
8327 9002
5/95 9312 9970
9505 9983
11/95 9294 9385
10745 10332
5/96 11662 10780
10981 10365
11/96 11135 10347
12601 11577
5/97 12732 11616
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Average Annual Total Returns
(As of May 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 9.43% 8.56%
(6/23/94)
1 Year 11.90 7.90
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* 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.
+ Index comparison begins June 30, 1994. The MSCI Emerging Markets Free Index is
an unmanaged, capitalization-weighted measure of 1,009 securities trading in
26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
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Pioneer Emerging Markets Fund
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PERFORMANCE UPDATE 5/31/97 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 5/31/97 11/30/96
$ 15.13 $ 13.73
Distributions per Share Income Short-Term Long-Term
(11/30/96 - 5/31/97) Dividends Capital Gains Capital Gains
- $ 0.773 -
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) Emerging Markets Free Index.
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Average Annual Total Returns
(As of May 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 15.75% 15.75%
(1/31/96)
1 Year 11.91 11.91
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[DESCRIPTION OF MOUNTAIN CHART]
Growth of $10,000
Pioneer Emerging Markets Fund MSCI Emerging Markets Free Index
1/96 10000 10000
2/96 10008 9841
9894 9918
10560 10314
5/96 10870 10268
11067 10332
10129 9626
8/96 10234 9872
10424 9958
10038 9692
11/96 10386 9855
10445 9900
11561 10575
2/97 11746 11027
11216 10737
11264 10757
5/97 12147 11064
* Reflects deduction of the 1% contingent deferred sales charge (CDSC) at the
end of the period and assumes reinvestment of distributions.
The MSCI Emerging Markets Free Index is an unmanaged, capitalization-weighted
measure of 1,009 securities trading in 26 emerging markets; it reflects only
those securities available to foreign investors. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any sales charges, fees or expenses. You cannot invest directly in the
Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
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Pioneer Emerging Markets Fund
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PORTFOLIO MANAGEMENT DISCUSSION 5/31/97
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Dear Shareowner,
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I am pleased to report that Pioneer Emerging Markets Fund rewarded shareowners
during the six months ended May 31. These results underscore the effectiveness
of scouring the world's developing markets for companies with great
appreciation potential. While strong performance is always welcome, you should
continue to be mindful of the risks involved with global investing.
Much of your Fund's success can be attributed to country selection. The
decision to take significant positions in the markets of Brazil, Israel and
Mexico proved correct. This strategy also explains the Fund's superior
performance relative to the MSCI Emerging Markets Free Index. The Fund
generated a six-month total return of 17.45% for Class A Shares, 17.04% for
Class B Shares and 16.96% for Class C Shares, all at net asset value. The Index
returned 12.28%.
Pinpointing Value, Growth Opportunities in Fast-Growing Markets
Careful examination of each market - and each company's business - is essential
to selecting investment opportunities and managing risk for your Fund. First,
we identify countries likely to provide a good or improving environment for
corporate and economic growth. Political events, such as elections or major
legislative initiatives, are critical factors that may serve as catalysts for
market growth.
The second step in our research is to analyze individual companies to search
for hidden value. Often, we find ourselves to be lonely buyers, willing to
invest while others stay on the sidelines. Because most investors tend to
assume that a company's current situation - good or bad - will remain
unchanged, stock prices get distorted. We try to determine whether a company
deserves a lower price because of weakened fundamentals or if it is caught-up
in a sweep of negative feelings about an entire industry or country. We want to
buy when the perception of risk is highest, when prices have been driven down,
because that's when the real risk is often lowest.
We also are patient, giving both markets and companies time to develop. If a
stock or market looks overheated, we'll sell and move to the next
6
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Pioneer Emerging Markets Fund
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place we think offers better potential. We seek to take advantage of shifts
among markets to capture what we believe are the best growth possibilities
available at any given time.
Current Emphasis on Brazil, Mexico and Israel
With 126 securities in 22 countries, the Fund is diversified to dampen
volatility with some country concentration to enhance performance. By the end
of the period, investments in Brazil, Mexico and Israel comprised over 50% of
equity holdings - largely the result of significant price appreciation.
In Brazil, our optimism is bolstered by stable and fairly positive
macroeconomic factors, as well as the continued transfer of state enterprises
into private hands. Changes within the telecommunications industry are well
underway, and we believe electric utilities and oil and gas enterprises will
follow suit. Telecomunicacoes Brasileiras (telecommunications), Companhia
Energetica de Minas Gerais (electric utility) and Petroleo Brasileiro (oil and
gas) are benefiting from modernization of infrastructure and deregulation. We
think they still have significant potential, even after the sharp rise in stock
prices over recent months.
Prospects for Mexico are brightening as it recovers from the recession
triggered by the peso's collapse in 1994. Mid-term elections will be closely
watched to see if the ruling Institutional Revolutionary Party (PRI), tainted
by corruption charges, retains its majority. Regardless of the election's
outcome, we're optimistic about the future of the country's democratic, free-
market modernization. Cellular phone company Grupo Iusacell soared over 100%
during the six months as subscription growth resumed.
Holdings in Israel increased to 14% of equity assets by May 31. They have
become "cheap" in the face of lingering concerns over the future of the peace
process. However, Prime Minister Netanyahu has implemented policies aimed at
controlling inflation and promoting free enterprise. We are attracted to
sophisticated, multinational companies in pharmaceuticals, telecommunications
equipment and electronics - these holdings all have high-quality management,
modern plants and equipment, a global customer base and the ability to
manufacture products worldwide. Teva Pharmaceutical Industries exemplifies our
strategy here.
7
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Pioneer Emerging Markets Fund
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PORTFOLIO MANAGEMENT DISCUSSION 5/31/97 (continued)
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Selective Buying in Asia, Eastern Europe
We reduced holdings in Korea and Thailand in January, anticipating poor
earnings, bankruptcies and, in the case of Thailand, currency devaluation.
While we expect to limit assets here in the near term, these countries are
still among the more advanced emerging markets in Asia, and the adoption of
free-market economic policies should bode well for them. In Turkey, stocks
offer attractive value, but we're monitoring the political stand-off between
the Islamic-led coalition and the military. We expect democratic and economic
reforms to go forward and would likely increase holdings if we see the right
balance of political stability and better value. We are encouraged by India's
recent strength, but will limit holdings until the political environment calms.
In the Czech Republic, Central European Media Enterprises, an operator of
television stations in Eastern Europe, had a tough period. Formerly one of the
Fund's largest positions, its near-term outlook was tainted by the devaluation
of the Czech koruna. We remain optimistic about its long-term prospects since
management is reinvesting cash flow to build its subscriber base; we bought
more shares when its price fell.
Moving Ahead
World markets are brimming with opportunities. Many countries are moving from
agricultural to industrial economies, while others have opened their markets
after years of isolation. Social and political changes - as well as economic
liberalization - are improving the overall quality of life in emerging markets.
Looking out over the next decade, we expect emerging markets to grow nearly
twice as fast as developed nations. This spells value today for investors with
patience and an understanding of the short-term risks of global investing.
Respectfully,
/s/ Mark H. Madden
Mark H. Madden,
Portfolio Manager
8
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Pioneer Emerging Markets Fund
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SCHEDULE OF INVESTMENTS 5/31/97
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Shares Value
INVESTMENTS IN SECURITIES - 96.7%
PREFERRED STOCKS - 18.6%
93,000,000 Banco Bradesco SA $ 741,915
59,450 Centrais Electricas Brasileiras S/A
(Sponsored A.D.R.) 1,428,286
1,410,000 Cia Cimento Portland Itau 465,610
115,000,000 Companhia Energetica de Minas Gerais 5,284,306
375,000,000 Companhia Forca e Luz Cataguazes-Leopoldina 651,565
84,000,000 Ericsson Telecomunicacoes SA 4,708,080
610,000 Itausa Investimentos Itau S/A NPV 507,146
30,010 L.G. Securities Co., Ltd.* 138,016
50,600,000 Metal Leve SA* 449,042
15,700 Multicanal Participacoes SA (A.D.R.)* 183,494
60,900,000 OSA SA 284,446
23,970,000 Petroleo Brasileiro SA 5,732,200
112,200 Petroleo Brasileiro SA (Sponsored A.D.R.)* 2,674,040
999,900,000 Randon Participacoes SA 784,602
25,940 Shin Won Corp. 139,666
34,600 Telecomunicacoes Brasileiras SA (Sponsored A.D.R.) 4,753,175
4,216,968 Telecomunicacoes do Rio de Janeiro S/A-Telerj* 649,977
16,910,000 Unibanco 584,307
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Total Preferred Stocks
(Cost $22,399,814) $ 30,159,873
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COMMON STOCKS - 77.9%
Basic Industries - 5.9%
Chemicals - 0.2%
50 Grasim Industries Ltd. $ 508
274,500 Indo Gulf Fertilizers and Chemicals Corp., Ltd.
(G.D.R.) 295,088
3,235 Reliance Industries Ltd. 27,467
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$ 323,063
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Forest Products - 0.1%
190,000 ITC Bhadrachalam Paperboards Ltd. $ 228,372
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Iron & Steel - 0.0%
2,959 Tata Iron & Steel Co., Ltd. $ 14,288
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Metals & Mining - 2.9%
32,600 Ashanti Goldfields Co., Ltd. (G.D.R.) $ 423,800
45,400 Freeport-McMoRan Copper & Gold, Inc. 1,259,850
The accompanying notes are an integral part of these financial statements.
9
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Pioneer Emerging Markets Fund
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SCHEDULE OF INVESTMENTS 5/31/97 (continued)
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Shares Value
Metals & Mining - (continued)
34,500 Newmont Mining Corp. $1,349,813
176,500 TVX Gold Inc.* 1,125,187
93,500 Vaal Reefs Exploration & Mining Co., Ltd. (A.D.R.) 561,000
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$4,719,650
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Precious Metals - 1.5%
1,325,000 Lihir Gold Ltd.* $2,413,314
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Tire & Rubber - 1.2%
257,000 China Tire Holdings Ltd. $1,863,250
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Total Basic Industries $9,561,937
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Capital Goods - 3.8%
Construction & Engineering - 3.8%
75,000 Apasco, SA de CV $ 487,728
200,000 Cemex, SA (Class B) 819,838
265,000 Cemex, SA de CV (Class B) (Sponsored A.D.R.) 2,136,563
38,000 Empresas ICA Sociodad Contradadora SA De CV
(Sponsored A.D.R.) 551,000
535,000 Grupo Mexicano de Desarrollo, SA* 1,003,125
212,000 Grupo Tribasa, SA de C.V. (A.D.R.)* 1,060,000
308,000 Zhejiang Expressway Co., Ltd.* 111,299
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Total Capital Goods $6,169,553
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Consumer Durables - 3.5%
Motor Vehicles - 3.5%
732,900 CIADEA SA $2,933,067
346,300 EK Chor China Motorcycle Co., Ltd. 1,818,075
400,000 Mirgor Sacifia (Class C) (Sponsored A.D.R.)* 940,000
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Total Consumer Durables $5,691,142
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Consumer Non-Durables - 9.7%
Beverages - 3.7%
206,749 Coca-Cola Amatil Ltd. $2,394,898
556,383 Embotelladores del Valle de Anahuac SA (Class B)* 401,942
245,000 Jugos de Valle SA (B Series)* 356,465
98,600 Panamerican Beverages, Inc. 2,859,400
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$6,012,705
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Retail Food - 2.5%
1,239,667 Supersol Ltd. (B Shares)* $4,097,325
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The accompanying notes are an integral part of these financial statements.
10
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Pioneer Emerging Markets Fund
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Shares Value
Retail Non-Food - 3.1%
327,912 Cadenalco, SA $ 268,019
113,905 Cifra, SA de CV (Series A) 194,837
536,300 Cifra, SA de CV (Series B) 921,426
395,000 Cifra, SA de CV (Class C) 623,684
1,900,000 Giordano International Ltd. 1,140,221
1,025,000 PT Matahari Putra Prima 1,822,456
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$ 4,970,643
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Textiles/Clothes - 0.4%
347,700 Asia Fiber Co., Ltd.* $ 105,512
26,890 Shin Won Corp. 476,570
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$ 582,082
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Total Consumer Non-Durables $ 15,662,755
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Financial - 11.6%
Brokerage - 0.9%
38,343 Daewoo Securities Co., Ltd. $ 494,610
60,700 L.G. Securities Co., Ltd.* 640,022
42,000 Ssangyong Investment Securities Co.* 393,382
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$ 1,528,014
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Commercial Banks - 2.3%
90,000 Cho Hung Bank (G.D.R.) $ 528,750
18,830 Commercial Bank of Korea 98,638
250,000 Dah Sing Financial Holdings Ltd. 1,226,044
160,000 First Bangkok City Bank Public Co., Ltd. 147,910
6,795 Kookmin Bank 121,921
155,000 Siam City Bank Public Co., Ltd. 104,351
6,950 Shinhan Bank 91,344
2,300 State Bank of India Ltd. 19,721
33,919,997 Turkiye Garanti Bankasi AS 1,369,437
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$ 3,708,116
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Misc. Finance - 5.8%
361,000 CMIC Finance and Securities Co., Ltd. $ 143,646
160,800 Credicorp Ltd. 3,638,100
483,600 Dhana Siam Finance and Securities Public Co., Ltd. 403,324
255,000 Finance One Public Co., Ltd. 71,744
72,092,000 Global Menkul Degerler AS 1,404,207
147,000 Hong Leong Finance Ltd. 462,490
The accompanying notes are an integral part of these financial statements.
11
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Pioneer Emerging Markets Fund
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SCHEDULE OF INVESTMENTS 5/31/97 (continued)
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Shares Value
Misc. Finance - (continued)
385,000 National Finance & Securities Co., Ltd. $ 332,697
512,200 Pakistan Investment Fund Inc.* 2,881,125
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$ 9,337,333
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Insurance - 1.2%
130,000 Ayudhya Jardine CMG Life Assurance Public Co., Ltd.
(Foreign Shares) $ 246,885
14,100 Ayadhya Jargin CGM Life Assurance Public Co., Ltd.
(Local Shares) 26,778
203,500 Malaysian Assurance Alliance Bhd. 1,198,631
450,000 National Mutual Asia Ltd. 490,740
------------
$ 1,963,034
------------
Real Estate - 1.4%
12,000 Land & House Public Co., Ltd. $ 15,193
167,000 New World Development Co., Ltd. 1,060,386
192,000 Quality House Public Co., Ltd. 72,540
500,000 Tai Cheung Holdings Ltd. 438,795
135,000 Wharf Holdings Ltd. 604,569
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$ 2,191,483
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Total Financial $ 18,727,980
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Services - 14.9%
Hotel/Restaurant - 0.7%
3,476,000 Cafe de Coral Holdings Ltd. $ 964,496
40,000 Overseas Union Enterprise Ltd. 191,568
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$ 1,156,064
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Broadcasting & Media - 9.5%
215,900 Central European Media Enterprises Ltd.* $ 5,073,650
304,800 Grupo Radio Centro SA de CV (A.D.R.) 3,200,400
112,000 Grupo Televisa, SA (Sponsored A.D.R.) 3,206,000
210,000,000 Medya Holding* 1,368,417
555,000 Television Broadcasts Ltd. 2,420,985
------------
$ 15,269,452
------------
Pharmaceuticals - 4.4%
119,500 Teva Pharmaceutical Industries Ltd.
(Sponsored A.D.R.) $ 7,170,000
------------
Publishing - 0.3%
56,970,000 Milliyet Gazetecilik AS* $ 524,567
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Total Services $ 24,120,083
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The accompanying notes are an integral part of these financial statements.
12
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Pioneer Emerging Markets Fund
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Shares Value
Technology - 6.9%
Computer Services - 3.3%
180,739 Formula Systems Ltd.* $ 3,215,838
283,000 Oshap Technologies, Ltd.* 2,087,125
------------
$ 5,302,963
------------
Electronics - 3.6%
19,000,000 Companhia de Eletricidade do Estado da Bahia* $ 1,597,384
66,500 Delta Electronics (Thailand) Public Co., Ltd. 355,486
141,000 L.G. Electronics 2,388,222
9,500 Samsung Electronics Co. 929,940
134,900 Shinawatra Computer Co., Plc 645,221
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$ 5,916,253
------------
Total Technology $11,219,216
------------
Utilities - 18.3%
Electric Utility - 3.9%
260,000 China Light & Power Co., Ltd. $ 1,301,929
3,200,000 Centrais Electricas Brasileira SA 1,509,575
140,000 Hongkong Electric Holdings Ltd. 504,098
75,000 Huaneng Power International, Inc. (Series N)
(Sponsored A.D.R.)* 1,800,000
100,100 Shandong Huaneng Power Co., Ltd.
(Sponsored A.D.R.) 1,251,250
------------
$ 6,366,852
------------
Telecommunications - 14.4%
163,000 ECI Telecommunications Ltd. $ 3,769,375
366,000 Grupo Iusacell SA (Series L) (Sponsored A.D.R.)* 6,039,000
315,000 Hong Kong Telecommunications Ltd. 697,199
6,080 SK Telecom Co., Ltd. 3,751,575
100,000 Mahanagar Telephone Nigam Ltd. 798,043
164,600 Shinawatra Satellite Public Co., Ltd. 178,625
66,500 Tadiran Ltd. (Sponsored A.D.R.) 1,795,500
10,700 Telecel-Comunicacaoes Pessoais, SA* 821,055
26,900,000 Telecomunicacoes Brasileiras SA 3,492,854
95,000 Videsh Sanchar Nigam Ltd. (G.D.R.) 1,957,000
------------
$23,300,226
------------
Total Utilities $29,667,078
------------
The accompanying notes are an integral part of these financial statements.
13
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Pioneer Emerging Markets Fund
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SCHEDULE OF INVESTMENTS 5/31/97 (continued)
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Shares Value
Miscellaneous - 3.3%
6,925,000 Aboitiz Equity Ventures Inc.* $ 519,867
42,000 Beijing Enterprises Holdings Ltd.* 245,002
124,000 Benpres Holdings Corp. (G.D.R.)* 906,750
91,103,000 Dogan Sirketler Grubu Holding AS* 1,968,086
1,000,000 First Pacific Co. Ltd. 1,277,667
7,146,000 Net Holding AS 283,441
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Total Miscellaneous $ 5,200,813
------------
Total Common Stocks
(Cost $121,695,304) $126,020,557
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RIGHTS/ WARRANTS - 0.2%
1,570,000 Guoco Group, 10/07/97* $ 184,384
114,000 Overseas Union Enterprise Ltd., 07/20/98* 142,669
102,648 PT Indah Kiat Pulp & Paper Corp., 04/13/01* 32,704
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Total Rights/ Warrants
(Cost $493,947) $ 359,757
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TOTAL INVESTMENTS IN SECURITIES
(Cost $144,589,065) (a) $156,540,187
------------
Principal
Amount
TEMPORARY CASH INVESTMENT - 3.3%
Commercial Paper - 3.3%
$ 5,365,000 American Express Co., 5.55%, 6/2/97 $ 5,365,000
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TOTAL TEMPORARY CASH INVESTMENT
(Cost $5,365,000)
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $149,954,065) (b) $161,905,187
------------
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Non-income producing security
(a) Distribution of investments by country, as a percentage of total equity
holdings, is as follows:
Brazil 23.3%
Mexico 17.1
Israel 14.1
Hong Kong 10.4
South Korea 6.5
Turkey 4.4
Czech Republic 3.2
Australia 3.1
Argentina 2.5
Peru 2.3
India 2.1
China 1.9
Pakistan 1.8
Thailand 1.8
Indonesia 1.2
Others (individually less than 1%) 4.3
------
100.0%
------
(b) At May 31, 1997, the net unrealized gain on investments based on cost for
federal income tax purposes of $150,006,929 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 28,221,323
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (16,323,065)
--------------
Net unrealized gain $ 11,898,258
--------------
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended May 31, 1997 aggregated $109,817,574 and $72,048,891,
respectively.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 5/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investment in securities, at value (including temporary cash investment
of $5,365,000) (cost $149,954,065) $ 161,905,187
Cash 463
Foreign currencies, at value 44,904
Receivables -
Investment securities sold 1,666,104
Fund shares sold 1,188,634
Dividends, interest and foreign taxes withheld 605,220
Forward foreign currency settlement contracts - net 285
Other 248
-------------
Total assets $ 165,411,045
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 4,244,309
Fund shares repurchased 89,505
Forward foreign currency portfolio hedge contracts, open - net 77,193
Due to affiliates 296,974
Reserve for capital gains taxes 44,548
Accrued expenses 69,975
-------------
Total liabilities $ 4,822,504
-------------
NET ASSETS:
Paid-in capital $ 144,471,019
Accumulated undistributed net investment income 120,263
Accumulated undistributed net realized gain on investments and foreign
currency transactions 4,125,525
Net unrealized gain on investments 11,951,122
Net unrealized loss on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies (79,388)
-------------
Total net assets $ 160,588,541
-------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $81,973,823/5,308,271 shares) $ 15.44
-------------
Class B (based on $67,148,897/4,435,129 shares) $ 15.14
-------------
Class C (based on $11,465,821/757,616 shares) $ 15.13
-------------
MAXIMUM OFFERING PRICE:
Class A $ 16.38
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 5/31/97
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $92,478) $ 1,673,677
Interest (net of foreign taxes withheld of $30) 124,399
-----------
Total investment income $ 1,798,076
-----------
EXPENSES:
Management fees $ 818,442
Transfer agent fees
Class A 112,928
Class B 77,365
Class C 10,427
Distribution fees
Class A 86,368
Class B 267,097
Class C 42,184
Accounting 76,566
Custodian fees 106,769
Registration fees 33,952
Professional fees 31,145
Printing 17,477
Fees and expenses of nonaffiliated trustees 8,294
Miscellaneous 36,589
-----------
Total expenses $ 1,725,603
Less management fees waived
by Pioneering Management Corporation (24,788)
Less fees paid indirectly (23,002)
-----------
Net expenses $ 1,677,813
-----------
Net investment income $ 120,263
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments (net of reserve for capital gains taxes of
$44,548) $ 3,239,270
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (109,117) $ 3,130,153
----------- -----------
Change in net unrealized gain or loss from:
Investments $17,276,529
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (79,443) $17,197,086
----------- -----------
Net gain on investments and foreign currency transactions $20,327,239
-----------
Net increase in net assets resulting from operations $20,447,502
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 5/31/97 and the Year Ended 11/30/96
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/97 11/30/96
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 120,263 $ (538,215)
Net realized gain on investments 3,130,153 8,419,503
Change in net unrealized gain or loss on investments and
foreign currency transactions 17,197,086 (3,430,126)
-------------- -------------
Net increase in net assets resulting from operations $ 20,447,502 $ 4,451,162
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain:
Class A ($0.77 and $0.00 per share, respectively) $ (3,201,753) $ -
Class B ($0.77 and $0.00 per share, respectively) (2,305,408) -
Class C ($0.77 and $0.00 per share, respectively) (323,755) -
-------------- -------------
Total distributions to shareholders $ (5,830,916) $ -
-------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 63,841,929 $113,084,559
Reinvestment of distributions 4,582,902 -
Cost of shares repurchased (24,376,915) (36,695,790)
-------------- -------------
Net increase in net assets resulting from fund share
transactions $ 44,047,916 $ 76,388,769
-------------- -------------
ADDITIONAL PAID-IN CAPITAL $ - $ 14,845
-------------- -------------
Net increase in net assets $ 58,664,502 $ 80,854,776
NET ASSETS:
Beginning of period 101,924,039 21,069,263
-------------- -------------
End of period (including accumulated undistributed net
investment income of $120,263 and $0, respectively) $ 160,588,541 $101,924,039
-------------- -------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
Shares sold 2,420,027 $ 34,617,450 4,732,811 $ 65,088,650
Reinvestment of distributions 218,645 2,798,650 - -
Less shares repurchased (1,379,913) (19,661,139) (2,016,882) (27,460,481)
------------ -------------- ------------ --------------
Net increase 1,258,759 $ 17,754,961 2,715,929 $ 37,628,169
------------ -------------- ------------ --------------
CLASS B
Shares sold 1,695,520 $ 23,874,863 3,061,963 $ 41,971,587
Reinvestment of distributions 132,503 1,668,219 - -
Less shares repurchased (297,878) (4,185,882) (650,489) (8,752,592)
------------ -------------- ------------ --------------
Net increase 1,530,145 $ 21,357,200 2,411,474 $ 33,218,995
------------ -------------- ------------ --------------
CLASS C*
Shares sold 380,447 $ 5,349,616 441,727 $ 6,024,322
Reinvestment of distributions 9,216 116,033 - -
Less shares repurchased (37,516) (529,894) (36,258) (482,717)
------------ -------------- ------------ --------------
Net increase 352,147 $ 4,935,755 405,469 $ 5,541,605
------------ -------------- ------------ --------------
</TABLE>
*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
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 5/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended Year Ended 6/23/94 to
Ended 5/31/97 11/30/96 11/30/95 11/30/94(a)
<S> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 13.94 $ 11.56 $ 12.24 $ 12.50
---------- ----------- ----------- -----------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.03 $ (0.07) $ 0.04 $ 0.08
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 2.24 2.45 (0.53) (0.34)
---------- ----------- ----------- -----------
Net increase (decrease) from investment operations $ 2.27 $ 2.38 $ (0.49) $ (0.26)
Distributions to shareholders:
Net investment income - - (0.06) -
Net realized gain (0.77) - (0.13) -
---------- ---------- ----------- -----------
Net increase (decrease) in net asset value $ 1.50 $ 2.38 $ (0.68) $ (0.26)
---------- ----------- ----------- -----------
Net asset value, end of period $ 15.44 $ 13.94 $ 11.56 $ 12.24
---------- ----------- ----------- -----------
Total return* 17.45% 20.59% (4.07%) (2.08%)
Ratio of net expenses to average net assets 2.26%**+ 2.28%+ 2.27%+ 2.25%**
Ratio of net investment income (loss) to average net assets 0.45%**+ (0.61%)+ 0.24%+ 1.85%**
Portfolio turnover rate 114%** 143% 247% 259%**
Average commission rate paid(1) $ 0.0003 $ 0.0003 - -
Net assets, end of period (in thousands) $ 81,974 $ 56,465 $ 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 2.29%** 3.00% 3.95% 4.13%**
Net investment income (loss) 0.42%** (1.33%) (1.44%) (0.03%)**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.22%** 2.25 2.25% -
Net investment income (loss) 0.49%** (0.58%) 0.27% -
</TABLE>
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) 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.
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 5/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended Year Ended 6/23/94 to
Ended 5/31/97 11/30/96 11/30/95 11/30/94(a)
<S> <C> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 13.73 $ 11.47 $ 12.19 $ 12.50
----------- ----------- ----------- -----------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.01) $ (0.03) $ (0.04) $ 0.02
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 2.19 2.29 (0.52) (0.33)
----------- ----------- ----------- -----------
Net increase (decrease) from investment operations $ 2.18 $ 2.26 $ (0.56) $ (0.31)
Distributions to shareholders:
Net investment income - - (0.03) -
Net realized gain (0.77) - (0.13) -
----------- ----------- ----------- -----------
Net increase (decrease) in net asset value $ 1.41 $ 2.26 $ (0.72) $ (0.31)
----------- ----------- ----------- -----------
Net asset value, end of period $ 15.14 $ 13.73 $ 11.47 $ 12.19
----------- ----------- ----------- -----------
Total return* 17.04% 19.70% (4.62%) (2.48%)
Ratio of net expenses to average net assets 2.97%**+ 3.00%+ 3.00%+ 3.33%**
Ratio of net investment income (loss) to average net
assets (0.21%)**+ (1.47%)+ (0.47%)+ 0.77%**
Portfolio turnover rate 114%** 143% 247% 259%**
Average commission rate paid(1) $ 0.0003 $ 0.0003 - -
Net assets, end of period (in thousands) $ 67,149 $ 39,893 $ 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 3.00%** 3.66% 4.57% 5.21%**
Net investment loss (0.24%)** (2.13%) (2.05%) (1.11%)**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.93%** 2.96% 2.96% -
Net investment loss (0.17%)** (1.43%) (0.43%) -
</TABLE>
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) 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.
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 5/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months 1/31/96 to
Ended 5/31/97 11/30/96
<S> <C> <C>
CLASS C
Net asset value, beginning of period $ 13.73 $ 13.22
---------- ----------
Increase (decrease) from investment
operations:
Net investment loss $ (0.01) $ (0.09)
Net realized and unrealized gain on
investments and foreign currency
transactions 2.18 0.60
---------- ----------
Net increase from investment operations $ 2.17 $ 0.51
Distributions to shareholders:
Net realized gain (0.77) -
---------- ----------
Net increase in net asset value $ 1.40 $ 0.51
---------- ----------
Net asset value, end of period $ 15.13 $ 13.73
---------- ----------
Total return* 16.96% 3.86%
Ratio of net expenses to average net assets 2.93%**+ 2.91%**+
Ratio of net investment loss to average net
assets (0.14%)**+ (1.51%)**+
Portfolio turnover rate 114%** 143%
Average commission rate paid(1) $ 0.0003 $ 0.0003
Net assets, end of period (in thousands) $ 11,466 $ 5,566
Ratios assuming no waiver of management fees
and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 2.96%** 3.48%**
Net investment loss (0.17%)** (2.08%)**
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.88%** 2.86%**
Net investment loss (0.09%)** (1.46%)**
</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.
(1) 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.
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
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.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Shares of Class A, Class B and Class C each represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class
A, Class B and Class C shareholders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Each day, securities are
valued at the last sale price on the principal exchange where they are
traded. Securities that have not traded on the date of valuation, or
securities for which sale prices are not generally reported, are valued at
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. Trading in
foreign securities is substantially completed each day at various times prior
to the close of the New York Stock Exchange. The values of such securities
used in computing the net asset value of the Fund's shares are determined as
of such times. Dividend income is recorded on the ex-dividend date, except
that certain dividends from foreign securities where the ex-dividend date may
have passed are recorded as soon as the Fund is informed of the ex-dividend
data in the exercise of reasonable diligence. Interest income is recorded on
the accrual basis, net
22
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
of unrecoverable foreign taxes withheld at the applicable country rates.
Temporary cash investments are valued at amortized cost.
The Fund's investments in emerging markets or countries with limited or
developing markets may subject the Fund to greater degree of risk than in a
developed market. Risks associated with these developing markets include
political, social or economic factors and 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. In addition, delays are common in
registering transfers of securities in certain countries, such as India, and
the Fund may be unable to sell portfolio securities until the registration
process is completed.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the time
a portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar (see Note 6).
23
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97 (continued)
- --------------------------------------------------------------------------------
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 carryforward (if applicable)
and other such factors.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
E. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $39,087 in
underwriting commissions on the sale of fund shares during the six months
ended May 31, 1997.
F. Class Allocations
Distribution fees are calculated based on the average daily net assets
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expense (see Note 3).
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning of
the day.
24
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 shares can bear different transfer
agent and distribution fees.
G. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest received
from counterparties, is required to be at least equal to or in excess of the
value of the repurchase agreement at the time of purchase. The collateral for
all repurchase agreements is held in safekeeping in the customer-only account
of the Fund's custodian, or subcustodians. The Fund's investment adviser,
Pioneering Management Corporation (PMC), is responsible for determining that
the value of the collateral remains at least equal to the repurchase price.
2. Management Agreement
PMC 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 other services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. At May 31, 1997, $169,808 was payable to PMC related to management
fees and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Fund at negotiated rates. Included in due
to affiliates is $32,173 in transfer agent fees payable to PSC at May 31, 1997.
25
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97 (continued)
- --------------------------------------------------------------------------------
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class
C shares. Included in due to affiliates is $94,993 in distribution fees payable
to PFD at May 31, 1997.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A 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
CDSC are paid to PFD. For the six months ended May 31, 1997, CDSCs in the
amount of $75,589 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 May 31, 1997,
the Fund's expenses were reduced by $23,002 under such arrangements.
26
<PAGE>
Pioneer Emerging Markets Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97 (continued)
- --------------------------------------------------------------------------------
6. Forward Foreign Currency Contracts
At May 31, 1997, the Fund had entered into various contracts that obligate the
Fund to deliver currencies at specified future dates. At the maturity of a
contact, the Fund must make delivery of the foreign currency. Alternatively,
prior to the settlement date of a portfolio hedge, the Fund may close out such
contracts by entering into an offsetting hedge contract. Open portfolio hedges
at May 31, 1997 were as follows:
<TABLE>
<CAPTION>
Contracts In Exchange Settlement Net Unrealized
Currency to Deliver For Date Value Loss
- ---------- ------------- ------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
THB 148,400,000 $5,600,000 8/4/97 $5,677,193 ($ 77,193)
</TABLE>
At May 31, 1997, the gross forward foreign currency settlement contracts
receivable and payable were $651,709 and $651,424, respectively, resulting in a
net receivable of $285.
7. Other
During the six months ended May 31, 1997, PMC reimbursed the Fund $18,859 in
connection with costs incurred on certain portfolio transactions.
27
<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, including the schedule of
investments, of Pioneer Emerging Markets Fund as of May 31, 1997, and the
related statement of operations, the statements of changes in net assets, and
the financial highlights for the periods presented. These financial statements
and the financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1997 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, 1997, the results of its
operations, the changes in its net assets, and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
July 1, 1997
28
<PAGE>
Pioneer Emerging Markets Fund
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
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Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Richard H. Egdahl, M.D. President
Margaret B.W. Graham David D. Tripple, Executive Vice
John W. Kendrick President
Marguerite A. Piret Norman Kurland, Senior Vice President
David D. Tripple Mark H. Madden, Vice President
Stephen K. West William H. Keough, Treasurer
John Winthrop Joseph P. Barri, Secretary
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
29
<PAGE>
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFoneSM for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us at:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[PIONEER Pioneer Funds Distributor, Inc. 0797-4311
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