Pioneer Global Equity Fund

Transcription

1 Pioneer Global Equity Fund COMMENTARY Performance Analysis & Commentary March 2018 Fund Ticker Symbol: GLOSX (Class A); PGSYX (Class Y) amundipioneer.com First Quarter Review The Fund s Class A shares returned 1.23% at net asset value in the first quarter, and Class Y shares returned 1.10%, while the Fund s benchmarks, the Morgan Stanley Capital International (MSCI) World ND Index and the MSCI All Country World ND Index 1, returned 1.28% and 0.96%, respectively. The top-down investment themes we have been pursuing for the Fund contributed positively to returns this quarter, as evidenced by positive sector allocation results. Specifically, the Fund was overweight information technology, which was the top-performing sector in the first quarter, and underweight interest rate-sensitive sectors such as consumer staples, which was the third-worst performing sector over the three-month period. Stock selection results were negative for the Fund in the first quarter, but no individual portfolio holding detracted disproportionally from overall returns. Though equity markets are likely to remain volatile due to trade issues, Brexit negotiations in the United Kingdom (UK), and concerns about interest-rate increases in the US, we believe markets will trend higher over the balance of the year as corporate earnings growth accelerates, driven in part by US tax reform. After an extended period of low volatility and slow and steady gains for global stocks, volatility increased in the first quarter, resulting in a decline of 1.28% for the MSCI World Index. The decline was overdue, in our opinion, given that valuations were stretched and stocks seemingly only responded to positive news related to US tax reform and upside earnings surprises, but did not adequately discount the risks associated with pending changes in trade policy, Brexit negotiations in the UK, and the prospect for an end to aggressive global monetary policy stimulus from various central banks. As it turned out, trade policy was the primary catalyst that caused stocks to decline globally, which they did in both February and March. However, we believe the announcements of tariffs by both China and the US are initial steps towards a negotiated solution on trade that will ultimately help reduce the significant trade imbalance the US has with China. Both the European and US markets declined in the first quarter, as the MSCI Europe Index returned 2.00% ( 4.00% in local currency) and the Standard & Poor s 500 Index returned 0.76%. The emerging markets managed to generate a positive 1.40% return, as did Japanese stocks, which eked out a 0.80% return. Sector performance was poor during the quarter, as nine of the 11 sectors in the MSCI World Index (the MSCI Index) posted negative returns for the three-month period, with telecommunication services ( 5.8%) and energy ( 5.3%) faring the worst. Information technology (+3.4%) and consumer discretionary (+1.8%) were the MSCI Index s only bright spots during the first quarter. Sector Allocation and Security Selection The top-down investment themes we have been pursuing for the Fund contributed positively to returns this quarter, as evidenced by positive sector allocation results versus the benchmark. Specifically, the Fund was overweight information technology, which was the top-performing sector in the first quarter, and underweight interest rate-sensitive sectors such as consumer staples, which was the third-worst performing sector over the three-month period. Stock selection results were negative for the Fund in the first quarter, but no individual portfolio holding detracted disproportionally from overall returns. 1 The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an as is basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the MSCI Parties ) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, noninfringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.

2 Within the portfolio, the top contributors to the Fund s benchmark-relative performance this quarter included a position in Micron Technology, a leading manufacturer of DRAM (dynamic random access memory) semiconductor chips used in computers and consumer electronics, among other end-markets. Micron s shares rose after the company reported better-than-expected financial results and issued earnings guidance for the upcoming quarter that was well ahead of expectations. Another positive contributor was luxury apparel manufacturer Moncler, shares of which moved higher after the company s senior management team presented a positive outlook due to brand extensions and expansion. The Fund s position in Total, the leading French energy company, also contributed to benchmark-relative returns as Total s shares moved higher due to increased oil prices as well as optimism related to Middle East oil production. Top detractors from the Fund s benchmark-relative performance during the first quarter included positions in Fujitsu, Vodafone, and Valeo. Fujitsu delivered fiscal results in the third quarter that were far below consensus expectations at the operating-profit level, while meeting net income expectations. Some contributory factors to the miss were one-offs. Others, however, were symptomatic of weak telecom equipment spending in Japan and the ongoing expense burden associated with the transition of the European IT Services business, which is refocusing on higher-margin consulting work versus its legacy lower-margin business process outsourcing (BPO) work. We expect improvements in both of those areas to be made in Fujitsu s fiscal fourth quarter ending March Shares of Vodafone, one of the largest wireless phone companies in the world, sold off during the quarter after the early-february announcement that the company was in discussions with Liberty Global regarding the acquisition of certain European assets. Despite the stock s slump, we believe the deal, if consummated, will be accretive to Vodafone s free cash flow per share. Finally, Valeo, a toptier automobile components supplier based in France, underperformed in the first quarter. The company s 2018 guidance for 5% organic growth, announced with results in late February, disappointed investors, who were looking for stronger growth. We remain confident that Valeo s large and growing order book will translate into sustainable future growth, especially the business related to the company s joint venture with Siemens for electric vehicle motors. Current Outlook and Positioning Though equity markets are likely to remain volatile due to trade issues, Brexit negotiations in the UK, and concerns about interestrate increases in the US, we believe markets will trend higher over the balance of the year as corporate earnings growth accelerates, driven in part by US tax reform. In terms of sector weightings, we continue to overweight the Fund in financials, as we believe many companies in the sector will benefit from reflation and higher interest rates. In addition, we have found a number of quality, global financial stocks that are trading at attractive valuations. We also continue to overweight the portfolio to information technology, as software content is increasing across all industries. Within technology, we are focused on owning stocks of quality companies that are selling at reasonable valuations, while avoiding the high-growth, high-momentum stocks that have been overdue, in our opinion, for a correction. Finally, the Fund is underweight to sectors such as consumer staples and real estate, as stocks of companies in those sectors are often considered bond proxies, thus making them vulnerable as interest rates rise. Our investment approach for the Fund is differentiated by the integration of the top-down macroeconomic themes referenced earlier with disciplined fundamental research and quantitative screening. We are optimistic about the outlook for global stocks as well as our ability to generate above average risk-adjusted returns for the Fund s shareholders, in an increasingly volatile market environment.

3 Performance Review Pioneer Global Equity Fund s Class A shares returned 1.23% at net asset value in the first quarter, and Class Y shares returned 1.10%, while the Fund s benchmarks, the MSCI World ND Index and the MSCI All Country World ND Index, returned 1.28% and 0.96%, respectively. Average Annual Total Return (Class A shares) Average Annual Total Return (Class Y shares) March 31, 2018 (at NAV) (at POP) MSCI World ND Index MSCI All Country World ND Index March 31, 2018 (at NAV) MSCI World ND Index MSCI All Country World ND Index 1 year 18.31% 11.47% 13.59% 14.85% 1 year 18.82% 13.59% 14.85% 3 years 8.02% 5.90% 7.97% 8.12% 3 years 8.55% 7.97% 8.12% 5 years 10.59% 9.29% 9.70% 9.20% 5 years 11.10% 9.70% 9.20% 10 years 5.63% 5.01% 5.90% 5.57% 10 years 6.11% 5.90% 5.57% Expense Ratio (As of prospectus dated December 31, 2017) Class A shares: Gross, 1.46%; Net 1.25% Class Y shares: Gross, 1.10%; Net 0.80% Call or visit amundipioneer.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. The NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. The POP performance data reflects deduction of the maximum 5.75% sales charge at the beginning of the period. 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 shown for periods prior to the inception of the Fund s Class Y shares on December 31, 2008, is the NAV performance of the Fund s Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. For the period beginning December 31, 2008, the actual performance of Class Y shares is reflected. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. 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 for more information. The net expense ratios reflect the contractual expense limitations currently in effect through January 1, 2019, for Class A and Class Y shares. There can be no assurance that Amundi Pioneer will extend the expense limitations beyond such time. Please see the prospectus and financial statements for more information. A Word About RIsk: Investing in foreign and/or emerging markets securities involves risks relating to interest rates, currency exchange rates, economic, and political conditions. The Fund is subject to currency risk, meaning that the Fund could experience losses based on changes in the exchange rate between non-us currencies and the US dollar. Investments in small and mid-sized companies may offer the potential for higher returns, but are also subject to greater short-term price fluctuations than larger, more established companies. When interest rates rise, the prices of fixed-income securities in the Fund will generally fall. Conversely, when interest rates fall, the prices of fixed-income securities in the Fund will generally rise. The Fund may use derivatives, such as options, futures, inverse-floating-rate obligations, swaps, and others, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Derivatives may have a leveraging effect on the Fund. 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 and sectors. These risks may increase share price volatility. The Morgan Stanley Capital International (MSCI) World ND Index is an unmanaged measure of the performance of stock markets in the developed world. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. It is not possible to invest directly in an index. The MSCI All Country World ND Index is an unmanaged, free-float-adjusted, market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. The Index consists of 45 country indices comprising 24 developed and 21 emerging market country indices.. Individuals are encouraged to seek advice from their financial, legal, tax, and other appropriate advisers before making any investment or financial decisions or purchasing any financial, securities or investment-related product or service, including any product or service described in these materials. Amundi Pioneer does not provide investment advice or investment recommendations

4 Securities Discussed Top 10 Holdings % of Portfolio as of March 31, 2018 Micron Technology 2.62% Moncler 1.65% Total 3.89% Fujitsu 2.00% Vodafone 1.20% Valeo 2.60% % of Portfolio as of March 31, Apple 4.07% 2. Total 3.89% 3. Discover Financial Services 3.62% 4. Microsoft 3.39% 5. United Rentals 3.06% 6. BNP Paribas 2.95% 7. Mitsubishi UFJ Financial Group 2.94% 8. Affiliated Managers Group 2.69% 9. Micron Technology 2.62% 10. Valeo 2.60% The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. Before investing, consider the Fund s investment objectives, risks, charges and expenses. Contact your advisor or Amundi Pioneer Asset Management for a prospectus or summary prospectus containing this information. Read it carefully. Neither Amundi Pioneer, nor its representatives are legal or tax advisors. In addition, Amundi Pioneer does not provide advice or recommendations. The investments you choose should correspond to your needs, goals, and risk tolerance. For assistance in determining your financial situation, please consult an investment professional.

5 Not FDIC insured May lose value No bank guarantee Securities offered through Amundi Pioneer Distributor, Inc., 60 State Street, Boston, MA Underwriter of Pioneer mutual funds, Member SIPC 2018 Amundi Pioneer Asset Management amundipioneer.com