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, Amundi Pioneer Asset 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, 2017 through October 31, 2017
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, 2017
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Ticker Symbol: HNW
[LOGO] Amundi Pioneer
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ASSET MANAGEMENT
visit us: www.amundipioneer.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 49
Financial Highlights 53
Notes to Financial Statements 55
Additional Information 71
Trustees, Officers and Service Providers 74
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 1
President's Letter
Robust, synchronized global economic growth and rising corporate profits have
continued to drive strong performance in both the credit and equity markets for
most of 2017. U.S. stocks, as measured by the Standard & Poor's 500 Index,
returned 14.23% through the end of the third quarter. Fixed-income markets,
while not generating the same dazzling returns as equities, held their own, led
by high-yield securities, which produced a return of 7.05% in the U.S., as
measured by the Bank of America Merrill Lynch U.S. High Yield Index. Meanwhile,
the Bloomberg Barclays U.S. Aggregate Bond Index returned 3.14% over the first
three quarters of the calendar year.
Continued strong employment numbers and higher consumer confidence, together
with solid global economic growth and a depreciating U.S. dollar contributed to
better-than-expected U.S. gross domestic product (GDP) growth of more than 3% in
both the second and third quarters. Outside the U.S., economic growth in the
second quarter also surprised to the upside across the Euro zone, China, and
Japan. Meanwhile, despite higher oil and commodities prices, inflation continued
to be moderate, both in the U.S. and globally, enabling major non-U.S. central
banks to maintain their easy monetary policies. As expected, however, the U.S.
Federal Reserve System (the Fed) recently announced that it would commence
tapering its balance sheet this October. The Fed also appears primed to raise
interest rates one more time before the end of this year, which would be the
fourth rate increase since December of 2016.
As we move into the final months of 2017, we believe the U.S. economy will
experience modest growth in the short term, depending on the mix of economic
policies enacted as the country moves away from monetary stimulus (driven by the
Fed) and toward fiscal stimulus (potentially including tax reform) as well as
lighter regulatory burdens. Meanwhile, corporate earnings remain solid and we
think they will improve even further, despite the possibility of some pressure
from wage increases. In addition, it is our view that the economy will continue
to grow and that we may begin to see a modest upturn in inflation. In that
scenario, we anticipate that the Fed will continue to raise interest rates.
While economic and market conditions appear solid, there are always risks to
consider that could dampen the outlook. Geopolitical concerns, such as increased
tensions with North Korea, and continued political gridlock in Washington are
just some of the risks that could lead to increased market volatility.
2 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
It is for those reasons that we at Amundi Pioneer continue to believe that
investors can benefit from the experience and tenure of our investment teams who
make active and informed decisions across our funds.
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 the trust you have placed in us and look forward to
continuing to serve you in the future.
Sincerely,
/s/ Lisa M. Jones
Lisa M. Jones
Head of the Americas, President and CEO of U.S.
Amundi Pioneer Asset Management USA, Inc.
October 31, 2017
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. Past performance is no
guarantee of future results.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 3
Portfolio Management Discussion | 10/31/17
Higher-yielding, credit-sensitive debt produced solid results over the six-month
period ended October 31, 2017, as an optimistic outlook for both the domestic
and global economies drove positive market performance. 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, Co-Director of High Yield,
a senior vice president, and a portfolio manager at Amundi Pioneer Asset
Management, Inc. ("Amundi Pioneer"), Mr. Melchreit, Deputy Head of Fixed
Income, Director of Multisector Fixed Income, a senior vice president, and a
portfolio manager at Amundi Pioneer, Mr. Sharkey, a senior vice president, and a
portfolio manager at Amundi Pioneer, and Mr. Liu, Director of Insurance-Linked
Securities, a vice president, and a portfolio manager at Amundi Pioneer, are
responsible for the day-to-day management of the Trust.
Q How did the Trust perform during the six months ended October 31, 2017?
A Pioneer Diversified High Income Trust returned 2.84% at net asset value
(NAV) and 1.69% at market price during the six-month period ended October
31, 2017. During the same six-month period, the Trust's composite benchmark
returned 3.58% and the Trust's former composite benchmark returned 3.62%.
The Trust's current composite benchmark is based on equal weights of the
ICE Bank of America Merrill Lynch (BofA ML) Global High Yield and Emerging
Markets Plus (GHY & EMP) Index and the Standard & Poor's/Loan Syndications
& Trading Association (S&P/LSTA) Leveraged Loan Index. The Trust's former
composite benchmark was based on equal weights of the ICE BofA ML GHY & EMP
Index and the Credit Suisse (CS) Leveraged Loan Index. Unlike the Trust,
the composite benchmarks do not use leverage. While the use of leverage
increases investment opportunity, it also increases investment risk.
During the same period, the average return (at market price) of the 31
closed end funds in Lipper's High Yield Closed End Funds Category (which
may or may not be leveraged) was 4.47%, and the average return (at NAV) of
the 35 closed end funds in the same Lipper category was 3.67%. Meanwhile,
the average return (at market price) of the 24 closed end funds in Lipper's
Loan Participation Closed End Funds Category (which may or may not be
leveraged) was -0.45%, and the average return of the 38 closed end Fund's
(at NAV) in the same Lipper category was 2.11%.
4 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
The shares of the Trust were selling at a 6.6% discount to NAV on
October 31, 2017. Comparatively, the shares of the Trust were selling at a
5.5% discount to NAV on April 30, 2017.
On October 31, 2017, the 30-day SEC yield on the Trust's shares was 8.51%.
Q How would you describe the investment environment in the global
fixed-income markets during the six-month period ended October 31, 2017?
A The period was characterized by generally uninterrupted market optimism
about both the domestic and global economies, which drove a sustained rally
in credit-sensitive debt, such as corporate bonds. In the United States,
the economy expanded at a steady pace, although the annual rate of gross
domestic product (GDP) growth did accelerate to better than 3% in both the
second and third calendar quarters of 2017, while the nation's unemployment
rate fell from 4.4% to 4.1% from the start of the period on May 1, 2017,
through the end of the period on October 31, 2017. Even though lawmakers in
Washington struggled to reach a consensus on health care and tax policy,
positive outlooks for both the economy and corporate profits continued to
fuel solid performance in the financial markets.
In Europe, despite some evidence of increasing political nationalism and
anti-European Union sentiment in advance of national elections in several
countries, the eventual election results seemed to calm worries about anti-
global trends. The European economy, meanwhile, continued to improve over
the six-month period and the euro strengthened on currency markets.
U.S. monetary policy continued to tighten during the period, but the
Federal Reserve System (the Fed) acted cautiously, raising short-term
interest rates just once after increasing rates twice between December 2016
and March 2017. The Fed's action on interest rates had been widely
expected, and the gradual implementation of rate increases showed no
evidence of dampening the improvements in global economic growth trends.
Late in the period, the Fed began reducing the rather large balance sheet
it had accumulated through its multiple quantitative easing bond-buying
programs from 2008 through 2014 by limiting reinvestments in some of its
holdings. As the period progressed, other central banks also began to
consider moving away from their highly accommodative policies.
In that environment, domestic and international high-yield corporate bonds
and emerging markets debt all produced solid overall performance. One
notable exception to the generally positive results was the performance of
insurance-linked securities (ILS), which are used by property-and-casualty
insurers to help alleviate some of the risks the insurers face in the
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 5
event of a major disaster. ILS returns skewed to the negative side in the
latter part of the six-month period when three severe hurricanes (Harvey,
Irma, and Maria) hit the U.S. mainland and Puerto Rico, two major
earthquakes shook western Mexico, and California suffered through its worst
period of wild fires on record. Those events, which occurred over a
relatively short space of time, resulted in a 12-year high in
natural-disaster-related damage claims in the global insurance industry,
while causing the industry $110 billion in estimated losses.
Q What factors affected the Trust's performance during the six-month period
ended October 31, 2017?
A The Trust's allocation to high-yield corporates, bank loans, emerging
markets debt, and securitized bonds all delivered positive results during
the period, and contributed to the Trust's returns, but the portfolio's
exposure to ILS, which are not a component of the benchmark, was a major
drag on performance due to the significant insurance claims and industry
losses resulting from the natural disasters mentioned earlier.
Investing in ILS has been part of our portfolio diversification* strategy
since the Trust's inception in May 2007, and the six-month period ended
October 31, 2017, marked the first reporting cycle - either annual or
semiannual - in which holdings of ILS did not contribute positively to the
Trust's performance. During the six-month period, ILS accounted for, on
average, about 16% of the Trust's total investment portfolio. Among the
Trust's ILS positions, a World Bank-sponsored bond holding became a total
loss because of the first Mexican earthquake. Subsequently, the effects of
Hurricanes Harvey, Irma, and Maria eroded the values of all ILS in general,
and helped pull down the Trust's performance.
In addition, a few of the portfolio's non-insurance-related investments
acted as minor drags on the Trust's results, including bonds issued by
wireline-based telecommunications companies Windstream and Frontier, loans
to Dixie Electric, an electric company providing services to the energy
industry, and to American Commercial Barge, which operates barges on major
waterways.
In a generally positive environment for European financials, portfolio
holdings that contributed positively to the Trust's performance during the
period included the subordinated debt issued by BNP, a major French
financial corporation, and the securitized debt of several other
European-based banks. Other notable contributors to the Trust's performance
were
* Diversification does not assure a profit nor protect against loss.
6 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
two securities that benefitted from the rising value of the fishing grounds
in Peruvian waters: debt issued by China Fish Group and by Pesquera
Exalmar.
Q How did the level of leverage in the Trust change over the six-month period
ended October 31, 2017?
A The Trust employs leverage through a credit agreement.
At the end of the six-month period on October 31, 2017, 30.6% of the
Trust's total managed assets were financed by leverage, or borrowed funds,
compared with 27.9% of the Trust's total managed assets financed by
leverage at the start of the period on May 1, 2017. The Trust's leverage
ratio rose primarily due to an increased amount of absolute funds borrowed
by the Trust early in the six-month period, and marginally due to the
depreciation of the value of the Trust's holdings.
Q Did the Trust's distributions to shareholders change during the six-month
period ended October 31, 2017?
A The Trust's distributions did not change during the period. However, newer
portfolio investments in high-yield bonds and bank loans tended to pay
yields that were lower than older investments issued when interest rates
were higher, and that could have a negative impact on future distributions.
In addition, as we lowered the overall risk in the portfolio, we invested
in bonds and loans that offered lower yields.
Q Did the Trust invest in any derivative securities during the six-month
period ended October 31, 2017? If so, did the derivatives have a notable
effect on performance?
A We did invest in some forward foreign currency contracts during the period
to help manage the risk of the portfolio's exposures to foreign currencies.
The contracts did not have a material effect on the Trust's results. In
addition to the currency forward contracts, the portfolio had a small CDS
(credit default swap) position, which also had no material effect on the
Trust's performance.
Q What is your investment outlook?
A Overall, we believe the global and domestic economic outlooks are good and
that the investment fundamentals of credit-sensitive debt appear solid. We
believe that corporations may have the financial health to pay their bond
obligations and that default rates should remain low, which would support
the performance of credit-sensitive securities. Nevertheless, we are
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 7
concerned about the relatively high current valuations of corporate bonds
and other fixed-income debt after more than a year and a half of strong
performance and price appreciation.
Over the coming 12 months, we anticipate that the Fed will raise the
federal funds rate as many as three more times. While we think the Fed's
gradual approach in tightening monetary policy should not be disruptive to
the capital markets, we also anticipate that higher short-term interest
rates may result in greater yields from bank loans and other floating-rate
investments.
In addition, following a period in which the asset class performed
relatively poorly, we anticipate that ILS securities will reprice to pay
investors higher coupons, and should once again offer favorable investment
opportunities.
In general, we remain optimistic about the credit markets, although we are
more cautious about higher-priced securities and have moved to reduce the
portfolio's credit risk by paring back exposures to high-yield debt. We've
done this for two reasons. First, given the flattening yield curve, with
short-term rates on the rise, we felt bank loans and other adjustable
floating-rate investments offered better opportunities. Second, high-yield
credit spreads have compressed, making those securities somewhat less
attractive. (Credit spreads are commonly defined as the differences in
yield between Treasuries and other types of fixed-income securities with
similar maturities.)
We intend to keep the Trust's portfolio well diversified by sector and to
remain vigilant regarding any potential changes in the investment
environment.
8 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Please refer to the Schedule of Investments on pages 14-48 for a full listing of
Trust securities.
All investments are subject to risk, including the possible loss of principal.
In the past several years, financial markets have experienced increased
volatility, depressed valuations, decreased liquidity and heightened
uncertainty. These conditions may continue, recur, worsen or spread.
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.
Interest rates in the U.S. recently have been historically low, so the Trust
faces a heightened risk that interest rates may rise. A general rise in interest
rates may cause investors to move out of fixed income securities on a large
scale, which could adversely affect the price and liquidity of fixed income
securities.
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
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 9
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.
Certain securities in which the Trust invests, including floating rate loans,
once sold, may not settle for an extended period (for example, several weeks or
even longer). The Trust will not receive its sale proceeds until that time,
which may constrain the Trust's ability to meet its obligations.
Insurance-linked securities may include event-linked bonds (also known as
insurance-linked bonds or catastrophe bonds). The return of principal and the
payment of interest on insurance-linked securities are contingent on the non-
occurrence of a predefined "trigger" event that leads to physical or economic
loss, such as a hurricane or an aerospace catastrophe.
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. Past performance is no
guarantee of future results.
10 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Portfolio Summary | 10/31/17
Portfolio Diversification*
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(As a percentage of total investment portfolio)
Corporate Bonds & Notes 63.5%
Senior Secured Floating Rate Loan Interests 26.4%
Treasury Bills 3.0%
Sovereign Debt Obligations 1.8%
Commercial Mortgage-Backed Securities 1.4%
Convertible Bond 0.9%
Preferred Stocks 0.9%
Repurchase Agreements 0.8%
Convertible Preferred Stock 0.5%
Asset Backed Securities 0.4%
Collateralized Mortgage Obligations 0.2%
Common Stocks 0.2%
Right / Warrant 0.0%+
* Includes investments in Insurance Linked Securities totaling 16.1% of total
investment portfolio.
+ Amount rounds to less than 0.1%.
10 Largest Holdings
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(As a percentage of total long-term holdings)**
1. Fixed Income Trust Series 2013-A, 0.0%, 10/15/97 (144A) 3.25%
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2. Gullane Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/21 1.22
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3. Queen Street X Re, Ltd., 6.884% (3 Month U.S. Treasury Bill + 575 bps),
6/8/18 (144A) (Cat Bond) 1.00
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4. Hercules LLC, 6.5%, 6/30/29 0.95
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5. East Lane Re VI, Ltd., 3.779% (3 Month U.S. Treasury Bill + 265 bps),
3/14/18 (144A) (Cat Bond) 0.87
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6. Pangaea Re Segregated Account (Artex SAC, Ltd.), Series 2017-1, Variable
Rate Notes, 11/30/21 0.83
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7. SIG Combibloc Holdings SCA, 7.75%, 2/15/23 (144A) 0.83
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8. Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 0.83
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9. Uniti Group, Inc. / CSL Capital LLC, 8.25%, 10/15/23 0.73
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10. Gleneagles Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/21 0.71
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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 | 10/31/17 11
Prices and Distributions | 10/31/17
Market Value per Share^
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10/31/17 4/30/17
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Market Value $16.29 $16.70
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(Discount) (6.6)% (5.5)%
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Net Asset Value per Share^
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--------------------------------------------------------------------------------
10/31/17 4/30/17
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Net Asset Value $17.44 $17.68
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Distributions per Share
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Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
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5/1/17 - 10/31/17 $0.69 $-- $--
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Yields
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10/31/17 4/30/17
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30-Day SEC Yield 8.51% 9.56%
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The data shown above represents past performance, which is no guarantee of
future results.
^ 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. Net asset value and market value are published daily on the
Trust's website at www.amundipioneer.com.
12 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Performance Update | 10/31/17
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 shares
of Pioneer Diversified High Income Trust during the periods shown, compared to
that of the composite (50%/50%) ICE BofA ML GHY & EMP Index and S&P/LSTA
Leveraged Loan Index benchmark; and compared to that of the Trust's prior
benchmark, which was the composite (50%/50%) ICE BofA ML GHY & EMP Index and CS
Leveraged Loan Index.
Average Annual Total Returns
(As of October 31, 2017)
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50% ICE
BofA ML 50% ICE
GHY & BofA ML
EMP GHY &
Index/ EMP
Net 50% S&P/ Index/
Asset LSTA 50% CS
Value Market Leveraged Leveraged
Period (NAV) Price Loan Index Loan Index
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10 years 8.18% 8.61% 5.98% 5.85%
5 years 7.28 5.41 4.72 4.87%
1 year 9.69 11.17 7.20 7.29%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
50% ICE BofA ML
GHY & EMP Index/ 50% ICE BofA ML
50% S&P/LSTA GHY & EMP Index/
Pioneer Diversified Leveraged 50% CS Leveraged
High Income Trust Loan Index Loan Index
10/07 $ 10,000 $ 10,000 $ 10,000
10/08 $ 7,100 $ 7,625 $ 7,659
10/09 $ 10,810 $ 10,739 $ 10,545
10/10 $ 14,649 $ 12,323 $ 12,066
10/11 $ 15,309 $ 12,730 $ 12,490
10/12 $ 17,547 $ 14,202 $ 13,925
10/13 $ 20,278 $ 15,134 $ 14,899
10/14 $ 21,565 $ 15,734 $ 15,520
10/15 $ 17,933 $ 15,489 $ 15,303
10/16 $ 20,546 $ 16,682 $ 16,464
10/17 $ 22,840 $ 17,883 $ 17,665
Call 1-800-225-6292 or visit www.amundipioneer.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 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 ICE BofA ML GHY & EMP Index is an unmanaged index that tracks the
performance of the below- and borderline 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 S&P/LSTA
Leveraged Loan Index provides broad and comprehensive total return metrics of
the U.S. universe of syndicated term loans. Note: Effective November 1, 2016,
the Trust's composite benchmark changed from 50% ICE BofA ML GHY & EMP Index/50%
CS Leveraged Loan Index, to 50% ICE BofA ML GHY & EMP Index/50% S&P/LSTA
Leveraged Loan Index. The change was implemented because management believes
that the S&P/LSTA Leveraged Loan Index better reflects the Trust's investment
strategy.
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 | 10/31/17 13
Schedule of Investments | 10/31/17 (unaudited)
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Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
UNAFFILIATED ISSUERS -- 144.1%
ASSET BACKED SECURITIES --
0.5% of Net Assets
299,996 Axis Equipment Finance Receivables III LLC,
Series 2015-1A, Class E, 5.27%, 5/20/20 (144A) $ 292,710
500,000 VB-S1 Issuer LLC, Series 2016-1A, Class F, 6.901%,
6/15/46 (144A) 513,769
------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $795,436) $ 806,479
------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
0.4% of Net Assets
41,959 Global Mortgage Securitization, Ltd., Series 2004-A,
Class B1, 5.25%, 11/25/32 (144A) $ 32,498
82,418 Global Mortgage Securitization, Ltd., Series 2005-A,
Class B3, 5.25%, 4/25/32 (144A) 21,812
290,000(a) GMAT Trust, Series 2013-1A, Class M, 5.0%,
11/25/43 (144A) 249,060
192,039(b) GMAT Trust, Series 2015-1A, Class A1, 4.25%,
9/25/20 (144A) 192,903
49,300 Homeowner Assistance Program Reverse Mortgage
Loan Trust, Series 2013-RM1, Class A, 4.0%,
5/26/53 (144A) 49,177
------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $636,445) $ 545,450
------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED SECURITIES --
2.0% of Net Assets
200,000(a) BAMLL Commercial Mortgage Securities Trust,
Series 2016-FR14, Class C, 1.388%, 2/27/48 (144A) $ 176,000
500,000(a) Banc of America Commercial Mortgage Trust,
Series 2007-4, Class D, 5.907%, 2/10/51 (144A) 500,000
112,543(a) Bear Stearns Commercial Mortgage Securities Trust,
Series 2005-PWR7, Class B, 5.214%, 2/11/41 112,427
260,000(c) CFCRE Mortgage Trust, Series 2015-RUM, Class E,
5.839% (1 Month USD LIBOR + 460 bps),
7/15/30 (144A) 254,128
500,000(a) Citigroup Commercial Mortgage Trust, Series 2014-GC23,
Class E, 3.208%, 7/10/47 (144A) 323,399
500,000(a) COBALT CMBS Commercial Mortgage Trust,
Series 2007-C3, Class C, 5.842%, 5/15/46 354,155
250,000(c) COMM Mortgage Trust, Series 2014-FL5, Class D,
5.239% (1 Month USD LIBOR + 400 bps),
10/15/31 (144A) 237,575
2,205(a) LB-UBS Commercial Mortgage Trust, Series 2006-C1,
Class AJ, 5.276%, 2/15/41 2,205
341,818(a) Morgan Stanley Capital I Trust, Series 2007-T25,
Class AJ, 5.574%, 11/12/49 345,988
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- (continued)
450,000(a) Wachovia Bank Commercial Mortgage Trust,
Series 2006-C27, Class B, 5.865%, 7/15/45 $ 454,704
250,000 Wells Fargo Commercial Mortgage Trust, Series
2016-BNK1, Class D, 3.0%, 8/15/49 (144A) 199,719
------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $3,055,201) $ 2,960,300
------------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE
LOAN INTERESTS -- 38.0% of Net Assets*(c)
AUTOMOBILES & COMPONENTS -- 1.1%
Auto Parts & Equipment -- 1.0%
232,063 American Axle & Manufacturing, Inc., Tranche B Term
Loan, 3.62% (LIBOR + 225 bps), 4/6/24 $ 232,473
339,516 Electrical Components International, Inc., Term Loan,
6.085% (LIBOR + 475 bps), 5/28/21 342,381
143,248 TI Group Automotive Systems LLC, Initial US Term Loan,
3.992% (LIBOR + 275 bps), 6/30/22 143,920
775,512 Tower Automotive Holdings USA LLC, Initial Term Loan,
4.0% (LIBOR + 275 bps), 3/7/24 780,359
---------------
$ 1,499,133
------------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 0.1%
106,796 Federal-Mogul Corp., Tranche C Term Loan,
4.99% (LIBOR + 375 bps), 4/15/21 $ 107,630
---------------
Total Automobiles & Components $ 1,606,763
------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 6.1%
Aerospace & Defense -- 1.5%
992,500(d) ADS Tactical, Inc., Term Loan,
8.833% (LIBOR + 750 bps), 12/31/22 $ 992,500
296,222 DAE Aviation Holdings, Inc., Initial Term Loan,
4.99% (LIBOR + 375 bps), 7/7/22 299,157
461,428 DynCorp International, Inc., Term Loan B2, 7.75%
(LIBOR + 600 bps), 7/7/20 463,639
225,420 Vencore, Inc. (fka SI Organization, Inc.), First Lien Initial
Term Loan, 6.083%, (LIBOR + 475 bps) 11/23/19 228,837
157,600 WP CPP Holdings LLC, Second Lien Term Loan B-1,
9.13% (LIBOR + 775 bps), 4/30/21 154,448
---------------
$ 2,138,581
------------------------------------------------------------------------------------------------------
Building Products -- 1.1%
872,411 Builders FirstSource, Inc., Refinancing Term Loan,
4.333% (LIBOR + 300 bps), 2/29/24 $ 877,006
250,000 NCI Building Systems, Inc., Tranche B Term Loan,
4.238% (LIBOR + 300 bps), 6/24/22 251,312
298,473 Summit Materials LLC, Restatement Effective Date
Term Loan, 3.992% (LIBOR + 275 bps), 7/18/22 301,209
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 15
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Building Products -- (continued)
249,375 Unifrax I LLC, Initial Dollar Term Loan, 4.9%
(LIBOR + 375 bps), 4/4/24 $ 251,869
---------------
$ 1,681,396
------------------------------------------------------------------------------------------------------
Construction Machinery & Heavy Trucks -- 0.9%
398,000 Clark Equipment Co. (aka Doosan Bobcat, Inc.),
Tranche B Term Loan, 4.083% (LIBOR + 275 bps), 5/18/24 $ 401,400
496,875 Commercial Vehicle Group, Inc., Term Loan B,
7.242% (LIBOR + 600 bps), 3/30/23 500,602
382,200 Navistar, Inc., Tranche B Term Loan, 5.24%
(LIBOR + 400 bps), 8/7/20 385,544
---------------
$ 1,287,546
------------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.5%
248,711 Pelican Products, Inc., First Lien Term Loan,
5.583% (LIBOR + 425 bps), 4/10/20 $ 250,266
414,399 WireCo WorldGroup, Inc., First Lien Initial Term Loan B,
6.817% (LIBOR + 550 bps), 9/29/23 416,885
---------------
$ 667,151
------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.8%
84,214 CeramTec Service GmbH (CeramTec Acquisition Corp.),
Dollar Term B-3 Loan, 4.067% (LIBOR + 275 bps), 8/30/20 $ 84,293
277,676 CeramTec Service GmbH (CeramTec Acquisition Corp.),
Initial Dollar Term B-1 Loan, 4.067% (LIBOR
+ 275 bps), 8/30/20 277,937
34,491 CeramTec Service GmbH (CeramTec Acquisition Corp.),
Initial Dollar Term B-2 Loan, 4.067% (LIBOR
+ 275 bps), 8/30/20 34,524
594,248 DTI Holdco, Inc., Initial Term Loan, 6.63%
(LIBOR + 525 bps), 10/2/23 584,591
248,706 Filtration Group Corp., First Lien Term Loan,
4.38% (LIBOR + 300 bps), 11/23/20 250,856
---------------
$ 1,232,201
------------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.5%
187,625(e) Blount International, Inc., Refinancing Term Loan, 4/12/23 $ 188,915
489,778 NN, Inc., Tranche B Term Loan, 5.492% (LIBOR
+ 425 bps), 10/19/22 490,757
---------------
$ 679,672
------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.8%
497,462 Beacon Roofing Supply, Inc., Initial Term Loan,
3.989% (LIBOR + 275 bps), 10/1/22 $ 500,364
500,000(e) Beacon Roofing Supply, Inc., Term Loan B, 10/11/24 503,541
138,021 WESCO Distribution, Inc., Tranche B-1 Term Loan,
6.25% (LIBOR + 300 bps), 12/12/19 138,625
---------------
$ 1,142,530
---------------
Total Capital Goods $ 8,829,077
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.3%
Environmental & Facilities Services -- 0.2%
248,654 Infiltrator Water Technologies LLC, Term B-1 Loan,
4.333% (LIBOR + 300 bps), 5/27/22 $ 250,571
------------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.1%
125,982 Prime Security Services Borrower LLC, First Lien 2016-2
Refinancing Term B-1 Loan, 3.992% (LIBOR
+ 275 bps), 5/2/22 $ 127,241
---------------
Total Commercial & Professional Services $ 377,812
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.8%
Home Furnishings -- 0.3%
522,133 Serta Simmons Bedding LLC, Second Lien Initial Term
Loan, 9.312% (LIBOR + 800 bps), 11/8/24 $ 495,374
------------------------------------------------------------------------------------------------------
Leisure Products -- 0.5%
350,000 Bass Pro Group LLC, Initial Term Loan, 6.242% (LIBOR
+ 500 bps), 9/25/24 $ 341,031
361,864 Bombardier Recreational Products, Inc., Term B Loan,
3.74% (LIBOR + 250 bps), 6/30/23 364,126
---------------
$ 705,157
---------------
Total Consumer Durables & Apparel $ 1,200,531
------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.0%
Casinos & Gaming -- 0.5%
169,267 Eldorado Resorts, Inc., Term Loan, 3.5% (LIBOR
+ 225 bps), 4/17/24 $ 169,796
557,792 Scientific Games International, Inc., Term Loan B-4,
4.522% (LIBOR + 325 bps), 8/14/24 564,939
---------------
$ 734,735
------------------------------------------------------------------------------------------------------
Education Services -- 1.0%
188,396 Cengage Learning Acquisitions, Inc., 2016 Refinancing
Term Loan, 5.485% (LIBOR + 425 bps), 6/7/23 $ 176,150
735,075 KUEHG Corp. (fka KC MergerSub, Inc.), Term B-2 Loan,
5.083% (LIBOR + 375 bps), 8/12/22 738,383
600,109 Laureate Education, Inc., Series 2024 Term Loan,
5.742% (LIBOR + 450 bps), 4/26/24 603,735
---------------
$ 1,518,268
------------------------------------------------------------------------------------------------------
Leisure Facilities -- 0.2%
275,522 Fitness International LLC, Term B Loan, 4.742% (LIBOR
+ 350 bps), 7/1/20 $ 278,449
------------------------------------------------------------------------------------------------------
Restaurants -- 0.4%
347,522 1011778 BC Unlimited Liability Co. (New Red
Finance, Inc.) (aka Burger King/Tim Hortons), Term B-3
Loan, 3.583% (LIBOR + 225 bps), 2/16/24 $ 348,028
242,250 Golden Nugget, Inc. (aka Landry's, Inc.), Initial Term
Loan B, 4.554% (LIBOR + 325 bps), 10/4/23 244,938
---------------
$ 592,966
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 17
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.9%
748,125 Constellis Holdings LLC, First Lien Term B Loan,
6.333% (LIBOR + 500 bps), 4/21/24 $ 747,190
531,199 Creative Artists Agency LLC, Refinancing Term Loan,
4.739% (LIBOR + 350 bps), 2/15/24 536,594
---------------
$ 1,283,784
---------------
Total Consumer Services $ 4,408,202
------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.9%
Diversified Capital Markets -- 0.2%
246,875 Freedom Mortgage Corp., Initial Term Loan,
6.956% (LIBOR + 550 bps), 2/23/22 $ 251,812
------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
190,266 Duff & Phelps Corp., Restatement Term Loan,
4.607% (LIBOR + 325 bps), 10/12/24 $ 192,430
179,500 LPL Holdings, Inc., Tranche B Term Loan, 3.576% (LIBOR
+ 225 bps), 9/23/24 180,201
---------------
$ 372,631
------------------------------------------------------------------------------------------------------
Specialized Finance -- 0.5%
243,750 DBRS, Ltd., Initial Term Loan, 6.567% (LIBOR
+ 525 bps), 3/4/22 $ 244,359
498,750 Peraton Corp. (fka MHVC Acquisition Corp.), First Lien
Initial Term Loan, 6.5% (LIBOR + 525 bps), 4/29/24 502,491
---------------
$ 746,850
---------------
Total Diversified Financials $ 1,371,293
------------------------------------------------------------------------------------------------------
ENERGY -- 2.1%
Oil & Gas Drilling -- 0.3%
250,000 Gavilan Resources LLC, Second Lien Initial Term Loan,
7.238% (LIBOR + 600 bps), 3/1/24 $ 243,750
250,000(e) Traverse Midstream Partners LLC, Advance Term
Loan, 9/27/24 254,094
---------------
$ 497,844
------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.2%
533,145 FR Dixie Acquisition Corp., Term Loan, 6.067% (LIBOR
+ 475 bps), 12/18/20 $ 327,884
------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.6%
250,000 California Resources Corp., Term Loan,
11.612% (LIBOR + 1038 bps), 12/31/21 $ 268,333
550,000 Chesapeake Energy Corp., Term Loan, Class A,
8.814% (LIBOR + 750 bps), 8/23/21 592,213
---------------
$ 860,546
------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 0.5%
672,959 Gulf Finance LLC, Tranche B Term Loan, 6.59% (LIBOR
+ 525 bps), 8/25/23 $ 653,611
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Pipeline -- 0.5%
633,413 Summit Midstream Partners Holdings LLC, Term Loan
Credit Facility, 7.242% (LIBOR + 600 bps), 5/13/22 $ 646,081
---------------
Total Energy $ 2,985,966
------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 1.3%
Agricultural Products -- 0.4%
98,746 NVA Holdings, Inc., First Lien Term B-2 Loan, 4.833%
(LIBOR + 350 bps), 8/14/21 $ 99,779
414,286 NVA Holdings, Inc., Second Lien Term Loan,
8.333% (LIBOR + 700 bps), 8/14/22 418,429
---------------
$ 518,208
------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 0.9%
495,000 Amplify Snack Brands, Inc., Term Loan, 6.74%
(LIBOR + 550 bps), 9/2/23 $ 492,732
468,315 Dole Food Co., Inc., Tranche B Term Loan, 4.022%
(LIBOR + 275 bps/PRIME + 175 bps), 4/6/24 470,981
350,000 Give and Go Prepared Foods Corp. (fka GG Foods
Acquisition Corp.), First Lien 2017 Term Loan,
5.564% (LIBOR + 425 bps), 7/29/23 354,703
---------------
$ 1,318,416
---------------
Total Food, Beverage & Tobacco $ 1,836,624
------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 2.9%
Health Care Facilities -- 0.6%
151,216 CHS/Community Health Systems, Inc., Incremental
2019 Term G Loan, 4.067% (LIBOR + 275 bps), 12/31/19 $ 148,853
450,472 CHS/Community Health Systems, Inc., Incremental
2021 Term H Loan, 4.317% (LIBOR + 300 bps), 1/27/21 436,998
311,303 Kindred Healthcare, Inc., New Term Loan,
4.875% (LIBOR + 350 bps), 4/9/21 312,795
---------------
$ 898,646
------------------------------------------------------------------------------------------------------
Health Care Services -- 1.3%
250,000 Envision Healthcare Corp. (fka Emergency Medical
Services Corp.), Initial Term Loan, 4.25% (LIBOR
+ 300 bps), 12/1/23 $ 251,458
248,747 ExamWorks Group, Inc. (fka Gold Merger Co., Inc.),
Term B-1 Loan, 4.492% (LIBOR + 325 bps), 7/27/23 250,768
200,000 Genoa Healthcare Co., LLC, Second Lien Initial Term
Loan, 9.242% (LIBOR + 800 bps), 10/28/24 202,333
343,000 HC Group Holdings III, Inc., First Lien Initial Term
Loan, 6.317% (LIBOR + 500 bps), 4/7/22 347,931
197,825 National Mentor Holdings, Inc., Tranche B Term
Loan, 4.333% (LIBOR + 300 bps), 1/31/21 199,834
198,492 nThrive, Inc. (fka Precyse Acquisition Corp.),
Additional Term B-2 Loan, 5.742% (LIBOR
+ 450 bps), 10/20/22 199,888
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 19
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Health Care Services -- (continued)
493,750 Prospect Medical Holdings, Inc., Term Loan,
7.5% (LIBOR + 600 bps), 6/30/22 $ 500,848
---------------
$ 1,953,060
------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.5%
184,538 Kinetic Concepts, Inc., Dollar Term Loan, 4.583%
(LIBOR + 325 bps), 2/2/24 $ 184,576
497,500 Sterigenics-Nordion Holdings LLC, Incremental Term
Loan, 4.242% (LIBOR + 300 bps), 5/15/22 499,366
---------------
$ 683,942
------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.5%
248,750 Change Healthcare Holdings, Inc. (fka Emdeon, Inc.),
Closing Date Term Loan, 3.992% (LIBOR
+ 275 bps), 3/1/24 $ 250,374
375,258(d) Medical Card System, Inc., Term Loan, 1.859% (LIBOR
+ 50 bps), 5/31/19 243,918
168,725 Quintiles IMS Inc., Term B-1 Dollar Loan, 3.333% (LIBOR
+ 200 bps), 3/7/24 169,955
---------------
$ 664,247
---------------
Total Health Care Equipment & Services $ 4,199,895
------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 1.2%
Cleaning Products -- 0.1%
149,625 Parfums Holding Co., Inc., First Lien Initial Term Loan,
6.083% (LIBOR + 475 bps), 6/30/24 $ 151,355
------------------------------------------------------------------------------------------------------
Household Products -- 0.5%
350,000 Alphabet Holding Co., Inc. (aka Nature's Bounty), First Lien
Initial Term Loan, 4.833% (LIBOR + 350 bps), 9/26/24 $ 342,946
399,000 WKI Holding Co., Inc., Initial Term Loan, 5.311% (LIBOR
+ 400 bps), 5/1/24 402,491
---------------
$ 745,437
------------------------------------------------------------------------------------------------------
Personal Products -- 0.6%
248,091 Atrium Innovations, Inc., First Lien Initial Tranche B-1
Term Loan, 4.833% (LIBOR + 350 bps), 2/15/21 $ 249,125
770,112 Revlon Consumer Products Corp., Initial Term Loan B,
4.742% (LIBOR + 350 bps), 9/7/23 667,591
---------------
$ 916,716
---------------
Total Household & Personal Products $ 1,813,508
------------------------------------------------------------------------------------------------------
INSURANCE -- 1.9%
Life & Health Insurance -- 0.4%
491,392 Integro, Inc., First Lien Initial Term Loan, 7.062% (LIBOR
+ 575 bps), 10/31/22 $ 491,392
------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.1%
164,388 Alliant Holdings I LLC, Term Loan B, 4.49% (LIBOR
+ 325 bps), 8/12/22 $ 165,725
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 1.4%
497,500 Acrisure LLC, First Lien Term B Loan, 6.272% (LIBOR
+ 500 bps), 11/22/23 $ 501,231
593,765 Confie Seguros Holding II Co., Second Lien Term Loan,
11.25% (LIBOR + 1000 bps), 5/8/19 581,890
508,331 Confie Seguros Holding II Co., Term B Loan,
6.992% (LIBOR + 575 bps), 4/19/22 504,010
500,000 USI, Inc. (fka Compass Investors, Inc.), Initial Term
Loan, 4.314% (LIBOR + 300 bps), 5/16/24 501,188
---------------
$ 2,088,319
---------------
Total Insurance $ 2,745,436
------------------------------------------------------------------------------------------------------
MATERIALS -- 4.8%
Construction Materials -- 0.4%
117,750 84 Lumber Co., Initial Term Loan, 6.988% (LIBOR
+ 575 bps), 10/25/23 $ 119,246
496,241 American Bath Group LLC, First Lien Replacement
Term Loan, 6.583% (LIBOR + 525 bps), 9/30/23 500,521
---------------
$ 619,767
------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 1.3%
311,675 Allnex (Luxembourg) & Cy SCA (fka AI Chem & Cy SCA),
Tranche B-2 Term Loan, 4.567% (LIBOR
+ 325 bps), 9/13/23 $ 313,233
234,813 Allnex (Luxembourg) & Cy SCA (fka AI Chem & Cy SCA),
Tranche B-3 Term Loan, 4.567% (LIBOR
+ 325 bps), 9/13/23 235,987
292,220 Chemours Co., Tranche B-1 US Dollar Term Loan,
3.75% (LIBOR + 250 bps), 5/12/22 295,416
366,686 Tata Chemicals North America, Term Loan, 4.125%
(LIBOR + 275 bps), 8/7/20 367,823
128,488 Tronox, Ltd., First Lien Blocked Dollar Term Loan,
4.323% (LIBOR + 300 bps), 9/23/24 129,352
296,512 Tronox, Ltd., First Lien Initial Dollar Term Loan,
4.323% (LIBOR + 300 bps), 9/23/24 298,504
269,526 Univar USA, Inc., Term B-2 Loan, 3.992% (LIBOR
+ 275 bps), 7/1/22 271,000
---------------
$ 1,911,315
------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.4%
495,000 Global Brass and Copper, Inc., Initial Term Loan,
4.5% (LIBOR + 325 bps), 7/18/23 $ 501,807
72,335(f) PT Bakrie & Brothers TBK, Term Loan B, 8.152% (LIBOR
+ 800 bps), 9/28/17 7,595
---------------
$ 509,402
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 21
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.9%
225,801 Coveris Holdings SA (fka Exopack Holdings SA), USD
Term B-1 Loan, 5.583% (LIBOR + 425 bps), 6/29/22 $ 225,871
473,204 Tank Holding Corp., Initial Term Loan, 7.5% (LIBOR
+ 425 bps), 3/16/22 477,052
598,500 Twist Beauty International Holdings SA, Facility B,
5.164% (LIBOR + 375 bps), 4/22/24 598,874
---------------
$ 1,301,797
------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.5%
515,911 Caraustar Industries, Inc., Refinancing Term Loan,
6.833% (LIBOR + 550 bps), 3/14/22 $ 520,855
247,500 Expera Specialty Solutions LLC, Term Loan B,
5.492% (LIBOR + 425 bps), 11/3/23 249,665
---------------
$ 770,520
------------------------------------------------------------------------------------------------------
Paper Products -- 0.3%
166,062 Ranpak Corp., Second Lien Initial Term Loan,
8.487% (LIBOR + 725 bps), 10/3/22 $ 165,232
198,473 Ranpak Corp., Tranche B-1 USD Term Loan,
4.492% (LIBOR + 325 bps), 10/1/21 199,093
---------------
$ 364,325
------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.7%
288,947 MacDermid, Inc. (Platform Specialty Products Corp.),
Tranche B-6 Term Loan, 3.742% (LIBOR
+ 250 bps), 6/7/20 $ 291,011
644,992 Omnova Solutions, Inc., Term B-2 Loan, 5.492% (LIBOR
+ 425 bps), 8/25/23 652,249
---------------
$ 943,260
------------------------------------------------------------------------------------------------------
Steel -- 0.3%
493,769 Zekelman Industries, Inc. (fka JMC Steel Group, Inc.),
Term Loan, 4.073%, (LIBOR + 275 bps) 6/14/21 $ 497,031
---------------
Total Materials $ 6,917,417
------------------------------------------------------------------------------------------------------
MEDIA -- 2.6%
Advertising -- 0.5%
247,505 CB Poly Investments LLC, First Lien Closing Date Term
Loan, 5.992% (LIBOR + 475 bps), 8/16/23 $ 249,206
500,000(e) Red Ventures LLC, Term Loan, 10/18/24 497,188
---------------
$ 746,394
------------------------------------------------------------------------------------------------------
Broadcasting -- 0.9%
163,365 A-L Parent LLC (aka Learfield Communications), First
Lien Initial Term Loan, 4.5% (LIBOR + 325 bps), 12/1/23 $ 164,794
199,000 CSC Holdings LLC (fka CSC Holdings, Inc. (Cablevision)),
March 2017 Refinancing Term Loan, 3.489% (LIBOR
+ 225 bps), 7/17/25 198,750
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Broadcasting -- (continued)
220,000 Hubbard Radio LLC, Term Loan, 4.5% (LIBOR
+ 325 bps), 5/27/22 $ 220,550
291,000 MediArena Acquisition BV (fka AP NMT Acquisition BV),
First Lien Dollar Term B Loan, 7.085% (LIBOR
+ 575 bps), 8/13/21 281,386
450,089 Univision Communications, Inc., First Lien 2017
Replacement Repriced Term Loan, 3.992% (LIBOR
+ 275 bps), 3/15/24 448,504
---------------
$ 1,313,984
------------------------------------------------------------------------------------------------------
Publishing -- 1.2%
491,272 DH Publishing LP, Term B-5 Loan, 3.738% (LIBOR
+ 250 bps), 8/21/23 $ 494,037
317,688 Houghton Mifflin Holdings, Inc., Term Loan,
4.242% (LIBOR + 300 bps), 5/28/21 304,186
32,504 Lee Enterprises, Inc., First Lien Term Loan,
7.492% (LIBOR + 625 bps), 3/31/19 32,605
913,438 McGraw-Hill Global Education Holdings LLC, First Lien
Term B Loan, 5.242% (LIBOR + 400 bps), 5/4/22 909,727
---------------
$ 1,740,555
---------------
Total Media $ 3,800,933
------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 0.9%
Life Sciences Tools & Services -- 0.3%
364,763 Catalent Pharma Solutions, Inc. (fka Cardinal Health 409,
Inc.), Dollar Term Loan, 3.492% (LIBOR
+ 225 bps), 5/20/24 $ 367,759
------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.6%
497,500 Horizon Pharma, Inc., Term Loan B, 4.5% (LIBOR
+ 325 bps), 3/29/24 $ 499,910
362,943 VRX Escrow Corp., Series F Tranche B Term Loan,
5.99% (LIBOR + 475 bps), 4/1/22 370,384
---------------
$ 870,294
---------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 1,238,053
------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.5%
Retail REITs -- 0.2%
271,136 DTZ US Borrower LLC, First Lien 2015-1 Additional
Term Loan, 4.567% (LIBOR + 325 bps), 11/4/21 $ 272,873
42,553 DTZ US Borrower LLC, Second Lien Initial Term Loan,
9.63% (LIBOR + 825 bps), 11/4/22 42,766
---------------
$ 315,639
------------------------------------------------------------------------------------------------------
Specialized REIT -- 0.3%
491,278 Communications Sales & Leasing, Inc. (CSL Capital LLC),
Shortfall Term Loan, 4.242% (LIBOR + 300 bps), 10/24/22 $ 472,392
---------------
Total Real Estate $ 788,031
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 23
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
RETAILING -- 0.5%
Automotive Retail -- 0.4%
633,821 CWGS Group LLC, Term Loan, 4.981% (LIBOR
+ 300 bps), 11/8/23 $ 640,291
------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.1%
154,522 PetSmart, Inc., Tranche B-2 Term Loan, 4.24%
(LIBOR + 300 bps), 3/11/22 $ 133,154
---------------
Total Retailing $ 773,445
------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.9%
Semiconductors -- 0.9%
494,933 MACOM Technology Solutions Holdings, Inc. (fka
M/A-COM Technology Solutions Holdings, Inc.), Initial
Term Loan, 3.489% (LIBOR + 225 bps), 5/17/24 $ 496,273
248,741 Micron Technology, Inc., Term Loan, 3.39% (LIBOR
+ 200 bps), 4/26/22 250,567
547,990 Mirion Technologies (Finance) LLC (Mirion
Technologies, Inc.), First Lien Initial Term Loan,
6.083% (LIBOR + 475 bps), 3/31/22 549,474
---------------
Total Semiconductors & Semiconductor Equipment $ 1,296,314
------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.4%
Application Software -- 0.5%
248,128 Greeneden US Holdings I LLC, Tranche B-2 Dollar Term
Loan, 5.083% (LIBOR + 375 bps), 12/1/23 $ 249,701
500,000 STG-Fairway Acquisitions, Inc., First Lien Term Loan,
6.583% (LIBOR + 525 bps), 6/30/22 487,500
---------------
$ 737,201
------------------------------------------------------------------------------------------------------
Data Processing & Outsourced Services -- 0.2%
230,733 First Data Corp., 2024 New Dollar Term Loan,
3.738% (LIBOR + 250 bps), 4/26/24 $ 232,151
------------------------------------------------------------------------------------------------------
Home Entertainment Software -- 0.0%+
52,000 MA FinanceCo., LLC (aka Micro Focus International Plc),
Tranche B-3 Term Loan, 3.989% (LIBOR
+ 275 bps), 6/21/24 $ 52,107
------------------------------------------------------------------------------------------------------
Internet Software & Services -- 0.3%
240,703 Avast Holding BV, Initial Refinancing Dollar Term Loan,
4.583% (LIBOR + 325 bps), 9/30/23 $ 242,422
154,000 Blucora, Inc., Initial Term Loan, 5.073% (LIBOR
+ 375 bps), 5/22/24 155,155
---------------
$ 397,577
------------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 1.2%
348,749 Go Daddy Operating Co., LLC (GD Finance Co., Inc.),
Initial Term Loan, 3.742% (LIBOR + 250 bps), 2/15/24 $ 350,689
248,752 Rackspace Hosting, Inc., First Lien 2017 Refinancing
Term B Loan, 4.311% (LIBOR + 300 bps), 11/3/23 248,730
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- (continued)
300,000 Rocket Software, Inc., Second Lien Term Loan,
10.833% (LIBOR + 950 bps), 10/14/24 $ 303,094
612,500 Sitel Worldwide Corp., First Lien Term B-1 Loan,
6.875% (LIBOR + 550 bps), 9/18/21 613,036
249,375 Tempo Acquisition LLC, Initial Term Loan, 4.242% (LIBOR
+ 300 bps), 5/1/24 250,492
---------------
$ 1,766,041
------------------------------------------------------------------------------------------------------
Systems Software -- 0.2%
348,000 Seattle Spinco, Inc. (aka Micro Focus International Plc),
Initial Term Loan, 3.988% (LIBOR + 275 bps), 6/21/24 $ 348,715
---------------
Total Software & Services $ 3,533,792
------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 1.2%
Integrated Telecommunication Services -- 0.8%
750,000 CenturyLink, Inc., Initial Term B Loan, 2.75% (Ticking Fee
+ 275 bps), 1/31/25 $ 741,016
486,811 Level 3 Financing, Inc., Tranche B 2024 Term Loan,
3.489% (LIBOR + 225 bps), 2/22/24 488,724
---------------
$ 1,229,740
------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.4%
200,000 Digicel International Finance, Ltd., First Lien Initial
Term B Loan, 5.07% (LIBOR + 375 bps), 5/27/24 $ 201,625
348,250 Sprint Communications, Inc., Initial Term Loan,
3.75% (LIBOR + 250 bps), 2/2/24 349,680
---------------
$ 551,305
---------------
Total Telecommunication Services $ 1,781,045
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.1%
Marine -- 0.6%
575,470 Commercial Barge Line Co., Initial Term Loan,
9.992% (LIBOR + 875 bps), 11/12/20 $ 445,510
487,500 Navios Maritime Partners LP, Initial Term Loan,
6.32% (LIBOR + 500 bps), 9/14/20 486,992
---------------
$ 932,502
------------------------------------------------------------------------------------------------------
Trucking -- 0.5%
693,696 YRC Worldwide, Inc., Tranche B-1 Term Loan,
9.742% (LIBOR + 850 bps), 7/26/22 $ 686,181
---------------
Total Transportation $ 1,618,683
------------------------------------------------------------------------------------------------------
UTILITIES -- 1.5%
Electric Utilities -- 0.8%
561,240 APLP Holdings LP, Term Loan B, 0.0% (LIBOR
+ 350 bps), 4/13/23 $ 567,087
487,684 TPF II Power LLC (TPF II Convert Midco LLC), Term Loan,
4.992% (LIBOR + 375 bps), 10/2/23 492,295
---------------
$ 1,059,382
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 25
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 0.7%
453,786 Dynegy, Inc., Tranche C-1 Term Loan, 4.492% (LIBOR
+ 325 bps), 2/7/24 $ 456,969
594,162 TerraForm AP Acquisition Holdings LLC, Term Loan,
5.583% (LIBOR + 425 bps), 6/27/22 600,103
---------------
$ 1,057,072
---------------
Total Utilities $ 2,116,454
------------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING RATE
LOAN INTERESTS
(Cost $55,313,007) $ 55,239,274
------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES --
91.6% of Net Assets
AUTOMOBILES & COMPONENTS -- 0.8%
Auto Parts & Equipment -- 0.8%
EUR 165,000(g) IHO Verwaltungs GmbH, 3.25% (4.0% PIK 0.0% cash),
9/15/23 (144A) $ 201,606
EUR 395,000(g) IHO Verwaltungs GmbH, 3.75% (4.5% PIK 0.0% cash),
9/15/26 (144A) 492,387
454,000 International Automotive Components Group SA,
9.125%, 6/1/18 (144A) 454,000
---------------
Total Automobiles & Components $ 1,147,993
------------------------------------------------------------------------------------------------------
BANKS -- 5.1%
Diversified Banks -- 4.2%
200,000 Access Bank Plc, 10.5%, 10/19/21 (144A) $ 226,044
300,000(a) Banco de Galicia y Buenos Aires, 8.25% (5 Year CMT
Index + 716 bps), 7/19/26 (144A) 334,539
200,000(a)(h) Banco Santander SA, 6.38% (5 Year USD Swap
Rate + 479 bps) 208,000
950,000(a)(h) BNP Paribas SA, 7.625% (5 Year USD Swap
Rate + 631 bps) (144A) 1,065,188
240,000(a)(h) Goldman Sachs Capital II, 4.0% (3 Month USD
LIBOR + 77 bps) 212,606
350,000(a)(h) ING Groep NV, 6.5% (5 Year USD Swap Rate + 445 bps) 384,160
225,000(a)(h) Intesa Sanpaolo S.p.A., 7.7% (5 Year USD Swap
Rate + 546 bps) (144A) 245,813
ARS 5,842,000(i) Letras del Banco Central de la Republica
Argentina, 4/18/18 292,674
250,000(a)(h) Royal Bank of Scotland Group Plc, 8.0% (5 Year USD
Swap Rate + 572 bps) 285,800
400,000(a)(h) Royal Bank of Scotland Group Plc, 8.625% (5 Year
USD Swap Rate + 760 bps) 452,960
200,000 Sberbank of Russia Via SB Capital SA, 5.25%,
5/23/23 (144A) 208,916
460,000(a)(h) Societe Generale SA, 7.375% (5 Year USD Swap
Rate + 624 bps) (144A) 507,150
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Diversified Banks -- (continued)
420,000 Turkiye Vakiflar Bankasi TAO, 5.625%, 5/30/22 (144A) $ 418,950
344,000(a) Turkiye Vakiflar Bankasi TAO, 8.0% (5 Year USD Swap
Rate + 585 bps), 11/1/27 (144A) 353,391
750,000 UBS AG, 7.625%, 8/17/22 885,000
---------------
$ 6,081,191
------------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance -- 0.9%
880,000 Financiera Independencia SAB de CV SOFOM ENR,
8.0%, 7/19/24 (144A) $ 910,888
450,000 Vnesheconombank Via VEB Finance Plc, 6.902%,
7/9/20 (144A) 487,472
---------------
$ 1,398,360
---------------
Total Banks $ 7,479,551
------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 2.1%
Agricultural & Farm Machinery -- 0.3%
475,000 Titan International, Inc., 6.875%, 10/1/20 $ 489,250
------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.3%
455,000 Tutor Perini Corp., 6.875%, 5/1/25 (144A) $ 490,831
------------------------------------------------------------------------------------------------------
Construction Machinery & Heavy Trucks -- 0.2%
229,000 Meritor, Inc., 6.75%, 6/15/21 $ 236,729
------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.7%
121,317(g) Boart Longyear Management Pty, Ltd., 10.0% (12.0%
PIK 10.0% cash), 12/31/22 $ 100,087
490,000 CSVC Acquisition Corp., 7.75%, 6/15/25 (144A) 477,750
365,000 JB Poindexter & Co., Inc., 9.0%, 4/1/22 (144A) 381,881
5,000 Park-Ohio Industries, Inc., 6.625%, 4/15/27 5,425
---------------
$ 965,143
------------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.6%
435,000 Apex Tool Group LLC, 7.0%, 2/1/21 (144A) $ 412,162
450,000 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) 460,688
---------------
$ 872,850
---------------
Total Capital Goods $ 3,054,803
------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.2%
Security & Alarm Services -- 0.2%
290,000 Prime Security Services Borrower LLC / Prime
Finance, Inc., 9.25%, 5/15/23 (144A) $ 321,378
---------------
Total Commercial & Professional Services $ 321,378
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.1%
Homebuilding -- 0.8%
135,000 Beazer Homes USA, Inc., 8.75%, 3/15/22 $ 150,012
350,000 Brookfield Residential Properties, Inc., 6.375%,
5/15/25 (144A) 366,625
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 27
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Homebuilding -- (continued)
250,000 KB Home, 7.0%, 12/15/21 $ 281,875
340,000 KB Home, 7.625%, 5/15/23 391,850
---------------
$ 1,190,362
------------------------------------------------------------------------------------------------------
Textiles -- 0.3%
460,000 Springs Industries, Inc., 6.25%, 6/1/21 $ 473,800
---------------
Total Consumer Durables & Apparel $ 1,664,162
------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.4%
Casinos & Gaming -- 1.8%
EUR 750,000 Intralot Capital Luxembourg SA, 6.75%, 9/15/21 (144A) $ 937,927
911,090(f)(g) Mashantucket Western Pequot Tribe, 6.5% (5.5% PIK
1.0% cash), 7/1/36 4,555
365,000 MGM Resorts International, 6.0%, 3/15/23 400,186
100,000 Scientific Games International, Inc., 6.25%, 9/1/20 100,875
1,050,000 Scientific Games International, Inc., 10.0%, 12/1/22 1,161,489
---------------
$ 2,605,032
------------------------------------------------------------------------------------------------------
Hotels, Resorts & Cruise Lines -- 0.8%
320,000 Hilton Grand Vacations Borrower LLC / Hilton Grand
Vacations Borrower, Inc., 6.125%, 12/1/24 (144A) $ 351,200
250,000 Silversea Cruise Finance, Ltd., 7.25%, 2/1/25 (144A) 268,125
266,000 Viking Cruises, Ltd., 5.875%, 9/15/27 (144A) 267,995
245,000 Viking Cruises, Ltd., 6.25%, 5/15/25 (144A) 253,575
---------------
$ 1,140,895
------------------------------------------------------------------------------------------------------
Restaurants -- 0.3%
495,000 Golden Nugget, Inc., 6.75%, 10/15/24 (144A) $ 503,663
------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.5%
160,000 Monitronics International, Inc., 9.125%, 4/1/20 $ 138,800
540,000 StoneMor Partners LP / Cornerstone Family Services WV,
7.875%, 6/1/21 517,050
---------------
$ 655,850
---------------
Total Consumer Services $ 4,905,440
------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 6.8%
Consumer Finance -- 1.0%
600,000 Credito Real SAB de CV SOFOM ER, 7.25%,
7/20/23 (144A) $ 631,800
445,000 Jefferies Finance LLC / JFIN Co-Issuer Corp., 7.375%,
4/1/20 (144A) 459,463
440,000 TMX Finance LLC / TitleMax Finance Corp., 8.5%,
9/15/18 (144A) 405,900
---------------
$ 1,497,163
------------------------------------------------------------------------------------------------------
Other Diversified Financial Services -- 4.5%
6,000,000(b)(d) Fixed Income Trust Series 2013-A, 0.0%, 10/15/97 (144A) $ 6,551,550
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Specialized Finance -- 0.5%
175,000 Nationstar Mortgage LLC / Nationstar Capital Corp.,
6.5%, 7/1/21 $ 177,625
580,000 Nationstar Mortgage LLC / Nationstar Capital Corp.,
6.5%, 6/1/22 594,500
---------------
$ 772,125
------------------------------------------------------------------------------------------------------
Supranational -- 0.8%
200,000 Banque Ouest Africaine de Developpement, 5.0%,
7/27/27 (144A) $ 208,000
680,000 Banque Ouest Africaine de Developpement, 5.5%,
5/6/21 (144A) 725,011
IDR 2,730,000,000 European Investment Bank, 7.2%, 7/9/19 (144A) 203,168
---------------
$ 1,136,179
---------------
Total Diversified Financials $ 9,957,017
------------------------------------------------------------------------------------------------------
ENERGY -- 14.4%
Integrated Oil & Gas -- 2.2%
145,000 Ascent Resources Utica Holdings LLC / ARU
Finance Corp., 10.0%, 4/1/22 (144A) $ 157,325
410,000 Petrobras Global Finance BV, 6.25%, 3/17/24 439,664
650,000 Petrobras Global Finance BV, 7.375%, 1/17/27 721,825
MXN 540,000 Petroleos Mexicanos, 7.19%, 9/12/24 (144A) 25,268
995,000 YPF SA, 6.95%, 7/21/27 (144A) 1,066,640
325,000 YPF SA, 8.875%, 12/19/18 (144A) 344,665
ARS 7,750,000 YPF SA, 16.5%, 5/9/22 (144A) 413,038
---------------
$ 3,168,425
------------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.6%
442,000 Rowan Cos., Inc., 5.4%, 12/1/42 $ 335,920
62,000 Rowan Cos., Inc., 5.85%, 1/15/44 49,910
289,904 Shelf Drilling Holdings, Ltd., 9.5%, 11/2/20 (144A) 294,253
120,000 Transocean, Inc., 7.5%, 1/15/26 (144A) 123,600
160,000 Trinidad Drilling, Ltd., 6.625%, 2/15/25 (144A) 155,600
---------------
$ 959,283
------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.8%
540,000 Archrock Partners LP / Archrock Partners Finance Corp.,
6.0%, 10/1/22 $ 536,625
425,000 McDermott International, Inc., 8.0%, 5/1/21 (144A) 438,813
170,000 SESI LLC, 7.75%, 9/15/24 (144A) 175,950
---------------
$ 1,151,388
------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 5.5%
300,000 Alta Mesa Holdings LP / Alta Mesa Finance
Services Corp., 7.875%, 12/15/24 (144A) $ 327,000
100,000 California Resources Corp., 8.0%, 12/15/22 (144A) 66,000
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 29
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- (continued)
250,000 Extraction Oil & Gas, Inc. / Extraction Finance Corp.,
7.875%, 7/15/21 (144A) $ 265,000
410,000 Great Western Petroleum LLC / Great Western
Finance, Inc., 9.0%, 9/30/21 (144A) 420,250
740,000 Gulfport Energy Corp., 6.0%, 10/15/24 740,000
450,000 Gulfport Energy Corp., 6.375%, 5/15/25 456,750
67,000 Halcon Resources Corp., 6.75%, 2/15/25 (144A) 68,507
420,000 MEG Energy Corp., 6.5%, 1/15/25 (144A) 417,900
1,045,000 Nostrum Oil & Gas Finance BV, 8.0%, 7/25/22 (144A) 1,087,322
450,000 Novatek OAO via Novatek Finance, DAC, 4.422%,
12/13/22 (144A) 462,465
390,000 Oasis Petroleum, Inc., 6.875%, 3/15/22 399,750
470,000 PDC Energy, Inc., 7.75%, 10/15/22 489,975
547,012(g) PetroQuest Energy, Inc., 10.0% (9.0% PIK 1.0%
cash), 2/15/21 410,259
375,000 Rice Energy, Inc., 6.25%, 5/1/22 392,400
870,000 Sanchez Energy Corp., 7.75%, 6/15/21 809,100
150,000 Whiting Petroleum Corp., 5.0%, 3/15/19 151,313
480,000 Whiting Petroleum Corp., 5.75%, 3/15/21 483,600
300,000 WPX Energy, Inc., 7.5%, 8/1/20 325,500
150,000 WPX Energy, Inc., 8.25%, 8/1/23 168,938
---------------
$ 7,942,029
------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.6%
669,000 Calumet Specialty Products Partners LP / Calumet
Finance Corp., 6.5%, 4/15/21 $ 654,784
200,000 PBF Holding Co., LLC / PBF Finance Corp.,
7.0%, 11/15/23 208,000
---------------
$ 862,784
------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 4.7%
220,000 Blue Racer Midstream LLC / Blue Racer Finance Corp.,
6.125%, 11/15/22 (144A) $ 229,350
200,000 Cheniere Corpus Christi Holdings LLC, 7.0%, 6/30/24 228,250
230,000 DCP Midstream Operating LP, 5.6%, 4/1/44 219,650
555,000 Delek Logistics Partners LP, 6.75%, 5/15/25 (144A) 565,406
450,000(c) Energy Transfer LP, 4.394% (3 Month USD LIBOR +
302 bps), 11/1/66 407,250
118,000 EnLink Midstream Partners LP, 5.05%, 4/1/45 115,538
344,000 EnLink Midstream Partners LP, 5.6%, 4/1/44 357,778
950,000 Genesis Energy LP / Genesis Energy Finance Corp.,
6.75%, 8/1/22 980,875
480,000 Global Partners LP / GLP Finance Corp., 7.0%, 6/15/23 487,200
765,000 PBF Logistics LP / PBF Logistics Finance Corp.,
6.875%, 5/15/23 (144A) 791,775
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- (continued)
170,000 PBF Logistics LP / PBF Logistics Finance Corp.,
6.875%, 5/15/23 $ 175,950
925,000 Sunoco LP / Sunoco Finance Corp., 6.375%, 4/1/23 982,813
1,175,000 Williams Cos., Inc., 5.75%, 6/24/44 1,245,500
---------------
$ 6,787,335
---------------
Total Energy $ 20,871,244
------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.3%
Food Retail -- 0.3%
200,000 C&S Group Enterprises LLC, 5.375%, 7/15/22 (144A) $ 194,000
169,849(f) Tonon Luxembourg SA, 10.5%, 5/14/24 (144A) 69,638
260,000 Tops Holding LLC / Tops Markets II Corp., 8.0%,
6/15/22 (144A) 156,000
---------------
Total Food & Staples Retailing $ 419,638
------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 6.5%
Agricultural Products -- 0.3%
444,769 Pinnacle Operating Corp., 9.0%, 5/15/23 (144A) $ 418,083
------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 5.3%
300,000(f) CFG Investment SAC, 9.75%, 7/30/19 (144A) $ 306,750
655,000 JBS Investments GmbH, 7.25%, 4/3/24 (144A) 646,813
800,000 Marfrig Holding Europe BV, 8.375%, 5/9/18 (144A) 824,560
700,000 Marfrig Holding Europe BV, 11.25%, 9/20/21 (144A) 696,500
515,000 Marfrig Holding Europe BV, 6.875%, 6/24/19 (144A) 532,381
975,000 Marfrig Holding Europe BV, 8.0%, 6/8/23 (144A) 1,018,875
700,000 MHP SE, 8.25%, 4/2/20 (144A) 756,000
580,000 Minerva Luxembourg SA, 6.5%, 9/20/26 (144A) 601,460
1,600,000 Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 1,674,000
600,000 Pesquera Exalmar SAA, 7.375%, 1/31/20 (144A) 585,000
---------------
$ 7,642,339
------------------------------------------------------------------------------------------------------
Soft Drinks -- 0.2%
355,000 Cott Beverages, Inc., 5.375%, 7/1/22 $ 369,865
------------------------------------------------------------------------------------------------------
Tobacco -- 0.7%
160,000 Alliance One International, Inc., 8.5%, 4/15/21 (144A) $ 167,600
900,000 Alliance One International, Inc., 9.875%, 7/15/21 793,125
---------------
$ 960,725
---------------
Total Food, Beverage & Tobacco $ 9,391,012
------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 1.8%
Health Care Facilities -- 1.5%
700,000 Kindred Healthcare, Inc., 6.375%, 4/15/22 $ 647,850
445,000 RegionalCare Hospital Partners Holdings, Inc., 8.25%,
5/1/23 (144A) 467,250
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 31
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Health Care Facilities -- (continued)
455,000 Team Health Holdings, Inc., 6.375%, 2/1/25 (144A) $ 418,600
630,000 Universal Hospital Services, Inc., 7.625%, 8/15/20 637,875
---------------
$ 2,171,575
------------------------------------------------------------------------------------------------------
Health Care Services -- 0.3%
425,000 BioScrip, Inc., 8.875%, 2/15/21 $ 392,062
---------------
Total Health Care Equipment & Services $ 2,563,637
------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.1%
Personal Products -- 0.1%
125,000 Revlon Consumer Products Corp., 5.75%, 2/15/21 $ 107,187
---------------
Total Household & Personal Products $ 107,187
------------------------------------------------------------------------------------------------------
INSURANCE -- 23.6%
Property & Casualty Insurance -- 0.3%
500,000(c) Spectrum Capital, Ltd., 6.903% (6 Month USD LIBOR +
575 bps), 6/8/21 (144A) $ 488,250
------------------------------------------------------------------------------------------------------
Reinsurance -- 23.3%
500,000+(j)(k) Ailsa Segregated Account (Artex SAC, Ltd.), Variable
Rate Notes, 6/15/18 $ 489,250
500,000(c) Alamo Re, Ltd., 4.884% (3 Month U.S. Treasury Bill +
375 bps), 6/8/20 (144A) (Cat Bond) 504,950
300,000(c) Aozora Re, Ltd., 3.219% (6 Month USD LIBOR +
200 bps), 4/7/21 (144A) (Cat Bond) 300,840
500,000(c) Aozora Re, Ltd., 3.549% (6 Month USD LIBOR +
220 bps), 4/7/20 (144A) (Cat Bond) 506,000
750,000(c) Bosphorus Re, Ltd., 4.468% (6 Month USD LIBOR +
325 bps), 8/17/18 (144A) (Cat Bond) 754,875
400,000(c) Caelus Re V, Ltd, Series C, 7.631% (3 Month U.S.
Treasury Bill + 650 bps), 6/5/20 (144A) (Cat Bond) 301,880
375,000(c) Caelus Re V, Ltd., Series D, 10.381% (3 Month U.S.
Treasury Bill + 925 bps), 6/5/20 (144A) (Cat Bond) 177,112
800,000+(j)(k) Carnoustie Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 12/31/17 16,320
1,000,000+(j)(k) Carnoustie Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 11/30/20 108,200
1,000,000+(j)(k) Carnoustie Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 11/30/21 900,000
750,000(c) Citrus Re, Ltd., 8.869% (3 Month U.S. Treasury Bill +
774 bps), 2/25/19 (144A) (Cat Bond) 621,750
750,000(c) Cranberry Re, Ltd., 3.129% (6 Month USD LIBOR +
200 bps), 7/13/20 (144A) (Cat Bond) 750,675
650,000+(j)(k) Cyprus Segregated Account (Artex SAC, Ltd.), Variable
Rate Notes, 1/10/18 560,365
400,000+(j)(k) Denning Segregated Account (Artex SAC, Ltd.), Variable
Rate Notes, 8/15/18 396,720
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
1,750,000(c) East Lane Re VI, Ltd., 3.779% (3 Month U.S. Treasury
Bill + 265 bps), 3/14/18 (144A) (Cat Bond) $ 1,752,450
1,000,000+(j)(k) Eden Re II, Ltd., Variable Rate Notes, 3/22/21 (144A) 961,800
250,000(c) Galilei Re, Ltd., 9.145% (6 Month USD LIBOR +
800 bps), 1/8/21 (144A) (Cat Bond) 217,650
250,000(c) Galilei Re, Ltd., 14.375% (6 Month USD LIBOR +
1,325 bps), 1/8/20 (144A) (Cat Bond) 173,125
250,000(c) Galilei Re, Ltd., 14.395% (6 Month USD LIBOR +
1,325 bps), 1/8/21 (144A) (Cat Bond) 161,425
500,000(c) Galileo Re, Ltd., 8.705% (3 Month USD LIBOR +
750 bps), 11/6/20 (Cat Bond) 500,000
250,000(c) Galileo Re, Ltd., 9.851% (3 Month U.S. Treasury
Bill + 872 bps), 1/8/19 (144A) (Cat Bond) 218,650
250,000(c) Galileo Re, Ltd., 14.371% (3 Month U.S. Treasury
Bill + 1,324 bps), 1/8/19 (144A) (Cat Bond) 173,750
157,500(c) Gator Re, Ltd., 0.5% (3 Month U.S. Treasury Bill +
50 bps), 10/9/17 (144A) (Cat Bond) 2
2,400,000+(j)(k) Gleneagles Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 11/30/20 281,280
1,500,000+(j)(k) Gleneagles Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 11/30/21 1,433,250
2,500,000+(j)(k) Gullane Segregated Account (Artex SAC, Ltd.), Variable
Rate Notes, 11/30/20 54,500
2,500,000+(j)(k) Gullane Segregated Account (Artex SAC, Ltd.), Variable
Rate Notes, 11/30/21 2,450,500
750,000(c) Integrity Re, Ltd., Series A, 4.369% (6 Month USD
LIBOR + 325 bps), 6/10/20 (144A) (Cat Bond) 747,900
500,000(c) Integrity Re, Ltd., Series C, 5.119% (6 Month USD
LIBOR + 400 bps), 6/10/20 (144A) (Cat Bond) 490,400
375,000(f)(c) International Bank for Reconstruction & Development,
5.572% (6 Month USD LIBOR + 450 bps),
8/11/20 (Cat Bond) (144A) 11,925
250,000(c) International Bank for Reconstruction & Development,
6.972% (6 Month USD LIBOR + 590 bps),
12/20/19 (Cat Bond) (144A) 249,992
300,000(c) International Bank for Reconstruction & Development,
7.957% (6 Month USD LIBOR + 7 bps),
7/15/20 (Cat Bond) 299,871
250,000(c) International Bank for Reconstruction & Development,
10.372% (6 Month USD LIBOR + 930 bps),
12/20/19 (Cat Bond) (144A) 249,990
300,000(c) International Bank for Reconstruction & Development,
12.557% (6 Month USD LIBOR + 1,150 bps),
7/15/20 (Cat Bond) (144A) 299,826
500,000(c) Kilimanjaro II Re, Ltd., 8.709% (6 Month USD
LIBOR + 750 bps), 4/20/21 (144A) (Cat Bond) 464,850
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 33
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
500,000(c) Kilimanjaro II Re, Ltd., 11.209% (6 Month USD
LIBOR + 1,000 bps), 4/20/21 (144A) (Cat Bond) $ 309,150
750,000+(j)(k) Lahinch Segregated Account (Artex SAC, Ltd.), Variable
Rate Notes, 5/10/22 745,125
EUR 500,000+(c) Lion II Re, DAC, 3.0% (3 Month EURIBOR + 300 bps),
7/15/21 (144A) (Cat Bond) 581,335
1,000,000+(j)(k) Lorenz Re 2017, Ltd. (Prime, Ltd.), Variable Rate
Notes, 3/31/20 900,900
500,000(c) Merna Re, Ltd., 3.129% (3 Month U.S. Treasury Bill +
200 bps), 4/8/20 (144A) (Cat Bond) 501,550
500,000(c) Nakama Re, Ltd., 3.329% (6 Month USD LIBOR +
220 bps), 10/13/21 (144A) (Cat Bond) 507,900
750,000(c) Northshore Re II, Ltd., 8.376% (3 Month U.S. Treasury
Bill + 725 bps), 7/6/20 (144A) (Cat Bond) 760,125
3,000,000+(j)(k) Pangaea Re Segregated Account (Artex SAC, Ltd.),
Series 2015-1, Variable Rate Notes, 2/1/19 13,500
2,000,000+(j)(k) Pangaea Re Segregated Account (Artex SAC, Ltd.),
Series 2016-1, Variable Rate Notes, 2/1/20 132,200
2,000,000+(j)(k) Pangaea Re Segregated Account (Artex SAC, Ltd.),
Series 2017-1, Variable Rate Notes, 11/30/21 1,678,400
750,000+(j)(k) Portrush 2017 Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 6/15/18 701,175
2,000,000(c) Queen Street X Re, Ltd., 6.884% (3 Month U.S. Treasury
Bill + 575 bps), 6/8/18 (144A) (Cat Bond) 2,008,400
500,000(i) Residential Reinsurance 2016, Ltd., 12/6/17
(144A) (Cat Bond) 496,850
700,000+(j)(k) Resilience Re, Ltd., Variable Rate Notes, 1/8/18 674,380
750,000+(j)(k) Resilience Re, Ltd., Variable Rate Notes, 6/4/18 736,500
AUD 300,000+(j)(k) Rewire Securities LLC, Variable Rate Notes, 1/10/18 7,595
AUD 250,000+(j)(k) Rewire Securities LLC, Variable Rate Notes, 7/15/18 160,525
500,000(c) Sanders Re, Ltd., 4.367% (6 Month USD LIBOR +
325 bps), 6/5/20 (144A) (Cat Bond) 500,550
750,000+(j)(k) Shinnecock Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 7/1/18 645,000
1,000,000+(j)(k) Silverton Re, Ltd., Variable Rate Notes, 9/17/18 (144A) 28,000
1,000,000+(j)(k) Silverton Re, Ltd., Variable Rate Notes, 9/16/19 (144A) 937,500
1,000,000+(j)(k) St. Andrews Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 12/31/17 19,700
1,000,000+(j)(k) St. Andrews Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 2/1/18 140,600
1,000,000+(j)(k) St. Andrews Segregated Account (Artex SAC, Ltd.),
Variable Rate Notes, 2/1/19 1,035,900
500,000(c) Vitality Re VI, Ltd., 3.229% (3 Month U.S. Treasury
Bill + 210 bps), 1/8/18 (144A) (Cat Bond) 499,300
1,000,000(c) Vitality Re VII, Ltd., 3.779% (3 Month U.S. Treasury
Bill + 265 bps), 1/7/20 (144A) (Cat Bond) 1,015,400
500,000+(j)(k) Wentworth 2017, Variable Rate Notes, 7/13/18 460,700
---------------
$ 33,780,333
---------------
Total Insurance $ 34,268,583
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
MATERIALS -- 6.9%
Commodity Chemicals -- 0.6%
300,000 Basell Finance Co., BV, 8.1%, 3/15/27 (144A) $ 401,531
175,000 Hexion US Finance Corp., 6.625%, 4/15/20 155,750
336,000 Rain CII Carbon LLC / CII Carbon Corp., 7.25%,
4/1/25 (144A) 363,720
---------------
$ 921,001
------------------------------------------------------------------------------------------------------
Construction Materials -- 0.2%
215,000 Cemex SAB de CV, 7.75%, 4/16/26 (144A) $ 243,509
------------------------------------------------------------------------------------------------------
Copper -- 0.6%
425,000 First Quantum Minerals, Ltd., 7.25%, 4/1/23 (144A) $ 449,438
465,000 Freeport-McMoRan, Inc., 3.55%, 3/1/22 460,350
---------------
$ 909,788
------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 1.2%
55,000 Blue Cube Spinco, Inc., 9.75%, 10/15/23 $ 65,312
55,000 Blue Cube Spinco, Inc., 10.0%, 10/15/25 66,963
500,000 Evolution Escrow Issuer LLC, 7.5%, 3/15/22 (144A) 524,375
1,025,000 Koks OAO Via Koks Finance, DAC, 7.5%, 5/4/22 (144A) 1,104,794
---------------
$ 1,761,444
------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.0%
300,000 FMG Resources August 2006 Pty, Ltd., 9.75%,
3/1/22 (144A) $ 335,250
200,000 Hudbay Minerals, Inc., 7.25%, 1/15/23 (144A) 214,500
180,000 Prince Mineral Holding Corp., 11.5%, 12/15/19 (144A) 185,850
70,000 Teck Resources, Ltd., 8.5%, 6/1/24 (144A) 80,150
160,000 Vale Overseas, Ltd., 6.25%, 8/10/26 184,360
375,000 Vedanta Resources Plc, 6.375%, 7/30/22 (144A) 392,325
---------------
$ 1,392,435
------------------------------------------------------------------------------------------------------
Fertilizers & Agricultural Chemicals -- 0.2%
200,000 CVR Partners LP / CVR Nitrogen Finance Corp., 9.25%,
6/15/23 (144A) $ 213,000
------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.4%
100,000(g) ARD Finance SA, 7.125% (7.875% PIK 0.0%
cash), 9/15/23 $ 106,500
320,000 Ardagh Packaging Finance Plc / Ardagh Holdings
USA, Inc., 7.25%, 5/15/24 (144A) 351,600
EUR 150,000 Horizon Holdings I SAS, 7.25%, 8/1/23 (144A) 186,109
---------------
$ 644,209
------------------------------------------------------------------------------------------------------
Paper Packaging -- 1.4%
390,000 Eldorado International Finance GmbH, 8.625%,
6/16/21 (144A) $ 398,775
EUR 1,365,000 SIG Combibloc Holdings SCA, 7.75%, 2/15/23 (144A) 1,677,687
---------------
$ 2,076,462
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 35
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.4%
410,000 A Schulman, Inc., 6.875%, 6/1/23 $ 432,038
150,000 Koppers, Inc., 6.0%, 2/15/25 (144A) 160,875
---------------
$ 592,913
------------------------------------------------------------------------------------------------------
Steel -- 0.9%
600,000 Big River Steel LLC / BRS Finance Corp., 7.25%,
9/1/25 (144A) $ 643,500
215,000 SunCoke Energy Partners LP / SunCoke Energy
Partners Finance Corp., 7.5%, 6/15/25 (144A) 225,212
400,000 Warrior Met Coal, Inc., 8.0%, 11/1/24 (144A) 409,820
---------------
$ 1,278,532
---------------
Total Materials $ 10,033,293
------------------------------------------------------------------------------------------------------
MEDIA -- 1.8%
Advertising -- 0.2%
270,000 MDC Partners, Inc., 6.5%, 5/1/24 (144A) $ 275,400
------------------------------------------------------------------------------------------------------
Broadcasting -- 0.2%
315,000 CSC Holdings LLC, 5.5%, 4/15/27 (144A) $ 324,450
------------------------------------------------------------------------------------------------------
Cable & Satellite -- 0.2%
220,000 DISH DBS Corp., 7.75%, 7/1/26 $ 240,625
78,000 Intelsat Connect Finance SA, 12.5%, 4/1/22 (144A) 73,905
---------------
$ 314,530
------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.5%
600,000 Gibson Brands, Inc., 8.875%, 8/1/18 (144A) $ 495,000
225,000 Regal Entertainment Group, 5.75%, 2/1/25 229,500
---------------
$ 724,500
------------------------------------------------------------------------------------------------------
Publishing -- 0.7%
855,000 Gannett Co., Inc., 6.375%, 10/15/23 $ 907,369
---------------
Total Media $ 2,546,249
------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 1.9%
Pharmaceuticals -- 1.9%
650,000 Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc.,
6.0%, 7/15/23 (144A) $ 526,500
240,000 Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc.,
6.0%, 2/1/25 (144A) 190,800
225,000 Horizon Pharma, Inc., 6.625%, 5/1/23 221,625
70,000 Horizon Pharma, Inc. / Horizon Pharma USA, Inc.,
8.75%, 11/1/24 (144A) 73,325
EUR 450,000 VRX Escrow Corp., 4.5%, 5/15/23 445,303
EUR 345,000 VRX Escrow Corp., 4.5%, 5/15/23 (144A) 341,399
494,000 VRX Escrow Corp., 5.875%, 5/15/23 (144A) 417,430
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Pharmaceuticals -- (continued)
430,000 VRX Escrow Corp., 7.0%, 3/15/24 (144A) $ 465,475
125,000 West Street Merger Sub, Inc., 6.375%, 9/1/25 (144A) 126,719
---------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 2,808,576
------------------------------------------------------------------------------------------------------
REAL ESTATE -- 1.3%
Specialized REITs -- 1.3%
428,536(g) AAF Holdings LLC / AAF Finance Co., 12.0% (12.75%
PIK 12.0% cash), 7/1/19 (144A) $ 449,963
1,520,000 Uniti Group, Inc. / CSL Capital LLC, 8.25%, 10/15/23 1,463,000
---------------
Total Real Estate $ 1,912,963
------------------------------------------------------------------------------------------------------
RETAILING -- 1.3%
Department Stores -- 1.3%
655,000 Grupo Kaltex SA de CV, 8.875%, 4/11/22 (144A) $ 614,881
350,000 Neiman Marcus Group, Ltd., LLC, 8.0%, 10/15/21 (144A) 206,500
450,000 PetSmart, Inc., 5.875%, 6/1/25 (144A) 392,625
300,000 PetSmart, Inc., 7.125%, 3/15/23 (144A) 228,750
660,000 PetSmart, Inc., 8.875%, 6/1/25 (144A) 519,750
---------------
Total Retailing $ 1,962,506
------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.3%
Semiconductors -- 0.3%
200,000 Micron Technology, Inc., 5.5%, 2/1/25 $ 212,500
150,000 Micron Technology, Inc., 5.625%, 1/15/26 (144A) 159,375
---------------
Total Semiconductors & Semiconductor Equipment $ 371,875
------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.6%
IT Consulting & Other Services -- 0.6%
130,000 Dell International LLC / EMC Corp., 7.125%,
6/15/24 (144A) $ 143,488
635,000 Rackspace Hosting, Inc., 8.625%, 11/15/24 (144A) 668,734
---------------
Total Software & Services $ 812,222
------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.7%
Communications Equipment -- 0.2%
280,000 CommScope Technologies LLC, 6.0%, 6/15/25 (144A) $ 295,750
------------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.1%
89,000 Zebra Technologies Corp., 7.25%, 10/15/22 $ 94,006
------------------------------------------------------------------------------------------------------
Technology Hardware, Storage & Peripherals -- 0.4%
560,000 Diebold Nixdorf, Inc., 8.5%, 4/15/24 $ 588,700
---------------
Total Technology Hardware & Equipment $ 978,456
------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 4.3%
Integrated Telecommunication Services -- 2.1%
325,000 CB Escrow Corp., 8.0%, 10/15/25 (144A) $ 335,562
300,000 Cincinnati Bell, Inc., 7.0%, 7/15/24 (144A) 299,250
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 37
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- (continued)
1,165,000 Frontier Communications Corp., 8.75%, 4/15/22 $ 959,669
290,000 Frontier Communications Corp., 11.0%, 9/15/25 246,138
750,000 GCI, Inc., 6.875%, 4/15/25 811,875
600,000 Windstream Corp., 7.5%, 6/1/22 447,000
---------------
$ 3,099,494
------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.2%
250,000 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 269,405
300,000 Altice SA, 7.75%, 5/15/22 (144A) 317,625
225,000 Digicel Group, Ltd., 8.25%, 9/30/20 (144A) 222,469
750,000 Digicel, Ltd., 6.0%, 4/15/21 (144A) 737,745
200,000 Mobile Telesystems OJSC via MTS International
Funding, Ltd., 5.0%, 5/30/23 (144A) 207,500
340,000 Sprint Corp., 7.125%, 6/15/24 367,519
485,000 Sprint Corp., 7.25%, 9/15/21 528,650
250,000 Unison Ground Lease Funding LLC, 5.78%,
3/15/20 (144A) 248,332
RUB 14,100,000 VimpelCom Holdings BV, 9.0%, 2/13/18 (144A) 241,753
---------------
$ 3,140,998
---------------
Total Telecommunication Services $ 6,240,492
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.2%
Airlines -- 0.3%
155,000 Intrepid Aviation Group Holdings LLC / Intrepid
Finance Co., 6.875%, 2/15/19 (144A) $ 153,062
300,000 Latam Finance, Ltd., 6.875%, 4/11/24 (144A) 317,250
---------------
$ 470,312
------------------------------------------------------------------------------------------------------
Airport Services -- 0.1%
200,000 Aeropuertos Dominicanos Siglo XXI SA, 6.75%,
3/30/29 (144A) $ 217,000
------------------------------------------------------------------------------------------------------
Highways & Railtracks -- 0.4%
MXN 4,500,000 Red de Carreteras de Occidente SAPIB de CV, 9.0%,
6/10/28 (144A) $ 229,368
260,000 Rumo Luxembourg S.a.r.l., 7.375%, 2/9/24 (144A) 283,270
---------------
$ 512,638
------------------------------------------------------------------------------------------------------
Marine -- 0.4%
300,000(f) Far East Capital, Ltd., SA, 8.0%, 5/2/18 $ 235,200
375,000 Navios South American Logistics, Inc. / Navios
Logistics Finance US, Inc., 7.25%, 5/1/22 (144A) 367,500
---------------
$ 602,700
---------------
Total Transportation $ 1,802,650
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
UTILITIES -- 5.1%
Electric Utilities -- 1.0%
575,000 Centrais Eletricas Brasileiras SA, 5.75%, 10/27/21 $ 609,132
460,000(a) Enel S.p.A., 8.75% (5 Year USD Swap Rate + 588 bps),
9/24/73 (144A) 568,100
225,000 Stoneway Capital Corp., 10.0%, 3/1/27 (144A) 237,375
---------------
$ 1,414,607
------------------------------------------------------------------------------------------------------
Gas Utilities -- 1.0%
665,000 Ferrellgas LP / Ferrellgas Finance Corp., 6.75%, 6/15/23 $ 618,450
400,000 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp.,
8.625%, 6/15/20 357,000
492,450 Transportadora de Gas del Sur SA, 9.625%,
5/14/20 (144A) 533,771
---------------
$ 1,509,221
------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 3.1%
224,000 Calpine Corp., 5.75%, 1/15/25 $ 212,800
633,000 Dynegy, Inc., 8.0%, 1/15/25 (144A) 691,552
338,000 Dynegy, Inc., 8.125%, 1/30/26 (144A) 375,180
570,000 NRG Energy, Inc., 6.625%, 1/15/27 607,050
320,000 NRG Energy, Inc., 7.25%, 5/15/26 346,800
232,009 NSG Holdings LLC / NSG Holdings, Inc., 7.75%,
12/15/25 (144A) 252,019
1,065,000 TerraForm Global Operating LLC, 9.75%, 8/15/22 (144A) 1,179,488
125,000(b) TerraForm Power Operating LLC, 6.375%, 2/1/23 (144A) 130,938
585,000(b) TerraForm Power Operating LLC, 6.625%, 6/15/25 (144A) 634,725
---------------
$ 4,430,552
---------------
Total Utilities $ 7,354,380
------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $127,516,944) $ 132,975,307
------------------------------------------------------------------------------------------------------
CONVERTIBLE BOND -- 1.3% of Net Assets
MATERIALS -- 1.3%
Specialty Chemicals -- 1.3%
1,900,000(l) Hercules LLC, 6.5%, 6/30/29 $ 1,919,000
---------------
Total Materials $ 1,919,000
------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BOND
(Cost $1,247,121) $ 1,919,000
------------------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS --
2.6% of Net Assets
Argentina -- 2.0%
211,840 Province of Salta Argentina, 9.5%, 3/16/22 (144A) $ 226,669
360,000 Provincia de Buenos Aires, 9.125%, 3/16/24 (144A) 419,400
230,000 Provincia de Buenos Aires, 9.95%, 6/9/21 (144A) 267,409
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 39
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Argentina -- (continued)
670,000 Provincia de Entre Rios Argentina, 8.75%, 2/8/25 (144A) $ 725,275
1,135,000 Provincia del Chubut Argentina, 7.75%, 7/26/26 (144A) 1,197,743
---------------
$ 2,836,496
------------------------------------------------------------------------------------------------------
Bahrain -- 0.2%
300,000 Bahrain Government International Bond, 7.0%,
10/12/28 (144A) $ 308,268
------------------------------------------------------------------------------------------------------
Kenya -- 0.4%
500,000 Kenya Government International Bond, 6.875%,
6/24/24 (144A) $ 519,600
------------------------------------------------------------------------------------------------------
Mexico -- 0.0%+
MXN 970,000 Mexican Bonos, 7.75%, 11/13/42 $ 51,721
MXN 350,245 Mexican Udibonos, 3.5%, 12/14/17 18,380
---------------
$ 70,101
------------------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $3,399,124) $ 3,734,465
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 0.3% of Net Assets
CAPITAL GOODS -- 0.0%+
Industrial Machinery -- 0.0%+
10,289(d)(m) Liberty Tire Recycling LLC $ 103
---------------
Total Capital Goods $ 103
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.0%+
Homebuilding -- 0.0%+
MXN 89,094(m) Desarrolladora Homex SAB de CV $ 3,676
---------------
Total Consumer Durables & Apparel $ 3,676
------------------------------------------------------------------------------------------------------
ENERGY -- 0.0%+
Oil & Gas Exploration & Production -- 0.0%+
273(m) Midstates Petroleum Co., Inc. $ 4,163
11,059(m) PetroQuest Energy, Inc. 19,906
---------------
Total Energy $ 24,069
------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 0.0%+
Health Care Technology -- 0.0%+
69,875(d)(m) Medical Card System, Inc. $ 699
---------------
Total Health Care Equipment & Services $ 699
------------------------------------------------------------------------------------------------------
RETAILING -- 0.0%+
Computer & Electronics Retail -- 0.0%+
42,088(d)(m) Targus Cayman SubCo., Ltd. $ 82,913
---------------
Total Retailing $ 82,913
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.3%
Air Freight & Logistics -- 0.3%
943(m) CEVA Holdings LLC $ 382,041
---------------
Total Transportation $ 382,041
------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $1,137,301) $ 493,501
------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK --
0.7% of Net Assets
BANKS -- 0.7%
Diversified Banks -- 0.7%
770(h) Bank of America Corp., 7.25% $ 998,659
---------------
Total Banks $ 998,659
------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $739,352) $ 998,659
------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.3% of Net Assets
BANKS -- 0.7%
Diversified Banks -- 0.7%
40,675(c) GMAC Capital Trust I, 7.1% (3 Month USD LIBOR +
579 bps), 2/15/40 $ 1,068,126
---------------
Total Banks $ 1,068,126
------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.4%
Specialized Finance -- 0.4%
500(a)(h) Compeer Financial ACA, 6.75% (3 Month USD
LIBOR + 458 bps) (144A) $ 534,562
---------------
Total Diversified Financials $ 534,562
------------------------------------------------------------------------------------------------------
MATERIALS -- 0.2%
Diversified Chemicals -- 0.2%
455,230(m) Pinnacle Agriculture, 0.0%, 12/30/99 $ 295,900
---------------
Total Materials $ 295,900
------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $1,810,580) $ 1,898,588
------------------------------------------------------------------------------------------------------
RIGHT / WARRANT -- 0.0%+ of Net Assets
ENERGY -- 0.0%+
Oil & Gas Exploration & Production -- 0.0%+
1,934(m)(n) Midstates Petroleum Co., Inc., Expires 4/21/20 $ --
---------------
Total Energy $ --
------------------------------------------------------------------------------------------------------
TOTAL RIGHT / WARRANT
(Cost $--) $ --
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 41
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS --
5.4% of Net Assets
REPURCHASE AGREEMENTS -- 1.2%
775,000 $775,000 ScotiaBank, 1.05%, dated 10/31/17, plus
accrued interest on 11/1/17 collateralized by the following:
$827 Freddie Mac Giant, 3.0%, 8/1/29
$789,696 Government National Mortgage Association,
3.0-3.5%, 7/20/46-9/20/47. $ 775,000
475,000 $475,000 TD Securities USA LLC, 1.04%, dated
10/31/17, plus accrued interest on 11/1/17
collateralized by the following:
$484,557 U.S. Treasury Notes, 1.75-1.875%,
7/31/22-9/30/22. 475,000
475,000 $475,000 TD Securities USA LLC, 1.05%, dated
10/31/17, plus accrued interest on 11/1/17
collateralized by the following: $484,557 U.S.
Treasury Notes, 1.75-1.875%, 7/31/22-9/30/22. 475,000
---------------
$ 1,725,000
------------------------------------------------------------------------------------------------------
TREASURY BILLS -- 4.2%
2,515,000(i) U.S. Treasury Bills, 11/2/17 $ 2,514,936
2,625,000(i) U.S. Treasury Bills, 11/16/17 2,623,950
1,050,000(i) U.S. Treasury Bills, 11/24/17 1,049,347
---------------
$ 6,188,233
------------------------------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $7,913,261) $ 7,913,233
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Number of Counter- Strike Expiration
Contracts Description party Notional Price Date Value
------------------------------------------------------------------------------------------------------
CALL OPTIONS PURCHASED -- 0.0%+
MXN 18,332(o) Desarrolladora Bank of
Homex SAB New York
de CV Mellon
Corp. 18,332 $--(q) 10/23/22 $ --
MXN 18,332(p) Desarrolladora Bank of
Homex SAB New York
de CV Mellon
Corp. 18,332 --(q) 10/23/22 --
---------------
$ --
------------------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS PURCHASED
(Premium paid $0) $ --
------------------------------------------------------------------------------------------------------
42 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN UNAFFILIATED
ISSUERS -- 144.1%
(Cost -- $203,563,772) (r) $ 209,484,256
------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (44.1)% $ (64,156,898)
------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 145,327,358
======================================================================================================
BPS Basis Point.
LIBOR London Interbank Offered Rate.
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, 2017, the value of these securities
amounted to $88,582,456, or 61.0% of net assets.
(Cat Bond) Catastrophe or event-linked bond. At October 31, 2017, the value of
these securities amounted to $17,110,448, or 11.8% of net assets.
See Notes to Financial Statements -- Note 1F.
+ Amount rounds to less than 0.1%.
* 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 rate plus a premium.
These base lending rates are generally (i) the lending rate offered
by one or more major European banks, such as LIBOR, (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, 2017.
+ Securities that used significant unobservable inputs to determine
their value.
(a) The interest rate is subject to change periodically. The interest
rate, reference index and spread shown at October 31, 2017.
(b) 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, 2017.
(c) Floating rate note. The Coupon rate, reference index and spread,
if applicable, shown as of October 31, 2017.
(d) Security is valued using fair value methods (other than prices
supplied by independent pricing services). See Notes to Financial
Statements -- Note 1A.
(e) This term loan will settle after October 31, 2017, at which time the
interest rate will be determined.
(f) Security is in default.
(g) Payment in Kind (PIK) security which may pay interest in the form of
additional principal amount.
(h) Security is perpetual in nature and has no stated maturity date.
(i) Security issued with a zero coupon. Income is recognized through
accretion of discount.
(j) Structured reinsurance investment. At October 31, 2017, the value of
these securities amounted to $16,669,885, or 11.5% of net assets.
See Notes to Financial Statements -- Note 1A.
(k) Rate to be determined.
(l) Security is priced as a unit.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 43
Schedule of Investments | 10/31/17 (unaudited) (continued)
(m) Non-income producing security.
(n) Midstates Petroleum Co., Inc. warrants are exercisable into 1,934
shares.
(o) Option does not become effective until underlying company's
outstanding common shares reach a market capitalization of MXN
12.5 Billion.
(p) Option does not become effective until underlying company's
outstanding common shares reach a market capitalization of MXN
15.5 Billion.
(q) Strike price is 1 Mexican Peso (MXN).
(r) Distributions of investments by country of issue, as a percentage of
long-term holdings based on country of domicile, is as follows:
United States 57.8%
Bermuda 13.6
Luxembourg 4.2
Netherlands 3.5
Cayman Islands 3.1
Argentina 2.9
Canada 2.7
Ireland 2.6
Supranational 1.5
Mexico 1.4
Other (individually less than 1%) 6.7
-----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended October 31, 2017 were as follows:
--------------------------------------------------------------------------------
Purchases Sales
--------------------------------------------------------------------------------
Long-Term U.S. Government $ -- $ 5,009,832
Other Long-Term Securities $33,204,994 $42,851,472
The Trust is permitted to engage in purchase and sale transactions ("cross
trades") with certain funds and accounts for which Amundi Pioneer Asset
Management, Inc. (the "Adviser"), serves as the investment adviser, as set forth
in Rule 17a-7 under the Investment Company Act of 1940, pursuant to procedures
adopted by the Board of Trustees. Under these procedures, cross trades are
effected at current market prices. During the six months ended October 31, 2017,
the Trust engaged in purchases and sales pursuant to these procedures amounting
to $0 and $413,272, respectively resulting in a gain of $10,125.
SWAP CONTRACTS
OVER THE COUNTER (OTC) CREDIT DEFAULT SWAP CONTRACTS -- SELL PROTECTION
---------------------------------------------------------------------------------------------------------------------
Obligation Annual
Notional Reference Pay/ Fixed Expiration Premiums Unrealized Market
Amount ($)(1) Counterparty Index Receive(2) Rate Date (Received) Appreciation Value
---------------------------------------------------------------------------------------------------------------------
80,000 Goldman Sachs Chesapeake Pay 5.00% 6/20/22 $ (9,000) $ 4,823 $ (4,177)
International Energy Corp.
Bank
45,000 Goldman Sachs Chesapeake Pay 5.00% 6/20/22 (5,512) 3,163 (2,349)
International Energy Corp.
Bank
75,000 Goldman Sachs Chesapeake Pay 5.00% 6/20/22 (9,188) 5,272 (3,916)
International Energy Corp.
Bank
---------------------------------------------------------------------------------------------------------------------
TOTAL SWAP CONTRACTS $(23,700) $ 13,258 $(10,442)
=====================================================================================================================
(1) The notional amount is the maximum amount that a seller of credit
protection would be obligated to pay upon occurrence of a credit event.
(2) Pays Quarterly.
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
FORWARD FOREIGN CURRENCY CONTRACTS
-----------------------------------------------------------------------------------------------------------
In Unrealized
Currency Exchange Currency Settlement Appreciation
Purchased for Sold Deliver Counterparty Date (Depreciation)
-----------------------------------------------------------------------------------------------------------
USD 4,690,593 EUR 4,037,329 State Street Bank & Trust Co. 11/30/17 $(20,167)
EUR 454,000 USD 527,163 State Street Bank & Trust Co. 11/30/17 2,565
-----------------------------------------------------------------------------------------------------------
TOTAL FORWARD FOREIGN CURRENCY CONTRACTS $(17,602)
===========================================================================================================
Principal amounts are denominated in U.S. dollars unless otherwise noted.
ARS -- Argentine Peso
AUD -- Australian Dollar
EUR -- Euro
IDR -- Indonesian Rupiah
MXN -- Mexican Peso
RUB -- Russian Ruble
At October 31, 2017, the net unrealized appreciation on investments based on
cost for federal tax purposes of $205,801,673 was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $12,460,235
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (8,805,696)
-----------
Net unrealized appreciation $ 3,654,539
===========
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).
The following is a summary of the inputs used as of October 31, 2017, in valuing
the Trust's investments.
---------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------------------------------------------------------------------------------
Asset Backed Securities $ -- $ 806,479 $ -- $ 806,479
Collateralized Mortgage Obligations -- 545,450 -- 545,450
Commercial Mortgage-Backed
Securities -- 2,960,300 -- 2,960,300
Senior Secured Floating Rate
Loan Interests
Capital Goods
Aerospace & Defense -- 1,146,081 992,500 2,138,581
Health Care Equipment & Services
Health Care Technology -- 420,329 243,918 664,247
All Other Senior Secured Floating
Rate Loan Interests -- 52,436,446 -- 52,436,446
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 45
Schedule of Investments | 10/31/17 (unaudited) (continued)
------------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------------------------------
Corporate Bonds & Notes
Diversified Financials
Other Diversified Financial
Services $ -- $ -- $ 6,551,550 $ 6,551,550
Insurance
Reinsurance -- 16,529,113 17,251,220 33,780,333
All Other Corporate
Bonds & Notes -- 92,643,424 -- 92,643,424
Convertible Bond -- 1,919,000 -- 1,919,000
Sovereign Debt Obligations -- 3,734,465 -- 3,734,465
Common Stocks
Capital Goods
Industrial Machinery -- -- 103 103
Health Care Equipment &
Services
Health Care Technology -- -- 699 699
Retailing
Computer & Electronics Retail -- -- 82,913 82,913
Transportation
Air Freight & Logistics -- 382,041 -- 382,041
All Other Common Stocks 27,745 -- -- 27,745
Convertible Preferred Stock 998,659 -- -- 998,659
Preferred Stocks
Materials
Diversified Chemicals -- 295,900 -- 295,900
All Other Preferred Stocks 1,602,688 -- -- 1,602,688
Right/Warrant
Energy
Oil & Gas Exploration &
Production -- --* -- --*
Repurchase Agreements -- 1,725,000 -- 1,725,000
Treasury Bills -- 6,188,233 -- 6,188,233
Call Options Purchased -- --* -- --*
------------------------------------------------------------------------------------------------------------
Total Investments in Securities $ 2,629,092 $ 181,732,261 $ 25,122,903 $209,484,256
============================================================================================================
Other Financial Instruments
Unrealized depreciation
on forward foreign
currency contracts $ -- $ (17,602) $ -- $ (17,602)
Unrealized appreciation on
swap contracts -- 13,258 -- 13,258
------------------------------------------------------------------------------------------------------------
Total Other
Financial Instruments $ -- $ (4,344) $ -- $ (4,344)
============================================================================================================
* Includes securities that are valued $0.
The accompanying notes are an integral part of these financial statements.
46 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
The following is a reconciliation of assets valued using significant
unobservable inputs (Level 3):
-----------------------------------------------------------------------------------------------------------------------------------
Change in Transfers
Balance Realized unrealized Accrued Transfers Transfers in and out Balance
as of gain appreciation discounts/ in to out of of Level 3 as of
4/30/17 (loss) (depreciation) Purchases Sales premiums Level 3* Level 3* categories 10/31/17
-----------------------------------------------------------------------------------------------------------------------------------
Senior Secured
Floating Rate
Loan Interests
Capital Goods
Aerospace &
Defense $ 997,500 $ 44 $ (1,053) $ -- $ (5,000) $ 1,009 $ -- $ -- $ -- $ 992,500
Health Care
Equipment &
Services
Health Care
Technology 243,918 -- (7,339) -- -- 7,339 -- -- -- 243,918
Corporate Bonds
& Notes
Diversified
Financials
Other
Diversified
Financial
Services -- -- 673,727 -- -- 12,265 -- -- 5,865,558 6,551,550
Insurance
Property
& Casualty
Insurance 5,865,558 -- -- -- -- -- -- -- (5,865,558) --
Reinsurance 17,775,556 156,827 (1,597,256) 4,871,259 (3,966,928) 11,762 -- -- -- 17,251,220
Common Stocks
Capital Goods
Industrial
Machinery 103 -- -- -- -- -- -- -- -- 103
Health Care
Equipment &
Services
Health Care
Technology 699 -- -- -- -- -- -- -- -- 699
Retailing
Computer &
Electronics
Retail 40,825 -- 42,088 -- -- -- -- -- -- 82,913
-----------------------------------------------------------------------------------------------------------------------------------
Total $24,924,159 $ 156,871 $ (889,833) $4,871,259 $(3,971,928) $ 32,375 $ -- $ -- $ -- $25,122,903
===================================================================================================================================
* Transfers are calculated on the beginning of period value. For the six
months ended October 31, 2017, there were no transfers between Levels 2 and
3. For the six months ended October 31, 2017, securities with aggregate
market value of $535,437 transferred from Level 2 to Level 1 as there were
observable inputs available to determine their value.
Net change in unrealized depreciation of Level 3 investments still held and
considered Level 3 at October 31, 2017: $722,677.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 47
Schedule of Investments | 10/31/17 (unaudited) (continued)
The following table presents additional information about valuation techniques
and inputs used for investments categorized as Level 3 at October 31, 2017.
These amounts exclude valuations provided by a broker.
-------------------------------------------------------------------------------------------
Fair Value Valuation Unobservable Value/
Asset Type 10/31/17 Technique Input Range
-------------------------------------------------------------------------------------------
Senior Secured
Floating Rate EBITDA Multiples(1) 4-7x
Loan Interests $1,236,418 Market Comparables Yield Comparables 6.54%-9.03%
-------------------------------------------------------------------------------------------
Corporate Bonds
& Notes $6,551,550 Market Comparables Yield Premiums(2) 1.05%
-------------------------------------------------------------------------------------------
Common Stocks $ 83,715 Market Comparables EBITDA Multiples(1) 4x-6x
-------------------------------------------------------------------------------------------
(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.
48 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Statement of Assets and Liabilities | 10/31/17 (unaudited)
ASSETS:
Investments in unaffiliated issuers, at value (cost $203,563,772) $209,484,256
Foreign currencies, at value (cost $6,734) 6,537
Receivables --
Investment securities sold 1,142,044
Interest 2,026,203
Other assets 2,135
-----------------------------------------------------------------------------------
Total assets $212,661,175
===================================================================================
LIABILITIES:
Payables --
Credit agreement $ 64,000,000
Investment securities purchased 2,853,410
Trustees' fees 588
Due to custodian 282,088
Swap contracts, at value (net premiums received $(23,700)) 10,442
Net unrealized depreciation on forward foreign currency contracts 17,602
Due to affiliates 33,779
Accrued expenses and other liabilities 135,908
-----------------------------------------------------------------------------------
Total liabilities $ 67,333,817
===================================================================================
NET ASSETS:
Paid-in capital $193,998,881
Distributions in excess of net investment income (1,886,916)
Accumulated net realized loss on investments (52,699,131)
Net unrealized appreciation on investments 5,914,524
-----------------------------------------------------------------------------------
Net assets $145,327,358
===================================================================================
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $145,327,358 /8,332,790 shares $ 17.44
===================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 49
Statement of Operations (unaudited)
For the Six Months Ended 10/31/17
INVESTMENT INCOME:
Interest from unaffiliated issuers $ 6,809,438
Dividends from unaffiliated issuers 80,047
--------------------------------------------------------------------------------------
Total investment income $ 6,889,485
======================================================================================
EXPENSES:
Management fees $ 895,774
Administrative expense 49,258
Transfer agent fees 7,628
Shareholder communications expense 3,175
Custodian fees 25,599
Professional fees 34,358
Printing expense 8,829
Trustees' fees 3,643
Pricing fees 18,172
Interest expense 708,392
Miscellaneous 40,330
--------------------------------------------------------------------------------------
Total expenses $ 1,795,158
--------------------------------------------------------------------------------------
Net investment income $ 5,094,327
======================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments from unaffiliated issuers $ 692,416
Swap contracts 183
Forward foreign currency contracts (281,189)
Other assets and liabilities denominated
in foreign currencies 20,845 $ 432,255
--------------------------------------------------------------------------------------
Change in net unrealized appreciation on:
Investments from unaffiliated issuers $ (1,728,281)
Swap contracts 13,258
Forward foreign currency contracts (39,157)
Other assets and liabilities denominated
in foreign currencies (4,787) $ (1,758,967)
--------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $ (1,326,712)
--------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 3,767,615
======================================================================================
The accompanying notes are an integral part of these financial statements.
50 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Statements of Changes in Net Assets
------------------------------------------------------------------------------------
Six Months
Ended Year
10/31/17 Ended
(unaudited) 4/30/17*
------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income (loss) $ 5,094,327 $ 10,778,243
Net realized gain (loss) on investments 432,255 (3,030,833)
Change in net unrealized appreciation (depreciation)
on investments (1,758,967) 13,016,437
------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $ 3,767,615 $ 20,763,847
------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income ($0.69 and $1.44 per
share, respectively) $ (5,749,625) $ (12,024,216)
------------------------------------------------------------------------------------
Total distributions to shareowners $ (5,749,625) $ (12,024,216)
------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (1,982,010) $ 8,739,631
NET ASSETS:
Beginning of period $147,309,368 $ 138,569,737
------------------------------------------------------------------------------------
End of period $145,327,358 $ 147,309,368
------------------------------------------------------------------------------------
Distributions in excess of net investment income $ (1,886,916) $ (1,231,618)
====================================================================================
* The Trust was audited by an independent registered public accounting firm
other than Ernst & Young LLP.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 51
Statement of Cash Flows (unaudited)
For the Six Months Ended 10/31/17
Cash Flows From Operating Activities:
Net increase in net assets resulting from operations $ 3,767,615
------------------------------------------------------------------------------------------------
Adjustments to reconcile net decrease in net assets resulting from operations to
net cash and foreign currencies from operating activities:
Purchases of investment securities $ (47,473,486)
Proceeds from disposition and maturity of investment securities 49,242,384
Net purchases of temporary cash investments (7,413,367)
Net accretion and amortization of discount/premium on investment securities (115,071)
Change in unrealized depreciation on investments 1,728,281
Change in unrealized depreciation on (central cleared) credit defaulted
swap contracts 10,442
Change in unrealized depreciation on (central cleared) interest rate
swap contracts 40,299
Net realized gain on investments (692,416)
Decrease in interest receivable 115,700
Decrease in dividends receivable 13,956
Increase in other assets (2,135)
Decrease in prepaid expenses 52
Decrease in due to affiliates (107,779)
Decrease in trustees' fees payable (30)
Decrease in administration fees payable (83,767)
Increase in accrued expenses payable 89,282
------------------------------------------------------------------------------------------------
Net cash and foreign currencies from operating activities $ (880,040)
------------------------------------------------------------------------------------------------
Cash Flows Used in Financing Activities:
Decrease in due to custodian $ (376,793)
Increase on borrowings 7,000,000
Distributions to shareowners (5,749,625)
------------------------------------------------------------------------------------------------
Net cash and foreign currencies used in financing activities $ 873,582
------------------------------------------------------------------------------------------------
Effect of Foreign Exchange Fluctuations on Cash:
Effect of foreign exchange fluctuations on cash $ (1,142)
------------------------------------------------------------------------------------------------
Cash and Foreign Currencies:
Beginning of the period $ 14,137
------------------------------------------------------------------------------------------------
End of the period $ 6,537
================================================================================================
Cash Flow Information:
Cash paid for interest $ 708,392
------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
52 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Financial Highlights
----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/17 Ended Ended Ended Ended Ended
(unaudited) 4/30/17* 4/30/16* 4/30/15* 4/30/14* 4/30/13
----------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 17.68 $ 16.63 $ 18.39 $ 20.03 $ 20.70 $ 19.51
----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 0.61 $ 1.29 $ 1.55 $ 1.82 $ 1.98 $ 2.24
Net realized and unrealized gain (loss) on
investments (0.16) 1.20 (1.81) (1.63) (0.36) 0.99
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 0.45 $ 2.49 $ (0.26) $ 0.19 $ 1.62 $ 3.23
----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareowners from:
Net investment income and previously undistributed
net investment income $ (0.69) $ (1.44)** $ (1.50) $ (1.83)** $ (2.29)** $ (2.04)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.24) $ 1.05 $ (1.76) $ (1.64) $ (0.67) $ 1.19
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.44 $ 17.68 $ 16.63 $ 18.39 $ 20.03 $ 20.70
----------------------------------------------------------------------------------------------------------------------------------
Market value, end of period $ 16.29 $ 16.70 $ 15.60 $ 17.42 $ 20.85 $ 21.82
==================================================================================================================================
Total return at net asset value (b) 2.84%(c) 16.20%(c) (1.01)% 1.21% 8.47% 17.38%
Total return at market value (b) 1.69%(c) 17.01%(c) (1.26)% (7.90)% 7.12% 19.98%
Ratios to average net assets of shareowners:
Total expenses plus interest expense (d) 2.43%(e) 2.12%(e) 1.99% 1.85% 1.86% 1.97%
Net investment income available to shareowners 6.89%(e) 7.52%(e) 9.11% 9.52% 9.88% 11.26%
Portfolio turnover 16% 58% 36% 48% 38% 34%
Net assets, end of period (in thousands) $145,327 $147,309 $138,570 $153,276 $166,611 $171,646
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 53
Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/17 Ended Ended Ended Ended Ended
(unaudited) 4/30/17* 4/30/16* 4/30/15* 4/30/14* 4/30/13
----------------------------------------------------------------------------------------------------------------------------------
Total amount of debt outstanding (in thousands) $ 64,000 $ 57,000 $ 57,000 $ 64,000 $ 67,000 $ 69,000
Asset coverage per indebtedness (in thousands) $ 3,271 $ 3,584 $ 3,431 $ 3,395 $ 3,487 $ 3,488
==================================================================================================================================
* The Trust was audited by an independent registered public accounting firm
other than Ernst & Young LLP.
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Total investment return is calculated assuming a purchase of common shares
at the current net asset value or market value on the first day and a sale
at the current net asset value or 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.
(c) Not annualized.
(d) Includes interest expense of 0.96% (annualized), 0.62%, 0.50%, 0.43%, 0.45%
and 0.48%, respectively.
(e) Annualized.
The accompanying notes are an integral part of these financial statements.
54 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
Notes to Financial Statements | 10/31/17 (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.
On July 3, 2017, Amundi acquired Pioneer Investments, a group of asset
management companies located throughout the world. Amundi, one of the world's
largest asset managers, is headquartered in Paris, France. As a result of the
transaction, Pioneer Investment Management, Inc., the Trust's investment
adviser, became an indirect wholly owned subsidiary of Amundi and Amundi's
wholly owned subsidiary, Amundi USA, Inc. Prior to July 3, 2017, Pioneer
Investments was owned by Pioneer Global Asset Management S.p.A., a wholly owned
subsidiary of UniCredit S.p.A.
In connection with the transaction, the names of the Trust's investment adviser
and principal underwriter changed. Effective July 3, 2017, the name of Pioneer
Investment Management, Inc. changed to Amundi Pioneer Asset Management, Inc.
(the Adviser) and the name of Pioneer Funds Distributor, Inc. changed to Amundi
Pioneer Distributor, Inc. (the Distributor).
In October 2016, the Securities and Exchange Commission (SEC) released its Final
Rule on Investment Company Reporting Modernization. In addition to introducing
two new regulatory reporting forms (Form N-PORT and Form N-CEN), the Final Rule
amends Regulation S-X, which impacts financial statement presentation,
particularly related to the presentation of derivative investments. The Trust's
financial statements were prepared in compliance with the amendments to
Regulation S-X.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles (U.S. GAAP) that require the management
of the Trust to 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.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 55
The Trust is an investment company and follows investment company accounting and
reporting guidance under U.S. GAAP. The following is a summary of significant
accounting policies followed by the Trust in the preparation of its financial
statements:
A. Security Valuation
The net asset value of the Trust is computed once daily, on each day the
New York Stock Exchange (NYSE) is open, as of the close of regular trading
on the NYSE.
Fixed income securities are valued by using 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, or may use a pricing matrix or other fair value
methods or techniques to provide an estimated value of the security or
instrument. A pricing matrix is a means of valuing a debt security on the
basis of current market prices for other debt securities, historical
trading patterns in the market for fixed income securities and/or other
factors. Non-U.S. debt securities that are listed on an exchange will be
valued at the bid price obtained from an independent third party pricing
service. When independent third party pricing services are unable to supply
prices, or when prices or market quotations are considered to be
unreliable, the value of that security may be determined using quotations
from one ore more broker-dealers.
Loan interests 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 third party 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 or catastrophe bonds are valued at the bid price
obtained from an independent third party pricing service. Other insurance
linked securities (including sidecars, collateralized reinsurance and
industry loss warranties) 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.
Equity securities that have traded on an exchange are valued by using the
last sale price on the principal exchange where they are traded. Equity
securities that have not traded on the date of valuation, or securities for
which sale
56 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
prices are not available, generally are valued using the mean between the
last bid and asked prices or, if both last bid and asked prices are not
available, at the last quoted bid price. Last sale and bid and asked prices
are provided by independent third party pricing services. In the case of
equity securities not traded on an exchange, prices are typically
determined by independent third party pricing services using a variety of
techniques and methods.
The value of foreign securities is translated in U.S. dollars based on
foreign currency exchange rate quotations supplied by a third party pricing
source. Trading in non-U.S. equity securities is substantially completed
each day at various times prior to the close of the NYSE. The values of
such securities used in computing the net asset value of the Trust's shares
are determined as of such times. The Trust may use a fair value model
developed by an independent pricing service to value non-U.S. equity
securities.
Option contracts are generally valued at the mean between the last bid and
ask prices on the principal exchange where they are traded.
Over-the-counter ("OTC") options and options on swaps ("swaptions") are
valued using 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, or may
use a pricing matrix or other fair value methods or techniques to provide
an estimated value of the security or instrument.
Swap contracts, including interest rate swaps, caps and floors (other than
centrally cleared swap contracts) are valued at the dealer quotations
obtained from reputable International Swap Dealers Association members.
Centrally cleared swaps are valued at the daily settlement price provided
by the central clearing counterparty.
Forward foreign currency contracts are valued daily using the foreign
exchange rate or, for longer term forward contract positions, the spot
currency rate, in each case provided by a third party pricing service.
Contracts whose forward settlement date falls between two quoted days are
valued by interpolation.
Shares of open-end registered investment companies (including money market
mutual funds) are valued at such funds' net asset value. Repurchase
agreements are valued at par. Cash may include overnight time deposits at
approved financial institutions.
Securities or loan interests for which independent pricing services or
broker-dealers 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 the Adviser, pursuant to procedures adopted by the Trust's
Board of Trustees. The Adviser's fair valuation team uses fair value
methods approved by the
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 57
Valuation Committee of the Board of Trustees. The Adviser's fair valuation
team is responsible for monitoring developments that may impact fair valued
securities and for discussing and assessing fair values 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, 2017, six securities were valued using fair value methods
(in addition to securities valued using prices supplied by independent
pricing services, broker-dealers or using a third party insurance pricing
model) representing 5.4% of net assets. The value of these fair valued
securities are $7,871,683.
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
data in the exercise of reasonable diligence. 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
and net of income accrued on defaulted securities.
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. Interest and dividend income payable by delivery of
additional shares is reclassified as PIK (payment-in-kind) income upon
receipt and is included in interest and dividend income, respectively.
Security transactions are recorded as of trade date. Gains and losses on
sales of investments are calculated on the identified cost method for both
financial reporting and federal income tax purposes.
58 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
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
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.
During six months ended October 31, 2017, 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 six months
ended October 31, 2017 was $(6,076,487).
Forward foreign currency contracts outstanding at October 31, 2017 are
listed in the Schedule of Investments.
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 April 30, 2017, the Trust did not accrue any interest or penalties with
respect to uncertain tax positions, which if applicable, would be recorded
as an
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 59
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. GAAP. 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 shareowners 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, 2017 was as follows:
---------------------------------------------------------------------------
2017
---------------------------------------------------------------------------
Distributions paid from:
Ordinary income $12,024,216
---------------------------------------------------------------------------
Total $12,024,216
===========================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2017:
---------------------------------------------------------------------------
2017
---------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 1,049,770
Capital loss carryforward (50,472,894)
Late year loss deferrals (2,656,724)
Other book/tax temporary differences (2,283,156)
Unrealized appreciation 7,673,491
---------------------------------------------------------------------------
Total $(46,689,513)
===========================================================================
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.
F. Insurance Linked Securities (ILS)
The Trust invests in event-linked bonds. 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
60 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
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 occurs, as defined within the terms of an
event-linked bond, the Trust may lose a portion or all of its accrued
interest and/or principal invested in such event-linked bond. The Trust 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 Trust to other risks, including but not limited to issuer (credit)
default, adverse regulatory or jurisdictional interpretations and adverse
tax consequences.
The Trust'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). A
traditional ILW takes the form of a bilateral reinsurance contract, but
there are also products that take the form of derivatives, collateralized
structures, or exchange traded instruments.
Structured reinsurance investments, including quota share instruments,
collateralized reinsurance investments and ILWs, generally are subject to
the same risks as event-linked bonds. In addition, where the instruments
are based on the performance of underlying reinsurance contracts, the Trust
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 the
Adviser to fully evaluate the underlying risk profile of the Trust's
structured reinsurance investments and therefore the Trust's assets are
placed at greater risk of loss than if the Adviser had more complete
information. Structured reinsurance instruments generally will be
considered illiquid securities by the Trust. These securities may be
difficult to purchase, sell or unwind. Illiquid securities also may be
difficult to value. If the Trust is forced to sell an illiquid asset, the
Trust may be forced to sell at a loss.
G. Purchased Options
The Trust may purchase put and call options to seek increase total return.
Purchased call and put options entitle the Trust to buy and sell a
specified number of shares or units of a particular security, currency or
index at a specified price at a specific date or within a specific period
of time. Upon the purchase of a call or put option, the premium paid by the
Trust is included in the Statement of Assets and Liabilities as an
investment. All premiums are marked-to-market daily, and any unrealized
gains or losses are recorded in
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 61
the Trust's financial statements. As the purchaser of an index option, the
Trust has the right to receive a cash payment equal to any depreciation in
the value of the index below the strike price of the option (in the case of
a put) or equal to any appreciation in the value of the index over the
strike price of the option (in the case of a call) as of the valuation date
of the option. Premiums paid for purchased calls and put options which have
expired are treated as realized losses on investments in the Statement of
Operations. Upon the exercise or closing of a purchased put option, the
premium is offset against the proceeds on the sale of the underlying
security or financial instrument in order to determine the realized gain or
loss on investments. Upon the exercise or closing of a purchased call
option, the premium is added to the cost of the security or financial
instrument. The risk associated with purchasing options is limited to the
premium originally paid. The average value of purchased options open during
the six months ended October 31, 2017 was $0. Purchased option contracts
outstanding at period end are listed within the Schedule of Investments.
H. Risks
At times, the Trust's investments may represent industries or industry
sectors that are interrelated 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 value of securities held by the Trust may go up or down, sometimes
rapidly or unpredictably, due to general market conditions, such as real or
perceived adverse economic, political or regulatory conditions, inflation,
changes in interest rates, lack of liquidity in the bond markets or adverse
investor sentiment. In the past several years, financial markets have
experienced increased volatility, depressed valuations, decreased liquidity
and heightened uncertainty. These conditions may continue, recur, worsen or
spread.
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 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. Certain securities in which the Trust invests, including
floating rate loans, once sold, may not settle for an
62 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
extended period (for example, several weeks or even longer). The Trust will
not receive its sale proceeds until that time, which may constrain the
Trust's ability to meet its obligations. 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. The Trust may invest
up to 50% of its total assets in illiquid securities. Illiquid securities
are securities that cannot be disposed of by the Trust within seven days in
the ordinary course of business at approximately the amounts which the
Trust values the securities.
Interest rates in the U.S. recently have been historically low, so the
Trust faces a heightened risk that interest rates may rise. A general rise
in interest rates may cause investors to move out of fixed income
securities on a large scale, which could adversely affect the price and
liquidity of fixed income securities.
I. 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 Adviser 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. 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. Open repurchase agreements as of October 31, 2017 are disclosed
in the Trust's Schedule of Investments.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 63
J. Automatic Dividend Reinvestment Plan
All 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 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 shares of the
Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on shares payable in cash,
participants in the Plan will receive the equivalent in shares acquired by
the Plan Agent either (i) through receipt of additional unissued but
authorized shares from the Trust or (ii) by purchase of outstanding shares
on the New York Stock Exchange or elsewhere. If, on the payment date for
any dividend, the net asset value per 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
shares. The number of newly issued shares to be credited to each account
will be determined by dividing the dollar amount of the dividend by the net
asset value per 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 share is greater than the market value (market
discount), the Plan Agent will invest the dividend amount in shares
acquired in open-market purchases. There are no brokerage charges with
respect to newly issued shares. However, 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.
64 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
K. Credit Default Swap Contracts
A credit default swap is a contract between a buyer of protection and a
seller of protection against a pre-defined credit event on an underlying
reference obligation, which may be a single security or a basket or index
of securities. The Trust may buy or sell credit default swap contracts to
seek to increase the Trust's income, or to attempt to hedge the risk of
default on portfolio securities. A credit default swap index is used to
hedge risk or take a position on a basket of credit entities or indices. As
a seller of protection, the Trust would be required to pay the notional (or
other agreed-upon) value of the referenced debt obligation to the
counterparty in the event of a default by a U.S. or foreign corporate
issuer of a debt obligation, which would likely result in a loss to the
Trust. In return, the Trust would receive from the counterparty a periodic
stream of payments during the term of the contract provided that no event
of default occurred. The maximum exposure of loss to the seller would be
the notional value of the credit default swaps outstanding. If no default
occurs, the Trust would keep the stream of payments and would have no
payment obligation. The Trust may also buy credit default swap contracts in
order to hedge against the risk of default of debt securities, in which
case the Trust would function as the counterparty referenced above.
When the Trust enters into a credit default swap contract, the protection
buyer makes an upfront or periodic payment to the protection seller in
exchange for the right to receive a contingent payment. An upfront payment
made by the Trust, as the protection buyer, is recorded as a component of
unrealized appreciation/depreciation on open swap contacts in the Statement
of Assets and Liabilities. Periodic payments received or paid by the Trust
are recorded as realized gains or losses in the Statement of Operations.
Credit default swap contracts are marked-to-market daily using valuations
supplied by independent sources and the change in value, if any, is
recorded within the "Swap contracts, at value" line item in the Statement
of Assets and Liabilities. Payments received or made as a result of a
credit event or upon termination of the contract are recognized, net of the
appropriate amount of the upfront payment, as realized gains or losses in
the Statement of Operations.
Credit default swap contracts involving the sale of protection may involve
greater risks than if the Trust had invested in the referenced debt
instrument directly. Credit default swap contracts are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the
Trust is a protection buyer and no credit event occurs, it will lose its
investment. If the Trust is a protection seller and a credit event occurs,
the value of the referenced debt instrument received by the Trust, together
with the periodic payments received, may be less than the amount the Trust
pays to the protection buyer, resulting in a loss to the Trust.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 65
Certain swap contracts that are cleared through a central clearinghouse are
referred to as centrally cleared swaps. All payments made or received by
the Trust are pursuant to a centrally cleared swap contract with the
central clearing party rather than the original counterparty. Upon entering
into a centrally cleared swap contract, the Trust is required to make an
initial margin deposit, either in cash or in securities. The daily change
in value on open centrally cleared swap contract is recorded as variation
margin on centrally cleared swaps in the Statement of Assets and
Liabilities.
The amount of cash deposited with the broker as collateral at October 31,
2017 is recorded as "Swaps collateral" on the Statement of Assets and
Liabilities.
Open credit default swap contracts at October 31, 2017 are listed in the
Schedule of Investments. The average market value of credit default swap
contracts open during the six months ended October 31, 2017 was $(12,764).
2. Management Agreement
The Adviser manages the Trust's portfolio. Management fees payable under the
Trust's Advisory Agreement with the Adviser 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,
2017 the net management fee was 0.85% (annualized) of the Trust's average daily
managed assets, which was equivalent of 1.21% (annualized) of the Trust's
average daily net assets.
In addition, under the management and administration agreements, certain other
services and costs are paid by the Adviser and reimbursed by the Trust. At
October 31, 2017, $33,779 was payable to the Adviser related to management
costs, administrative costs and certain other services is included in "Due to
affiliates" in the Statement of Assets and Liabilities.
66 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
3. Transfer Agent
American Stock Transfer & Trust Company (AST) serves as the transfer agent with
respect to the Trust's 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.
In addition, the Trust reimbursed the transfer agent for out-of-pocket expenses
incurred by the transfer agent related to shareowner communications activities
such as proxy and statement mailings and outgoing calls.
4. 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
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 67
collateral obligations, if any, will be reported separately in the Statement of
Assets and Liabilities as "Swap Collateral". 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 not been offset on the Statement of Assets and
Liabilities. The following charts show gross assets and liabilities of the Trust
as of October 31, 2017:
---------------------------------------------------------------------------------------------
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)
---------------------------------------------------------------------------------------------
Goldman Sachs $ 13,258 $ -- $ -- $ -- $ 13,258
International
State Street 2,565 (2,565) -- -- --
Bank & Trust Co.
---------------------------------------------------------------------------------------------
Total $ 15,823 $ (2,565) $ -- $ -- $ 13,258
=============================================================================================
---------------------------------------------------------------------------------------------
Derivative
Liabilities
Subject to Derivatives Non-Cash Cash Net Amount
Master Netting Available Collateral Collateral of Derivative
Counterparty Agreement for Offset Pledged (a) Pledged (a) Liabilities (c)
---------------------------------------------------------------------------------------------
State Street $ 20,167 $ (2,565) $ -- $ -- $ 17,602
Bank & Trust Co.
---------------------------------------------------------------------------------------------
Total $ 20,167 $ (2,565) $ -- $ -- $ 17,602
=============================================================================================
(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.
5. 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.
68 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
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,
2017 was as follows:
---------------------------------------------------------------------------------------
Statement of Assets and Liabilities
Interest Credit Foreign Equity Commodity
Rate Risk Risk Exchange Risk Risk Risk
---------------------------------------------------------------------------------------
Liabilities:
Net unrealized
depreciation on
forward foreign
currency contracts $ -- $ -- $ 17,602 $ -- $ --
---------------------------------------------------------------------------------------
Total Value $ -- $ -- $ 17,602 $ -- $ --
=======================================================================================
The effect of derivative instruments (not considered to be hedging instruments
for accounting disclosure purposes) in the Statement of Operations by risk
exposure at October 31, 2017 was as follows:
---------------------------------------------------------------------------------------
Statement of Operations
Interest Credit Foreign Equity Commodity
Rate Risk Risk Exchange Risk Risk Risk
---------------------------------------------------------------------------------------
Net realized
gain (loss):
Swap contracts $ -- $ 183 $ -- $ -- $ --
Forward foreign
currency contracts -- -- (281,189) -- --
---------------------------------------------------------------------------------------
Total Value $ -- $ 183 $(281,189) $ -- $ --
=======================================================================================
Change in net
unrealized
appreciation
(depreciation) on:
Swap contracts $ -- $ 13,258 $ -- $ -- $ --
Forward foreign
currency contracts -- -- (39,157) -- --
---------------------------------------------------------------------------------------
Total Value $ -- $ 13,258 $ (39,157) $ -- $ --
=======================================================================================
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 69
6. Trust Shares
Transactions in shares of beneficial interest for the six months ended October
31, 2017 and the year ended April 30, 2017 were as follows:
--------------------------------------------------------------------------------
10/31/17 4/30/17
--------------------------------------------------------------------------------
Shares outstanding at beginning of period 8,332,790 8,332,790
--------------------------------------------------------------------------------
Shares outstanding at end of period 8,332,790 8,332,790
================================================================================
7. Credit Agreement
Effective January 27, 2017, the Trust extended the maturity of its existing
Revolving Credit Facility (the Credit Agreement) with the Bank of Scotia to
January 27, 2020. There is a $70 million borrowing limit.
At October 31, 2017, the Trust had a borrowing outstanding under the credit
agreement totaling $64,000,000. The interest rate charged at October 31, 2017
was 1.31%. During the six months ended October 31, 2017, the average daily
balance was $62,250,000 at an average interest rate of 2.26%. Interest expense
of $708,392 in connection with the Credit Agreement is included in the Statement
of Operations.
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.
8. Subsequent Events
A monthly dividend was declared on December 13, 2017 from undistributed and
accumulated net investment income of $0.0950 per share payable December 18,
2017, to shareowners of record on December 14, 2017.
70 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
ADDITIONAL INFORMATION (unaudited)
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 shares
in the open market.
Change in Independent Registered Public Accounting Firm
Prior to July 3, 2017 Pioneer Investment Management, Inc. (the Adviser), the
Trust's investment adviser, was an indirect, wholly owned subsidiary of
UniCredit S.p.A. (UniCredit). On that date, UniCredit completed the sale of its
Pioneer Investments business, which includes the Adviser, to Amundi (the
Transaction). As a result of the Transaction, the Adviser became an indirect,
wholly-owned subsidiary of Amundi. Amundi is controlled by Credit Agricole S.A.
Amundi is headquartered in Paris, France, and, as of September 30, 2016, had
more than $1.1 trillion in assets under management worldwide.
Deloitte & Touche LLP (D&T), the Trust's previous independent registered public
accounting firm, informed the Audit Committee and the Board that it would no
longer be independent with respect to the Trust upon the completion of the
Transaction as a result of certain services being provided to Amundi and Credit
Agricole, and, accordingly, that it intended to resign as the Trust's
independent registered public accounting firm upon the completion of the
Transaction. D&T's resignation was effective on July 3, 2017, when the
Transaction was completed.
During the periods as to which D&T has served as the Trust's independent
registered public accounting firm, including the Trust's two most recent fiscal
years, D&T's reports on the Trust's financial statements have not contained an
adverse opinion or disclaimer of opinion and have not been qualified or modified
as to uncertainty, audit scope or accounting principles. Further, there have
been no disagreements with D&T on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the satisfaction of D&T, would have caused D&T to make
reference to the subject matter of the disagreement in connection with
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 71
its report on the financial statements. In addition, there have been no
reportable events of the kind described in Item 304(a)(1)(v) of Regulation S-K
under the Securities Exchange Act of 1934.
Effective immediately following the completion of the Transaction on July 3,
2017, the Board, acting upon the recommendation of the Audit Committee, engaged
a new independent registered public accounting firm, Ernst & Young LLP (EY).
Prior to its engagement, EY had advised the Trust's Audit Committee that EY had
identified the following matters, in each case relating to services rendered by
other member firms of Ernst & Young Global Limited, all of which are located
outside the United States, to UniCredit and certain of its subsidiaries during
the period commencing July 1, 2016, that it determined to be inconsistent with
the auditor independence rules set forth by the Securities and Exchange
Commission (SEC): (a) project management support services to UniCredit in the
Czech Republic, Germany, Italy, Serbia and Slovenia in relation to twenty-two
projects, that were determined to be inconsistent with Rule 2-01(c)(4)(vi) of
Regulation S-X (management functions); (b) two engagements for UniCredit in
Italy where fees were contingent/success based and that were determined to be
inconsistent with Rule 2-01(c)(5) of Regulation S-X (contingent fees); (c) four
engagements where legal and expert services were provided to UniCredit in the
Czech Republic and Germany, and twenty engagements where the legal advisory
services were provided to UniCredit in Austria, Czech Republic, Italy and
Poland, that were determined to be inconsistent with Rule 2-01(c)(4)(ix) and (x)
of Regulation S-X (legal and expert services); and (d) two engagements for
UniCredit in Italy involving assistance in the sale of certain assets, that were
determined to be inconsistent with Rule 2-01(c)(4)(viii) of Regulation S-X
(broker-dealer, investment advisor or investment banking services). None of the
foregoing services involved the Trust, any of the other funds in the Pioneer
Family of Funds or any other Pioneer entity sold by UniCredit in the
Transaction.
EY advised the Audit Committee that it had considered the matters described
above and had concluded that such matters would not impair EY's ability to
exercise objective and impartial judgment in connection with the audits of the
financial statements of the Trust under the SEC and Public Company Accounting
Oversight Board independence rules, and that a reasonable investor with
knowledge of all relevant facts and circumstances would reach the same
conclusion. Management and the Audit Committee considered these matters and
discussed the matters with EY and, based upon EY's description of the matters
and statements made by EY, Management and the Audit Committee believe that EY
will be capable of exercising objective and
72 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
impartial judgment in connection with the audits of the financial statements of
the Trust, and Management further believes that a reasonable investor with
knowledge of all relevant facts and circumstances would reach the same
conclusion.
Results of Shareholder Meeting
At a special meeting of shareholders held on June 13, 2017, shareholders of the
Trust were asked to consider the proposal described below. A report of the total
votes cast by the Trust's shareholders follows:
---------------------------------------------------------------------------------------
For Against Abstain Broker Non-Votes
---------------------------------------------------------------------------------------
Proposal 1 - To approve 5,910,817.800 174,154.000 254,931.000 0.000
a New Management
Agreement with
the Adviser
At the annual meeting held on September 21, 2017, shareholders of the Trust were
asked to consider the proposal described below. A report of the total votes cast
by the Trust's shareholders follows:
---------------------------------------------------------------------------------------
For Withheld
---------------------------------------------------------------------------------------
Proposal 1 - To elect three Class I Trustees
---------------------------------------------------------------------------------------
Benjamin M. Friedman 7,127,661.405 281,848.156
---------------------------------------------------------------------------------------
Margaret B.W. Graham 7,105,441.744 304,067.817
---------------------------------------------------------------------------------------
Kenneth J. Taubes 7,140,095.297 269,414.264
---------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 73
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
Amundi Pioneer Asset Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Principal Underwriter
Amundi Pioneer 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 www.amundipioneer.com. This information is also available on the Securities
and Exchange Commission's web site at www.sec.gov.
74 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
This page is for your notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17 75
This page is for your notes.
76 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/17
How to Contact Amundi 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 www.amundipioneer.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] Amundi Pioneer
==============
ASSET MANAGEMENT
Amundi Pioneer Asset Management, Inc.
60 State Street
Boston, MA 02109
www.amundipioneer.com
Securities offered through Amundi Pioneer Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2017 Amundi Pioneer Asset Management 21398-10-1217
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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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 Amundi Pioneer Asset Management, Inc, 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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
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.
N/A
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 29, 2017
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 29, 2017
By (Signature and Title)* /s/ Mark E. Bradley
Mark E. Bradley, Treasurer & Chief Accounting & Financial Officer
Date December 29, 2017
* Print the name and title of each signing officer under his or her signature.