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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 811-22014
Pioneer Diversified High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, 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: April 30
Date of reporting period: May 1, 2015 through October 31, 2015
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 STOCKHOLDERS.
Pioneer Diversified
High Income Trust
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Semiannual Report | October 31, 2015
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Ticker Symbol: HNW
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
President's Letter 2
Portfolio Management Discussion 4
Portfolio Summary 11
Prices and Distributions 12
Performance Update 13
Schedule of Investments 14
Financial Statements 45
Financial Highlights 49
Notes to Financial Statements 51
Approval of Investment Advisory Agreement 66
Trustees, Officers and Service Providers 70
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 1
President's Letter
Dear Shareholder,
Through the first three quarters of 2015, global markets experienced pockets of
higher-than-average volatility due to significant cross-currents from different
geographic regions. All year, investors focused on the Federal Reserve System's
(the Fed's) deliberations over when to begin normalizing interest rates.
However, while there were signs of gradual economic improvement in the U.S.,
economies abroad increasingly diverged. In June, for example, investors grew
concerned about the debt crisis in Greece. That news, in turn, was followed by
evidence of an economic slowdown in China, which only served to exacerbate
existing worries about growth trends in the emerging markets, a segment of the
global economy already being negatively impacted by slumping commodity prices,
including the price of crude oil, which has been in near-steady decline for
almost a year. Through September 30, 2015, the pockets of height ened market
volatility alluded to above had resulted in the Standard & Poor's 500 Index
turning in a negative (-5.27%) return over the first nine months of the year.
However, the S&P 500 recovered nicely in October, returning 8.43% for the month,
which boosted the index's year-to-date return into positive territory, at 2.71%.
Despite the headwinds still vexing the global economy, our longer-term view of
the U.S. economy has remained positive. Economic conditions in the U.S. have
generally been constructive, based largely on improvements in employment
statistics and an uptick in the housing sector, which has aided the consumer
side of the economy, where household spending has been rising modestly. U.S.
consumers also stand to benefit, potentially, from lower energy prices as the
winter weather approaches. We continue to believe the U.S. economy remains on
a slow, steady growth trend, and that it is unlikely to be disrupted by a slow
pace of interest-rate normalization by the Fed.
Pioneer Investments believes that investors in today's environment can
potentially benefit from the consistent and disciplined investment approach we
have used since our founding in 1928. We focus on identifying value across
global markets using proprietary research, careful risk management, and a
long-term perspective. Our ongoing goal is to produce compelling returns
consistent with the stated objectives of our investment products, and with our
shareowners' expectations. We believe our shareowners can benefit from the
experience and tenure of our investment teams as well as the insights generated
from our extensive research process.
2 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
As always, and particularly during times of market uncertainty, we encourage you
to work with your financial advisor to develop an overall investment plan that
addresses both your short- and long-term goals, and to implement such a plan in
a disciplined manner.
We greatly appreciate your trust in us in the past and look forward to
continuing to serve you in the future.
Sincerely,
/s/ Lisa M. Jones
Lisa M. Jones
President and CEO
Pioneer Investment Management USA Inc.
November 2, 2015
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Fund's historical or future performance are
statements of opinion 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 Diversified High Income Trust | Semiannual Report | 10/31/15 3
Portfolio Management Discussion | 10/31/15
A series of developments contributed to growing investor concerns about
weakening global economic growth trends during the six-month period ended
October 31, 2015, which, in turn, undercut the performance of credit-sensitive
investments. In the following interview, Andrew Feltus, Charles Melchreit,
Jonathan Sharkey and Chin Liu discuss the factors that affected the performance
of Pioneer Diversified High Income Trust during the six-month period. Mr.
Feltus, Director of High Yield and Bank Loans, a senior vice president and a
portfolio manager at Pioneer; Mr. Melchreit, Director of Investment-Grade
Management, a senior vice president and a portfolio manager at Pioneer; Mr.
Sharkey, a senior vice president and a portfolio manager at Pioneer; and Mr.
Liu, a vice president and a portfolio manager at Pioneer, are responsible for
the day-to-day management of the Trust. Note: Mr. Liu became a portfolio manager
on the Trust in September 2015.
Q How did the Trust perform during the six-month period ended October 31,
2015?
A Pioneer Diversified High Income Trust returned -2.83% at net asset value
and -7.75% at market price during the six-month period ended October 31,
2015. During the same six-month period, the Trust's custom benchmark
returned -1.92%. The custom benchmark is based on equal weights of the Bank
of America Merrill Lynch (BofA ML) Global High Yield and Emerging Markets
Plus (GHY and EMP) Index, which returned -2.38% at net asset value during
the six-month period, and the Credit Suisse (CS) Leveraged Loan Index,
which returned -1.47%. Unlike the Trust, the custom benchmark does not use
leverage. While the use of leverage increases investment opportunity, it
also increases investment risk. During the six-month period, the Trust's
use of leverage was the biggest detractor from benchmark-relative
performance.
During the same six-month period, the average return (at market price) of
the 31 closed end funds in Lipper's High Current Yield Closed End Funds
Category (which may or may not be leveraged) was -7.94%, and the average
return (at market price) of the 22 closed end funds in Lipper's Loan
Participation Closed End Funds Category (which may or may not be leveraged)
was -7.43%.
The shares of the Trust were selling at a 10.1% discount to net asset value
at the end of the period on October 31, 2015.
On October 31, 2015, the 30-day SEC yield on the Trust's shares was 7.08%*.
* The 30-day SEC yield is a standardized formula that is based on the
hypothetical annualized earning power (investment income only) of the
Trust's portfolio securities during the period indicated.
4 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Q How would you describe the investment environment during the six-month
period ended October 31, 2015?
A High-yield, credit-sensitive bonds tended to drop in price during the
period as investors wrestled with the risks associated with three principal
developments: a renewed debt crisis in Greece; slowing economic growth
trends in China; and declines in the prices of oil and other commodities.
The combination of events exacerbated growing market worries about
potential weakening in the global economy.
High-yield corporate bonds struggled during much of the period, although
they did rally in the final month after the U.S. Federal Reserve System
(the Fed) opted not to raise short-term interest rates in September. While
the delay by the Fed to raise rates helped the performance of
higher-yielding bonds, it did little to help the performance of
floating-rate securities, the yields of which move up and down with
interest rates. Meanwhile, insurance-linked securities turned in solid
performance during the period, as a mild storm season led to a relatively
small amount of insurance claim filings.
Q Could you review your principal investment strategies in managing the
Trust's portfolio during the six-month period ended October 31, 2015?
A During the period, we maintained an emphasis on credit-linked debt in the
Trust's portfolio, while continuing to reduce the allocation to high-yield
corporate bonds and placing a greater focus on floating-rate instruments,
including bank loans and insurance-linked securities. Over the longer term,
we think creating a more balanced weighting in the portfolio between
higher-yielding, fixed-coupon debt and floating-rate securities is a proper
investment approach. In fact, as 2015 progressed and the Fed made clear
that it was contemplating tightening monetary policy by raising the
influential Federal funds rate, the strategic migration of the portfolio to
a more balanced approach seemed to make increasing sense, even though the
Fed did not actually raise rates before the end of the six-month period. At
period end, roughly 48% of the Trust's total investment portfolio was
allocated to floating-rate instruments, with 52% allocated to fixed-rate
investments.
With regard to specific asset classes, more than 64% of the Trust's total
investment portfolio was held in corporate bonds and notes as of October
31, 2015, while senior secured bank loans, at 23% of the Trust's total
investment portfolio, represented the portfolio's second-largest asset
allocation. Within the allocation to corporate bonds and notes was a 17%
position in insurance-linked securities, which included quota-share
instruments and event-linked securities.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 5
Q What were the primary reasons for the Trust's underperformance of its
customized benchmark during the six-month period ended October 31, 2015?
A The main reason for the Trust's underperformance of its benchmark during
the period was the use of leverage, or borrowed funds. The use of leverage
increases the Trust's risk and has the effect of exaggerating the size of
the high-yield market's moves on the portfolio. In down markets, when
securities are underperforming and bond prices are falling, as was the case
during the six-month period, the use of leverage can and will negatively
impact the Trust's benchmark-relative performance.
With regard to specific asset classes, U.S. high-yield (29% weighting) was
the worst-performing area of the Trust's portfolio during the period,
primarily due to security selection results in energy, metals and mining,
and industrials, as all of those sectors struggled for a number of reasons,
including declining oil prices and oversupply due to concerns about global
economic growth. The Trust's domestic high-yield portfolio did recover
somewhat, however, during the aforementioned market rally over the final
month of the period. In addition, the portfolio's allocation to emerging
markets debt detracted slightly from relative returns, even though emerging
markets debt outperformed U.S. high yield during the period. Declining oil
and energy prices took their toll on emerging markets corporates as the
period progressed, given that the energy sector represents roughly 40% of
all emerging markets corporate bond issues. The Trust's exposure to the
emerging markets stood at less than 10% as of period end.
Individual securities held in the portfolio that detracted from the Trust's
relative performance during the period included bank loans to Fieldwood
Energy, an energy exploration-and-production (E&P) company, and Essar
Steel. Performance from the Trust's allocation to insurance-linked
securities was solid during the period, but poor results from one
insurance-linked holding did hurt relative returns, as MultiCat Mexico - a
catastrophe bond sponsored by the Mexican government - suffered likely
principal loss resulting from the landfall of Hurricane Patricia on
Mexico's Pacific coast. Within domestic high yield, the biggest
underperformers in the Trust's portfolio were E&P companies Penn Virginia
and Halcon Resources.
Q Which of your strategies or individual investments made positive contri-
butions to the Trust's benchmark-relative returns during the six-month
period ended October 31, 2015?
A The portfolio's allocation to insurance-linked securities made the biggest
positive contribution to relative returns during the period, even after
allowing for the negative performance hit the Trust experienced from the
MultiCat Mexico bond holding mentioned earlier. Historically,
6 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
insurance-linked securities have had little-to-no correlation to the
credit-sensitive sectors, and the asset class once again proved to be a
good buffer against credit-market volatility over the six-month period, as
claims received by property-and-casualty insurers were relatively light.
Other factors contributing to the Trust's relative performance during the
period included security selection results among the portfolio's
floating-rate bank-loan holdings, the Trust's minimal foreign currency
exposure, and an allocation to European high-yield bonds.
The bank-loan asset class, in general, benefited from persistent investor
demand during the early part the period, backed by heavy new issuance of
collateralized loan obligations (CLOs). Also aiding the performance of bank
loans during the period was the expectation that the Fed, eventually, would
begin to increase interest rates, a move that has the potential to drive up
the prices of existing bank loans selling at discounts, at the same time
that loan coupons would rise. European high-yield bonds, which often have
less direct exposure to price trends of oil and other commodities, tended
to hold up well during the period, especially when compared with the
performance of domestic high-yield securities.
Finally, the Trust's exposure to non-U.S. dollar (USD) currencies is at its
lowest level for quite some time, and the positioning aided relative
returns as the USD outperformed most developed and emerging markets
currencies over the six-month period.
As for individual positions, high-yield securities in the portfolio that
contributed positively to the Trust's relative results during the period
included bonds issued by Title Max, a U.S. corporation that provides
automobile loans, and by two Russian wireless communication providers: MTS
of Russia and VimpelCom. Bank loans held in the Trust's portfolio that
contributed to relative performance during the period included loans to
Virtual Radiological, a corporation that provides remote diagnostic imaging
services to health care providers, and loans to Appvion, a diversified
paper-and-printing company. Also, several insurance-linked positions in the
Trust's portfolio had positive effects on relative returns, including
insurance-linked securities issued by Exeter Segregated Account, and by
Pangaea Reinsurance.
Q How did the level of leverage in the Trust change over the six-month period
ended October 31, 2015?
A At the end of the six-month period, on October 31, 2015, 31.1% of the
Trust's total managed assets were financed by leverage (or borrowed funds),
compared with 29.5% of the Trust's total managed assets financed by
leverage at the start of the period on May 1, 2015. While the amount of
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 7
borrowed funds employed by the Trust during the period did not increase or
decrease, the percentage increase was due to a decrease in the values of
securities in which the Trust had invested.
Q Did the Trust have any investments in derivative securities during the six-
month period ended October 31, 2015? If so, did those investments have any
effect on the Trust's performance?
A Yes, we invested in some forward currency transactions as part of our
overall strategy to emphasize the U.S. dollar in the Trust's portfolio,
relative to other currencies. The strategy was highly successful, and the
Trust's use of the forward currency transactions had a positive impact on
benchmark-relative performance as the U.S. dollar appreciated against most
foreign currencies over the course of the period.
Q What were major factors affecting the Trust's dividend, or yield, during
the six-month period ended October 31, 2015?
A The Trust's dividend** was stable during the six-month period, although
shareholders should continue to be mindful that, given the current low-
interest-rate environment, we often have no choice but to reinvest assets
at lower interest rates as older portfolio investments either reach
maturity, are called back by issuers, or are sold. In addition, the Trust
has drawn on accumulated net investment income in paying its dividend in
recent periods, but these reserves will be depleted over time.
At the same time, however, we think any Fed action to raise short-term
interest rates has the longer-term potential to increase interest income
paid by the floating-rate securities held in the Trust's portfolio.
Q Do you have any closing thoughts for investors?
A The Fed, as of the date of this report, seemed poised to begin raising
short-term interest rates in the near future, given that the domestic
economy appeared to be strengthening and the labor market was on the cusp
of meeting the Fed's target of a 5% or lower unemployment rate. Any
monetary tightening by the Fed has the potential to have a positive effect
on floating-rate investments, whose coupons rise and fall with
interest-rate movements. Most bank loans were selling at a discount as of
period end, and an increase in short-term rates would likely attract more
investors to the bank-loan market. That, in turn, could lead to price
appreciation. Meanwhile, the market for insurance-linked securities has
shown some signs of price stabilization, while coupon rates also appear to
be firming.
As of period end, the Trust has some - albeit limited - duration exposure
in its portfolio, but we have maintained a short-duration position relative
to the benchmark. (Duration is a measure of the sensitivity of the price,
or
** Dividends are not guaranteed.
8 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
the value of principal, of a fixed-income investment to a change in
interest rates, expressed as a number of years.) Most of the duration in
the Trust's portfolio comes from its high-yield bond positions, however,
and those securities tend to have more spread compared with other
long-duration securities, and so they could fare better when rates are
rising, a factor that could mitigate any negative, duration-related effects
of a Fed interest-rate increase on the Trust's performance. (Credit spreads
are commonly defined as the differences in yield between Treasuries and
other types of fixed-income securities with similar maturities.)
In managing the Trust, we seek to maintain a balanced portfolio with
significant exposures to floating-rate debt such as bank loans and
insurance-linked securities, as well as to fixed-rate corporate bonds and
notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 9
Please refer to the Schedule of Investments on pages 14-44 for a full listing of
Trust securities.
Investments in high-yield or lower-rated securities are subject to greater-than-
average risk. The Trust may invest in securities of issuers that are in default
or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of debt securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities in the Trust generally will rise. Investments in the Trust are
subject to possible loss due to the financial failure of the issuers of the
underlying securities and the issuers' inability to meet their debt obligations.
The Trust may invest a significant amount of its total assets in illiquid
securities. Illiquid securities may be difficult to dispose of at a price
reflective of their value at the times when the Trust believes it is desirable
to do so and the market price of illiquid securities is generally more volatile
than that of more liquid securities. Illiquid securities also are more difficult
to value, and investment of the Trust's assets in illiquid securities may
restrict the Trust's ability to take advantage of market opportunities.
The Trust is authorized to borrow from banks and issue debt securities, which
are forms of leverage. Leverage creates significant risks, including the risk
that the Trust's incremental income or capital appreciation for investments
purchased with the proceeds of leverage will not be sufficient to cover the cost
of the leverage, which may adversely affect the return for shareholders.
The Trust is required to maintain certain regulatory and other asset coverage
requirements in connection with its use of leverage. In order to maintain
required asset coverage levels, the Trust may be required to reduce the amount
of leverage employed by the Trust, alter the composition of its investment
portfolio or take other actions at what might be inopportune times in the
market. Such actions could reduce the net earnings or returns to shareowners
over time, which is likely to result in a decrease in the market value of the
Trust's shares.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering prospectus and in shareowner reports issued from time to time.
These risks may increase share price volatility.
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 opinion 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.
10 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Portfolio Summary | 10/31/15
Portfolio Diversification*
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 64.4%
Senior Secured Floating Rate Loan Interests 22.9%
U.S. Government And Agency Obligations 4.4%
Convertible Bonds & Notes 2.0%
Collateralized Mortgage Obligations 2.0%
Preferred Stocks 1.2%
Asset Backed Securities 1.2%
Sovereign Debt Obligations 0.9%
Commercial Paper 0.5%
Convertible Preferred Stocks 0.3%
Common Stocks 0.2%
* Includes investments in Insurance Linked Securities totaling 17.0% of total
investment portfolio.
10 Largest Holdings
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(As a percentage of total long-term holdings)**
1. Fixed Income Trust, Series 2013-A, 0.00%, 10/15/97 (144A) 2.14%
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2. Pangaea Re Segregated Account (Kane SAC, Ltd.), Series 2015-1, Variable Rate Notes, 2/1/19 1.73
---------------------------------------------------------------------------------------------------------
3. U.S. Treasury Notes, 0.09%, 7/31/16 1.52
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4. Exeter Segregated Account (Kane SAC, Ltd.), Variable Rate Notes, 1/7/16 1.51
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5. U.S. Treasury Notes, 0.073%, 10/31/16 1.50
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6. U.S. Treasury Notes, 0.089%, 4/30/16 1.44
---------------------------------------------------------------------------------------------------------
7. Lahinch Segregated Account (Kane SAC, Ltd.), Variable Rate Notes, 6/15/16 1.01
---------------------------------------------------------------------------------------------------------
8. PI-6 Segregated Account (Kane SAC, Ltd.), Series C, Variable Rate Notes, 7/7/16 1.01
---------------------------------------------------------------------------------------------------------
9. Queen Street X Re, Ltd., 5.811%, 6/8/18 (144A) (Cat Bond) 1.00
---------------------------------------------------------------------------------------------------------
10. Gator Re, Ltd., 6.746%, 1/9/17 (144A) (Cat Bond) 0.93
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** This list excludes temporary cash investments and derivative instruments.
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.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 11
Prices and Distributions | 10/31/15
Market Value per Common Share
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--------------------------------------------------------------------------------
10/31/15 4/30/15
--------------------------------------------------------------------------------
Market Value $15.27 $17.42
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(Discount) (10.1)% (5.6)%
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Net Asset Value per Common Share
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--------------------------------------------------------------------------------
10/31/15 4/30/15
--------------------------------------------------------------------------------
Net Asset Value $16.98 $18.39
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Distributions per Common Share*
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--------------------------------------------------------------------------------
Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
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5/1/15 - 10/31/15 $0.81 $ -- $ --
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The data shown above represents past performance, which is no guarantee of
future results.
* The amount of distributions made to shareholders during the period was in
excess of the net investment income earned by the Trust during the period.
The Trust has accumulated undistributed net investment income which is part
of the Trust's NAV. A portion of this accumulated net investment income was
distributed to shareowners during the period. A decrease in distributions
may have a negative effect on the market value of the Trust's shares.
12 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Performance Update | 10/31/15
Investment Returns
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The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in common
shares of Pioneer Diversified High Income Trust during the periods shown,
compared to that of the combined (50%/50%) Bank of America Merrill Lynch Global
High Yield and Emerging Markets Plus Index (BofA ML Global HY and EMP Index) and
the Credit Suisse (CS) Leveraged Loan Index.
Average Annual Total Returns
(As of October 31, 2015)
--------------------------------------------------------------------------------
50% BofA
ML Global
HY and
Net EMP Index
Asset 50% CS
Value Market Leveraged
Period (NAV) Price Loan Index
--------------------------------------------------------------------------------
Life-of-Trust
(5/30/07) 7.29% 5.37% 5.27%
5 Years 6.54 4.13 4.87
1 Year -2.63 -16.84 -1.40
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Diversified 50% BofA ML Global HY and EMP Index
High Income Trust 50% CS Leveraged Loan Index
5/07 $10,000 $10,000
10/07 $ 8,661 $10,070
10/08 $ 6,149 $ 7,712
10/09 $ 9,362 $10,619
10/10 $12,687 $12,151
10/11 $13,259 $12,577
10/12 $15,197 $14,022
10/13 $17,562 $15,003
10/14 $18,676 $15,628
10/15 $15,532 $15,410
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below NAV due to such factors as interest rate changes
and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Shares of closed-end funds, unlike open-end funds, are not continuously offered.
There is a one-time public offering and, once issued, shares of closed-end funds
are bought and sold in the open market through a stock exchange and frequently
trade at prices lower than their NAV. NAV per common share is total assets less
total liabilities, which include preferred shares or borrowings, as applicable,
divided by the number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends are
assumed to be reinvested at prices obtained through open-market purchases under
the Trust's dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the sale of Trust shares.
Had these fees and taxes been reflected, performance would have been lower.
The BofA ML Global High Yield and Emerging Markets Plus Index is an unmanaged
index that tracks the performance of the below- and border-line investment-grade
global debt markets denominated in the major developed market currencies. The
Index includes sovereign issuers rated BBB1 and lower along with corporate
issues rated BB1 and lower. There are no restrictions on issuer country of
domicile. The CS Leveraged Loan Index is unmanaged and is designed to mirror the
investible universe of the U.S. dollar-denominated leveraged loan market. The
CS Leveraged Loan Index consists of tradable term loans with at least one year
to maturity and rated BBB or lower.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Trust returns, do not reflect any fees, expenses or sales charges. The
indices do not use leverage. It is not possible to invest directly in an index.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 13
Schedule of Investments | 10/31/15 (unaudited)
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Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 1.8% of
Net Assets
656,321(a) Aircraft Finance Trust, Series 1999-1A, Class A1,
0.676%, 5/15/24 (144A) $ 175,566
200,000 Ascentium Equipment Receivables LLC, Series
2015-1A, Class E, 5.92%, 6/12/23 (144A) 199,119
81,268 Continental Airlines Pass Through Trust, Series
1998-1, Class B, 6.748%, 3/15/17 84,365
250,000 Delta Air Lines Pass Through Trust, Series 2010-1,
Class B, 6.375%, 1/2/16 (144A) 251,875
290,000(b) GMAT Trust, Series 2013-1A, Class M, 5.0%,
11/25/43 (144A) 276,813
135,842 Monty Parent Issuer LLC, Series 2013-LTR1, Class B,
4.25%, 11/20/28 (144A) 135,842
923,666 Nations Equipment Finance Funding I LLC, Series
2013-1A, Class C, 5.5%, 5/20/21 (144A) 927,850
400,000(c) VOLT XXXVII LLC, Series 2015-NP11, Class A2,
4.375%, 7/25/45 (144A) 395,717
28,154 Westgate Resorts LLC, Series 2012-2A, Class C,
9.0%, 1/20/25 (144A) 28,274
-----------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $2,694,761) $ 2,475,421
-----------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
2.8% of Net Assets
375,000(a) BAMLL Commercial Mortgage Securities Trust,
Series 2014-INLD, Class F, 2.736%, 12/15/29 (144A) $ 346,974
150,000(b) Bear Stearns Commercial Mortgage Securities Trust,
Series 2005-PWR7, Class B, 5.214%, 2/11/41 149,867
260,000(a) CFCRE Mortgage Trust, Series 2015-RUM, Class E,
4.796%, 7/15/30 (144A) 260,272
500,000(b) Citigroup Commercial Mortgage Trust, Series
2014-GC23, Class E, 3.208%, 7/10/47 (144A) 325,961
300,000(b) COMM Mortgage Trust, Series 2007-C9,
Class H, 5.796%, 12/10/49 (144A) 269,948
250,000(b) COMM Mortgage Trust, Series 2012-CR2, Class E,
4.855%, 8/15/45 (144A) 241,205
500,000(a) CSMC Trust, Series 2015-SAND, Class F,
4.896%, 8/15/30 (144A) 500,076
115,766(a) EQTY Mezzanine Trust, Series 2014-INMZ,
Class M, 4.944%, 5/8/31 (144A) 114,652
170,000(a) EQTY Mortgage Trust, Series 2014-INNS, Class E,
3.645%, 5/8/31 (144A) 168,294
76,836 Global Mortgage Securitization, Ltd., Series 2004-A,
Class B1, 5.25%, 11/25/32 (144A) 59,756
142,983 Global Mortgage Securitization, Ltd., Series 2005-A,
Class B3, 5.25%, 4/25/32 105,988
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- (continued)
137,938 Homeowner Assistance Program Reverse Mortgage
Loan Trust, Series 2013-RM1, Class A, 4.0%,
5/26/53 (144A) $ 135,738
150,000 JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2006-CB16, Class AJ, 5.623%, 5/12/45 147,679
150,600(a) JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2006-FL2A, Class G, 0.556%, 11/15/18 (144A) 144,123
556,571(b) LB-UBS Commercial Mortgage Trust, Series 2006-C1,
Class AJ, 5.276%, 2/15/41 558,006
400,000(b) Wachovia Bank Commercial Mortgage Trust, Series
2007-C34, Class AJ, 5.947%, 5/15/46 412,914
-----------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $3,982,275) $ 3,941,453
-----------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE LOAN
INTERESTS -- 32.2% of Net Assets*(a)
AUTOMOBILES & COMPONENTS -- 2.9%
Auto Parts & Equipment -- 1.5%
496,241 Crowne Group LLC, First Lien Initial Term
Loan, 6.0%, 9/30/20 $ 494,226
185,525 Federal-Mogul Corp., Tranche C Term Loan,
4.75%, 4/15/21 170,103
162,519 Key Safety Systems, Inc., Initial Term Loan,
4.75%, 8/29/21 161,096
253,390 MPG Holdco I, Inc., Initial Term Loan,
3.75%, 10/20/21 252,462
179,545 TI Group Automotive Systems LLC, Initial US Term
Loan, 4.5%, 6/30/22 178,423
901,604 Tower Automotive Holdings USA LLC, Refinancing
Term Loan, 4.0%, 4/23/20 895,593
---------------
$ 2,151,903
-----------------------------------------------------------------------------------------------
Automobile Manufacturers -- 1.0%
1,436,250 Chrysler Group LLC, Term Loan B, 3.5%, 5/24/17 $ 1,435,499
-----------------------------------------------------------------------------------------------
Tires & Rubber -- 0.4%
479,167 Goodyear Tire & Rubber Co., Second Lien Term Loan,
3.75%, 4/30/19 $ 480,856
---------------
Total Automobiles & Components $ 4,068,258
-----------------------------------------------------------------------------------------------
CAPITAL GOODS -- 3.8%
Aerospace & Defense -- 0.3%
126,314 TASC, Inc., First Lien Term Loan, 7.0%, 5/22/20 $ 126,787
233,229 Vencore, Inc. (fka SI Organization, Inc.), Initial First
Lien Term Loan, 5.75%, 11/23/19 232,573
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 15
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Aerospace & Defense -- (continued)
157,600 WP CPP Holdings LLC, Second Lien Term Loan B-1,
8.75%, 4/30/21 $ 151,296
---------------
$ 510,656
-----------------------------------------------------------------------------------------------
Building Products -- 1.3%
915,196 Builders FirstSource, Inc., Term Loan B,
6.0%, 7/29/22 $ 911,907
500,000 Quanex Building Products Corp., Initial Term Loan,
5.25%, 11/2/22 494,062
398,224 Unifrax Holding Co., New Term B Dollar Loan,
4.25%, 11/28/18 395,072
---------------
$ 1,801,041
-----------------------------------------------------------------------------------------------
Construction Machinery & Heavy Trucks -- 0.3%
390,000 Navistar, Inc., Tranche B Term Loan, 6.5%, 8/7/20 $ 378,788
-----------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.4%
518,191 WireCo WorldGroup, Inc., Term Loan, 6.0%, 2/15/17 $ 517,543
-----------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.8%
495,915 Doosan Infracore International, Inc. (Doosan Holdings
Europe, Ltd.), Tranche B Term Loan, 4.5%, 5/28/21 $ 497,568
103,660 Faenza Acquisition GmbH (CeramTec Acquisition Corp.),
Dollar Term B-3 Loan, 4.25%, 8/30/20 103,822
342,497 Faenza Acquisition GmbH (CeramTec Acquisition Corp.),
Initial Dollar Term B-1 Loan, 4.25%, 8/30/20 343,032
35,208 Faenza Acquisition GmbH (CeramTec Acquisition Corp.),
Initial Dollar Term B-2 Loan, 4.25%, 8/30/20 35,263
89,694 Filtration Group Corp., Initial Second Lien Term Loan,
8.25%, 11/22/21 89,620
10,659 Kleopatra Holdings 2 SCA, Initial German Borrower
Dollar Term Loan, 5.0%, 4/28/20 10,685
24,941 Kleopatra Holdings 2 SCA, Initial US Borrower Dollar
Term Loan, 5.0%, 4/28/20 25,004
---------------
$ 1,104,994
-----------------------------------------------------------------------------------------------
Industrial Machinery -- 0.3%
Xerium Technologies, Inc., New Term Loan,
5.75%, 5/17/19 $ 474,703
-----------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.4%
305,106 AWAS Finance Luxembourg 2012 SA, Term Loan,
3.5%, 7/16/18 $ 304,534
284,593 WESCO Distribution, Inc., Tranche B-1 Loan,
3.75%, 12/12/19 284,860
---------------
$ 589,394
---------------
Total Capital Goods $ 5,377,119
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.8%
Environmental & Facilities Services -- 0.3%
500,000 Granite Acquisition, Inc., Second Lien Term B Loan,
8.25%, 12/19/22 $ 462,500
-----------------------------------------------------------------------------------------------
Research & Consulting Services -- 0.3%
338,143 Wyle Services Corp., Term Loan, 5.0%, 5/23/21 $ 337,365
-----------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.2%
120,230 Monitronics International, Inc., 2013 Term Loan B,
4.25%, 3/23/18 $ 119,689
127,569 Protection One, Inc., 2012 Term Loan,
5.0%, 7/1/21 127,043
---------------
$ 246,732
---------------
Total Commercial & Professional Services $ 1,046,597
-----------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.3%
Home Furnishings -- 0.1%
73,155 Tempur Pedic International, Inc., New Term B Loan,
3.5%, 3/18/20 $ 73,323
-----------------------------------------------------------------------------------------------
Leisure Products -- 0.2%
300,000 Bombardier Recreational Products, Inc., Term B Loan,
3.75%, 1/30/19 $ 300,187
---------------
Total Consumer Durables & Apparel $ 373,510
-----------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 1.5%
Casinos & Gaming -- 0.2%
297,750 Scientific Games International, Inc., Initial Term
B-2 Loan, 6.0%, 10/1/21 $ 291,562
-----------------------------------------------------------------------------------------------
Leisure Facilities -- 0.1%
131,127 Fitness International LLC, Term B Loan, 5.5%, 7/1/20 $ 124,844
-----------------------------------------------------------------------------------------------
Restaurants -- 0.7%
400,493 Landry's, Inc. (fka Landry's Restaurants, Inc.),
Term Loan B, 4.0%, 4/24/18 $ 401,430
535,575 NPC International, Inc., Term Loan, 4.0%, 12/28/18 530,219
---------------
$ 931,649
-----------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.5%
750,000 KC MergerSub, Inc., First Lien Initial Term Loan,
6.0%, 8/12/22 $ 742,500
---------------
Total Consumer Services $ 2,090,555
-----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.3%
Consumer Finance -- 0.1%
215,168 Trans Union LLC, Term B-2 Loan, 3.5%, 4/9/21 $ 212,855
-----------------------------------------------------------------------------------------------
Specialized Finance -- 0.2%
248,750 DBRS, Ltd., Initial Term Loan, 6.25%, 3/4/22 $ 248,750
---------------
Total Diversified Financials $ 461,605
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 17
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
ENERGY -- 1.0%
Coal & Consumable Fuels -- 0.1%
352,500 PT Bumi Resources Tbk, Term Loan, 18.0%, 11/7/15 $ 114,563
-----------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.3%
498,750 TerraForm AP Acquisition Holdings LLC, Term Loan,
5.0%, 6/27/22 $ 488,775
-----------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.3%
444,680 Jonah Energy LLC, Initial Second Lien Term Loan,
7.5%, 5/12/21 $ 350,185
38,138(d) Offshore Group Investment, Ltd. (Vantage Delaware
Holdings LLC), Second Lien Term Loan, 5.75%, 3/28/19 11,378
---------------
$ 361,563
-----------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.3%
544,223 FR Dixie Acquisition Corp., Term Loan, 5.75%, 12/18/20 $ 408,167
---------------
Total Energy $ 1,373,068
-----------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.3%
Food Distributors -- 0.3%
400,000 AdvancePierre Foods, Inc., Second Lien Term Loan,
9.5%, 10/10/17 $ 397,000
---------------
Total Food & Staples Retailing $ 397,000
-----------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.3%
Packaged Foods & Meats -- 0.3%
476,386 Dole Food Co., Inc., Tranche B Term Loan,
4.5%, 11/1/18 $ 477,081
---------------
Total Food, Beverage & Tobacco $ 477,081
-----------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 3.5%
Health Care Equipment -- 0.5%
500,000 Concentra, Inc., Initial Second Lien Term Loan,
9.0%, 6/1/23 $ 502,500
235,926 Kinetic Concepts, Inc., Dollar E-1 Term Loan,
4.5%, 5/4/18 236,220
---------------
$ 738,720
-----------------------------------------------------------------------------------------------
Health Care Facilities -- 1.5%
264,429 CHS/Community Health Systems, Inc., Incremental
2018 Term F Loan, 3.575%, 12/31/18 $ 263,726
248,160 CHS/Community Health Systems, Inc., Incremental
2019 Term G Loan, 3.75%, 12/31/19 247,423
456,604 CHS/Community Health Systems, Inc., Incremental
2021 Term H Loan, 4.0%, 1/27/21 456,002
194,080 HCA, Inc., Tranche B-5 Term Loan, 2.94%, 3/31/17 194,268
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Health Care Facilities -- (continued)
317,734 Kindred Healthcare, Inc., Incremental Term Loan,
4.25%, 4/9/21 $ 317,334
298,473 Steward Health Care System LLC, Term Loan,
6.75%, 4/10/20 296,138
402,326 Surgical Care Affiliates, Inc., Initial Term Loan,
4.25%, 3/17/22 402,580
---------------
$ 2,177,471
-----------------------------------------------------------------------------------------------
Health Care Services -- 0.9%
208,835 Bioscrip, Inc., Delayed Term Loan, 6.5%, 7/31/20 $ 192,128
348,058 Bioscrip, Inc., Initial Term B Loan, 6.5%, 7/31/20 320,213
350,000 HC Group Holdings III, Inc., Initial First Lien Term
Loan, 6.0%, 4/7/22 351,459
201,925 National Mentor Holdings, Inc., Tranche B Term
Loan, 4.25%, 1/31/21 198,896
277,085 Valitas Health Services, Inc., Term Loan B,
6.0%, 6/2/17 221,668
---------------
$ 1,284,364
-----------------------------------------------------------------------------------------------
Health Care Supplies -- 0.2%
249,375 Alere, Inc., Term Loan B, 4.25%, 6/20/22 $ 249,842
-----------------------------------------------------------------------------------------------
Health Care Technology -- 0.4%
237,043 IMS Health, Inc., Tranche B-1 Dollar Term Loan,
3.5%, 3/17/21 $ 236,283
335,022 Medical Card System, Inc., Term Loan,
12.0%, 3/17/17 321,621
---------------
$ 557,904
---------------
Total Health Care Equipment & Services $ 5,008,301
-----------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.8%
Household Products -- 0.6%
443,333 Dollar Tree, Inc., Term B-1 Loan, 3.5%, 7/6/22 $ 444,639
374,192 SRAM LLC, First Lien Term Loan, 4.0%, 4/10/20 353,612
---------------
$ 798,251
-----------------------------------------------------------------------------------------------
Personal Products -- 0.2%
100,000 Atrium Innovations, Inc., Second Lien Term Loan,
7.75%, 8/13/21 $ 87,667
215,357 NBTY, Inc., B-2 Term Loan, 3.5%, 10/1/17 213,930
---------------
$ 301,597
---------------
Total Household & Personal Products $ 1,099,848
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 19
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
INSURANCE -- 2.6%
Life & Health Insurance -- 0.4%
138,889 Integro, Ltd., Delayed Draw Term Loan, 5.75%,
10/31/22 $ 134,722
361,111 Integro, Ltd., Term Loan, 5.75%, 10/31/22 350,278
---------------
$ 485,000
-----------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.1%
167,750 Alliant Holdings I LLC, Term Loan B, 4.5%, 8/12/22 $ 166,230
-----------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 2.1%
746,149 Confie Seguros Holding II Co., First Lien Term Loan B,
5.75%, 11/9/18 $ 748,014
593,765 Confie Seguros Holding II Co., Second Lien Term Loan,
10.25%, 5/8/19 587,827
746,250 Hyperion Insurance Group, Ltd., Term B Loan,
5.5%, 4/29/22 749,360
938,758 USI, Inc., Initial Term Loan, 4.25%, 12/27/19 930,544
---------------
$ 3,015,745
---------------
Total Insurance $ 3,666,975
-----------------------------------------------------------------------------------------------
MATERIALS -- 1.8%
Diversified Chemicals -- 0.2%
275,000 Univar USA, Inc., Initial Dollar Term Loan,
4.25%, 7/1/22 $ 271,071
-----------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.0%+
75,256(d)(j) PT Bakrie & Brothers Tbk, Facility Term Loan B,
8.0%, 11/25/14 $ 24,458
-----------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.8%
391,021 Tank Holding Corp., Initial Term Loan, 6.5%, 3/16/22 $ 388,870
748,125 Tekni-Plex, Inc., USD Term Loan, 4.5%, 6/1/22 745,787
---------------
$ 1,134,657
-----------------------------------------------------------------------------------------------
Paper Packaging -- 0.3%
490,684 Caraustar Industries, Inc., Incremental Term Loan,
8.0%, 5/1/19 $ 490,889
-----------------------------------------------------------------------------------------------
Paper Products -- 0.3%
287,111 Appvion, Inc., Term Commitment, 5.75%, 6/28/19 $ 272,038
79,339 Exopack Holdings SA, USD Term Loan, 4.5%, 5/8/19 79,289
---------------
$ 351,327
-----------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.0%+
23,810 Chemtura Corp., New Term Loan, 3.5%, 8/29/16 $ 23,790
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Steel -- 0.2%
495,000 Essar Steel Algoma, Inc., Initial Term Loan,
7.5%, 8/16/19 $ 272,869
---------------
Total Materials $ 2,569,061
-----------------------------------------------------------------------------------------------
MEDIA -- 3.7%
Advertising -- 0.6%
945,654 Affinion Group, Inc., Tranche B Term Loan,
6.75%, 4/30/18 $ 910,586
-----------------------------------------------------------------------------------------------
Broadcasting -- 1.0%
291,667 Hubbard Radio LLC, Term Loan, 4.25%, 5/27/22 $ 286,745
315,000 Learfield Communications, Inc., Initial Second Lien
Term Loan, 8.75%, 10/8/21 313,228
297,000 MediArena Acquisition BV (fka AP NMT Acquisition BV),
First Lien Dollar Term B Loan, 6.75%, 8/13/21 286,358
459,811 Univision Communications, Inc., Replacement First
Lien Term Loan, 4.0%, 3/1/20 457,001
---------------
$ 1,343,332
-----------------------------------------------------------------------------------------------
Cable & Satellite -- 0.2%
310,709 WideOpenWest Finance LLC, Replacement Term B
Loan, 4.5%, 4/1/19 $ 306,793
-----------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.0%+
45,328 Cinedigm Digital Funding I LLC, Term Loan,
3.75%, 2/28/18 $ 45,271
-----------------------------------------------------------------------------------------------
Publishing -- 1.9%
511,252 Cengage Learning Acquisitions, Inc., Term Loan,
7.0%, 3/31/20 $ 509,015
324,188 Houghton Mifflin Holdings, Inc., Term Loan,
4.0%, 5/28/21 321,756
742,481 Interactive Data Corp., Term Loan, 4.75%, 5/2/21 743,252
130,228 Lee Enterprises, Inc., First Lien Term Loan,
7.25%, 3/31/19 128,678
933,375 McGraw-Hill School Education Holdings LLC,
Term B Loan, 6.25%, 12/18/19 934,250
---------------
$ 2,636,951
---------------
Total Media $ 5,242,933
-----------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY
& LIFE SCIENCES -- 2.1%
Biotechnology -- 0.7%
1,047,375 Lantheus Medical Imaging, Inc., Term Loan,
7.0%, 6/30/22 $ 979,296
-----------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 1.0%
1,000,000 Albany Molecular Research, Inc., Term Loan B,
5.75%, 7/16/21 $ 1,001,250
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 21
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- (continued)
427,759 Catalent Pharma Solutions, Inc., Dollar Term Loan,
4.25%, 5/20/21 $ 427,855
---------------
$ 1,429,105
-----------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.4%
550,000 Concordia Healthcare Corp., Initial Dollar Term Loan,
4.25%, 10/21/21 $ 530,406
---------------
Total Pharmaceuticals, Biotechnology
& Life Sciences $ 2,938,807
-----------------------------------------------------------------------------------------------
REAL ESTATE -- 0.2%
Retail REIT -- 0.2%
276,683 DTZ U.S. Borrower LLC, First Lien Initial Term Loan,
4.25%, 11/4/21 $ 274,565
---------------
Total Real Estate $ 274,565
-----------------------------------------------------------------------------------------------
RETAILING -- 1.0%
Automotive Retail -- 0.5%
656,250 CWGS Group LLC, Term Loan, 5.25%, 2/20/20 $ 656,660
-----------------------------------------------------------------------------------------------
Computer & Electronics Retail -- 0.4%
718,579 Targus Group International, Inc., Term Loan,
14.75%, 5/24/16 $ 538,934
-----------------------------------------------------------------------------------------------
Specialty Stores -- 0.1%
157,692 Petsmart, Inc., Tranche B-1 Loan, 4.25%, 3/11/22 $ 157,853
---------------
Total Retailing $ 1,353,447
-----------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.3%
Semiconductor Equipment -- 0.3%
471,611 VAT Lux II S.a.r.l., Term Loan, 4.25%, 2/11/21 $ 471,218
---------------
Total Semiconductors & Semiconductor Equipment $ 471,218
-----------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.0%
Application Software -- 0.9%
497,533 Epiq Systems, Inc., Term Loan, 4.5%, 8/27/20 $ 495,046
210,670 Expert Global Solutions, Inc., Advance First Lien
Term Loan B, 8.5%, 4/3/18 209,221
500,000 Vertafore, Inc., Second Lien Term Loan,
9.75%, 10/27/17 501,750
---------------
$ 1,206,017
-----------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 1.1%
246,875 Evergreen Skills Lux S.a r.l., First Lien Initial Term Loan,
5.75%, 4/28/21 $ 206,449
625,000 Sitel Worldwide Corp., First Lien Term B-1 Loan,
6.5%, 9/18/21 617,969
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
IT Consulting & Other Services -- (continued)
772,637 SunGard Data Systems, Inc., Tranche C Term Loan,
3.945%, 2/28/17 $ 773,309
---------------
$ 1,597,727
---------------
Total Software & Services $ 2,803,744
-----------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.4%
Communications Equipment -- 0.1%
89,329 CommScope, Inc., Tranche 4 Term Loan,
3.25%, 1/14/18 $ 88,980
-----------------------------------------------------------------------------------------------
Electronic Components -- 0.3%
457,700 Mirion Technologies (Finance) LLC (Mirion
Technologies, Inc.), First Lien Initial Term Loan,
5.75%, 3/31/22 $ 458,501
---------------
Total Technology Hardware & Equipment $ 547,481
-----------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.9%
Integrated Telecommunication Services -- 0.6%
497,500 GCI Holdings, Inc., Term B Loan, 4.0%, 2/2/22 $ 499,987
500,000 Securus Technologies Holdings, Inc., Term Loan B2,
5.25%, 4/30/20 390,000
---------------
$ 889,987
-----------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.3%
333,333 Syniverse Holdings, Inc., Initial Term Loan,
4.0%, 4/23/19 $ 305,209
166,667 Syniverse Holdings, Inc., Tranche B Term Loan,
4.0%, 4/23/19 152,604
---------------
$ 457,813
---------------
Total Telecommunication Services $ 1,347,800
-----------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.2%
Air Freight & Logistics -- 0.1%
190,613 Ozburn-Hessey Holding Co., LLC, Term Loan,
6.75%, 5/23/19 $ 189,779
-----------------------------------------------------------------------------------------------
Marine -- 0.8%
622,129 Commercial Barge Line Co., Initial First Lien Term
Loan, 7.5%, 9/22/19 $ 619,407
474,507 Navios Maritime Partners LP, Term Loan,
5.25%, 6/27/18 471,541
---------------
$ 1,090,948
-----------------------------------------------------------------------------------------------
Trucking -- 0.3%
497,468 YRC Worldwide, Inc., Initial Term Loan, 8.25%, 2/13/19 $ 477,570
---------------
Total Transportation $ 1,758,297
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 23
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
UTILITIES -- 0.5%
Electric Utilities -- 0.5%
447,790 Atlantic Power Limited Partnership, Term Loan,
4.75%, 2/24/21 $ 448,069
280,050 Star West Generation LLC, Advance Term Loan B,
4.25%, 3/13/20 275,850
---------------
Total Utilities $ 723,919
-----------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING
RATE LOAN INTERESTS
(Cost $46,630,537) $ 45,471,189
-----------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 90.5% of
Net Assets
AUTOMOBILES & COMPONENTS -- 0.9%
Auto Parts & Equipment -- 0.9%
350,000 International Automotive Components Group SA,
9.125%, 6/1/18 (144A) $ 353,500
220,000 Pittsburgh Glass Works LLC, 8.0%, 11/15/18 (144A) 229,130
640,000 Stackpole International Intermediate Co.,
SA / Stackpole International Powder, 7.75%,
10/15/21 (144A) 716,800
---------------
Total Automobiles & Components $ 1,299,430
-----------------------------------------------------------------------------------------------
BANKS -- 2.4%
Diversified Banks -- 2.4%
525,000 Banco de Galicia y Buenos Aires, 8.75%,
5/4/18 (144A) $ 536,157
400,000(b) Banco Macro SA, 9.75%, 12/18/36 398,000
200,000(b)(e) Banco Santander SA, 6.375% 195,500
325,000(b)(e) Bank of America Corp., 6.25% 329,566
350,000(b)(e) ING Groep NV, 6.5% 336,656
200,000(b)(e) Royal Bank of Scotland Group Plc, 7.5% 207,000
200,000 Sberbank of Russia Via SB Capital SA, 5.25%,
5/23/23 (144A) 176,250
245,000 Trade & Development Bank of Mongolia LLC, 9.375%,
5/19/20 (144A) 244,440
750,000 UBS AG / Stamford CT, 7.625%, 8/17/22 867,435
---------------
Total Banks $ 3,291,004
-----------------------------------------------------------------------------------------------
CAPITAL GOODS -- 4.1%
Aerospace & Defense -- 1.0%
400,000 ADS Tactical, Inc., 11.0%, 4/1/18 (144A) $ 410,000
680,000 DynCorp International, Inc., 10.375%, 7/1/17 537,200
435,000 LMI Aerospace, Inc., 7.375%, 7/15/19 427,387
---------------
$ 1,374,587
-----------------------------------------------------------------------------------------------
Agricultural & Farm Machinery -- 0.3%
475,000 Titan International, Inc., 6.875%, 10/1/20 $ 401,375
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Building Products -- 0.2%
300,000 USG Corp., 7.875%, 3/30/20 (144A) $ 316,500
-----------------------------------------------------------------------------------------------
Construction & Engineering -- 0.2%
900,000 Empresas ICA S.A.B. de CV, 8.9%, 2/4/21 (144A) $ 249,750
-----------------------------------------------------------------------------------------------
Construction Machinery & Heavy Trucks -- 0.3%
360,000 Meritor, Inc., 6.75%, 6/15/21 $ 355,500
-----------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.5%
750,000 WireCo WorldGroup, Inc., 9.5%, 5/15/17 $ 682,500
-----------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.3%
455,000 JB Poindexter & Co., Inc., 9.0%, 4/1/22 (144A) $ 481,163
-----------------------------------------------------------------------------------------------
Industrial Machinery -- 0.8%
560,000 Apex Tool Group LLC, 7.0%, 2/1/21 (144A) $ 450,800
450,000 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) 433,170
217,120(f)(g) Liberty Tire Recycling LLC, 11.0% (11.0% PIK
0.0% cash), 3/31/21 (144A) 138,957
150,000 Xerium Technologies, Inc., 8.875%, 6/15/18 153,000
---------------
$ 1,175,927
-----------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.5%
150,000 H&E Equipment Services, Inc., 7.0%, 9/1/22 $ 152,250
544,000 TRAC Intermodal LLC / TRAC Intermodal Corp.,
11.0%, 8/15/19 590,240
---------------
$ 742,490
---------------
Total Capital Goods $ 5,779,792
-----------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 1.7%
Commercial Printing -- 0.7%
340,000 Cenveo Corp., 6.0%, 8/1/19 (144A) $ 298,350
700,000 Multi-Color Corp., 6.125%, 12/1/22 (144A) 719,250
---------------
$ 1,017,600
-----------------------------------------------------------------------------------------------
Diversified Support Services -- 1.0%
950,000 NANA Development Corp., 9.5%, 3/15/19 (144A) $ 874,000
260,000 TMS International Corp., 7.625%, 10/15/21 (144A) 237,900
280,000 Transfield Services, Ltd., 8.375%, 5/15/20 (144A) 285,600
---------------
$ 1,397,500
---------------
Total Commercial & Professional Services $ 2,415,100
-----------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.8%
Home Furnishings -- 0.4%
535,000 Tempur Sealy International, Inc., 6.875%, 12/15/20 $ 572,450
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 25
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Homebuilding -- 0.7%
350,000 Brookfield Residential Properties, Inc., 6.375%,
5/15/25 (144A) $ 336,000
605,000(d) Desarrolladora Homex SAB de CV, 9.5%,
12/11/19 (144A) 12,100
250,000 KB Home, 7.0%, 12/15/21 253,125
340,000 KB Home, 7.625%, 5/15/23 345,100
---------------
$ 946,325
-----------------------------------------------------------------------------------------------
Leisure Products -- 0.7%
1,000,000 Icon Health & Fitness, Inc., 11.875%,
10/15/16 (144A) $ 993,750
---------------
Total Consumer Durables & Apparel $ 2,512,525
-----------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 2.7%
Casinos & Gaming -- 1.1%
806,032(d)(f) Mashantucket Western Pequot Tribe, 6.5% (5.5% PIK
1.0% cash), 7/1/36 $ 4,030
365,000 MGM Resorts International, 6.0%, 3/15/23 370,475
100,000 Scientific Games International, Inc., 6.25%, 9/1/20 69,500
1,200,000 Scientific Games International, Inc., 10.0%, 12/1/22 1,062,000
---------------
$ 1,506,005
-----------------------------------------------------------------------------------------------
Hotels, Resorts & Cruise Lines -- 0.4%
245,000 Viking Cruises, Ltd., 6.25%, 5/15/25 (144A) $ 240,713
325,000 Viking Cruises, Ltd., 8.5%, 10/15/22 (144A) 353,437
---------------
$ 594,150
-----------------------------------------------------------------------------------------------
Leisure Facilities -- 0.4%
EUR 566,487 Cirsa Funding Luxembourg SA, 8.75%, 5/15/18 (144A) $ 631,298
-----------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.8%
890,000 Constellis Holdings LLC / Constellis Finance Corp.,
9.75%, 5/15/20 (144A) $ 805,450
315,000 StoneMor Partners LP / Cornerstone Family Services
of WV, 7.875%, 6/1/21 326,025
---------------
$ 1,131,475
---------------
Total Consumer Services $ 3,862,928
-----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 1.9%
Consumer Finance -- 0.8%
445,000 Jefferies Finance LLC / JFIN Co-Issuer Corp., 7.375%,
4/1/20 (144A) $ 436,100
406,687 Tarjeta Naranja SA, 9.0%, 1/28/17 (144A) 403,637
440,000 TMX Finance LLC / TitleMax Finance Corp., 8.5%,
9/15/18 (144A) 345,400
---------------
$ 1,185,137
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
450,000(b)(e) Goldman Sachs Capital II, 4.0% $ 324,000
-----------------------------------------------------------------------------------------------
Specialized Finance -- 0.9%
750,000(a) Bosphorus, Ltd., 3.579%, 8/17/18 (144A) $ 743,625
375,000(f) Igloo Holdings Corp., 8.25% (9.0% PIK 8.25% cash),
12/15/17 (144A) 377,812
175,000 Nationstar Mortgage LLC / Nationstar Capital Corp.,
6.5%, 7/1/21 160,125
---------------
$ 1,281,562
---------------
Total Diversified Financials $ 2,790,699
-----------------------------------------------------------------------------------------------
ENERGY -- 10.1%
Coal & Consumable Fuels -- 0.2%
400,000(d) James River Coal Co., 7.875%, 4/1/19 $ 208
715,000 Penn Virginia Corp., 8.5%, 5/1/20 207,350
---------------
$ 207,558
-----------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.3%
MXN 540,000 Petroleos Mexicanos, 7.19%, 9/12/24 (144A) $ 30,708
325,000 YPF SA, 8.875%, 12/19/18 (144A) 335,562
---------------
$ 366,270
-----------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.4%
730,000 Ocean Rig UDW, Inc., 7.25%, 4/1/19 (144A) $ 339,450
320,000 Shelf Drill Holdings, Ltd., 8.625%, 11/1/18 (144A) 245,600
---------------
$ 585,050
-----------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.4%
330,000(a) FTS International, Inc., 7.837%, 6/15/20 (144A) $ 229,361
425,000 McDermott International, Inc., 8.0%, 5/1/21 (144A) 365,500
---------------
$ 594,861
-----------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 5.7%
100,000 Comstock Resources, Inc., 7.75%, 4/1/19 $ 21,000
137,000 Comstock Resources, Inc., 9.5%, 6/15/20 30,140
750,000 EP Energy LLC / EP Energy Finance, Inc.,
9.375%, 5/1/20 652,500
360,000 GeoPark Latin America, Ltd., Agencia en Chile,
7.5%, 2/11/20 (144A) 247,500
570,000 Gulfport Energy Corp., 7.75%, 11/1/20 564,300
330,000 Halcon Resources Corp., 8.875%, 5/15/21 110,756
705,000 Halcon Resources Corp., 9.75%, 7/15/20 239,700
630,000 Memorial Production Partners LP / Memorial
Production Finance Corp., 7.625%, 5/1/21 422,100
600,000 Midstates Petroleum Co., Inc., 9.25%, 6/1/21 108,000
350,000 MIE Holdings Corp., 7.5%, 4/25/19 (144A) 203,870
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 27
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- (continued)
285,000 Noble Energy, Inc., 5.875%, 6/1/24 $ 286,181
1,330,000 Northern Oil & Gas, Inc., 8.0%, 6/1/20 1,099,910
450,000 Novatek OAO via Novatek Finance, Ltd., 4.422%,
12/13/22 (144A) 402,840
535,000 PDC Energy, Inc., 7.75%, 10/15/22 537,675
750,000 PetroQuest Energy, Inc., 10.0%, 9/1/17 652,500
240,000(d) Quicksilver Resources, Inc., 7.125%, 4/1/16 120
375,000 Rice Energy, Inc., 6.25%, 5/1/22 339,375
310,000 RSP Permian, Inc., 6.625%, 10/1/22 (144A) 306,900
1,170,000 Sanchez Energy Corp., 7.75%, 6/15/21 930,150
300,000 WPX Energy, Inc., 7.5%, 8/1/20 280,500
650,000 WPX Energy, Inc., 8.25%, 8/1/23 611,000
---------------
$ 8,047,017
-----------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.4%
669,000 Calumet Specialty Products Partners LP / Calumet
Finance Corp., 6.5%, 4/15/21 $ 622,170
-----------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 2.7%
450,000(a) Energy Transfer Partners LP, 3.318%, 11/1/66 $ 312,750
950,000 Genesis Energy LP / Genesis Energy Finance Corp.,
6.75%, 8/1/22 926,250
480,000 Global Partners LP / GLP Finance Corp., 7.0%,
6/15/23 (144A) 451,200
170,000 PBF Logistics LP / PBF Logistics Finance Corp.,
6.875%, 5/15/23 (144A) 158,100
925,000 Sunoco LP / Sunoco Finance Corp., 6.375%,
4/1/23 (144A) 931,937
520,000 Western Refining Logistics LP / WNRL Finance Corp.,
7.5%, 2/15/23 530,400
725,000 Williams Cos., Inc., 5.75%, 6/24/44 530,612
---------------
$ 3,841,249
---------------
Total Energy $ 14,264,175
-----------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 1.0%
Food Distributors -- 0.7%
900,000 JBS Investments GmbH, 7.25%, 4/3/24 (144A) $ 924,750
-----------------------------------------------------------------------------------------------
Food Retail -- 0.3%
460,000 Tops Holding LLC / Tops Markets II Corp., 8.0%,
6/15/22 (144A) $ 476,100
---------------
Total Food & Staples Retailing $ 1,400,850
-----------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 8.6%
Agricultural Products -- 1.0%
900,000 Pinnacle Operating Corp., 9.0%, 11/15/20 (144A) $ 873,000
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Agricultural Products -- (continued)
520,000 Southern States Cooperative, Inc., 10.0%,
8/15/21 (144A) $ 452,400
225,000 Tonon Luxembourg SA, 10.5%, 5/14/24 (144A) 148,500
---------------
$ 1,473,900
-----------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 6.3%
225,000 Agrokor DD, 8.875%, 2/1/20 (144A) $ 240,660
EUR 200,000 Agrokor DD, 9.875%, 5/1/19 (144A) 236,019
650,000 Bertin SA / Bertin Finance, Ltd., 10.25%,
10/5/16 (144A) 686,562
500,000 CFG Investment SAC, 9.75%, 7/30/19 (144A) 285,500
136,000 Chiquita Brands International, Inc. / Chiquita
Brands LLC, 7.875%, 2/1/21 144,330
1,100,000 FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc.,
9.875%, 2/1/20 (144A) 1,146,750
515,000 Marfrig Holding Europe BV, 6.875%, 6/24/19 (144A) 469,938
800,000 Marfrig Holding Europe BV, 8.375%, 5/9/18 (144A) 782,000
700,000 Marfrig Holding Europe BV, 11.25%, 9/20/21 (144A) 668,850
475,000 Marfrig Overseas, Ltd., 9.5%, 5/4/20 (144A) 475,000
700,000 MHP SA, 8.25%, 4/2/20 (144A) 603,960
1,600,000 Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 1,580,000
200,000 Minerva Luxembourg SA, 12.25%, 2/10/22 (144A) 216,000
600,000 Pesquera Exalmar SAA, 7.375%, 1/31/20 (144A) 438,000
640,000 Post Holdings, Inc., 6.75%, 12/1/21 (144A) 662,400
200,000 Post Holdings, Inc., 7.75%, 3/15/24 (144A) 213,000
---------------
$ 8,848,969
-----------------------------------------------------------------------------------------------
Soft Drinks -- 0.3%
355,000 Cott Beverages, Inc., 5.375%, 7/1/22 $ 353,225
-----------------------------------------------------------------------------------------------
Tobacco -- 1.0%
1,645,000 Alliance One International, Inc., 9.875%, 7/15/21 $ 1,416,756
---------------
Total Food, Beverage & Tobacco $ 12,092,850
-----------------------------------------------------------------------------------------------
EQUIPMENT & SERVICES -- 2.0%
Health Care Facilities -- 0.5%
700,000 Kindred Healthcare, Inc., 6.375%, 4/15/22 $ 661,500
-----------------------------------------------------------------------------------------------
Health Care Services -- 1.0%
425,000 BioScrip, Inc., 8.875%, 2/15/21 $ 328,313
990,000 Truven Health Analytics, Inc., 10.625%, 6/1/20 1,037,025
---------------
$ 1,365,338
-----------------------------------------------------------------------------------------------
Health Care Supplies -- 0.3%
500,000 Immucor, Inc., 11.125%, 8/15/19 $ 512,500
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 29
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Health Care Technology -- 0.2%
275,000 Emdeon, Inc., 11.0%, 12/31/19 $ 292,875
---------------
Total Health Care Equipment & Services $ 2,832,213
-----------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.8%
Household Products -- 0.6%
EUR 350,000(a) Hydra Dutch Holdings 2BV, 5.451%, 4/15/19 (144A) $ 364,565
460,000 Springs Industries, Inc., 6.25%, 6/1/21 457,700
---------------
$ 822,265
-----------------------------------------------------------------------------------------------
Products -- 0.2%
345,000 Monitronics International, Inc., 9.125%, 4/1/20 $ 300,150
---------------
Total Household & Personal Products $ 1,122,415
-----------------------------------------------------------------------------------------------
INSURANCE -- 26.9%
Insurance Brokers -- 0.0%+
GBP 10,489(a) Towergate Finance Plc, 8.5%, 3/2/20 (144A) $ 16,929
-----------------------------------------------------------------------------------------------
Life & Health Insurance -- 0.1%
GBP 59,442 TIG FINCO Plc, 8.75%, 4/2/20 (144A) $ 84,749
-----------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 3.0%
6,000,000(c)(g) Fixed Income Trust, Series 2013-A, 0.0%,
10/15/97 (144A) $ 4,225,383
80,000(b)(e) White Mountains Insurance Group, Ltd.,
7.506% (144A) 80,800
---------------
$ 4,306,183
-----------------------------------------------------------------------------------------------
Reinsurance -- 23.8%
1,563,217(h) Altair Re II, Ltd. (Willis Securities, Inc.), Variable
Rate Notes, 6/30/16 $ 110,519
1,000,000(h) Altair Re III, Ltd. (Willis Securities, Inc.), Variable
Rate Notes, 6/30/17 1,051,300
EUR 750,000(a) ATLAS Reinsurance VII, Ltd., 3.65%, 1/7/16
(144A) (Cat Bond) 819,544
1,000,000(a) Bosphorus Re, Ltd., 2.566%, 5/3/16 (144A) (Cat Bond) 997,900
800,000(h) Carnoustie Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 2/19/16 877,040
1,750,000(a) East Lane Re VI, Ltd., 2.816% , 3/14/18
(144A) (Cat Bond) 1,734,950
2,740,500(h) Exeter Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 1/7/16 2,981,116
1,000,000(h) Fairfield Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 2/2/16 985,300
2,000,000(a) Gator Re, Ltd., 6.746%, 1/9/17 (144A) (Cat Bond) 1,844,800
1,500,000(a) Ibis Re II, Ltd., 4.066%, 6/28/16 (144A) (Cat Bond) 1,513,950
2,000,000(h) Lahinch Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 6/15/16 2,005,800
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
1,750,000(a) Longpoint Re, Ltd. III, 4.266%, 5/18/16 (144A)
(Cat Bond) $ 1,762,075
1,450,000(h) Lorenz Re, Ltd. (Prime, Ltd.), Variable Rates
Notes, 3/31/18 1,549,905
1,000,000(a) Merna Reinsurance V, Ltd., 2.066%, 4/7/17
(144A) (Cat Bond) 998,400
750,000(a) MetroCat Re, Ltd., 4.566%, 8/5/16 (144A) (Cat Bond) 763,350
2,000,000(a)(d) MultiCat Mexico, Ltd., Class A, 7.566%, 12/4/15
(144A) (Cat Bond) 80,000
3,000,000(h) Pangaea Re Segregated Account (Kane SAC, Ltd.),
Series 2015-1, Variable Rates Notes, 2/1/19 3,421,500
2,004,948(h) PI-6 Segregated Account (Kane SAC, Ltd.), Series C,
Variable Rate Notes, 7/7/16 1,997,530
1,000,000(a) Queen Street VIII Re, Ltd., 6.561%, 6/8/16 (144A)
(Cat Bond) 1,000,300
2,000,000(a) Queen Street X Re, Ltd., 5.811%, 6/8/18 (144A)
(Cat Bond) 1,970,000
1,000,000(a) Residential Reinsurance 2012, Ltd., 22.061%, 6/6/16
(144A) (Cat Bond) 1,094,800
5,731(h) Sector Re V, Ltd. (Swiss Re), Series 3, Class C, Variable
Rate Notes, 12/1/17 (144A) 24,598
2,582(h) Sector Re V, Ltd. (Swiss Re), Series 4, Class A,
Variable Rate Notes, 3/30/19 (144A) 60,718
1,000,000(h) Silverton Re, Ltd. (Aon Benfield Securities, Inc.), Variable
Rate Notes, 9/16/16 (144A) 20,000
1,000,000(h) Silverton Re, Ltd. (Aon Benfield Securities, Inc.), Variable
Rate Notes, 9/18/17 (144A) 1,159,400
1,000,000(h) St. Andrews Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 1/22/16 1,072,600
JPY 150,799,195(h) Tralee Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 7/20/17 1,248,299
500,000(a) Vitality Re VI, Ltd., 2.166%, 1/8/18 (144A) (Cat Bond) 502,850
---------------
$ 33,648,544
---------------
Total Insurance $ 38,056,405
----------------------------------------------------------------------------------------------------
MATERIALS -- 7.9%
Commodity Chemicals -- 0.4%
300,000 Basell Finance Co., BV, 8.1%, 3/15/27 (144A) $ 384,346
175,000 Hexion US Finance Corp., 6.625%, 4/15/20 148,313
---------------
$ 532,659
----------------------------------------------------------------------------------------------------
Construction Materials -- 0.4%
389,000 Cemex Espana Luxembourg, 9.875%, 4/30/19 (144A) $ 414,771
300,000(e) Magnesita Finance, Ltd., 8.625% (144A) 184,500
---------------
$ 599,271
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 31
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Diversified Chemicals -- 0.4%
55,000 Blue Cube Spinco, Inc., 9.75%, 10/15/23 (144A) $ 59,263
55,000 Blue Cube Spinco, Inc., 10.0%, 10/15/25 (144A) 59,675
660,000 Evolution Escrow Issuer LLC, 7.5%, 3/15/22 (144A) 466,950
---------------
$ 585,888
-----------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.0%
109,000 Boart Longyear Management Pty, Ltd., 10.0%,
10/1/18 (144A) $ 92,650
300,000 FMG Resources August 2006 Pty, Ltd., 9.75%,
3/1/22 (144A) 298,500
409,276 Mirabela Nickel, Ltd., 9.5%, 6/24/19 204,638
180,000 Prince Mineral Holding Corp., 11.5%, 12/15/19 (144A) 151,200
750,000 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 705,000
---------------
$ 1,451,988
-----------------------------------------------------------------------------------------------
Gold -- 0.1%
85,000 IAMGOLD Corp., 6.75%, 10/1/20 (144A) $ 64,175
-----------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.3%
261,325(f) Ardagh Finance Holdings SA, 8.625% (8.625% PIK
0.0% cash), 6/15/19 (144A) $ 273,738
EUR 150,000 Horizon Holdings I SASU, 7.25%, 8/1/23 (144A) 171,708
---------------
$ 445,446
-----------------------------------------------------------------------------------------------
Paper Packaging -- 2.2%
580,000 Exopack Holding Corp., 10.0%, 6/1/18 (144A) $ 574,200
500,000 Reynolds Group Issuer, Inc., 9.0%, 4/15/19 511,250
475,000 Reynolds Group Issuer, Inc., 9.875%, 8/15/19 499,937
EUR 1,365,000 SIG Combibloc Holdings SCA, 7.75%, 2/15/23 (144A) 1,585,770
---------------
$ 3,171,157
-----------------------------------------------------------------------------------------------
Paper Products -- 1.2%
675,000 Appvion, Inc., 9.0%, 6/1/20 (144A) $ 273,375
500,000 Mercer International, Inc., 7.0%, 12/1/19 510,000
840,000 Resolute Forest Products, Inc., 5.875%, 5/15/23 625,800
255,000 Unifrax I LLC / Unifrax Holding Co., 7.5%,
2/15/19 (144A) 246,075
---------------
$ 1,655,250
-----------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.3%
410,000 A Schulman, Inc., 6.875%, 6/1/23 (144A) $ 406,925
-----------------------------------------------------------------------------------------------
Steel -- 1.6%
500,000 Cliffs Natural Resources, Inc., 8.25%, 3/31/20 (144A) $ 447,500
250,000 Evraz Group SA, 9.5%, 4/24/18 (144A) 265,817
190,000 JMC Steel Group, Inc., 8.25%, 3/15/18 (144A) 129,200
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Steel -- (continued)
499,000 Optima Specialty Steel, Inc., 12.5%, 12/15/16 (144A) $ 444,110
850,000 Ryerson, Inc., 9.0%, 10/15/17 741,625
350,000 United States Steel Corp., 7.5%, 3/15/22 270,375
---------------
$ 2,298,627
---------------
Total Materials $ 11,211,386
-----------------------------------------------------------------------------------------------
MEDIA -- 3.2%
Broadcasting -- 0.2%
400,000 Intelsat Luxembourg SA, 7.75%, 6/1/21 $ 236,000
-----------------------------------------------------------------------------------------------
Movies & Entertainment -- 2.2%
1,710,000 AMC Entertainment, Inc., 9.75%, 12/1/20 $ 1,799,775
600,000 Gibson Brands, Inc., 8.875%, 8/1/18 (144A) 526,500
225,000 Regal Entertainment Group, 5.75%, 2/1/25 221,062
625,000 WMG Acquisition Corp., 6.75%, 4/15/22 (144A) 578,519
---------------
$ 3,125,856
-----------------------------------------------------------------------------------------------
Publishing -- 0.8%
855,000 Gannett Co., Inc., 6.375%, 10/15/23 $ 923,400
250,000 MPL 2 Acquisition Canco, Inc., 9.875%,
8/15/18 (144A) 262,500
---------------
$ 1,185,900
---------------
Total Media $ 4,547,756
-----------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 1.1%
Biotechnology -- 0.2%
300,000 ConvaTec Healthcare E SA, 10.5%, 12/15/18 (144A) $ 310,125
-----------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.9%
208,000 DPx Holdings BV, 7.5%, 2/1/22 (144A) $ 212,160
650,000 Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc.,
6.0%, 7/15/23 (144A) 650,000
EUR 250,000 VRX Escrow Corp., 4.5%, 5/15/23 222,469
235,000 VRX Escrow Corp., 5.875% , 5/15/23 (144A) 197,841
---------------
$ 1,282,470
---------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 1,592,595
-----------------------------------------------------------------------------------------------
REAL ESTATE -- 1.3%
Real Estate Operating Companies -- 0.3%
410,000 IRSA Inversiones y Representaciones SA, 8.5%,
2/2/17 (144A) $ 410,000
-----------------------------------------------------------------------------------------------
Specialized REIT -- 1.0%
1,520,000 Communications Sales & Leasing, Inc. / CSL Capital
LLC, 8.25%, 10/15/23 $ 1,405,240
---------------
Total Real Estate $ 1,815,240
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 33
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
RETAILING -- 1.8%
Automotive Retail -- 0.7%
1,100,000 DriveTime Automotive Group, Inc. / DT Acceptance
Corp., 8.0%, 6/1/21 (144A) $ 1,023,000
-----------------------------------------------------------------------------------------------
Computer & Electronics Retail -- 0.1%
235,000 Rent-A-Center, Inc., 6.625%, 11/15/20 $ 220,900
-----------------------------------------------------------------------------------------------
Department Stores -- 0.9%
300,000 Argos Merger Sub, Inc., 7.125%, 3/15/23 (144A) $ 315,750
625,000 Grupo Famsa SAB de CV, 7.25%, 6/1/20 (144A) 567,187
350,000 Neiman Marcus Group, Ltd., LLC, 8.0%,
10/15/21 (144A) 363,563
---------------
$ 1,246,500
-----------------------------------------------------------------------------------------------
Specialty Stores -- 0.1%
85,000 Outerwall, Inc., 6.0%, 3/15/19 $ 84,575
---------------
Total Retailing $ 2,574,975
-----------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.4%
Semiconductors -- 0.4%
85,000 Advanced Micro Devices, Inc., 6.75%, 3/1/19 $ 65,450
235,000 Advanced Micro Devices, Inc., 7.0%, 7/1/24 164,500
400,000 Advanced Micro Devices, Inc., 7.5%, 8/15/22 290,000
---------------
Total Semiconductors & Semiconductor Equipment $ 519,950
-----------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.6%
Data Processing & Outsourced Services -- 0.6%
162,000 First Data Corp., 10.625%, 6/15/21 $ 180,832
404,000 First Data Corp., 8.25%, 1/15/21 (144A) 423,695
225,000 NeuStar, Inc., 4.5%, 1/15/23 193,500
---------------
Total Software & Services $ 798,027
-----------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.4%
Communications Equipment -- 0.2%
280,000 CommScope Technologies Finance LLC, 6.0%,
6/15/25 (144A) $ 284,200
-----------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.2%
315,000 Zebra Technologies Corp., 7.25%, 10/15/22 (144A) $ 343,744
---------------
Total Technology Hardware & Equipment $ 627,944
-----------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.5%
Integrated Telecommunication Services -- 1.3%
300,000 Frontier Communications Corp., 8.75%, 4/15/22 $ 288,750
290,000 Frontier Communications Corp., 11.0%,
9/15/25 (144A) 303,955
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- (continued)
750,000 GCI, Inc., 6.875% , 4/15/25 $ 772,500
600,000 Windstream Corp., 7.5%, 6/1/22 498,750
---------------
$ 1,863,955
-----------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.2%
250,000 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 248,750
300,000 Altice SA, 7.75%, 5/15/22 (144A) 288,750
200,000 Mobile Telesystems OJSC via MTS International
Funding, Ltd., 5.0%, 5/30/23 (144A) 184,750
340,000 Sprint Corp., 7.125%, 6/15/24 298,563
275,000 Sprint Corp., 7.25%, 9/15/21 252,656
250,000 Unison Ground Lease Funding LLC, 5.78%,
3/15/20 (144A) 247,180
RUB 14,100,000 VimpelCom Holdings BV, 9.0%, 2/13/18 (144A) 207,846
---------------
$ 1,728,495
---------------
Total Telecommunication Services $ 3,592,450
-----------------------------------------------------------------------------------------------
TRANSPORTATION -- 3.7%
Airlines -- 0.9%
545,000 Gol LuxCo SA, 8.875%, 1/24/22 (144A) $ 274,544
155,000 Intrepid Aviation Group Holdings LLC / Intrepid
Finance Co., 6.875%, 2/15/19 (144A) 134,656
450,000 Intrepid Aviation Group Holdings LLC / Intrepid
Finance Co., 8.25%, 7/15/17 (144A) 445,500
500,000 TAM Capital 3, Inc., 8.375%, 6/3/21 (144A) 402,500
---------------
$ 1,257,200
-----------------------------------------------------------------------------------------------
Airport Services -- 0.9%
488,040 Aeropuertos Argentina 2000 SA, 10.75%,
12/1/20 (144A) $ 503,852
800,000 Aguila 3 SA, 7.875% , 1/31/18 (144A) 818,000
---------------
$ 1,321,852
-----------------------------------------------------------------------------------------------
Highways & Railtracks -- 0.2%
MXN 4,500,000 Red de Carreteras de Occidente SAPIB de CV, 9.0%,
6/10/28 (144A) $ 266,445
-----------------------------------------------------------------------------------------------
Marine -- 0.4%
500,000 Far East Capital, Ltd., SA, 8.0%, 5/2/18 $ 306,490
375,000 Navios South American Logistics, Inc. / Navios
Logistics Finance US, Inc., 7.25%, 5/1/22 (144A) 315,469
---------------
$ 621,959
-----------------------------------------------------------------------------------------------
Railroads -- 0.6%
377,991(f) AAF Holdings LLC / AAF Finance Co., 12.0% (12.75%
PIK 12.0% cash), 7/1/19 (144A) $ 395,946
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 35
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
Railroads -- (continued)
485,000 Florida East Coast Holdings Corp., 6.75%,
5/1/19 (144A) $ 488,516
---------------
$ 884,462
-----------------------------------------------------------------------------------------------
Trucking -- 0.7%
1,000,000 Jack Cooper Holdings Corp., 10.25%, 6/1/20 (144A) $ 907,500
---------------
Total Transportation $ 5,259,418
-----------------------------------------------------------------------------------------------
UTILITIES -- 2.7%
Electric Utilities -- 0.8%
375,000 ContourGlobal Power Holdings SA, 7.125%,
6/1/19 (144A) $ 374,062
460,000(b) Enel S.p.A., 8.75%, 9/24/73 (144A) 530,150
290,000 PPL Energy Supply LLC, 6.5%, 6/1/25 (144A) 257,375
---------------
$ 1,161,587
-----------------------------------------------------------------------------------------------
Gas Utilities -- 0.4%
492,450 Transportadora de Gas del Sur SA, 9.625%,
5/14/20 (144A) $ 488,757
-----------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 1.5%
560,000 NRG Energy, Inc., 6.25%, 5/1/24 $ 501,200
1,065,000 Terraform Global Operating LLC, 9.75%,
8/15/22 (144A) 953,175
200,000 TerraForm Power Operating LLC, 5.875%,
2/1/23 (144A) 184,500
585,000 TerraForm Power Operating LLC, 6.125%,
6/15/25 (144A) 526,500
---------------
$ 2,165,375
---------------
Total Utilities $ 3,815,719
-----------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $137,445,093) $ 128,075,846
-----------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 2.8%
of Net Assets
DIVERSIFIED FINANCIALS -- 0.1%
Asset Management & Custody Banks -- 0.1%
120,000 Apollo Investment Corp., 5.75%, 1/15/16 $ 120,450
---------------
Total Diversified Financials $ 120,450
-----------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 1.2%
Health Care Equipment -- 1.2%
1,040,000(c) Hologic, Inc., 2.0%, 12/15/37 $ 1,772,550
---------------
Total Health Care Equipment & Services $ 1,772,550
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------------------
MATERIALS -- 1.3%
Diversified Chemicals -- 1.2%
1,900,000(i) Hercules, Inc., 6.5%, 6/30/29 $ 1,748,000
-----------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.1%
100,000 Vedanta Resources Jersey, Ltd., 5.5%, 7/13/16 $ 94,630
---------------
Total Materials $ 1,842,630
-----------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY & LIFE
SCIENCES -- 0.2%
Biotechnology -- 0.2%
250,000 Corsicanto, Ltd., 3.5%, 1/15/32 $ 224,687
---------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 224,687
-----------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $2,597,092) $ 3,960,317
-----------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS --
6.2% of Net Assets
3,000,000(a) U.S. Treasury Notes, 0.09%, 7/31/16 $ 3,000,432
2,975,000(a) U.S. Treasury Notes, 0.073%, 10/31/16 2,974,459
2,850,000(a) U.S. Treasury Notes, 0.089%, 4/30/16 2,850,342
-----------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $8,824,633) $ 8,825,233
-----------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS -- 1.3% of
Net Assets
Argentina -- 0.4%
305,920 Province of Salta Argentina, 9.5%, 3/16/22 (144A) $ 299,801
230,000 Provincia de Buenos Aires, 9.95%, 6/9/21 (144A) 236,900
---------------
$ 536,701
-----------------------------------------------------------------------------------------------
Ireland -- 0.3%
450,000 Vnesheconombank Via VEB Finance Plc, 6.902%,
7/9/20 (144A) $ 459,144
-----------------------------------------------------------------------------------------------
Mexico -- 0.4%
MXN 8,870,000 Mexican Bonos, 7.75%, 11/13/42 $ 603,122
MXN 319,897 Mexican Udibonos, 3.5%, 12/14/17 20,574
---------------
$ 623,696
-----------------------------------------------------------------------------------------------
Zambia -- 0.2%
300,000 Zambia Government International Bond, 5.375%,
9/20/22 (144A) $ 222,000
-----------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $1,974,476) $ 1,841,541
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 37
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------------
Shares Value
-----------------------------------------------------------------------------------------------
COMMON STOCKS -- 0.3% of Net Assets
CAPITAL GOODS -- 0.0%+
Industrial Machinery -- 0.0%+
10,289(g)(j) Liberty Tire Recycling LLC $ 103
---------------
Total Capital Goods $ 103
-----------------------------------------------------------------------------------------------
INSURANCE -- 0.0%+
Insurance Brokers -- 0.0%+
GBP 10,233(g)(j) TopCo., Ltd. $ 2,526
GBP 475(g)(j) Towergate Finance Plc 117
---------------
$ 2,643
---------------
Total Insurance $ 2,643
-----------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.3%
Air Freight & Logistics -- 0.3%
943(j) CEVA Holdings LLC $ 424,489
---------------
Total Transportation $ 424,489
-----------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $916,150) $ 427,235
-----------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS --
0.4% of Net Assets
DIVERSIFIED FINANCIALS -- 0.4%
Other Diversified Financial Services -- 0.4%
470 Bank of America Corp., 7.25% $ 519,350
---------------
Total Diversified Financials $ 519,350
-----------------------------------------------------------------------------------------------
ENERGY -- 0.0%+
Oil & Gas Exploration & Production -- 0.0%+
200 Halcon Resources Corp., 5.75% $ 25,550
---------------
Total Energy $ 25,550
-----------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $524,900) $ 544,900
-----------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.6% of Net Assets
BANKS -- 0.4%
Diversified Banks -- 0.4%
500(b) AgStar Financial Services ACA, 6.75% (144A) $ 531,531
---------------
Total Banks $ 531,531
-----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.7%
Other Diversified Financial Services -- 0.7%
40,675(b) GMAC Capital Trust I, 8.125% $ 1,050,635
---------------
Total Diversified Financials $ 1,050,635
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------
Shares Value
-----------------------------------------------------------------------------------------------
INSURANCE -- 0.5%
Insurance Brokers -- 0.5%
GBP 452,745(g)(j) Towergate Finance Plc, Class B $ 684,548
-----------------------------------------------------------------------------------------------
Reinsurance -- 0.0%+
15,000(h)(j) Lorenz Re, Ltd. (Aon Benefield Securities, Inc.),
Variable Rate Notes $ 37,500
---------------
Total Insurance $ 722,048
-----------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $2,106,323) $ 2,304,214
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Principal
Amount
USD ($)
-----------------------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS -- 0.7%
of Net Assets
COMMERCIAL PAPER -- 0.7%
515,000 Societe Generale, 0.05%, 11/2/15 $ 514,996
515,000 Prudential Funding LLC, 0.07%, 11/2/15 514,995
---------------
$ 1,029,991
-----------------------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $1,029,998) $ 1,029,991
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 140.6%
(Cost -- $208,726,238) (k)(l) $ 198,897,340
-----------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (40.6)% $ (57,421,591)
-----------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $ 141,475,749
===============================================================================================
REIT Real Estate Investment Trust.
(144A) Security is exempt from registration under Rule 144A of the
Securities Act of 1933. Such securities may be resold normally to
qualified institutional buyers in a transaction exempt from
registration. At October 31, 2015, the value of these securities
amounted to $80,403,358, or 56.8% of total net assets applicable to
common shareowners.
(Cat Bond) Catastrophe or Event-linked bond. At October 31, 2015, the value of
these securities amounted to $15,082,919, or 10.7% of total net
assets applicable to common shareowners. See Notes to Financial
Statements -- Note 1F.
+ Amount rounds to less than 0.1%.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 39
Schedule of Investments | 10/31/15 (unaudited) (continued)
* Senior secured floating rate loan interests in which the Trust
invests generally pay interest at rates that are periodically
redetermined by reference to a base lending plus a premium. These
base lending rates are generally (i) the lending rate offered by
one or more major European banks, such as LIBOR (London InterBank
Offered Rate), (ii) the prime rate offered by one or more major
United States banks, (iii) the rate of a certificate of deposit or
(iv) other base lending rates used by commercial lenders. The
interest rate shown is the rate accruing at October 31, 2015.
(a) Floating rate note. The rate shown is the coupon rate at October
31, 2015.
(b) The interest rate is subject to change periodically. The interest
rate shown is the rate at October 31, 2015.
(c) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specific date. The rate shown is the rate at
October 31, 2015.
(d) Security is in default.
(e) Security is perpetual in nature and has no stated maturity date.
(f) Payment in Kind (PIK) security which may pay interest in the form
of additional principal amount.
(g) Security is valued using fair value methods (other than prices
supplied by independent pricing services). See Notes to Financial
Statements -- Note 1A.
(h) Structured reinsurance investment. At October 31, 2015, the value
of these securities amounted to $18,603,125, or 13.1% of total net
assets applicable to common shareowners. See Notes to Financial
Statements -- Note 1F.
(i) Security is priced as a unit.
(j) Non-income producing.
(k) At October 31, 2015, the net unrealized depreciation on investments
based on cost for federal tax purposes of $210,804,330 was as
follows:
Aggregate gross unrealized appreciation for all investments in which
there is an excess of value over tax cost $ 6,355,587
Aggregate gross unrealized depreciation for all investments in which
there is an excess of tax cost over value (18,262,577)
------------
Net unrealized depreciation $(11,906,990)
============
For financial reporting purposes net unrealized depreciation on investments was
$9,828,898 and cost of investments aggregated $208,726,238.
(l) Distributions of Investments by country of issue, as a percentage
of total investments in securities, is as follows:
United States 68.0%
Bermuda 8.6
Luxembourg 5.0
Cayman Islands 4.1
Ireland 2.4
Netherlands 1.9
Argentina 1.8
Canada 1.4
Other (individually less than 1%) 6.8
-----
100.0%
=====
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended October 31, 2015 aggregated $31,474,188 and $37,820,070,
respectively.
Principal amounts are denominated in U.S. dollars unless otherwise noted.
EUR -- Euro
GBP -- Great British Pound
JPY -- Japanese Yen
MXN -- Mexican Peso
RUB -- Russian Ruble
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels below.
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
risks, etc.). See Notes to Financial Statements -- Note 1A.
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments). See Notes
to Financial Statements -- Note 1A.
The following is a summary of the inputs used as of October 31, 2015, in valuing
the Trust's investments.
-------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------------------
Asset Backed Securities $ -- $ 2,475,421 $ -- $ 2,475,421
Collateralized Mortgage Obligations -- 3,941,453 -- 3,941,453
Senior Secured Floating Rate
Loan Interests -- 45,471,189 -- 45,471,189
Corporate Bonds & Notes
Capital Goods
Industrial Machinery -- 1,036,970 138,957 1,175,927
Insurance
Property & Casualty Insurance -- 80,800 4,225,383 4,306,183
Reinsurance -- 15,082,919 18,565,625 33,648,544
All Other Corporate Bonds & Notes -- 88,945,192 -- 88,945,192
Convertible Bonds & Notes -- 3,960,317 -- 3,960,317
U.S. Government and
Agency Obligations -- 8,825,233 -- 8,825,233
Sovereign Debt Obligations -- 1,841,541 -- 1,841,541
Common Stocks
Capital Goods
Industrial Machinery -- -- 103 103
Insurance
Insurance Brokers -- -- 2,643 2,643
Transportation
Air Freight & Logistics -- 424,489 -- 424,489
Convertible Preferred Stocks
Energy
Oil & Gas Exploration &
Production -- 25,550 -- 25,550
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 41
Schedule of Investments | 10/31/15 (unaudited) (continued)
-----------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
-----------------------------------------------------------------------------------------
All Other Convertible
Preferred Stocks $ 519,350 $ -- $ -- $ 519,350
Preferred Stocks
Banks
Diversified Banks -- 531,531 -- 531,531
Insurance
Insurance Brokers -- -- 684,548 684,548
Reinsurance -- -- 37,500 37,500
All Other Preferred Stocks 1,050,635 -- -- 1,050,635
Commercial Paper -- 1,029,991 -- 1,029,991
-----------------------------------------------------------------------------------------
Total Investments In Securities $1,569,985 $173,672,596 $23,654,759 $198,897,340
=========================================================================================
Other Financial Instruments
Assets:
Unrealized appreciation
on forward foreign
currency contracts $ -- $ 8,359 $ -- $ 8,359
Liabilities:
Unrealized depreciation
on forward foreign
currency contracts -- (117,602) -- (117,602)
-----------------------------------------------------------------------------------------
Total Other Financial Instruments $ -- $ (109,243) $ -- $ (109,243)
=========================================================================================
The following is a summary of the fair valuation of certain of the Trust's
assets and liabilities as of October 31, 2015:
-------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------------
Assets:
Foreign currencies, at value
(cost $2,021,080) $ -- $ 1,998,032 $ -- $ 1,998,032
Liabilities:
Outstanding borrowings -- (64,000,000) -- (64,000,000)
-------------------------------------------------------------------------------------
Total $ -- $ (62,001,968) $ -- $ (62,001,968)
=====================================================================================
The accompanying notes are an integral part of these financial statements.
42 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
The following is a reconciliation of assets valued using significant
unobservable inputs (Level 3):
-----------------------------------------------------------------------------------------------------------------------------------
Change in
Balance Realized unrealized Accrued Transfers Transfers Balance
as of gain appreciation discounts/ in to out of as of
4/30/15 (loss)(1) (depreciation)(2) Purchases Sales premiums Level 3* Level 3* 10/31/15
-----------------------------------------------------------------------------------------------------------------------------------
Collateralized
Mortgage
Obligations $ 165,062 $ (29,812) $ 460 $ -- $ -- $ 28 $ -- $(135,738) $ --
Corporate Bonds
& Notes
Capital Goods
Industrial
Machinery 239,330 4,677 (60,932) 10,120 (56,000) 1,762 -- -- 138,957
Insurance
Insurance
Brokers 16,096 -- -- -- -- -- -- (16,096) --
Life & Health
Insurance 500,600 -- 2,250 -- -- -- -- (502,850) --
Property &
Casualty
Insurance 4,354,042 -- (128,659) -- -- -- -- -- 4,225,383
Reinsurance 22,537,165 (248,629) (702,804) 3,140,981 (6,271,020) 109,932 -- -- 18,565,625
Common
Stocks
Capital
Goods
Industrial
Machinery 103 -- -- -- -- -- -- -- 103
Insurance
Insurance
Brokers 2,540 -- 103 -- -- -- -- -- 2,643
Reinsurance 1,019,800 -- -- -- (1,019,800) -- -- -- --
Preferred Stocks
Insurance
Insurance
Brokers 671,036 -- 13,512 -- -- -- -- -- 684,548
Reinsurance 941,821 -- -- -- (904,321) -- -- -- 37,500
-----------------------------------------------------------------------------------------------------------------------------------
Total $30,447,595 $(273,764) $(876,070) $3,151,101 $(8,251,141) $111,722 $ -- $(654,684) $23,654,759
===================================================================================================================================
* Transfers are calculated on the beginning of period value. For the six
months ended October 31, 2015, there were no transfers between Levels 1 and
2. For the six months ended October 31, 2015 securities with aggregate
market value of $654,684 transferred from Level 3 to Level 2 as there were
observable inputs available to determine their value.
(1) Realized gain (loss) on these securities is included in the realized gain
(loss) from investments in the Statement of Operations.
(2) Unrealized appreciation (depreciation) on these securities is included in
the change in unrealized appreciation (depreciation) from investments in
the Statement of Operations.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 43
Schedule of Investments | 10/31/15 (unaudited) (continued)
Net change in unrealized appreciation of Level 3 investments still held and
considered Level 3 at October 31, 2015: $69,107.
The following table presents additional information about valuation techniques
and inputs used for investments categorized as Level 3 at October 31, 2015.
These amounts exclude valuations provided by a broker.
------------------------------------------------------------------------------------------------------
Fair Value Valuation Unobservable
Asset Type 10/31/15 Technique (s) Input Value/Range
------------------------------------------------------------------------------------------------------
Corporate Bonds $4,364,340 Market Comparables EBITDA Multiples(1) 5.0x to 6.5x
Yield Premium(2) 1.05%
------------------------------------------------------------------------------------------------------
Common Stocks $ 2,746 Market Comparables EBITDA 5.0x to 6.5x
Multiples(1)
------------------------------------------------------------------------------------------------------
Preferred Stocks $ 684,548 Market Comparables EBITDA 5.0x to 5.5x
Multiples(1)
------------------------------------------------------------------------------------------------------
(1) An increase in this unobservable input would result in a higher fair value
measurement, while a decrease would result in a lower fair value
measurement.
(2) An increase in this unobservable input would result in a lower fair value
measurement, while a decrease would result in a higher fair value
measurement.
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Statement of Assets and Liabilities | 10/31/15 (unaudited)
ASSETS:
Investments in securities, at value (cost $208,726,238) $ 198,897,340
Cash 4,090,952
Foreign currencies, at value (cost $2,021,090) 1,998,032
Receivables --
Investment securities sold 464,050
Interest receivable 2,749,754
Unrealized appreciation on forward foreign currency contracts 8,359
Prepaid expenses 3,930
---------------------------------------------------------------------------------------
Total assets $ 208,212,417
---------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Outstanding borrowings $ 64,000,000
Investment securities purchased 2,278,179
Trustees' fees 679
Unrealized depreciation on forward foreign currency contracts 117,602
Due to affiliates 147,916
Administration fee payable 85,021
Interest expense payable 2,681
Accrued expenses 104,590
---------------------------------------------------------------------------------------
Total liabilities $ 66,736,668
---------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $ 194,643,780
Distributions in excess of net investment income (983,303)
Accumulated net realized loss on investments and foreign
currency transactions (42,222,244)
Net unrealized depreciation on investments (9,828,898)
Net unrealized depreciation on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies (133,586)
---------------------------------------------------------------------------------------
Net assets applicable to common shareowners $ 141,475,749
---------------------------------------------------------------------------------------
NET ASSET VALUE PER COMMON SHARE:
No par value (unlimited number of shares authorized)
Based on $141,475,749 / 8,332,790 common shares $ 16.98
=======================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 45
Statement of Operations (unaudited)
For the Six Months Ended 10/31/15
INVESTMENT INCOME:
Interest $ 7,514,080
Dividends 86,532
Loan facility and other income 79,696
-------------------------------------------------------------------------------------------
Total investment income $ 7,680,308
-------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 908,233
Administrative expense 70,286
Transfer agent fees and expenses 5,704
Shareholder communications expense 5,147
Custodian fees 24,180
Professional fees 43,973
Printing expenses 6,304
Trustees' fees 4,001
Pricing fees 16,882
Interest expense 343,300
Miscellaneous 15,778
-------------------------------------------------------------------------------------------
Net operating expenses $ 1,443,788
-------------------------------------------------------------------------------------------
Net investment income $ 6,236,520
-------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on:
Investments $(2,261,707)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (116,479) $ (2,378,186)
-------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on:
Investments $(9,064,541)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 155,578 $ (8,908,963)
-------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign
currency transactions $(11,287,149)
-------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (5,050,629)
===========================================================================================
The accompanying notes are an integral part of these financial statements.
46 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Statements of Changes in Net Assets
-------------------------------------------------------------------------------------------
Six Months
Ended
10/31/15 Year Ended
(unaudited) 4/30/15
-------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 6,236,520 $ 15,171,206
Net realized loss on investments and foreign currency
transactions (2,378,186) (7,185,833)
Change in net unrealized depreciation on investments and
foreign currency transactions (8,908,963) (6,329,324)
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $ (5,050,629) $ 1,656,049
-------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income and previously undistributed net
investment income ($0.81 and $1.83 per share,
respectively) $ (6,749,560) $ (15,241,784)
-------------------------------------------------------------------------------------------
Total distributions to common shareowners $ (6,749,560) $ (15,241,784)
-------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ -- $ 250,324
-------------------------------------------------------------------------------------------
Net increase in net assets applicable to common
shareowners from Trust share transactions $ -- $ 250,324
-------------------------------------------------------------------------------------------
Net decrease in net assets applicable to common
shareowners $ (11,800,189) $ (13,335,411)
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of period 153,275,938 166,611,349
-------------------------------------------------------------------------------------------
End of period $ 141,475,749 $ 153,275,938
-------------------------------------------------------------------------------------------
Distributions in excess of net investment income $ (983,303) $ (470,263)
===========================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 47
Statement of Cash Flows (unaudited)
For the Six Months Ended 10/31/15
Cash Flows From Operating Activities:
Net decrease in net assets resulting from operations $ (5,050,629)
-----------------------------------------------------------------------------------------------
Adjustments to reconcile net decrease in net assets resulting from operations to
net cash and foreign currencies from operating activities:
Inflation indexed bond income $ (55)
Purchases of investment securities (34,194,089)
Proceeds from disposition and maturity of investment securities 39,394,552
Net sales of temporary cash investments 425,006
Net accretion and amortization of discount/premium on investment securities (314,904)
Decrease in interest receivable 13,556
Increase in prepaid expenses (3,930)
Decrease in due to affiliates (3,439)
Increase in trustees' fees payable 305
Increase in administration fee payable 14,583
Decrease in accrued expenses payable (16,487)
Decrease in interest expense payable (3,181)
Change in unrealized depreciation on investments 9,064,541
Change in unrealized appreciation on forward foreign currency contracts
and foreign currency (155,482)
Net realized loss on investments 2,261,707
-----------------------------------------------------------------------------------------------
Net cash and foreign currencies from operating activities $ 11,432,054
-----------------------------------------------------------------------------------------------
Cash Flows Used in Financing Activities:
Decrease in due to custodian $ (1,318,932)
Distributions to common shareholders (6,749,560)
-----------------------------------------------------------------------------------------------
Net cash and foreign currencies used in financing activities $ (8,068,492)
-----------------------------------------------------------------------------------------------
Effect of Foreign Exchange Fluctuations on Cash:
Effect of foreign exchange fluctuations on cash $ (2,311)
-----------------------------------------------------------------------------------------------
Cash and Foreign Currencies:
Beginning of the period $ 2,727,733
-----------------------------------------------------------------------------------------------
End of the period $ 6,088,984
===============================================================================================
Cash Flow Information:
Cash paid for interest $ 346,481
-----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
48 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------------
Six Months Year Year
Ended Year Year Year Ended Ended
10/31/15 Ended Ended Ended 4/30/12 4/30/11
(unaudited) 4/30/15 4/30/14 4/30/13 (Consolidated) (Consolidated)
------------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 18.39 $ 20.03 $ 20.70 $ 19.51 $ 21.01 $ 20.17
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 0.75 $ 1.82 $ 1.98 $ 2.24 $ 2.10 $ 2.03
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (1.35) (1.63) (0.36) 0.99 (1.64) 0.73
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (0.60) $ 0.19 $ 1.62 $ 3.23 $ 0.46 $ 2.76
------------------------------------------------------------------------------------------------------------------------------------
Distributions to common shareowners from:
Net investment income and previously
undistributed net investment income $ (0.81)* $ (1.83)* $ (2.29)* $ (2.04) $ (1.96) $ (1.92)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (1.41) $ (1.64) $ (0.67) $ 1.19 $ (1.50) $ 0.84
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (b) $ 16.98 $ 18.39 $ 20.03 $ 20.70 $ 19.51 $ 21.01
------------------------------------------------------------------------------------------------------------------------------------
Market value, end of period (b) $ 15.27 $ 17.42 $ 20.85 $ 21.82 $ 20.13 $ 21.95
====================================================================================================================================
Total return at market value (c) (7.75)%(d) (7.90)% 7.12% 19.98% 1.35% 17.95%
Ratios to average net assets of common shareowners:
Total expenses plus interest expense (e)(f) 1.93%(g) 1.85% 1.86% 1.97% 2.04% 2.20%
Net investment income available to common
shareowners 8.33%(g) 9.52% 9.88% 11.26% 10.75% 10.02%
Portfolio turnover 16% 48% 38% 34% 24% 30%
Net assets of common shareowners, end of period
(in thousands) $141,476 $153,276 $166,611 $171,646 $161,146 $172,882
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 49
Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------------------
Six Months Year Year
Ended Year Year Year Ended Ended
10/31/15 Ended Ended Ended 4/30/12 4/30/11
(unaudited) 4/30/15 4/30/14 4/30/13 (Consolidated) (Consolidated)
------------------------------------------------------------------------------------------------------------------------------------
Total amount of debt outstanding (in thousands) $64,000 $64,000 $67,000 $69,000 $69,000 $69,000
Asset coverage per indebtedness (in thousands) $ 3,211 $ 3,395 $ 3,487 $ 3,488 $ 3,335 $ 3,506
====================================================================================================================================
* The amount of distributions made to shareowners during the period were in
excess of the net investment income earned by the Trust during the period.
The Trust has accumulated undistributed net investment income which is part
of the Trust's NAV. A portion of the accumulated net investment income was
distributed to shareowners during the period. A decrease in distributions
may have a negative effect on the market value of the Trust's shares.
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(c) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Past
performance is not a guarantee of future results.
(d) Not annualized.
(e) Expense ratios do not reflect the effect of distribution payments to
preferred shareowners.
(f) Includes interest expense of 0.46%, 0.43%, 0.45%, 0.48%, 0.56% and 0.58%,
respectively.
(g) Annualized.
The accompanying notes are an integral part of these financial statements.
50 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Notes to Financial Statements | 10/31/15 (unaudited)
1. Organization and Significant Accounting Policies
Pioneer Diversified High Income Trust (the Trust) was organized as a Delaware
statutory trust on January 30, 2007. Prior to commencing operations on May 30,
2007, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended. The investment
objective of the Trust is to seek a high level of current income and the Trust
may, as a secondary objective, also seek capital appreciation to the extent that
it is consistent with its investment objective.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gain or loss 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
Trust in the preparation of its financial statements:
A. Security Valuation
Security transactions are recorded as of trade date. Fixed-income
securities are valued at prices supplied by independent pricing services,
which consider such factors as market prices, market events, quotations
from one or more brokers, Treasury spreads, yields, maturities and ratings.
Senior floating rate loan interests (senior loans) are valued in accordance
with guidelines established by the Board of Trustees at the mean between
the last available bid and asked prices from one or more brokers or dealers
as obtained from Loan Pricing Corporation, an independent pricing service.
If price information is not available from Loan Pricing Corporation or if
the price information is deemed to be unreliable, price information will be
obtained from an alternative loan interest pricing service. If no reliable
price quotes are available from either the primary or alternative pricing
service, broker quotes will be solicited. Event-linked bonds are valued at
the bid price obtained from an independent third party pricing service.
Other insurance-linked securities may be valued at the bid price obtained
from an independent pricing service, or through a third party using a
pricing matrix, insurance industry valuation models, or other fair value
methods or techniques to provide an estimated value of the instrument.
Valuations may be supplemented by dealers and other sources, as required.
Equity securities that have traded on an exchange are valued at the last
sale price on the principal exchange where they are
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 51
traded. Equity securities that have not traded on the date of valuation or
securities for which sale prices are not available, generally are valued
using the mean between the last bid and asked prices. Shares of money
market mutual funds are valued at such funds' net asset value.
Trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange (NYSE). The
values of such securities used in computing the net asset value of the
Trust's shares are determined as of such times.
Securities or senior loans for which independent pricing services are
unable to supply prices or for which market prices and/or quotations are
not readily available or are considered to be unreliable are valued by a
fair valuation team comprised of certain personnel of Pioneer Investment
Management, Inc. (PIM), the Trust's investment adviser, pursuant to
procedures adopted by the Trust's Board of Trustees. PIM's fair valuation
team uses fair value methods approved by the Valuation Committee of the
Board of Trustees. PIM's valuation team is responsible for monitoring
developments that may impact fair valued securities and for discussing and
assessing fair value on an ongoing basis, and at least quarterly, with the
Valuation Committee of the Board of Trustees.
Inputs used when applying fair value methods to value a security may
include credit ratings, the financial condition of the company, current
market conditions and comparable securities. The Trust 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 Trust's net asset value. Examples of a significant
event might include political or economic news, corporate restructurings,
natural disasters, terrorist activity or trading halts. Thus, the valuation
of the Trust's securities may differ significantly from exchange prices and
such differences could be material.
At October 31, 2015, seven securities were valued using fair value methods
(in addition to securities valued using prices supplied by independent
pricing services, broker-dealers or through a third party insurance
industry valuation model) representing 3.6% of net assets. The value of
these fair valued securities are $5,051,634.
B. Investment Income and Transactions
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 Trust becomes aware of the ex-dividend
date in the exercise of reasonable diligence.
52 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Interest income, including interest on income bearing cash accounts, is
recorded on an accrual basis, net of unrecoverable foreign taxes withheld
at the applicable country rates.
Discounts and premiums on purchase prices of debt securities are accreted
or amortized, respectively, daily, into interest income on an effective
yield to maturity basis with a corresponding increase or decrease in the
cost basis of the security. Premiums and discounts related to certain
mortgage-backed securities are amortized or accreted in proportion to the
monthly paydowns.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
C. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on foreign
currency contracts, disposition of foreign currencies and the difference
between the amount of income accrued and the U.S. dollars actually
received. Further, the effects of changes in foreign currency exchange
rates on investments are not segregated in the Statement of Operations from
the effects of changes in the market price of those securities but are
included with the net realized and unrealized gain or loss on investments.
D. Forward Foreign Currency Contracts
The Trust may enter into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date. All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized appreciation or depreciation
are recorded in the Trust's financial statements. The Trust records
realized gains and losses at the time a contract is offset by entry into a
closing transaction or extinguished by delivery of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contracts and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar
(see Note 5).
E. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its net taxable income and net realized capital gains, if any, to
its shareowners. Therefore, no federal income tax provision is required. As
of
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 53
April 30, 2015, the Trust did not accrue any interest or penalties with
respect to uncertain tax positions, which if applicable, would be recorded
as an income tax expense in the Statement of Operations. Tax returns filed
within the prior three years remain subject to examination by federal and
state tax authorities.
The amount and character of income and capital gain distributions to
shareowners are determined in accordance with federal income tax rules,
which may differ from U.S. generally accepted accounting principles.
Distributions in excess of net investment income or net realized gains are
temporary overdistributions for financial statement and tax purposes.
Capital accounts within the financial statements are adjusted for permanent
book/tax differences to reflect tax character, but are not adjusted for
temporary differences.
The tax character of current year distributions payable to shareholders
will be determined at the end of the current taxable year.
The tax character of distributions paid to shareowners during the year
ended April 30, 2015 was as follows:
---------------------------------------------------------------------------
2015
---------------------------------------------------------------------------
Distributions paid from:
Ordinary income $15,241,784
---------------------------------------------------------------------------
Total $15,241,784
===========================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2015:
---------------------------------------------------------------------------
2015
---------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 1,318,771
Capital loss carryforward (33,249,374)
Late year loss deferrals (6,572,661)
Other book/tax temporary differences (1,811,057)
Unrealized depreciation (1,053,521)
---------------------------------------------------------------------------
Total $(41,367,842)
===========================================================================
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the realization for tax purposes of unrealized
gains on investments in passive foreign investment companies, the book/tax
differences in the accrual of income on securities in default, the
difference between book and tax amortization methods and discounts on fixed
income securities and book/tax temporary differences.
54 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
F. Insurance Linked Securities
Event-linked bonds are floating rate debt obligations for which the return
of principal and the payment of interest are contingent on the
non-occurrence of a pre-defined "trigger" event, such as a hurricane or an
earthquake of a specific magnitude. The trigger event's magnitude may be
based on losses to a company or industry, industry indexes or readings of
scientific instruments, or may be based on specified actual losses. If a
trigger event, as defined within the terms of an event-linked bond occurs,
the fund may lose a portion or all of its accrued interest and/or principal
invested in such event-linked bond. The fund is entitled to receive
principal and interest payments so long as no trigger event occurs of the
description and magnitude specified by the instrument. In addition to the
specified trigger events, event-linked bonds may expose the Fund to other
risks, including but not limited to issuer (credit) default, adverse
regulatory or jurisdictional interpretations and adverse tax consequences.
The Fund's investments in ILS may include special purpose vehicles ("SPVs")
or similar instruments structured to comprise a portion of a reinsurer's
catastrophe-oriented business, known as quota share instruments (sometimes
referred to as reinsurance sidecars), or to provide reinsurance relating to
specific risks to insurance or reinsurance companies through a
collateralized instrument, known as collateralized reinsurance. Structured
reinsurance investments also may include industry loss warranties ("ILWs"),
are subject to the same risks as event-linked bonds. In addition, because
quota share instruments represent an interest in a basket of underlying
reinsurance contracts, the Fund has limited transparency into the
individual underlying contracts and therefore must rely upon the risk
assessment and sound underwriting practices of the issuer. Accordingly, it
may be more difficult for PIM to fully evaluate the underlying risk profile
of the Fund's investment in quota share instruments and therefore place the
Fund's assets at greater risk of loss than if PIM had more complete
information.
Quota share instruments and other structured reinsurance instruments
generally will be considered illiquid securities by the Fund. These
securities may be impossible or difficult to purchase, sell or unwind.
Illiquid securities also may be difficult to value. If the Fund is forced
to sell an illiquid asset, the Fund may be forced to sell at a loss.
G. Risks
Information regarding the Trust's principal risks is contained in the
Trust's original offering prospectus, with additional information included
in the Trust's shareowner reports issued from time to time. Please refer to
those documents when considering the Trust's principal risks. At times, the
Trust's investments may represent industries or industry sectors that are
interrelated
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 55
or have common risks, making the Trust more susceptible to any economic,
political, or regulatory developments or other risks affecting those
industries and sectors.
The Trust invests in below investment grade (high yield) debt securities,
floating rate loans and event-linked bonds sometimes referred to as
"catastrophe" bonds or "insurance-linked" bonds. The Trust may invest in
securities and other obligations of any credit quality, including those
that are rated below investment grade, or are unrated but are determined by
the investment adviser to be of equivalent credit quality. Below investment
grade securities are commonly referred to as "junk bonds" and are
considered speculative with respect to the issuer's capacity to pay
interest and repay principal. Below investment grade securities, including
floating rate loans, involve greater risk of loss, are subject to greater
price volatility, and are less liquid and more difficult to value,
especially during periods of economic uncertainty or change, than higher
rated debt securities. The trust may invest in securities of issuers that
are in default or that are in bankruptcy. The value of collateral, if any,
securing a floating rate loan can decline or may be insufficient to meet
the issuer's obligations or may be difficult to liquidate. No active
trading market may exist for many floating rate loans, and many loans are
subject to restrictions on resale. Any secondary market may be subject to
irregular trading activity and extended settlement periods. The Trust's
investments in certain foreign markets or countries with limited developing
markets may subject the Trust to a greater degree of risk than in a
developed market. These risks include disruptive political or economic
conditions and the possible imposition of adverse governmental laws or
currency exchange restrictions.
H. Repurchase Agreements
Repurchase agreements are arrangements under which the Trust purchases
securities from a broker-dealer or a bank, called the counterparty, upon
the agreement of the counterparty to repurchase the securities from the
Trust at a later date, and at a specific price, which is typically higher
than the purchase price paid by the Trust. The securities purchased serve
as the Trust's collateral for the obligation of the counterparty to
repurchase the securities. The value of the 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 Trust's custodian or a subcustodian of the
Trust. The Trust's investment adviser, PIM is responsible for determining
that the value of the collateral remains at least equal to the repurchase
price. In the event of a default by the counterparty, the Trust is entitled
to sell the securities, but the Trust may not be able to sell them for the
price at which they were purchased, thus causing a loss to the Trust.
56 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Additionally, if the counterparty becomes insolvent, there is some risk
that the Trust will not have a right to the securities, or the immediate
right to sell the securities.
I. Automatic Dividend Reinvestment Plan
All common shareowners whose shares are registered in their own names
automatically participate in the Automatic Dividend Reinvestment Plan (the
Plan), under which participants receive all dividends and capital gain
distributions (collectively, dividends) in full and fractional common
shares of the Trust in lieu of cash. Shareowners may elect not to
participate in the Plan. Shareowners not participating in the Plan receive
all dividends and capital gain distributions in cash. Participation in the
Plan is completely voluntary and may be terminated or resumed at any time
without penalty by notifying American Stock Transfer & Trust Company, the
agent for shareowners in administering the Plan (the Plan Agent), in
writing prior to any dividend record date; otherwise such termination or
resumption will be effective with respect to any subsequently declared
dividend or other distribution.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate in
the Plan on the shareowner's behalf. If the firm or nominee does not offer
the Plan, dividends will be paid in cash to the shareowner of record. A
firm or nominee may reinvest a shareowner's cash dividends in common shares
of the Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend, the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees (market premium), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per common share is greater than the market value (market discount), the
Plan Agent will invest the dividend amount in common shares acquired in
open-market purchases. There are no brokerage charges with respect to newly
issued common shares. However,
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 57
each participant will pay a pro rata share of brokerage trading fees
incurred with respect to the Plan Agent's open-market purchases.
Participating in the Plan does not relieve shareowners from any federal,
state or local taxes which may be due on dividends paid in any taxable
year. Shareowners holding Plan shares in a brokerage account may be able to
transfer the shares to another broker and continue to participate in the
Plan.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), manages
the Trust's portfolio. Management fees payable under the Trust's Advisory
Agreement with PIM are calculated daily at the annual rate of 0.85% of the
Trust's average daily managed assets. "Managed assets" means (a) the total
assets of the Trust, including any form of investment leverage, minus (b) all
accrued liabilities incurred in the normal course of operations, which shall not
include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without limitation,
borrowing through a credit facility or the issuance of debt securities), (ii)
the issuance of preferred stock or other similar preference securities, and/or
(iii) any other means. For the six months ended October 31, 2015, the net
management fee was 0.85% (annualized) of the Trust's average daily managed
assets, which was equivalent to 1.21% (annualized) of the Trust's average daily
net assets.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. At October 31,
2015, $232,937 was payable to PIM related to management costs, administrative
costs and certain other services is included in "Due to affiliates" and
"Administration fee payable" on the Statement of Assets and Liabilities.
3. Transfer Agent
Prior to November 2, 2015, Pioneer Investment Management Shareholder Services,
Inc. (PIMSS), a wholly owned indirect subsidiary of UniCredit, through a
sub-transfer agency agreement with American Stock Transfer & Trust Company
(AST), provided substantially all transfer agent and shareowner services related
to the Trust's common shares at negotiated rates.
In addition, the Trust reimbursed PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareowner communications activities such as proxy and
statement mailings and outgoing calls.
Effective November 2, 2015, AST serves as the transfer agent with respect to the
Trust's common shares. The Trust pays AST an annual fee, as is agreed to from
time to time by the Trust and AST, for providing such services.
58 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
4. Expense Offset Arrangement
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Trust's custodian expenses. For the six months ended October 31, 2015, the
Trust expenses were not reduced under such arrangement.
5. Forward Foreign Currency Contracts
At October 31, 2015, the Trust had entered into various forward foreign currency
contracts that obligate the Trust to deliver or take delivery of currencies at
specified future maturity dates. Alternatively, prior to the settlement date of
a forward foreign currency contract, the Trust may close out such contract by
entering into an offsetting contract. The average value of contracts open during
the six months ended October 31, 2015 was $(172,873).
Open foreign currency contracts at October 31, 2015, were as follows:
-------------------------------------------------------------------------------------------------
In Net
Currency Currency Exchange Settlement Unrealized
Sold Deliver Purchased for Counterparty Date Appreciation
-------------------------------------------------------------------------------------------------
Japanese 150,799,195 USD 1,258,023 Brown Brothers 11/25/15 $8,359
Yen (JPY) Harriman & Co.
-------------------------------------------------------------------------------------------------
Total $8,359
=================================================================================================
----------------------------------------------------------------------------------------------
In Net
Currency Currency Exchange Settlement Unrealized
Sold Deliver Purchased for Counterparty Date Depreciation
----------------------------------------------------------------------------------------------
British 122,786 USD 189,278 Brown Brothers 12/29/15 $ (122)
Pound Harriman & Co.
Sterling
(GBP)
British 123,264 USD 188,729 Citibank NA 11/3/15 (1,449)
Pound
Sterling
(GBP)
Euro (EUR) 6,010,882 USD 6,541,502 Societe General 4/27/16 (99,703)
Mexican 6,340,000 USD 373,806 Societe General 11/23/15 (9,777)
Peso
(MXN)
Russian 5,515,000 USD 84,577 JP Morgan 11/06/15 (1,715)
Ruble Chase Bank
(RUB)
USD 540,694 Euro (EUR) 485,000 Societe General 4/27/16 (4,836)
----------------------------------------------------------------------------------------------
Total $(117,602)
==============================================================================================
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 59
6. Assets and Liabilities Offsetting
The Trust has entered into an International Swaps and Derivatives Association,
Inc. Master Agreement ("ISDA Master Agreement") or similar agreement with
substantially all its derivative counterparties. An ISDA Master Agreement is a
bilateral agreement between the Trust and a counterparty that governs the
trading of certain OTC derivatives and typically contains, among other things,
close-out and set-off provisions which apply upon the occurrence of event of a
default and/or termination event as defined under the relevant ISDA Master
Agreement. The ISDA Master Agreement may also give a party the right to
terminate all transactions traded under such agreement if, among other things,
there is deterioration in the credit quality of the other party. Upon an event
of default or a termination of the ISDA Master Agreement, the non-defaulting
party has the right to close out all transactions under such agreement and to
net amounts owed under each transaction to determine one net amount payable by
one party to the other. The right to close out and net payments across all
transactions under the ISDA Master Agreement could result in a reduction of the
Trust's credit risk to its counterparty equal to any amounts payable by the
Trust under the applicable transactions, if any. However, the Trust's right to
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of
the particular jurisdiction to which a specific ISDA counterparty is subject.
The collateral requirements for derivatives transactions under an ISDA Master
Agreement are governed by a credit support annex to the ISDA Master Agreement.
Collateral requirements are generally determined at the close of business each
day and are typically based on changes in market values for each transaction
under an ISDA Master Agreement and netted into one amount for such agreement.
Generally, the amount of collateral due from or to a counterparty is subject to
threshold (a "minimum transfer amount") before a transfer is required, which may
vary by counterparty. Collateral pledged for the benefit of the Trust and/or
counterparty is held in segregated accounts by the Trust's custodian and cannot
be sold, re-pledged, assigned or otherwise used while pledged. Cash that has
been segregated to cover the Trust's collateral obligations, if any, will be
reported separately in the Statement of Assets and Liabilities as "Futures
collateral", "Swap collateral " or "Deposit with broker." Securities pledged by
the Trust as collateral, if any, are identified as such in the Schedule of
Investments.
Financial instruments subject to an enforceable master netting agreement such as
an ISDA Master Agreement have been offset on the Statement of Assets and
Liabilities. The following charts show gross assets and liabilities of the Trust
as of October 31, 2015:
60 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-----------------------------------------------------------------------------------------------------
Derivative
Assets
Subject to Derivatives Non-Cash Cash Net Amount
Master Netting Available Collateral Collateral of Derivative
Counterparty Agreement for Offset Received (a) Received (a) Assets (b)
-----------------------------------------------------------------------------------------------------
Brown Brothers $8,359 $(122) $ -- $ -- $8,237
Harriman & Co.
-----------------------------------------------------------------------------------------------------
Total $8,359 $(122) $ -- $ -- $8,237
=====================================================================================================
------------------------------------------------------------------------------------------------------
Derivative
Liabilities
Subject to Derivatives Non-Cash Cash Net Amount
Master Netting Available for Collateral Collateral of Derivative
Counterparty Agreement Offset Pledged (a) Pledged (a) Liabilities (c)
------------------------------------------------------------------------------------------------------
Brown Brothers $ 122 $ (122) $ -- $ -- $ --
Harriman & Co.
Citibank NA 1,449 -- -- -- 1,449
JP Morgan Chase 1,715 -- -- -- 1,715
Bank
Societe General 114,316 -- -- -- 114,316
------------------------------------------------------------------------------------------------------
Total $ 117,602 $ (122) $ -- $ -- $117,480
======================================================================================================
(a) The amount presented here may be less than the total amount of collateral
received/pledged as the net amount of derivative assets and liabilities
cannot be less than $0.
(b) Represents the net amount due from the counterparty in the event of
default.
(c) Represents the net amount payable to the counterparty in the event of
default.
7. Bridge Loan Commitments
Bridge loans are designed to provide temporary or "bridge" financing to a
borrower pending the sale of identified assets or the arrangement of longer-term
loans or the issuance and sale of debt obligations.
As of October 31, 2015, the Trust had one bridge loan commitment of $1,085,000,
which could be extended at the option of the borrower, pursuant to the following
loan agreement:
--------------------------------------------------------------------------------------
Unrealized
Appreciation
Borrower Par Cost Value (Depreciation)
--------------------------------------------------------------------------------------
Charter Communications $1,085,000 $1,085,000 $1,085,000 $ --
======================================================================================
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 61
8. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the six months ended
October 31, 2015 and the year ended April 30, 2015 were as follows:
--------------------------------------------------------------------------------
10/31/15
(unaudited) 4/30/15
--------------------------------------------------------------------------------
Shares outstanding at beginning of period 8,332,790 8,320,167
Reinvestment of distributions -- 12,623
--------------------------------------------------------------------------------
Shares outstanding at end of period 8,332,790 8,332,790
================================================================================
9. Additional Disclosures about Derivative Instruments and Hedging Activities
The Trust's use of derivatives subjects it to the following risks:
Interest rate risk relates to the fluctuations in the value of interest-bearing
securities due to changes in the prevailing levels of market interest rates.
Credit risk relates to the ability of the issuer of a financial instrument to
make further principal or interest payments on an obligation or commitment that
it has to the Trust.
Foreign exchange rate risk relates to fluctuations in the value of an asset or
liability due to changes in currency exchange rates.
Equity risk relates to the fluctuations in the value of financial instruments as
a result of changes in market prices (other than those arising from interest
rate risk or foreign exchange risk), whether caused by factors specific to an
individual investment, its issuer, or all factors affecting all instruments
traded in a market or market segment.
Commodity risk relates to the risk that the value of a commodity or commodity
index will fluctuate based on increases or decreases in the commodities market
and factors specific to a particular industry or commodity.
The fair value of open derivative instruments (not considered to be hedging
instruments for accounting disclosure purposes) by risk exposure at October 31,
2015 was as follows:
62 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
-------------------------------------------------------------------------------------
Statement of Assets and Liabilities
Interest Credit Foreign Equity Commodity
Caption Rate Risk Risk Exchange Risk Risk Risk
-------------------------------------------------------------------------------------
Assets:
Unrealized
appreciation on
forward foreign
currency contracts $ -- $ -- $8,359 $ -- $ --
-------------------------------------------------------------------------------------
Total Value $ -- $ -- $8,359 $ -- $ --
=====================================================================================
Liabilities:
Unrealized
depreciation on
forward foreign
currency contracts $ -- $ -- $(117,602) $ -- $ --
-------------------------------------------------------------------------------------
Total Value $ -- $ -- $(117,602) $ -- $ --
=====================================================================================
The effect of derivative instruments (not considered to be hedging instruments
for accounting disclosure purposes) on the Statement of Operations by risk
exposure at October 31, 2015 was as follows:
-------------------------------------------------------------------------------------
Statement of Operations
Interest Credit Foreign Equity Commodity
Caption Rate Risk Risk Exchange Risk Risk Risk
-------------------------------------------------------------------------------------
Net realized
gain (loss):
Forward foreign
currency contracts $ -- $ -- $(10,030) $ -- $ --
-------------------------------------------------------------------------------------
Total Value $ -- $ -- $(10,030) $ -- $ --
=====================================================================================
Change in net
unrealized
appreciation
(depreciation) on:
Unrealized
appreciation on
forward foreign
currency contracts $ -- $ -- $(157,793) $ -- $ --
-------------------------------------------------------------------------------------
Total Value $ -- $ -- $(157,793) $ -- $ --
=====================================================================================
10. Margin Loan Financing
The Trust has entered into credit agreement with the Bank of Nova Scotia. There
is a $75 million borrowing limit.
At October 31, 2015, the Trust had a borrowing outstanding under the credit
agreement totaling $64,000,000. The interest rate charged at October 31, 2015
was 1.06%. During the six months ended October 31, 2015, the average daily
balance was $64,000,000 at an average interest rate of 1.06%. With respect to
the credit agreement, interest expense of $343,300 is included in the Statement
of Operations.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 63
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the credit agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities not including any bank loans and
senior securities, from the Trust's total assets and dividing such amount by the
principal amount of the borrowing outstanding.
11. Subsequent Events
A monthly dividend was declared on November 3, 2015 from undistributed and
accumulated net investment income of $0.1150 per common share payable November
30, 2015, to common shareowners of record on November 18, 2015.
ADDITIONAL INFORMATION
During the period, there have been no material changes in the Trust's investment
objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which has not been
approved by the shareowners. During the period, there have been no changes in
the principal risk factors associated with investment in the Trust. There were
no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
PIM, the Trust's investment adviser, is currently an indirect, wholly owned
subsidiary of UniCredit. On November 11, 2015, UniCredit announced that it
signed a binding master agreement with Banco Santander and affiliates of Warburg
Pincus and General Atlantic (the "Private Equity Firms") with respect to Pioneer
Investments ("Pioneer") and Santander Asset Management ("SAM") (the
"Transaction").
The Transaction, as previously announced by UniCredit, will establish a holding
company, with the name Pioneer Investments, to be owned by UniCredit (50%) and
the Private Equity Firms (50% between them). The holding company will control
Pioneer's U.S. operations, including PIM. The holding company also will own
66.7% of Pioneer's and SAM's combined operations outside the U.S., while Banco
Santander will own directly the remaining 33.3% stake. The closing of the
Transaction is expected to happen in 2016, subject to certain regulatory and
other approvals.
64 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Under the Investment Company Act of 1940, completion of the Transaction will
cause the Trust's current investment advisory agreement with PIM to terminate.
Accordingly, the Trust's Board of Trustees will be asked to approve a new
investment advisory agreement. If approved by the Board, the Trust's new
investment advisory agreement will be submitted to the shareholders of the Trust
for their approval.
Results of Shareholder Meeting (unaudited)
At the annual meeting of shareowners held on September 22, 2015, shareowners of
Pioneer Diversified High Income Trust were asked to consider the proposals
described below. A report of the total votes cast by the Trust's shareholders
follows:
Proposal 1 -- To elect three Class II Trustees and two Class III Trustees.
--------------------------------------------------------------------------------
Nominee For Withheld
--------------------------------------------------------------------------------
Class II
Thomas J. Perna 6,473,199 216,006
Marguerite A. Piret 6,447,738 241,467
Fred J. Ricciardi 6,476,335 212,870
Class III
Lisa M. Jones 6,458,071 231,134
Lorraine H. Monchak 6,450,240 238,965
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 65
Approval of Investment Advisory Agreement
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Diversified High Income Trust (the Trust) pursuant to an investment
advisory agreement between PIM and the Trust. In order for PIM to remain the
investment adviser of the Trust, the Trustees of the Trust must determine
annually whether to renew the investment advisory agreement for the Trust.
The contract review process began in January 2015 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the process.
Contract review materials were provided to the Trustees in March 2015 and July
2015. Supplemental contract review materials were provided to the Trustees in
September 2015. In addition, the Trustees reviewed and discussed the Trust's
performance at regularly scheduled meetings throughout the year, and took into
account other information related to the Trust provided to the Trustees at
regularly scheduled meetings, in connection with the review of the Trust's
investment advisory agreement.
In March 2015, the Trustees, among other things, discussed the memorandum
provided by Trust counsel that summarized the legal standards and other
considerations that are relevant to the Trustees in their deliberations
regarding the renewal of the investment advisory agreement, and reviewed and
discussed the qualifications of the investment management teams, as well as the
level of investment by the Trust's portfolio managers in the Trust. In July
2015, the Trustees, among other things, reviewed the Trust's management fee and
total expense ratios, the financial statements of PIM and its parent companies,
the profitability analyses provided by PIM, and possible economies of scale. The
Trustees also reviewed the profitability of the institutional business of PIM
and PIM's affiliate, Pioneer Institutional Asset Management, Inc. (together with
PIM, "Pioneer"), as compared to that of PIM's fund management business, and
considered the differences between the fees and expenses of the Trust and the
fees and expenses of Pioneer's institutional accounts, as well as the different
services provided by PIM to the Trust and by Pioneer to the institutional
accounts. The Trustees further considered contract review materials in September
2015.
At a meeting held on September 15, 2015, based on their evaluation of the
information provided by PIM and third parties, the Trustees of the Trust,
including the Independent Trustees voting separately, unanimously approved the
renewal of the investment advisory agreement for another year. In approving the
renewal of the investment 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 agreement.
66 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust. The Trustees also reviewed PIM's investment approach
for the Trust and its research process. The Trustees considered the resources of
PIM and the personnel of PIM who provide investment management services to the
Trust. They also reviewed the amount of non-Trust assets managed by the
portfolio managers of the Trust. The Trustees considered the non-investment
resources and personnel of PIM involved in PIM's services to the Trust,
including PIM's compliance and legal resources and personnel. The Trustees noted
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
Trust's service providers and provides the Trust with personnel (including Trust
officers) and other resources that are necessary for the Trust's business
management and operations. The Trustees also considered that, as administrator,
PIM is responsible for the administration of the Trust'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 to the Trust were
satisfactory and consistent with the terms of the investment advisory agreement.
Performance of the Trust
In considering the Trust's performance, the Trustees regularly review and
discuss throughout the year data prepared by PIM and information comparing the
Trust's performance with the performance of its peer group of funds as
classified by each of Morningstar, Inc. (Morningstar) and Lipper, and with the
performance of the Trust's benchmark index. They also discuss the Trust's
performance with PIM on a regular basis. The Trustees' regular reviews and
discussions were factored into the Trustees' deliberations concerning the
renewal of the advisory agreement. The Trustees indicated that the Trust's
performance, when considered in connection with the various other factors, was
consistent with the renewal of the investment advisory agreement.
Management Fee and Expenses
The Trustees considered information showing the fees and expenses of the Trust
in comparison to the management fees 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 Fund
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 67
Research and Consulting, LLC (Strategic Insight), an independent third party. In
all quintile rankings referred to below, first quintile is most favorable to the
Trust's shareowners.
The Trustees considered that the Trust's management fee (based on managed
assets) for the most recent fiscal year was in the second quintile relative to
the management fees paid by other funds in its Strategic Insight peer group for
the comparable period. The Trustees considered that the expense ratio (based on
managed assets) of the Trust's common shares for the most recent fiscal year was
in the second quintile relative its Strategic Insight peer group for the
comparable period.
The Trustees reviewed management fees charged by Pioneer to institutional and
other clients, including publicly offered European funds sponsored by affiliates
of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory
capacity), and unaffiliated foreign and domestic separate accounts. The Trustees
also considered PIM's costs in providing services to the Trust and Pioneer's
costs in providing services to the other clients and considered the differences
in management fees and profit margins for Trust and non-Trust services. In
evaluating the fees associated with Pioneer's client accounts, the Trustees took
into account the respective demands, resources and complexity associated with
the Trust and client accounts. The Trustees noted that, in some instances, the
fee rates for those clients were lower than the management fee for the Trust and
considered that, under the investment advisory agreement with the Trust, PIM
performs additional services for the Trust that it does not provide to those
other clients or services that are broader in scope, including oversight of the
Trust's other service providers and activities related to compliance and the
extensive regulatory and tax regimes to which the Trust is subject. The Trustees
also considered the different entrepreneurial risks associated with PIM's
management of the Trust and Pioneer's management of the other client accounts.
The Trustees concluded that the management fee payable by the Trust to PIM was
reasonable in relation to the nature and quality of the services provided by PIM
to the Trust.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from
68 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
non-fund businesses. The Trustees considered PIM's profit margins with
respect to the Trust 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 expenses. The
Trustees concluded that PIM's profitability with respect to the management of
the Trust was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is a
closed-end fund that has not raised additional capital, the Trustees concluded
that economies of scale were not a relevant consideration in the renewal of the
investment advisory agreement.
Other Benefits
The Trustees considered the other benefits to PIM from its relationship with the
Trust. The Trustees considered the character and amount of fees paid by the
Trust, 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. Pioneer is the
principal U.S. asset management business of Pioneer Global Asset Management, the
worldwide asset management business of UniCredit Group, which manages over $150
billion in assets (including the Funds). Pioneer and the Funds receive
reciprocal intangible benefits from the relationship, including mutual brand
recognition and, for the Funds, direct and indirect access to the resources of a
large global asset manager. The Trustees concluded that any such benefits
received by Pioneer as a result of its relationship with the Funds were
reasonable and their consideration of the advisory agreement between the Trust
and PIM and the fees thereunder were unaffected by Pioneer's possible receipt of
any such intangible benefits.
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of the investment advisory agreement for the Trust.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 69
Trustees, Officers and Service Providers
Trustees Officers
Thomas J. Perna, Chairman Lisa M. Jones, President and Chief
David R. Bock Executive Officer
Benjamin M. Friedman Mark E. Bradley, Treasurer and
Margaret B.W. Graham Chief Financial Officer
Lisa M. Jones Christopher J. Kelley, Secretary and
Lorraine H. Monchak Chief Legal Officer
Marguerite A. Piret
Fred J. Ricciardi
Kenneth J. Taubes
Investment Adviser and Administrator
Pioneer Investment Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Morgan, Lewis & Bockius LLP
Transfer Agent
American Stock Transfer & Trust Company
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 us.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at www.sec.gov.
70 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
This page for your notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 71
This page for your notes.
72 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
This page for your notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 73
This page for your notes.
74 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
This page for your notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15 75
76 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/15
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
--------------------------------------------------------------------------------
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site us.pioneerinvestments.com.
The Trust 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. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at 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.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
Securities offered through Pioneer Funds Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2015 Pioneer Investments 21398-08-1215
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 12(a)(1), 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 (see attachment);
(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.
Not applicable.
(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.
Not applicable.
(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.
Not applicable.
(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.
Not applicable.
(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.
Not applicable.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountants 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.
Not applicable.
(g) Disclose the aggregate non-audit fees billed by the registrants accountant
for services rendered to the registrant, and rendered to the registrants
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.
Not applicable.
(h) Disclose whether the registrants audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrants 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 registrant's 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 of Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.1212
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 semi-annual report.
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 registrant's portfolio ("Portfolio Manager"). Also state each Portfolio
Manager's business experience during the past 5 years.
Not applicable to semi-annual report.
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 registrant's equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781).
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
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 registrant's board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 407(c)(2)(iv) of
Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15))
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 registrant's board of
directors since the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-R 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 and
principal financials officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR
270.30a-3(c))) as of a date within 90 days of the filing date of the report
that includes the disclosure required by this paragraph,
based on the evaluation of these controls and procedures required by Rule
30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b)
under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on the evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that
occured 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.
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.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) 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.
(2) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2(a) under the Act
(17 CFR 270.30a-2(a)) , exactly as set forth below:
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 Diversified High Income Trust
By (Signature and Title)* /s/ Lisa M. Jones
Lisa M. Jones, President & Chief Executive Officer
Date December 30, 2015
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/ Lisa M. Jones
Lisa M. Jones, President & Chief Executive Officer
Date December 30, 2015
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date December 30, 2015
* Print the name and title of each signing officer under his or her signature.