-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EEFVgpqvizGMDIdF+pa7K34ao6UCsS2Xtdu3HFzoHK7Roby/fSWpDu7MnULc3dxQ FueUoTac7TJjED62ht9E6w== 0000078713-10-000023.txt : 20100301 0000078713-10-000023.hdr.sgml : 20100301 20100301130824 ACCESSION NUMBER: 0000078713-10-000023 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100301 DATE AS OF CHANGE: 20100301 EFFECTIVENESS DATE: 20100301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER REAL ESTATE SHARES CENTRAL INDEX KEY: 0000908996 IRS NUMBER: 043201341 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07870 FILM NUMBER: 10643132 BUSINESS ADDRESS: STREET 1: 60 STATE ST STREET 2: 20TH FLOOR CITY: BOSTON STATE: MA ZIP: 02109-1820 BUSINESS PHONE: 6174224700 MAIL ADDRESS: STREET 1: 60 STATE STREET STREET 2: 20TH FLOOR CITY: BOSTON STATE: MA ZIP: 02109-1820 FORMER COMPANY: FORMER CONFORMED NAME: PIONEER WINTHROP REAL ESTATE INVESTMENT FUND DATE OF NAME CHANGE: 19930713 0000908996 S000010000 Pioneer Real Estate Shares C000027661 Pioneer Real Estate Shares: Class A PWREX C000027662 Pioneer Real Estate Shares: Class B PBREX C000027663 Pioneer Real Estate Shares: Class C PCREX C000027664 Pioneer Real Estate Shares: Class Y PYREX N-CSR 1 ncsr.txt OMB APPROVAL OMB Number: 3235-0570 Expires: August 31, 2010 Estimated average burden hours per response.....18.9 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 811-07870 Pioneer Real Estate Shares (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: December 31 Date of reporting period: January 1, 2009 through December 31, 2009 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 Real Estate Shares - -------------------------------------------------------------------------------- Annual Report | December 31, 2009 - -------------------------------------------------------------------------------- Ticker Symbols: Class A PWREX Class B PBREX Class C PCREX Class Y PYREX [LOGO]PIONEER Investments(R) visit us: pioneerinvestments.com Table of Contents Letter to Shareowners 2 Portfolio Management Discussion 4 Portfolio Summary 8 Prices and Distributions 9 Performance Update 10 Comparing Ongoing Fund Expenses 14 Schedule of Investments 16 Financial Statements 21 Notes to Financial Statements 29 Report of Independent Registered Public Accounting Firm 36 Approval of Investment Advisory and Sub-Advisory Agreements 37 Trustees, Officers and Service Providers 41
Pioneer Real Estate Shares | Annual Report | 12/31/09 1 President's Letter Dear Shareowner, Stock and bond markets around the globe have begun to recover over the past year from one of their most tumultuous periods in history. This is a welcome relief, and we are generally optimistic about the prospects for the economy going forward. Still, challenges remain. Unemployment is high; consumer demand and loan growth are weak; and housing has not returned to normal. At Pioneer, we have long advocated the benefits of investing for the long term. This strategy has generally performed well for many investors. Those who remained invested in the market during the downturn have most likely seen their portfolios start to recover over the past year, as the Dow Jones Industrial Average climbed back from the depressed levels we saw in early 2009. Many bond investors have similarly seen a strong rebound, with a broad-based recovery occurring across many different fixed-income asset classes. The riskiest asset classes, such as high-yield bonds, outperformed other fixed-income asset classes during most of 2009. At Pioneer, we are not changing the approach to investing that we have used for more than 80 years. We remain focused on company fundamentals and risk management. Our investment process is based on careful research into individual companies, quantitative analysis, and active portfolio management. This three-pillared process, which we apply to each of our portfolios, is supported by an integrated team approach and is designed to carefully balance risk and reward. While we see potential opportunities for making money in many corners of the markets around the globe, it takes research and experience to separate solid investment opportunities from speculation. Following this difficult period, many investors are rethinking their approach to investing and risk management. Some are questioning whether the basic investment principles they were taught in the past are still useful in today's markets. Complicating matters is that financial markets remain unpredictable. Our advice, as always, is to work closely with a trusted financial advisor to discuss your goals and work together to develop an investment strategy that meets your individual needs. There is no single best strategy that works for every investor. 2 Pioneer Real Estate Shares | Annual Report | 12/31/09 We invite you to learn more about Pioneer and our time-tested approach to investing by consulting with your financial advisor or visiting us online at www.pioneerinvestments.com. We greatly appreciate your trust in us and we thank you for investing with Pioneer. Sincerely, /s/ Daniel K. Kingsbury Daniel K. Kingsbury President and CEO Pioneer Investment Management USA 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. Pioneer Real Estate Shares | Annual Report | 12/31/09 3 Portfolio Management Discussion | 12/31/09 After a gloomy start to 2009, real estate investments recovered nicely throughout the balance of the year. The sector's rebound was catalyzed by several factors suggesting that it had successfully weathered the worst of the recession. In the following interview, Matthew Troxell of AEW Capital Management, L.P., Pioneer Real Estate Shares' subadviser, discusses the environment for real estate investing and for the Fund over the 12 months ended December 31, 2009. Q What contributed to the turnaround in the real estate market over the 12 months ended December 31, 2009? A Early in the Fund's fiscal year, a global recession, frozen credit markets, rising unemployment, and waning investor sentiment contributed to difficult conditions. The credit markets were especially challenging for real estate investment trusts (REITs), as the dearth of third-party commercial mortgage capital available, the higher cost of available debt, and tightened lending standards curtailed commercial real estate transactions, which, in turn, depressed property valuations. Sentiment began to improve in March 2009, when indicators suggested that the U.S. economy was beginning to stabilize. As the 12-month reporting period progressed, REITs benefited from the positive influence of new equity issuance activity, improving capital market conditions, a strengthening of the financial sector, and a general perception that most REITs had survived the worst of the recession. Q How did the Fund perform over the 12 months ended December 31, 2009? A Pioneer Real Estate Shares Class A shares returned 30.15% at net asset value over the 12 months ended December 31, 2009, while the Fund's benchmark, the Morgan Stanley Capital International (MSCI) U.S. REIT Index, returned 28.61%. Over the same period, the average return of the 229 real estate funds tracked by Lipper, Inc., returned 30.34%. On the heels of its worst-ever annual performance in 2008, the U.S. REIT market started 2009 in dismal fashion, losing approximately 40% from January 1 through early March. However, the sector's rally that began in March 2009 continued largely unabated through the final three quarters of the year. The Fund's solid returns and outperformance of its benchmark for the fiscal year were the result of effective stock selection, particularly in the regional mall, office and diversified sectors. 4 Pioneer Real Estate Shares | Annual Report | 12/31/09 Q Which holdings or weightings contributed to the Fund's strong results during the 12-month period ended December 31, 2009? A Top contributors to the Fund's performance included overweight positions in Macerich, a regional mall REIT, and HRPT Properties, an office REIT. Macerich benefited from the firm's efforts to deleverage and eliminate much of its near-term balance sheet risks. HRPT Properties rallied on the strength of the company's stable balance sheet and a lack of exposure to development property. From a sector allocation perspective, the Fund's underweight to health care, which underperformed on a relative basis, and overweight positioning in regional malls, which outperformed on a relative basis, contributed positively to benchmark-relative performance over the 12-month period. Q Which holdings or weightings proved most disappointing for the Fund over the 12 months ended December 31, 2009? A Shopping center company Regency Centers suffered significant erosion in its share price early in 2009, which was the result of the weakened retail environment and concerns over the company's exposure to development. However, the company's stock price has since recovered somewhat, as the thawing in the credit markets has allowed it to reduce its debt and eliminate most of its near-term liquidity concerns. Kilroy Realty, an office REIT, struggled in the first quarter of 2009 because of market concerns over the company's exposure to Southern California -- which remains economically depressed -- as well as some scheduled lease expirations. Kilroy's shares subsequently recovered, considerably, on the merits of its relatively strong balance sheet and positive investor sentiment towards the company's limited exposure to new development. On a sector basis, the Fund's overweighting to the storage sector, which underperformed on a relative basis, and an underweight to the hotel sector, which outperformed on a relative basis, were detractors from performance over the 12-month period. The Fund's modest cash balance also detracted from performance relative to the MSCI REIT Index, in light of the REIT sector's positive absolute returns for the year. Q Given the market's recovery, are the fundamentals in the various property sectors showing improvement? A While an economic recovery is under way, market fundamentals in all property types continue to deteriorate, and we believe they likely will continue to do so well into 2010. The lack of job growth is translating into weak leasing demand in every sector. Not surprisingly, vacancy rates are at record levels in retail, apartment and industrial markets. Some office market rents are down by more than 20% from peak levels, and if leasing incentives and tenant improvements are factored in, that number rises even more. Pioneer Real Estate Shares | Annual Report | 12/31/09 5 Conditions in the apartment sector have been impacted both negatively and positively by troubles in the single-family housing sector. Rising foreclosures and stricter mortgage underwriting standards are forcing some home buyers and would-be buyers to become renters, but rentals of investor-owned homes and condominiums are providing housing alternatives to apartments. The conditions are likely to persist until a clear bottom is reached in single-family fundamentals. With home prices nearing a bottom, pent-up sales are likely to limit any strong rebound in prices, as sellers who have been trapped in their homes over the past several years will be putting houses on the market at the first sign of increased sales velocity. In the hotel sector, occupancies have declined recently compared with levels from a year ago, and room rates are down by 5 to 10 percent. Luxury hotels have been especially hard hit. Hotel fundamentals should show rapid improvement as confidence improves, given the night-to-night nature of their leases. However, revenue per available room will continue to be under pressure as long as both leisure and business travelers remain cautious about spending. On a positive note, there already has been some slowing in the rate of decline in all of the major real estate sectors. Vacancy rates have been climbing at a much slower rate in recent quarters, and we expect that such measures will begin to top out during 2010. Even rent declines began to flatten in late 2009. Q What is your outlook for the real estate market and the Fund in 2010? A We believe real estate market conditions will remain difficult in 2010, but will show improvement compared with the very challenging environment of the past two years. While it appears that the worst of the downturn is behind us, we believe a lack of job growth will translate into weak leasing demand fundamentals in every sector for the foreseeable future. Against that backdrop, our investment process for the Fund will continue to focus on securities selection within each property sector, with the goal of identifying those companies that we believe are mispriced relative to their peers and, thus, represent the greatest relative value and strongest price appreciation potential, as well as lower downside risk. 6 Pioneer Real Estate Shares | Annual Report | 12/31/09 Please refer to the Schedule of Investments on pages 16-20 for a full listing of Fund securities. The Fund invests in REIT securities, the value of which can fall for a variety of reasons, such as declines in rental income, fluctuating interest rates, poor property management, environmental liabilities, uninsured damage, increased competition, or changes in real estate tax laws. At times, the Fund's investments may represent industries or industry sectors that are interrelated or have common risks, making it more susceptible to any economic, political, or regulatory developments or other risks affecting those industries or sectors. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. 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. Pioneer Real Estate Shares | Annual Report | 12/31/09 7 Portfolio Summary | 12/31/09 Portfolio Diversification - -------------------------------------------------------------------------------- (As a percentage of total investment portfolio) [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL] U.S. Common Stocks 80.2% Temporary Cash Investments 19.8%
Sector Diversification - -------------------------------------------------------------------------------- (As a percentage of equity holdings) [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL] Apartment 17.1% Regional Mall 14.7% Office 12.7% Healthcare 12.1% Shopping Center 9.7% Industrial 8.6% Diversified 7.8% Storage 7.5% Hotel 5.7% Triple Net Lease 3.4% Manufactured Home 0.7%
10 Largest Holdings* - -------------------------------------------------------------------------------- (As a percentage of equity holdings) 1. Simon Property Group, Inc. 9.81% 2. Equity Residential Property Trust 6.12 3. Vornado Realty Trust 5.31 4. Boston Properties, Inc. 4.93 5. Public Storage, Inc. 4.81 6. AvalonBay Communities, Inc. 4.74 7. The Macerich Co. 4.40 8. HCP, Inc. 4.18 9. Nationwide Health Properties, Inc. 4.13 10. Host Hotels & Resorts, Inc. 3.71
* This list excludes temporary cash and derivative instruments. Portfolio holdings will vary for other periods. The holdings listed should not be considered recommendations to buy or sell any securities listed. 8 Pioneer Real Estate Shares | Annual Report | 12/31/09 Prices and Distributions | 12/31/09 Net Asset Value per Share - --------------------------------------------------------------------------------
- ---------------------------------------------- Class 12/31/09 12/31/08 - ---------------------------------------------- A $ 16.24 $ 13.00 - ---------------------------------------------- B $ 16.03 $ 12.84 - ---------------------------------------------- C $ 16.06 $ 12.86 - ---------------------------------------------- Y $ 16.23 $ 12.98 - ----------------------------------------------
Distributions per Share: 1/1/09-12/31/09 - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Non-Taxable Class Income Capital Gains Capital Gains Distributions - -------------------------------------------------------------------------------- A $ 0.3429 $ -- $ -- $ 0.1431 - -------------------------------------------------------------------------------- B $ 0.1768 $ -- $ -- $ 0.1431 - -------------------------------------------------------------------------------- C $ 0.2207 $ -- $ -- $ 0.1431 - -------------------------------------------------------------------------------- Y $ 0.4483 $ -- $ -- $ 0.1431 - --------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/09 9 Performance Update | 12/31/09 Class A Shares Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Real Estate Shares at public offering price, compared to that of the Morgan Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns (As of December 31, 2009) - ------------------------------------------------------------------------ Net Asset Public Offering Period Value (NAV) Price (POP) - ------------------------------------------------------------------------ 10 Years 10.10% 9.46% 5 Years 0.18 -1.01 1 Year 30.15 22.70 - ------------------------------------------------------------------------ Expense Ratio (Per prospectus dated May 1, 2009) - ------------------------------------------------------------------------ Gross Net - ------------------------------------------------------------------------ 2.04% 2.04% - ------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index 12/99 9,425 10,000 12,190 12,681 12/01 13,100 14,308 13,573 14,830 12/03 18,089 20,279 24,468 26,664 12/05 28,086 29,899 38,137 40,639 12/07 30,740 33,805 18,965 20,969 12/09 24,684 26,968
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The MSCI U.S. REIT Index is a widely used index comprising a broad representation of the most actively traded real estate trusts, and is designed to be a measure of real estate equity performance. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. 10 Pioneer Real Estate Shares | Annual Report | 12/31/09 Performance Update | 12/31/09 Class B Shares Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Real Estate Shares, compared to that of the Morgan Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns (As of December 31, 2009) - -------------------------------------------------------------------- If If Period Held Redeemed - -------------------------------------------------------------------- 10 Years 9.09% 9.09% 5 Years -0.89 -0.89 1 Year 28.38 24.38 - -------------------------------------------------------------------- Expense Ratio (Per prospectus dated May 1, 2009) - -------------------------------------------------------------------- Gross Net - -------------------------------------------------------------------- 3.57% 3.57% - --------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index 12/99 10,000 10,000 12,850 12,681 12/01 13,675 14,308 14,063 14,830 12/03 18,605 20,279 24,968 26,664 12/05 28,392 29,899 38,190 40,639 12/07 30,497 33,805 18,600 20,969 12/09 23,879 26,968
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares continues to be 4%. For more complete information, please see the prospectus. Note: Shares purchased prior to December 1, 2004, remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerinvestments.com. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The MSCI U.S. REIT Index is a widely used index comprising a broad representation of the most actively traded real estate trusts, and is designed to be a measure of real estate equity performance. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in an Index. Pioneer Real Estate Shares | Annual Report | 12/31/09 11 Performance Update | 12/31/09 Class C Shares Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Real Estate Shares, compared to that of the Morgan Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns (As of December 31, 2009) - -------------------------------------------------------------------- If If Period Held Redeemed - -------------------------------------------------------------------- 10 Years 9.22% 9.22% 5 Years -0.70 -0.70 1 Year 28.87 28.87 - -------------------------------------------------------------------- Expense Ratio (Per prospectus dated May 1, 2009) - -------------------------------------------------------------------- Gross Net - -------------------------------------------------------------------- 3.10% 3.10% - --------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index 12/99 10,000 10,000 12,842 12,681 12/01 13,693 14,308 14,075 14,830 12/03 18,629 20,279 25,015 26,664 12/05 28,479 29,899 38,334 40,639 12/07 30,641 33,805 18,737 20,969 12/09 24,148 26,968
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). The performance of Class C shares does not reflect the 1% front-end sales charge in effect prior to February 1, 2004. If you paid a 1% sales charge, your returns would be lower than those shown above. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The MSCI U.S. REIT Index is a widely used index comprising a broad representation of the most actively traded real estate trusts, and is designed to be a measure of real estate equity performance. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in an Index. 12 Pioneer Real Estate Shares | Annual Report | 12/31/09 Performance Update | 12/31/09 Class Y Shares Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Real Estate Shares, compared to that of the Morgan Stanley Capital International (MSCI) U.S. REIT Index.
Average Annual Total Returns (As of December 31, 2009) - -------------------------------------------------------------------- If If Period Held Redeemed - -------------------------------------------------------------------- 10 Years 10.75% 10.75% 5 Years 0.78 0.78 1 Year 31.38 31.38 - -------------------------------------------------------------------- Expense Ratio (Per prospectus dated May 1, 2009) - -------------------------------------------------------------------- Gross Net - -------------------------------------------------------------------- 1.02% 1.02% - --------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Real Estate Shares MSCI U.S. REIT Index 12/99 10,000 10,000 12,999 12,681 12/01 14,039 14,308 14,630 14,830 12/03 19,628 20,279 26,687 26,664 12/05 30,787 29,899 42,003 40,639 12/07 34,011 33,805 21,122 20,969 12/09 27,749 26,968
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The MSCI U.S. REIT Index is a widely used index comprising a broad representation of the most actively traded real estate trusts, and is designed to be a measure of real estate equity performance. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in an Index. Pioneer Real Estate Shares | Annual Report | 12/31/09 13 Comparing Ongoing Fund Expenses As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables - -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value [divided by] $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares Based on actual returns from July 1, 2009 through December 31, 2009.
- -------------------------------------------------------------------------------------- Share Class A B C Y - -------------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 7/1/09 - -------------------------------------------------------------------------------------- Ending Account $1,441,79 $1,432.97 $1,435.40 $1,447.39 Value on 12/31/09 - -------------------------------------------------------------------------------------- Expenses Paid $ 11.39 $ 19.93 $ 17.74 $ 6.54 During Period* - --------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.85%, 3.25%, 2.89% and 1.06% for Class A, Class B, Class C and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). 14 Pioneer Real Estate Shares | Annual Report | 12/31/09 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Real Estate Shares Based on a hypothetical 5% return per year before expenses, reflecting the period from July 1, 2009 through December 31, 2009.
- ----------------------------------------------------------------------------------- Share Class A B C Y - ----------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 7/1/09 - ----------------------------------------------------------------------------------- Ending Account $1,015.88 $1,008.82 $1,010.64 $1,019.86 Value on 12/31/09 - ----------------------------------------------------------------------------------- Expenses Paid $ 9.40 $ 16.46 $ 14.65 $ 5.40 During Period* - -----------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.85%, 3.25%, 2.89% and 1.06% for Class A, Class B, Class C and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Pioneer Real Estate Shares | Annual Report | 12/31/09 15 Schedule of Investments | 12/31/09
- --------------------------------------------------------------------------------- Shares Value - --------------------------------------------------------------------------------- COMMON STOCKS -- 97.9% CONSUMER SERVICES -- 1.3% Hotels, Resorts & Cruise Lines -- 1.3% 43,600 Starwood Hotels & Resorts Worldwide, Inc. $ 1,594,452 ------------ Total Consumer Services $ 1,594,452 - --------------------------------------------------------------------------------- REAL ESTATE -- 96.6% Diversified Real Estate Activities -- 0.6% 35,600 Pebblebrook Hotel Trust* $ 783,556 - --------------------------------------------------------------------------------- Diversified Real Estate Investment Trusts -- 9.1% 138,700 Liberty Property Trust (b) $ 4,439,787 61,000 Retail Opportunity Investment Corp.* 615,490 95,023 Vornado Realty Trust (b) 6,645,909 ------------ $ 11,701,186 - --------------------------------------------------------------------------------- Industrial Real Estate Investment Trusts -- 6.8% 100,500 AMB Property Corp. (b) $ 2,567,775 531,000 DCT Industrial Trust, Inc. 2,665,620 128,200 Dupont Fabros Technology, Inc. 2,306,318 90,200 First Potomac Realty Trust 1,133,814 ------------ $ 8,673,527 - --------------------------------------------------------------------------------- Office Real Estate Investment Trusts -- 13.1% 11,100 Alexandria Real Estate Equities, Inc. (b) $ 713,619 150,000 BioMed Property Trust, Inc. 2,367,000 92,000 Boston Properties, Inc. 6,170,440 51,900 Digital Realty Trust, Inc. (b) 2,609,532 18,600 HRPT Properties Trust 120,342 111,300 Kilroy Realty Corp. (b) 3,413,571 37,800 Mack-Cali Realty Corp. 1,306,746 ------------ $ 16,701,250 - --------------------------------------------------------------------------------- Residential Real Estate Investment Trusts -- 17.5% 72,301 AvalonBay Communities, Inc. (b) $ 5,936,635 101,100 Camden Property Trust (b) 4,283,607 17,700 Equity Lifestyle Properties, Inc. (b) 893,319 227,000 Equity Residential Property Trust 7,668,060 33,200 Essex Property Trust, Inc. (b) 2,777,180 41,100 Post Properties, Inc. 805,560 ------------ $ 22,364,361 - --------------------------------------------------------------------------------- Retail Real Estate Investment Trusts -- 25.3% 67,800 Federal Realty Investment Trust (b) $ 4,591,416 162,300 Kimco Realty Corp. 2,195,919 276,200 Kite Realty Group Trust 1,124,134 76,700 National Retail Properties LP (b) 1,627,574 33,600 Realty Income Corp. (b) 870,576 100,500 Regency Centers Corp. (b) 3,523,530 153,882 Simon Property Group, Inc. 12,279,759
The accompanying notes are an integral part of these financial statements. 16 Pioneer Real Estate Shares | Annual Report | 12/31/09
- ---------------------------------------------------------------------------------- Shares Value - ---------------------------------------------------------------------------------- Retail Real Estate Investment Trusts -- (continued) 19,400 Taubman Centers, Inc. (b) $ 696,654 153,191 The Macerich Co. (b) 5,507,220 ------------ $ 32,416,782 - ---------------------------------------------------------------------------------- Specialized Real Estate Investment Trusts -- 24.2% 48,500 Entertainment Properties Trust (b) $ 1,710,595 296,100 Extra Space Storage, Inc. 3,419,955 171,300 HCP, Inc. 5,231,502 17,700 HealthCare Real Estate Investment Trust, Inc. 784,464 397,938 Host Hotels & Resorts, Inc. (b) 4,643,936 147,000 Nationwide Health Properties, Inc. 5,171,460 205,700 Omega Healthcare Investors 4,000,865 74,000 Public Storage, Inc. 6,027,300 ------------ $ 30,990,077 ------------ Total Real Estate $123,630,739 - ---------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $92,348,636) $125,225,191 - ----------------------------------------------------------------------------------
- --------------------------------------------------------------------------- Principal Amount - --------------------------------------------------------------------------- TEMPORARY CASH INVESTMENTS -- 24.1% Securities Lending Collateral -- 24.1% (c) Certificates of Deposit: $ 913,596 Bank of Nova Scotia, 0.19%, 2/17/10 $ 913,596 913,596 DnB NOR Bank ASA NY, 0.2%, 2/17/10 913,596 332,580 Nordea Bank Finland, 0.19%, 1/28/10 332,580 830,562 Svenska NY, 0.20%, 3/30/10 830,562 996,650 Rabobank Nederland NY, 0.19%, 3/2/10 996,650 89,086 Westpac Banking NY, 1.35%, 3/19/10 89,086 830,542 Societe Generale, 0.21%, 3/4/10 830,542 913,594 CBA Financial, 0.27%, 1/3/11 913,594 252,975 BNP Paribas, 0.78%, 6/4/10 252,975 590,021 Wachovia Bank NA, 1.17%, 5/14/10 590,021 ------------ $ 6,663,202 - --------------------------------------------------------------------------- Commercial Paper: 664,041 BBVA London, 0.28%, 3/18/10 $ 664,041 178,246 US Bancorp, 0.26%, 5/6/10 178,246 167,296 American Honda Finance, 0.22%, 2/5/10 167,296 249,382 GE Capital Corp., 0.45%, 8/20/10 249,382 89,910 GE Capital Corp., 0.38%, 10/21/10 89,910 90,511 GE Capital Corp., 0.34%, 10/6/10 90,511 664,234 HND AF, 0.18%, 3/2/10 664,234 913,347 HSBC, 0.20%, 2/19/10 913,347 92,640 John Deer Capital Corp., 0.36%, 7/6/10 92,640 703,481 JPMorgan Chase & Co., 0.57%, 9/24/10 703,481
The accompanying notes are an integral part of these financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 17 Schedule of Investments | 12/31/09 (continued)
- ------------------------------------------------------------------------ Principal Amount Value - ------------------------------------------------------------------------ Commercial Paper -- (continued) $ 830,260 NABPP, 0.19%, 3/8/10 $ 830,260 647,337 PARFIN, 0.25%, 4/19/10 647,337 830,205 Cafco, 0.20%, 3/15/10 830,205 913,308 Char FD, 0.18%, 3/5/10 913,308 829,700 WSTPAC, 0.25%, 5/27/10 829,700 498,142 Ciesco, 0.20%, 3/8/10 498,142 415,160 Ciesco, 0.20%, 2/18/10 415,160 830,377 Fasco, 0.17%, 2/12/10 830,377 415,856 Kithaw, 0.21%, 3/2/10 415,856 425,992 Kithaw, 0.20%, 2/23/10 425,992 570,340 Old LLC, 0.19%, 3/17/10 570,340 232,896 Old LLC, 0.18%, 2/17/10 232,896 283,536 Ranger, 0.20%, 3/12/10 283,536 282,335 SRCPP, 0.19%, 2/3/10 282,335 581,256 SRCPP, 0.19%, 2/10/10 581,256 248,946 TB LLC, 0.19%, 2/8/10 248,946 456,546 TB LLC, 0.20%, 3/5/10 456,546 166,192 TB LLC, 0.10%, 2/9/10 166,192 947,669 Bank of America, 0.87%, 5/12/10 947,669 166,132 BBVA Senior US, 0.30%, 3/12/10 166,132 941,849 Santander, 0.33%, 7/23/10 941,849 332,095 WFC, 0.49%, 8/20/10 332,095 ------------ $ 15,659,217 - ------------------------------------------------------------------------ Tri-party Repurchase Agreements: 3,322,167 Deutsche Bank, 0.01%, 1/4/10 $ 3,322,167 1,661,083 JPMorgan, 0.0%, 1/4/10 1,661,083 2,244,207 Barclays Capital Markets, 0.0%, 1/4/10 2,244,207 ------------ $ 7,227,457 - ------------------------------------------------------------------------
- ----------------------------------------------------------------------- Shares - ----------------------------------------------------------------------- Money Market Mutual Funds: 664,433 Dreyfus Preferred Money Market Fund $ 664,433 664,433 Blackrock Liquidity Temporary Cash Fund 664,433 ------------ $ 1,328,866 ------------ Total Securities Lending Collateral $ 30,878,742 - ----------------------------------------------------------------------- TOTAL TEMPORARY CASH INVESTMENTS (Cost $30,878,742) $ 30,878,742 - ----------------------------------------------------------------------- TOTAL INVESTMENT IN SECURITIES -- 122.0% (Cost $123,227,378) (a) $156,103,933 - ----------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- (22.0)% $(28,154,722) - ----------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $127,949,211 =======================================================================
The accompanying notes are an integral part of these financial statements. 18 Pioneer Real Estate Shares | Annual Report | 12/31/09 * Non-income producing security. (a) At December 31, 2009, the net unrealized gain on investments based on cost for federal income tax purposes of $131,089,199 was as follows: Aggregate gross unrealized gain for all investments in which there is an excess of value over tax cost $32,127,206 Aggregate gross unrealized loss for all investments in which there is an excess of tax cost over value (7,112,472) ----------- Net unrealized gain $25,014,734 ===========
(b) At December 31, 2009, the following securities were out on loan:
- -------------------------------------------------------------------- Shares Security Value - -------------------------------------------------------------------- 5,000 Alexandria Real Estate Equities, Inc. $ 321,450 2,000 AMB Property Corp. 51,100 73,500 AvalonBay Communities, Inc. 6,035,085 1,500 Camden Property Trust 63,555 48,400 Digital Realty Trust, Inc. 2,433,552 8,300 Entertainment Properties Trust 292,741 5,500 Equity Lifestyle Properties, Inc. 277,585 11,100 Essex Property Trust, Inc. 928,515 52,400 Federal Realty Investment Trust 3,548,528 203,700 Host Hotels & Resorts, Inc. 2,377,179 104,500 Kilroy Realty Corp. 3,205,015 105,000 Liberty Property Trust 3,361,050 98,816 The Macerich Co. 3,552,435 19,000 National Retail Properties LP 403,180 33,250 Realty Income Corp. 861,507 16,700 Regency Centers Corp. 585,502 7,600 Taubman Centers, Inc. 272,916 17,923 Vornado Realty Trust 1,253,535 - -------------------------------------------------------------------- Total $29,824,430 ====================================================================
(c) Securities lending collateral is managed by Credit Suisse AG, New York Branch. Purchases and sales of securities (excluding temporary cash investments) for the year ended December 31, 2009 aggregated $26,761,107 and $21,701,128, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below. Highest priority is given to Level 1 inputs and lowest priority is given to Level 3. Level 1 -- quoted prices in active markets for identical securities Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) The accompanying notes are an integral part of these financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 19 Schedule of Investments | 12/31/09 (continued) The following is a summary of the inputs used as of December 31, 2009, in valuing the Fund's assets:
- -------------------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total - -------------------------------------------------------------------------------------------- Common Stocks $125,225,191 $ -- $-- $125,225,191 Temporary Cash Investments -- 29,549,876 -- 29,549,876 Money Market Mutual Funds 1,328,866 -- -- 1,328,866 - -------------------------------------------------------------------------------------------- Total $126,554,057 $29,549,876 $-- $156,103,933 ============================================================================================
The accompanying notes are an integral part of these financial statements. 20 Pioneer Real Estate Shares | Annual Report | 12/31/09 Statement of Assets and Liabilities | 12/31/09 ASSETS: Investment in securities (including securities loaned of $29,824,430) (cost $123,227,378) $156,103,933 Cash 2,511,701 Receivables -- Investment securities sold 551,313 Fund shares sold 77,141 Dividends 630,870 Other 33,930 - --------------------------------------------------------------------------- Total assets $159,908,888 - --------------------------------------------------------------------------- LIABILITIES: Payables -- Investment securities purchased $ 364,537 Fund shares repurchased 629,469 Upon return of securities loaned 30,878,742 Due to affiliates 37,310 Accrued expenses 49,619 - --------------------------------------------------------------------------- Total liabilities $ 31,959,677 - --------------------------------------------------------------------------- NET ASSETS: Paid-in capital $131,745,990 Accumulated net realized loss on investments (36,673,334) Net unrealized gain on investments 32,876,555 - --------------------------------------------------------------------------- Total net assets $127,949,211 =========================================================================== NET ASSET VALUE PER SHARE: (No par value, unlimited number of shares authorized) Class A (based on $67,510,179/4,157,002 shares) $ 16.24 Class B (based on $8,753,157/546,106 shares) $ 16.03 Class C (based on $9,152,766/570,031 shares) $ 16.06 Class Y (based on $42,533,109/2,621,184 shares) $ 16.23 MAXIMUM OFFERING PRICE: Class A ($16.24 [divided by] 94.25%) $ 17.23 ===========================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 21 Statement of Operations For the Year Ended 12/31/09 INVESTMENT INCOME: Dividends (net of foreign taxes withheld of $4,761) $4,323,547 Interest and other income 3,001 Income from securities loaned, net 147,418 - ------------------------------------------------------------------------------------------ Total investment income $ 4,473,966 - ------------------------------------------------------------------------------------------ EXPENSES: Management fees $ 777,838 Transfer agent fees and expenses Class A 224,764 Class B 68,480 Class C 44,032 Class Y 624 Distribution fees Class A 132,526 Class B 72,009 Class C 69,144 Shareholder communication expense 105,504 Administrative reimbursements 32,982 Custodian fees 10,849 Registration fees 59,780 Professional fees 60,601 Printing expense 53,132 Fees and expenses of nonaffiliated trustees 7,577 Miscellaneous 14,833 - ------------------------------------------------------------------------------------------ Total expenses $ 1,734,675 Less fees paid indirectly (23) - ------------------------------------------------------------------------------------------ Net expenses $ 1,734,652 - ------------------------------------------------------------------------------------------ Net investment income $ 2,739,314 - ------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments $ (25,661,256) - ------------------------------------------------------------------------------------------ Change in net unrealized gain on investments $ 53,330,486 - ------------------------------------------------------------------------------------------ Net gain on investments $ 27,669,230 - ------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations $ 30,408,544 ==========================================================================================
The accompanying notes are an integral part of these financial statements. 22 Pioneer Real Estate Shares | Annual Report | 12/31/09 Statement of Changes in Net Assets For the Years Ended 12/31/09 and 12/31/08, respectively
- ------------------------------------------------------------------------------------------------ Year Ended Year Ended 12/31/09 12/31/08 - ------------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 2,739,314 $ 3,106,813 Net realized loss on investments (25,661,256) (9,879,430) Change in net unrealized gain (loss) on investments 53,330,486 (55,661,050) - ------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations $ 30,408,544 $(62,433,667) - ------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREOWNERS: Net investment income: Class A ($0.34 and $0.46 per share, respectively) $ (1,438,940) $ (1,997,135) Class B ($0.18 and $0.24 per share, respectively) (102,822) (171,449) Class C ($0.22 and $0.29 per share, respectively) (123,573) (179,329) Class Y ($0.45 and $0.58 per share, respectively) (1,073,979) (1,079,004) Tax return of capital: Class A ($0.14 and $0.29 per share, respectively) (601,023) (1,249,707) Class B ($0.14 and $0.29 per share, respectively) (82,898) (206,544) Class C ($0.14 and $0.29 per share, respectively) (80,134) (178,055) Class Y ($0.14 and $0.29 per share, respectively) (341,939) (536,147) - ------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (3,845,308) $ (5,597,370) - ------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sale of shares $ 22,897,579 $ 39,347,126 Reinvestment of distributions 2,404,017 4,971,103 Cost of shares repurchased (21,548,877) (54,576,418) - ------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from Fund share transactions $ 3,752,719 $(10,258,189) - ------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets $ 30,315,955 $(78,289,226) NET ASSETS: Beginning of year 97,633,256 175,922,482 - ------------------------------------------------------------------------------------------------ End of year $127,949,211 $ 97,633,256 - ------------------------------------------------------------------------------------------------ Undistributed net investment income $ -- $ -- ================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 23 Statement of Changes in Net Assets (continued)
- ---------------------------------------------------------------------------------------------- '09 Shares '09 Amount '08 Shares '08 Amount - ---------------------------------------------------------------------------------------------- Class A Shares sold 1,045,870 $12,568,673 1,308,307 $27,208,478 Reinvestment of distributions 140,891 1,676,324 149,644 2,795,752 Less shares repurchased (1,288,054) (15,497,747) (1,652,413) (31,691,972) - ---------------------------------------------------------------------------------------------- Net decrease (101,293) $(1,252,750) (194,462) $(1,687,742) ============================================================================================== Class B Shares sold 81,080 $ 964,620 171,590 $ 3,400,601 Reinvestment of distributions 15,601 176,412 19,100 350,488 Less shares repurchased (207,052) (2,430,205) (381,164) (7,322,566) - ---------------------------------------------------------------------------------------------- Net decrease (110,371) $(1,289,173) (190,474) $(3,571,477) ============================================================================================== Class C Shares sold 151,985 $ 1,984,736 144,485 $ 2,878,143 Reinvestment of distributions 15,004 173,266 16,748 304,205 Less shares repurchased (189,338) (2,312,012) (265,784) (5,214,556) - ---------------------------------------------------------------------------------------------- Net decrease (22,349) $ (154,010) (104,551) $(2,032,208) ============================================================================================== Class Y Shares sold 665,022 $ 7,379,550 394,808 $ 5,859,904 Reinvestment of distributions 41,332 378,015 83,015 1,520,658 Less shares repurchased (105,841) (1,308,913) (499,132) (10,347,324) - ---------------------------------------------------------------------------------------------- Net increase (decrease) 600,513 $ 6,448,652 (21,309) $(2,966,762) ==============================================================================================
The accompanying notes are an integral part of these financial statements. 24 Pioneer Real Estate Shares | Annual Report | 12/31/09 Financial Highlights
- ---------------------------------------------------------------------------------------- Year Ended Year Ended 12/31/09 12/31/08 - ---------------------------------------------------------------------------------------- Class A Net asset value, beginning of year $ 13.00 $ 21.94 - ---------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income $ 0.35 $ 0.43 Net realized and unrealized gain (loss) on investments 3.37 (8.62) - ---------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 3.72 $ (8.19) Distributions to shareowners: Net investment income (0.34) (0.46) Net realized gain -- -- Tax return of capital (0.14) (0.29) - ---------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 3.24 $ (8.94) - ---------------------------------------------------------------------------------------- Net asset value, end of period $ 16.24 $ 13.00 ======================================================================================== Total return* 30.15% (38.31)% Ratio of net expenses to average net assets+ 1.85% 1.63% Ratio of net investment income to average net assets+ 2.77% 2.10% Portfolio turnover rate 23% 18% Net assets, end of period (in thousands) $67,510 $55,353 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 1.85% 1.63% Net investment income 2.77% 2.10% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.85% 1.63% Net investment income 2.77% 2.10% ======================================================================================== - ----------------------------------------------------------------------------------------------------- Year Ended Year Ended Year Ended 12/31/07 12/31/06 12/31/05 - ----------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of year $ 33.07 $ 25.87 $ 24.52 - ----------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income $ 0.36 $ 0.28 $ 0.28 Net realized and unrealized gain (loss) on investments (6.76) 8.88 3.29 - ----------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ (6.40) $ 9.16 $ 3.57 Distributions to shareowners: Net investment income (0.36) (0.28) (0.24) Net realized gain (4.37) (1.68) (1.84) Tax return of capital -- -- (0.14) - ----------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $(11.13) $ 7.20 $ 1.35 - ----------------------------------------------------------------------------------------------------- Net asset value, end of period $ 21.94 $ 33.07 $ 25.87 ===================================================================================================== Total return* (19.39)% 35.79% 14.79% Ratio of net expenses to average net assets+ 1.36% 1.37% 1.50% Ratio of net investment income to average net assets+ 1.10% 0.98% 1.14% Portfolio turnover rate 21% 20% 24% Net assets, end of period (in thousands) $97,691 $163,088 $110,217 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 1.36% 1.37% 1.50% Net investment income 1.10% 0.98% 1.14% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.35% 1.36% 1.50% Net investment income 1.11% 0.99% 1.14% =====================================================================================================
* 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. + Ratio with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 25 Financial Highlights (continued)
- ---------------------------------------------------------------------------------------- Year Ended Year Ended 12/31/09 12/31/08 - ---------------------------------------------------------------------------------------- Class B Net asset value, beginning of year $12.84 $ 21.68 - ---------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income $ 0.17 $ 0.19 Net realized and unrealized gain (loss) on investments 3.34 (8.50) - ---------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 3.51 $ (8.31) Distributions to shareowners: Net investment income (0.18) (0.24) Net realized gain -- -- Tax return of capital (0.14) (0.29) - ---------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 3.19 $ (8.84) - ---------------------------------------------------------------------------------------- Net asset value, end of period $16.03 $ 12.84 ======================================================================================== Total return* 28.38% (39.01)% Ratio of net expenses to average net assets+ 3.25% 2.72% Ratio of net investment income to average net assets+ 1.41% 0.89% Portfolio turnover rate 23% 18% Net assets, end of period (in thousands) $8,753 $ 8,428 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 3.25% 2.72% Net investment income 1.41% 0.89% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 3.25% 2.71% Net investment income 1.41% 0.90% ======================================================================================== - ------------------------------------------------------------------------------------------------------ Year Ended Year Ended Year Ended 12/31/07 12/31/06 12/31/05 - ------------------------------------------------------------------------------------------------------ Class B Net asset value, beginning of year $ 32.74 $ 25.64 $ 24.32 - ------------------------------------------------------------------------------------------------------ Increase (decrease) from investment operations: Net investment income $ 0.06 $ 0.01 $ 0.06 Net realized and unrealized gain (loss) on investments (6.68) 8.78 3.24 - ------------------------------------------------------------------------------------------------------ Net increase (decrease) from investment operations $ (6.61) $ 8.79 $ 3.30 Distributions to shareowners: Net investment income (0.07) (0.01) (0.05) Net realized gain (4.37) (1.68) (1.84) Tax return of capital -- -- (0.09) - ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net asset value $(11.06) $ 7.10 $ 1.32 - ------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 21.68 $ 32.74 $ 25.64 ====================================================================================================== Total return* (20.14)% 34.51% 13.72% Ratio of net expenses to average net assets+ 2.28% 2.31% 2.42% Ratio of net investment income to average net assets+ 0.11% 0.00%(a) 0.14% Portfolio turnover rate 21% 20% 24% Net assets, end of period (in thousands) $18,364 $35,442 $29,992 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 2.28% 2.31% 2.42% Net investment income 0.11% 0.00%(a) 0.14% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 2.26% 2.30% 2.42% Net investment income 0.13% 0.01% 0.14% ======================================================================================================
(a) Amount rounds to less than 0.01% 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. + Ratio with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 26 Pioneer Real Estate Shares | Annual Report | 12/31/09
- ---------------------------------------------------------------------------------------- Year Ended Year Ended 12/31/09 12/31/08 - ---------------------------------------------------------------------------------------- Class C Net asset value, beginning of year $12.86 $ 21.72 - ---------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income $ 0.22 $ 0.25 Net realized and unrealized gain (loss) on investments 3.34 (8.53) - ---------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 3.56 $ (8.28) Distributions to shareowners: Net investment income (0.22) (0.29) Net realized gain -- -- Tax return of capital (0.14) (0.29) - ---------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 3.20 $ (8.86) - ---------------------------------------------------------------------------------------- Net asset value, end of period $16.06 $ 12.86 ======================================================================================== Total return* 28.87% (38.85)% Ratio of net expenses to average net assets+ 2.89% 2.50% Ratio of net investment income to average net assets+ 1.76% 1.18% Portfolio turnover rate 23% 18% Net assets, end of period (in thousands) $9,153 $ 7,619 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 2.89% 2.50% Net investment income 1.76% 1.18% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 2.89% 2.49% Net investment income 1.76% 1.19% ======================================================================================== - ------------------------------------------------------------------------------------------------------ Year Ended Year Ended Year Ended 12/31/07 12/31/06 12/31/05 - ------------------------------------------------------------------------------------------------------ Class C Net asset value, beginning of year $ 32.80 $ 25.68 $ 24.35 - ------------------------------------------------------------------------------------------------------ Increase (decrease) from investment operations: Net investment income $ 0.10 $ 0.02 $ 0.08 Net realized and unrealized gain (loss) on investments (6.70) 8.80 3.26 - ------------------------------------------------------------------------------------------------------ Net increase (decrease) from investment operations $ (6.60) $ 8.82 $ 3.34 Distributions to shareowners: Net investment income (0.11) (0.02) (0.07) Net realized gain (4.37) (1.68) (1.84) Tax return of capital -- -- (0.10) - ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net asset value $(11.08) $ 7.12 $ 1.33 - ------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 21.72 $ 32.80 $ 25.68 ====================================================================================================== Total return* (20.07)% 34.60% 13.85% Ratio of net expenses to average net assets+ 2.17% 2.24% 2.32% Ratio of net investment income to average net assets+ 0.26% 0.10% 0.27% Portfolio turnover rate 21% 20% 24% Net assets, end of period (in thousands) $15,139 $27,209 $19,824 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 2.17% 2.24% 2.32% Net investment income 0.26% 0.10% 0.27% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 2.16% 2.23% 2.32% Net investment income 0.27% 0.11% 0.27% ======================================================================================================
* 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. + Ratio with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 27 Financial Highlights (continued)
- ---------------------------------------------------------------------------------------- Year Ended Year Ended 12/31/09 12/31/08 - ---------------------------------------------------------------------------------------- Class Y Net asset value, beginning of year $ 12.98 $ 21.90 - ---------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income $ 0.44 $ 0.54 Net realized and unrealized gain (loss) on investments 3.40 (8.59) - ---------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 3.84 $ (8.05) Distributions to shareowners: Net investment income (0.45) (0.58) Net realized gain -- -- Tax return of capital (0.14) (0.29) - ---------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 3.25 $ (8.92) - ---------------------------------------------------------------------------------------- Net asset value, end of period $ 16.23 $ 12.98 ======================================================================================== Total return* 31.38% (37.90)% Ratio of net expenses to average net assets+ 1.06% 1.02% Ratio of net investment income to average net assets+ 3.49% 2.76% Portfolio turnover rate 23% 18% Net assets, end of period (in thousands) $42,533 $26,233 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 1.06% 1.02% Net investment income 3.49% 2.76% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.06% 1.02% Net investment income 3.49% 2.76% ======================================================================================== - ----------------------------------------------------------------------------------------------------- Year Ended Year Ended Year Ended 12/31/07 12/31/06 12/31/05 - ----------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of year $ 33.03 $ 25.84 $ 24.49 - ----------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income $ 0.49 $ 0.42 $ 0.35 Net realized and unrealized gain (loss) on investments (6.75) 8.87 3.34 - ----------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ (6.26) $ 9.29 $ 3.69 Distributions to shareowners: Net investment income (0.50) (0.42) (0.34) Net realized gain (4.37) (1.68) (1.84) Tax return of capital -- -- (0.16) - ----------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $(11.13) $ 7.19 $ 1.35 - ----------------------------------------------------------------------------------------------------- Net asset value, end of period $ 21.90 $ 33.03 $ 25.84 ===================================================================================================== Total return* (19.03)% 36.43% 15.36% Ratio of net expenses to average net assets+ 0.90% 0.87% 1.00% Ratio of net investment income to average net assets+ 1.81% 1.54% 1.84% Portfolio turnover rate 21% 20% 24% Net assets, end of period (in thousands) $44,729 $46,436 $26,490 Ratios no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Net expenses 0.90% 0.87% 1.00% Net investment income 1.81% 1.54% 1.84% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.90% 0.87% 1.00% Net investment income 1.81% 1.54% 1.84% =====================================================================================================
* Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, and the complete redemption of the investment at net asset value at the end of each period. + Ratio with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 28 Pioneer Real Estate Shares | Annual Report | 12/31/09 Notes to Financial Statements | 12/31/09 1. Organization and Significant Accounting Policies Pioneer Real Estate Shares (the Fund) is a Delaware statutory 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. Current income is a secondary objective. The Fund offers four classes of shares designated as Class A, Class B, Class C and Class Y shares. Effective as of the close of business on December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except that dividends and/or capital gain distributions may continue to be reinvested in Class B shares, and shareholders may exchange their Class B shares for Class B shares of other Pioneer funds, as permitted by existing exchange privileges. Each class of shares represents an interest in the same portfolio of investments of the Fund and has identical rights (based on relative net asset values) to assets and liquidation proceeds. Share classes can bear different rates of class-specific fees and expenses such as transfer agent and distribution fees. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different dividends from net investment income earned by each class. The Amended and Restated Declaration of Trust of the Fund gives the Board the flexibility to specify either per-share voting or dollar-weighted voting when submitting matters for shareholder approval. Under per-share voting, each share of a class of the Fund is entitled to one vote. Under dollar-weighted voting, a shareholder's voting power is determined not by the number of shares owned, but by the dollar value of the shares on the record date. Each share class exclusive voting rights with respect to matters affecting only that class, including with respect to the distribution plan for that class. There is no distribution plan for Class Y shares. Class B shares convert to Class A shares approximately eight years after the date of purchase. Because the Fund may invest a substantial portion of its assets in Real Estate Investment Trusts (REITs), the Fund may be subject to certain risks associated with direct investments in REITs. REITs may be affected by changes in the value of their underlying properties and by defaults of their borrowers or tenants. REITs depend generally on their ability to generate cash flow to make distributions to shareowners, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time. In addition, the performance of a REIT may be affected by its failure to qualify for tax-free pass through of income under the Internal Revenue Code or its failure to maintain exemption from registration under the Investment Company Act of 1940. The Fund's prospectuses Pioneer Real Estate Shares | Annual Report | 12/31/09 29 contain unaudited information regarding the Fund's principal risks. Please refer to those documents when considering the Fund's risks. The Fund's financial statements have been prepared in conformity with U.S. generally accepted accounting principles that require the management of the Fund to, among other things, make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income, expenses and gains and losses on investments during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements, which are consistent with those policies generally accepted in the investment company industry. A. Security Valuation Security transactions are recorded as of trade date. The net asset value of the Fund is computed once daily, on each day the New York Stock Exchange (NYSE) is open, as of the close of regular trading on the NYSE. In computing the net asset value, securities that have traded on an exchange are fair 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 available, generally are fair valued at the mean between the last bid and asked prices. Securities for which market prices and/or quotations are not readily available or are considered to be unreliable are valued using fair value methods pursuant to procedures adopted by the Board of Trustees. Trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. The Fund may use fair value methods if it is determined that a significant event has occurred after the close of the exchange or market on which the security trades and prior to the determination of the Fund's net asset value. Thus, the valuation of the Fund's securities may differ from exchange prices. At December 31, 2009, there were no securities that were valued using fair value methods. Inputs used in the valuation of a security using fair value methods include credit ratings, the financial condition of the company, current market conditions and comparable securities. Short-term fixed income securities with remaining maturities of sixty days or less generally are valued at amortized cost. Money market mutual funds are valued at net asset value. 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 30 Pioneer Real Estate Shares | Annual Report | 12/31/09 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 are reported net of unrecoverable foreign taxes withheld at the applicable country rates. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. B. 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. Tax years for the prior three fiscal years remain subject to examination by tax authorities. The amounts and characterizations of distributions to shareowners for financial reporting purposes are determined in accordance with federal income tax rules. Therefore, the sources of the Fund's distributions may be shown in the accompanying financial statements as from or in excess of net investment income or net realized gain on investment transactions, or as from paid-in capital, depending on the type of book/tax differences that may exist. A portion of the dividend income recorded by the Fund is from distributions by publicly traded REITs, and such distributions for tax purposes may also consist of capital gains and return of capital. The actual return of capital and capital gains portions of such distributions will be determined by formal notifications from the REITs subsequent to the calendar year-end. Distributions received from the REITs that are determined to be a return of capital are recorded by the Fund as a reduction of the cost basis of the securities held and those determined to be capital gain are reflected as such on the Statement of Operations. The Fund has elected to defer $1,435,822 of capital losses recognized between November 1, 2009 and December 31, 2009 to its fiscal year ending December 31, 2010. At December 31, 2009, the Fund had a net capital loss carryforward of $27,375,691 of which $7,060,199 will expire in 2016 and $20,315,492 will expire in 2017 if not utilized. Pioneer Real Estate Shares | Annual Report | 12/31/09 31 The tax character of distributions paid during the years ended December 31, 2009 and December 31, 2008 was as follows:
- ------------------------------------------------------------ 2009 2008 - ------------------------------------------------------------ Distributions paid from: Ordinary income $2,739,314 $3,426,917 Return of capital 1,105,994 2,170,453 - ------------------------------------------------------------ Total $3,845,308 $5,597,370 ============================================================
The following shows the components of distributable earnings on a federal income tax basis at December 31, 2009:
- ------------------------------------------------------------ 2009 - ------------------------------------------------------------ Distributable earnings: Capital loss carryforward $(27,375,691) Post-October loss deferred (1,435,822) Unrealized appreciation 25,014,734 - ------------------------------------------------------------ Total $ (3,796,779) ============================================================
The difference between book-basis and tax-basis unrealized appreciation is attributable to the tax deferral of losses on wash sales. C. 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 UniCredit S.p.A. (UniCredit), earned approximately $8,848 in underwriting commissions on the sale of Class A shares during the year ended December 31, 2009. D. Class Allocations 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 their respective percentage of adjusted net assets at the beginning of the day. Distribution fees are calculated based on the average daily net asset value attributable to Class A, Class B and Class C shares of the Fund, respectively (see Note 4). Class Y shares do not pay distribution fees. Shareowners of each class participate in all expenses and fees paid to the transfer agent, Pioneer Investment Management Shareholder Services, Inc. (PIMSS), for its services, which are allocated based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 3). 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 and at the same time, except that net investment 32 Pioneer Real Estate Shares | Annual Report | 12/31/09 income dividends to Class A, Class B, Class C and Class Y shares can reflect different transfer agent and distribution expense rates. E. Securities Lending The Fund lends securities in its portfolio to certain broker-dealers or other institutional investors. When entering into a securities loan transaction, the Fund typically receives cash collateral from the borrower equal to at least the fair value of the securities loaned, which is invested in temporary investments. Credit Suisse AG, New York Branch, as the Fund's securities lending agent, manages the Fund's securities lending collateral. The income earned on the investment of collateral is shared with the borrower and the lending agent in payment of any rebate due to the borrower with respect to the securities loan, and in compensation for the lending agent's services to the Fund. The Fund also continues to receive payments in lieu of dividends or interest on the securities loaned. Gain or loss on the fair value of the loaned securities that may occur during the term of the loan will be for the account of the Fund. The amount of the collateral is required to be adjusted daily to reflect any price fluctuation in the fair value of the loaned securities. If the required market value of the collateral is less than the fair value of the loaned securities, the borrower is required to deliver additional collateral for the account of the Fund prior to the close of the next business day. The Fund has the right, under the lending agreement, to terminate the loan and recover the securities from the borrower with prior notice. The Fund is required to return the cash collateral to the borrower and could suffer a loss if the value of the collateral, as invested, has declined. F. Repurchase Agreements With respect to repurchase agreements entered into by the Fund, the value of the underlying securities (collateral), including accrued interest, is required to be equal to or in excess of the repurchase price. The collateral for all repurchase agreements is held in safekeeping in the customer-only account of the Fund's custodian or a subcustodian of the Fund. The Fund's investment adviser, Pioneer Investment Management, Inc. (PIM), is responsible for determining that the value of the collateral remains at least equal to the repurchase price. 2. Management Agreement PIM, a wholly owned indirect subsidiary of UniCredit, manages the Fund's portfolio. Management fees are calculated daily at the annual rate of 0.80% of the Fund's average daily net assets up to $1 billion; and 0.75% of the Fund's average daily net assets over $1 billion. Prior to January 1, 2010, management fees were calculated daily at the annual rate of 0.80% of the Fund's average daily net assets. PIM pays a portion of the fee it receives from the Fund to AEW Capital Management, L.P. as compensation for sub-advisory services to the Fund. Pioneer Real Estate Shares | Annual Report | 12/31/09 33 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 as administrative reimbursements. Included in "Due to affiliates" reflected on the statement of Assets and Liabilities is $4,013 in management fees, administrative costs and certain other reimbursements payable to PIM at December 31, 2009. 3. Transfer Agent PIMSS, a wholly owned indirect subsidiary of UniCredit, provides substantially all transfer agent and shareowner services to the Fund at negotiated rates. In addition, the Fund reimburses PIMSS for out-of-pocket expenses incurred by PIMSS related to shareholder communications activities such as proxy and statement mailings, outgoing phone calls and omnibus relationship contracts. For the year ended December 31, 2009, such out-of-pocket expenses by class of shares were as follows:
- -------------------------------------------- Shareholder Communications: - -------------------------------------------- Class A $ 70,287 Class B 18,005 Class C 14,267 Class Y 2,945 - -------------------------------------------- Total $105,504 ============================================
Included in "Due to affiliates" reflected on the Statement of Assets and Liabilities is $32,323 in transfer agent fees and out-of-pocket reimbursements payable to PIMSS at December 31, 2009. 4. Distribution Plan The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 of the Investment Company Act of 1940 with respect to its Class A, Class B and Class C shares. Pursuant to the Plan, the Fund pays PFD 0.25% of the average daily net assets attributable to Class A shares as compensation for personal services and/or account maintenance services or distribution services with regard to Class A shares. Pursuant to the Plan, the Fund also pays PFD 1.00% of the average daily net assets attributable to Class B and Class C shares. The fee for Class B and Class C shares consists of a 0.25% service fee and a 0.75% distribution fee paid as compensation for personal services and/or account maintenance services or distribution services with regard to Class B and Class C shares. Included in "Due to affiliates" reflected on the Statement of Assets and Liabilities is $974 in distribution fees payable to PFD at December 31, 2009. 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 18 months of purchase (within 12 months for purchases made 34 Pioneer Real Estate Shares | Annual Report | 12/31/09 on or after April 1, 2009). Class B shares that are redeemed within five 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%, based on the lower of cost or market value of shares being redeemed. Shares purchased as part of an exchange remain subject to any CDSC that applied to the original purchase of those shares. There is no CDSC for Class Y shares. Proceeds from the CDSCs are paid to PFD. For the year ended December 31, 2009, CDSCs in the amount of $11,512 were paid to PFD. 5. Expense Offset Arrangements 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 the year ended December 31, 2009, the Fund's expenses were reduced by $23 under such arrangements. 6. Line of Credit Facility The Fund, along with certain other funds in the Pioneer Family of Funds (the Funds), participates in a $165 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 the amount available under the facility or the limits set for borrowing by the Fund's prospectus and the 1940 Act. Interest on borrowings is payable at the higher of the London Interbank Offered Rate (LIBOR) on the borrowing date plus 1.25% on an annualized basis or the Federal Funds Rate on the borrowing date plus 1.25% on an annualized basis. The Funds pay an annual commitment fee for this facility. The commitment fee is allocated among participating Funds based on an allocation schedule set forth in the credit agreement. For the year ended December 31, 2009, the Fund had no borrowings under this agreement. 7. Subsequent Events In preparing these financial statements, PIM has evaluated the impact of all events and transactions for potential recognition or disclosure through February 22, 2010 and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements. Pioneer Real Estate Shares | Annual Report | 12/31/09 35 Report of Independent Registered Public Accounting Firm To the Board of Trustees and Shareowners of Pioneer Real Estate Shares: - -------------------------------------------------------------------------------- We have audited the accompanying statement of assets and liabilities of Pioneer Real Estate Shares (the "Fund"), including the schedule of investments, as of December 31, 2009, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five 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. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the custodian and broker or by other appropriate auditing procedures where replies from brokers were not received. 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 Real Estate Shares at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Boston, Massachusetts February 22, 2010 36 Pioneer Real Estate Shares | Annual Report | 12/31/09 Approval of Investment Advisory and Sub-Advisory Agreements (unaudited) Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to Pioneer Real Estate Shares (the Fund) pursuant to an investment advisory agreement between PIM and the Fund. PIM has retained AEW Capital Management, L.P. (AEW) to serve as the sub-adviser to the Fund pursuant to a sub-advisory agreement between PIM and the sub-adviser. In order for PIM and AEW to remain the investment adviser and sub-adviser of the Fund, respectively, the Trustees of the Fund must determine annually whether to renew the investment advisory agreement and the sub-advisory agreement for the Fund. The contract review process began in March 2009 as the Trustees of the Fund agreed on, among other things, an overall approach and timeline for the process. In July 2009, the Trustees approved the format of the contract review materials and submitted their formal request to PIM to furnish information necessary to evaluate the terms of the investment advisory agreement and the sub-advisory agreement. The contract review materials were provided to the Trustees in August 2009. After reviewing and discussing the materials, the Trustees submitted a request for additional information to PIM in September 2009, and materials were provided in response to this request. Meetings of the independent Trustees of the Fund were held in July, September, October, and November, 2009 to review and discuss the contract review materials. In addition, the Trustees took into account the information related to the Fund provided to the Trustees at each regularly scheduled meeting. At a meeting held on November 10, 2009, based on their evaluation of the information provided by PIM, the sub-adviser and third parties, the Trustees of the Fund, including the independent Trustees voting separately, unanimously approved the renewal of the investment advisory agreement and the sub-advisory agreement for another year. In considering the renewal of the investment advisory agreement and the sub-advisory agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the agreements. Nature, Extent and Quality of Services The Trustees considered the nature, extent and quality of the services that had been provided by PIM and the sub-adviser to the Fund, taking into account the investment objective and strategy of the Fund. The Trustees reviewed the terms of the investment advisory agreement and the sub-advisory agreement. The Trustees also reviewed the sub-adviser's investment approach for the Fund, its research process and its process for trade execution. The Trustees considered the resources of PIM and the sub-adviser and the personnel of PIM and the Pioneer Real Estate Shares | Annual Report | 12/31/09 37 sub-adviser who provide investment management services to the Fund. The Trustees considered the non-investment resources and personnel of PIM involved in PIM's services to the Fund, including PIM's compliance and legal resources and personnel. The Trustees also considered the substantial attention and high priority given by PIM's senior management to the Pioneer fund complex. The Trustees considered that PIM supervises and monitors the performance of the Fund's service providers (including the sub-adviser) and provides the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund's business management and operations. The Trustees also considered that, as administrator, PIM is responsible for the administration of the Fund's business and other affairs. The Trustees considered the fees paid to PIM for the provision of administration services. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by PIM and the sub-adviser to the Fund were satisfactory and consistent with the terms of the investment advisory agreement and the sub-advisory agreement. Performance of the Fund The Trustees considered the performance results of the Fund over various time periods. They reviewed information comparing the Fund's performance with the performance of its peer group of funds as classified by Morningstar, Inc. (Morningstar), an independent provider of investment company data, and with the performance of the Fund's benchmark index. The Trustees considered that the Fund's annualized total return was in the third quintile of its Morningstar category for the one, three and ten year periods ended June 30, 2009 and in the second quintile of its Morningstar category for the five year period ended June 30, 2009. (In all quintile rankings referred to throughout this disclosure, first quintile is most favorable to the Fund's shareowners. Thus, highest relative performance would be first quintile and lowest relative expenses would also be first quintile.) The Trustees concluded that the investment performance of the Fund was satisfactory. Management Fee and Expenses The Trustees considered information showing the fees and expenses of the Fund in comparison to the management fees of its peer group of funds as classified by Morningstar and the expense ratios of a peer group of funds selected on the basis of criteria determined by the independent Trustees for this purpose using data provided by Strategic Insight Mutual Trust Research and Consulting, LLC (Strategic Insight), an independent third party. The Trustees also considered that PIM, not the Fund, paid the sub-adviser pursuant to the sub-advisory agreement. The Trustees evaluated both the fee under the sub-advisory agreement and the portion of the fee under the investment advisory agreement retained by PIM. 38 Pioneer Real Estate Shares | Annual Report | 12/31/09 The Trustees considered that the Fund's management fee for the twelve months ended June 30, 2009 was in the third quintile relative to the management fees paid by other funds in its Morningstar peer group for the comparable period. The Trustees also considered that the Fund's expense ratio for the twelve months ended June 30, 2009 was in the fifth quintile relative to its Strategic Insight peer group for the comparable period. The Trustees considered that, effective January 1, 2010, a breakpoint would be added to the Fund's management fee schedule on assets over $1 billion. The Trustees also reviewed management fees charged by PIM to its institutional and other clients. In evaluating the fees associated with PIM's client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and client accounts. The Trustees noted that in some instances the fee rates for those clients were lower than the management fee for the Fund and considered that, under the investment advisory agreement with the Fund, PIM performs additional services for the Fund that it does not provide to those other clients or services that are broader in scope, including oversight of the Fund's other service providers and activities related to compliance and the extensive regulatory and tax regimes to which the Fund is subject. The Trustees also reviewed management fees charged by the sub- adviser to its other clients. The Trustees noted that in most instances the fee rates for those clients were higher than the sub-advisory fees paid to the sub- adviser with respect to the Fund. The Trustees concluded that the management fee payable by the Fund to PIM, as well as the fees payable by PIM to the sub-adviser of the Fund, were reasonable in relation to the nature and quality of the services provided by PIM and the sub-adviser. The Trustees also concluded that the Fund's expense ratio was reasonable taking into account the nature and quality of services provided by PIM and the sub-adviser. Profitability The Trustees considered information provided by PIM regarding the profitability of PIM with respect to the advisory services provided by PIM to the Fund, including the methodology used by PIM in allocating certain of its costs to the management of the Fund. The Trustees also considered PIM's profit margin in connection with the overall operation of the Fund. The Trustees further considered the sub-advisory fees received by the sub-adviser with respect to the Fund and the percentage that such fees represented of the sub-adviser's overall revenues (for the 12-month period ended December 31, 2008). They further reviewed the financial results realized by PIM and its affiliates from non-fund businesses. The Trustees considered PIM's profit margins with respect to the Fund in comparison to the limited industry data available and noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating Pioneer Real Estate Shares | Annual Report | 12/31/09 39 expenses. The Trustees concluded that the profit margins with respect to the management of the Fund were not unreasonable. Economies of Scale The Trustees considered PIM's views relating to economies of scale in connection with the Pioneer Funds as fund assets grow and the extent to which any such economies of scale are shared with funds and fund shareholders. The Trustees recognize that economies of scale are difficult to identify and quantify and that, among other factors that may be relevant, are the following: fee levels, expense subsidization, investment by PIM in research and analytical capabilities and PIM's commitment and resource allocation to the Funds. The Trustees noted that profitability also may be an indicator of the availability of any economies of scale, although profitability may vary for other reasons particularly, for example during the difficult year in 2008 for financial markets, as the level of services was maintained notwithstanding a significant decline in PIM's fee revenues from the Funds. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund. Other Benefits The Trustees considered the other benefits to each of PIM and the sub-adviser from its relationship with the Fund. The Trustees considered the character and amount of fees paid by the Fund, other than under the investment advisory agreement, for services provided by PIM and its affiliates. The Trustees further considered the revenues and profitability of PIM's businesses other than the fund business. The Trustees also considered the benefits to the Fund and to the sub-adviser and its affiliates from the use of "soft" commission dollars generated by the Fund to pay for research and brokerage services. The Trustees considered the intangible benefits to each of PIM and the sub-adviser by virtue of its relationship with the Fund and the other Pioneer funds. The Trustees concluded that the receipt of these benefits was reasonable in the context of the overall relationship between each of PIM and the sub-adviser and the Fund. Conclusion After consideration of the factors described above as well as other factors, the Trustees, including all of the independent Trustees, concluded that each of the investment advisory agreement between PIM and the Fund and the sub-advisory agreement between PIM and the sub-adviser, including the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of each of the investment advisory agreement and the sub-advisory agreement for the Fund. 40 Pioneer Real Estate Shares | Annual Report | 12/31/09 Trustees, Officers and Service Providers Investment Adviser Pioneer Investment Management, Inc. Custodian Brown Brothers Harriman & Co. Independent Registered Public Accounting Firm Ernst & Young LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Bingham McCutchen LLP Shareowner Services and Transfer Agent Pioneer Investment Management Shareholder Services, Inc. Proxy Voting Policies and Procedures of the Fund are available without charge, upon request, by calling our toll free number (1-800-225-6292). Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is publicly available to shareowners at www.pioneerinvestments.com. This information is also available on the Securities and Exchange Commission's web site at http://www.sec.gov. Trustees and Officers The Board of Trustees provides broad supervision over the Fund's affairs. The officers of the Fund are responsible for the Fund's operations. The 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 1940 Act 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, except Mr. West, serves as a Trustee of each of the 61 U.S. registered investment portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds"). Mr. West serves as a Trustee of 46 U.S. registered investment portfolios for which Pioneer serves as investment adviser. The address for all Trustees and all officers of the Fund is 60 State Street, Boston, Massachusetts 02109. Pioneer Real Estate Shares | Annual Report | 12/31/09 41 Interested Trustees
- -------------------------------------------------------------------------------- Position Held Length of Service Name and Age with the Fund and Term of Office - -------------------------------------------------------------------------------- John F. Cogan, Jr. (83)* Chairman of the Board, Trustee since 1995. Trustee and President Serves until a successor trustee is elected or earlier retirement or removal. - -------------------------------------------------------------------------------- Daniel K. Kingsbury (51)* Trustee and Executive Trustee since 2007. Vice President Serves until a successor trustee is elected or earlier retirement or removal. - -------------------------------------------------------------------------------- * Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the Fund's investment adviser and certain of its affiliates. Interested Trustees - ------------------------------------------------------------------------------------------------------------------- Other Directorships Name and Age Principal Occupation During Past Five Years Held by this Trustee - ------------------------------------------------------------------------------------------------------------------- John F. Cogan, Jr. (83)* Deputy Chairman and a director of Pioneer Global Asset None Management S.p.A. ("PGAM"); Non-Executive Chairman and a director of Pioneer Investment Management USA Inc. ("PIM-USA"); Chairman and a director of Pioneer; Chairman and Director of Pioneer Institutional Asset Management, Inc. (since 2006); Director of Pioneer Alternative Investment Management Limited (Dublin); President and a director of Pioneer Alternative Investment Management (Bermuda) Limited and affiliated funds; Director of PIOGLOBAL Real Estate Investment Fund (Russia) (until June 2006); Director of Nano-C, Inc. (since 2003); Director of Cole Management Inc. (since 2004); Director of Fiduciary Counseling, Inc.; President and Director of Pioneer Funds Distributor, Inc. ("PFD") (until May 2006); President of all of the Pioneer Funds; and Of Counsel, Wilmer Cutler Pickering Hale and Dorr LLP - ------------------------------------------------------------------------------------------------------------------- Daniel K. Kingsbury (51)* Director, CEO and President of Pioneer Investment Management None USA Inc. (since February 2007); Director and President of Pioneer Investment Management, Inc. and Pioneer Institutional Asset Management, Inc. (since February 2007); Executive Vice President of all of the Pioneer Funds (since March 2007); Director of Pioneer Global Asset Management S.p.A. (since April 2007); and Head of New Markets Division, Pioneer Global Asset Management S.p.A. (2000 - 2007) - ------------------------------------------------------------------------------------------------------------------- * Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the Fund's investment adviser and certain of its affiliates.
42 Pioneer Real Estate Shares | Annual Report | 12/31/09 Independent Trustees
- ------------------------------------------------------------------------ Position Held Length of Service Name and Age with the Fund and Term of Office - ------------------------------------------------------------------------ David R. Bock (66) Trustee Trustee since 2005. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------ Mary K. Bush (61) Trustee Trustee since 1997. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------ Independent Trustees - ----------------------------------------------------------------------------------------------------------------------- Other Directorships Name and Age Principal Occupation During Past Five Years Held by this Trustee - ----------------------------------------------------------------------------------------------------------------------- David R. Bock (66) Managing Partner, Federal City Capital Advisors (corporate Director of Enterprise advisory services company) (1997 to 2004 and 2008 to present); Community Investment, Inc. and Executive Vice President and Chief Financial Officer, I-trax, (privately held affordable Inc. (publicly traded health care services company) (2004 - 2007) housing finance company); and Director of Oxford Analytica, Inc. (privately held research and consulting company) - ----------------------------------------------------------------------------------------------------------------------- Mary K. Bush (61) President, Bush International, LLC (international financial - Director of Marriott - advisory firm) International, Inc.; Director of Discover Financial Services (credit card issuer and electronic payment services); Director of Briggs & Stratton Co. (engine manufacturer); Director of UAL Corporation (airline holding company); Director of Mantech International Corporation (national security, defense, and intelligence technology firm); and Member, Board of Governors, Investment Company Institute - -----------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/09 43 Independent Trustees (continued)
- ------------------------------------------------------------------------- Position Held Length of Service Name and Age with the Fund and Term of Office - ------------------------------------------------------------------------- Benjamin M. Friedman (65) Trustee Trustee since 2008. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------- Margaret B.W. Graham (62) Trustee Trustee since 1995. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------- Thomas J. Perna (59) Trustee Trustee since 2006. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------- Marguerite A. Piret (61) Trustee Trustee since 1995. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------- Stephen K. West (81) Trustee Trustee since 1995. Serves until a successor trustee is elected or earlier retirement or removal. - ------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------ Other Directorships Name and Age Principal Occupation During Past Five Years Held by this Trustee - ------------------------------------------------------------------------------------------------------------------------------ Benjamin M. Friedman (65) Professor, Harvard University - ------------------------------------------------------------------------------------------------------------------------------ Margaret B.W. Graham (62) Founding Director, Vice President and Corporate Secretary, The None Winthrop Group, Inc. (consulting firm); and Desautels Faculty of Management, McGill University - ------------------------------------------------------------------------------------------------------------------------------ Thomas J. Perna (59) Chief Executive Officer, Quadriserv, Inc. (technology products for None securities lending industry) (2008 - present); Private investor (2004 - 2008); and Senior Executive Vice President, The Bank of New York (financial and securities services) (1986 - 2004) - ------------------------------------------------------------------------------------------------------------------------------ Marguerite A. Piret (61) President and Chief Executive Officer, Newbury, Piret & Company, Director of New America Inc. (investment banking firm) High Income Fund, Inc. (closed-end investment company) - ------------------------------------------------------------------------------------------------------------------------------ Stephen K. West (81) Senior Counsel, Sullivan & Cromwell LLP (law firm) Director, The Swiss Helvetia Fund, Inc. (closed-end investment company) - ------------------------------------------------------------------------------------------------------------------------------
44 Pioneer Real Estate Shares | Annual Report | 12/31/09 Fund Officers
- -------------------------------------------------------------------------------- Position Held Length of Service Name and Age with the Fund and Term of Office - -------------------------------------------------------------------------------- Dorothy E. Bourassa (61) Secretary Since 2003. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- Christopher J. Kelley (45) Assistant Secretary Since 2003. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- Mark E. Bradley (50) Treasurer Since 2008. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- Luis I. Presutti (44) Assistant Treasurer Since 2000. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- Gary Sullivan (51) Assistant Treasurer Since 2002. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- David F. Johnson (30) Assistant Treasurer Since 2009. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- Fund Officers - ---------------------------------------------------------------------------------------------------------------------------- Other Directorships Name and Age Principal Occupation During Past Five Years Held by this Officer - ---------------------------------------------------------------------------------------------------------------------------- Dorothy E. Bourassa (61) Secretary of PIM-USA; Senior Vice President -- Legal of Pioneer; None Secretary/Clerk of most of PIM-USA's subsidiaries; and Secretary of all of the Pioneer Funds since September 2003 (Assistant Secretary from November 2000 to September 2003) - ---------------------------------------------------------------------------------------------------------------------------- Christopher J. Kelley (45) Associate General Counsel of Pioneer since January 2008 and Assistant None Secretary of all of the Pioneer Funds since September 2003; Vice President and Senior Counsel of Pioneer from July 2002 to December 2007 - ---------------------------------------------------------------------------------------------------------------------------- Mark E. Bradley (50) Vice President -- Fund Accounting, Administration and Controllership None Services of Pioneer; and Treasurer of all of the Pioneer Funds since March 2008; Deputy Treasurer of Pioneer from March 2004 to February 2008; Assistant Treasurer of all of the Pioneer Funds from March 2004 to February 2008; and Treasurer and Senior Vice President, CDC IXIS Asset Management Services, from 2002 to 2003 - ---------------------------------------------------------------------------------------------------------------------------- Luis I. Presutti (44) Assistant Vice President -- Fund Accounting, Administration and None Controllership Services of Pioneer; and Assistant Treasurer of all of the Pioneer Funds - ---------------------------------------------------------------------------------------------------------------------------- Gary Sullivan (51) Fund Accounting Manager -- Fund Accounting, Administration and None Controllership Services of Pioneer; and Assistant Treasurer of all of the Pioneer Funds - ---------------------------------------------------------------------------------------------------------------------------- David F. Johnson (30) Fund Administration Manager -- Fund Accounting, Administration and None Controllership Services since November 2008; Assistant Treasurer of all of the Pioneer Funds since January 2009; and Client Service Manager -- Institutional Investor Services at State Street Bank from March 2003 to March 2007 - ----------------------------------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares | Annual Report | 12/31/09 45 Fund Officers (continued)
- -------------------------------------------------------------------------------- Position Held Length of Service Name and Age with the Fund and Term of Office - -------------------------------------------------------------------------------- Teri W. Anderholm (50) Chief Compliance Officer Since 2007. Serves at the discretion of the Board. - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Other Directorships Name and Age Principal Occupation During Past Five Years Held by this Officer - ---------------------------------------------------------------------------------------------------------------- Teri W. Anderholm (50) Chief Compliance Officer of Pioneer since December 2006 and of None all the Pioneer Funds since January 2007; Vice President and Compliance Officer, MFS Investment Management (August 2005 to December 2006); Consultant, Fidelity Investments (February 2005 to July 2005); and Independent Consultant (July 1997 to February 2005) - ----------------------------------------------------------------------------------------------------------------
46 Pioneer Real Estate Shares | Annual Report | 12/31/09 This page for your notes. Pioneer Real Estate Shares | Annual Report | 12/31/09 47 This page for your notes. 48 Pioneer Real Estate Shares | Annual Report | 12/31/09 This page for your notes. Pioneer Real Estate Shares | Annual Report | 12/31/09 49 This page for your notes. 50 Pioneer Real Estate Shares | Annual Report | 12/31/09 This page for your notes. Pioneer Real Estate Shares | Annual Report | 12/31/09 51 This page for your notes. 52 Pioneer Real Estate Shares | Annual Report | 12/31/09 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 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@pioneerinvestments.com (for general questions about Pioneer only) Visit our web site: pioneerinvestments.com This report must be preceded or accompanied by a prospectus. The Fund files a complete schedule of investments with the Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's web site at http://www.sec.gov. The filed form may also be viewed and copied at the Commission's Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 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. See Item 10(2) 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. Audit Fees Fees for audit services provided to the Fund, including fees associated with the routine and non routine filings of its Form N-1A, totaled approximately $38,200 in 2009 and $37,900 in 2008. (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. Audit-Related Fees There were no audit-related services provided to the Fund during the fiscal years ended December 31, 2009 and 2008. (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. Tax Fees Fees for tax compliance services, primarily for tax returns, totaled $8,290 in 2009 and $8,290 in 2008. (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. Other Fees There were no other services provided to the Fund during the fiscal years ended December 31, 2009 and 2008. (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. PIONEER FUNDS APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES PROVIDED BY THE INDEPENDENT AUDITOR SECTION I - POLICY PURPOSE AND APPLICABILITY The Pioneer Funds recognize the importance of maintaining the independence of their outside auditors. Maintaining independence is a shared responsibility involving Pioneer Investment Management, Inc ("PIM"), the audit committee and the independent auditors. The Funds recognize that a Fund's independent auditors: 1) possess knowledge of the Funds, 2) are able to incorporate certain services into the scope of the audit, thereby avoiding redundant work, cost and disruption of Fund personnel and processes, and 3) have expertise that has value to the Funds. As a result, there are situations where it is desirable to use the Fund's independent auditors for services in addition to the annual audit and where the potential for conflicts of interests are minimal. Consequently, this policy, which is intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and procedures to be followed by the Funds when retaining the independent audit firm to perform audit, audit-related tax and other services under those circumstances, while also maintaining independence. Approval of a service in accordance with this policy for a Fund shall also constitute approval for any other Fund whose pre-approval is required pursuant to Rule 210.2-01(c)(7)(ii). In addition to the procedures set forth in this policy, any non-audit services that may be provided consistently with Rule 210.2-01 may be approved by the Audit Committee itself and any pre-approval that may be waived in accordance with Rule 210.2-01(c)(7)(i)(C) is hereby waived. Selection of a Fund's independent auditors and their compensation shall be determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY - ---------------- -------------------------------- ------------------------------------------------- SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES CATEGORY - ---------------- -------------------------------- ------------------------------------------------- I. AUDIT Services that are directly o Accounting research assistance SERVICES related to performing the o SEC consultation, registration independent audit of the Funds statements, and reporting o Tax accrual related matters o Implementation of new accounting standards o Compliance letters (e.g. rating agency letters) o Regulatory reviews and assistance regarding financial matters o Semi-annual reviews (if requested) o Comfort letters for closed end offerings - ---------------- -------------------------------- ------------------------------------------------- II. Services which are not o AICPA attest and agreed-upon procedures AUDIT-RELATED prohibited under Rule o Technology control assessments SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments and are related extensions of o Enterprise security architecture the audit services support the assessment audit, or use the knowledge/expertise gained from the audit procedures as a foundation to complete the project. In most cases, if the Audit-Related Services are not performed by the Audit firm, the scope of the Audit Services would likely increase. The Services are typically well-defined and governed by accounting professional standards (AICPA, SEC, etc.) - ---------------- -------------------------------- ------------------------------------------------- ------------------------------------- ------------------------------------ AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY ------------------------------------- ------------------------------------ o "One-time" pre-approval o A summary of all such for the audit period for all services and related fees pre-approved specific service reported at each regularly subcategories. Approval of the scheduled Audit Committee independent auditors as meeting. auditors for a Fund shall constitute pre approval for these services. ------------------------------------- ------------------------------------ o "One-time" pre-approval o A summary of all such for the fund fiscal year within services and related fees a specified dollar limit (including comparison to for all pre-approved specified dollar limits) specific service subcategories reported quarterly. o Specific approval is needed to exceed the pre-approved dollar limit for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) o Specific approval is needed to use the Fund's auditors for Audit-Related Services not denoted as "pre-approved", or to add a specific service subcategory as "pre-approved" ------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED - ----------------------- --------------------------- ----------------------------------------------- SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES DESCRIPTION - ----------------------- --------------------------- ----------------------------------------------- III. TAX SERVICES Services which are not o Tax planning and support prohibited by the Rule, o Tax controversy assistance if an officer of the Fund o Tax compliance, tax returns, excise determines that using the tax returns and support Fund's auditor to provide o Tax opinions these services creates significant synergy in the form of efficiency, minimized disruption, or the ability to maintain a desired level of confidentiality. - ----------------------- --------------------------- ----------------------------------------------- - ------------------------------------- ------------------------- AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY - ------------------------------------- ------------------------- - ------------------------------------- ------------------------- o "One-time" pre-approval o A summary of for the fund fiscal year all such services and within a specified dollar limit related fees (including comparison to specified dollar limits) reported quarterly. o Specific approval is needed to exceed the pre-approved dollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) o Specific approval is needed to use the Fund's auditors for tax services not denoted as pre-approved, or to add a specific service subcategory as "pre-approved" - ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED - ----------------------- --------------------------- ----------------------------------------------- SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES DESCRIPTION - ----------------------- --------------------------- ----------------------------------------------- IV. OTHER SERVICES Services which are not o Business Risk Management support prohibited by the Rule, o Other control and regulatory A. SYNERGISTIC, if an officer of the Fund compliance projects UNIQUE QUALIFICATIONS determines that using the Fund's auditor to provide these services creates significant synergy in the form of efficiency, minimized disruption, the ability to maintain a desired level of confidentiality, or where the Fund's auditors posses unique or superior qualifications to provide these services, resulting in superior value and results for the Fund. - ----------------------- --------------------------- ----------------------------------------------- - --------------------------------------- ------------------------ AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY - ------------------------------------- -------------------------- o "One-time" pre-approval o A summary of for the fund fiscal year within all such services and a specified dollar limit related fees (including comparison to specified dollar limits) reported quarterly. o Specific approval is needed to exceed the pre-approved dollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) o Specific approval is needed to use the Fund's auditors for "Synergistic" or "Unique Qualifications" Other Services not denoted as pre-approved to the left, or to add a specific service subcategory as "pre-approved" - ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED - ----------------------- ------------------------- ----------------------------------------------- SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES DESCRIPTION - ----------------------- ------------------------- ----------------------------------------------- PROHIBITED SERVICES Services which result 1. Bookkeeping or other services in the auditors losing related to the accounting records or independence status financial statements of the audit under the Rule. client* 2. Financial information systems design and implementation* 3. Appraisal or valuation services, fairness* opinions, or contribution-in-kind reports 4. Actuarial services (i.e., setting actuarial reserves versus actuarial audit work)* 5. Internal audit outsourcing services* 6. Management functions or human resources 7. Broker or dealer, investment advisor, or investment banking services 8. Legal services and expert services unrelated to the audit 9. Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible - ----------------------- ------------------------- ----------------------------------------------- - ------------------------------------------- ------------------------------ AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY - ------------------------------------------- ------------------------------ o These services are not to be o A summary of all performed with the exception of the(*) services and related services that may be permitted fees reported at each if they would not be subject to audit regularly scheduled procedures at the audit client (as Audit Committee meeting defined in rule 2-01(f)(4)) level will serve as continual the firm providing the service. confirmation that has not provided any restricted services. - ------------------------------------------- ------------------------------
- -------------------------------------------------------------------------------- GENERAL AUDIT COMMITTEE APPROVAL POLICY: o For all projects, the officers of the Funds and the Fund's auditors will each make an assessment to determine that any proposed projects will not impair independence. o Potential services will be classified into the four non-restricted service categories and the "Approval of Audit, Audit-Related, Tax and Other Services" Policy above will be applied. Any services outside the specific pre-approved service subcategories set forth above must be specifically approved by the Audit Committee. o At least quarterly, the Audit Committee shall review a report summarizing the services by service category, including fees, provided by the Audit firm as set forth in the above policy. - -------------------------------------------------------------------------------- (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. Beginning with non-audit service contracts entered into on or after May 6, 2003, the effective date of the new SEC pre-approval rules, the Fund's audit committee is required to pre-approve services to affiliates defined by SEC rules to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Fund. For the years ended December 31, 2009 and 2008, there were no services provided to an affiliate that required the Fund's audit committee pre-approval. (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. N/A (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. The aggregate non-audit fees for the Fund and affiliates, as previously defined, totaled $8,290 in 2009 and $8,290 in 2008. (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. The Fund's audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the Affiliates (as defined) 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. Item 5. Audit Committee of Listed Registrants (a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17 CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrants audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state. N/A (b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption from the listing standards for audit committees. N/A Item 6. Schedule of Investments. File Schedule I Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in 210.12- 12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form. Included in Item 1 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. Portfolio Managers of Closed-End Management Investment Companies. (a) If the registrant is a closed-end management investment company that is filing an annual report on this Form N-CSR,provide the following information: (1) State the name, title, and length of service of the person or persons employed by or associated with the registrant or an investment adviser of the registrant who are primarily responsible for the day-to-day management of the registrants portfolio (Portfolio Manager). Also state each Portfolio Managers business experience during the past 5 years. Not applicable to open-end management investment companies. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. (a) If the registrant is a closed-end management investment company, in the following tabular format, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any affiliated purchaser, as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrants equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose all purchases covered by this Item, including purchases that do not satisfy the conditions of the safe harbor of Rule 10b-18 under the Exchange Act (17 CFR 240.10b-18), made in the period covered by the report. Provide disclosures covering repurchases made on a monthly basis. For example, if the reporting period began on January 16 and ended on July 15, the chart would show repurchases for the months from January 16 through February 15, February 16 through March 15, March 16 through April 15, April 16 through May 15, May 16 through June 15, and June 16 through July 15. Not applicable to open-end management investment companies. Item 10. Submission of Matters to a Vote of Security Holders. Describe any material changes to the procedures by which shareholders may recommend nominees to the registrants board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrants board of directors since the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in its definitive proxy statement, or this Item. ITEM 11. 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 principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures are effective based on their evaluation of these controls and procedures as of a date within 90 days of 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 control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. The registrant's principal executive officer and principal financial officer, however, voluntarily are reporting the following information: In August of 2006 the registrant's investment adviser enhanced its internal procedures for reporting performance information required to be included in prospectuses. Those enhancements involved additional internal controls over the appropriateness of performance data generated for this purpose. Such enhancements were made following an internal review which identified prospectuses relating to certain classes of shares of a limited number of registrants where, inadvertently, performance information not reflecting the deduction of applicable sales charges was included. Those prospectuses were revised, and the revised prospectuses were distributed to shareholders. ITEM 12. 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. (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 Real Estate Shares By (Signature and Title)* /s/ John F. Cogan, Jr. John F. Cogan, Jr, President Date March 1, 2010 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 March 1, 2010 By (Signature and Title)* /s/ Mark Bradley Mark Bradley, Treasurer Date March 1, 2010 * Print the name and title of each signing officer under his or her signature. EX-99 2 cert.txt CERTIFICATIONS -------------- I, John F. Cogan, Jr., certify that: 1. I have reviewed this report on Form N-CSR of Pioneer Real Estate Shares; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 1, 2010 /s/ John F. Cogan, Jr. John F. Cogan, Jr. President CERTIFICATIONS -------------- I, Mark Bradley, certify that: 1. I have reviewed this report on Form N-CSR of Pioneer Real Estate Shares; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 1, 2010 /s/ Mark Bradley Mark Bradley Treasurer SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Pioneer Real Estate Shares (the "Fund"), hereby certifies, to the best of his knowledge, that the Fund's Report on Form N-CSR for the period ended December 31, 2009 (the "Report") fully complies with the requirements of Section 13 (a) or 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Dated: March 1, 2010 /s/ John F. Cogan, Jr. John F. Cogan, Jr. President This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or a separate disclosure document. A signed original of this written statement required by section 906 has been provided to the Fund and will be retained by the Fund and furnished to the SEC or its staff upon request. SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Pioneer Real Estate Shares (the "Fund"), hereby certifies, to the best of his knowledge, that the Fund's Report on Form N-CSR for the period ended December 31, 2009 (the "Report") fully complies with the requirements of Section 13 (a) or 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Dated: March 1, 2010 /s/ Mark Bradley Mark Bradley Treasurer This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or a separate disclosure document. A signed original of this written statement required by section 906 has been provided to the Fund and will be retained by the Fund and furnished to the SEC or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----