N-CSR 1 ncsr.txt OMB APPROVAL OMB Number: 3235-0570 Expires: November 30, 2005 Estimated average burden hours per response..... 5.0 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-06151 Pioneer Europe Fund (Exact name of registrant as specified in charter) 60 State Street, Boston, MA 02109 (Address of principal executive offices) (ZIP code) Dorothy E. Bourassa, Pioneer Investment Management, Inc., 60 State Street, Boston, MA 02109 (Name and address of agent for service) Registrant's telephone number, including area code: (617) 742-7825 Date of fiscal year end: October 31 Date of reporting period: November 1, 2002 through October 31, 2003 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO SHAREOWNERS. ================================================================================ PIONEER ------- EUROPE FUND Annual Report 10/31/03 [LOGO] PIONEER Investments Table of Contents -------------------------------------------------------------------------------- Letter to Shareowners 1 Portfolio Summary 2 Performance Update 3 Portfolio Management Discussion 8 Schedule of Investments 12 Financial Statements 18 Notes to Financial Statements 27 Report of Independent Auditors 34 Trustees, Officers and Service Providers 35 Programs and Services for Pioneer Shareowners 42 Retirement Plans for Pioneer 44
Pioneer Europe Fund -------------------------------------------------------------------------------- LETTER TO SHAREOWNERS 10/31/03 -------------------------------------------------------------------------------- Dear Shareowner, -------------------------------------------------------------------------------- The stock market rally that began last spring extended into late summer as signs of an economic recovery accumulated. Gross domestic product, a tally of all goods and services produced in the United States, expanded, thanks to increased personal consumption, housing and business spending, low short-term interest rates and lower taxes on individuals. While broader market indicators managed small gains, the NASDAQ Composite rose sharply in the third quarter as investors sensed that companies might soon boost technology outlays. September's dip in consumer expectations linked to slow job creation, plus cutbacks in OPEC oil production, drove markets off their highest levels. Investors also kept an eye on the news, as U.S. troops came under daily fire in Iraq and tensions elsewhere remained. As the economy appeared to strengthen, investors who had sought safety in U.S. Treasury issues grew less risk-averse. As a result, corporate bonds moved broadly higher and the Treasury bond rally stalled. Some of the biggest gains were recorded among lower-- rated, high-yield bonds whose issuers often depend on a strong economy to boost earnings. Bonds in emerging and developed markets also did well, as economies stabilized and currencies rose against the slumping U.S. dollar. Stocks and bonds, bonds and stocks Over the past few years, investor sentiment has swung from stocks to bonds and back again, from U.S. government securities to corporate and international issues. Each sector has spent time in the spotlight or backstage, delivering periods of stronger or weaker performance relative to one another. With sectors constantly moving in and out of favor, how can you increase your chances of holding investments that are performing well? By owning several kinds of securities, not just one or two. Through a process called asset allocation, you can create an investment mix that reflects your needs, taking into account such factors as your age, your financial goals and their timing, and, of course, your comfort level where risk is concerned. Asset allocation is only one area in which a qualified investment professional can serve you well. Ask your advisor to review how shifting markets may have affected your asset allocation recently. And if you've never thought about asset allocation before, now is the best time to start. Like everyone at Pioneer, I appreciate your continued confidence in our products and services. [BEGINNING CALLOUT] Pioneer's new president Osbert Hood was recently named Chief Executive Officer and President of Pioneer Investments U.S.A. Mr. Hood, formerly Pioneer's Chief Operating Officer and a key member of the senior management committee, joined Pioneer in 2000 from John Hancock Financial Services, where he had held senior financial positions. "I am excited and honored to have the opportunity to lead Pioneer as it continues to grow," Mr. Hood said. "As CEO I look forward to furthering Pioneer's strategic goals, including developing new products that can meet the wider needs of investors and the advisers who serve them." [END CALLOUT] Respectfully, /s/ Osbert Hood --------------- Osbert Hood, President and Chief Executive Officer Pioneer Investment Management, Inc. Any information in this shareholder report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. 1 Pioneer Europe Fund -------------------------------------------------------------------------------- PORTFOLIO SUMMARY 10/31/03 -------------------------------------------------------------------------------- Portfolio Diversification -------------------------------------------------------------------------------- (As a percentage of total investment portfolio) [BEGINNING PIE CHART] International Common Stocks 99% Preferred International Stocks 1% [END PIE CHART] Geographical Distribution -------------------------------------------------------------------------------- (As a percentage of equity holdings) [BEGINNING LINE CHART] United Kingdom 34.8% Italy 2.6% France 17.6% Finland 2.5% Germany 12.0% Sweden 2.1% Switzerland 11.6% Ireland 1.7% Netherlands 10.7% Portugal 1.0% Spain 2.8% Belgium 0.6% [END LINE CHART] 10 Largest Holdings -------------------------------------------------------------------------------- (As a percentage of equity holdings)* 1. HSBC Holding Plc 4.90% 2. Vodafone Group Plc 3.93 3. BNP Paribas SA 3.06 4. Royal Dutch Petroleum Co. 3.04 5. GalaxoSmithKline Plc 2.88 6. Nestle SA (Registered Shares) 2.76 7. Royal Bank of Scotland Group Plc. 2.59 8. Nokia Oyj 2.50 9. Total SA 2.39 10 BP Amoco Plc 2.33
*This list excludes temporary cash and derivative investments. Fund holdings will vary for other periods. 2 Pioneer Europe Fund -------------------------------------------------------------------------------- PERFORMANCE UPDATE 10/31/03 CLASS A SHARES -------------------------------------------------------------------------------- Share Prices and Distributions --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/03 10/31/02 $22.66 $19.40 Net Distributions per Share Investment Short-Term Long-Term (11/1/02 - 10/31/03) Income Capital Gains Capital Gains $ - $ - $ -
Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Europe Fund at public offering price, compared to that of the Morgan Stanley Capital International (MSCI) Europe Index. Average Annual Total Returns (As of October 31, 2003)
Net Asset Public Offering Period Value Price* 10 Years 6.41 5.78 5 Years -4.23 -5.35 1 Year 16.80 10.11
All returns reflect reinvestment of distributions at net asset value. * Reflects deduction of the maximum 5.75% sales charge at the beginning of the period. [BEGINNING MOUNTAIN CHART] Value of $10,000 Investment
Pioneer Europe Fund* MSCI Europe Index "10/93" 9425 10000 10926 11124 "10/95" 12577 12594 14817 14792 "10/97" 19009 18637 21767 22935 "10/99" 23728 25808 25348 26051 "10/01" 17685 20100 15015 17307 "10/03" 17538 21491
[END MOUNTAIN CHART] The Morgan Stanley Capital International (MSCI) Europe Index is a capitalization-weighted index of the 15 European country indexes included in the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 3 Pioneer Europe Fund -------------------------------------------------------------------------------- PERFORMANCE UPDATE 10/31/03 CLASS B SHARES -------------------------------------------------------------------------------- Share Prices and Distributions --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/03 10/31/02 $20.85 $18.04 Net Distributions per Share Investment Short-Term Long-Term (11/1/02 - 10/31/03) Income Capital Gains Capital Gains $ - $ - $ -
Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley Capital International (MSCI) Europe Index. Average Annual Total Returns (As of October 31, 2003)
If If Period Held Redeemed* Life-of-Class (4/4/94) 5.31% 5.31% 5 Years -5.13 -5.31 1 Year 15.58 11.58
All returns reflect reinvestment of distributions at net asset value. * Reflects deduction of the maximum applicable contingent deferred sales charge (CDSC) at the end of the period. The maximum CDSC of 4% declines to zero over six years. [BEGINNING MOUNTAIN CHART] Value of $10,000+ Investment
Pioneer Europe Fund* MSCI Europe Index "4/94" 10000 10000 10539 10309 "10/95" 12060 11672 14089 13709 "10/97" 17493 17272 20367 21256 "10/99" 22021 23919 23322 24143 "10/01" 16106 18628 13545 16040 "10/03" 15655 19917
[END MOUNTAIN CHART] + Index comparison begins April 30, 1994. The Morgan Stanley Capital International (MSCI) Europe Index is a capitalization-weighted index of the 15 European country indexes included in the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 4 Pioneer Europe Fund -------------------------------------------------------------------------------- PERFORMANCE UPDATE 10/31/03 CLASS C SHARES -------------------------------------------------------------------------------- Share Prices and Distributions --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/03 10/31/02 $20.79 $17.98 Net Distributions per Share Investment Short-Term Long-Term (11/1/02 - 10/31/03) Income Capital Gains Capital Gains $ - $ - $ -
Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Europe Fund at public offering price, compared to that of the Morgan Stanley Capital International (MSCI) Europe Index. Average Annual Total Returns (As of October 31, 2003)
Net Asset Public Offering Period Value Price/CDSC* Life-of-Class (1/31/96) 3.14% 3.01% 5 Years -5.10 -5.29 1 Year 15.63 14.48
All returns reflect reinvestment of distributions at net asset value. * Reflects deduction of the 1% sales charge at the beginning of the period. The 1% contingent deferred sales charge (CDSC) applies to investments sold within one year of purchase. [BEGINNING MOUNTAIN CHART] Value of $10,000 Investment
Pioneer Europe Fund* MSCI Europe Index "1/96" 9900 10000 11277 11232 "10/97" 14375 14151 16345 17414 "10/99" 17685 19596 18733 19780 "10/01" 12947 15262 10883 13142 "10/03" 12584 16317
[END MOUNTAIN CHART] The Morgan Stanley Capital International (MSCI) Europe Index is a capitalization-weighted index of the 15 European country indexes included in the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 5 Pioneer Europe Fund -------------------------------------------------------------------------------- PERFORMANCE UPDATE 10/31/03 CLASS R SHARES -------------------------------------------------------------------------------- Share Prices and Distributions --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/03 4/1/03** $22.67 $17.92
Net Distributions per Share Investment Short-Term Long-Term (4/1/03 - 10/31/03) Income Capital Gains Capital Gains $ - $ - $ -
Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley Capital International (MSCI) Europe Index. Average Annual Total Returns+ (As of October 31, 2003)
If If Period Held Redeemed* 10 Years 6.03 6.03 5 Years -4.37 -4.37 1 Year 16.85 15.85
All returns reflect reinvestment of distributions at net asset value. * Reflects deduction of 1% CDSC. Shares sold within 18 months of purchase may be subject to CDSC. [BEGINNING MOUNTAIN CHART] Value of $10,000 Investment
Pioneer Europe Fund* MSCI Europe Index "10/93" 10000 10000 11506 11124 "10/95" 13177 12594 15412 14792 "10/97" 19731 18637 22456 22935 "10/99" 24287 25808 25951 26051 "10/01" 18106 20100 15372 17307 "10/03" 17964 21491
[END MOUNTAIN CHART] ** Class R shares were first publicly offered on April 1, 2003. + Class R shares have no front-end load, may be subject to a back-end load and are available to certain retirement plans. The performance of Class R shares for the period prior to the commencement of operations of Class R shares on April 1, 2003 is based on the performance of Class A shares, reduced to reflect the higher distribution and service fees of Class R shares. You do not pay a sales charge on purchases of Class R shares, but will pay a CDSC if you sell your shares within 18 months of purchase, unless you qualify for a waiver. The Morgan Stanley Capital International (MSCI) Europe Index is a capitalization-weighted index of the 15 European country indexes included in the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 6 Pioneer Europe Fund -------------------------------------------------------------------------------- PERFORMANCE UPDATE 10/31/03 CLASS Y SHARES -------------------------------------------------------------------------------- Share Prices and Distributions --------------------------------------------------------------------------------
Net Asset Value per Share 10/31/03 10/31/02 $23.40 $19.88 Net Distributions per Share Investment Short-Term Long-Term (11/1/02 - 10/31/03) Income Capital Gains Capital Gains $ - $ - $ -
Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley Capital International (MSCI) Europe Index. Average Annual Total Returns* (As of October 31, 2003)
If If Period Held Redeemed Life-of-Class (7/2/98) -6.07% -6.07% 5 Year -3.67 -3.67 1 Year 17.71 17.71
* All returns reflect reinvestment of distributions at net asset value. [BEGINNING MOUNTAIN CHART] Value of $10,000 Investment+
Pioneer Europe Fund* MSCI Europe Index "7/98" 10000 10000 8458 9064 "10/99" 9269 10199 9950 10295 "10/01" 6973 7943 5960 6840 "10/03" 7015 8494
[END MOUNTAIN CHART] + Index comparison begins July 31, 1998. The Morgan Stanley Capital International (MSCI) Europe Index is a capitalization-weighted index of the 15 European country indexes included in the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 7 Pioneer Europe Fund -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT DISCUSSION 10/31/03 -------------------------------------------------------------------------------- European stocks made strong gains during the 12 months ended October 31, 2003. Improving corporate fundamentals and rising investor optimism helped push stock prices higher. As the year progressed, however, investors turned increasingly to higher-risk stocks that outperformed during Pioneer Europe Fund's fiscal year. In the following interview, Stan Pearson, a member of the Fund's management team, discusses the equity market's recovery, its impact on your portfolio and his outlook for the months ahead. Q: What contributed to the rally in European markets? A: Rising investor confidence in a nutshell. The rather swift conclusion of the war in Iraq last spring encouraged many investors to reallocate investments into stocks. Prior to that time, the heightened awareness of terrorism, the risks associated with potential war and rising energy prices had curbed investors' appetite for riskier investments. The more conservative tone meant that investors preferred higher-quality stocks to lower-quality or less proven equity investments. As the Fund's fiscal year progressed and geopolitical uncertainties eased, investors began to reassess their risk tolerance, focusing increasingly on higher-risk investments that had dramatically underperformed in the multi-year correction. Evidence of an economic recovery in the United States and the prospect of a U.S.-led global recovery further elevated prospects for European stocks. Q: How did the Fund perform in this more favorable environment? A: The Fund turned in strong double-digit returns for its fiscal year. For the 12 months ended October 31, 2003, the Fund's Class A shares returned 16.80% at net asset value. While the gains were considerable, the Fund underperformed the Morgan Stanley Capital International (MSCI) Europe Index, which posted a return of 24.16% for the same period. Several of the portfolio's more stable, high quality holdings, which had served the Fund so well during more uncertain times, lagged relatively riskier, lower-quality investments during the second half of the fiscal year. Investors perceived lower quality stocks as offering better value since they had not appreciated as strongly in the months preceding the rally. Incidentally, this realignment of investors' risk tolerance was also evident in the bond markets. 8 Pioneer Europe Fund -------------------------------------------------------------------------------- Q: Corporate earnings are improving. Are you encouraged? A: Certainly. Several years of cost-cutting, debt reduction and restructuring have created more efficient, streamlined companies that are better positioned to profit from an improving economic outlook. The quality of corporate balance sheets has vastly improved. During the course of 2003, we've seen the global economy move out of a recession. The U.S. economy has led the way, but toward the end of the Fund's fiscal year, we began to see some tentative signs of an upturn in the Euro-zone. Business confidence in Germany, Europe's largest economy, showed a notable increase. Given businesses' improving assessment of their operating environment, we expect to see the re-emergence of growth in Germany and the rest of continental Europe. Q: Has the Fund's strategy changed in response to the improving economic environment? A: Despite the positive developments, we don't believe the answer lies in the portfolio's taking on a riskier profile. Rather, we think it's more prudent to remain focused on our bottom-up investment approach to stock selection, which is based on the individual merits of single companies. This approach is designed to uncover European companies with strong balance sheets, a competitive advantage in the market they operate, a well defined strategy and the ability to implement that strategy. Many times, we find high quality companies with stock prices that we think are undervalued and don't reflect the underlying companies' intrinsic value. As their value is recognized, prices should increase to reflect their future growth potential. Q: Could you mention some companies that support your strategy? A: Given the changing demographics of an aging population throughout much of the world, demand for drugs is on the rise. Furthermore, stock price valuations in the health care sector are attractive, especially given that the sector is somewhat out of favor currently. In addition, we believe the markets have generally priced in the risks from generic competition on patented drugs and from pressure by governments to lower drug prices. Lastly, new, exciting drugs are on the horizon, which should contribute to 9 Pioneer Europe Fund -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT DISCUSSION 10/31/03 (continued) -------------------------------------------------------------------------------- future profits. On October 31, the Fund held large positions in AstraZeneca (United Kingdom) and Schering (Germany). In the capital goods sector, many companies have implemented considerable cost reduction strategies, which should contribute to improving profit margins. We think these more efficient, streamlined companies will be more likely to prosper as economic growth strengthens. In keeping with that thinking, we increased the Fund's exposure to German-based Siemens and Schneider during the fiscal year. The Fund's investments in the diversified financials sector also proved rewarding, particularly Deutsche Boerse (Germany) and ING Groep (Netherlands). In the technology sector, we believe companies are fully valued following the strong gains of the past year and have trimmed positions accordingly. Our decision to underweight the troubled insurance sector hurt the Fund during recent months. However, we remain confident in our decision to keep the Fund's exposure limited until we see improvement within the industry, which is still feeling the effects of low capital-adequacy ratios. Q: Was the strong euro a factor in the Fund's performance? A: Yes. The euro's ongoing strength relative to the dollar played a favorable role in your Fund's performance. In fact, the dollar fell 14.5 percent against the euro for the 12 months that ended October 31, 2003. When the Fund's gains or losses in more expensive foreign currencies are converted back into a weaker U.S. dollar, the dollar-based returns become more favorable. During the reporting period, the strength of the euro versus the U.S. dollar raised some investor concerns regarding the prospects for European-export-related companies and their growth in the Euro-zone. The rise in the euro relative to the dollar makes European products more expensive in the United States and erodes the value of European companies' export sales. However, the assumption that the U.S.-led global recovery will create sufficient demand to compensate for the euro's strength served to ease such investor concerns. 10 Pioneer Europe Fund -------------------------------------------------------------------------------- Q: What is your outlook? A: The upturn in the business cycle is creating a favorable investment environment for the earnings potential of European companies. Furthermore, corporate restructuring has contributed to a more solid overall position from which a sustained recovery in corporate profits can occur. We believe that equity valuations across Europe are not excessive and remain supported by historically high dividend yields. (A high dividend yield is usually indicative of a low stock price valuation; as a stock's price rises, its dividend yield decreases.) As the global economy continues to improve, we believe European equities offer further appreciation potential. We feel confident that our bottom-up investment approach is the most reliable way to take advantage of such growth opportunities going forward. Any information in this shareholder report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. 11 Pioneer Europe Fund -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 10/31/03 --------------------------------------------------------------------------------
Shares Value PREFERRED STOCK - 1.0% Automobiles & Components - 1.0% Automobile Manufacturers - 1.0% 3,303 Porsche AG Designs* $ 1,613,657 ----------- TOTAL PREFERRED STOCK (Cost $951,737) $ 1,613,657 ----------- COMMON STOCKS - 98.4% Energy - 10.9% Integrated Oil & Gas - 5.5% 575,762 BP Amoco Plc $ 3,985,831 160,888 Eni S.p.A. 2,552,006 473,591 Shell Transport & Trading Co. 2,949,273 ----------- $ 9,487,110 ----------- Oil & Gas Refining Marketing & Transportation - 5.4% 117,776 Royal Dutch Petroleum Co. $ 5,216,371 26,445 Total SA 4,102,650 ----------- $ 9,319,021 ----------- Total Energy $18,806,131 ----------- Materials - 5.6% Commodity Chemicals - 0.9% 35,420 BASF India Ltd. $ 1,620,970 ----------- Construction Materials - 2.3% 96,536 CRH Plc $ 1,732,882 30,856 Lafarge SA 2,205,514 ----------- $ 3,938,396 ----------- Diversified Metals & Mining - 1.5% 65,671 Rio Tinto Plc $ 1,593,540 35,492 Sandvik AB 1,054,315 ----------- $ 2,647,855 ----------- Specialty Chemicals - 0.9% 10,331 Air Liquide SA $ 1,528,418 ----------- Total Materials $ 9,735,639 ----------- Capital Goods - 6.3% Aerospace & Defense - 0.8% 113,663 Smiths Industries $ 1,349,074 -----------
The accompanying notes are an integral part of these financial statements. 12 Pioneer Europe Fund --------------------------------------------------------------------------------
Shares Value Construction & Engineering - 2.9% 79,691 Grupo Dragados SA $ 1,624,690 80,953 Compagnie de Saint Gobain 3,408,862 ----------- $ 5,033,552 ----------- Electrical Component & Equipment - 0.9% 25,459 Schneider Electric SA* $ 1,487,409 ----------- Industrial Machinery - 1.7% 40,970 SKF AB* $ 1,447,861 266,724 Scottish Power Plc 1,587,519 ----------- $ 3,035,380 ----------- Total Capital Goods $10,905,415 ----------- Commercial Services & Supplies - 2.1% Diversified Commercial Services - 2.1% 883,298 Hays Plc $ 1,827,329 85,486 TNT Post Group NV 1,840,045 ----------- $ 3,667,374 ----------- Total Commercial Services & Supplies $ 3,667,374 ----------- Automobiles & Components - 1.1% Automobile Manufacturers - 1.1% 46,414 Bayerische Motoren Werke AG $ 1,858,051 ----------- Total Automobiles & Components $ 1,858,051 ----------- Hotels, Restaurants & Leisure - 1.6% Restaurants - 1.6% 241,297 Compass Group Plc $ 1,397,309 114,010 GUS Plc 1,392,922 ----------- $ 2,790,231 ----------- Total Hotels, Restaurants & Leisure $ 2,790,231 ----------- Media - 3.4% Advertising - 0.8% 40,357 Publicis SA $ 1,259,681 ----------- Broadcasting & Cable T.V. - 0.0% 375 Antena 3 Television SA* $ 12,227 -----------
The accompanying notes are an integral part of these financial statements. 13 Pioneer Europe Fund -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 10/31/03 (continued) --------------------------------------------------------------------------------
Shares Value Publishing - 2.6% 205,295 Elsevier NV $ 2,282,093 32,786 VNU NV 996,734 87,280 Wolters Kluwer NV* 1,224,420 ----------- $ 4,503,247 ----------- Total Media $ 5,775,155 ----------- Retailing - 1.9% Department Stores - 1.2% 49,893 Metro AG $ 2,022,217 ----------- Home Improvement Retail - 0.7% 98,688 Wolseley $ 1,208,235 ----------- Total Retailing $ 3,230,452 ----------- Food & Drug Retailing - 7.1% Food Retail - 7.1% 36,961 Carrefour Supermarch $ 1,936,810 21,540 Nestle SA (Registered Shares) 4,732,120 220,780 Tomkins Plc 1,045,448 750,328 Tesco Plc 3,015,430 26,324 Unilever NV 1,526,338 ----------- $12,256,146 ----------- Total Food & Drug Retailing $12,256,146 ----------- Food, Beverage & Tobacco - 2.5% Distillers & Vintners - 0.9% 133,665 Diageo Plc $ 1,572,993 ----------- Tobacco - 1.6% 232,357 British American Tobacco Plc $ 2,811,250 ----------- Total Food, Beverage & Tobacco $ 4,384,243 ----------- Health Care Equipment & Services - 1.3% Health Care Equipment - 1.3% 24,310 Celesio AG* $ 1,014,929 31,474 Getinge AB (B Shares) 1,150,561 ----------- $ 2,165,490 ----------- Total Health Care Equipment & Services $ 2,165,490 -----------
The accompanying notes are an integral part of these financial statements. 14 Pioneer Europe Fund --------------------------------------------------------------------------------
Shares Value Pharmaceuticals & Biotechnology - 11.7% Pharmaceuticals - 11.7% 78,497 AstraZeneca Plc $ 3,699,060 231,091 GlaxoSmithKline Plc 4,929,619 83,709 Novartis AG 3,183,851 44,664 Roche Holdings AG 3,687,930 23,872 Sanofi-Synthelabo SA* 1,475,020 68,765 Schering AG 3,226,770 ----------- $20,202,250 ----------- Total Pharmaceuticals & Biotechnology $20,202,250 ----------- Banks - 16.7% Diversified Banks - 16.7% 77,239 Allied Irish Banks Plc $ 1,127,475 388,377 Barclays Plc 3,276,395 157,436 Banco Bilbao Vizcaya Argentaria SA 1,803,062 99,903 BNP Paribas SA 5,239,700 68,932 Credit Agricole SA* 1,461,332 57,131 CS Group 2,008,603 66,887 Dexia* 1,050,872 557,273 HSBC Holding Plc 8,391,328 164,862 Royal Bank of Scotland Group Plc 4,436,569 ----------- $28,795,336 ----------- Total Banks $28,795,336 ----------- Diversified Financials - 7.1% Diversified Financial Services - 7.1% 45,593 Deutsche Boerse AG $ 2,530,922 26,431 Deutsche Bank AG 1,737,719 32,840 Societe Generale AG 2,434,969 98,705 ING Groep NV 2,045,550 58,324 UBS AG 3,573,748 ----------- $12,322,908 ----------- Total Diversified Financials $12,322,908 ----------- Insurance - 4.2% Life & Health Insurance - 1.1% 136,551 Aegon NV $ 1,787,284 -----------
The accompanying notes are an integral part of these financial statements. 15 Pioneer Europe Fund -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 10/31/03 (continued) --------------------------------------------------------------------------------
Shares Value Multi-Line Insurance - 3.1% 138,886 AXA SA $ 2,626,852 21,627 Zurich Financial Services* 2,763,472 ------------ $ 5,390,324 ------------ Total Insurance $ 7,177,608 ------------ Technology Hardware & Equipment - 4.7% Semiconductors - 0.8% 52,250 Philips Electronics NV $ 1,405,972 ------------ Communications Equipment - 2.5% 252,449 Nokia Oyj $ 4,288,488 ------------ Electronic Equipment & Instruments - 1.4% 36,498 Siemens AG $ 2,447,859 ------------ Total Technology Hardware & Equipment $ 8,142,319 ------------ Telecommunication Services - 8.1% Integrated Telecommunications Services - 4.2% 112,874 British Sky Broadcasting Plc* $ 1,225,922 40,465 France Telecom* 977,574 201,038 Portugal Telecom SGPS SA 1,686,576 111,107 Telefonica SA 1,379,478 242,058 Telecom Italia Mobile S.p.A. 1,109,446 304,857 Telecom Italia S.p.A.* 794,149 ------------ $ 7,173,145 ------------ Wireless Telecommunications Services - 3.9% 3,213,197 Vodafone Group Plc $ 6,729,054 ------------ Total Telecommunication Services $ 13,902,199 ------------ Utilities - 2.1% Electric Utilities - 2.1% 48,974 E.On AG $ 2,461,747 182,876 National Grid Transco Plc 1,168,125 ------------ $ 3,629,872 ------------ Total Utilities $ 3,629,872 ------------ TOTAL COMMON STOCKS (Cost $153,136,533) $169,746,819 ------------
The accompanying notes are an integral part of these financial statements. 16 Pioneer Europe Fund --------------------------------------------------------------------------------
Shares Value RIGHTS/WARRANTS - 0.0% Miscellaneous - 0.0% 68,932 Credit Agricole SA (Rights)* $ 15,998 ------------ TOTAL RIGHTS/WARRANTS (Cost $10,434) $ 15,998 ------------ TOTAL INVESTMENT IN SECURITIES - 99.4% (Cost $154,098,704) (a)(b)(c) $171,376,474 ------------ OTHER ASSETS AND LIABILITIES - 0.6% $ 1,113,498 ------------ TOTAL NET ASSETS - 100.0% $172,489,972 ============
* Non-income producing security. (a) Distribution of investments by country of issue, as a percentage of total equity holdings (excluding temporary cash investments) is as follows: United Kingdom 34.8% France 17.6 Germany 12.0 Switzerland 11.6 Netherlands 10.7 Spain 2.8 Italy 2.6 Finland 2.5 Sweden 2.1 Ireland 1.7 Portugal 1.0 Belgium 0.6 ---- Total 100.0% =====
(b) At October 31, 2003, the net unrealized gain on investments based on cost for federal income tax purposes of $156,769,478 was as follows:
Aggregate gross unrealized gain for all investments in which there is an excess of value over tax cost $20,570,923 Aggregate gross unrealized loss for all investments in which there is an excess of tax cost over value (5,963,927) ----------- Net unrealized gain $14,606,996 ===========
(c) At October 31, 2003, the Fund had a net capital loss carryforward of $70,123,211 of which the following amounts will expire between 2008 and 2011, if not utilized. $5,276,444 in 2008 $27,419,760 in 2009 $23,790,437 in 2010 $13,636,570 in 2011 Purchases and sales of securities (excluding temporary cash investments) for the year ended October 31, 2003 aggregated $89,240,438 and $119,140,030, respectively. The accompanying notes are an integral part of these financial statements. 17 Pioneer Europe Fund -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES 10/31/03 -------------------------------------------------------------------------------- ASSETS: Investment in securities, at value (cost $154,098,704) $171,376,474 Cash 1,002,547 Foreign currency, at value (cost $1,295) 1,295 Receivables - Fund shares sold 220,130 Dividends, interest and foreign taxes withheld 577,365 Other 5,362 ------------- Total assets $173,183,173 ------------- LIABILITIES: Payables - Fund shares repurchased $ 189,630 Due to affiliates 336,321 Accrued expenses 167,250 ------------- Total liabilities $ 693,201 ------------- NET ASSETS: Paid-in capital $227,479,112 Accumulated undistributed net investment income 472,241 Accumulated net realized loss on investments, futures contracts, and foreign currency transactions (72,793,985) Net unrealized gain on investments 17,277,770 Net unrealized gain on forward foreign currency contracts and other assets and liabilities denominated in foreign currencies 54,834 ------------- Total net assets $172,489,972 ============= NET ASSET VALUE PER SHARE: Class A (based on $112,159,701/4,949,304 shares) $ 22.66 ============= Class B (based on $46,358,155/2,223,708 shares) $ 20.85 ============= Class C (based on $11,801,485/567,599 shares) $ 20.79 ============= Class R (based on $632.66/27.902 shares) $ 22.67 ============= Class Y (based on $2,169,998/92,735 shares) $ 23.40 ============= MAXIMUM OFFERING PRICE: Class A ($22.66 [divided by] 94.25%) $ 24.04 ============= Class C ($20.79 [divided by] 99.00%) $ 21.00 =============
The accompanying notes are an integral part of these financial statements. 18 Pioneer Europe Fund -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS -------------------------------------------------------------------------------- For the Year Ended 10/31/03 INVESTMENT INCOME: Dividends (net of foreign taxes withheld of $716,033) $ 4,673,867 Interest 51,948 ------------ Total investment income $ 4,725,815 ------------ EXPENSES: Management fees $ 1,729,369 Transfer agent fees Class A 600,932 Class B 389,672 Class C 90,563 Class Y 23 Distribution fees Class A 280,463 Class B 470,056 Class C 117,409 Class R 2 Administrative Fees 27,146 Custodian fees 86,685 Registration fees 94,924 Professional fees 31,607 Printing 71,748 Fees and expenses of nonaffiliated trustees 7,709 Miscellaneous 19,273 ------------ Total expenses $ 4,017,581 Less fees paid indirectly (8,973) ------------ Net expenses $ 4,008,608 ------------ Net investment income $ 717,207 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) from: Investments $(13,001,885) Futures contracts 77,226 Forward foreign currency contracts and other assets and liabilities denominated in foreign currencies (244,966) $(13,169,625) ------------ ------------ Change in net unrealized gain (loss) from: Investments $ 39,950,585 Futures contracts (305,156) Other assets and liabilities denominated in foreign currencies (29,972) $ 39,615,457 ------------ ------------ Net gain on investments, futures contracts and foreign currency transactions $ 26,445,832 ------------ Net increase in net assets resulting from operations $ 27,163,039 ============
The accompanying notes are an integral part of these financial statements. 19 Pioneer Europe Fund -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- For the Years Ended 10/31/03 and 10/31/02, respectively
Year Ended Year Ended 10/31/03 10/31/02 FROM OPERATIONS: Net investment income (loss) $ 717,207 $ (448,297) Net realized loss on investments, futures contracts and foreign currency transactions (13,169,625) (25,082,839) Change in net unrealized gain (loss) on investments, futures contracts and foreign currency transactions 39,615,457 (5,397,104) ------------ ------------ Net increase (decrease) in net assets resulting from operations $ 27,163,039 $(30,928,240) ------------ ------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sale of shares $189,080,988 $198,272,236 Cost of shares repurchased (226,348,321) (258,730,533) ------------ ------------ Net decrease in net assets resulting from fund share transactions $(37,267,333) $(60,458,297) ------------ ------------ Net increase (decrease) in net assets $ 10,104,294 $(91,386,537) NET ASSETS: Beginning year 182,594,266 273,980,803 ------------ ------------ End of year (including accumulated undistributed net investment income of $472,241 and $0, respectively) $172,489,972 $182,594,266 ============ ============
The accompanying notes are an integral part of these financial statements. 20 Pioneer Europe Fund -------------------------------------------------------------------------------- For the Years Ended 10/31/03 and 10/31/02, respectively
'03 Shares '03 Amount '02 Shares '02 Amount CLASS A Shares sold 8,641,097 $167,590,556 7,647,990 $161,453,853 Less shares repurchased (9,673,429) (190,142,083) (9,000,673) (194,461,375) ---------- ------------ ---------- ------------ Net decrease (1,032,332) $(22,551,527) (1,352,683) $(33,007,522) ========== ============ ========== ============ CLASS B Shares sold 185,386 $ 3,518,231 438,959 $ 9,257,799 Less shares repurchased (844,268) (15,582,369) (1,428,876) (29,996,573) ---------- ------------ ---------- ------------ Net decrease (658,882) $(12,064,138) (989,917) $(20,738,774) ========== ============ ========== ============ CLASS C Shares sold 943,312 $ 17,383,577 524,672 $ 10,712,190 Less shares repurchased (1,063,578) (19,709,696) (841,956) (17,464,179) ---------- ------------ ---------- ------------ Net decrease (120,266) $ (2,326,119) (317,284) $ (6,751,989) ========== ============ ========== ============ CLASS R* Shares sold 28 $ 500 Less shares repurchased - - ---------- ------------ Net increase 28 $ 500 ========== ============ CLASS Y Shares sold 30,059 $ 588,124 845,869 $ 16,848,394 Less shares repurchased (46,183) (914,173) (815,867) (16,808,406) ---------- ------------ ---------- ------------ Net increase (decrease) (16,124) $ (326,049) 30,002 $ 39,988 ========== ============ ========== ============
*Class R shares were first publicly offered on April 1,2003. The accompanying notes are an integral part of these financial statements. 21
Pioneer Europe Fund -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Year Ended Year Ended CLASS A 10/31/03 10/31/02 Net asset value, beginning of period $ 19.40 $ 22.85 -------- --------- Increase (decrease) from investment operations: Net investment income (loss) $ 0.17 $ 0.06 Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions 3.09 (3.51) -------- --------- Net increase (decrease) from investment operations $ 3.26 $ (3.45) Distributions to shareowners: Net investment income - - Net realized gain - - -------- --------- Net increase (decrease) in net asset value $ 3.26 $ (3.45) -------- --------- Net asset value, end of period $ 22.66 $ 19.40 ======== ========= Total return* 16.80% (15.10)% Ratio of net expenses to average net assets+ 1.98% 1.89% Ratio of net investment income (loss) to average net assets+ 0.76% 0.14% Portfolio turnover rate 53% 38% Net assets, end of period (in thousands) $112,160 116,051 Ratios with no waiver of management fees by PIM and no reduction for fees paid indirectly: Net expenses 1.98% 1.89% Net investment income (loss) 0.76% 0.14% Ratios with waiver of management fees by PIM and reduction for fees paid indirectly: Net expenses 1.98% 1.89% Net investment income (loss) 0.76% 0.14% FINANCIAL HIGHLIGHTS Pioneer Europe Fund 22 Year Ended Year Ended Year Ended CLASS A 10/31/01 10/31/00 10/31/99 Net asset value, beginning of period $ 32.75 $ 31.71 $ 29.87 -------- --------- -------- Increase (decrease) from investment operations: Net investment income (loss) $ 0.07 $ (0.15) $ 0.12 Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions (9.97) 2.30 2.54 -------- --------- -------- Net increase (decrease) from investment operations $ (9.90) $ 2.15 $ 2.66 Distributions to shareowners: Net investment income - (0.00)(a) (0.09) Net realized gain - (1.11) (0.73) -------- --------- -------- Net increase (decrease) in net asset value $ (9.90) $ 1.04 $ 1.84 -------- --------- -------- Net asset value, end of period $ 22.85 $ 32.75 $ 31.71 ======== ========= ======== Total return* (30.23)% 6.83% 9.01% Ratio of net expenses to average net assets+ 1.76% 1.54% 1.63% Ratio of net investment income (loss) to average net assets+ (0.07)% (0.39)% 0.29% Portfolio turnover rate 116% 46% 60% Net assets, end of period (in thousands) $167,568 $ 314,781 $268,446 Ratios with no waiver of management fees by PIM and no reduction for fees paid indirectly: Net expenses 1.76% 1.54% 1.63% Net investment income (loss) (0.07)% (0.39)% 0.29% Ratios with waiver of management fees by PIM and reduction for fees paid indirectly: Net expenses 1.74% 1.52% 1.62% Net investment income (loss) (0.05)% (0.37)% 0.30%
(a) Amount rounds to less than one cent per share. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 22
Pioneer Europe Fund -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended CLASS B 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99 Net asset value, beginning of period $ 18.04 $ 21.45 $ 31.06 $ 30.38 $ 28.79 ------- -------- -------- ------- ------- Increase (decrease) from investment operations: Net investment loss $ (0.06) $ (0.40) $ (0.38) $ (0.40) $ (0.18) Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions 2.87 (3.01) (9.23) 2.19 2.50 ------- -------- -------- ------- ------- Net increase (decrease) from investment operations $ 2.81 $ (3.41) $ (9.61) $ 1.79 $ 2.32 Distributions to shareowners: Net realized gain - - - (1.11) (0.73) ------- -------- -------- ------- ------- Net increase (decrease) in net asset value $ 2.81 $ (3.41) $ (9.61) $ 0.68 $ 1.59 ------- -------- -------- ------- ------- Net asset value, end of period $ 20.85 $ 18.04 $ 21.45 $ 31.06 $ 30.38 ======= ======== ======== ======= ======= Total return* 15.58% (15.90)% (30.94)% 5.90% 8.12% Ratio of net expenses to average net assets+ 3.02% 2.81% 2.64% 2.37% 2.48% Ratio of net investment loss to average net assets+ (0.31)% (0.78)% (0.94)% (1.21)% (0.52)% Portfolio turnover rate 53% 38% 116% 46% 60% Net assets, end of period (in thousands) $46,358 $ 52,009 $ 83,075 $150,436 $129,336 Ratios with no waiver of management fees by PIM and no reduction for fees paid indirectly: Net expenses 3.02% 2.81% 2.64% 2.37% 2.48% Net investment loss (0.31)% (0.78)% (0.94)% (1.21)% (0.52)% Ratios with waiver of management fees by PIM and reduction for fees paid indirectly: Net expenses 3.01% 2.81% 2.63% 2.36% 2.47% Net investment loss (0.30)% (0.78)% (0.93)% (1.20)% (0.51)%
* Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 23
Pioneer Europe Fund -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended CLASS C 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99 24 Net asset value, beginning of period $ 17.98 $ 21.39 $ 30.95 $ 30.27 $ 28.67 ------- -------- -------- ------- ------- Increase (decrease) from investment operations: Net investment loss $ (0.05) $ (0.45) $ (0.44) $ (0.39) $ (0.13) Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions 2.86 (2.96) (9.12) 2.18 2.46 ------- -------- -------- ------- ------- Net increase (decrease) from investment operations $ 2.81 $ (3.41) $ (9.56) $ 1.79 $ 2.33 Distributions to shareowners: Net realized gain - - - (1.11) (0.73) ------- -------- -------- ------- ------- Net increase (decrease) in net asset value $ 2.81 $ (3.41) $ (9.56) $ 0.68 $ 1.60 ------- -------- -------- ------- ------- Net asset value, end of period $ 20.79 $ 17.98 $ 21.39 $ 30.95 $ 30.27 ======= ======== ======== ======= ======= Total return* 15.63% (15.94)% (30.89)% 5.93% 8.19% Ratio of net expenses to average net assets+ 2.97% 2.82% 2.60% 2.34% 2.42% Ratio of net investment loss to average net assets+ (0.24)% (0.80)% (0.93)% (1.19)% (0.44)% Portfolio turnover rate 53% 38% 116% 46% 60% Net assets, end of period (in thousands) $11,801 $ 12,391 $ 21,503 $46,544 $43,559 Ratios with no waiver of management fees by PIM and no reduction for fees paid indirectly: Net expenses 2.97% 2.82% 2.60% 2.34% 2.42% Net investment loss (0.24)% (0.80)% (0.93)% (1.19)% (0.44)% Ratios with waiver of management fees by PIM and reduction for fees paid indirectly: Net expenses 2.96% 2.82% 2.58% 2.33% 2.40% Net investment loss (0.23)% (0.80)% (0.91)% (1.18)% (0.42)%
* Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 24 Pioneer Europe Fund -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
4/1/03 to 10/31/03 CLASS R (a) Net asset value, beginning of period $ 17.92 ------- Increase from investment operations: Net investment income $ 0.18 Net realized and unrealized gain on investments, futures contracts and foreign currency transactions 4.57 ------- Net increase from investment operations $ 4.75 ------- Net increase in net asset value $ 4.75 ------- Net asset value, end of period $ 22.67 ======= Total return* 26.51% Ratio of net expenses to average net assets+ 1.75%** Ratio of net investment income to average net assets+ 1.46%** Portfolio turnover rate 53% Net assets, end of period (in thousands) $ 1 Ratios with waiver of management fees by PIM and reduction for fees paid indirectly: Net expenses 1.75%** Net investment income 1.46%**
(a) Class R shares were first publicly offered on April 1, 2003. * Assumes initial investment at net asset value at the beginning of the period, reinvestment of distributions, and the complete redemption of the investment at net asset value at the end of the period. ** Annualized + Ratio with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 25
Pioneer Europe Fund -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended CLASS Y 10/31/03 10/31/02 10/31/01 10/31/00(a) 10/31/99 Net asset value, beginning of period $ 19.88 $ 23.26 $ 33.19 $ 31.97 $ 29.90 -------- --------- --------- --------- ------- Increase (decrease) from investment operations: Net investment income (loss) $ 0.33 $ 0.11 $ (0.25) $ - $ 0.35 Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions 3.19 (3.49) (9.68) 2.33 2.49 -------- --------- --------- --------- ------- Net increase (decrease) from investment operations $ 3.52 $ (3.38) $ (9.93) $ 2.33 $ 2.84 Distributions to shareowners: Net investment income - - - (0.00)(b) (0.04) Net realized gain - - - (1.11) (0.73) -------- --------- --------- --------- ------- Net increase (decrease) in net asset value $ 3.52 $ (3.38) $ (9.93) $ 1.22 $ 2.07 -------- --------- --------- --------- ------- Net asset value, end of period $ 23.40 $ 19.88 $ 23.26 $ 33.19 $ 31.97 ======== ========= ========= ========= ======= Total return* 17.71% (14.53)% (29.92)% 7.35% 9.59% Ratio of net expenses to average net assets+ 1.20% 1.19% 1.20% 1.08% 1.12% Ratio of net investment income (loss) to average net assets+ 1.52% 0.87% 0.53% (0.01)% 0.90% Portfolio turnover rate 53% 38% 116% 46% 60% Net assets, end of period (in thousands) $ 2,170 $ 2,164 $ 1,834 $ 2,953 $ 6,252 Ratios with no waiver of management fees by PIM and no reduction for fees paid indirectly: Net expenses 1.20% 1.19% 1.20% 1.08% 1.12% Net investment income (loss) 1.52% 0.87% 0.53% (0.01)% 0.90% Ratios with waiver of management fees by PIM and reduction for fees paid indirectly: Net expenses 1.20% 1.16% 1.19% 1.07% 1.12% Net investment income 1.52% 0.90% 0.54% 0.00% 0.90%
(a) The per share data presented above is based upon the average shares outstanding for the period presented. (b) Amount rounds to less than one cent per share. * Assumes initial investment at net asset value at the beginning of the period, reinvestment of distributions, and the complete redemption of the investment at net asset value at the end of the period. + Ratio with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 26 Pioneer Europe Fund -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 10/31/03 -------------------------------------------------------------------------------- 1. Organization and Significant Accounting Policies Pioneer Europe Fund (the Fund) is a Massachusetts business trust registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The investment objective of the Fund is to seek long-term growth of capital. The Fund offers five classes of shares - Class A, Class B, Class C, Class R and Class Y shares. Each class of shares represents an interest in the same portfolio of investments of the Fund and has equal rights to voting, redemptions, dividends and liquidation, except that the level of transfer agent and distribution fees may differ among classes. Class A, Class B, Class C and Class R shareowners have exclusive voting rights with respect to the distribution plan for each class. There is no distribution plan for Class Y shares. The Fund's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America 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 income, expenses and gains and losses on investments during the reporting year. 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 as of trade date. The net asset value is computed once daily, on each day the New York Stock Exchange is open, as of the close of regular trading on the Exchange. In computing the net asset value, securities are valued at the last sale price on the principal exchange where they are traded. Securities that have not traded on the date of valuation, or securities for which sale prices are not generally reported, are valued at the mean between the last bid and asked prices. Securities for which market quotations are not readily available are valued at their fair values as determined by, or under the direction of, the Board of Trustees. 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 27 Pioneer Europe Fund -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 10/31/03 (continued) -------------------------------------------------------------------------------- of the Fund's shares are determined as of such times. The Fund also may use the fair value of a security, including a non-U.S. security, when the closing market price on the primary exchange where the security is traded no longer accurately reflects the value of the security. 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 becomes aware 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. Dividend and interest income from foreign securities are reported 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. 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. dollars 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 28 Pioneer Europe Fund -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- records realized gains and losses at the time a portfolio hedge is offset by entry into a closing transaction or extinguished by delivery of the currency. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. As of October 31, 2003, the Fund had no outstanding portfolio or settlement hedges. D. Futures Contracts The Fund 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 Fund 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 Fund, depending on the daily fluctuation in the value of the contracts, and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund 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 and counterparty risks which may exceed the amounts recognized by the Fund. Changes in value of the contracts may not directly correlate to the changes in value of the underlying securities. These risks may decrease the effectiveness of the Fund's hedging strategies and potentially result in a loss. As of October 31, 2003, the Fund had no open futures contracts. E. Federal Income Taxes It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income and net realized capital gains, if any, to its shareowners. Therefore, no federal income tax provision is required. The characterization of distributions to shareowners 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 29 Pioneer Europe Fund -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 10/31/03 (continued) -------------------------------------------------------------------------------- transactions, or from paid-in capital, depending on the type of book/ tax differences that may exist. There were no distributions paid during the years ended October 31, 2003 and 2002, respectively. The following shows components of distributable earnings on a federal income tax basis at October 31, 2003.
------------------------------------------------------------ 2003 ------------------------------------------------------------ Undistributed ordinary income $ 472,241 Capital loss carryforward (70,123,211) Unrealized appreciation 14,661,830 ------------ Total $(54,989,140) ============
------------------------------------------------------------ The difference between book basis and tax-basis unrealized appre ciation is attributable to the tax deferral of losses on wash sales. At October 31, 2003, The Fund reclassified $244,966 to decrease accumulated net realized loss on investments, futures contracts and foreign currency transactions and $244,966 to decrease accumulated undistributed net investment income. This reclassification has no impact on the net assets of the Fund and presents the Fund's capital accounts on a tax basis. F. Fund Shares The Fund records sales and repurchases of its shares as of trade date. Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito Italiano), earned $17,009 in underwriting commissions on the sale of Fund shares during the year ended October 31,2003. G. Class Allocations Distribution fees are calculated based on the average daily net asset value attributable to Class A, Class B, Class C and Class R shares of the Fund, respectively. Class Y shares are not subject to a distribution plan. Shareowners of each class share all expenses and fees paid to the transfer agent, Pioneering Investment Management Shareholder Services (PIMSS), for its services, which are 30 Pioneer Europe Fund -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- allocated based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 3). Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on the respective percentage of adjusted net assets at the beginning of the day. Distributions to shareowners 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, Class C, Class Y and Class R shares can bear different transfer agent and distribution fees. 2. Management Agreement Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser, manages the Fund's portfolio and is a wholly owned indirect subsidiary of UniCredito Italiano. Management fees are calculated daily at the annual rate of 1.00% of the Fund's average daily net assets up to $300 million; 0.85% of the next $200 million; and 0.75% of the excess over $500 million. In addition, under the management and administration agreements, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Fund. At October 31, 2003, $156,127 was payable to PIM related to management fees, administrative fees and certain other services, and is included in due to affiliates. 3. Transfer Agent PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides substantially all transfer agent and shareowner services to the Fund at negotiated rates. Included in due to affiliates is $105,020 in transfer agent fees payable to PIMSS at October 31, 2003. 4. Distribution and Service Plans The Fund adopted Plans of Distribution with respect to Class A, Class B, Class C, and Class R shares (Class A Plan, Class B Plan, Class C Plan and Class R 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 average daily net assets attributable to Class A shares in reimbursement of its actual expenditures to finance 31 Pioneer Europe Fund -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 10/31/03 (continued) -------------------------------------------------------------------------------- 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. Pursuant to the Class R Plan, the Fund pays PFD 0.50% of the average daily net assets attributable to Class R shares for distribution services. Included in due to affiliates is $75,174 in distribution fees payable to PFD at October 31, 2003. The Fund also has adopted a separate service plan for Class R shares (Service Plan). The Service Plan authorizes the Fund to pay securities dealers, plan administrators or other service organizations that agree to provide certain services to retirement plans or plan participants holding shares of the Fund a service fee of up to 0.25% of the Fund's average daily net assets attributable to Class R shares held by such plans. In addition, redemptions of each class of shares (except Class Y shares) may be subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of certain net asset value purchases of Class A shares within one year of purchase. Class B shares that are redeemed within six years of purchase are subject to a CDSC at declining rates beginning at 4.00%, 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%. Redemptions of Class R shares within 18 months of purchase may be subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to PFD. For the year ended October 31, 2003, CDSCs in the amount of $193,442 were paid to PFD. 5. Expense Offsets The Fund has entered into certain expense offset arrangements with PIMSS resulting in a reduction in the Fund's total expenses, due to interest earned on cash held by PIMSS. For year ended October 31, 2003, the Fund's expenses were reduced by $8,973 under such arrangements. 32 Pioneer Europe Fund -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 6. Line of Credit Facility The Fund, along with certain other Funds in the Pioneer Family of Funds (the Funds), collectively participate in a $50 million committed, unsecured revolving line of credit facility. Borrowings are used solely for temporary or emergency purposes. The Fund may borrow up to the lesser of $50 million or the limits set by its prospectus for borrowings. Interest on collective borrowings is payable at the Federal Funds Rate plus 1/2% on an annualized basis. The Funds pay an annual commitment fee for this facility. The commitment fee is allocated among such Funds based on their respective borrowing limits. For the year ended October 31, 2003, the Fund had no borrowings under this agreement. 7. Tax Information (Unaudited) For the fiscal year ended October 31, 2003, the Fund has elected to pass through foreign taxes credits of $716,033. 33 Pioneer Europe Fund -------------------------------------------------------------------------------- REPORT OF INDEPENDENT AUDITORS -------------------------------------------------------------------------------- To the Board of Trustees and Shareowners of Pioneer Europe Fund: We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Pioneer Europe Fund (the "Fund") as of October 31, 2003, and the related statement of operations for the year then ended, and the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 2001 were audited by other auditors who have ceased operations and whose report, dated December 7, 2001, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 and financial highlights. Our procedures included confirmation of securities as of October 31, 2003, 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 Europe Fund at October 31, 2003, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Boston, Massachusetts December 12, 2003 34 Pioneer Europe Fund -------------------------------------------------------------------------------- TRUSTEES, OFFICERS AND SERVICE PROVIDERS -------------------------------------------------------------------------------- Investment Adviser Pioneer Investment Management, Inc. Custodian Brown Brothers Harriman & Co. Independent Auditors Ernst & Young LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Hale and Dorr LLP Shareowner Services and Transfer Agent Pioneer Investment Management Shareholder Services, Inc. Trustees and Officers The Fund's Board of Trustees provides broad supervision over the Fund's affairs. The officers of the Fund are responsible for the Fund's operations. The Fund's Trustees and officers are listed below, together with their principal occupations during the past five years. Trustees who are interested persons of the Fund within the meaning of the Investment Company Act of 1940 are referred to as Interested Trustees. Trustees who are not interested persons of the Fund are referred to as Independent Trustees. Each of the Trustees serves as a trustee of each of the 50 U.S. registered investment portfolios for which Pioneer Investment Management, Inc. ("Pioneer") serves as investment adviser (the "Pioneer Funds"). The address for all Interested Trustees and all officers of the Fund is 60 State Street, Boston, Massachusetts 02109. The Fund's statement of additional information provides more detailed information regarding the Fund's Trustees and is available upon request, without charge, by calling 1-800-225-6292. Proxy Voting Policies and Procedures of the Fund are available without charge, upon request, by calling our toll free number (1-800-225-6292). This information is also available at pioneerfunds.com. 35 -------------------------------------------------------------------------------- INTERESTED TRUSTEES --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service John F. Cogan, Jr. (77)* Chairman of the Board, Serves until a successor trustee is Trustee and President elected or earlier retirement or removal. *Mr. Cogan is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates. ========================================================================================================= Osbert M. Hood (51)** Trustee and Since June, 2003 Executive Vice President Serves until a successor trustee is elected or earlier retirement or removal. **Mr. Hood is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
-------------------------------------------------------------------------------- INDEPENDENT TRUSTEES --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service Mary K. Bush (55) Trustee Since 1997. 3509 Woodbine Street, Serves until a successor trustee is Chevy Chase, MD 20815 elected or earlier retirement or removal. ========================================================================================================= Richard H. Egdahl, M.D. (76) Trustee Since 1992. Boston University Healthcare Serves until a successor trustee is Entrepreneurship Program, elected or earlier retirement or removal. 53 Bay State Road, Boston, MA 02215 =========================================================================================================
36
-------------------------------------------------------------------------------- Principal Occupation During Past Five Years Other Directorships Held by this Trustee Deputy Chairman and a Director of Pioneer Global Director of Harbor Global Company, Asset Management S.p.A. ("PGAM"); Non-Executive Ltd. Chairman and a Director of Pioneer Investment Management USA Inc. ("PIM-USA"); Chairman and a Director of Pioneer; Director of Pioneer Alternative Investment Management Limited (Dublin); President and a Director of Pioneer Alternative Investment Management (Bermuda) Limited and affiliated funds; President and Director of Pioneer Funds Distributor, Inc. ("PFD"); President of all of the Pioneer Funds; and Of Counsel (since 2000, partner prior to 2000), Hale and Dorr LLP (counsel to PIM-USA and the Pioneer Funds) ======================================================================================================== President and Chief Executive Officer, PIM-USA since None May, 2003 (Director since January, 2001); President and Director of Pioneer since May, 2003; Chairman and Director of Pioneer Investment Management Shareholder Services, Inc. ("PIMSS") since May, 2003; Executive Vice President of all of the Pioneer Funds since June, 2003; Executive Vice President and Chief Operating Officer of PIM-USA, November 2000 to May 2003; Executive Vice President, Chief Financial Officer and Treasurer, John Hancock Advisers, L.L.C., Boston, MA, November 1999 to November 2000; Senior Vice President and Chief Financial Officer, John Hancock Advisers, L.L.C., April 1997 to November 1999
--------------------------------------------------------------------------------
Principal Occupation During Past Five Years Other Directorships Held by this Trustee President, Bush International (international financial Director of Brady Corporation advisory firm) (industrial identification and specialty coated material products manufacturer), Millennium Chemicals, Inc. (commodity chemicals), Mortgage Guaranty Insurance Corporation, and R.J. Reynolds Tobacco Holdings, Inc. (tobacco) ========================================================================================================= Alexander Graham Bell Professor of Health Care None Entrepreneurship, Boston University; Professor of Management, Boston University School of Management; Professor of Public Health, Boston University School of Public Health; Professor of Surgery, Boston University School of Medicine; and University Professor, Boston University =========================================================================================================
37 -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES --------------------------------------------------------------------------------
Name, Age and Address Positions Held With the Fund Term of Office and Length of Service Margaret B.W. Graham (56) Trustee Since 1990. 1001 Sherbrooke Street West, Serves until a successor trustee is Montreal, Quebec, Canada elected or earlier retirement or removal. H3A 1G5 ====================================================================================================== Marguerite A. Piret (55) Trustee Since 1990. One Boston Place, 28th Floor, Serves until a successor trustee is Boston, MA 02108 elected or earlier retirement or removal. ====================================================================================================== Stephen K. West (75) Trustee Since 1993. 125 Broad Street, Serves until a successor trustee is New York, NY 10004 elected or earlier retirement or removal. ====================================================================================================== John Winthrop (47) Trustee Since 1990. One North Adgers Wharf, Serves until a successor trustee is Charleston, SC 29401 elected or earlier retirement or removal.
----------------------------------------------------------------------------- FUND OFFICERS -----------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service Dorothy E. Bourassa (55) Secretary Serves at the discretion of board. ========================================================================================================= Christopher J. Kelley (38) Assistant Secretary Serves at the discretion of board. ========================================================================================================= David C. Phelan (46) Assistant Secretary Serves at the discretion of board. ========================================================================================================= Vincent Nave (58) Treasurer Serves at the discretion of board. ========================================================================================================= Luis I. Presutti (38) Assistant Treasurer Serves at the discretion of board. =========================================================================================================
38 --------------------------------------------------------------------------------
Other Directorships Held by Principal Occupation During Past Five Years this Trustee Founding Director, The Winthrop Group, Inc. (consulting None firm); Professor of Management, Faculty of Management, McGill University ========================================================================================================= President and Chief Executive Officer, Newbury, Piret & None Company, Inc. (investment banking firm) ========================================================================================================= Senior Counsel, Sullivan & Cromwell (law firm) Director, The Swiss Helvetia Fund, Inc. (closed-end investment company) and AMVESCAP PLC (investment managers) ========================================================================================================= President, John Winthrop & Co., Inc. None (private investment firm) =========================================================================================================
Other Directorships Held by this Principal Occupation During Past Five Years Officer Secretary of PIM-USA: Senior Vice President-Legal of None Pioneer; and Secretary/Clerk of most of PIM-USA's subsidiaries since October 2000; Secretary of all of the Pioneer Funds since September 2003 (Assistant Secretary from November 2000 to September 2003); and Senior Counsel, Assistant Vice President and Director of Compliance of PIM-USA from April 1998 through October 2000 ========================================================================================================= Assistant Vice President and Senior Counsel of Pioneer None since July 2002; Vice President and Senior Counsel of BISYS Fund Services, Inc. (April 2001 to June 2002); Senior Vice President and Deputy General Counsel of Funds Distributor, Inc. (July 2000 to April 2001; Vice President and Associate General Counsel from July 1996 to July 2000); Assistant Secretary of all of the Pioneer Funds since September 2003 ========================================================================================================= Partner, Hale and Dorr LLP; Assistant Secretary of all of None Pioneer Funds since September 2003 ========================================================================================================= Vice President-Fund Accounting, Administration and Custody None Services of Pioneer (Manager from September 1996 to February 1999); and Treasurer of all of the Pioneer Funds (Assistant Treasurer from June 1999 to November 2000) ========================================================================================================= Assistant Vice President-Fund Accounting, Administration None and Custody Services of Pioneer (Fund Accounting Manager from 1994 to 1999); and Assistant Treasurer of all of the Pioneer Funds since November 2000 =========================================================================================================
39 -------------------------------------------------------------------------------- FUND OFFICERS --------------------------------------------------------------------------------
Name and Age Positions Held With the Fund Term of Office and Length of Service Gary Sullivan (45) Assistant Treasurer Serves at the discretion of board. ========================================================================================================= Katherine Kim Sullivan (29) Assistant Treasurer Serves at the discretion of board. =========================================================================================================
40 --------------------------------------------------------------------------------
Other Directorships Held by this Principal Occupation During Past Five Years Officer Fund Accounting Manager-Fund Accounting, Administration None and Custody Services of Pioneer; and Assistant Treasurer of all of the Pioneer Funds since May 2002 ========================================================================================================= Fund Administration Manager-Fund Accounting, None Administration and Custody Services since June 2003; Assistant Vice President-Mutual Fund Operations of State Street Corporation from June 2002 to June 2003 (formerly Deutsche Bank Asset Management); Pioneer Fund Accounting, Administration and Custody Services (Fund Accounting Manager from August 1999 to May 2002, Fund Accounting Supervisor from 1997 to July 1999); Assistant Treasurer of all of the Pioneer Funds since September 2003 =========================================================================================================
41 -------------------------------------------------------------------------------- PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS -------------------------------------------------------------------------------- Your investment professional can give you additional information on Pioneer's programs and services. If you want to order literature on any of the following items directly, simply call Pioneer at 1-8O0-225-6292. FactFone(SM) Our automated account information service, available to you 24 hours a day, seven days a week. FactFone gives you a quick and easy way to check fund share prices, yields, dividends and distributions, as well as information about your own account. Simply call 1-800-225-4321. For specific account information, have your 10-digit account number, your three-digit fund number and your four-digit personal identification number at hand. 6-Month Reinstatement Privilege (for Class A and Class B Shares) Enables you to reinvest all or a portion of the money you redeem from your Pioneer account - without paying a sales charge - within 6 months of your redemption. You have the choice of investing in any Pioneer fund provided the account has the exact same registration and meets the fund's minimum investment requirement. Reinstated accounts may only purchase Class A fund shares. Investomatic Plan An easy and convenient way for you to invest on a regular basis. All you need to do is authorize a set amount of money to be moved out of your bank account into the Pioneer fund of your choice. Investomatic also allows you to change the dollar amount, frequency and investment date right over the phone. By putting aside affordable amounts of money regularly, you can build a long-term investment - without sacrificing your current standard of living. Payroll Investment Program (PIP) Lets you invest in a Pioneer fund directly through your paycheck. All that's involved is for your employer to fill out an authorization form allowing Pioneer to deduct from participating employees' paychecks. You specify the dollar amount you want to invest into the Pioneer fund(s) of your choice. 42 -------------------------------------------------------------------------------- Automatic Exchange Program A simple way to move money from one Pioneer fund to another over a period of time. Just invest a lump sum in one fund, and select the other Pioneer funds you wish to invest in. You choose the amounts and dates for Pioneer to sell shares of your original fund and use the proceeds to buy shares of the other funds you have chosen. Over time, your investment will be shifted out of the original fund. (Automatic Exchange is available for originating accounts with a balance of $5,000 or more.) Directed Dividends Lets you invest cash dividends from one Pioneer fund to an account in another Pioneer fund with no sales charge or fee. Simply fill out the applicable information on a Pioneer Account Options Form. (This program is available for dividend payments only; capital gains distributions are not eligible at this time.) Direct Deposit Lets you move money into your bank account using electronic funds transfer (EFT). EFT moves your money faster than you would receive a check, eliminates unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer Direct Deposit Form, giving your instructions. Systematic Withdrawal Plan (SWP) Lets you establish automatic withdrawals from your account at set intervals. You decide the frequency and the day of the month. Pioneer will send the proceeds by check to the address you designate, or electronically to your bank account. You also can authorize Pioneer to make the redemptions payable to someone else. (SWPs are available for accounts with a value of $10,000 or more.) 43 -------------------------------------------------------------------------------- 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 Accounts (IRAs) Traditional IRA* For anyone under age 70 1/2 earning income. Individuals can contribute up to $3,000 annually. Earnings are tax-deferred, and contributions may be tax-deductible. Roth IRA* Available to single individuals earning less than $110,000 in income annually, and married couples with joint income less than $160,000. Contributions of up to $3,000 a year are not tax-deductible, but all earnings are tax-free for qualified withdrawals. Distributions are tax and penalty-free if certain conditions are met. Employer-Sponsored Plans Uni-K Plan* A 401(k) plan designed specifically for any business that employs only owners and their spouses. Participants can make salary deferral contributions up to $11,000 per year. In addition, each year the business may contribute up to 25% of pay. 401(k) Plan* Allows employees to make pre-tax contributions through payroll deduction, up to $11,000 per year. Employers' contributions are discretionary. The 401(k) offers companies maximum flexibility. SIMPLE IRA Plan* The Savings Incentive Match PLan for Employees (SIMPLE) is designed for employers with 100 or fewer eligible employees. Employees can decide whether to contribute. Employers must contribute. Most retirement plan withdrawals must meet specific conditions to avoid penalties. * Special Catch-Up Provisions are available to individuals age 50 and older to contribute additional amounts to their retirement accounts. For more information, call our Retirement Plans Information line at 1-800-622-0176. 44 -------------------------------------------------------------------------------- 403(b) Plan* Also known as a Tax-Sheltered Account (TSA), this plan lets employees of public schools, non-profit hospitals and other tax-exempt organizations make pre-tax contributions through payroll deduction. SEP-IRA The Simplified Employee Pension (SEP) plan lets self-employed people and small-business owners make tax-deductible contributions of up to 25% of income, while maintaining complete contribution flexibility each year. Profit Sharing Plan Companies can decide each year whether - and how much - to contribute to participants, up to 25% of each participant's pay. Can include vesting schedules that are not available with a SEP-IRA. Age-Based Profit Sharing Plan Employer contributions are flexible, but are based on a formula using age and salary. Each year, a business can contribute up to 25% of the total eligible payroll. Money Purchase Pension Plan (MPP) Allows employer contributions, up to 25% of pay annually. Companies must contribute a fixed percentage of pay each year. Defined Benefit Pension Plan Requires a business to contribute enough each year to fund a specific future benefit. Most beneficial to older employees who need to accumulate assets rapidly. Most retirement plan withdrawals must meet specific conditions to avoid penalties. * Special Catch-Up Provisions are available to individuals age 50 and older to contribute additional amounts to their retirement accounts. For more information, call our Retirement Plans Information line at 1-800-622-0176. 45 -------------------------------------------------------------------------------- HOW TO CONTACT PIONEER -------------------------------------------------------------------------------- We are pleased to offer a variety of convenient ways for you to contact us for assistance or information. Call us for: Account Information, including existing accounts, new accounts, prospectuses, applications and service forms 1-800-225-6292 FactFone(SM) for automated fund yields, prices, account information and transactions 1-800-225-4321 Retirement plans information 1-800-622-0176 Telecommunications Device for the Deaf (TDD) 1-800-225-1997 Write to us: PIMSS, Inc. P.O. Box 55014 Boston, Massachusetts 02205-5014 Our toll-free fax 1-800-225-4240 Our internet e-mail address ask.pioneer@piog.com (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 Investment Management, Inc. 14479-00-1203 60 State Street (Copyright) 2003 Pioneer Funds Distributor, Inc. Boston, Massachusetts 02109 Underwriter of Pioneer mutual funds, Member SIPC www.pioneerfunds.com ITEM 2. CODE OF ETHICS. (a) Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so. The registrant has adopted, as of the end of the period covered by this report, a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer and controller. (b) For purposes of this Item, the term "code of ethics" means written standards that are reasonably designed to deter wrongdoing and to promote: (1) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant; (3) Compliance with applicable governmental laws, rules, and regulations; (4) The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and (5) Accountability for adherence to the code. (c) The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item. The registrant has made no amendments to the code of ethics during the period covered by this report. (d) If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver. Not applicable. (e) If the registrant intends to satisfy the disclosure requirement under paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item by posting such information on its Internet website, disclose the registrant's Internet address and such intention. Not applicable. (f) The registrant must: (1) File with the Commission, pursuant to Item 10(a), a copy of its code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as an exhibit to its annual report on this Form N-CSR; (2) Post the text of such code of ethics on its Internet website and disclose, in its most recent report on this Form N-CSR, its Internet address and the fact that it has posted such code of ethics on its Internet website; or (3) Undertake in its most recent report on this Form N-CSR to provide to any person without charge, upon request, a copy of such code of ethics and explain the manner in which such request may be made. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a) (1) Disclose that the registrant's board of trustees has determined that the registrant either: (i) Has at least one audit committee financial expert serving on its audit committee; or (ii) Does not have an audit committee financial expert serving on its audit committee. The registrant's Board of Trustees has determined that the registrant has at least one audit committee financial expert. (2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is "independent." In order to be considered "independent" for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of trustees, or any other board committee: (i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or (ii) Be an "interested person" of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)). Ms. Marguerite A. Piret, an independent trustee, is such an audit committee financial expert. (3) If the registrant provides the disclosure required by paragraph (a)(1) (ii) of this Item, it must explain why it does not have an audit committee financial expert. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. (b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (e) (1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. (2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. (h) Disclose whether the registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. Not applicable; to be answered on annual submissions after December 15, 2003. ITEMS 5-6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company's investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company's investment adviser, or any other third party, that the company uses, or that are used on the company's behalf, to determine how to vote proxies relating to portfolio securities. Not applicable to open-end management investment companies. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) Disclose the conclusions of the registrant's principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, about the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-2(c))) based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph. The registrant's certifying officers have determined that the registrant's disclosure controls and procedures are effective based on our evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report. (b) Disclose whether or not there were significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. Filed herewith. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2). Filed herewith. SIGNATURES [See General Instruction F] Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Pioneer Europe Fund By (Signature and Title)* /s/ John F. Cogan, Jr. John F. Cogan, Jr, President Date December XX, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ John F. Cogan, Jr. John F. Cogan, Jr., President Date December XX, 2003 By (Signature and Title)* /s/ Vincent Nave Vincent Nave, Treasurer Date December XX, 2003 * Print the name and title of each signing officer under his or her signature.