<PAGE>
[PIONEER LOGO]
Pioneer Variable Contracts Trust
Pioneer Emerging Markets VCT Portfolio -- Class II Shares
SEMIANNUAL REPORT
June 30, 2000
<PAGE>
PIONEER VARIABLE CONTRACTS TRUST
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Table of Contents
<TABLE>
<S> <C>
Pioneer Emerging Markets VCT Portfolio
Portfolio and Performance Update 2
Portfolio Management Discussion 3
Schedule of Investments
Pioneer Emerging Markets VCT Portfolio 4
Financial Statements 8
Notes to Financial Statements 12
</TABLE>
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Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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PORTFOLIO AND PERFORMANCE UPDATE 6/30/00
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Sector Distribution
(As a percentage of equity holdings)
[PIE CHART PLOT POINTS]
Technology 34%
Communication Services 26%
Financial 14%
Consumer Staples 10%
Consumer Cyclicals 8%
Energy 3%
Healthcare 2%
Capital Goods 1%
Other 2%
[END PLOT POINTS]
Geographical Distribution
(As a percentage of equity holdings)
[PIE CHART PLOT POINTS]
Asia 52%
Latin America 24%
Other 14%
Israel 6%
Africa 4%
[END PLOT POINTS]
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Five Largest Holdings
(As a percentage of equity holdings)
<TABLE>
<S> <C>
-----------------------------------------------------------
1. Taiwan Semiconductor Manufacturing Co. 2.87%
-----------------------------------------------------------
2. Telefonos de Mexico SA (L Shares) (A.D.R.) 2.41
-----------------------------------------------------------
3. United Microelectronics Corp., Ltd. 2.31
-----------------------------------------------------------
4. Samsung Electronics Co. 2.27
-----------------------------------------------------------
5. Carso Global Telecom 2.09
-----------------------------------------------------------
</TABLE>
Holdings will vary for other periods.
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Prices and Distributions - Class II Shares
<TABLE>
<CAPTION>
6/30/00 5/1/00
<S> <C> <C>
Net Asset Value per Share $ 16.99 $ 18.02
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(5/1/00 - 6/30/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ - $ - $ 0.331
</TABLE>
--------------------------------------------------------------------------------
Performance of a $10,000 Investment - Class II Shares
The following chart shows the value of an investment made in Pioneer Emerging
Markets VCT Portfolio at net asset value, compared to the growth of MSCI
Emerging Markets Free Index.
[LINE CHART PLOT POINTS]
<TABLE>
<CAPTION>
Pioneer
Emerging MSCI Emerging
Markets VCT Markets Free
Portfolio* Index
<S> <C> <C>
5/1/00 10000 10000
5/31/00 9023 9023
6/30/00 9428 9613
</TABLE>
Index comparison begins 5/1/00. The Morgan Stanley Capital International (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 Portfolio returns, do not reflect
any fees or expenses. Portfolio returns are based on net asset value and do not
reflect any annuity-related costs. You cannot invest directly in the Index.
Class II Shares
Cumulative
Total Return
(As of June 30, 2000)
--------------------------------------------------------------------------------
Net Asset Value*
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Period
Life-of-Portfolio -3.86%
(5/1/00)
</TABLE>
All total returns shown assume reinvestment of distributions at net asset
value.
* Reflects Portfolio performance only. Does not reflect any applicable
insurance fees or surrender charges.
2
Past performance does not guarantee future results. Return and share prices
fluctuate so that your investment, when redeemed, may be worth more or less than
its original cost.
<PAGE>
Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/00
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[BEGIN SIDE BAR]
International investing may involve special risks, including differences in
accounting and currency, as well as economic and political instability. Such
risks may be higher for emerging market securities.
[END SIDE BAR]
In the following discussion, Mark Madden, manager of Pioneer Emerging Markets
VCT Portfolio, explains the current positioning of the Portfolio and factors
impacting its performance. The discussion reviews the past six months and their
impact on the Portfolio. The Portfolio's Class II shares were publicly first
offered on May 1, 2000.
Q: How has the Portfolio performed since its inception?
A: For the two months ended June 30, 2000, Pioneer Emerging Markets VCT
Portfolio delivered a total return of -3.86% at net asset value. In
comparison, the MSCI Emerging Market Free Index returned -0.76% for the same
period.
Q: Where are you finding attractive investment opportunities in the emerging
markets?
A: As a result of the recoveries in many of the economies in Asia and Latin
America, we are finding numerous companies that are poised to deliver strong
earnings growth over the next several years. For example, Portfolio holding
Star Publications, a media company in Malaysia, is experiencing a sharp
recovery in profitability. During the recession, advertising revenue fell by
over 20% because advertising is one of the easiest expenses for companies to
cut during difficult times. Now that the Malaysian economy has returned to
strong growth, advertising revenues are recovering sharply.
Your Portfolio benefited from the trend of multinational corporations in the
United States and Europe increasingly outsourcing production and services to
companies in developing countries in order to reduce costs and improve
efficiency in bringing new products to the marketplace. Today, the need for
semiconductor outsourcing is particularly strong with the increasing demand
for products such as personal computers, cellular phones and internet
devices. Portfolio holdings Taiwan Semiconductor Manufacturing and United
Microelectronics of Taiwan are among the most competitive producers of
semiconductor wafers in the world and are poised to benefit from growth in
this industry.
Q: How did the recent correction in the U.S. equity markets affect the
Portfolio's performance?
A: The correction in the U.S. equity markets led to similar corrections in
nearly all equity markets worldwide. The primary cause for investor concern
has been the potential for higher global inflation which would lead to an
increase in U.S. interest rates. Despite the improving prospects of the
countries and companies in which the Portfolio is invested, many of these
holdings saw significant corrections in March and April. We believe that the
current uncertainty relating to the prospects of the U.S. economy and equity
markets may continue to weigh on equity markets in the near term. However,
the recent improvement in many emerging market economies and companies has
the potential to provide attractive investment opportunities for the
intermediate to long term.
Q: What is your outlook?
A: We view the recent correction in stock prices as an opportunity to add to
existing positions that have compelling long-term prospects. The companies in
your Portfolio are well-established with strong underlying fundamentals,
effective management, dynamic growth prospects and reasonable valuations. We
believe that such companies have limited downside during market corrections
and will reward shareholders who stay the course.
Investing in emerging markets carries its own set of risks, including but
not limited to, currency fluctuations, and social and economic instability.
However, we feel confident that the long-term prospects warrant serious
consideration. Arguably, accelerating economic growth, low inflation, stable
interest rates and declining political risk all point to solid economic
expansion in the years ahead.
3
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Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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SCHEDULE OF INVESTMENTS 6/30/00 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
PREFERRED STOCKS - 6.4%
2,190,000 Banco Itau SA $ 192,467
700,000 Eletropaulo Metropolitana SA* 49,293
5,000 Lukoil Oil Co. (A.D.R.)* 100,244
139 Shinsegae Department Store Co.
(New Shares)* 4,912
13,501 Tele Norte Leste Participacoes SA (A.D.R.) 318,961
825 Telecomunicacoes Brasileras SA (A.D.R.) 80,128
1,600 Telecular Sul Participoes SA (A.D.R.)* 72,400
4,100 Telemig Celular Participacoes SA (A.D.R.)* 293,150
2,920 Telesp Celular Participacoes SA (A.D.R.) 131,035
825 Telesp Participacoes SA (A.D.R.) 15,262
165 Tele Sudeste Celular Participacoes SA
(A.D.R.) 5,033
----------
TOTAL PREFERRED STOCKS
(Cost $1,072,691) $1,262,885
----------
COMMON STOCKS - 93.1%
Basic Materials - 0.4%
Chemicals - 0.2%
9,799 Daelim Industrial Co. $ 46,665
----------
Construction (Cement & Aggregates) - 0.1%
3,350 Associated Cement Companies Ltd. $ 8,850
----------
Paper & Forest Products - 0.1%
3,200 Hansol Paper Co. $ 15,095
----------
Total Basic Materials $ 70,610
----------
Capital Goods - 1.4%
Electrical Equipment - 0.5%
22,000 Bharat Heavy Electricals Ltd. $ 65,754
112,000 Nanjing Panda Electronics Co., Ltd.
(Class H)* 40,228
----------
$ 105,982
----------
Trucks & Parts - 0.9%
25,775 Escorts Ltd. $ 81,683
14,950 Larsen & Toubro Ltd. 82,602
----------
$ 164,285
----------
Total Capital Goods $ 270,267
----------
Communication Services - 21.2%
Cellular/Wireless Telecommunications - 5.5%
7,352 Grupo Iusacell SA (Series V) (A.D.R.) $ 114,877
6,600 MIH Ltd.* 198,206
2,000 Mobile Telesystems (A.D.R.)* 44,750
2,700 Mobinil Ltd.* 87,869
7,537 SK Telecom Co., Ltd. (A.D.R.) 273,687
5,500 Stet Hellas Telecomm SA (A.D.R.)* 109,313
55,000 Technology Resources Industries Bhd. 58,474
2,000 Tele Norte Celular Participacoes (A.D.R.) 101,500
9,000 Total Access Communication Public
Co., Ltd.* 36,180
71,500 United Communication Industry Public
Co., Ltd.* 61,598
----------
$1,086,454
----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Telecommunications (Long-Distance) - 1.6%
559,000 Celular CRT Participacoes SA* $ 244,863
1,100 FirstCom Corp.* 16,569
38,000 Keppel Telecom & Transport Ltd. 49,287
----------
$ 310,719
----------
Telephone - 14.1%
144,400 Carso Global Telecom* $ 412,111
5,000 Compania Anonima Nacional Telefonos de
Venezuela (A.D.R.) 135,938
10,800 Embratel Participacoes SA (A.D.R.)* 255,150
1,800 Estonian Telecom Ltd. (G.D.R.) (144A) 36,090
10,601 Hellenic Telecommunication Organization SA 259,744
400 Hellenic Telecommunication Organization SA
(A.D.R.) 4,875
5,800 Korea Telecom Corp. (A.D.R.) 280,575
3,750 Matav (A.D.R.) 129,141
4,900 Philippine Long Distance Telephone
Co. (A.D.R.) ,975
6,700 PT Indosat Indonesian Satellite
Corp. (A.D.R.) 76,213
13,700 Tele Centro Oeste Celular Participacoes
SA (A.D.R.)* 164,400
8,300 Telefonos de Mexico SA (L Shares) (A.D.R.) 474,138
68,600 Telekom Malaysia Bhd. 236,489
15,940 Telekomunikasi Indonesia (A.D.R.) 110,584
6,700 Videsh Sanchar Nigam Ltd. (G.D.R.) (144A) 105,523
----------
$2,767,946
----------
Total Communication Services $4,165,119
----------
Consumer Cyclicals - 8.0%
Automobiles - 0.9%
938,000 Koc Holdings AS $ 66,520
21,600 Mahindra & Mahindra Ltd. (G.D.R.) 99,900
----------
$ 166,420
----------
Auto Parts & Equipment - 0.3%
1,600 Halla Climate Control Co.* $ 53,021
----------
Household Furnishings & Appliances - 0.2%
153,000 Vestel Elektronik Sanayi ve Ticaret AS* $ 46,237
----------
Leisure Time (Products) - 1.0%
51,000 Berjaya Sports Toto Bhd. $ 83,210
2,900 Hero Honda Motors, Ltd.* 64,138
8,500 TVS Suzuki Ltd. (144A) 48,240
----------
$ 195,588
----------
Lodging - Hotels - 0.2%
5,550 The Indian Hotels Co., Ltd. (G.D.R.) (144A) $ 30,109
----------
Publishing - 0.6%
5,300,000 Dogan Sirketler Grubu Holding AS* $ 128,134
----------
Publishing (Newspapers) - 2.1%
9,690,000 Hurriyet Gazetecilile ve Matbaacilik AS* $ 93,707
24,400 Naspers Ltd. 203,183
34,000 Star Publications Inc. 115,421
----------
$ 412,311
----------
</TABLE>
4 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Retail (Department Stores) - 0.2%
800 Shinsegae Department Store Co. $ 35,156
----------
Retail (General Merchandise) - 0.7%
2,200 39 Shopping Corp.* $ 72,016
800 LG Home Shopping, Inc.* 76,052
----------
$ 148,068
----------
Retail (Specialty) - 0.7%
57,415 Walmart De Mexico SA de CV (Series C)* $ 132,371
----------
Services (Advertising/Marketing) - 0.8%
850 Cheil Communications, Inc. $ 110,917
900 LG AD, Inc. 57,389
----------
$ 168,306
----------
Services (Commercial & Consumer) - 0.1%
4,851 Hansol CSN* $ 20,970
----------
Textiles (Home Furnishings) - 0.2%
31,000 Far Eastern Textile Ltd. $ 38,542
----------
Total Consumer Cyclicals $1,575,233
----------
Consumer Staples - 10.1%
Broadcasting (Television/Radio/Cable) - 7.2%
240,900 ABS-CBN Broadcasting Corp. (A.D.R.)* $ 297,992
2,700 Antenna Hungaria Rt.* 78,282
1,025,000 Benpres Holdings Corp* 98,353
700 Benpres Holdings Corp. (G.D.R.) (144A)* 1,400
1,350 Ceske Radiokomunikace AS
(G.D.R.) (144A)* 60,075
11,650 Globo Cabo SA (A.D.R.)* 161,644
12,505 Grupo Radio Centro SA de CV (A.D.R.) 142,244
4,673 Grupo Televisa SA (G.D.R.)* 322,145
6,540 Matav-Cable Systems Media Ltd. 131,665
10,000 TV Azteca, SA de CV (A.D.R.) 131,875
----------
$1,425,675
----------
Entertainment - 1.1%
24,579 Corporacion Interamericana de
Entretenimiento SA (Series B)* $ 96,109
50,500 Tanjong Public Co., Ltd. 120,934
----------
$ 217,043
----------
Foods - 0.7%
2,780 Cheil Jedang Corp. $ 127,404
----------
Restaurants - 0.8%
113,500 Kentucky Fried Chicken Bhd. $ 161,289
----------
Retail Stores (Food Chains) - 0.3%
225,000 Migros Turk T.A.S. $ 41,704
6,000 President Chain Store Corp. 22,457
----------
$ 64,161
----------
Total Consumer Staples $1,995,572
----------
Energy - 2.5%
Oil (International Integrated) - 1.1%
7,400 Petroleo Brasileiro SA $ 214,183
----------
Oil & Gas (Production/Exploration) - 0.5%
2,000 Lukoil Holding (A.D.R.) $ 102,500
----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Oil & Gas (Refining & Marketing) - 0.9%
2,400 Bharat Petroleum Corp., Ltd. $ 10,366
27,035 Hindustan Petroleum Corp., Ltd. 74,324
4,593 SK Corp. 84,237
----------
$ 168,927
----------
Total Energy $ 485,610
----------
Financial - 12.8%
Banks (Major Regional) - 5.5%
3,188,000 Akbank T.A.S. $ 24,664
2,400 Banco Ganadero SA (A.D.R.) 14,100
5,000 Banco de Galicia y Buenos Aires SA de
CV (A.D.R.)* 74,063
69,000 Bangkok Bank Ltd. (Foreign Shares)* 84,544
2,075,000 Bank International* 23,708
4,800 Commercial International Bank 51,163
52,720 Grupo Financiero Banamex Accival (Class O)* 221,675
5,291 Kookmin Bank 67,380
17,800 Malayan Banking Bhd. 72,137
636,200 National Finance Public Co., Ltd.* 90,944
4,425 Shinhan Bank 41,669
27,500 Thai Farmers Bank, Ltd.* 23,165
6,700,000 Turkiye Garanti Bankasi AS* 80,990
4,280 Uniao de Bancos Brasileiros SA (G.D.R.) 123,050
8,561,610 Yapi ve Kredi Bankasi AS* 95,214
----------
$1,088,466
----------
Banks (Money Center) - 0.8%
1,942,000 PT Lippo Bank Tbk* $ 27,735
72,000 PT Lippo Bank Foreign Tbk (Certificate of
Entitlement) (144A)* 0
5,852,800 Turkiye Is Bankasi 124,990
----------
$ 152,725
----------
Banks (Regional) - 0.2%
750 Alpha Bank SA $ 29,589
----------
Consumer Finance - 0.4%
56,300 African Bank Investments Ltd.* $ 73,518
----------
Financial (Diversified) - 3.5%
518,000 Ayala Corp. $ 95,817
40,200 Grupo Financiero Inbursa SA de CV* 134,939
18,500 Housing Development Finance Corp. Ltd. 231,633
11,453 Imperial Holdings Ltd.* 93,180
28,600 Pakistan Investment Fund Inc. 71,500
646,000 SM Prime Holdings, Inc. 77,668
----------
$ 704,737
----------
Insurance (Property/Casualty) - 1.0%
86,240 Cathay Life Insurance Co. Ltd. $ 199,285
----------
Investment Management - 1.4%
51,500 AMMB Holdings Bhd. $ 172,118
46,000 China Everbright Ltd. 35,995
5,796,000 Haci Omer Sabanci Holding AS 68,195
----------
$ 276,308
----------
Total Financial $2,524,628
----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 5
<PAGE>
Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Healthcare - 1.7%
Biotechnology - 0.5%
3,650 Dr. Reddy's Laboratories Ltd. $ 106,749
-----------
Healthcare (Drugs/Major Pharmaceuticals) - 0.8%
2,300 E Merck (India) Ltd. $ 16,463
2,100 Hoechst Marion Roussel Ltd. 22,526
1,500 Knoll Pharmaceutical Ltd. 11,803
6,100 Ranbaxy Laboratories Ltd. 78,774
800 Sun Pharmaceutical Industries Ltd.* 9,616
1,600 Sun Pharmaceutical Industries Ltd.
(Bonus Shares)* 19,161
-----------
$ 158,343
-----------
Healthcare (Medical Products/Supplies) - 0.3%
6,000 Medison Co., Ltd. $ 65,380
-----------
Total Healthcare $ 330,472
-----------
Technology - 33.9%
Communications Equipment - 3.4%
34,000 China Unicom Ltd.* $ 72,183
5,200 China Unicom Ltd. (A.D.R.)* 110,500
5,000 Datacraft Asia Ltd. 44,000
730 Gilat Satellite Networks Ltd.* 50,644
6,100 Insung Information Co., Ltd. 93,276
400 LG Information & Communication Co. 22,493
1,950 Nice Systems Ltd. (A.D.R.)* 150,516
700 Orckit Communications Ltd.* 21,088
3,800 Radvision Ltd.* 106,161
-----------
$ 670,861
-----------
Computers (Hardware) - 3.5%
45,000 Acer, Co. $ 84,215
24,700 Compal Electronics Corp. 60,695
1,350 Samsung Electronics Co. 446,761
16,000 Synnex Technology International Corp. 85,923
-----------
$ 677,594
-----------
Computers (Networking) - 0.8%
6,000 Radware Ltd.* $ 159,000
-----------
Computers (Peripherals) - 1.3%
32,774 Acer Peripherals, Inc. $ 92,803
8,239 Daou Technology, Inc.* 79,802
235,000 Datacapital SA* 79,718
-----------
$ 252,323
-----------
Computers (Software & Services) - 9.3%
4,550 BFL Software Ltd.* $ 51,976
890 Check Point Software Technologies Ltd.* 188,458
800 Daum Communications Corp.* 76,052
2,300 HCL Technologies Ltd.* 72,013
50,000 Idion Technology Holdings Ltd.* 82,535
1,255 Infosys Technologies Ltd. 233,822
51,100 Ixchange Technology Holdings Ltd.* 99,790
7,102 Korea Next Education Service Inc.* 44,458
2,500 Mastek Ltd. 90,389
5,800 NIIT Ltd. 287,123
2,400 Satyam Computer Services, Ltd. 160,303
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Computers (Software & Services) - (continued)
1,400 Silverline Technologies, Ltd. (A.D.R.)* $ 30,275
48,000 Softline Ltd.* 44,144
47,300 ST Computer Systems Ltd. 102,433
11,530 VocalTec Communications, Ltd.* 265,190
-----------
$ 1,828,961
-----------
Electronics (Semiconductors) - 13.5%
27,131 ACER Sertek, Inc. $ 104,638
32,000 Advanced Semiconductor Engineering Inc. 97,901
5,000 Ambit Microsystems Corp. 49,634
28,560 Asustek Computer, Inc. 236,102
31,500 Elec & Eltek International Co. Ltd. 79,065
16,900 Hana Microelectronics Public Co., Ltd. 128,556
16,000 Hon Hai Precision Industry Co. Ltd. 144,768
17,100 Hyundai Electronics Industries Co.* 337,392
1,725 L.G. Electronics Inc. 48,268
50,776 Phoenixtec Power Co., Ltd. 92,545
1,250 Samsung Corp.* 10,773
8,750 Siliconware Precision Industries Co. (A.D.R.)* 80,938
119,040 Taiwan Semiconductor Manufacturing Co. 565,658
6,800 Unisem Bhd. 48,316
163,200 United Microelectronics Corp., Ltd. 454,145
4,000 Venture Manufacturing Ltd. 40,764
4,800 Winbond Electronics Corp. (G.D.R.)* 138,720
-----------
$ 2,658,183
-----------
Equipment (Semiconductors) - 0.4%
810 Orbotech Ltd.* $ 75,229
-----------
Services (Computer Systems) - 1.4%
28,939 Dimension Data Holdings Ltd.* $ 239,275
98,000 Founder Hong Kong Ltd.* 43,685
-----------
$ 282,960
-----------
Services (Data Processing) - 0.3%
13,000 Shinawatra Computer Co., Plc* $ 68,360
-----------
Total Technology $ 6,673,471
-----------
Transportation - 0.7%
Railroads - 0.4%
41,000 Malaysia International Shipping Bhd. $ 67,974
-----------
Shipping - 0.3%
160,000 Far Eastern Silo & Shipping Corp. $ 67,697
-----------
Total Transportation $ 135,671
-----------
Utilities - 0.4%
Electric Companies - 0.0%
4,200 Manila Electric Co. (Class B) $ 6,166
-----------
Power Producers (Independent) - 0.4%
7,660 Unified Energy System (G.D.R.) (144A)* $ 86,293
-----------
Total Utilities $ 92,460
-----------
TOTAL COMMON STOCKS
(Cost $20,183,694) $18,319,113
-----------
</TABLE>
6 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
RIGHTS/WARRANTS - 0.5%
72,000 PT Lippo Bank, 4/15/02 (144A)* $ 0
20,600 Queenbee Restaurant, 3/24/03 5,716
635,900 Siam Commercial Bank, 5/10/02* 74,669
32,211 TelecomAsia Public Co. Ltd.,
4/13/02 (144A)* 16,094
-----------
TOTAL RIGHTS/WARRANTS
(Cost $191,427) $ 96,479
-----------
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $21,447,812) (a) $19,678,477
-----------
</TABLE>
* Non-income producing security.
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At June 30, 2000, the
value of these securities amounted to $383,824 or 2.0% of total net assets.
(a) Distribution of investments by country of issue, as a percentage of equity
holdings, is as follows:
<TABLE>
<S> <C>
Taiwan 13.3%
South Korea 13.2
Brazil 12.4
Mexico 11.5
India 10.6
Israel 5.8
Malaysia 5.8
South Africa 4.2
Turkey 3.9
Philippines 3.4
Thailand 3.0
Greece 2.1
Russia 1.7
Singapore 1.6
Indonesia 1.2
Hungary 1.1
British Virgin Islands 1.0
Others (individually less than 1%) 4.2
-----
100.0%
-----
</TABLE>
The accompanying notes are an integral part of these financial statements. 7
<PAGE>
Pioneer Emerging Markets VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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FINANCIAL HIGHLIGHTS 6/30/00
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
5/1/00
to
6/30/00
(unaudited)
<S> <C>
CLASS II (a)
Net asset value, beginning of period $ 18.02
--------
Decrease from investment operations:
Net investment loss $ (0.30)
Net realized and unrealized loss on investments and foreign currency transactions (0.40)
--------
Net decrease in net asset value $ (0.70)
--------
Distributions to shareholders:
Net realized gain ( 0.33)
--------
Net decrease in net asset value $ (1.03)
--------
Net asset value, end of period $ 16.99
--------
Total return* (3.86)%
Ratio of net expenses to average net assets 2.09%**
Ratio of net investment loss to average net assets (1.10)%**
Portfolio turnover rate 135%**
Net assets, end of period (in thousands) $ 181
Ratios assuming no waiver of management fees and assumption of expenses by PIM:
Net expenses 2.31%**
Net investment loss (1.32)%**
</TABLE>
(a) Class II shares were first publicly offered on May 1, 2000.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of the period.
** Annualized.
8 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Emerging Markets VCT Portfolio
--------------------------------------------------------------------------------
BALANCE SHEET 6/30/00 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $21,447,812) $ 19,678,477
Foreign currencies, at value 226,440
Receivables -
Investment securities sold 207,852
Fund shares sold 15,269
Dividends, interest and foreign taxes withheld 25,960
Forward foreign currency settlement contracts, net 457
Other 2,678
------------
Total assets $ 20,157,133
------------
LIABILITIES:
Payables -
Investment securities purchased $ 380,087
Fund shares repurchased 115,239
Due to bank 155,581
Due to affiliates 19,347
Accrued expenses 1,806
------------
Total liabilities $ 672,060
------------
NET ASSETS:
Paid-in capital $ 21,633,619
Accumulated net investment loss (42,196)
Accumulated net realized loss on investments and foreign currency transactions (337,839)
Net unrealized loss on investments (1,769,335)
Net unrealized gain on foreign currency contracts and other assets and liabilities
denominated in foreign currencies 824
------------
Total net assets $ 19,485,073
------------
NET ASSET VALUE PER SHARE:
Class I:
(Unlimited number of shares authorized)
Net assets $ 19,304,516
Shares outstanding 1,136,316
Net asset value per share $ 16.99
------------
Class II:
(Unlimited number of shares authorized)
Net assets $ 180,557
Shares outstanding 10,627
Net asset value per share $ 16.99
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Emerging Markets VCT Portfolio
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00
INVESTMENT INCOME:
<S> <C>
Dividends (net of foreign taxes withheld of $14,565) $ 99,172
Interest (net of foreign taxes withheld of $974) 35,700
------------
Total investment income $ 134,872
------------
EXPENSES:
Management fees $ 116,590
Transfer agent fees 182
Distribution fees (Class II) 34
Administrative fees 15,707
Custodian fees 47,782
Professional fees 10,920
Printing 6,006
Fees and expenses of nonaffiliated trustees 182
Miscellaneous 3,508
------------
Total expenses $ 200,911
Less management fees waived by Pioneer Investment Management, Inc. (21,015)
Less fees paid indirectly (2,828)
------------
Net expenses $ 177,068
------------
Net investment loss $ (42,196)
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss from:
Investments $ (302,942)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (18,691)
------------
$ (321,633)
------------
Change in net unrealized gain from:
Investments $ (3,803,045)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (300)
------------
$ (3,803,345)
------------
Net loss on investments and foreign currency transactions $ (4,124,978)
------------
Net decrease in net assets resulting from operations $ (4,167,174)
------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Emerging Markets VCT Portfolio
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended
(unaudited) 12/31/99
<S> <C> <C>
FROM OPERATION
Net investment loss $ (42,196) $ (14,131)
Net realized gain (loss) on investments, futures contracts and
foreign currency transactions (321,633) 381,443
Change in net unrealized gain or loss on investments
and foreign currency transactions (3,803,345) 2,029,032
------------ ------------
Net increase (decrease) in net assets resulting from operations $ (4,167,174) $ 2,396,344
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain
Class I $ (380,527) $ -
Class II (2,989) -
------------ ------------
Total distributions to shareholders $ (383,516) $ -
------------ ------------
FROM FUND SHARE TRANSACTION
Net proceeds from sale of shares $ 19,937,295 $ 8,263,933
Reinvestment of distributions 383,516 -
Cost of shares repurchased (5,963,772) (1,114,326)
------------ ------------
Net increase in net assets resulting from fund
share transactions $ 14,357,039 $ 7,149,607
------------ ------------
Net increase in net assets $ 9,806,349 $ 9,545,951
------------ ------------
NET ASSETS:
Beginning of period 9,678,724 132,773
------------ ------------
End of period $ 19,485,073 $ 9,678,724
------------ ------------
Accumulated net investment loss, end of period $ (42,196) $ -
------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Emerging Markets VCT Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/00 (unaudited)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Variable Contracts Trust (the Trust) is a Delaware business trust
registered under the Investment Company Act of 1940 as an open-end management
investment company. The Trust consists of fifteen separate portfolios
(collectively, the Portfolios) as follows:
Pioneer Emerging Markets VCT Portfolio (Emerging Markets Portfolio), Pioneer
Europe VCT Portfolio (Europe Portfolio), Pioneer International Growth VCT
Portfolio (International Growth Portfolio), Pioneer Science & Technology VCT
Portfolio (Science & Technology Portfolio), Pioneer Mid-Cap Value VCT Portfolio
(Mid-Cap Value Portfolio) (formerly Capital Growth Portfolio), Pioneer Growth
Shares VCT Portfolio (Growth Shares Portfolio), Pioneer Real Estate Growth VCT
Portfolio (Real Estate Growth Portfolio), Pioneer Fund VCT Portfolio (Fund
Portfolio) (formerly Growth and Income Portfolio), Pioneer Equity-Income VCT
Portfolio (Equity-Income Portfolio), Pioneer Balanced VCT Portfolio (Balanced
Portfolio), Pioneer High Yield VCT Portfolio (High Yield Portfolio), Pioneer
Strategic Income VCT Portfolio (Strategic Income Portfolio), Pioneer Swiss
Franc Bond VCT Portfolio (Swiss Franc Bond Portfolio), Pioneer America Income
VCT Portfolio (America Income Portfolio), Pioneer Money Market VCT Portfolio
(Money Market Portfolio).
Portfolio shares may only be purchased by insurance companies for the purpose
of funding variable annuity or variable life insurance contracts.
The financial statements included herein are for the Emerging Markets Portfolio
(the Portfolio). The investment objective of the Portfolio is to seek long-term
growth of capital.
The Trust's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the
Trust 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 Trust, which are in conformity
with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value
for the Portfolio is computed once daily, on each day the New York Stock
Exchange is open, as of the close of regular trading on the Exchange. In
computing the net asset value, securities are valued at the last sale price
on the principal exchange where they are traded. Securities that have not
traded on the date of valuation, or securities for which sale prices are
not generally reported, are valued at the mean between the last bid and
asked prices. Securities for which market quotations are not readily
available are valued at their fair values as determined by, or under the
direction of, the Board of Trustees. 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 Portfolio'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 Portfolio is informed of the
ex-dividend data in the exercise of reasonable diligence. Interest income,
including interest on income bearing cash accounts, 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 Portfolio's investments in emerging markets or countries with limited
or developing markets may subject the Portfolio to a 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 Portfolio's investments and income generated by these investments, as
well as the Portfolio's ability to repatriate such amounts. In addition,
delays are common in registering transfers of securities in certain foreign
countries, and the Portfolio may be unable to sell portfolio securities
until the registration process is completed.
B. Futures Contracts
The Portfolio may enter into futures transactions to hedge against changes
in interest rates, securities prices, and currency rates or to seek to
increase total return. Upon entering into a futures contract, the Portfolio
is required to deposit with a broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the associated futures
exchange. Subsequent payments for futures contracts ("variation margin")
are paid or received by the Portfolio, depending on the daily fluctuation
in the value of the contracts, and are recorded by the Portfolio as
unrealized gain or loss. When the contract
12
<PAGE>
Pioneer Emerging Markets VCT Portfolio
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
is closed, the Portfolio realizes a gain or loss equal to the difference
between the opening and closing value of the contract. The use of futures
contracts involves, to varying degrees, elements of market risk which may
exceed the amounts recognized by the Portfolio. Changes in the value of the
contracts may not directly correlate to the changes in the value of the
underlying securities. These risks may decrease the effectiveness of the
Portfolio's hedging strategies and potentially result in loss. As of June
30, 2000, the Portfolio had no outstanding futures contracts.
C. Foreign Currency Translation
The books and records of the Portfolio 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.
D. Forward Foreign Currency Contracts
The Portfolio 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 Portfolio 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.
As of June 30, 2000, the Portfolio had no outstanding portfolio hedges. The
Portfolio's gross forward foreign currency settlement contracts receivable
and payable were $30,826 and $30,369, respectively, resulting in a net
receivable of $457.
E. Taxes
It is the Trust'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 Trust may
also be required to pay local taxes on the recognition of capital gains
and/or the repatriation of foreign currencies in certain countries. During
the six months ended June 30, 2000, the Portfolio paid $71,084 in such
taxes.
In determining the daily net asset value, the Portfolio estimates the
reserve for such taxes, if any, associated with investments in certain
countries. The estimated reserve for capital gains is based on the net
unrealized appreciation on certain portfolio securities, the holding period
of such securities and the related tax rates, tax loss carryforward (if
applicable) and other such factors. The estimated reserve for the
repatriation of foreign currencies is based on principal balances and/or
unrealized appreciation of applicable securities, the holding period of
such investments and the related tax rates and other such factors. As of
June 30, 2000, the Portfolio had no reserve related to capital gains taxes
or taxes on the repatriation of foreign currencies.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Portfolio'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.
F. Portfolio Shares
The Portfolio records sales and repurchases of its shares as of trade date.
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
G. Repurchase Agreements
With respect to repurchase agreements entered into by the Portfolio, 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 Trust's custodian, or subcustodians. The
Trust's investment adviser, Pioneer Investment Management, Inc. (PIM), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
13
<PAGE>
Pioneer Emerging Markets VCT Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/00 (unaudited) (continued)
--------------------------------------------------------------------------------
2. Management Agreement
PIM manages the Portfolio, and is a wholly owned subsidiary of the Pioneer
Group, Inc. (PGI). Management fees are calculated daily at the annual rate of
1.15% of the Portfolio's average daily net assets.
PIM has agreed not to impose all or a portion of its management fees and to
assume other operating expenses of the Portfolio to the extent necessary to
limit expenses of Class I shares to 1.75% of the Portfolio's average daily net
assets attributable to Class I shares. The portion of the Portfolio-wide
expenses attributable to Class II shares will be reduced only to the extent
that such expenses are reduced for Class I shares. PIM's agreement is voluntary
and temporary and may be revised or terminated at any time.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Portfolio. At June 30, 2000, $19,323 was payable to
PIM related to management fees, administrative fees, and certain other
services.
3. Transfer Agent
Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the Trust
at negotiated rates.
4. Distribution Plan
The Portfolio has adopted a plan of distribution for Class II shares in
accordance with Rule 12b-1 under the Investment Company Act of 1940. Under the
plan, the Portfolio pays Pioneer Funds Distributor, Inc. (PFD), the principal
underwriter for the trust and an indirect subsidiary of PGI, a distribution fee
of 0.25% of the average daily net assets attributable to Class II shares.
Included in due to affiliates is $24 in distribution fees payable to PFD at
June 30, 2000.
5. Expense Offsets
The Trust has entered into certain expense offset arrangements resulting in a
reduction in the Portfolio's total expenses. For the six months ended June 30,
2000, the Portfolio's expenses were reduced by $2,828 under such arrangements.
6. Aggregate Unrealized Appreciation and Depreciation
At June 30, 2000, the Portfolios' aggregate unrealized appreciation and
depreciation based on cost of $21,528,086 for federal income tax purposes were
$1,586,237 and $3,435,846, respectively, resulting in net depreciation of
$1,849,609.
7. Portfolio Transactions
The cost of purchases and the proceeds from sales of investments other than
U.S. Government obligations and temporary cash investments for the six months
ended June 30, 2000 were $27,181,513 and $12,293,259, respectively.
8. Capital Shares
At June 30, 2000, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
'00 Shares '00 Amount
Class I: (unaudited) (unaudited) '99 Shares '99 Amount
<S> <C> <C> <C> <C>
Shares sold 935,309 $ 19,755,659 590,026 $ 8,263,933
Reinvestment of distributions 22,347 380,527 - -
Shares repurchased (337,523) (5,963,429) (86,499) (1,114,326)
-------- ------------ ------- ------------
Net increase 620,133 $ 14,172,757 503,527 $ 7,149,607
-------- ------------ ------- ------------
Class II:
Shares sold 10,470 $ 181,636
Reinvestment of distributions 177 2,989
Shares repurchased (21) (343)
-------- ------------
Net increase 10,626 $ 184,282
-------- ------------
</TABLE>
14
<PAGE>
[PIONEER LOGO]
Pioneer Variable Contracts Trust
Officers
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Eric W. Reckard, Treasurer
Joseph P. Barri, Secretary
Trustees
John F. Cogan, Jr.
Richard H. Egdahl, M.D.
Marguerite A. Piret
David D. Tripple
Stephen K. West
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Hale and Dorr LLP
This report must be preceded or accompanied by a prospectus, which includes
more information about charges and expenses. Please read the prospectus
carefully before you invest or send money.
8745-00-0800
