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[Pioneer logo]
Pioneer
Emerging Markets
Fund
ANNUAL REPORT 11/30/97
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 15
Notes to Financial Statements 21
Report of Independent Public Accountants 26
Trustees, Officers and Service Providers 27
Retirement Plans from Pioneer 28
<PAGE>
Pioneer Emerging Markets Fund
LETTER FROM THE CHAIRMAN 11/30/97
Dear Shareowner,
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I am pleased to present this report for Pioneer Emerging Markets Fund, covering
its fiscal year ended November 30, 1997. I thank you
for your interest and this opportunity to comment briefly on today's investing
environment.
Since October, the world's emerging markets have taken on a whole new look.
After a 12-year period of tremendous growth, Southeast Asia is facing
tremendous financial and economic setbacks, and stock markets and currencies
there have plunged to nearly unimaginable depths. European markets have bounced
around, heartened by the relative strength of the U.S. stock market but shaken
by the drop in Asia. In today's truly global economy, Latin America is feeling
pressures on currency and interest rates. It is difficult to say when and how
Asia's vast difficulties will be resolved and what the real effects will be on
companies and countries there and in other regions.
One thing is clear, however. Over the past year, as is so often the case with
emerging markets, it did not pay to share the group mentality of investors who
piled out of Asia in near unison. I am pleased to say that thinking
independently helped your Fund make 1997 a profitable year. Your investment
team's willingness to invest in a "contrarian" manner - where research and
logic show long-term opportunity rather than where popular opinion may reside
in the short term - proved to be the difference between investment success and
disappointment.
I encourage you to read on to learn more about Pioneer Emerging Markets Fund
and your investment team's strategy. If you have questions about your Fund,
please contact your investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Emerging Markets Fund
PORTFOLIO SUMMARY 11/30/97
Portfolio Diversification
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(As a percentage of total investment portfolio)
[pie chart]
International Common Stocks 47%
Depositary Receipts for International Stocks 33%
International Preferred Stocks 13%
Short-Term Cash Equivalents 7%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[bar chart]
Brazil 26.5%
Mexico 15.4%
Israel 10.6%
India 9.9%
Thailand 5.8%
Argentina 5.6%
Turkey 5.5%
Bermuda 4.3%
Sinagapore 3.1%
Hong Kong 2.3%
Peru 2.0%
South Korea 1.8%
Pakistan 1.7%
Philippines 1.7%
Poland 1.1%
Australia 1.0%
Chile 1.0%
China 0.4%
Colombia 0.2%
Malaysia 0.1%
10 Largest Holdings
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(As a percentage of equity holdings)
1. Central European Media 4.27% 6. Petroleo Brasileiro SA 2.77%
Enterprises Ltd. (Preferred)
2. Teva Pharmaceutical 3.68 7. Medya Holding 2.73
Industries Ltd. (Sponsored A.D.R.)
3. Grupo Radio Centro SA de 3.00 8. Centrais Electricas 2.72
CV (A.D.R.) Brasileiras SA
4. Telecomunicacoes Brasileiras 2.98 9. Ericsson Telecomunicacoes 2.66
SA (Sponsored A.D.R.) (Preferred) SA (Preferred)
5. Videsh Sanchar Nigam Ltd. 2.87 10. Telefonos de Mexico SA 2.55
(G.D.R.) (L Shares) (Sponsored A.D.R.)
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Emerging Markets Fund
PERFORMANCE UPDATE 11/30/97 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 11/30/97 11/30/96
$ 14.42 $13.94
Distributions per Share Income Short-Term Long-Term
(11/30/96 - 11/30/97) Dividends Capital Gains Capital Gains
- $0.853 $0.021
Investment Returns
- --------------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of November 30, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 6.71% 4.89%
(6/23/94)
1 Year 10.37 4.03
[Class A mountain chart]
Growth of $10,000[dagger]
Pioneer Emerging Markets Fund* MSCI Emerging Markets Free Index
6/94 9425 10000
10365 11940
11/94 9128 11242
7808 9002
5/95 8743 9970
8930 9983
11/95 8748 9385
10127 10332
5/96 11013 10780
10392 10365
11/96 10558 10347
11967 11577
5/97 12385 11616
12558 10840
11/97 11653 8972
* 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
<PAGE>
Pioneer Emerging Markets Fund
PERFORMANCE UPDATE 11/30/97 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 11/30/97 11/30/96
$ 14.09 $ 13.73
Distributions per Share Income Short-Term Long-Term
(11/30/96 - 11/30/97) Dividends Capital Gains Capital Gains
- $ 0.853 $ 0.021
Investment Returns
- --------------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of November 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 5.96% 5.20%
(6/23/94)
1 Year 9.61 5.61
[Class B mountain chart]
Growth of $10,000[dagger]
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 13015 11616
13175 10840
11/97 11905 8972
* 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
<PAGE>
Pioneer Emerging Markets Fund
PERFORMANCE UPDATE 11/30/97 CLASS C SHARES
Share Prices and Distributions
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Net Asset Value
per Share 11/30/97 11/30/96
$ 14.08 $ 13.73
Distributions per Share Income Short-Term Long-Term
(11/30/96 - 11/30/97) Dividends Capital Gains Capital Gains
- $ 0.853 $ 0.021
Investment Returns
- --------------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of November 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 7.30% 7.30%
(1/31/96)
1 Year 9.53 9.53
[Class C mountain chart]
Growth of $10,000
Pioneer Emerging Markets Fund* MSCI Emerging Markets Free Index
1/96 10000 10000
10008 9841
9894 9918
5/96 10560 10314
10870 10268
11067 10332
10129 9626
9/96 10234 9872
10424 9958
10038 9692
10386 9855
1/97 10445 9900
11561 10575
11746 11027
11216 10737
5/97 11264 10757
12131 11064
13097 11656
13412 11830
9/97 12281 10325
13186 10611
11287 8870
11/97 11376 8546
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
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
<PAGE>
Pioneer Emerging Markets Fund
PORTFOLIO MANAGEMENT DISCUSSION 11/30/97
Dear Shareowner,
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We are pleased to report that Pioneer Emerging Markets Fund delivered strong
performance in a year that ended amid much turmoil in Southeast Asia. Shifting
assets out of the Pacific Rim into Latin America, Israel and India proved
constructive for the 12 months ended November 30, 1997, and helped your Fund
avoid much of the Asian currency and stock market fallout.
The Fund generated one-year total returns of around 10% at net asset value
(NAV). This performance is particularly gratifying in light of the -13.28%
return of the MSCI Emerging Markets Free Index. The Fund's one-year NAV returns
surpassed 85% of the 128 emerging market funds followed by Lipper Analytical
Services, Inc.*
Southeast Asia at a Crossroads
Since the devaluation of Thailand's currency on July 2, Asia has been hit hard
by dramatic stock market sell-offs, slowing economic growth and falling
currency values. The troubles of the most distressed countries - notably Korea
and Thailand - have spilled into the rest of the region and across the world in
the form of declining sales and corporate earnings, weakened balance sheets and
increased skepticism about emerging markets. It's safe to say most investors
are looking at Asia with a new view since Hong Kong's stock market sparked a
global selloff in late October.
We had identified many of the difficulties now plaguing Asia early in the year.
Short-sighted economic policies, overextended banks and relatively high stock
prices were some of the reasons we trimmed Asian investments as early as
January. As a result, holdings in Thailand, South Korea, Indonesia, the
Philippines and Malaysia represented just 11% of equity holdings on May 31 and
9% by November, less than half of what they were a year ago. The Asian
companies in the portfolio today are poised to benefit from export-led growth
boosted by the new lows in local currencies. Delta Electronics in Thailand, for
example, has a high export ratio, which has already helped cushion operating
results.
*Lipper Analytical Services, an independent research organization, ranks funds
according to total return performance. Rankings vary over time and do not
reflect the effects of sales charges. For periods ended 11/30/97, Class A
Shares ranked 16 of 128 and 4 of 55 emerging markets funds for one- and
three-year performance, respectively. Class B Shares ranked 17 of 128 and 5 of
55 for one- and three-year performance, respectively. Class C Shares ranked 17
of 128 funds for one-year performance and were not ranked for longer periods.
Past performance does not guarantee future results.
6
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Pioneer Emerging Markets Fund
Many analogies are being drawn between Asia's current state and the Mexican
peso crisis in 1994 and the painful U.S. corporate restructuring of the early
1990s. Bad loans, real estate excesses, bank failures and a unique brand of
centrally controlled capitalism now characterize the Pacific Rim. If Asian
governments take a short-sighted or "do-nothing" approach, the crisis will be
prolonged. We are closely monitoring the situation, and we intend to limit
investments in Asia until we see policy makers making the tough decisions
required to put their economies on track to recovery.
Fastest Growing Markets--Brazil, Mexico, Israel and India
While Brazil, Mexico, Israel and India were not immune to the changing fortunes
of Southeast Asia, they are further along in their economic cycles and their
transition to free-market economies. These countries comprised 62% of equity
holdings on November 30, 1997, and were the main reasons for your Fund's
standout performance throughout the year.
As Latin America's largest economy, Brazil is closely watched as a barometer of
the region's growth prospects. Its currency has been under pressure since Hong
Kong's market fell, leading its central bank to raise interest rates in an
effort to prevent currency devaluation. Nevertheless, voters appear to be
pleased with President Cardoso's efforts to promote free-market policies, and
we're optimistic that further reforms will go forward. Deregulation and
privatization of state-owned enterprises continue as major focuses for the
Fund, with Telecomunicacoes Brasileiras (telecommunications), Petroleo
Brasileiro (oil and gas) and Centrais Electricas Brasileiras (electric utility)
all top holdings. They proved profitable for the year, even though their stock
prices took a wild ride in the past few months.
It's been a decade since Latin America began opening its markets. Today its
companies are emerging as world-class competitors headed by a new breed of
savvy, U.S.-trained executives who are moving beyond national borders. In
Mexico, Grupo Televisa is the world's largest Spanish-language media company,
broadcasting from four countries. Cifra, a Wal-Mart-controlled retailer, is
benefiting from general economic prosperity. Grupo Radio Centro, a major radio
station in Mexico City, is enjoying rising advertising revenues fueled by the
pursuit of the emerging Mexican consumer.
With a variety of dynamic, seasoned companies and a gross domestic product of
$17,000 per capita, Israel is an anomaly among emerging
7
<PAGE>
Pioneer Emerging Markets Fund
PORTFOLIO MANAGEMENT DISCUSSION 11/30/97 (continued)
markets. But uncertainty about the future of the peace process continues to
overshadow this corner of the globe, creating attractive valuations. Software
developers Formula Systems and Oshap Technologies enjoyed substantial increases
in stock price; late in the year we scaled backed Formula Systems and sold out
of Oshap Technologies to lock in profits. Tadiran is a leading-edge
telecommunications equipment provider and performed well.
Holdings in India rose to about 10% of equity assets by November 30. While
infighting remains prevalent among political factions, we were heartened to see
the government pass a responsible budget in February that lowered corporate and
personal income taxes. In September, they enacted long-awaited policies to
reduce the government budget deficit. Holdings Reliance Industries (chemicals)
and Videsh Sanchar Nigam (telecommunications), reacted favorably to the news.
India remains a complex market, often hampered by inefficient bureaucracy and
inadequate infrastructure. Nevertheless, the latest round of reforms are
evidence of policymakers' commitment to steady growth and their pledge to make
India a more attractive country for foreign investment, regardless of political
differences.
Looking Forward
The world's financial markets are likely to stay choppy in the months ahead. We
expect Asia's troubles will reduce global economic growth in 1998 and 1999.
With the region's stock markets now down some 70% from recent levels, and stock
valuations at eight- to 10-year lows, we are excited about the investment
opportunities we expect to surface in Asia. We're confident we can continue to
provide shareowners with a unique investment opportunity by continuing our
disciplined, research-driven, value-oriented approach - rather than running
with the herd.
Respectfully,
/s/ Mark H. Madden
Mark H. Madden,
Portfolio Manager
8
<PAGE>
Pioneer Emerging Markets Fund
SCHEDULE OF INVESTMENTS 11/30/97
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INVESTMENT IN SECURITIES - 93.1%
PREFERRED STOCKS - 19.1%
7,370,000 Centrais Electricas Brasileiras S/A $ 3,607,599
59,450 Centrais Electricas Brasileiras S/A (Class B)
(Sponsored A.D.R.) 1,382,213
1,410,000 Cia Cimento Portland Itau 265,018
81,500,000 Companhia Energetica de Minas Gerais 3,930,632
232,100,000 Companhia Forca e Luz Cataguazes-Leopoldina 418,462
123,100,000 Ericsson Telecomunicacoes SA 4,273,489
50,600,000 Metal Leve SA* 296,493
261,700 Multicanal Participacoes SA (A.D.R.)* 1,243,075
20,620,000 Petroleo Brasileiro SA 4,461,378
112,200 Petroleo Brasileiro SA (Sponsored A.D.R.) 2,427,582
9,900,000 Randon Participacoes SA* 3,570
10,000 Shin Won Corp. 16,332
45,930 Telecomunicacoes Brasileiras SA (Sponsored A.D.R.) 4,793,944
23,216,968 Telecomunicacoes do Rio de Janeiro SA 2,448,738
13,000,000 Telecomunicacoes de San Paulo SA 3,433,697
-----------
Total Preferred Stocks
(Cost $33,152,156) $33,002,222
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COMMON STOCKS - 74.0%
Basic Industries - 4.1%
Chemicals - 0.1%
50 Grasim Industries Ltd. $ 423
274,500 Indo Gulf Fertilizers and Chemicals Corp., Ltd.
(G.D.R.)* 178,425
6,470 Reliance Industries Ltd. 26,472
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$ 205,320
-----------
Forest Products - 0.1%
190,000 ITC Bhadrachalam Paperboards Ltd. $ 145,683
-----------
Iron & Steel - 0.4%
217,959 Tata Iron & Steel Co., Ltd. $ 730,275
-----------
Metals & Mining - 1.1%
223,200 KGHM Polska Miedz SA (G.D.R.)* $ 1,841,400
-----------
Paper Products - 0.0%
102,648 PT Indah Kiat Pulp & Paper Corp. $ 23,921
-----------
Precious Metals - 1.0%
1,701,000 Lihir Gold Ltd.* $ 1,683,969
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Emerging Markets Fund
SCHEDULE OF INVESTMENTS 11/30/97 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Tire & Rubber - 1.4%
257,000 China Tire Holdings Ltd. $ 2,393,313
-----------
Total Basic Industries $ 7,023,881
-----------
Capital Goods - 8.8%
Construction & Engineering - 4.3%
75,000 Apasco, SA de CV $ 441,955
200,000 Cemex, SA de CV (Class B)* 984,964
265,000 Cemex, SA de CV (Class B) (Sponsored A.D.R.)* 2,650,000
27,952,000 DMCI Holdings Inc.* 1,471,579
212,000 Grupo Tribasa, SA de CV (A.D.R.)* 1,311,750
50,000 Gujarat Ambuja Cements Ltd. (G.D.R.) 400,000
84,800 Siam City Cement Co., Ltd. 133,183
-----------
$ 7,393,431
-----------
Producer Goods - 4.5%
302,250 Grupo Carso SA de CV $ 1,965,076
324,000 Larsen & Toubro (G.D.R.) 3,159,000
290,000 Zag Industries Ltd.* 2,610,000
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$ 7,734,076
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Total Capital Goods $15,127,507
-----------
Consumer Durables - 3.0%
Motor Vehicles - 3.0%
34,050 Baja Auto Ltd. (G.D.R.) $ 595,875
1,323,480 CIADEA SA 1,774,111
346,300 EK Chor China Motorcycle Co., Ltd. 1,385,200
400,000 Mirgor Sacifia (Class C) (Sponsored A.D.R.)* 1,400,000
-----------
Total Consumer Durables $ 5,155,186
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Consumer Non-Durables - 4.1%
Beverages - 0.6%
556,383 Embotelladores del Valle de Anahuac SA (Class B)* $ 548,694
245,000 Jugos de Valle SA (B Series)* 292,025
5,400 Panamerican Beverages, Inc. 184,950
-----------
$ 1,025,669
-----------
Retail Food - 0.9%
539,667 Supersol Ltd. (B Shares) $ 1,521,379
-----------
</TABLE>
10 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer Emerging Markets Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Retail Non-Food - 2.6%
327,912 Cadenalco, SA $ 345,698
1,008,415 Cifra, SA de CV (Series A) 1,988,960
1,105,000 Cifra, SA de CV (Series C) 2,133,719
-----------
$ 4,468,377
-----------
Textiles/Clothes - 0.0%
347,700 Asia Fiber Co., Ltd.* $ 49,489
-----------
Total Consumer Non-Durables $ 7,064,914
-----------
Energy - 0.8%
Oil & Gas Extraction - 0.8%
167,700 Oil & Natural Gas Commission Ltd. $ 1,353,918
-----------
Total Energy $ 1,353,918
-----------
Financial - 12.8%
Commercial Banks - 7.5%
76,000 Banco de Galicia y Buenos Aires SA de CV
(Sponsored A.D.R.) $ 1,786,000
748,000 Bangkok Bank Ltd. 2,202,699
262,000 Development Bank of Singapore Ltd. 2,465,109
3,176,000 Industrial Finance Corp. of Thailand 1,558,773
408,000 Overseas-Chinese Banking Corp., Ltd. 2,444,033
2,300 State Bank of India Ltd. 13,041
988,000 Thai Farmers Bank, Ltd. 2,473,031
-----------
$12,942,686
-----------
Insurance - 0.1%
144,100 Ayudhya Jardine CMG Life Assurance
Public Co., Ltd.* $ 56,579
74,500 Malaysian Assurance Alliance Bhd. 87,141
-----------
$ 143,720
-----------
Misc. Finance - 5.0%
361,000 CMIC Finance and Securities Co., Ltd. $ 28,570
175,300 Credicorp Ltd. 3,199,225
1,374,900 Dhana Siam Finance and Securities Public Co., Ltd. 413,313
213,000 Finance One Public Co., Ltd.* 8,771
72,092,000 Global Menkul Degerler AS 1,805,109
578,400 Pakistan Investment Fund Inc.* 2,747,400
824,700 Phatra Thanakit Public Co. Ltd. 384,523
-----------
$ 8,586,911
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Emerging Markets Fund
SCHEDULE OF INVESTMENTS 11/30/97 (continued)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Real Estate - 0.2%
1,037,394 Land & House Public Co., Ltd. $ 394,592
-----------
Total Financial $22,067,909
-----------
Services - 15.8%
Hotel/Restaurant - 1.8%
164,000 Indian Hotels Co. Ltd. (G.D.R.) $ 3,116,000
-----------
Broadcasting & Media - 10.6%
269,300 Central European Media Enterprises Ltd.* $ 6,867,150
324,100 Grupo Radio Centro SA de CV (A.D.R.) 4,820,988
28,900 Grupo Televisa, SA (Sponsored G.D.R.)* 1,069,300
210,000,000 Medya Holding 4,399,704
250,000 TV Filme, Inc.* 1,125,000
-----------
$18,282,142
-----------
Pharmaceuticals - 3.4%
119,500 Teva Pharmaceutical Industries Ltd.
(Sponsored A.D.R.) $ 5,915,250
-----------
Total Services $27,313,392
-----------
Technology - 3.4%
Computer Services - 1.4%
75,739 Formula Systems Ltd.* $ 2,504,653
-----------
Electronics - 2.0%
33,285,000 Companhia de Eletricidade do Estado da Bahia* $ 1,878,639
58,500 GSS Array Technology Public Co., Ltd.* 117,718
35,200 Hana Microelectronics Public Co., Ltd. 91,563
164,400 KCE Electronics Public Co., Ltd. 476,054
146,000 K.R. Precision Plc 917,202
-----------
$ 3,481,176
-----------
Total Technology $ 5,985,829
-----------
Utilities - 19.0%
Electric Utility - 2.9%
9,400,000 Centrais Electricas Brasileiras SA $ 4,372,487
100,100 Shandong Huaneng Power Co., Ltd. (N Shares)
(Sponsored A.D.R.) 656,906
-----------
$ 5,029,393
-----------
Telecommunications - 16.1%
128,000 ECI Telecommunications Ltd. $ 3,480,000
391,800 Empresas Telex-Chile SA (Sponsored A.D.R.) 1,616,175
</TABLE>
12 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer Emerging Markets Fund
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Telecommunications - (continued)
111,775 Grupo Iusacell SA (Series L) (Sponsored A.D.R.)* $ 2,333,303
280,000 Mahanagar Telephone Nigam Ltd. 1,652,577
8,420 SK Telecom Co., Ltd. 2,874,823
24,500 Tadiran Ltd. (Sponsored A.D.R.) 957,031
64,700 Telecom Argentina Stet-France Telecom SA (Class B)
(Sponsored A.D.R.) 1,985,481
24,400,000 Telecomunicacoes Brasileiras SA 2,289,768
60,700 Telefonica de Argentina SA (Class B)
(Sponsored A.D.R.) 2,006,894
83,000 Telefonos de Mexico SA (L Shares)
(Sponsored A.D.R.) 4,108,500
348,000 Videsh Sanchar Nigam Ltd. (G.D.R.) 4,611,000
------------
$ 27,915,552
------------
Total Utilities $ 32,944,945
------------
Miscellaneous - 2.2%
23,525,000 Aboitiz Equity Ventures Inc.* $ 686,567
124,000 Benpres Holdings Corp. (G.D.R.)* 368,590
49,600 Benpres Holdings Corp. (G.D.R.) (Lopez)* 148,232
70,354,500 Dogan Sirketler Grubu Holding AS* 2,660,381
------------
Total Miscellaneous $ 3,863,770
------------
Total Common Stocks
(Cost $142,515,409) $127,901,251
------------
RIGHTS - 0.0%
434,290 Telecomunicacoes de San Paulo SA (Preferred),
12/12/97* $ 8,221
900,213 Telecomunicacoes do Rio de Janeiro SA (Preferred),
12/12/97* 1,720
------------
Total Rights
(Cost $13,206) $ 9,941
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $175,680,771) (a) $160,913,414
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Emerging Markets Fund
SCHEDULE OF INVESTMENTS 11/30/97 (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
TEMPORARY CASH INVESTMENTS - 6.9%
Commercial Paper - 6.9%
$5,867,000 American Express Co., 5.65%, 12/2/97 $ 5,867,000
6,000,000 Household Financial Corp., 5.70%, 12/1/97 6,000,000
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $11,867,000) $ 11,867,000
------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS - 100%
(Cost $187,547,771) (b) $172,780,414
------------
</TABLE>
* Non-income producing security
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
Brazil 26.5%
Mexico 15.4
Israel 10.6
India 9.9
Thailand 5.8
Argentina 5.6
Turkey 5.5
Bermuda 4.3
Singapore 3.1
Hong Kong 2.3
Peru 2.0
South Korea 1.8
Pakistan 1.7
Philippines 1.7
Poland 1.1
Australia 1.0
Chile 1.0
Others (individually less than 1%) 0.7
-----
100.0%
-----
(b) At November 30, 1997, the net unrealized loss on investments based on cost
for federal income tax purposes of $188,361,617 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 16,557,595
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (32,138,798)
------------
Net unrealized loss $(15,581,203)
------------
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the year ended November 30, 1997 aggregated $262,200,645 and $206,907,410,
respectively.
14 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer Emerging Markets Fund
BALANCE SHEET 11/30/97
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investments of $11,867,000) (cost $187,547,771) $172,780,414
Cash 817
Foreign currencies, at value 13,853
Receivables -
Investment securities sold 131
Fund shares sold 470,701
Dividends, interest and foreign taxes withheld 111,122
Other 6,560
-------------
Total assets $173,383,598
-------------
LIABILITIES:
Payables --
Investment securities purchased $ 1,526,643
Fund shares repurchased 762,231
Due to affiliates 372,357
Accrued expenses 145,676
-------------
Total liabilities $ 2,806,907
-------------
NET ASSETS:
Paid-in capital $168,833,518
Accumulated undistributed net realized gain on investments and foreign
currency transactions 16,489,183
Net unrealized loss on investments (14,767,357)
Net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies 21,347
-------------
Total net assets $170,576,691
-------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $87,628,437/6,077,698 shares) $ 14.42
-------------
Class B (based on $70,218,106/4,984,824 shares) $ 14.09
-------------
Class C (based on $12,730,148/903,923 shares) $ 14.08
-------------
MAXIMUM OFFERING PRICE:
Class A $ 15.30
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Emerging Markets Fund
STATEMENT OF OPERATIONS
For the Year Ended 11/30/97
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $95,918) $ 2,466,528
Interest (net of foreign taxes withheld of $36) 466,325
-----------
Total investment income $ 2,932,853
-----------
EXPENSES:
Management fees $ 1,997,347
Transfer agent fees
Class A 260,438
Class B 176,649
Class C 25,645
Distribution fees
Class A 209,135
Class B 649,336
Class C 111,999
Accounting 136,496
Custodian fees 294,945
Registration fees 97,175
Professional fees 70,887
Printing 28,992
Fees and expenses of nonaffiliated trustees 14,646
Miscellaneous 53,556
-----------
Total expenses $ 4,127,246
Less management fees waived
by Pioneering Management Corporation (27,058)
Less fees paid indirectly (61,858)
-----------
Net expenses $ 4,038,330
-----------
Net investment loss $(1,105,477)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Investments (net of capital gains taxes paid of
$44,588) $16,725,287
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 954,019 $17,679,306
----------- -----------
Change in net unrealized gain or loss from:
Investments $(9,441,950)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 21,292 $(9,420,658)
----------- -----------
Net gain on investments and foreign currency
transactions $ 8,258,648
-----------
Net increase in net assets resulting from operations $ 7,153,171
-----------
</TABLE>
16 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer Emerging Markets Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended 11/30/97 and 11/30/96
<TABLE>
<CAPTION>
Year Ended Year Ended
FROM OPERATIONS: 11/30/97 11/30/96
<S> <C> <C>
Net investment loss $ (1,105,477) $ (538,215)
Net realized gain on investments and foreign
currency transactions 17,679,306 8,419,503
Change in net unrealized loss on investments and
foreign currency transactions (9,420,658) (3,430,126)
------------- -------------
Net increase in net assets resulting from
operations $ 7,153,171 $ 4,451,162
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain:
Class A ($0.87 and $0.00 per share, respectively) $ (3,748,664) $ -
Class B ($0.87 and $0.00 per share, respectively) (2,760,159) -
Class C ($0.87 and $0.00 per share, respectively) (402,111) -
------------- -------------
Total distributions to shareholders $ (6,910,934) $ -
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $136,454,386 $113,084,559
Reinvestment of distributions 5,402,385 -
Cost of shares repurchased (73,446,356) (36,695,790)
------------- -------------
Net increase in net assets resulting from fund
share transactions $ 68,410,415 $ 76,388,769
------------- -------------
ADDITIONAL PAID-IN CAPITAL $ - $ 14,845
------------- -------------
Net increase in net assets $ 68,652,652 $ 80,854,776
NET ASSETS:
Beginning of year 101,924,039 21,069,263
------------- -------------
End of year (including accumulated net investment
income of $0 and $0, respectively) $170,576,691 $101,924,039
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
<S> <C> <C> <C> <C>
Shares sold 5,408,096 $ 82,847,859 4,732,811 $ 65,088,650
Reinvestment of distributions 247,565 3,269,476 - -
Less shares repurchased (3,627,475) (55,640,657) (2,016,882) (27,460,481)
---------- ------------ ---------- ------------
Net increase 2,028,186 $ 30,476,678 2,715,929 $ 37,628,169
---------- ------------ ---------- ------------
CLASS B
Shares sold 2,888,466 $ 42,926,866 3,061,963 $ 41,971,587
Reinvestment of distributions 152,326 1,984,390 - -
Less shares repurchased (960,952) (14,294,210) (650,489) (8,752,592)
---------- ------------ ---------- ------------
Net increase 2,079,840 $ 30,617,046 2,411,474 $ 33,218,995
---------- ------------ ---------- ------------
CLASS C*
Shares sold 714,579 $ 10,679,661 441,727 $ 6,024,322
Reinvestment of distributions 11,254 148,519 - -
Less shares repurchased (227,379) (3,511,489) (36,258) (482,717)
---------- ------------ ---------- ------------
Net increase 498,454 $ 7,316,691 405,469 $ 5,541,605
---------- ------------ ---------- ------------
*Class C shares were first publicly offered on January 31, 1996.
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
<TABLE>
<CAPTION>
Pioneer Emerging Markets Fund
FINANCIAL HIGHLIGHTS 11/30/97
Year Ended Year Ended
11/30/97 11/30/96
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 13.94 $ 11.56
------ ------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.05) $ (0.07)
Net realized and unrealized gain (loss) on investments and foreign currency transactions 1.40 2.45
-------- -------
Net increase (decrease) from investment operations $ 1.35 $ 2.38
Distributions to shareholders:
Net investment income - -
Net realized gain (0.87) -
-------- --------
Net increase (decrease) in net asset value $ 0.48 $ 2.38
-------- --------
Net asset value, end of period $ 14.42 $ 13.94
-------- --------
Total return* 10.37% 20.59%
Ratio of net expenses to average net assets 2.23%+ 2.28%+
Ratio of net investment income (loss) to average net assets (0.40%)+ (0.61%)+
Portfolio turnover rate 140% 143%
Average commission rate paid(1) $0.0004 $0.0003
Net assets, end of period (in thousands) $87,628 $56,465
Ratios assuming no waiver of management fees and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 2.25% 3.00%
Net investment loss (0.42%) (1.33)%
Ratios assuming waiver of management fees and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.19% 2.25%
Net investment income (loss) (0.36%) (0.58)
<CAPTION>
Year Ended 6/23/94 to
11/30/95 11/30/94(a)
<S> <C> <C>
Net asset value, beginning of period $ 12.24 $ 12.50
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.04 $ 0.08
Net realized and unrealized gain (loss) on investments and foreign currency transactions (0.53) (0.34)
------- -------
Net increase (decrease) from investment operations $ (0.49) $(0.26)
Distributions to shareholders:
Net investment income (0.06) -
Net realized gain (0.13) -
------- -------
Net increase (decrease) in net asset value $ (0.68) $(0.26)
------- -------
Net asset value, end of period $ 11.56 $12.24
------- --------
Total return* (4.07)% (2.08)%
Ratio of net expenses to average net assets 2.27%+ 2.25%**
Ratio of net investment income (loss) to average net assets 0.24%+ 1.85%**
Portfolio turnover rate 247% 259%**
Average commission rate paid(1) - -
Net assets, end of period (in thousands) $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 3.95% 4.13%**
Net investment loss (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% -
Net investment income (loss) 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.
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Pioneer Emerging Markets Fund
FINANCIAL HIGHLIGHTS 11/30/97
Year Ended Year Ended
11/30/97 11/30/96
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 13.73 $ 11.47
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.14) $ (0.03)
Net realized and unrealized gain (loss) on investments and foreign currency transactions 1.37 2.29
------- -------
Net increase (decrease) from investment operations $ 1.23 $ 2.26
Distributions to shareholders:
Net investment income - -
Net realized gain (0.87) -
------- -------
Net increase (decrease) in net asset value $ 0.36 $ 2.26
------- -------
Net asset value, end of period $ 14.09 $ 13.73
------- --------
Total return* 9.61% 19.70%
Ratio of net expenses to average net assets 2.94%+ 3.00%+
Ratio of net investment income (loss) to average net assets (1.10%)+ (1.47)%+
Portfolio turnover rate 140% 143%
Average commission rate paid(1) $0.0004 $0.0003
Net assets, end of period (in thousands) $70,218 $38,893
Ratios assuming no waiver of management fees and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 2.95% 3.66%
Net investment income (loss) (1.11%) (2.13%)
Ratios assuming waiver of management fees and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.90% 2.96%
Net investment loss (1.06%) (1.43%)
<CAPTION>
Year Ended 6/23/94 to
11/30/95 11/30/94(a)
<S> <C> <C>
Net asset value, beginning of period $ 12.19 $ 12.50
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.04) $ 0.02
Net realized and unrealized gain (loss) on investments and foreign currency transactions (0.52) (0.33)
------- -------
Net increase (decrease) from investment operations $ (0.56) $(0.31)
Distributions to shareholders:
Net investment income (0.03) -
Net realized gain (0.13) -
------- -------
Net increase (decrease) in net asset value $ (0.72) $(0.31)
------- -------
Net asset value, end of period $ 11.47 $ 12.19
------- -------
Total return* (4.62%) (2.48)%
Ratio of net expenses to average net assets 3.00%+ 3.33%**
Ratio of net investment income (loss) to average net assets 0.47%+ 0.77%**
Portfolio turnover rate 247% 259%**
Average commission rate paid(1) - -
Net assets, end of period (in thousands) $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 4.57% 5.21%**
Net investment income (loss) 2.05%) 1.11%**
Ratios assuming waiver of management fees and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 2.96% -
Net investment loss (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. 19
<PAGE>
Pioneer Emerging Markets Fund
FINANCIAL HIGHLIGHTS 11/30/97
<TABLE>
<CAPTION>
Year Ended 11/31/96 to
11/30/97 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 $ (0.13) $ (0.09)
Net realized and unrealized gain on
investments and foreign currency
transactions 1.35 0.60
---------- -------
Net increase from investment operations $ 1.22 $ 0.51
Distributions to shareholders:
Net realized gain (0.87) -
---------- -------
Net increase in net asset value $ 0.35 $ 0.51
---------- -------
Net asset value, end of period $ 14.08 $ 13.73
---------- -------
Total return* 9.53% 3.86%
Ratio of net expenses to average net assets 2.89%+ 2.91%* *+
Ratio of net loss to average net assets (1.09%)+ (1.51%)**+
Portfolio turnover rate 140% 143%
Average commission rate paid(1) $0.0004 $0.0003
Net assets, end of period (in thousands) $12,730 $ 5,566
Ratios assuming no waiver of management fees
by PMC and no reduction for fees paid
indirectly:
Net expenses 2.90% 3.48%* *
Net investment loss (1.10%) (2.08%)**
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 2.85% 2.86%* *
Net investment loss (1.05%) (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.
20 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS 11/30/97
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 by investing primarily in securities of issuers in
countries with emerging economies or securities markets.
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 rea-
21
<PAGE>
Pioneer Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS 11/30/97 (continued)
sonable diligence. Interest income is recorded on the accrual basis, net of
unrecoverable foreign taxes withheld at the applicable country rates.
Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
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 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
22
<PAGE>
Pioneer Emerging Markets Fund
closing transaction or extinguished by delivery of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar. As
of November 30, 1997, the Fund had no outstanding settlement or portfolio
hedges.
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. During the year ended November 30, 1997, the Fund
paid $44,588 in capital gains taxes on the sale of certain foreign
securities.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
At November 30, 1997, the Fund reclassified $1,105,477 from accumulated
undistributed net realized gain on investments and foreign currency
transactions to accumulated net investment loss. The reclassification has no
impact on the net asset value of the Fund and is designed to present the
Fund's capital accounts on a tax basis.
In order to comply with federal income tax regulations, the Fund has
designated $3,212,225 as a capital gain dividend for the purposes of the
dividend paid deduction.
23
<PAGE>
Pioneer Emerging Markets Fund
NOTES TO FINANCIAL STATEMENTS 11/30/97 (continued)
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 $72,117 in
underwriting commissions on the sale of fund shares during the year ended
November 30, 1997.
F. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expense (see Note 3).
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning
of the day.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different transfer
agent and distribution fees.
2. Management Agreement
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 other services and costs,
including accounting, regulatory reporting and insurance premiums,
24
<PAGE>
Pioneer Emerging Markets Fund
are paid by the Fund. At November 30, 1997, $174,169 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 $89,651 in transfer agent fees payable to PSC at November 30,
1997.
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 $108,537 in distribution fees
payable to PFD at November 30, 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 year ended November 30, 1997, CDSCs in the amount
of $145,123 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 year ended November 30, 1997,
the Fund's expenses were reduced by $61,858 under such arrangements.
6. Other
During the year ended November 30, 1996, PMC reimbursed the Fund $14,845 in
connection with costs incurred on certain portfolio transactions.
25
<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 November 30, 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
November 30, 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 November 30, 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
January 5, 1998
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Pioneer Emerging Markets Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Norman Kurland, Senior Vice President
John W. Kendrick Mark H. Madden, Vice President
Marguerite A. Piret William H. Keough, Treasurer
David D. Tripple Joseph P. Barri, Secretary
Stephen K. West
John Winthrop
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
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RETIREMENT PLANS FROM PIONEER
Pioneer has a long history of helping people work toward their retirement
goals, offering plans suited to the individual investor and businesses of all
sizes. For more information on Pioneer retirement plans, contact your
investment professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Account (IRA)
An IRA is a tax-favored account that allows anyone under age 701/2 with earned
income to contribute up to $2,000 annually. Spouses may contribute up to $2,000
annually into a separate IRA, for a total of $4,000 per year for a married
couple. Earnings are tax-deferred, and contributions may be tax-deductible.
Roth IRA
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and is
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $9,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees)
401(k) or IRA Plan
Businesses with 100 or fewer eligible employees can establish either plan; both
resemble the traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and
an employer contribution is required.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their
salary, before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must
contribute the same percentage of pay for themselves and any eligible
employees; contributions are made directly to employees' IRAs. SEPs are easy to
administer and can be an especially good choice for firms with few or no
employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and
vesting schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are flexible, but
age-weighted plans allocate contributions based on both age and salary. Age-
weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit-sharing plans, but allow for higher
annual contributions--up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFoneSM for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225 - 4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[Pioneer logo]
Pioneer Funds Distributor, Inc.
60 State Street 0198-4680
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com [recycle logo] Printed on Recycled Paper
