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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22014
Pioneer Diversified High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: April 30
Date of reporting period: May 1, 2014 through October 31, 2014
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
-------------------------------------------------------------------------------
Semiannual Report | October 31, 2014
-------------------------------------------------------------------------------
Ticker Symbol: HNW
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
President's Letter 2
Portfolio Management Discussion 4
Portfolio Summary 10
Prices and Distributions 11
Performance Update 12
Schedule of Investments 13
Financial Statements 43
Financial Highlights 47
Notes to Financial Statements 49
Approval of Investment Advisory Agreement 62
Trustees, Officers and Service Providers 67
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 1
President's Letter
Dear Shareowner,
As we move into the final months of 2014, we remain confident that U.S. economic
growth remains self-sustaining despite weakness in foreign economies, and that
the expansion will continue until the economy reaches full employment.
Unemployment has ticked down below 6% and the number of job openings is at the
highest level since 2000, while the number of people filing initial unemployment
claims has fallen to the lowest level in fourteen years. Wage growth, while
still low, is outpacing inflation, consumer debt burdens are modest and lower
gasoline prices are freeing up discretionary spending power.
The global economic picture is less rosy, however, as the conflict between
Russia and the Ukraine is exacting a toll on the European economy, Japan is
still working through the impact of its large tax increase, and the growth of
China's investment-driven economy has been slowing. There are also geopolitical
and other threats to the outlook, such as the Ebola virus outbreak and the
advance of ISIS in key areas of the Middle East. On balance, though, we expect
the global economy to continue to grow over the remainder of 2014 and in 2015.
While our economic outlook is generally constructive and we believe
opportunities remain for prudent investors to earn attractive returns, markets
are likely to continue to be volatile, a scenario that offers the potential for
rewards, but for increased risks as well.
Since 1928, Pioneer's investment professionals have worked on behalf of our
shareholders, incorporating proprietary research to find attractive investment
opportunities and prudent risk management to construct portfolios.
We continue to advocate the benefits of adhering to a disciplined investment
strategy and encourage you to work with your financial advisor to develop and
implement an overall investment plan that addresses both your short- and
long-term goals.
2 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
On August 11, 2014, I joined Pioneer as the new President and CEO of Pioneer
Investment Management USA, Inc. In my role, I will focus on preserving many of
the rich qualities of our history, while meeting the challenges and capitalizing
on the opportunities presented by an ever-changing world.
We greatly appreciate your trust in us in the past and look forward to
continuing to serve you in the future.
Sincerely,
/s/ Lisa M. Jones
Lisa M. Jones
President and CEO
Pioneer Investment Management USA, Inc.
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. These statements should not
be relied upon for any other purposes. Past performance is no guarantee of
future results, and there is no guarantee that market forecasts discussed will
be realized.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 3
Portfolio Management Discussion | 10/31/14
The world's bond markets became increasingly volatile during the six-month
period ended October 31, 2014, with ongoing interest about the potential effects
of the U.S. Federal Reserve System's (the Fed's) gradual withdrawal of economic
stimulus from the U.S. economy, and about mounting geopolitical risks to the
global economy affecting investor sentiment. In the following interview, Andrew
Feltus, Charles Melchreit and Jonathan Sharkey discuss the factors that affected
the performance of Pioneer Diversified High Income Trust during the six-month
period. Mr. Feltus, Director of High Yield and Bank Loans, a senior vice
president and a portfolio manager at Pioneer, Mr. Melchreit, Director of
Investment-Grade Management, a senior vice president and a portfolio manager at
Pioneer, and Mr. Sharkey, a senior vice president and a portfolio manager at
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, 2014?
A Pioneer Diversified High Income Trust returned 1.01% at net asset value
and 2.17% at market price during the six-month period ended October 31,
2014. During the same six-month period, the Trust's custom benchmark
returned 0.37% at net asset value. The custom benchmark is based on equal
weights of the Bank of America Merrill Lynch (BofA ML) Global High Yield
and Emerging Markets Plus (GHY and EMP) Index, which returned -0.45% at net
asset value during the six-month period, and the Credit Suisse (CS)
Leveraged Loan Index, which returned 1.18%. Unlike the Trust, the custom
benchmark does not use leverage. While the use of leverage increases
investment opportunity, it also increases investment risk. During the same
six-month period, the average return (at market price) of the 32 closed end
funds in Lipper's High Current Yield Closed End Funds category (which may
or may not be leveraged) was -1.19%, and the average return (at market
price) of the 22 closed end funds in Lipper's Loan Participation Closed End
Funds category (which may or may not be leveraged) was -2.81%.
The shares of the Trust were selling at a 5.3% premium to net asset
value at the end of the period on October 31, 2014.
On October 31, 2014, the 30-day SEC yield on the Trust's shares was 7.10%*.
* The 30-day SEC yield is a standardized formula that is based on the
hypothetical annualized earning power (investment income only) of the
Trust's portfolio securities during the period indicated.
4 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Q How would you describe the investment environment for credit-sensitive
securities during the six-month period ended October 31, 2014?
A It was a period featuring growing market concerns about threats to the
global economy. In part, investors were monitoring the potential effects
of the Fed's scaling back and eventually ending its monthly bond purchases
under the quantitative easing program. At the same time, potential economic
headwinds created by certain geopolitical events also weighed on market
sentiment. Economic sanctions taken against Russia by the United States and
several European countries due to Russia's aggression against the Ukraine
began having impacts not only on the Russian economy, but also on many
European economies. Meanwhile, the increased violence in the Middle East in
the wake of the rising influence of ISIS raised new concerns in the minds of
many investors.
The most positive news during the period came from the United States, where
the domestic economy demonstrated resilience after contracting in the first
quarter of 2014. In the U.S., gross domestic product (GDP) bounced back to
grow at an annual rate of 4.6% in the second quarter and at roughly 3.9% in
the third quarter. While growth in China continued to decelerate, the
country's economy still grew at an annual pace of 7.5%. Meanwhile, world
petroleum prices took an unexpected dip late in the period, a development
which had both positive and negative effects on the global economy. While
falling gasoline and fuel oil prices helped consumers, the declines also had
potential negative effects on capital goods spending in the oil services
industry.
As these many developments occurred, global fixed-income markets became
increasingly volatile. U.S. Treasuries, which still were perceived by many
as the safest and most liquid asset class, rallied during the period. Prices
rose as the 10-year Treasury yield declined from 2.64% to 2.34% during the
six-month period; however, credit-sensitive securities experienced some
difficulties, due mainly to serious market corrections both in July and in
October 2014. High-yield corporates and other more economically-sensitive
bond groups produced modest results during the period, underperforming
higher-quality debt. Floating-rate bank loans and emerging markets
securities each slightly exceeded the returns of domestic high-yield bonds.
Those results came despite good corporate profit reports and relatively low
default rates on corporate debt. Among spread sensitive products, one bright
area could be found in event-linked (catastrophe)
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 5
bonds issued by property-and-casualty insurance companies. The asset class
rallied and posted strong performance due to a relatively mild hurricane
season in the U.S.
In world currency markets, the U.S. dollar (USD) rallied against virtually
all major foreign currencies, including the euro and the Japanese yen, as
the USD came to be viewed as the safest currency during a time of growing
uncertainty about slowing global economic growth as well as increasing
geopolitical risks.
Q Could you review your principal investment strategies during the
six-month period ended October 31, 2014, and how those strategies affected
the Trust's performance?
A We kept the Trust well diversified** among the credit sectors during the
period, while hedging virtually all of the portfolio's non-USD exposure back
into the dollar. The Trust's minimal exposure to foreign currencies, which
represented 14% of the benchmark, helped relative performance as the USD
gained in value against virtually all major non-U.S. currencies. While
underweighting foreign currencies contributed strongly to relative returns,
the greatest contribution to the Trust's performance relative to the
benchmark derived from the portfolio's significant out-of-benchmark position
in catastrophe bonds and other insurance-linked securities. At the end of
the six-month period, for example, more than 23% of the Trust's total
investment portfolio was allocated to catastrophe bonds and other
insurance-linked securities.
On the down side, the portfolio's slightly shorter-duration positioning
detracted from benchmark-relative results during the period, as interest
rates declined and longer- and intermediate-term securities tended to
outperform. (Duration is a measure of the sensitivity of the price - the
value of principal - of a fixed-income investment to a change in interest
rates, expressed as a number of years.) At the end of the period, the
effective duration of the Trust's portfolio was just 2.16 years. Shorter-
duration portfolios tend to underperform when interest rates decline, as
they did during the period, while longer-duration portfolios tend to hold up
better during periods of declining rates.
At the end of the period on October 31, 2014, the largest allocation in the
Trust's portfolio remained in U.S. high-yield corporate bonds, which
accounted for more than 30% of the Trust's total investment portfolio. The
aforementioned significant out-of-benchmark allocation to insurance-linked
securities was the second-highest allocation in the Trust's portfolio,
followed by exposure to floating-rate bank loans (15% of the Trust's total
investment portfolio).
** Diversification does not assure a profit nor protect against loss in a
declining market.
6 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Q What types of individual investments had noteworthy effects on the Trust's
performance during the six-month period ended October 31, 2014?
A Several positions in catastrophe bonds performed very well for the Trust
during the period, including securities issued by Lorenzo Re and Gator Re,
two property-and-casualty reinsurers. Other individual portfolio
investments that fared relatively well included the bonds of PC Nextco, a
private company that distributes party-related supplies, and the preferred
shares of Pegasus Solutions, a software company that was sold after it
emerged from bankruptcy protection. Also contributing to performance was an
investment in a bank loan to AccentCare, a provider of in-home and hospice
health care services.
As world oil prices declined during the period, the Trust's positions in
several oil industry-related securities underperformed, including bonds of
Halcon Resources, Samson Investment, and Hercules Offshore. The debt of
Towergate Finance, an insurance broker based in the United Kingdom, also
underperformed due to concerns about the company's slowing growth rate.
Q Did the use of derivatives affect the Trust's performance during the
six-month period ended October 31, 2014?
A Yes. We invested in currency forward contracts to help hedge the
portfolio's exposure to foreign currencies, and they helped support the
Trust's results.
Q How did the level of leverage in the Trust change over the six-month
period ended October 31, 2014?
A At the end of the six-month period on October 31, 2014, 29.4% of the
Trust's total managed assets were financed by leverage (or borrowed funds),
compared with 28.7% of the Trust's total managed assets financed by
leverage at the beginning of the six-month period on May 1, 2014. However,
the dollar amount of the borrowing through the revolving credit facility did
not change during the period. The percentage increase in leverage was due to
a decrease in the values of securities in which the Trust had invested.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 7
Q What is your investment outlook?
A We have a positive view about opportunities in the credit markets,
especially in domestic high-yield corporates. As credit-sensitive debt,
including high-yield securities, underperformed Treasuries during the past
six months, the spreads between the two groups widened, leading to improved
relative value in high-yield and other credit-sensitive bonds. (Credit
spreads are commonly defined as the differences in yield between Treasuries
and other types of fixed-income securities with similar maturities.) At the
same time, the investment fundamentals of corporate securities remain
solid. Profits, in general, continue to grow, balance sheets are strong,
and default rates are low by historical standards. The economic backdrop in
the United States also appears solid, as we expect the economy to continue
to grow moderately. In addition, inflation rates should remain low given
declining commodity prices, a strong USD, and low wage growth. The decision
by the European Central Bank to inject more financial liquidity into the
European markets by quantitative easing (or bank loan-buying) also should
help the euro zone economies to strengthen.
We do, however, expect more volatility in the capital markets as the
Fed continues its gradual withdrawal of economic stimulus from the domestic
economy. The end of quantitative easing was likely just the first step in
that process, and interest-rate hikes, long anticipated by the market, may
finally begin to occur sometime in 2015. With that said, even if interest
rates do start rising, we believe the Trust's portfolio is positioned to
hold up well, given the exposure to floating-rate securities such as bank
loans and catastrophe bonds, which would benefit performance as their
yields rise, and the relatively short-duration positioning, which we expect
to shorten even more as the Trust's current fiscal year progresses.
Please refer to the Schedule of Investments on pages 13-41 for a full listing of
Trust securities.
Investments in high-yield or lower-rated securities are subject to greater-than-
average risk. The Trust may invest in securities of issuers that are in default
or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of debt securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities in the Trust generally will rise. Investments in the Trust are
subject to possible loss due to the financial failure of the issuers of the
underlying securities and the issuers' inability to meet their debt obligations.
8 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
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 rating agency asset
coverage requirements in connection with its use of leverage. In order to
maintain required asset coverage levels, the Trust may be required to reduce the
amount of leverage employed by the Trust, alter the composition of its
investment portfolio or take other actions, at what might be inopportune times
in the market. Such actions could reduce the net earnings or returns to holders
of the Trust's common shares over time.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering prospectus and in shareowner reports issued from time to time.
These risks may increase share price volatility.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes. Past performance is no guarantee of
future results, and there is no guarantee that market forecasts discussed will
be realized.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 9
Portfolio Summary | 10/31/14
Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 74.0%
Senior Secured Floating Rate Loan Interests 15.2%
Preferred Stocks 2.7%
U.S. Government and Agency Obligations 1.6%
Collateralized Mortgage Obligations 1.6%
Convertible Bonds & Notes 1.6%
Asset Backed Securities 1.3%
Sovereign Debt Obligations 0.8%
Common Stocks 0.5%
Commercial Mortgage-Backed Securities 0.4%
Convertible Preferred Stocks 0.3%
Right/Warrant* 0.0%
* Amount rounds to less than 0.1%.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of total long-term holdings)**
1. Fixed Income Trust Series 2013-A, 0.00%, 10/15/97 (144A) 1.82%
--------------------------------------------------------------------------------
2. Altair Re II, Ltd. 1.22
--------------------------------------------------------------------------------
3. PI-6, Series D - 2014 (Kane SAC, Ltd.), Variable Rate Notes, 7/30/16 0.98
--------------------------------------------------------------------------------
4. PI-6, Series B - 2014 (Kane SAC, Ltd.), Variable Rate Notes, 7/18/16 0.97
--------------------------------------------------------------------------------
5. PI-1, Series E - 2014 (Kane SAC, Ltd.), Variable Rate Notes, 6/12/15 0.93
--------------------------------------------------------------------------------
6. Gator Re, Ltd., 6.51%, 1/9/17 (144A) (Cat Bond) 0.93
--------------------------------------------------------------------------------
7. Queen Street IV Capital, Ltd., 7.51%, 4/9/15 (144A) (Cat Bond) 0.93
--------------------------------------------------------------------------------
8. Kizuna II Re, Ltd., 2.25%, 4/6/18 (144A) (Cat Bond) 0.92
--------------------------------------------------------------------------------
9. PI-6, Series C - 2014 (Kane SAC, Ltd.), Variable Rate Notes, 7/7/16 0.91
--------------------------------------------------------------------------------
10. AMC Entertainment, Inc., 9.75%, 12/1/20 0.86
--------------------------------------------------------------------------------
** 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.
10 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Prices and Distributions | 10/31/14
Market Value per Common Share
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--------------------------------------------------------------------------------
10/31/14 4/30/14
--------------------------------------------------------------------------------
Market Value $20.30 $20.85
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Premium 5.3% 4.1%
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Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
10/31/14 4/30/14
--------------------------------------------------------------------------------
Net Asset Value $19.28 $20.03
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Distributions per Common Share
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--------------------------------------------------------------------------------
Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
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5/1/14 - 10/31/14 $0.96 $ -- $ --
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The data shown above represents past performance, which is no guarantee of
future results.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 11
Performance Update | 10/31/14
Investment Returns
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The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in common
shares of Pioneer Diversified High Income Trust during the periods shown,
compared to that of the combined (50%/50%) Bank of America Merrill Lynch Global
High Yield and Emerging Markets Plus Index (BofA ML Global HY and EMP Index) and
the Credit Suisse (CS) Leveraged Loan Index.
Average Annual Total Returns
(As of October 31, 2014)
--------------------------------------------------------------------------------
50% BofA
ML Global
HY and
Net EMP Index
Asset 50% CS
Value Market Leveraged
Period (NAV) Price Loan Index
--------------------------------------------------------------------------------
Life-of-Trust
(5/30/07) 8.69% 8.77% 4.58%
5 Years 11.61 14.80 8.02
1 Year 6.47 6.34 4.16
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Market Value of $10,000 Investment
Pioneer Diversified 50% BofA ML Global HY and EMP Index
High Income Trust 50% CS Leveraged Loan Index
5/31/2007 $10,000 $ 10,000
10/31/2007 $ 8,661 $ 10,034
10/31/2008 $ 6,149 $ 7,683
10/31/2009 $ 9,362 $ 10,570
10/31/2010 $12,687 $ 12,116
10/31/2011 $13,259 $ 12,532
10/31/2012 $15,197 $ 14,010
10/31/2013 $17,562 $ 14,996
10/31/2014 $18,676 $ 15,626
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below NAV due to such factors as interest rate changes
and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Shares of closed-end funds, unlike open-end funds, are not continuously offered.
There is a one-time public offering and, once issued, shares of closed-end funds
are bought and sold in the open market through a stock exchange and frequently
trade at prices lower than their NAV. NAV per common share is total assets less
total liabilities, which include preferred shares or borrowings, as applicable,
divided by the number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends are
assumed to be reinvested at prices obtained through open-market purchases under
the Trust's dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the sale of Trust shares.
Had these fees and taxes been reflected, performance would have been lower.
The BofA ML Global High Yield and Emerging Markets Plus Index is an unmanaged
index that tracks the performance of the below- and border-line investment-grade
global debt markets denominated in the major developed market currencies. The
Index includes sovereign issuers rated BBB1 and lower along with corporate
issues rated BB1 and lower. There are no restrictions on issuer country of
domicile. The CS Leveraged Loan Index is unmanaged and is designed to mirror
the investible universe of the U.S. dollar-denominated leveraged loan market.
The CS Leveraged Loan Index consists of tradable term loans with at least one
year to maturity and rated BBB or lower.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Trust returns, do not reflect any fees, expenses or sales charges. The
indices do not use leverage. It is not possible to invest directly in an index.
12 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Schedule of Investments | 10/31/14 (unaudited)
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Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 1.8% of
Net Assets
751,698(a) Aircraft Finance Trust, Series 1999-1A, Class A1,
0.633%, 5/15/24 (144A) $ 293,162
81,268 Continental Airlines Pass Through Trust, Series 1998-1,
Class B, 6.748%, 3/15/17 85,738
250,000 Delta Air Lines Pass Through Trust, Series 2010-1,
Class B, 6.375%, 1/2/16 (144A) 260,625
290,000(b) GMAT Trust, Series 2013-1A, Class M, 5.0%,
11/25/43 (144A) 277,218
734,627 Monty Parent Issuer LLC, Series 2013-LTR, Class B,
4.25%, 11/20/28 (144A) 729,285
940,000 Nations Equipment Finance Funding I LLC, Series
2013-1A, Class C, 5.5%, 5/20/21 (144A) 964,158
87,837 Westgate Resorts LLC, Series 2012-2A, Class C, 9.0%,
1/20/25 (144A) 90,280
217,616 Westgate Resorts LLC, Series 2012-BA, Class A,
9.5%, 2/20/25 (144A) 221,968
----------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $2,981,387) $ 2,922,434
----------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
2.1% of Net Assets
275,000(c) CAM Mortgage Trust, Series 2014-1, Class M, 5.5%,
12/15/53 (144A) $ 275,924
200,000(b) Credit Suisse First Boston Mortgage Securities Corp.,
Series 2004-C4, Class E, 5.135%, 10/15/39 (144A) 201,683
125,000(a) EQTY Mezzanine Trust, Series 2014-INMZ, Class M,
4.903%, 5/8/31 (144A) 125,141
170,000(a) EQTY Mortgage Trust, Series 2014-INNS, Class E,
3.603%, 5/8/31 (144A) 170,254
103,830 Global Mortgage Securitization, Ltd., Series 2004-A,
Class B1, 5.25%, 11/25/32 (144A) 99,978
178,458 Global Mortgage Securitization, Ltd., Series 2005-A,
Class B3, 5.25%, 4/25/32 135,010
189,127 Homeowner Assistance Program Reverse Mortgage
Loan Trust, Series 2013-RM1, Class A, 4.0%,
5/26/53 (144A) 184,701
743,660(a) Impac CMB Trust, Series 2004-9, Class 1A1,
0.912%, 1/25/35 670,875
150,000 JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2006-CB16, Class AJ, 5.623%, 5/12/45 153,425
150,000(a) JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2013-FL3, Class E, 3.05%, 4/15/28 (144A) 149,879
300,000(b) LB-UBS Commercial Mortgage Trust, Series 2005-C2,
Class C, 5.203%, 4/15/40 304,388
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 13
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- (continued)
556,571(b) LB-UBS Commercial Mortgage Trust, Series 2006-C1,
Class AJ, 5.276%, 2/15/41 $ 565,656
400,000(b) Wachovia Bank Commercial Mortgage Trust, Series
2007-C34, Class AJ, 5.95%, 5/15/46 411,635
----------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $3,415,348) $ 3,448,549
----------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED SECURITIES --
0.5% of Net Assets
150,000(b) Bear Stearns Commercial Mortgage Securities Trust,
Series 2005-PWR7, Class B, 5.214%, 2/11/41 $ 150,663
250,000(b) COMM 2012-CCRE2 Mortgage Trust, Series 2012-CR2,
Class E, 4.858%, 8/15/45 (144A) 252,496
200,000(a) COMM 2013-FL3 Mortgage Trust, Series 2013-FL3,
Class RGC2, 4.403%, 10/13/28 (144A) 200,194
150,600(a) JPMorgan Chase Commercial Mortgage Securities Corp.,
Series 2006-FL2A, Class G, 0.513%, 11/15/18 (144A) 145,330
----------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $691,657) $ 748,683
----------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE LOAN
INTERESTS -- 20.9% of Net Assets*(a)
AUTOMOBILES & COMPONENTS -- 2.4%
Auto Parts & Equipment -- 1.2%
187,403 Federal-Mogul Corp., Tranche C Term Loan,
4.75%, 4/15/21 $ 186,492
321,623 MPG Holdco I Inc., Initial Term Loan, 3.5%, 10/20/21 321,322
278,628 TI Group Automotive Systems LLC, Facility Term Loan,
4.25%, 7/2/21 276,539
965,367 Tower Automotive Holdings USA, LLC, Refinancing
Term Loan, 4.0%, 4/23/20 954,909
139,563 UCI International, Inc., (United Components), Term
Loan, 5.5%, 7/26/17 139,679
------------
$ 1,878,941
----------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 0.9%
1,451,250 Chrysler Group LLC, Term Loan B, 3.5%, 5/24/17 $ 1,445,203
----------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.3%
575,000 Goodyear Tire & Rubber Co., Second Lien Term Loan,
4.75%, 4/30/19 $ 577,156
------------
Total Automobiles & Components $ 3,901,300
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 2.3%
Aerospace & Defense -- 1.0%
824,732 DAE Aviation Holdings, Inc., Tranche B-1 Loan,
5.0%, 11/2/18 $ 826,022
373,879 DAE Aviation Holdings, Inc., Tranche B-2 Loan,
5.0%, 11/2/18 374,113
133,269 TASC, Inc., First Lien Term Loan, 6.5%, 5/22/20 131,603
320,000 WP CPP Holdings LLC, Second Lien Term Loan B-1,
8.75%, 4/30/21 319,400
------------
$ 1,651,138
----------------------------------------------------------------------------------------------------
Construction & Farm Machinery &
Heavy Trucks -- 0.5%
390,000 Navistar, Inc., Tranche B, Term Loan, 5.75%, 8/17/17 $ 391,706
443,806 Waupaca Foundry, Inc., Term Loan, 4.0%, 6/29/17 443,066
------------
$ 834,772
----------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.4%
548,458 WireCo WorldGroup, Inc., Term Loan, 6.0% , 2/15/17 $ 550,344
----------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.4%
355,866 AWAS Finance Luxembourg 2012 SA, Term Loan,
3.5%, 7/16/18 $ 353,791
284,593 WESCO Distribution, Inc., Tranche B-1 Loan,
3.75%, 12/12/19 283,881
------------
$ 637,672
------------
Total Capital Goods $ 3,673,926
----------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.4%
Environmental & Facilities Services -- 0.3%
500,000 Granite Acquisition, Inc., Second Lien Term B Loan,
7.25%, 10/14/22 $ 503,125
----------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.1%
203,227 Protection One, Inc., 2012 Term Loan, 4.25%, 3/21/19 $ 202,761
------------
Total Commercial & Professional Services $ 705,886
----------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 1.2%
Automobiles & Components -- 0.4%
686,875 CWGS Group LLC, Term Loan, 5.75%, 2/20/20 $ 689,451
----------------------------------------------------------------------------------------------------
Education Services -- 0.6%
942,875 McGraw-Hill School Education Holdings LLC, Term B
Loan, 6.25%, 12/18/19 $ 945,625
----------------------------------------------------------------------------------------------------
Leisure Facilities -- 0.1%
132,455 Fitness International LLC, Term B Loan, 5.5%, 7/1/20 $ 131,644
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 15
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Publishing -- 0.1%
163,260 Lee Enterprises, Inc., First Lien Term Loan,
7.25%, 3/31/19 $ 163,358
------------
Total Consumer Discretionary $ 1,930,078
----------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.1%
Textiles -- 0.1%
108,694 Klockner Pentaplast of America, Inc., Term Loan B-1,
4.75%, 12/21/16 $ 108,830
------------
Total Consumer Durables & Apparel $ 108,830
----------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 1.0%
Hotels, Resorts & Cruise Lines -- 0.4%
731,586 Seven Sea Cruises S. DE R.L., Term B2 Loan,
3.75%, 12/21/18 $ 730,671
----------------------------------------------------------------------------------------------------
Restaurants -- 0.6%
438,326 Landry's, Inc., (fka Landry's Restaurants, Inc.), Term
Loan B, 4.0% , 4/24/18 $ 437,641
541,125 NPC International, Inc., Term Loan, 4.0%, 12/28/18 518,127
------------
$ 955,768
------------
Total Consumer Services $ 1,686,439
----------------------------------------------------------------------------------------------------
CONSUMER STAPLES -- 0.1%
Personal Products -- 0.1%
100,000 Altrium Innovations, Inc., Second Lien Term Loan,
7.75%, 8/13/21 $ 94,750
------------
Total Consumer Staples $ 94,750
----------------------------------------------------------------------------------------------------
ENERGY -- 1.9%
Coal & Consumable Fuels -- 0.1%
352,500 PT Bumi Resources Tbk, Term Loan, 18.153%, 11/7/14 $ 178,012
----------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.3%
500,000 Chief Exploration & Development, LLC, Second Lien
Term Loan, 7.5%, 5/16/21 $ 485,100
----------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.4%
444,680 Jonah Energy LLC, Initial Second Lien Initial Loan,
7.5%, 5/12/21 $ 431,340
183,178 Offshore Group Investment, Ltd., (Vantage Delaware
Holdings LLC), Second Lien Term Loan, 5.75%, 3/28/19 164,860
------------
$ 596,200
----------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.2%
298,496 FR Dixie Acquisition Corp., Term Loan, 5.75%, 12/18/20 $ 292,651
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.9%
849,204 Fieldwood Energy LLC, Closing Date Second Lien
Term Loan, 8.375%, 9/30/20 $ 820,756
650,000 Samson Investment Co., Second Lien Term Loan,
5.0%, 9/25/18 604,500
------------
$ 1,425,256
------------
Total Energy $ 2,977,219
----------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.7%
Packaged Foods & Meats -- 0.7%
153,101 Del Monte Corp., Initial Term Loan, 3.5%, 3/9/20 $ 147,608
935,300 New HB Acquisition LLC, Term B Loan, 6.75%, 4/9/20 955,175
------------
Total Food, Beverage & Tobacco $ 1,102,783
----------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 3.6%
Health Care Equipment & Services -- 0.4%
366,000 Accellent, Inc., Initial Second Lien Term Loan,
7.5%, 3/11/22 $ 354,867
238,327 Kinetic Concepts, Inc., Dollar E-1 Term Loan,
4.0%, 5/4/18 236,987
------------
$ 591,854
----------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.9%
710,108 CHS/Community Health Systems, Inc., Term B Loan,
4.25%, 1/27/21 $ 711,662
266,428 CHS/Community Health Systems, Inc., Term D Loan,
3.485%, 1/25/17 266,033
196,060 HCA, Inc., Tranche B-5 Term Loan, 2.905%, 3/31/17 195,529
320,952 Kindred Healthcare, Inc., Incremental Term Loan,
4.0%, 4/9/21 318,143
------------
$ 1,491,367
----------------------------------------------------------------------------------------------------
Health Care Services -- 1.8%
372,153 AccentCare, Inc., Term Loan, 7.25%, 12/22/16 $ 316,795
208,835 Bioscrip, Inc., Delayed Term Loan, 6.5%, 7/31/20 210,053
348,058 Bioscrip, Inc., Initial Term B Loan, 6.5%, 7/31/20 350,088
714,401 Gentiva Health Services, Inc., Initial Term Loan B,
6.5%, 10/18/19 716,634
203,975 National Mentor Holdings, Inc., Tranche B Term Loan,
4.75%, 1/31/21 202,700
459,188 Surgical Care Affiliates LLC, Class C Term Loan,
4.0%, 6/29/18 450,279
283,225 Valitas Health Services, Inc., Term Loan B, 6.0%, 6/2/17 269,772
483,750(d) Virtual Radiologic Corp., Term Loan B,
7.25%, 12/22/16 368,255
------------
$ 2,884,576
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 17
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.2%
236,457 Alere, Inc., Term Loan B, 5.5% , 6/30/17 $ 235,896
----------------------------------------------------------------------------------------------------
Health Care Technology -- 0.3%
239,450 IMS Health, Inc., Tranche B-1 Dollar Term Loan,
3.5%, 3/17/21 $ 236,606
332,600 Medical Card System, Inc., Term Loan, 0.0%, 9/17/15 319,296
------------
$ 555,902
------------
Total Health Care Equipment & Services $ 5,759,595
----------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.7%
Household Products -- 0.4%
388,438 SRAM LLC, First Lien Term Loan, 4.0%, 4/10/20 $ 382,612
213,818 Wash MultiFamily Laundry Systems LLC, U.S. Term
Loan, 4.5%, 2/21/19 211,680
------------
$ 594,292
----------------------------------------------------------------------------------------------------
Personal Products -- 0.1%
215,357 NBTY, Inc., B-2 Term Loan, 3.5%, 10/1/17 $ 211,265
----------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.2%
268,157 Monitronics International, Inc., 2013 Term Loan B,
4.25%, 3/23/18 $ 267,571
------------
Total Household & Personal Products $ 1,073,128
----------------------------------------------------------------------------------------------------
INDUSTRIALS -- 0.4%
Aerospace & Defense -- 0.2%
233,457 SI Organization, Inc., The Initial First Lien Term
Loan, 5.75%, 11/23/19 $ 233,846
----------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.2%
355,000 Filtration Group Corp., Initial Second Lien Term
Loan, 8.25%, 11/22/21 $ 354,889
------------
Total Industrials $ 588,735
----------------------------------------------------------------------------------------------------
INSURANCE -- 1.0%
Multi-Line Insurance -- 0.3%
563,633 Alliant Holdings I LLC, Initial Term Loan,
4.25%, 12/20/19 $ 555,883
----------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 0.7%
593,765 Confie Seguros Holding II Co., Second Lien Term
Loan, 10.25%, 5/8/19 $ 598,589
447,072 USI, Inc., Initial Term Loan, 4.25%, 12/27/19 442,601
------------
$ 1,041,190
------------
Total Insurance $ 1,597,073
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
MATERIALS -- 0.6%
Diversified Chemicals -- 0.2%
297,106 Univar, Inc., Term Loan B, 5.0%, 6/30/17 $ 295,620
----------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.0%+
57,668(e) PT Bakrie & Brothers Tbk, Facility Term Loan B,
0.0%, 1/20/13 $ 23,067
----------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.2%
413,493 Tank Holding Corp., Initial Term Loan, 5.5%, 7/9/19 $ 408,712
----------------------------------------------------------------------------------------------------
Paper Products -- 0.1%
99,250 Exopack Holdings SA, USD Term Loan, 5.25%, 5/8/19 $ 99,933
----------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.1%
123,694 Chemtura Corp., New Term Loan, 3.5%, 8/29/16 $ 123,694
------------
Total Materials $ 951,026
----------------------------------------------------------------------------------------------------
MEDIA -- 1.4%
Advertising -- 0.6%
955,254 Affinion Group, Inc., Tranche B Term Loan,
6.75%, 4/30/18 $ 928,586
----------------------------------------------------------------------------------------------------
Broadcasting -- 0.5%
315,000 Learfield Communications, Inc., Initial Second Lien
Term Loan, 8.75%, 10/8/21 $ 315,000
464,668 Univision Communications, Inc., Replacement First-
Lien Term Loan, 4.0%, 3/1/20 460,651
------------
$ 775,651
----------------------------------------------------------------------------------------------------
Cable & Telecommunications -- 0.2%
340,050 WideOpenWest Finance LLC, Term Loan B,
4.75%, 4/1/19 $ 340,227
----------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.0%+
77,587 Cinedigm Digital Funding I LLC, Term Loan,
3.75%, 2/28/18 $ 77,587
----------------------------------------------------------------------------------------------------
Publishing -- 0.1%
202,980 Cengage Learning Acquisitions, Inc., Term Loan,
7.0%, 3/31/20 $ 203,564
------------
Total Media $ 2,325,615
----------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY & LIFE
SCIENCES -- 0.3%
Life Sciences Tools & Services -- 0.3%
432,090 Catalent Pharma Solutions, Inc., Dollar Term Loan,
` 4.5%, 5/20/21 $ 432,167
------------
Total Pharmaceuticals, Biotechnology &
Life Sciences $ 432,167
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 19
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
RETAIL REIT -- 0.1%
Retail Reit -- 0.1%
174,696 DTZ U.S. Borrower LLC, Delayed Draw Term Loan, 4.5%,
10/28/21 $ 174,951
------------
Total Retail REIT's $ 174,951
----------------------------------------------------------------------------------------------------
RETAILING -- 0.4%
Computer & Electronics Retail -- 0.4%
813,027 Targus Group International, Inc., Term Loan, 12.0%,
5/24/16 $ 650,422
------------
Total Retailing $ 650,422
----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 1.3%
Application Software -- 0.7%
210,670 Expert Global Solutions, Inc., Advance First Lien Term
Loan B, 8.5%, 4/3/18 $ 210,301
424,125 Houghton Mifflin Holdings, Inc., Term Loan,
4.25%, 5/22/18 423,065
500,000 Vertafore, Inc., Second Lien Term Loan, 9.75%,
10/27/17 504,062
------------
$ 1,137,428
----------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 0.6%
249,375 Evergreen Skills Lux S.a r.l., First Lien Initial Term
Loan, 5.75%, 4/28/21 $ 246,881
772,637 SunGuard Data Systems, Inc., Tranche C Term Loan,
3.902%, 2/28/17 770,538
------------
$ 1,017,419
------------
Total Software & Services $ 2,154,847
----------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.4%
Communications Equipment -- 0.1%
85,534 CommScope, Inc., Tranche 3 Term Loan,
2.735%, 1/21/17 $ 85,320
128,301 CommScope, Inc., Tranche 4 Term Loan,
3.25%, 1/14/18 128,221
------------
$ 213,541
----------------------------------------------------------------------------------------------------
Electronic Components -- 0.3%
477,897 Scitor Corp., Term Loan, 5.0%, 2/15/17 $ 473,404
------------
Total Technology Hardware & Equipment $ 686,945
----------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.1%
Air Freight & Logistics -- 0.1%
192,563 Ozburn-Hessey Holding Co., LLC, Term Loan,
6.75%, 5/23/19 $ 191,961
------------
Total Transportation $ 191,961
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
UTILITIES -- 0.5%
Electric Utilities -- 0.5%
292,172 Star West Generation LLC, Advance Term Loan B,
4.25%, 3/13/20 $ 290,346
629,720 Texas Competitive Electric Holdings Co., LLC, 2017
Term Loan, 4.647%, 10/10/17 459,958
------------
Total Utilities $ 750,304
----------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING RATE
LOAN INTERESTS
(Cost $34,122,300) $ 33,517,980
----------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 101.3% of
Net Assets
AUTOMOBILES & COMPONENTS -- 0.6%
Auto Parts & Equipment -- 0.6%
350,000 International Automotive Components Group SA,
9.125%, 6/1/18 (144A) $ 364,000
248,000 Pittsburgh Glass Works LLC, 8.0%, 11/15/18 (144A) 260,400
290,000 Stackpole International Intermediate Co., SA /
Stackpole International Powder, 7.75%,
10/15/21 (144A) 294,713
------------
Total Automobiles & Components $ 919,113
----------------------------------------------------------------------------------------------------
BANKS -- 1.9%
Diversified Banks -- 1.5%
525,000 Banco de Galicia y Buenos Aires, 8.75%,
5/4/18 (144A) $ 511,875
400,000(b) Banco Macro SA, 9.75%, 12/18/36 364,000
200,000(b)(f) Banco Santander SA, 6.375%, 5/29/49 196,550
325,000(b)(f) Bank of America Corp., 6.25%, 9/29/49 324,594
200,000 Turkiye IS Bankasi AS, 6.0%, 10/24/22 (144A) 199,250
750,000 UBS AG / Stamford CT, 7.625%, 8/17/22 885,117
------------
$ 2,481,386
----------------------------------------------------------------------------------------------------
Regional Banks -- 0.4%
600,000(b)(f) PNC Financial Services Group, Inc., 4.454%, 5/29/49 $ 600,750
------------
Total Banks $ 3,082,136
----------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 5.4%
Aerospace & Defense -- 0.6%
400,000 ADS Tactical, Inc., 11.0%, 4/1/18 (144A) $ 391,000
680,000 DynCorp International, Inc., 10.375%, 7/1/17 583,100
------------
$ 974,100
----------------------------------------------------------------------------------------------------
Building Products -- 0.2%
300,000 USG Corp., 7.875%, 3/30/20 (144A) $ 322,500
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 21
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Construction & Engineering -- 1.3%
900,000 Empresas ICA S.A.B. de CV, 8.9%, 2/4/21 (144A) $ 951,750
1,200,000 OAS Investments GmbH, 8.25%, 10/19/19 (144A) 1,167,000
------------
$ 2,118,750
----------------------------------------------------------------------------------------------------
Construction & Farm Machinery &
Heavy Trucks -- 0.7%
360,000 Meritor, Inc., 6.75%, 6/15/21 $ 379,800
660,000 Navistar International Corp., 8.25%, 11/1/21 678,480
------------
$ 1,058,280
----------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.5%
750,000 WireCo WorldGroup, Inc., 9.5%, 5/15/17 $ 765,000
----------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.3%
455,000 JB Poindexter & Co., Inc., 9.0%, 4/1/22 (144A) $ 495,950
----------------------------------------------------------------------------------------------------
Industrial Machinery -- 1.1%
450,000 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) $ 489,375
335,000 Liberty Tire Recycling, 11.0%, 10/1/16 (144A) 314,900
761,000 Mueller Water Products, Inc., 7.375%, 6/1/17 772,415
150,000 Xerium Technologies, Inc., 8.875%, 6/15/18 158,250
------------
$ 1,734,940
----------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.7%
1,090,000 TRAC Intermodal LLC / TRAC Intermodal Corp.,
11.0%, 8/15/19 $ 1,201,725
------------
Total Capital Goods $ 8,671,245
----------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 1.0%
Diversified Support Services -- 0.7%
950,000 NANA Development Corp., 9.5%, 3/15/19 (144A) $ 893,000
260,000 TMS International Corp., 7.625%, 10/15/21 (144A) 271,700
------------
$ 1,164,700
----------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.0%+
700,000(d)(e) Old AII, Inc., 10.0%, 12/15/16 $ 7
----------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.3%
415,000 Interface Security Systems Holdings, Inc. / Interface
Security Systems LLC, 9.25%, 1/15/18 $ 422,262
------------
Total Commercial & Professional Services $ 1,586,969
----------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 0.7%
Automotive Retail -- 0.6%
925,000 DriveTime Automotive Group, Inc. / DT Acceptance
Corp., 8.0%, 6/1/21 (144A) $ 906,500
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Textiles -- 0.1%
195,000 Polymer Group, Inc., 6.875%, 6/1/19 (144A) $ 192,563
------------
Total Consumer Discretionary $ 1,099,063
----------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.4%
Home Furnishings -- 0.3%
535,000 Tempur Sealy International, Inc., 6.875%, 12/15/20 $ 571,113
----------------------------------------------------------------------------------------------------
Homebuilding -- 0.1%
605,000(d)(e) Desarrolladora Homex SAB de CV, 9.5%,
12/11/19 (144A) $ 69,877
500,000(d)(e) Urbi Desarrollos Urbanos SAB de CV, 9.75%,
2/3/22 (144A) 50,250
------------
$ 120,127
----------------------------------------------------------------------------------------------------
Leisure Products -- 1.0%
EUR 275,000 Heckler & Koch GmbH, 9.5%, 5/15/18 (144A) $ 258,390
1,000,000 Icon Health & Fitness, Inc., 11.875%, 10/15/16 (144A) 978,750
375,000 PC Nextco Holdings LLC / PC Nextco Finance, Inc.,
8.75%, 8/15/19 380,625
------------
$ 1,617,765
------------
Total Consumer Durables & Apparel $ 2,309,005
----------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.1%
Business Services -- 0.8%
750,000 Sitel LLC / Sitel Finance Corp., 11.0%, 8/1/17 (144A) $ 772,500
500,000 Sitel LLC / Sitel Finance Corp., 11.5%, 4/1/18 438,750
------------
$ 1,211,250
----------------------------------------------------------------------------------------------------
Casinos & Gaming -- 0.0%+
756,089(d)(e)(g) Mashantucket Western Pequot Tribe, 6.5% (5.5%
PIK 1.0% cash), 7/1/36 $ 4,016
100,000 Scientific Games International, Inc., 6.25%, 9/1/20 80,000
------------
$ 84,016
----------------------------------------------------------------------------------------------------
Hotels, Resorts & Cruise Lines -- 0.5%
400,000 Seven Seas Cruises S de RL LLC, 9.125%, 5/15/19 $ 425,000
325,000 Viking Cruises, Ltd., 8.5%, 10/15/22 (144A) 351,812
------------
$ 776,812
----------------------------------------------------------------------------------------------------
Leisure Facilities -- 0.6%
EUR 800,000 Cirsa Funding Luxembourg SA, 8.75%,
5/15/18 (144A) $ 1,024,891
----------------------------------------------------------------------------------------------------
Restaurants -- 1.0%
1,235,000(c) Burger King Capital Holdings LLC, 0.0%,
4/15/19 (144A) $ 1,145,462
400,000 Burger King Corp., 9.875%, 10/15/18 422,000
------------
$ 1,567,462
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 23
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.2%
315,000 StoneMor Partners LP / Cornerstone Family Services
of WV, 7.875%, 6/1/21 (144A) $ 328,388
------------
Total Consumer Services $ 4,992,819
----------------------------------------------------------------------------------------------------
CONSUMER STAPLES -- 1.0%
Food Distributors -- 0.6%
900,000 JBS Investments GmbH, 7.25%, 4/3/24 (144A) $ 956,250
----------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 0.4%
640,000 Post Holdings, Inc., 6.75%, 12/1/21 (144A) $ 639,200
------------
Total Consumer Staples $ 1,595,450
----------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 2.1%
Asset Management & Custody Banks -- 0.4%
590,000 Janus Capital Group, Inc., 6.7%, 6/15/17 $ 659,015
----------------------------------------------------------------------------------------------------
Consumer Finance -- 0.9%
445,000 Jefferies Finance LLC / JFIN Co-Issuer Corp.,
7.375%, 4/1/20 (144A) $ 442,775
610,000 Tarjeta Naranja SA, 9.0%, 1/28/17 (144A) 604,789
440,000 TMX Finance LLC / TitleMax Finance Corp., 8.5%,
9/15/18 (144A) 429,000
------------
$ 1,476,564
----------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
450,000(b)(f) Goldman Sachs Capital II, 4.0%, 12/29/49 $ 338,400
----------------------------------------------------------------------------------------------------
Multi-Sector Holdings -- 0.3%
600,000 Constellation Enterprises LLC, 10.625%,
2/1/16 (144A) $ 492,000
----------------------------------------------------------------------------------------------------
Specialized Finance -- 0.3%
375,000(g) Igloo Holdings Corp., 8.25%, (9.0% PIK
8.25% cash), 12/15/17 (144A) $ 378,281
------------
Total Diversified Financials $ 3,344,260
----------------------------------------------------------------------------------------------------
ENERGY -- 13.4%
Coal & Consumable Fuels -- 0.9%
285,000 Alpha Natural Resources, Inc., 7.5%, 8/1/20 (144A) $ 228,000
650,000(e) Bumi Capital Pte, Ltd., 12.0%, 11/10/16 (144A) 237,250
400,000(e) James River Coal Co., 7.875%, 4/1/19 2,750
300,000 Murray Energy Corp., 8.625%, 6/15/21 (144A) 309,750
715,000 Penn Virginia Corp., 8.5%, 5/1/20 698,912
------------
$ 1,476,662
----------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.3%
150,000 Jones Energy Holdings LLC / Jones Energy Finance
Corp., 6.75%, 4/1/22 (144A) $ 143,250
MXN 540,000 Petroleos Mexicanos, 7.19%, 9/12/24 (144A) 40,618
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- (continued)
325,000 YPF SA, 8.875%, 12/19/18 (144A) $ 339,625
------------
$ 523,493
----------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.8%
645,000 Hercules Offshore, Inc., 8.75%, 7/15/21 (144A) $ 412,800
730,000 Ocean Rig UDW, Inc., 7.25%, 4/1/19 (144A) 624,150
320,000 Shelf Drill Holdings, Ltd., 8.625%, 11/1/18 (144A) 316,000
------------
$ 1,352,950
----------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 1.0%
690,000 Forbes Energy Services, Ltd., 9.0%, 6/15/19 $ 665,850
395,000 FTS International, Inc., 6.25%, 5/1/22 (144A) 373,275
425,000 McDermott International, Inc., 8.0%, 5/1/21 (144A) 374,000
250,000 Seitel, Inc., 9.5%, 4/15/19 242,500
------------
$ 1,655,625
----------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 9.9%
520,000 Athlon Holdings LP / Athlon Finance Corp.,
7.375%, 4/15/21 $ 569,400
100,000 Comstock Resources, Inc., 7.75%, 4/1/19 98,000
750,000 Comstock Resources, Inc., 9.5%, 6/15/20 791,250
515,000 Energy XXI Gulf Coast, Inc., 7.5%, 12/15/21 427,450
600,000 EP Energy LLC / EP Energy Finance, Inc.,
9.375%, 5/1/20 655,500
920,000 Forest Oil Corp., 7.5%, 9/15/20 864,800
360,000 GeoPark Latin America, Ltd., Agencia en Chile,
7.5%, 2/11/20 (144A) 381,600
570,000 Gulfport Energy Corp., 7.75%, 11/1/20 581,400
165,000 Halcon Resources Corp., 9.25%, 2/15/22 134,062
890,000 Halcon Resources Corp., 9.75%, 7/15/20 742,594
485,000 Jupiter Resources, Inc., 8.5%, 10/1/22 (144A) 428,012
680,000 Lightstream Resources, Ltd., 8.625%, 2/1/20 (144A) 625,600
630,000 Memorial Production Partners LP / Memorial
Production Finance Corp., 7.625%, 5/1/21 610,313
600,000 Midstates Petroleum Co., Inc., 9.25%, 6/1/21 510,000
455,000 Midstates Petroleum Co., Inc., 10.75%, 10/1/20 404,950
350,000 MIE Holdings Corp., 7.5%, 4/25/19 (144A) 343,000
1,440,000 Northern Oil & Gas, Inc., 8.0%, 6/1/20 1,342,800
535,000 PDC Energy, Inc., 7.75%, 10/15/22 561,868
750,000 PetroQuest Energy, Inc., 10.0%, 9/1/17 746,250
480,000 QR Energy LP / QRE Finance Corp., 9.25%, 8/1/20 541,200
240,000 Quicksilver Resources, Inc., 7.125%, 4/1/16 48,000
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 25
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- (continued)
700,000 Resolute Energy Corp., 8.5%, 5/1/20 $ 623,000
375,000 Rice Energy, Inc., 6.25%, 5/1/22 (144A) 362,578
870,000 RKI Exploration & Production LLC / RKI Finance
Corp., 8.5%, 8/1/21 (144A) 850,425
285,000 Rosetta Resources, Inc., 5.875%, 6/1/24 273,600
310,000 RSP Permian, Inc., 6.625%, 10/1/22 (144A) 309,163
700,000 Samson Investment Co., 9.75%, 2/15/20 518,000
1,170,000 Sanchez Energy Corp., 7.75%, 6/15/21 1,193,400
335,000 Talos Production LLC / Talos Production Finance,
Inc., 9.75%, 2/15/18 (144A) 337,513
------------
$ 15,875,728
----------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.2%
300,000 Calumet Specialty Products Partners LP / Calumet
Finance Corp., 6.5%, 4/15/21 (144A) $ 291,000
----------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 0.3%
450,000(a) Energy Transfer Partners LP, 3.25%, 11/1/66 $ 419,063
------------
Total Energy $ 21,594,521
----------------------------------------------------------------------------------------------------
FINANCIALS -- 0.5%
Specialized Finance -- 0.5%
695,000 DFC Finance Corp., 10.5%, 6/15/20 (144A) $ 679,362
175,000 Nationstar Mortgage LLC / Nationstar Capital Corp.,
6.5%, 7/1/21 162,750
------------
Total Financials $ 842,112
----------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 8.3%
Agricultural Products -- 1.3%
900,000 Pinnacle Operating Corp., 9.0%, 11/15/20 (144A) $ 969,750
520,000 Southern States Cooperative, Inc., 10.0%,
8/15/21 (144A) 512,200
500,000 Tonon Bioenergia SA, 9.25%, 1/24/20 (144A) 405,000
225,000 Tonon Luxembourg SA, 10.5%, 5/14/24 (144A) 210,375
------------
$ 2,097,325
----------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 6.0%
225,000 Agrokor DD, 8.875%, 2/1/20 (144A) $ 245,250
EUR 200,000 Agrokor DD, 9.875%, 5/1/19 (144A) 273,486
650,000 Bertin SA / Bertin Finance, Ltd., 10.25%,
10/5/16 (144A) 730,782
500,000 CFG Investment SAC, 9.75%, 7/30/19 (144A) 457,500
297,000 Chiquita Brands International, Inc. / Chiquita Brands
LLC, 7.875%, 2/1/21 325,957
491,000 Corporacion Pesquera Inca SAC, 9.0%,
2/10/17 (144A) 486,581
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- (continued)
1,100,000 FAGE Dairy Industry SA / FAGE USA Dairy Industry,
Inc., 9.875%, 2/1/20 (144A) $ 1,164,625
515,000 Marfrig Holding Europe BV, 6.875%, 6/24/19 (144A) 522,725
800,000 Marfrig Holding Europe BV, 8.375%, 5/9/18 (144A) 842,000
700,000 Marfrig Holding Europe BV, 11.25%, 9/20/21 (144A) 784,700
475,000 Marfrig Overseas, Ltd., 9.5%, 5/4/20 (144A) 501,719
700,000 MHP SA, 8.25%, 4/2/20 (144A) 612,640
1,600,000 Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 1,672,000
200,000 Minerva Luxembourg SA, 12.25%, 2/10/22 (144A) 231,000
600,000 Pesquera Exalmar SAA, 7.375%, 1/31/20 (144A) 528,000
300,000 Pilgrim's Pride Corp., 7.875%, 12/15/18 312,750
------------
$ 9,691,715
----------------------------------------------------------------------------------------------------
Tobacco -- 1.0%
1,645,000 Alliance One International, Inc., 9.875%, 7/15/21 $ 1,570,975
------------
Total Food, Beverage & Tobacco $ 13,360,015
----------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 2.2%
Health Care Equipment & Services -- 0.6%
831,000 Physio-Control International, Inc., 9.875%,
1/15/19 (144A) $ 895,403
----------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.6%
700,000 Kindred Healthcare, Inc., 6.375%, 4/15/22 (144A) $ 689,500
200,000 United Surgical Partners International, 9.0%, 4/1/20 216,000
------------
$ 905,500
----------------------------------------------------------------------------------------------------
Health Care Services -- 0.5%
425,000 BioScrip, Inc., 8.875%, 2/15/21 (144A) $ 433,500
426,000 Gentiva Health Services, Inc., 11.5%, 9/1/18 456,352
------------
$ 889,852
----------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.3%
500,000 Immucor, Inc., 11.125%, 8/15/19 $ 545,000
----------------------------------------------------------------------------------------------------
Health Care Technology -- 0.2%
275,000 Emdeon, Inc., 11.0%, 12/31/19 $ 304,906
------------
Total Health Care Equipment & Services $ 3,540,661
----------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.5%
Household Products -- 0.3%
EUR 350,000(a) Hydra Dutch Holdings 2BV, 5.582%, 4/15/19 (144A) $ 412,171
----------------------------------------------------------------------------------------------------
Personal Products -- 0.2%
345,000 Monitronics International, Inc., 9.125%, 4/1/20 $ 355,350
------------
Total Household & Personal Products $ 767,521
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 27
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
INDUSTRIALS -- 0.6%
Aerospace & Defense -- 0.3%
435,000 LMI Aerospace, Inc., 7.375%, 7/15/19 (144A) $ 435,000
----------------------------------------------------------------------------------------------------
Diversified Support Services -- 0.2%
280,000 Transfield Services, Ltd., 8.375%, 5/15/20 (144A) $ 300,300
----------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.1%
250,000 Apex Tool Group LLC, 7.0%, 2/1/21 (144A) $ 225,000
------------
Total Industrials $ 960,300
----------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 0.0%+
Internet Software & Services -- 0.0%+
68,586(g) First Data Holdings, Inc., 14.5% (14.5% PIK
0.0% cash), 9/24/19 (144A) $ 72,564
------------
Total Information Technology $ 72,564
----------------------------------------------------------------------------------------------------
INSURANCE -- 33.9%
Insurance Brokers -- 0.3%
GBP 475,000 Towergate Finance Plc, 10.5%, 2/15/19 (144A) $ 493,722
----------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.6%
1,000,000(b) Liberty Mutual Group, Inc., 7.0%, 3/15/37 (144A) $ 1,040,000
----------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 2.6%
6,000,000(c)(d)(h) Fixed Income Trust Series 2013-A, 0.0%,
10/15/97 (144A) $ 4,012,686
80,000(b)(f) White Mountains Insurance Group, Ltd.,
7.506%, 5/29/49 (144A) 83,998
------------
$ 4,096,684
----------------------------------------------------------------------------------------------------
Reinsurance -- 30.4%
1,500,000(d) Arlington Segregated Account (Kane SAC Ltd.),
Variable Rate Notes, 8/1/15 $ 1,563,300
EUR 750,000(a) ATLAS Reinsurance VII, 3.65%, 1/7/16 (144A) 945,237
1,000,000(a) Bosphorus 1 Re, Ltd., 2.505%, 5/3/16 (144A)
(Cat Bond) 999,400
1,018,720(d) Clarendon Segregated Account (Kane SAC Ltd.),
Variable Rate Notes, 7/14/15 980,416
750,000(a) Combine Re, Ltd., 17.755%, 1/7/15 (144A) (Cat Bond) 769,425
500,000(a) Compass Re, Ltd., 10.255%, 1/8/15 (144A) (Cat Bond) 506,400
500,000(a) Compass Re, Ltd., 11.255%, 1/8/15 (144A) (Cat Bond) 507,500
1,750,000(a) East Lane Re VI, Ltd., 2.755%, 3/14/18 (144A)
(Cat Bond) 1,755,950
2,000,000(a) Gator Re, Ltd., 6.505%, 1/9/17 (144A) (Cat Bond) 2,054,200
2,000,000(d) Gloucester Segregated Account (Kane SAC Ltd.),
Variable Rate Notes, 6/12/15 1,854,400
1,300,000(a) Ibis Re II, Ltd., 13.505%, 2/5/15 (144A) (Cat Bond) 1,337,700
1,000,000(a) Kilimanjaro Re, Ltd., 4.505%, 4/30/18 (144A)
(Cat Bond) 1,014,400
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
1,000,000(a) Kilimanjaro Re, Ltd., 4.755%, 4/30/18 (144A)
(Cat Bond) $ 1,033,500
2,000,000(a) Kizuna II Re, Ltd., 2.255%, 4/6/18 (144A) (Cat Bond) 2,024,400
EUR 1,500,000(a) Lion I Re, Ltd., 2.336%, 4/28/17 (144A) 1,878,072
1,000,000(a) Merna Reinsurance V, Ltd., 2.005%, 4/7/17 (144A)
(Cat Bond) 1,001,300
1,750,000(a) MetroCat Re, Ltd., 4.505%, 8/5/16 (144A) (Cat Bond) 1,819,475
975,000(a) Mythen Re, Ltd., 11.756%, 11/10/16 (144A) 1,051,830
500,000(a) Mythen Re, Ltd., Series 2012-2 Class A, 8.526%,
1/5/17 (144A) (Cat Bond) 536,400
1,250,000(a) Pelican Re, Ltd., 6.005%, 5/15/17 (144A) (Cat Bond) 1,317,250
2,008,000(d) PI-1, Series E -- 2014 (Kane SAC Ltd.), Variable Rate
Notes, 6/12/15 2,055,590
2,006,000(d) PI-6, Series B -- 2014 (Kane SAC Ltd.), Variable Rate
Notes, 7/18/16 2,130,573
2,004,948(d) PI-6, Series C -- 2014 (Kane SAC Ltd.), Variable Rate
Notes, 7/7/16 1,995,124
2,011,000(d) PI-6, Series D -- 2014 (Kane SAC Ltd.), Variable Rate
Notes, 7/30/16 2,149,558
2,000,000(a) Queen Street IV Capital, Ltd., 7.505%, 4/9/15 (144A)
(Cat Bond) 2,035,400
500,000(a) Queen Street VII Re, Ltd., 8.605%, 4/8/16 (144A)
(Cat Bond) 520,150
1,250,000(a) Residential Reinsurance 2011, Ltd., 12.005%,
6/6/15 (144A) (Cat Bond) 1,317,625
250,000(a) Residential Reinsurance 2012, Ltd., 12.755%,
12/6/16 (144A) (Cat Bond) 276,575
1,250,000(a) Residential Reinsurance 2012, Ltd., 19.005%,
12/6/16 (144A) (Cat Bond) 1,435,125
1,000,000(a) Residential Reinsurance 2012, Ltd., 22.005%,
6/6/16 (144A) (Cat Bond) 1,183,700
500,000(a) Residential Reinsurance 2013, Ltd., 20.005%,
12/6/17 (144A) (Cat Bond) 525,050
5,999(d)(i) Sector Re V, Ltd., Series 2, Class C, 0.0%, 12/1/17
(144A) (Cat Bond) 11,899
1,630(d)(i) Sector Re V, Ltd., Series 3, Class A, 0.0%, 3/1/18
(144A) (Cat Bond) 51,734
1,000,000(d)(i) Sector Re V, Ltd., Series 3, Class C, 0.0%, 12/1/17
(144A) (Cat Bond) 1,172,900
1,500,000(i) Sector Re V, Ltd., Series 4, Class A, 0.0%, 3/30/19
(144A) (Cat Bond) 1,665,300
1,000,000(d)(i) Silverton RE, Ltd., 0.0%, 9/16/16 (144A) (Cat Bond) 1,210,400
1,500,000(a) Successor X, Ltd., 11.255%, 11/10/15 (144A)
(Cat Bond) 1,569,900
500,000(a) Successor X, Ltd., 16.255%, 11/10/15 (144A)
(Cat Bond) 527,250
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 29
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
1,000,000(a) Successor X, Ltd., 16.505%, 1/27/15 (144A)
(Cat Bond) $ 1,009,400
1,000,000(a) Tar Heel Re, Ltd., 8.505%, 5/9/16 (144A) (Cat Bond) 1,063,900
------------
$ 48,857,708
------------
Total Insurance $ 54,488,114
----------------------------------------------------------------------------------------------------
MATERIALS -- 8.6%
Commodity Chemicals -- 0.5%
300,000 Basell Finance Co., BV, 8.1%, 3/15/27 (144A) $ 402,201
EUR 250,000 KP Germany Erste GmbH, 11.625%, 7/15/17 (144A) 342,992
------------
$ 745,193
----------------------------------------------------------------------------------------------------
Construction Materials -- 0.5%
389,000 Cemex Espana Luxembourg, 9.875%, 4/30/19 (144A) $ 433,813
300,000(f) Magnesita Finance, Ltd., 8.625%, 4/29/49 (144A) 300,000
------------
$ 733,813
----------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.1%
330,000 Boart Longyear Management Pty, Ltd., 10.0%,
10/1/18 (144A) $ 353,100
300,000(e) Midwest Vanadium Pty, Ltd., 11.5%, 2/15/18 (144A) 42,000
373,000 Mirabela Nickel, Ltd., 9.5%, 6/20/19 320,780
180,000 Prince Mineral Holding Corp., 12.0%, 12/15/19 (144A) 197,100
750,000 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 853,125
------------
$ 1,766,105
----------------------------------------------------------------------------------------------------
Gold -- 0.0%+
85,000 IAMGOLD Corp., 6.75%, 10/1/20 (144A) $ 70,125
----------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.4%
240,000(g) Ardagh Finance Holdings SA, 8.625% (8.625%
PIK 0.0% cash), 6/15/19 (144A) $ 245,402
EUR 250,000 Ardagh Glass Finance Plc, 8.75%, 2/1/20 (144A) 325,728
------------
$ 571,130
----------------------------------------------------------------------------------------------------
Paper Packaging -- 1.4%
606,510(c) Bio Pappel SAB de CV, 10.0%, 8/27/16 $ 612,575
580,000 Exopack Holding Corp., 10.0%, 6/1/18 (144A) 623,500
500,000 Reynolds Group Issuer, Inc., 9.0%, 4/15/19 522,500
475,000 Reynolds Group Issuer, Inc., 9.875%, 8/15/19 515,969
------------
$ 2,274,544
----------------------------------------------------------------------------------------------------
Paper Products -- 1.6%
675,000 Appvion, Inc., 9.0%, 6/1/20 (144A) $ 526,500
344,000 Mercer International, Inc., 9.5%, 12/1/17 361,200
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Paper Products -- (continued)
840,000 Resolute Forest Products, Inc., 5.875%, 5/15/23 $ 804,300
545,000 Sappi Papier Holding GmbH, 8.375%, 6/15/19 (144A) 591,325
255,000 Unifrax I LLC / Unifrax Holding Co., 7.5%,
2/15/19 (144A) 258,825
------------
$ 2,542,150
----------------------------------------------------------------------------------------------------
Precious Metals & Minerals -- 0.3%
500,000 ALROSA Finance SA, 8.875%, 11/17/14 (144A) $ 500,940
----------------------------------------------------------------------------------------------------
Steel -- 2.8%
450,000 Essar Steel Algoma, Inc., 9.375%, 3/15/15 (144A) $ 447,750
250,000 Evraz Group SA, 9.5%, 4/24/18 (144A) 255,937
900,000 Ferrexpo Finance Plc, 7.875%, 4/7/16 (144A) 846,180
900,000 Metinvest BV, 8.75%, 2/14/18 (144A) 628,344
600,000 Metinvest BV, 10.25%, 5/20/15 (144A) 477,120
585,000 Optima Specialty Steel, Inc., 12.5%, 12/15/16 (144A) 623,025
507,000 Permian Holdings, Inc., 10.5%, 1/15/18 (144A) 507,000
750,000 Ryerson, Inc., 9.0%, 10/15/17 789,375
------------
$ 4,574,731
------------
Total Materials $ 13,778,731
----------------------------------------------------------------------------------------------------
MEDIA -- 4.9%
Broadcasting -- 2.1%
400,000 Intelsat Luxembourg SA, 7.75%, 6/1/21 $ 418,000
200,000 Nara Cable Funding, Ltd., 8.875%, 12/1/18 (144A) 209,820
1,655,000 Townsquare Radio LLC / Townsquare Radio, Inc.,
9.0%, 4/1/19 (144A) 1,787,400
990,000 Truven Health Analytics, Inc., 10.625%, 6/1/20 1,059,300
------------
$ 3,474,520
----------------------------------------------------------------------------------------------------
Cable -- 0.2%
EUR 200,000 Nara Cable Funding, Ltd., 8.875%, 12/1/18 (144A) $ 262,512
----------------------------------------------------------------------------------------------------
Movies & Entertainment -- 2.0%
1,710,000 AMC Entertainment, Inc., 9.75%, 12/1/20 $ 1,898,100
600,000 Gibson Brands, Inc., 8.875%, 8/1/18 (144A) 576,000
200,000 Production Resource Group, Inc., 8.875%, 5/1/19 151,000
625,000 WMG Acquisition Corp., 6.75%, 4/15/22 (144A) 615,625
------------
$ 3,240,725
----------------------------------------------------------------------------------------------------
Publishing -- 0.6%
855,000 Gannett Co., Inc., 6.375%, 10/15/23 $ 919,125
------------
Total Media $ 7,896,882
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 31
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 0.8%
Biotechnology -- 0.8%
300,000 ConvaTec Healthcare E SA, 10.5%, 12/15/18 (144A) $ 318,000
1,043,000 Lantheus Medical Imaging, Inc., 9.75%, 5/15/17 983,027
------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 1,301,027
----------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.4%
Diversified REIT -- 0.1%
200,000 CNL Lifestyle Properties, Inc., 7.25%, 4/15/19 $ 204,500
----------------------------------------------------------------------------------------------------
Real Estate Operating Companies -- 0.3%
410,000 IRSA Inversiones y Representaciones SA, 8.5%,
2/2/17 (144A) $ 405,900
------------
Total Real Estate $ 610,400
----------------------------------------------------------------------------------------------------
RETAILING -- 0.7%
Computer & Electronics Retail -- 0.0%+
60,000 Rent-A-Center, Inc., 6.625%, 11/15/20 $ 57,900
----------------------------------------------------------------------------------------------------
Department Stores -- 0.6%
625,000 Grupo Famsa SAB de CV, 7.25%, 6/1/20 (144A) $ 596,875
350,000 Neiman Marcus Group, Ltd., LLC, 8.0%,
10/15/21 (144A) 373,340
------------
$ 970,215
----------------------------------------------------------------------------------------------------
Specialty Stores -- 0.1%
85,000 Outerwall, Inc., 6.0%, 3/15/19 $ 83,938
------------
Total Retailing $ 1,112,053
----------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.6%
Semiconductors -- 0.6%
210,000 Advanced Micro Devices, Inc., 6.75%, 3/1/19 $ 198,450
285,000 Advanced Micro Devices, Inc., 7.0%, 7/1/24 250,087
500,000 Advanced Micro Devices, Inc., 7.5%, 8/15/22 457,500
------------
Total Semiconductors & Semiconductor Equipment $ 906,037
----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 1.2%
Data Processing & Outsourced Services -- 0.5%
404,000 First Data Corp., 8.25%, 1/15/21 (144A) $ 438,340
162,000 First Data Corp., 10.625%, 6/15/21 186,705
225,000 NeuStar, Inc., 4.5%, 1/15/23 194,625
------------
$ 819,670
----------------------------------------------------------------------------------------------------
Systems Software -- 0.7%
1,144,999(d) Pegasus Solutions, Inc., 13.0%, 4/15/14 (144A) $ 1,076,299
------------
Total Software & Services $ 1,895,969
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.2%
Electronic Equipment & Instruments -- 0.2%
315,000 Zebra Technologies Corp., 7.25%, 10/15/22 (144A) $ 331,538
------------
Total Technology Hardware & Equipment $ 331,538
----------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.2%
Integrated Telecommunication Services -- 0.5%
186,000 Cincinnati Bell, Inc., 8.75%, 3/15/18 $ 192,510
300,000 Frontier Communications Corp., 8.75%, 4/15/22 346,500
350,000 PAETEC Holding Corp., 9.875%, 12/1/18 369,250
------------
$ 908,260
----------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.7%
250,000 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 263,125
300,000 Altice SA, 7.75%, 5/15/22 (144A) 315,000
340,000 Sprint Corp., 7.125%, 6/15/24 (144A) 349,350
250,000 Unison Ground Lease Funding LLC, 5.78%,
3/15/20 (144A) 252,622
1,115,000 Vimpel Communications Via VIP Finance Ireland,
Ltd. OJSC, 9.125%, 4/30/18 (144A) 1,202,806
RUB 14,400,000 VimpelCom Holdings BV, 9.0%, 2/13/18 (144A) 308,452
------------
$ 2,691,355
------------
Total Telecommunication Services $ 3,599,615
----------------------------------------------------------------------------------------------------
TRANSPORTATION -- 3.2%
Airlines -- 0.8%
545,000 Gol LuxCo SA, 8.875%, 1/24/22 (144A) $ 535,462
155,000 Intrepid Aviation Group Holdings LLC / Intrepid
Finance Co., 6.875%, 2/15/19 (144A) 153,838
500,000 TAM Capital 3, Inc., 8.375%, 6/3/21 (144A) 535,000
------------
$ 1,224,300
----------------------------------------------------------------------------------------------------
Airport Services -- 0.4%
564,400 Aeropuertos Argentina 2000 SA, 10.75%,
12/1/20 (144A) $ 599,957
----------------------------------------------------------------------------------------------------
Highways & Railtracks -- 0.2%
MXN 4,500,000 Red de Carreteras de Occidente SAPIB de CV, 9.0%,
6/10/28 (144A) $ 318,705
----------------------------------------------------------------------------------------------------
Marine -- 0.4%
500,000 Far East Capital, Ltd. SA, 8.0%, 5/2/18 (144A) $ 260,000
375,000 Navios South American Logistics, Inc. / Navios
Logistics Finance US, Inc., 7.25%, 5/1/22 (144A) 377,812
------------
$ 637,812
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 33
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Railroads -- 0.5%
355,000(g) AAF Holdings LLC / AAF Finance Co., 12.0% (6.0%
PIK 6.75% Cash), 7/1/19 (144A) $ 355,000
485,000 Florida East Coast Holdings Corp., 6.75%,
5/1/19 (144A) 500,462
------------
$ 855,462
----------------------------------------------------------------------------------------------------
Trucking -- 0.9%
1,000,000 Jack Cooper Holdings Corp., 9.25%, 6/1/20 (144A) $ 1,072,500
425,000 Swift Services Holdings, Inc., 10.0%, 11/15/18 446,973
------------
$ 1,519,473
------------
Total Transportation $ 5,155,709
----------------------------------------------------------------------------------------------------
UTILITIES -- 1.9%
Electric Utilities -- 1.4%
750,000 Cia de Energia Electrica en Alta Tension Transener SA,
9.75%, 8/15/21 (144A) $ 569,250
375,000 ContourGlobal Power Holdings SA, 7.125%,
6/1/19 (144A) 375,938
225,000 DTEK Finance Plc, 7.875%, 4/4/18 (144A) 142,875
419,000 Empresa Distrbuidora Y Comercializadora Norte,
9.75%, 10/25/22 (144A) 293,300
460,000(b) Enel S.p.A., 8.75%, 9/24/73 (144A) 537,050
225,000 PNM Resources, Inc., 9.25%, 5/15/15 234,319
------------
$ 2,152,732
----------------------------------------------------------------------------------------------------
Gas Utilities -- 0.5%
867,450 Transportadora de Gas del Sur SA, 9.625%,
5/14/20 (144A) $ 867,450
------------
Total Utilities $ 3,020,182
----------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $162,636,888) $162,834,011
----------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 2.2% of
Net Assets
DIVERSIFIED FINANCIALS -- 0.1%
Asset Management & Custody Banks -- 0.1%
120,000 Apollo Investment Corp., 5.75%, 1/15/16 $ 123,600
------------
Total Diversified Financials $ 123,600
----------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 0.8%
Health Care Equipment & Services -- 0.8%
1,040,000(c) Hologic, Inc., 2.0%, 12/15/37 $ 1,296,750
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Health Care Services -- 0.0%+
15,000 Omnicare, Inc., 3.25%, 12/15/35 $ 15,900
------------
Total Health Care Equipment & Services $ 1,312,650
----------------------------------------------------------------------------------------------------
MATERIALS -- 1.1%
Diversified Chemicals -- 1.1%
1,900,000(j) Hercules, Inc., 6.5%, 6/30/29 $ 1,745,625
----------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.0%+
100,000 Vedanta Resources Jersey, Ltd., 5.5%, 7/13/16 $ 100,250
------------
Total Materials $ 1,845,875
----------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY & LIFE
SCIENCES -- 0.1%
Biotechnology -- 0.1%
250,000 Corsicanto, Ltd., 3.5%, 1/15/32 $ 148,750
------------
Total Pharmaceuticals, Biotechnology &
Life Sciences $ 148,750
----------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.1%
Semiconductors -- 0.1%
250,000 ReneSola, Ltd., 4.125%, 3/15/18 (144A) $ 161,250
------------
Total Semiconductors & Semiconductor Equipment $ 161,250
----------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $2,733,850) $ 3,592,125
----------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS -- 2.2% of Net Assets
1,170,000(a) U.S. Treasury Notes Floating Rate Note,
0.09%, 7/31/16 $ 1,170,413
1,170,000(a) U.S. Treasury Notes Floating Rate Note,
0.065%, 1/31/16 1,169,944
1,170,000(a) U.S. Treasury Notes Floating Rate Note,
0.089%, 4/30/16 1,170,336
------------
$ 3,510,693
----------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $3,511,006) $ 3,510,693
----------------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS -- 1.1% of
Net Assets
Argentina -- 0.2%
352,960 Province of Salta Argentina, 9.5%, 3/16/22 (144A) $ 344,136
----------------------------------------------------------------------------------------------------
Ghana -- 0.3%
500,000 Republic of Ghana, 7.875%, 8/7/23 (144A) $ 503,250
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 35
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
----------------------------------------------------------------------------------------------------
Mexico -- 0.5%
MXN 8,870,000 Mexican Bonos, 7.75%, 11/13/42 $ 736,282
MXN 312,115 Mexican Udibonos, 3.5%, 12/14/17 25,017
------------
$ 761,299
----------------------------------------------------------------------------------------------------
Ukraine -- 0.1%
100,000 Ukraine Government International Bond, 6.75%,
11/14/17 (144A) $ 87,250
----------------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $1,668,135) $ 1,695,935
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Shares
----------------------------------------------------------------------------------------------------
COMMON STOCKS -- 0.7% of Net Assets
DIVERSIFIED FINANCIALS -- 0.0%+
Other Diversified Financial Services -- 0.0%+
731(k) BTA Bank JSC (G.D.R.) $ 464
------------
Total Diversified Financials $ 464
----------------------------------------------------------------------------------------------------
ENERGY -- 0.0%+
Oil & Gas Exploration & Production -- 0.0%+
1,890(k) Halcon Resources Corp. $ 5,878
------------
Total Energy $ 5,878
----------------------------------------------------------------------------------------------------
MATERIALS -- 0.1%
Diversified Metals & Mining -- 0.1%
AUD 1,587,442(k) Mirabela Nickel, Ltd. $ 102,629
------------
Total Materials $ 102,629
----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.0%+
Systems Software -- 0.0%+
2,114(d)(h)(k) Perseus Holding Corp. $ --
------------
Total Software & Services $ --
----------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.6%
Air Freight & Logistics -- 0.5%
943(d)(k) CEVA Holdings LLC $ 872,562
----------------------------------------------------------------------------------------------------
Marine -- 0.1%
247,509(d)(k) Horizon Lines, Inc. $ 97,766
------------
Total Transportation $ 970,328
----------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $1,603,630) $ 1,079,299
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
----------------------------------------------------------------------------------------------------
Shares Value
----------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 0.4% of
Net Assets
DIVERSIFIED FINANCIALS -- 0.3%
Other Diversified Financial Services -- 0.3%
470(f) Bank of America Corp., 7.25% $ 537,309
------------
Total Diversified Financials $ 537,309
----------------------------------------------------------------------------------------------------
ENERGY -- 0.1%
Oil & Gas Exploration & Production -- 0.1%
200(f)(k) Halcon Resources Corp., 5.75% $ 132,675
------------
Total Energy $ 132,675
----------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $524,900) $ 669,984
----------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 3.7% of Net Assets
BANKS -- 0.3%
Diversified Banks -- 0.3%
500(b)(f) AgStar Financial Services ACA, 6.75% $ 512,937
------------
Total Banks $ 512,937
----------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.7%
Other Diversified Financial Services -- 0.7%
40,675(b) GMAC Capital Trust I, 8.125% $ 1,087,243
------------
Total Diversified Financials $ 1,087,243
----------------------------------------------------------------------------------------------------
INSURANCE -- 2.7%
Reinsurance -- 2.7%
2,500,000(d)(k) Altair Re II, Ltd. $ 2,686,500
15,000(d)(k) Lorenz Re, Ltd. 1,662,750
------------
$ 4,349,250
------------
Total Insurance $ 4,349,250
----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.0%+
Data Processing & Outsourced Services -- 0.0%+
1,110(d)(h)(k) Perseus Holding Corp., 14.0% $ --
------------
Total Software & Services $ --
----------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $5,425,247) $ 5,949,430
----------------------------------------------------------------------------------------------------
RIGHT/WARRANT -- 0.0%+ of Net Assets
AUTOMOBILES & COMPONENTS -- 0.0%+
Auto Parts & Equipment -- 0.0%+
86(d)(k) Lear Corp., Expires 11/9/14 $ 15,931
------------
Total Automobiles & Components $ 15,931
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 37
Schedule of Investments | 10/31/14 (unaudited) (continued)
----------------------------------------------------------------------------------------------------
Shares Value
----------------------------------------------------------------------------------------------------
TOTAL RIGHT/WARRANT
(Cost $4,645) $ 15,931
-----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 136.9%
(Cost $219,318,993) (l)(m) $219,985,054
-----------------------------------------------------------------------------------------------------
WRITTEN PUT OPTION -- 0.0%+
(672,138) U.S. Dollar versus Turkish Lira $ (11)
-----------------------------------------------------------------------------------------------------
TOTAL WRITTEN PUT OPTION
(Premiums received $(11,073)) $ (11)
-----------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (36.9)% $(59,321,819)
-----------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
COMMON SHAREOWNERS -- 100.0% $160,663,224
=====================================================================================================
+ Amount rounds less than 0.1%
(Cat Bond) Catastrophe bond is a high yield debt instrument that is
usually insurance linked and meant to raise money in case of
catastrophe.
(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, 2014, the value of these securities
amounted to $114,610,184, or 71.3% of total net assets applicable
to common shareowners.
* Senior secured floating rate loan interests in which the Trust
invests generally pay interest at rates that are periodically
redetermined by reference to a base lending plus a premium. These
base lending rates are generally (i) the lending rate offered by
one or more major European banks, such as LIBOR (London InterBank
Offered Rate), (ii) the prime rate offered by one or more major
United States banks, (iii) the rate of a certificate of deposit or
(iv) other base lending rates used by commercial lenders. The
interest rate shown is the rate accruing at October 31, 2014.
(a) Floating rate note. The rate shown is the coupon rate at
October 31, 2014.
(b) The interest rate is subject to change periodically. The
interest rate shown is the rate at October 31, 2014.
(c) Debt obligation initially issued at one coupon which converts
to a higher coupon at a specific date. The rate shown is the rate
at October 31, 2014.
(d) Indicates a security that has been deemed illiquid. As of
October 31, 2014 the aggregate cost of illiquid securities in the
Trust's portfolio was $26,989,077. As of that date, the aggregate
value of illiquid securities in the Trust's portfolio of
$26,092,793 represented 16.2% of total net assets applicable to
common shareowners.
(e) Security is in default and is non income producing.
(f) Security is perpetual in nature and has no stated maturity date.
(g) Payment in Kind (PIK) security which may pay interest in the
form of additional principal amount.
(h) Security is valued using fair value methods (other than prices
supplied by independent pricing services or broker-dealers). See
Notes to Financial Statements -- Note 1A.
(i) Security issued with a zero coupon. Income is recognized
through accretion of discount.
(j) Security is priced as a unit.
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
(k) Non-income producing.
(l) At October 31, 2014, the net unrealized depreciation on
investments based on cost for federal tax purposes of $221,659,627
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 10,366,808
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (12,041,381)
------------
Net unrealized depreciation $ (1,674,573)
============
For financial reporting purposes net unrealized appreciation on investments was
$666,061 and cost of investments aggregated $219,318,993.
(m) Distributions of Investments by country of issue, as a
percentage of total investments in securities, is as follows:
United States 62.4%
Bermuda 9.2
Cayman Islands 7.2
Luxembourg 3.6
Ireland 3.2
Argentina 2.2
Netherlands 2.0
Mexico 1.5
Austria 1.2
United Kingdom 1.1
Other (individually less than 1%) 6.4
-----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended October 31, 2014 aggregated $32,232,638 and $34,196,739,
respectively.
Glossary of Terms:
(G.D.R.) Global Depositary Receipt
Principal amounts are denominated in U.S. dollars unless otherwise noted.
AUD -- Australian Dollar
EUR -- Euro
GBP -- Great British Pound
MXN -- Mexican Peso
RUB -- Russian Ruble
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels below.
Level 1 -- quoted prices in active markets for identical securities.
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risks, etc.). See Notes to Financial Statements -- Note 1A.
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments). See Notes
to Financial Statements -- Note 1A.
Generally, equity securities are categorized as Level 1, fixed income securities
and senior loans are categorized as Level 2, and securities valued using fair
value methods (other than prices supplied by independent pricing services or
broker dealers) as Level 3. See Notes to Financial Statements -- Note 1A.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 39
Schedule of Investments | 10/31/14 (unaudited) (continued)
The following is a summary of the inputs used as of October 31, 2014, in valuing
the Trust's investments.
------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------------------------
Asset Backed Securities $ -- $ 2,922,434 $ -- $ 2,922,434
Collateralized Mortgage
Obligations -- 3,448,549 -- 3,448,549
Commercial Mortgage-Backed
Securities -- 748,683 -- 748,683
Senior Secured Floating Rate
Loan Interests -- 33,517,980 -- 33,517,980
Corporate Bonds & Notes
Insurance
Property & Casualty
Insurance -- 83,998 4,012,686 4,096,684
Reinsurance -- 32,016,514 16,841,194 48,857,708
All Other Corporate Bonds & Notes -- 109,879,619 -- 109,879,619
Convertible Bonds & Notes -- 3,592,125 -- 3,592,125
Sovereign Debt Obligations -- 1,695,935 -- 1,695,935
U.S. Government and Agency
Obligations -- 3,510,693 -- 3,510,693
Common Stocks
Software & Services
Systems Software -- -- --* --*
Transportation
Air Freight & Logistics -- 872,562 -- 872,562
All Other Common Stocks 206,737 -- -- 206,737
Convertible Preferred Stocks
Energy
Oil & Gas Exploration &
Production -- 132,675 -- 132,675
All Other Convertible Preferred Stocks 537,309 -- -- 537,309
Preferred Stocks
Banks
Diversified Banks -- 512,937 -- 512,937
Insurance
Reinsurance -- -- 4,349,250 4,349,250
Software & Services
Data Processing &
Outsourced Services -- -- --* --*
All Other Preferred Stocks 1,087,243 -- -- 1,087,243
Right/Warrant 15,931 -- -- 15,931
------------------------------------------------------------------------------------------------------
Total Investments in Securities $ 1,847,220 $192,934,704 $ 25,203,130 $219,985,054
======================================================================================================
Other Financial Instruments
Net unrealized appreciation on
forward foreign currency
contracts $ -- $ 251,382 $ -- $ 251,382
Net unrealized depreciation on
forward foreign currency
contracts $ -- $ (64,692) $ -- $ (64,692)
Net unrealized appreciation on
written option -- 11,062 -- 11,062
------------------------------------------------------------------------------------------------------
Total Other Financial Instruments $ -- $ 197,752 $ -- $ 197,752
======================================================================================================
* Securities in this category are valued at $0.
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
The following is a reconciliation of assets valued using significant
unobservable inputs (Level 3):
------------------------------------------------------------------------------------------------------------------------------------
Change in
Balance Realized Unrealized Accrued Transfers Transfers Balance
as of gain appreciation discounts/ in to out of as of
4/30/14 (loss)(1) (depreciation)(2) Purchases Sales premiums Level 3* Level 3* 10/31/14
------------------------------------------------------------------------------------------------------------------------------------
Corporate Bonds
& Notes
Insurance
Property &
Casualty
Insurance $ 3,588,313 $ -- $ 424,373 $ -- $ -- $ -- $ -- $ -- $ 4,012,686
Reinsurance 8,046,566 -- 448,252 8,227,125 -- 119,251 -- -- 16,841,194
Materials
Diversified
Metals &
Mining 146,250 -- 3,750 50,000 (200,000) -- -- -- --
Common Stocks
Software &
Services
Systems
Software --** -- -- -- -- -- -- -- --**
Preferred Stocks
Insurance
Reinsurance 6,852,231 152,745 (329,543) -- (2,326,183) -- -- -- 4,349,250
Software &
Services
Systems
Software --** -- -- -- -- -- -- -- --**
------------------------------------------------------------------------------------------------------------------------------------
Total $18,633,360 $152,745 $ 546,832 $ 8,277,125 $ (2,526,183) $ 119,251 $ -- $ -- $25,203,130
====================================================================================================================================
* Transfers are calculated on the beginning of period values. During the six
months ended October 31, 2014, there were no transfers between levels 1, 2
and 3.
** Securities in this category are valued at $0.
(1) Realized gain (loss) on these securities is included in the realized gain
(loss) from investments in the Statement of Operations.
(2) Unrealized appreciation (depreciation) on these securities is included in
the change in unrealized appreciation (depreciation) from investments in the
Statement of Operations.
Net change in unrealized appreciation of Level 3 investments still held and
considered Level 3 at 10/31/14: $850,426.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 41
The following table presents additional information about valuation techniques
and inputs used for investments that were measured at fair value and categorized
as Level 3 at October 31, 2014:
Fair Value Valuation Unobservable Value/
10/31/14 Technique(s) Input Range
=====================================================================================
Corporate Bonds & Notes $16,841,194 Broker Quote Proprietary $31.7385-198.35
Broker Model per bond
-------------------------------------------------------------------------------------
Corporate Bonds & Notes** $ 4,012,686 Market Yield Premium 1.05%
Comparables
-------------------------------------------------------------------------------------
Preferred Stocks $ 4,349,250 Broker Quote Proprietary $1.0746-110.85
Broker Model per share
-------------------------------------------------------------------------------------
** The significant unobservable input used in the fair value measurement of
corporate bonds and notes is yield premium. Significant increases (decreases)
in this input would result in a significantly higher (lower) fair value
measurement.
42 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Statement of Assets and Liabilities | 10/31/14 (unaudited)
ASSETS:
Investments in securities, at value (cost $219,318,993) $219,985,054
Cash 5,276,331
Foreign currencies, at value (cost $423,401) 371,330
Net unrealized appreciation on unfunded loan commitments 2,053
Receivables --
Investment securities sold 1,059,484
Interest receivable 3,143,690
Net unrealized appreciation on forward foreign currency contracts 251,382
Reinvestment of distributions 45,870
Prepaid expenses 3,794
-------------------------------------------------------------------------------------
Total assets $230,138,988
-------------------------------------------------------------------------------------
LIABILITIES:
Written options (premiums received $11,073) $ 11
Payables --
Outstanding borrowing 67,000,000
Investment securities purchased 2,074,905
Trustees' fees 571
Net unrealized depreciation on forward foreign currency contracts 64,692
Due to Affiliates 164,875
Administration fee payable 62,422
Interest expense payable 2,884
Accrued expenses 105,404
-------------------------------------------------------------------------------------
Total liabilities $ 69,475,764
-------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $194,643,780
Distributions in excess of net investment income (1,646,224)
Accumulated net realized loss on investments and foreign
currency transactions (33,141,225)
Net unrealized appreciation on investments 666,061
Net unrealized appreciation on unfunded loan commitments 2,053
Net unrealized appreciation on written option 11,062
Net unrealized appreciation on forward foreign currency contracts
and other assets and liabilities denominated in foreign currencies 127,727
-------------------------------------------------------------------------------------
Net assets applicable to common shareowners $160,663,224
-------------------------------------------------------------------------------------
NET ASSET VALUE PER COMMON SHARE:
No par value (unlimited number of shares authorized)
Based on $160,663,224 / 8,332,790 common shares $ 19.28
=====================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 43
Statement of Operations (unaudited)
For the Six Months Ended 10/31/14
INVESTMENT INCOME:
Interest $ 9,350,820
Dividends 98,555
Loan facility and other income 79,204
---------------------------------------------------------------------------------------
Total investment income $ 9,528,579
---------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 997,243
Administrative reimbursements 63,224
Transfer agent fees and expenses 2,165
Shareholder communications expense 5,612
Custodian fees 14,932
Professional fees 40,918
Printing expenses 8,081
Trustees' fees 2,498
Pricing fees 15,747
Miscellaneous 20,948
---------------------------------------------------------------------------------------
Net operating expenses $ 1,171,368
---------------------------------------------------------------------------------------
Interest expense $ 343,300
---------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 1,514,668
---------------------------------------------------------------------------------------
Net investment income $ 8,013,911
---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
WRITTEN OPTIONS, UNFUNDED LOAN COMMITMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $ (2,271,532)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 520,329 $ (1,751,203)
---------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on:
Investments $ (4,650,625)
Unfunded loan commitments 2,053
Written options 4,041
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 175,631 $ (4,468,900)
---------------------------------------------------------------------------------------
Net loss on investments, written options, unfunded loan
commitments and foreign currency transactions $ (6,220,103)
---------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,793,808
=======================================================================================
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------
Six Months
Ended
10/31/14 Year Ended
(unaudited) 4/30/14
----------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 8,013,911 $ 16,463,899
Net realized loss on investments and foreign
currency transactions (1,751,203) (4,012,420)
Change in net unrealized appreciation (depreciation)
on investments, written options, unfunded loan
commitments and foreign currency transactions (4,468,900) 958,090
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,793,808 $ 13,409,569
----------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income and previously undistributed
net investment income ($0.96 and $2.29 per
share, respectively) $ (7,992,257) $ (19,031,655)
----------------------------------------------------------------------------------------
Total distributions to common shareowners $ (7,992,257) $ (19,031,655)
----------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 250,324 $ 587,349
----------------------------------------------------------------------------------------
Net increase in net assets applicable to
common shareowners from Trust
share transactions $ 250,324 $ 587,349
----------------------------------------------------------------------------------------
Net decrease in net assets applicable to
common shareowners $ (5,948,125) $ (5,034,737)
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of period 166,611,349 171,646,086
----------------------------------------------------------------------------------------
End of period $160,663,224 $ 166,611,349
----------------------------------------------------------------------------------------
Distributions in excess of net investment income $ (1,646,224) $ (1,610,823)
========================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 45
Statement of Cash Flows (unaudited)
For the Six Months Ended 10/31/14
Cash Flows From Operating Activities:
Net increase in net assets resulting from operations $ 1,793,808
------------------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets resulting from
operations to net cash and foreign currencies from operating activities:
Purchases of investment securities $ (76,463,002)
Proceeds from disposition and maturity of investment securities 80,928,819
Inflation indexed bond income (235)
Net accretion and amortization of discount/premium on investment securities (491,627)
Decrease in investment securities sold receivable 2,256,241
Decrease in interest receivable 360,022
Increase in reinvestment of distributions (4,917)
Increase in prepaid expenses (3,794)
Decrease in other assets 61,700
Increase in investment securities purchased payable 1,774,062
Decrease in due to custodian (3,504,842)
Increase in affiliated expenses payable 1,795
Increase in trustees' fees payable 571
Increase in administration fees payable 4,243
Decrease in accrued expenses payable (13,859)
Decrease in interest expense payable (187)
Change in unrealized depreciation on investments 4,650,625
Change in unrealized appreciation on forward foreign currency contracts (225,267)
Change in unrealized appreciation on unfunded loan commitments (2,053)
Change in unrealized appreciation on written options (4,041)
Net realized loss on investments 2,271,532
------------------------------------------------------------------------------------------------
Net cash and foreign currencies from operating activities $ 13,389,594
------------------------------------------------------------------------------------------------
Cash Flows Used in Financing Activities:
Distributions to common shareowners from net investment income $ (7,992,257)
Reinvestment of distributions 250,324
------------------------------------------------------------------------------------------------
Net cash and foreign currencies used in financing activities $ (7,741,933)
------------------------------------------------------------------------------------------------
Cash and Foreign Currencies:
Beginning of the period $ --
------------------------------------------------------------------------------------------------
End of the period $ 5,647,661
================================================================================================
Cash Flow Information:
Cash paid for interest $ 343,487
------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
46 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------------
Six Months Year Year
Ended Year Year Ended Ended Year
10/31/14 Ended Ended 4/30/12 4/30/11 Ended
(unaudited) 4/30/14 4/30/13 (Consolidated) (Consolidated) 4/30/10
------------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 20.03 $ 20.70 $19.51 $ 21.01 $20.17 $13.94
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 0.96 $ 1.98 $ 2.24 $ 2.10 $ 2.03 $ 1.76
Net realized and unrealized gain (loss) on investments,
written options, unfunded loan commitments and foreign
currency transactions (0.75) (0.36) 0.99 (1.64) 0.73 6.48
------------------------------------------------------------------------------------------------------------------------------------
Net increase from investment operations $ 0.21 $ 1.62 $ 3.23 $ 0.46 $ 2.76 $ 8.24
------------------------------------------------------------------------------------------------------------------------------------
Distributions to common shareowners from:
Net investment income and previously undistributed net
investment income $ (0.96) $ (2.29) $(2.04) $ (1.96) $(1.92) $(1.69)
Tax return of capital -- -- -- -- -- (0.32)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.75) $ (0.67) $ 1.19 $ (1.50) $ 0.84 $ 6.23
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (b) $ 19.28 $ 20.03 $20.70 $ 19.51 $21.01 $20.17
------------------------------------------------------------------------------------------------------------------------------------
Market value, end of period (b) $ 20.30 $ 20.85 $21.82 $ 20.13 $21.95 $20.46
====================================================================================================================================
Total return at market value (c) 2.17% 7.12% 19.98% 1.35% 17.95% 73.25%
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 47
---------------------------------------------------------------------------------------------------------------------------------
Six Months Year Year
Ended Year Year Ended Ended Year
10/31/14 Ended Ended 4/30/12 4/30/11 Ended
(unaudited) 4/30/14 4/30/13 (Consolidated) (Consolidated) 4/30/10
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets of common shareowners:
Total expenses plus interest expense (d)(e) 1.81%(f) 1.86% 1.97% 2.04% 2.20% 2.22%
Net investment income available to common shareowners 9.59%(f) 9.88% 11.26% 10.75% 10.02% 9.84%
Portfolio turnover 14% 38% 34% 24% 30% 24%
Net assets of common shareowners, end of period
(in thousands) $160,663 $166,611 $171,646 $161,146 $172,882 $165,281
=================================================================================================================================
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and Saturday.
(c) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Past
performance is not a guarantee of future results.
(d) Expense ratios do not reflect the effect of distribution payments to
preferred shareowners.
(e) Includes interest expense of 0.41%, 0.45%, 0.48%, 0.56%, 0.58% and 0.83%,
respectively.
(f) Annualized.
The accompanying notes are an integral part of these financial statements.
48 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Notes to Financial Statements | 10/31/14 (unaudited)
1. Organization and Significant Accounting Policies
Pioneer Diversified High Income Trust (the Trust) was organized as a Delaware
statutory trust on January 30, 2007. Prior to commencing operations on May 30,
2007, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended. The investment
objective of the Trust is to seek a high level of current income and the Trust
may, as a secondary objective, also seek capital appreciation to the extent that
it is consistent with its investment objective.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gain or loss on investments during the reporting
period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Senior floating rate
loan interests (senior loans) are valued in accordance with guidelines
established by the Board of Trustees at the mean between the last available
bid and asked prices from one or more brokers or dealers as obtained from
Loan Pricing Corporation, an independent pricing service. If price
information is not available from Loan Pricing Corporation or if the price
information is deemed to be unreliable, price information will be obtained
from an alternative loan interest pricing service. If no reliable price
quotes are available from either the primary or alternative pricing service
broker quotes will be solicited. Fixed-income securities are valued at
prices supplied by independent pricing services, which consider such factors
as market prices, market events, quotations from one or more brokers,
Treasury spreads, yields, maturities and ratings. Valuations may be
supplemented by dealers and other sources, as required. Equity securities
that have traded on an exchange are valued at the last sale price on the
principal exchange where they are traded. Equity securities that have not
traded on the date of valuation or securities for which sale prices are not
available, generally are valued using the mean between the last bid and
asked prices. Shares of money market mutual funds are valued at such funds'
net asset value.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 49
Trading in foreign securities is substantially completed each day at various
times prior to the close of the New York Stock Exchange (NYSE). The values
of such securities used in computing the net asset value of the Trust's
shares are determined as of such times.
Securities and loans interests for which independent pricing services are
unable to supply prices or for which market prices and/or quotations are not
readily available, or are considered to be unreliable are valued by a fair
valuation team comprised of certain personnel of Pioneer Investment
Management, Inc. (PIM), the Trust's investment adviser, pursuant to
procedures adopted by the Trust's Board of Trustees. PIM's fair valuation
team uses fair value methods approved by the Valuation Committee of the
Board of Trustees. PIM's valuation team is responsible for monitoring
developments that may impact fair valued securities and for discussing and
assessing fair value on an ongoing basis, and at least quarterly, with the
Valuation Committee of the Board of Trustees.
Inputs used when applying fair value methods to value a security may include
credit ratings, the financial condition of the company, current market
conditions and comparable securities. The Trust may use fair value methods
if it is determined that a significant event has occurred after the close of
the exchange or market on which the security trades and prior to the
determination of the Trust's net asset value. Examples of a significant
event might include political or economic news, corporate restructurings,
natural disasters, terrorist activity or trading halts. Thus, the valuation
of the Trust's securities may differ significantly from exchange prices and
such differences could be material.
At October 31, 2014, three securities were valued using fair value methods
(in addition to securities valued using prices supplied by independent
pricing services or broker-dealers) representing 2.5% of net assets
applicable to common shareowners. The value of these fair valued securities
was $4,012,686.
B. Investment Income and Transactions
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Trust becomes aware of the ex-dividend date in
the exercise of reasonable diligence.
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.
50 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Premiums and discounts related to certain mortgage-backed securities are
amortized or accreted in proportion to the monthly paydowns. Discounts and
premiums on 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.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
C. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on foreign
currency contracts, disposition of foreign currencies and the difference
between the amount of income accrued and the U.S. dollars actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the Statement of Operations from the
effects of changes in the market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
D. Forward Foreign Currency Contracts
The Trust may enter into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date. All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized appreciation or depreciation
are recorded in the Trust's financial statements. The Trust records realized
gains and losses at the time a contract is offset by entry into a closing
transaction or extinguished by delivery of the currency. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contracts and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar
(see Note 5).
E. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. As of
April 30, 2014, the Trust did not accrue any interest or penalties with
respect to uncertain tax positions, which if applicable, would be recorded
as an income tax expense in the Statement of Operations. Tax returns filed
within the prior three years remain subject to examination by federal and
state tax authorities.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 51
The amount and character of income and capital gain distributions to
shareowners are determined in accordance with federal income tax rules,
which may differ from U.S. generally accepted accounting principles.
Distributions in excess of net investment income or net realized gains are
temporary overdistributions for financial statement and tax purposes.
Capital accounts within the financial statements are adjusted for permanent
book/tax differences to reflect tax character, but are not adjusted for
temporary differences.
The tax character of distributions paid to shareowners during the year ended
April 30, 2014 was as follows:
----------------------------------------------------------------------------
2014
----------------------------------------------------------------------------
Distributions paid from:
Ordinary income $19,031,655
----------------------------------------------------------------------------
Total $19,031,655
============================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2014:
----------------------------------------------------------------------------
2014
----------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 755,799
Capital loss carryforward (29,453,615)
Post-October loss deferred (1,642,624)
Unrealized appreciation 2,558,333
----------------------------------------------------------------------------
Total $ (27,782,107)
============================================================================
The difference between book-basis and tax-basis unrealized appreciation is
primarily attributable to the tax deferral of losses on wash sales, 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 for premiums and discounts on fixed income securities
and other book/tax temporary differences.
F. Risks
Information regarding the Trust's principal risks is contained in the
Trust's original offering prospectus, with additional information included
in the Trust's shareowner reports issued from time to time. Please refer to
those documents when considering the Trust's principal risks. At times, the
Trust's investments may represent industries or industry sectors that are
interrelated or have common risks, making the Trust more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
52 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
The Trust invests in below investment grade (high yield) debt securities,
floating rate loans and event-linked bonds sometimes referred to as
"catastrophe" bonds or "insurance-linked" bonds. The Trust may invest in
securities and other obligations of any credit quality, including those that
are rated below investment grade, or are unrated but are determined by the
investment adviser to be of equivalent credit quality. Below investment
grade securities are commonly referred to as "junk bonds" and are considered
speculative with respect to the issuer's capacity to pay interest and repay
principal. Below investment grade securities, including floating rate loans,
involve greater risk of loss, are subject to greater price volatility, and
are less liquid and more difficult to value, especially during periods of
economic uncertainty or change, than higher rated debt securities. The trust
may invest in securities of issuers that are in default or that are in
bankruptcy. The value of collateral, if any, securing a floating rate loan
can decline or may be insufficient to meet the issuer's obligations or may
be difficult to liquidate. No active trading market may exist for many
floating rate loans, and many loans are subject to restrictions on resale.
Any secondary market may be subject to irregular trading activity and
extended settlement periods. Additionally, the Trust may invest in "event-
linked" bonds, which sometimes are referred to as "insurance-linked" or
"catastrophe" bonds. The return of principal and the payment of interest on
event-linked instruments are contingent on the nonoccurrence of pre-defined
"trigger" events, such as hurricane or an earthquake of a specific
magnitude. In addition to the specific 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 certain foreign markets
or countries with limited developing markets may subject the Trust to a
greater degree of risk than would investments in a developed market. These
risks include disruptive political or economic conditions and the possible
imposition of adverse governmental laws or currency exchange restrictions.
G. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest, is
required to be equal to or in excess of the repurchase price. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Trust's custodian or a sub-custodian of the Trust. PIM is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 53
H. Automatic Dividend Reinvestment Plan
All common shareowners whose shares are registered in their own names
automatically participate in the Automatic Dividend Reinvestment Plan (the
Plan), under which participants receive all dividends and capital gain
distributions (collectively, dividends) in full and fractional common
shares of the Trust in lieu of cash. Shareowners may elect not to
participate in the Plan. Shareowners not participating in the Plan receive
all dividends and capital gain distributions in cash. Participation in the
Plan is completely voluntary and may be terminated or resumed at any time
without penalty by notifying American Stock Transfer & Trust Company, the
agent for shareowners in administering the Plan (the Plan Agent), in
writing prior to any dividend record date; otherwise such termination or
resumption will be effective with respect to any subsequently declared
dividend or other distribution.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate in
the Plan on the shareowner's behalf. If the firm or nominee does not offer
the Plan, dividends will be paid in cash to the shareowner of record. A firm
or nominee may reinvest a shareowner's cash dividends in common shares of
the Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional unissued
but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend, the net asset value per common share
is equal to or less than the market price per share plus estimated brokerage
trading fees (market premium), the Plan Agent will invest the dividend
amount in newly issued common shares. The number of newly issued common
shares to be credited to each account will be determined by dividing the
dollar amount of the dividend by the net asset value per common share on the
date the shares are issued, provided that the maximum discount from the then
current market price per share on the date of issuance does not exceed 5%.
If, on the payment date for any dividend, the net asset value per common
share is greater than the market value (market discount), the Plan Agent
will invest the dividend amount in common shares acquired in open-market
purchases. There are no brokerage charges with respect to newly issued
common shares. However, 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 not
be able to transfer the shares to another broker and continue to participate
in the Plan.
54 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
I. Option Writing
The Trust may write put and covered call options to seek to increase total
return. When an option is written, the Trust receives a premium and becomes
obligated to purchase or sell the underlying security at a fixed price, upon
the exercise of the option. When the Trust writes an option, an amount equal
to the premium received by the Trust is recorded as a liability and is
subsequently adjusted to the current value of the option written. Premiums
received from writing options that expire unexercised are treated by the
Trust on the expiration date as realized gains from investments. The
difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
realized gain, or, if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the
underlying security in determining whether the Trust has realized a gain or
loss. The Trust as a writer of an option bears the market risk of an
unfavorable change in the price of the security underlying the written
option.
The average value of option contracts open for the period ended October 31,
2014 was $1,224. Written call and put option contracts outstanding at period
end are listed at the end of the Trust's schedule of investments.
The Trust held one written call option contract that was open at October 31,
2014.
Transactions in written call options for the period ended October 31, 2014
are summarized as follows:
----------------------------------------------------------------------------
Number of Contracts Premiums Received
----------------------------------------------------------------------------
Options open at beginning of period 672,138 $11,073
Options written -- --
Options terminated in closing transactions -- --
Options expired -- --
----------------------------------------------------------------------------
Options open at end of period 672,138 $11,073
============================================================================
J. 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 the Trust's financial statements. As the purchaser of an index
option, the
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 55
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 during the
year ended October 31, 2014 was $3,796. There were no outstanding purchased
options at October 31, 2014.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), manages
the Trust's portfolio. Management fees payable under the Trust's Advisory
Agreement with PIM are calculated daily at the annual rate of 0.85% of the
Trust's average daily managed assets. "Managed assets" means (a) the total
assets of the Trust, including any form of investment leverage, minus (b) all
accrued liabilities incurred in the normal course of operations, which shall not
include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without limitation,
borrowing through a credit facility or the issuance of debt securities), (ii)
the issuance of preferred stock or other similar preference securities, and/or
(iii) any other means. For the six months ended October 31, 2014, the net
management fee was 0.85% of the Trust's average daily managed assets, which was
equivalent to 1.20% of the Trust's average daily net assets.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. At October 31,
2014, $227,297 was payable to PIM related to management costs, administrative
costs and certain other services is included in "Due to Affiliates" and
"Administration fees payable" on the Statement of Assets and Liabilities.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly owned
indirect subsidiary of UniCredit, through a sub-transfer agency agreement with
American Stock Transfer & Trust Company, provides substantially all transfer
agent and shareowner services related to the Trust's common shares at negotiated
rates.
56 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
In addition, the Trust reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareowner communications activities such as proxy and
statement mailings and outgoing calls.
4. Expense Offset Arrangement
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Trust's custodian expenses. For the six months ended October 31, 2014, the
Trust expenses were not reduced under such arrangement.
5. Forward Foreign Currency Contracts
At October 31, 2014, the Trust had entered into various forward foreign currency
contracts that obligate the Trust to deliver or take delivery of currencies at
specified future maturity dates. Alternatively, prior to the settlement date of
a forward foreign currency contract, the Trust may close out such contract by
entering into an offsetting contract. The average value of contracts open during
the six months ended October 31, 2014 was $16,264,650.
Open foreign currency contracts at October 31, 2014, were as follows:
----------------------------------------------------------------------------------------------
Quantity/ Net
Shares Unrealized
Currency Purchased/ Book Settlement US$ Value Appreciation/
Description Sold Value Date at 10/31/14 (Depreciation)
----------------------------------------------------------------------------------------------
EUR
(European Euro) (5,454,057) $(7,076,984) 4/24/15 $(6,840,942) $236,042
EUR
(European Euro) 490,058 679,364 4/24/15 614,672 (64,692)
GBP
(British Pound
Sterling) (394,254) (645,089) 3/9/15 (629,749) 15,340
----------------------------------------------------------------------------------------------
Total $186,690
==============================================================================================
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 57
6. Assets and Liabilities Offsetting
Financial instruments subject to an enforceable master netting agreement have
been offset on the Statements of Assets and Liabilities. The following charts
show gross assets and liabilities as of October 31, 2014:
----------------------------------------------------------------------------------------------------
Assets:
Net
Gross Amounts of Gross Amounts
Amounts Assets Not Offset in the
Offset Presented Statement of
in the In the Assets and Liabilities
Gross Statement Statement -----------------------------------
Amounts of of of Cash
Recognized Assets and Assets and Financial Collateral Net
Description Assets Liabilities Liabilities Instruments Received Amount
----------------------------------------------------------------------------------------------------
Forward
foreign
currency
contracts $186,690 $ -- $ -- $ -- $ -- $186,690
----------------------------------------------------------------------------------------------------
$186,690 $ -- $ -- $ -- $ -- $186,690
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Liabilities:
Net
Gross Amounts of Gross Amounts
Amounts Assets Not Offset in the
Offset Presented Statement of
in the In the Assets and Liabilities
Gross Statement Statement -----------------------------------
Amounts of of of Cash
Recognized Assets and Assets and Financial Collateral Net
Description Liabilities Liabilities Liabilities Instruments Received Amount
----------------------------------------------------------------------------------------------------
Forward
foreign
currency
contracts $ -- $ -- $ -- $ -- $ -- $ --
Written
options $ 11 $ -- $ -- $ -- $ -- $ 11
----------------------------------------------------------------------------------------------------
$ 11 $ -- $ -- $ -- $ -- $ 11
----------------------------------------------------------------------------------------------------
7. Unfunded and Bridge Loan Commitments
The Trust had the following bridge loan outstanding at October 31, 2014:
----------------------------------------------------------------------------------------------------
Unrealized
Appreciation
Borrower Par Cost Value (Depreciation)
----------------------------------------------------------------------------------------------------
Burger King Worldwide, Inc.,
Bridge Loan $2,000,000 $2,000,000 $2,000,000 $ --
====================================================================================================
58 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
As of October 31, 2014, the Trust had unfunded loan commitments amounting to
$135,032 (excluding unrealized appreciation on the commitment of $2,053 as of
October 31, 2014) which could be extended at the option of the borrower,
pursuant to the following loan agreements:
----------------------------------------------------------------------------------------------
Unrealized
Borrower Par Cost Value Appreciation
----------------------------------------------------------------------------------------------
Vencore, Inc.,
Delayed Draw Term Loan $ 30,958 $ 30,670 $ 31,010 $ 340
DTZ U.S. Borrower LLC,
Delayed Draw Term Loan 104,074 102,513 104,226 1,713
----------------------------------------------------------------------------------------------
Total $ 2,053
==============================================================================================
8. Loan Agreement
Effective January 31, 2014, the Trust extended the maturity of its existing
Revolving Credit Facility (the Credit Agreement) with the Bank of Nova Scotia;
the amount of the facility remains at $75 million.
At October 31, 2014, the Trust had a borrowing outstanding under the Credit
Agreement totaling $67,000,000. The interest rate charged at October 31, 2014
was 1.0015%. During the period ended October 31, 2014, the average daily balance
was $67,000,000 at a weighted average interest rate of 1.0022%. With respect to
the loan, interest expense of $343,000 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 borrowings outstanding.
9. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the six months ended
October 31, 2014 and the year ended April 30, 2014 were as follows:
--------------------------------------------------------------------------------
10/31/14 4/30/14
--------------------------------------------------------------------------------
Shares outstanding at beginning of period 8,320,167 8,290,790
Reinvestment of distributions 12,623 29,377
--------------------------------------------------------------------------------
Shares outstanding at end of period 8,332,790 8,320,167
================================================================================
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 59
10. Additional Disclosures about Derivative Instruments and Hedging Activities:
Values of derivative instruments as of October 31, 2014 were as follows:
-----------------------------------------------------------------------------------------------
Derivatives Not
Accounted for as Asset Derivatives 2014 Liabilities Derivatives 2014
Hedging Instruments ---------------------------- -------------------------------
Under Accounting Statement of Assets Statement of Assets
Standards Codification and Liabilities and Liabilities
(ASC) 815 Location Value Location Value
----------------------------------------------------------------------------------------------
Forward foreign Net unrealized Net unrealized
currency contracts appreciation on depreciation on
forward foreign forward foreign
currency contracts $251,382 currency contracts $ (64,692)
Written options Written options -- Written options (11)
----------------------------------------------------------------------------------------------
Total $251,382 $ (64,703)
----------------------------------------------------------------------------------------------
The effect of derivative instruments on the Statement of Operations for the six
months ended October 31, 2014 was as follows:
-----------------------------------------------------------------------------------------------
Change in
Derivatives Not Realized Unrealized
Accounted for as Gain or Appreciation or
Hedging Instruments (Loss) on (Depreciation)
Under Accounting Location of Gain or (Loss) Derivatives on Derivatives
Standards Codification on Derivatives Recognized Recognized Recognized
(ASC) 815 in Income in Income in Income
-----------------------------------------------------------------------------------------------
Forward foreign Net realized gain (loss) on
currency contracts forward foreign currency
contracts $567,283
-----------------------------------------------------------------------------------------------
Forward foreign Change in net unrealized
currency contracts appreciation (depreciation)
on forward foreign currency
contracts $ 225,267
-----------------------------------------------------------------------------------------------
Written options Change in unrealized
appreciation (depreciation)
on written options $ 4,041
-----------------------------------------------------------------------------------------------
11. Subsequent Event
The Board of Trustees of the Trust declared on November 4, 2014 a monthly
dividend from undistributed and accumulated net investment income of $0.1350 per
common share, payable November 28, 2014, to common shareowners of record on
December 17, 2014.
12. Change in Independent Registered Public Accounting Firm
The Board of Trustees of the Trust, with the approval and recommendation of the
Audit Committee, appointed Deloitte & Touche LLP to serve as the Trust's
independent registered public accounting firm for the fiscal year ending
60 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
April 30, 2015. Deloitte & Touche LLP replaces Ernst & Young LLP, which resigned
as the Trust's independent registered public accounting firm, effective upon
completion of the audit of the Trust's financial statements for the fiscal year
ended April 30, 2015.
During the periods that Ernst & Young LLP served as the Trust's independent
registered public accounting firm, including the Trust's fiscal years ending
April 30, 2014 and April 30, 2013, Ernst & Young LLP's reports on the financial
statements of the Trust 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 disagreement with Ernst &
Young LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
the satisfaction of Ernst & Young LLP would have caused Ernst & Young LLP to
make reference to the subject matter of the disagreement in connection with 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.
ADDITIONAL INFORMATION (unaudited)
During the period ended October 31, 2014, there have been no material changes in
the Trust's investment objective or fundamental policies that have not been
approved by the shareowners. There have been no changes in the Trust's charter
or By-Laws that would delay or prevent a change in control of the Trust which
has not been approved by the shareowners. During the period, there have been no
changes in the principal risk factors associated with investment in the Trust.
There were no changes in the persons who are primarily responsible for the
day-to-day management of the Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
Results of Shareholder Meeting (unaudited)
At the annual meeting of shareowners held on September 23, 2014, shareowners of
Pioneer Diversified High Income Trust were asked to consider the proposals
described below. A report of the total votes cast by the Trust's shareholders
follows:
Proposal 1 -- To elect Class I Trustee.
------------------------------------------------------------------------------
Nominee For Withheld
------------------------------------------------------------------------------
Benjamin M. Friedman 7,131,394 212,695
Margaret B.W. Graham 7,094,394 249,695
Kenneth J. Taubes 7,134,646 209,443
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 61
Approval of Investment Advisory Agreement
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Diversified High Income Trust (the Trust) pursuant to an investment
advisory agreement between PIM and the Trust. In order for PIM to remain the
investment adviser of the Trust, the Trustees of the Trust must determine
annually whether to renew the investment advisory agreement for the Trust.
The contract review process began in January 2014 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the process.
Contract review materials were provided to the Trustees in March 2014 and July
2014. Supplemental contract review materials were provided to the Trustees in
September 2014. In addition, the Trustees reviewed and discussed the Trust's
performance at regularly scheduled meetings throughout the year, and took into
account other information related to the Trust provided to the Trustees at
regularly scheduled meetings, in connection with the review of the Trust's
investment advisory agreement.
In March 2014, the Trustees, among other things, discussed the memorandum
provided by Trust counsel that summarized the legal standards and other
considerations that are relevant to the Trustees in their deliberations
regarding the renewal of the investment advisory agreement, and reviewed and
discussed the qualifications of the investment management teams, as well as the
level of investment by the Trust's portfolio managers in the Trust. In July
2014, the Trustees, among other things, reviewed the Trust's management fee and
total expense ratios, the financial statements of PIM and its parent companies,
the profitability analyses provided by PIM, and possible economies of scale. The
Trustees also reviewed the profitability of the institutional business of PIM
and PIM's affiliate, Pioneer Institutional Asset Management, Inc. (together with
PIM, "Pioneer"), as compared to that of PIM's fund management business, and
considered the differences between the fees and expenses of the Trust and the
fees and expenses of Pioneer's institutional accounts, as well as the different
services provided by PIM to the Trust and by Pioneer to the institutional
accounts. The Trustees further considered contract review materials in September
2014.
At a meeting held on September 16, 2014, based on their evaluation of the
information provided by PIM and third parties, the Trustees of the Trust,
including the Independent Trustees voting separately, unanimously approved the
renewal of the investment advisory agreement for another year. In considering
the renewal of the investment advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. In all quintile rankings referred to throughout this
62 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
disclosure, first quintile is most favorable to the Trust's shareowners. The
Trustees did not identify any single factor as the controlling factor in
determining to approve the renewal of the agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust. The Trustees reviewed the terms of the investment
advisory agreement. The Trustees also reviewed PIM's investment approach for the
Trust and its research process. The Trustees considered the resources of PIM
and the personnel of PIM who provide investment management services to the
Trust. They also reviewed the amount of non-Trust assets managed by the
portfolio managers of the Trust. The Trustees considered the non-investment
resources and personnel of PIM involved in PIM's services to the Trust,
including PIM's compliance and legal resources and personnel. The Trustees noted
the substantial attention and high priority given by PIM's senior management to
the Pioneer fund complex.
The Trustees considered that PIM supervises and monitors the performance of the
Trust's service providers and provides the Trust with personnel (including Trust
officers) and other resources that are necessary for the Trust's business
management and operations. The Trustees also considered that, as administrator,
PIM is responsible for the administration of the Trust's business and other
affairs. The Trustees considered the fees paid to PIM for the provision of
administration services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had been provided by PIM to the Trust were
satisfactory and consistent with the terms of the investment advisory agreement.
Performance of the Trust
In considering the Trust's performance, the Trustees regularly review and
discuss analysis and data prepared by PIM and information comparing the Trust's
performance with the performance of its peer group of funds as classified by
each of Morningstar, Inc. (Morningstar) and Lipper, and with the performance of
the Trust's benchmark index. They also discuss the Trust's performance with PIM
on a regular basis. The Trustees confirmed that these regular reviews and
discussions were factored into the Trustees' deliberations concerning the
renewal of the advisory agreement. For purposes of their contract renewal
deliberations, the Trustees considered the discussions held throughout the year
regarding the Trust's performance and the performance results of the Trust over
various time periods, including the Trust's performance results for periods
ended June 30, 2014. The Trustees indicated that they were satisfied with PIM's
response to the Trust's performance issues.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 63
Management Fee and Expenses
The Trustees considered information showing the fees and expenses of the Trust
in comparison to the management fees and expense ratios of its peer group of
funds as classified by Morningstar and also to the expense ratios of a peer
group of funds selected on the basis of criteria determined by the Independent
Trustees for this purpose using data provided by Strategic Insight Mutual Fund
Research and Consulting, LLC (Strategic Insight), an independent third party.
The Trustees considered that the Trust's management fee (based on managed
assets) for the twelve months ended June 30, 2014 was in the fifth quintile
relative to the management fees paid by other funds in its Strategic Insight
peer group for the comparable period. The Trustees considered that the expense
ratio (based on managed assets) of the Trust's common shares for the twelve
months ended June 30, 2014 was in the fifth quintile relative its Strategic
Insight peer group for the comparable period. The Trustees noted the investment
management expertise and resources required to implement the Trust's complex
investment strategy given the multiple asset classes in which the Trust invests.
The Trustees also considered that the Trust did not have a clear cut peer group,
noting that other funds in the peer group invested primarily in traditional high
yield bonds.
The Trustees reviewed management fees charged by Pioneer to institutional and
other clients, including publicly offered European funds sponsored by affiliates
of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory
capacity), and unaffiliated foreign and domestic separate accounts. The Trustees
also considered PIM's costs in providing services to the Trust and Pioneer's
costs in providing services to the other clients and considered the differences
in management fees and profit margins for Trust and non-Trust services. In
evaluating the fees associated with Pioneer's client accounts, the Trustees took
into account the respective demands, resources and complexity associated with
the Trust and client accounts. The Trustees noted that, in some instances, the
fee rates for those clients were lower than the management fee for the Trust and
considered that, under the investment advisory agreement with the Trust, PIM
performs additional services for the Trust that it does not provide to those
other clients or services that are broader in scope, including oversight of the
Trust's other service providers and activities related to compliance and the
extensive regulatory and tax regimes to which the Trust is subject. The Trustees
also considered the different entrepreneurial risks associated with PIM's
management of the Trust and Pioneer's management of the other client accounts.
64 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
The Trustees concluded that the management fee payable by the Trust to PIM was
reasonable in relation to the nature and quality of the services provided by PIM
to the Trust.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
concluded that PIM's profitability with respect to the management of the Trust
was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is a
closed-end fund that has not raised additional capital, the Trustees concluded
that economies of scale were not a relevant consideration in the renewal of the
investment advisory agreement.
Other Benefits
The Trustees considered the other benefits to PIM from its relationship with the
Trust. The Trustees considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services provided
by PIM and its affiliates. The Trustees further considered the revenues and
profitability of PIM's businesses other than the fund business. Pioneer is the
principal U.S. asset management business of Pioneer Global Asset Management, the
worldwide asset management business of UniCredit Group, which manages over $150
billion in assets (including the Funds). Pioneer and the Funds receive
reciprocal intangible benefits from the relationship, including mutual brand
recognition and, for the Funds, direct and indirect access to the resources of a
large global asset manager. The Trustees concluded that any such benefits
received by Pioneer as a result of its relationship with the Funds were
reasonable and their consideration of the advisory agreement between the Trust
and PIM and the fees thereunder were unaffected by Pioneer's possible receipt of
any such intangible benefits.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 65
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of the investment advisory agreement for the Trust.
66 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
Trustees, Officers and Service Providers
Trustees Advisory Trustee
Thomas J. Perna, Chairman Lorraine H. Monchak*
David R. Bock
Benjamin M. Friedman Officers
Margaret B.W. Graham Lisa M. Jones, President and Chief
Marguerite A. Piret Executive Officer
Fred J. Ricciardi** Mark E. Bradley, Treasurer and
Kenneth J. Taubes Chief Financial Officer
Christopher J. Kelley, Secretary and
Chief Legal Officer
Investment Adviser and Administrator
Pioneer Investment Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Morgan, Lewis & Bockius LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is publicly available to shareowners
at us.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at www.sec.gov.
* Ms. Monchak became a non-voting Advisory Trustee on November 11, 2014.
** Mr. Ricciardi became a Trustee on November 11, 2014.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14 67
This page for your notes.
68 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/14
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
--------------------------------------------------------------------------------
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site us.pioneerinvestments.com.
The Trust files a complete schedule of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at www.sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
Securities offered through Pioneer Funds Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2014 Pioneer Investments 21398-07-1214
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 Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
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(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 Funds audit committee of the Board of Trustees has considered whether
the provision of non-audit services that were rendered to the Affiliates
(as defined) that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrant's audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.1212
of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to semi-annual reporting
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrant's portfolio ("Portfolio Manager"). Also state each Portfolio
Manager's business experience during the past 5 years.
Not applicable to semi-annual reporting
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).
Not applicable to semi-annual reporting
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, 2014
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, 2014
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date December 29, 2014
* Print the name and title of each signing officer under his or her signature.