0000869356-17-000012.txt : 20170627 0000869356-17-000012.hdr.sgml : 20170627 20170627154609 ACCESSION NUMBER: 0000869356-17-000012 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20170430 FILED AS OF DATE: 20170627 DATE AS OF CHANGE: 20170627 EFFECTIVENESS DATE: 20170627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Pioneer Diversified High Income Trust CENTRAL INDEX KEY: 0001388126 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-22014 FILM NUMBER: 17932350 BUSINESS ADDRESS: STREET 1: 60 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 617-742-7825 MAIL ADDRESS: STREET 1: 60 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: Pioneer Diversified Income Opportunity Trust DATE OF NAME CHANGE: 20070129 N-CSR 1 ncsr.txt 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, 2016 through April 30, 2017 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. Pioneer Diversified High Income Trust -------------------------------------------------------------------------------- Annual Report | April 30, 2017 -------------------------------------------------------------------------------- Ticker Symbol: HNW [LOGO] PIONEER Investments(R) visit us: us.pioneerinvestments.com Table of Contents President's Letter 2 Portfolio Management Discussion 4 Portfolio Summary 11 Prices and Distributions 12 Performance Update 13 Schedule of Investments 14 Financial Statements 49 Financial Highlights 53 Notes to Financial Statements 55 Report of Independent Registered Public Accounting Firm 70 Approval of New and Interim Management Agreements 72 Trustees, Officers and Service Providers 80
Pioneer Diversified High Income Trust | Annual Report | 4/30/17 1 President's Letter After an overall strong year for leading market indices in 2016, U.S. markets continued to generate positive returns over the first calendar quarter of 2017, with so-called "risk" assets, such as equities and credit-sensitive bonds, posting solid gains. In the first quarter, U.S. equities, as measured by the Standard & Poor's 500 Index, returned slightly more than 6%, while high-yield securities dominated bond market performance. The transfer of power in Washington, D.C. in January had little or no effect on the markets in the first quarter, as the post-election momentum we witnessed late in the fourth quarter of 2016 slowed only when oil prices slumped in March, due to both higher-than-expected inventories and concerns over whether OPEC (Organization of Petroleum Exporting Countries) would continue its supply cuts in June. Not even the Federal Reserve System's (the Fed's) highly anticipated rate hike during the month of March, its second in three months, nor Britain's trigger of Article 50 to begin the "Brexit" process caused any dramatic sell-off of risk assets. While U.S. gross domestic product (GDP) did slow in the first quarter, the expectation is for GDP to accelerate in the second quarter, with a strong consumer leading the way. Pioneer believes the U.S. economy may lead all developed nations in 2017, with GDP growth in excess of 2% for the year. President Trump has proposed decidedly pro-business policies, such as lower taxes, higher infrastructure spending, and less regulation, though we believe the economy may realize the benefits of those policies, if enacted, more so in 2018 than in 2017. Conversely, the effects of the President's potentially restrictive trade policies could offset some of the benefits of the pro-growth fiscal policies. Even so, we believe solid domestic employment figures should continue to support consumption and the housing market, and that stronger corporate profits and increased government spending may contribute to economic growth in 2018 and beyond. Increasing global Purchasing Manager Indices (PMIs) suggest that growth in global economies is also improving. (PMIs are used to measure the economic health of the manufacturing sector.) There are, as always, some risks to our outlook. First, the market already has priced in a good deal of the Trump economic reform platform, and that could lead to near-term disappointment if Congressional follow-through does not happen this year. The future of the Affordable Care Act is another potential concern. The first attempt to repeal/replace it failed, but any new proposed 2 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 legislation will undoubtedly have an effect on the health care sector, one of the largest segments of the U.S. economy. Geopolitical risks, of course, remain a potential headwind, given ongoing strife in the Middle East and renewed tensions on the Korean Peninsula. While our current outlook is generally optimistic, conditions can and often do change, and while passive investment strategies may have a place in one's overall portfolio, it is our view that all investment decisions are active choices. Throughout Pioneer's history, we have believed in the importance of active management. The active decisions to invest in equities or fixed-income securities are made by a team of experienced investment professionals focusing on identifying value across global markets using proprietary research, careful risk management, and a long-term perspective. We believe our shareowners can benefit from the experience and tenure of our investment teams as well as the insights generated from our extensive research process. As always, and particularly during times of market uncertainty, we encourage you to work with your financial advisor to develop an overall investment plan that addresses both your short- and long-term goals, and to implement such a plan in a disciplined manner. We greatly appreciate the trust you have placed in us and look forward to continuing to serve you in the future. Sincerely, /s/ Lisa M. Jones Lisa M. Jones President and CEO Pioneer Investment Management USA Inc. April 30, 2017 Any information in this shareowner report regarding market or economic trends or the factors influencing the Trust's historical or future performance are statements of opinion as of the date of this report. Past performance is no guarantee of future results. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 3 Portfolio Management Discussion | 4/30/17 Lower-quality, higher-yielding debt produced solid results over the 12-month period ended April 30, 2017, as global economic conditions appeared to brighten and investor confidence grew. In the following interview, Andrew Feltus, Charles Melchreit, Jonathan Sharkey, and Chin Liu discuss the factors that affected the performance of Pioneer Diversified High Income Trust during the 12-month period. Mr. Feltus, Director of High Yield and Bank Loans, a senior vice president and a portfolio manager at Pioneer; Mr. Melchreit, Director of Investment-Grade Management, a senior vice president and a portfolio manager at Pioneer; Mr. Sharkey, a senior vice president and a portfolio manager at Pioneer; and Mr. Liu, a vice president and a portfolio manager at Pioneer, are responsible for the day-to-day management of the Trust. Q How did the Trust perform during the 12 months ended April 30, 2017? A Pioneer Diversified High Income Trust returned 16.20% at net asset value and 17.01% at market price during the 12-month period ended April 30, 2017. During the same 12-month period, the Trust's custom benchmark returned 8.44%. 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 and the Standard & Poor's/Loan Syndications & Trading Association (S&P/LSTA) Leveraged Loan Index. 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 12-month period, the average return (at market price) of the 30 closed end funds in Lipper's High Yield Closed End Funds Category (which may or may not be leveraged) was 21.01%, 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 22.06%. The shares of the Trust were selling at a 5.5% discount to net asset value at the end of the period on April 30, 2017. Comparatively, the shares of the Trust were selling at a 6.2% discount to net asset value on April 30, 2016, the end of the Trust's previous annual reporting period. On April 30, 2017, the 30-day SEC yield on the Trust's shares was 9.56%*. * 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 | Annual Report | 4/30/17 Q How would you describe the investment environment in the fixed-income markets during the 12-month period ended April 30, 2017? A Higher-yielding investments performed strongly over the 12-month period. The surge in high-yield bond prices reflected persistent market confidence in the prospects for sustained economic growth in the United States and overseas, and was only briefly interrupted by unforeseen events, such as the so-called "Brexit" vote in June 2016 by the British electorate to exit the European Union. Even monetary tightening by the U.S. Federal Reserve System (the Fed), which hiked the Federal funds rate twice during the period - once in December 2016 and again in March 2017 - did not cause any interruptions in general market trends. In the United States, despite a disappointing gross domestic product (GDP) growth report for the first calendar quarter of 2017, economic indicators were strong, especially the employment situation, as new-job creation brought the nation's unemployment rate down to 4.4% by the period's end. Europe's economy also continued to gain ground during the period, despite the very brief market sell-off driven by the Brexit vote, while Japan's economy strengthened and China's economy responded positively after the Chinese government took steps to encourage business lending. Renewed growth in China combined with rising commodity prices also helped lift the emerging markets, especially in the latter months of the period. Emerging markets corporate bonds, in particular, performed well over the 12 months. Q What factors affected the Trust's performance relative to its customized benchmark during the 12-month period ended April 30, 2017? A The Trust's heavy exposure to the U.S. high-yield corporate bond market as well as good security selection results within that group were the main drivers of the Trust's benchmark-relative performance. In addition, the Trust's non-benchmark positions in floating-rate bank loans and insurance- linked securities also aided benchmark-relative returns, despite noteworthy property damage claims resulting from Hurricane Matthew in the United States and wildfires in Alberta, Canada. In addition to strong results from the Trust's portfolio of investments, the Trust's use of leverage, or borrowed funds, also contributed to benchmark-relative returns during the period. The use of leverage increases risk and has the effect of amplifying the size of market swings on the portfolio. Just as the use of leverage can exaggerate negative results during market downturns when prices of high-yield bonds decline, leverage can also enhance gains when high-yield and emerging markets bond prices rise, as they did during the 12-month period. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 5 Over the course of the 12 months, we eventually reduced the allocation to insurance-linked securities in the Trust's portfolio, as we saw less relative value in the asset class. We used the opportunity to increase the portfolio's exposure to bank loans. Like catastrophe bonds, bank loans have floating-rate features that can be advantageous in a rising interest-rate environment. As of period end, senior secured floating-rate loans represented more than 28% of the Trust's total investment portfolio, while insurance-linked securities represented nearly 15% of the Trust's total investment portfolio. Q What were some of the individual holdings that had noteworthy effects on the Trust's benchmark-relative results, either positively or negatively, during the 12-month period ended April 30, 2017? A Among the portfolio's U.S. high-yield bond holdings, Scientific Games, a producer of gambling equipment for casinos, delivered standout results for the Trust during the period, while Jack Cooper Holdings, a transportation firm that ships new vehicles from manufacturing plants to dealerships, detracted from benchmark-relative results as the company's profit margins shrank. Among the loan holdings in the Trust's portfolio, leading contributors to benchmark-relative returns during the period included loans of Dixie Electric, a leader in the oil and natural gas services industry, facilitating upstream, midstream, and downstream operations in the most prolific energy-producing regions of the U.S., and Jonah Energy, a privately held natural gas production company. Holdings that detracted from the Trust's benchmark-relative performance during the period included a loan to Concordia Health, a diversified pharmaceutical company that experienced soft earnings in its operations in the United States and the United Kingdom. Among insurance-linked holdings, while nearly all of the portfolio's positions worked out well for the Trust's benchmark-relative performance, one notable exception was a bond of Gator Re, which was affected by an increase in tornado activity in the U.S. Q How did the level of leverage in the Trust change over the 12-month period ended April 30, 2017? A The Trust employs leverage through a credit agreement. (See Note 8 to the Financial Statements.) At the end of the 12-month period on April 30, 2017, 27.9% of the Trust's total managed assets were financed by leverage (or borrowed funds), compared with 29.1% of the Trust's total managed assets financed by leverage at the start of the period on May 1, 2016. The absolute amount of funds borrowed by the Trust did not change. The reduction in the percentage of leveraged funds was the result of appreciation in the value of the Trust's holdings. 6 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Q Were there any changes in the Trust's dividend** distributions during the 12-month period ended April 30, 2017? A No, the Trust's dividend distributions remained relatively consistent during the period. However, the Trust has drawn on accumulated net investment income in paying the Trust's distributions in recent periods, and these reserves may be depleted over time. Q Did the Trust invest in any derivative securities during the 12-month period ended April 30, 2017? If so, did the use of derivatives have a material impact on benchmark-relative performance? A We used some forward foreign currency contracts during the period to help manage the Trust's exposures to different currencies. The contracts had a very minor, negative effect on the Trust's benchmark-relative results. Q What is your investment outlook? A The economic fundamentals underpinning high-yield investments appear to be strong, and improving. We anticipate that both the domestic and global economies will continue to expand, adding to corporate profitability and enabling companies to improve their earnings and strengthen their balance sheets. That, in turn, should increase the probability that corporate bond default rates will decline further. We think there is good potential for U.S. economic growth to accelerate in the coming months, especially if President Trump should secure Congressional approval of his economic agenda, which includes proposed reductions in both personal and corporate income tax rates and a boost in infrastructure spending. We believe Japan's economy should continue to improve, and we anticipate that growth trends in China and Europe should remain steady. An improving global economic outlook characterized by healthy corporate profits and low bond default rates also bodes well for the emerging markets. As high-yield investments have outperformed other fixed-income securities, credit spreads have tightened. (Credit spreads are commonly defined as the differences in yield between Treasuries and other types of fixed-income securities with similar maturities.) We think high-yield bonds are fairly valued at the present time, and so there may be less potential for price appreciation after the recent market rallies. As a consequence, we have become more cautious and started to reduce the overall credit risk in the Trust's portfolio. ** Dividends are not guaranteed. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 7 We have a positive outlook for bank-loan investments. We continue to believe that bank loans can create solid opportunities for income-oriented investors, despite recent increases in loan prices, which have resulted in more than three-quarters of the loans in the S&P/LSTA Index selling at above par (face value). Re-pricings in the loan market remain a concern, however, as many issuers continue to call away their older, higher-coupon loans and refinance them into lower-cost loans. We believe the credit-quality of the loan asset class is good, as defaults rates remain well below historical averages. We think overall default rates should stay relatively low, although we anticipate there may be some defaults in the retail loan sector as online sellers continue to take business from traditional "brick-and-mortar" retailers. We plan to maintain exposure in the Trust's portfolio to insurance-linked securities. As noted earlier, like bank loans, insurance-linked securities offer the advantage of floating-rate income, which can be advantageous in a rising interest-rate environment. Within the Trust's allocation to insurance-linked securities, our approach is to be well diversified*** across different types of risk exposures and geographical areas. Our objective remains to have the portfolio's holdings of insurance-linked securities produce strong, risk-adjusted returns for the Trust's shareholders, with performance that is largely separate from the returns of most other asset classes, including bonds and bank loans. *** Diversification does not assure a profit nor protect against loss. 8 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Please refer to the Schedule of Investments on pages 14-48 for a full listing of Trust securities. All investments are subject to risk, including the possible loss of principal. In the past several years, financial markets have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. These conditions may continue, recur, worsen or spread. Investments in high-yield or lower-rated securities are subject to greater-than- average risk. The Trust may invest in securities of issuers that are in default or that are in bankruptcy. Investing in foreign and/or emerging markets securities involves risks relating to interest rates, currency exchange rates, economic, and political conditions. When interest rates rise, the prices of debt securities in the Trust will generally fall. Conversely, when interest rates fall the prices of debt securities in the Trust generally will rise. Investments in the Trust are subject to possible loss due to the financial failure of the issuers of the underlying securities and the issuers' inability to meet their debt obligations. Interest rates in the U.S. recently have been historically low, so the Trust faces a heightened risk that interest rates may rise. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities. The Trust may invest a significant amount of its total assets in illiquid securities. Illiquid securities may be difficult to dispose of at a price reflective of their value at the times when the Trust believes it is desirable to do so and the market price of illiquid securities is generally more volatile than that of more liquid securities. Illiquid securities also are more difficult to value, and investment of the Trust's assets in illiquid securities may restrict the Trust's ability to take advantage of market opportunities. The Trust is authorized to borrow from banks and issue debt securities, which are forms of leverage. Leverage creates significant risks, including the risk that the Trust's incremental income or capital appreciation for investments purchased with the proceeds of leverage will not be sufficient to cover the cost of the leverage, which may adversely affect the return for shareholders. The Trust is required to maintain certain regulatory and other asset coverage requirements in connection with its use of leverage. In order to maintain required asset coverage levels, the Trust may be required to reduce the amount of leverage employed by the Trust, alter the composition of its investment portfolio or take other actions at what might be inopportune times in the market. Such actions could reduce the net earnings or returns to shareowners over time, which is likely to result in a decrease in the market value of the Trust's shares. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 9 Certain securities in which the Trust invests, including floating rate loans, once sold, may not settle for an extended period (for example, several weeks or even longer). The Trust will not receive its sale proceeds until that time, which may constrain the Trust's ability to meet its obligations. Insurance-linked securities may include event-linked bonds (also known as insurance-linked bonds or catastrophe bonds). The return of principal and the payment of interest on event-linked bonds are contingent on the non-occurrence of a predefined "trigger" event that leads to physical or economic loss, such as a hurricane or an aerospace catastrophe. 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. Past performance is no guarantee of future results. 10 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Portfolio Summary | 4/30/17 Portfolio Diversification* -------------------------------------------------------------------------------- (As a percentage of total investment portfolio) [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 61.9% Senior Secured Floating Rate Loan Interests 28.4% Commercial Mortgage-Backed Securities 2.4% U.S. Government And Agency Obligation 2.3% Sovereign Debt Obligations 1.6% Convertible Bond 0.9% Preferred Stocks 0.7% Asset Backed Securities 0.7% Convertible Preferred Stock 0.4% Collateralized Mortgage Obligations 0.3% Treasury Bill 0.2% Common Stocks 0.1% Tax Exempt Obligation 0.1% Call Options Purchased 0.0%+ Warrant 0.0%+
* Includes investments in Insurance Linked Securities totaling 14.8% of total investment portfolio. + 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, 0.0%, 10/15/97 (144A) 2.72% ----------------------------------------------------------------------------------------- 2. U.S. Treasury Notes, 1.012%, 4/30/18 2.32 ----------------------------------------------------------------------------------------- 3. Gullane Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/21 1.18 ----------------------------------------------------------------------------------------- 4. Pangaea Re Segregated Account (Artex SAC, Ltd.), Series 2017-1, Variable Rate Notes, 11/30/21 0.95 ----------------------------------------------------------------------------------------- 5. Queen Street X Re, Ltd., 6.547%, 6/8/18 (144A) (Cat Bond) 0.93 ----------------------------------------------------------------------------------------- 6. Hercules LLC, 6.5%, 6/30/29 0.86 ----------------------------------------------------------------------------------------- 7. East Lane Re VI, Ltd., 3.447%, 3/14/18 (144A) (Cat Bond) 0.81 ----------------------------------------------------------------------------------------- 8. Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 0.78 ----------------------------------------------------------------------------------------- 9. Communications Sales & Leasing, Inc. / CSL Capital LLC, 8.25%, 10/15/23 0.75 ----------------------------------------------------------------------------------------- 10. SIG Combibloc Holdings SCA, 7.75%, 2/15/23 (144A) 0.74 -----------------------------------------------------------------------------------------
** This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 11 Prices and Distributions | 4/30/17 Market Value per Share^ --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 4/30/17 4/30/16 -------------------------------------------------------------------------------- Market Value $16.70 $15.60 -------------------------------------------------------------------------------- (Discount) (5.5)% (6.2)% --------------------------------------------------------------------------------
Net Asset Value per Share^ --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 4/30/17 4/30/16 -------------------------------------------------------------------------------- Net Asset Value $17.68 $16.63 --------------------------------------------------------------------------------
Distributions per Share* --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Income Capital Gains Capital Gains -------------------------------------------------------------------------------- 5/1/16 - 4/30/17 $1.44 $-- $-- --------------------------------------------------------------------------------
Yields --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 4/30/17 4/30/16 -------------------------------------------------------------------------------- 30-Day SEC Yield 9.56% 9.03% --------------------------------------------------------------------------------
The data shown above represents past performance, which is no guarantee of future results. ^ Net asset value and market value are published in Barron's on Saturday, The Wall Street Journal on Monday and The New York Times on Monday and Saturday. Net asset value and market value are published daily on the Trust's website at us.pioneerinvestments.com. * The amount of distributions made to shareowners during the period was in excess of the net investment income earned by the Trust during the period. The Trust has accumulated undistributed net investment income which is part of the Trust's NAV. A portion of this accumulated net investment income was distributed to shareowners during the period. A decrease in distributions may have a negative effect on the market value of the Trust's shares. 12 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Performance Update | 4/30/17 Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in market value, plus reinvested dividends and distributions, of a $10,000 investment made in shares of Pioneer Diversified High Income Trust during the periods shown, compared to that of the combined (50%/50%) Bank of America Merrill Lynch Global High Yield and Emerging Markets Plus Index (BofA ML Global HY and EMP Index) and S&P/LSTA Leveraged Loan Index.
Average Annual Total Returns (As of April 30, 2017) -------------------------------------------------------------------------------- 50% BofA ML Global High Yield & Net EMP Index/ Asset 50% S&P/ Value Market LSTA Leveraged Period (NAV) Price Loan Index -------------------------------------------------------------------------------- Life of Trust (5/30/2007) 8.05% 6.94% 5.72% 5 years 8.35 6.46 5.17 1 year 16.20 17.01 8.44 --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
50% BofA ML Global High Yield & EMP Pioneer Diversified Index/50% S&P/LSTA Leveraged Loan High Income Trust Index 4/07 $10,000 $10,000 4/08 $ 8,933 $ 9,947 4/09 $ 6,868 $ 8,593 4/10 $11,899 $11,822 4/11 $14,034 $13,026 4/12 $14,224 $13,545 4/13 $17,065 $15,079 4/14 $18,280 $15,835 4/15 $16,836 $15,964 4/16 $16,624 $16,071 4/17 $19,452 $17,428
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 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 S&P/LSTA Leveraged Loan Index provides broad and comprehensive total return metrics of the U.S. universe of syndicated term loans. Note: Effective November 1, 2016, the Trust's composite benchmark changed from 50% BofA ML Global High Yield & EMP Index/50% CS Leveraged Loan Index, to 50% BofA ML Global High Yield & EMP Index/50% S&P/LSTA Leveraged Loan Index. The change was implemented to achieve a better style fit and to maintain consistency with Pioneer Floating Rate Trust (PHD), which began to utilize the S&P/LSTA Leveraged Loan Index as its benchmark effective October 1, 2016. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Trust returns, do not reflect any fees, expenses or sales charges. The indices do not use leverage. It is not possible to invest directly in an index. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 13 Schedule of Investments | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- ASSET BACKED SECURITIES -- 1.0% of Net Assets 250,000 American Credit Acceptance Receivables Trust, Series 2014-2, Class D, 4.96%, 5/10/21 (144A) $ 251,399 299,996 Axis Equipment Finance Receivables III LLC, Series 2015-1A, Class E, 5.27%, 5/20/20 (144A) 288,953 400,000(a) NCF Dealer Floorplan Master Trust, Series 2016-1A, Class C, 9.478%, 3/21/22 (144A) 401,859 500,000 VB-S1 Issuer LLC, Series 2016-1A, Class F, 6.901%, 6/15/46 (144A) 509,556 ---------------------------------------------------------------------------------------------------------- TOTAL ASSET BACKED SECURITIES (Cost $1,437,996) $ 1,451,767 ---------------------------------------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.4% of Net Assets 46,711 Global Mortgage Securitization, Ltd., Series 2004-A, Class B1, 5.25%, 11/25/32 (144A) $ 29,674 94,977 Global Mortgage Securitization, Ltd., Series 2005-A, Class B3, 5.25%, 4/25/32 (144A) 54,978 290,000(b) GMAT Trust, Series 2013-1A, Class M, 5.0%, 11/25/43 (144A) 270,051 248,463(c) GMAT Trust, Series 2015-1A, Class A1, 4.25%, 9/25/20 (144A) 249,095 ---------------------------------------------------------------------------------------------------------- TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $659,180) $ 603,798 ---------------------------------------------------------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED SECURITIES -- 3.5% of Net Assets 375,000(a) BAMLL Commercial Mortgage Securities Trust, Series 2014-INLD, Class F, 3.299%, 12/15/29 (144A) $ 366,291 200,000(b) BAMLL Commercial Mortgage Securities Trust, Series 2016-FR14, Class C, 1.407%, 2/27/48 (144A) 168,688 500,000(b) Banc of America Commercial Mortgage Trust, Series 2007-4, Class D, 6.103%, 2/10/51 (144A) 494,161 124,956(b) Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR7, Class B, 5.214%, 2/11/41 124,771 260,000(a) CFCRE Mortgage Trust, Series 2015-RUM, Class E, 5.594%, 7/15/30 (144A) 254,496 500,000(b) Citigroup Commercial Mortgage Trust, Series 2014-GC23, Class E, 3.208%, 7/10/47 (144A) 326,548 500,000(b) COBALT CMBS Commercial Mortgage Trust, Series 2007-C3, Class C, 5.99%, 5/15/46 354,913 300,000(b) COMM Mortgage Trust, Series 2007-C9, Class H, 5.979%, 12/10/49 (144A) 297,516 250,000(a) COMM Mortgage Trust, Series 2014-FL5, Class D, 4.994%, 10/15/31 (144A) 231,190 366,979(a) EQTY Mezzanine Trust, Series 2014-INMZ, Class M, 5.739%, 5/8/31 (144A) 368,102
The accompanying notes are an integral part of these financial statements. 14 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED SECURITIES -- (continued) 170,000(a) EQTY Mortgage Trust, Series 2014-INNS, Class E, 4.439%, 5/8/31 (144A) $ 170,412 80,115 Homeowner Assistance Program Reverse Mortgage Loan Trust, Series 2013-RM1, Class A, 4.0%, 5/26/53 (144A) 79,714 400,000 JP Morgan Chase Commercial Mortgage Securities Trust, Series 2014-FRR1, Class B702, 4.234%, 4/27/44 (144A) 388,344 550,000(a) JP Morgan Chase Commercial Mortgage Securities Trust, Series 2014-INN, Class E, 4.594%, 6/15/29 (144A) 550,000 395,422(b) LB-UBS Commercial Mortgage Trust, Series 2006-C1, Class AJ, 5.276%, 2/15/41 395,592 346,716(b) Morgan Stanley Capital I Trust, Series 2007-T25, Class AJ, 5.574%, 11/12/49 350,184 250,000 Wells Fargo Commercial Mortgage Trust, Series 2016-BNK1, Class D, 3.0%, 8/15/49 (144A) 207,377 ---------------------------------------------------------------------------------------------------------- TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $5,182,496) $ 5,128,299 ---------------------------------------------------------------------------------------------------------- SENIOR SECURED FLOATING RATE LOAN INTERESTS -- 41.6% of Net Assets* (a) AUTOMOBILES & COMPONENTS -- 1.4% Auto Parts & Equipment -- 1.2% 235,000 American Axle & Manufacturing, Inc., Tranche B Term Loan, 3.24%, 4/6/24 $ 234,324 344,277 Electrical Components International, Inc., Term Loan, 5.897%, 5/28/21 347,074 182,707 Federal-Mogul Corp., Tranche C Term Loan, 4.75%, 4/15/21 182,726 176,852 TI Group Automotive Systems LLC, Initial US Term Loan, 3.743%, 6/30/22 178,178 779,419 Tower Automotive Holdings USA LLC, Initial Term Loan, 3.75%, 3/7/24 778,769 ------------ $ 1,721,071 ---------------------------------------------------------------------------------------------------------- Automobile Manufacturers -- 0.1% 154,621 Inteva Products LLC, Term B Loan, 9.75%, 9/8/21 $ 155,104 ---------------------------------------------------------------------------------------------------------- Tires & Rubber -- 0.1% 191,667 Goodyear Tire & Rubber Co., Second Lien Term Loan, 2.99%, 4/30/19 $ 193,983 ------------ Total Automobiles & Components $ 2,070,158 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 15 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- CAPITAL GOODS -- 5.3% Aerospace & Defense -- 1.7% 401,237 Accudyne Industries Borrower SCA/Accudyne Industries LLC, Refinancing Term Loan, 4.147%, 12/13/19 $ 400,067 997,500(f) ADS Tactical, Inc., Term Loan, 8.482%, 12/31/22 997,500 297,733 DAE Aviation Holdings, Inc., Initial Term Loan, 5.25%, 7/7/22 299,640 461,428 DynCorp International, Inc., Term Loan B2, 7.75%, 7/7/20 463,158 226,621 Vencore, Inc. (fka SI Organization, Inc.), First Lien Initial Term Loan, 5.897%, 11/23/19 230,197 157,600 WP CPP Holdings LLC, Second Lien Term Loan B-1, 8.922%, 4/30/21 143,416 ------------ $ 2,533,978 ---------------------------------------------------------------------------------------------------------- Building Products -- 0.9% 776,839 Builders FirstSource, Inc., Refinancing Term Loan, 4.069%, 2/29/24 $ 775,674 300,000(d) Summit Materials LLC, Restatement Effective Date Term Loan, 7/18/22 303,375 250,000 Unifrax I LLC, Initial Dollar Term Loan, 4.9%, 4/4/24 251,145 ------------ $ 1,330,194 ---------------------------------------------------------------------------------------------------------- Construction Machinery & Heavy Trucks -- 0.9% 500,000 Commercial Vehicle Group, Inc., Term Loan B, 7.158%, 3/30/23 $ 503,750 395,580 Doosan Infracore International, Inc. (Doosan Holdings Europe, Ltd.), Tranche B Term Loan, 4.5%, 5/28/21 400,772 385,125 Navistar, Inc., Tranche B Term Loan, 5.0%, 8/7/20 390,581 ------------ $ 1,295,103 ---------------------------------------------------------------------------------------------------------- Electrical Components & Equipment -- 0.3% 416,492 Wireco WorldGroup, Inc., First Lien Initial Term Loan, 6.5%, 9/29/23 $ 421,264 ---------------------------------------------------------------------------------------------------------- Industrial Conglomerates -- 0.6% 597,249 DTI Holdco, Inc., Initial Term Loan, 6.25%, 10/2/23 $ 588,664 250,000(d) Filtration Group Corp., First Lien Term Loan, 11/23/20 252,344 ------------ $ 841,008 ---------------------------------------------------------------------------------------------------------- Industrial Machinery -- 0.4% 188,575 Blount International, Inc., Initial Term Loan, 6.0%, 4/12/23 $ 189,636 492,389 NN, Inc., Tranche B Term Loan, 5.243%, 10/19/22 492,158 ------------ $ 681,794 ---------------------------------------------------------------------------------------------------------- Trading Companies & Distributors -- 0.5% 500,000(d) Beacon Roofing Supply, Inc., Initial Term Loan, 10/1/22 $ 503,958
The accompanying notes are an integral part of these financial statements. 16 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Trading Companies & Distributors -- (continued) 186,879 WESCO Distribution, Inc., Tranche B-1 Loan, 3.778%, 12/12/19 $ 187,638 ------------ $ 691,596 ------------ Total Capital Goods $ 7,794,937 ---------------------------------------------------------------------------------------------------------- COMMERCIAL & PROFESSIONAL SERVICES -- 1.0% Environmental & Facilities Services -- 0.9% 500,000 Granite Acquisition, Inc., Second Lien Term B Loan, 8.397%, 12/19/22 $ 496,250 249,551 Infiltrator Water Technologies LLC, Term B-1 Loan, 4.647%, 5/27/22 251,891 547,250 Safway Group Holding LLC, Initial Term Loan, 5.75%, 8/21/23 553,178 ------------ $ 1,301,319 ---------------------------------------------------------------------------------------------------------- Security & Alarm Services -- 0.1% 126,297 Prime Security Services Borrower LLC, First Lien 2016-2 Refinancing Term B-1 Loan, 4.25%, 5/2/22 $ 127,730 ------------ Total Commercial & Professional Services $ 1,429,049 ---------------------------------------------------------------------------------------------------------- CONSUMER DURABLES & APPAREL -- 1.2% Home Furnishings -- 0.4% 550,000 Serta Simmons Holdings LLC, Second Lien Term Loan, 9.038%, 11/8/24 $ 558,594 ---------------------------------------------------------------------------------------------------------- Housewares & Specialties -- 0.3% 500,000 World Kitchen LLC, US Term Loan, 7.25%, 3/4/19 $ 501,250 ---------------------------------------------------------------------------------------------------------- Leisure Products -- 0.5% 350,000 Bass Pro Group LLC, Initial Term Loan, 6.147%, 12/15/23 $ 341,578 363,691 Bombardier Recreational Products, Inc., Term B Loan, 4.04%, 6/30/23 366,159 ------------ $ 707,737 ------------ Total Consumer Durables & Apparel $ 1,767,581 ---------------------------------------------------------------------------------------------------------- CONSUMER SERVICES -- 3.1% Casinos & Gaming -- 0.5% 200,000 CityCenter Holdings LLC, Term B Loan, 3.74389%, 4/18/24 $ 200,550 250,000 Eldorado Resorts, Inc., Term Loan, 5.25%, 4/17/24 250,313 309,190 Scientific Games International, Inc., Initial Term B-3 Loan, 4.994%, 10/1/21 314,021 ------------ $ 764,884 ---------------------------------------------------------------------------------------------------------- Education Services -- 0.6% 314,053 Cengage Learning Acquisitions, Inc., 2016 Refinancing Term Loan, 5.25%, 6/7/23 $ 302,669 478,124 Laureate Education, Inc., Series 2021 Extended Term Loan, 8.509%, 3/17/21 482,681
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 17 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Education Services -- (continued) 125,000 Laureate Education, Inc., Series 2024 Term Loan, 7.5%, 4/26/24 $ 125,156 ------------ $ 910,506 ---------------------------------------------------------------------------------------------------------- Leisure Facilities -- 0.2% 326,880 Fitness International LLC, Term B Loan, 5.397%, 7/1/20 $ 331,511 ---------------------------------------------------------------------------------------------------------- Restaurants -- 0.4% 349,272 1011778 BC Unlimited Liability Co. (New Red Finance, Inc.) (aka Burger King/Tim Hortons), Term B-3 Loan, 3.309%, 2/16/24 $ 349,890 243,479 Landry's, Inc. (fka Landry's Restaurants, Inc.), Term Loan B, 3.733%, 10/4/23 244,218 ------------ $ 594,108 ---------------------------------------------------------------------------------------------------------- Specialized Consumer Services -- 1.4% 750,000 Constellis Group, Inc., Term Loan B, 6.155%, 4/19/24 $ 743,438 533,875(d) Creative Artists Agency LLC, Refinancing Term Loan, 2/15/24 540,882 738,788 KinderCare Education LLC, Term Loan, 4.917%, 8/12/22 743,944 ------------ $ 2,028,264 ------------ Total Consumer Services $ 4,629,273 ---------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS -- 1.8% Consumer Finance -- 0.2% 211,895 Trans Union LLC, Term B-2 Loan, 3.493%, 4/9/23 $ 214,040 ---------------------------------------------------------------------------------------------------------- Diversified Capital Markets -- 0.2% 250,000 Freedom Mortgage Corp., Initial Term Loan, 6.862%, 2/23/22 $ 254,219 ---------------------------------------------------------------------------------------------------------- Investment Banking & Brokerage -- 0.3% 250,000 Duff & Phelps Corp., Initial Term Loan, 4.897%, 4/23/20 $ 252,156 200,000 LPL Holdings, Inc., Initial Term Loan, 3.92%, 3/11/24 201,250 ------------ $ 453,406 ---------------------------------------------------------------------------------------------------------- Other Diversified Financial Services -- 0.6% 268,549 AWAS Finance Luxembourg 2012 SA, Term Loan, 3.91%, 7/16/18 $ 269,556 635,000 Summit Midstream Partners Holdings LLC, Term Loan Credit Facility, 7.022%, 5/13/22 648,494 ------------ $ 918,050 ---------------------------------------------------------------------------------------------------------- Specialized Finance -- 0.5% 245,000 DBRS, Ltd., Initial Term Loan, 6.304%, 3/4/22 $ 237,650 500,000(d) MHVC Acquisition Corp., First Lien Initial Term Loan, 4/29/24 503,750 ------------ $ 741,400 ------------ Total Diversified Financials $ 2,581,115 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 18 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- ENERGY -- 2.3% Integrated Oil & Gas -- 0.3% 498,114(d) ExGen Renewables I LLC, Term Loan, 2/8/21 $ 501,071 ---------------------------------------------------------------------------------------------------------- Oil & Gas Drilling -- 0.6% 250,000 Gavilan Resources LLC, Second Lien Initial Term Loan, 7.0%, 3/1/24 $ 249,450 744,680 Jonah Energy LLC, Second Lien Initial Term Loan, 7.5%, 5/12/21 710,239 ------------ $ 959,689 ---------------------------------------------------------------------------------------------------------- Oil & Gas Equipment & Services -- 0.3% 535,914 FR Dixie Acquisition Corp., Term Loan, 5.804%, 12/18/20 $ 393,897 ---------------------------------------------------------------------------------------------------------- Oil & Gas Exploration & Production -- 0.6% 250,000 California Resources Corp., Term Loan, 11.375%, 12/31/21 $ 274,375 550,000 Chesapeake Energy Corp., Term Loan Class A, 8.553%, 8/23/21 595,146 ------------ $ 869,521 ---------------------------------------------------------------------------------------------------------- Oil & Gas Storage & Transportation -- 0.5% 686,550 Gulf Finance LLC, Tranche B Term Loan, 6.25%, 8/25/23 $ 687,408 ------------ Total Energy $ 3,411,586 ---------------------------------------------------------------------------------------------------------- FOOD, BEVERAGE & TOBACCO -- 0.9% Packaged Foods & Meats -- 0.9% 497,500 Amplify Snack Brands, Inc., Term Loan, 6.5%, 9/2/23 $ 489,830 471,260 Dole Food Co., Inc., Tranche B Term Loan, 4.15%, 4/6/24 473,701 349,123 Give and Go Prepared Foods Corp., First Lien Term Loan, 6.647%, 7/29/23 352,323 ------------ Total Food, Beverage & Tobacco $ 1,315,854 ---------------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SERVICES -- 3.9% Health Care Facilities -- 1.1% 237,518 CHS/Community Health Systems, Inc., Incremental 2019 Term G Loan, 3.75%, 12/31/19 $ 236,903 437,027 CHS/Community Health Systems, Inc., Incremental 2021 Term H Loan, 4.0%, 1/27/21 434,750 192,079 HCA Inc., Tranche B-9 Term Loan, 2.993%, 3/17/23 193,093 312,910 Kindred Healthcare, Inc., Incremental Term Loan, 4.688%, 4/9/21 313,742 496,250 Prospect Medical Holdings, Inc., Term Loan, 7.063%, 6/30/22 504,624 ------------ $ 1,683,112 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 19 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Health Care Services -- 1.7% 328,840(e) Bioscrip, Inc., Initial Term B Loan, 9.25% (2.75% PIK 6.5% cash), 7/31/20 $ 326,168 197,304(e) Bioscrip, Inc., Term Loan, 9.25% (2.75% PIK 6.5% cash), 7/31/20 195,701 250,000(d) ExamWorks Group, Inc. (fka Gold Merger Co., Inc.), Term B-1 Loan, 7/27/23 252,656 200,000 Genoa Healthcare Co., LLC, Second Lien Initial Term Loan, 9.147%, 10/28/24 202,000 344,750 HC Group Holdings III, Inc., First Lien Initial Term Loan, 6.0%, 4/7/22 340,441 249,375 Inventiv Group Holdings, Inc., Initial Term Loan, 4.804%, 11/9/23 251,187 198,850 National Mentor Holdings, Inc., Tranche B Term Loan, 4.397%, 1/31/21 199,782 199,497(d) nThrive, Inc. (fka Precyse Acquisition Corp.), First Lien Initial Term Loan, 10/20/22 201,243 99,243 NVA Holdings, Inc., First Lien Term B-2 Loan, 4.647%, 8/14/21 100,267 414,286 NVA Holdings, Inc., Second Lien Term Loan, 8.147%, 8/14/22 418,601 ------------ $ 2,488,046 ---------------------------------------------------------------------------------------------------------- Health Care Supplies -- 0.6% 228,904 Alere, Inc., Term Loan B, 4.25%, 6/20/22 $ 229,691 185,000 Kinetic Concepts, Inc., Dollar Term Loan, 4.397%, 2/2/24 185,559 500,000 Sterigenics-Nordion Holdings LLC, Incremental Term Loan, 4.15%, 5/15/22 498,125 ------------ $ 913,375 ---------------------------------------------------------------------------------------------------------- Health Care Technology -- 0.5% 250,000(d) Change Healthcare Holdings, Inc. (fka Emdeon Inc.), Closing Date Term Loan, 3/1/24 $ 251,005 375,258(f) Medical Card System, Inc., Term Loan, 1.5%, 5/31/19 243,918 169,575 Quintiles IMS, Inc., Term B-1 Dollar Loan, 3.051%, 3/7/24 171,341 ------------ $ 666,264 ------------ Total Health Care Equipment & Services $ 5,750,797 ---------------------------------------------------------------------------------------------------------- HOUSEHOLD & PERSONAL PRODUCTS -- 0.9% Household Products -- 0.5% 248,063 Redbox Automated Retail LLC, First Lien Term B Loan, 8.5%, 9/27/21 $ 248,889 400,000(d) WKI Holding Co., Inc. (World Kitchen LLC), Term Loan B, 4/25/24 402,000 ------------ $ 650,889 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 20 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Personal Products -- 0.4% 249,364 Atrium Innovations, Inc., First Lien Initial Tranche B-1 Term Loan, 4.647%, 2/15/21 $ 250,922 126,910 Nature's Bounty Co. (aka NBTY Inc.), Dollar Term B-1 Loan, 4.647%, 5/5/23 127,624 248,750 Revlon Consumer Products Corp., Initial Term B Loan, 4.493%, 9/7/23 249,666 ------------ $ 628,212 ------------ Total Household & Personal Products $ 1,279,101 ---------------------------------------------------------------------------------------------------------- INSURANCE -- 2.2% Life & Health Insurance -- 0.3% 493,892 Integro, Ltd., Initial Term Loan, 6.75%, 10/31/22 $ 495,127 ---------------------------------------------------------------------------------------------------------- Multi-Line Insurance -- 0.1% 165,228 Alliant Holdings I LLC, Term Loan B, 4.417%, 8/12/22 $ 166,231 ---------------------------------------------------------------------------------------------------------- Property & Casualty Insurance -- 1.8% 300,000 Acrisure LLC, First Lien Term B Loan, 5.897%, 11/22/23 $ 304,781 593,765 Confie Seguros Holding II Co., Second Lien Term Loan, 10.25%, 5/8/19 592,529 510,892 Confie Seguros Holding II Co., Term B Loan, 5.75%, 4/19/22 512,594 689,587 USI, Inc., Initial Term Loan, 4.25%, 12/27/19 691,096 500,000(d) USI, Inc., Term Loan, 4/5/24 498,282 ------------ $ 2,599,282 ------------ Total Insurance $ 3,260,640 ---------------------------------------------------------------------------------------------------------- MATERIALS -- 5.4% Construction Materials -- 0.7% 119,250 84 Lumber Co., Initial Term Loan, 6.75%, 10/25/23 $ 120,741 498,747 American Bath Group LLC, First Lien Replacement Term Loan, 6.397%, 9/30/23 503,422 90,696 CeramTec Service GmbH (CeramTec Acquisition Corp.), Dollar Term B-3 Loan, 3.804%, 8/30/20 91,660 297,122 CeramTec Service GmbH (CeramTec Acquisition Corp.), Initial Dollar Term B-1 Loan, 3.804%, 8/30/20 300,279 34,670 CeramTec Service GmbH (CeramTec Acquisition Corp.), Initial Dollar Term B-2 Loan, 3.804%, 8/30/20 35,039 ------------ $ 1,051,141 ---------------------------------------------------------------------------------------------------------- Diversified Chemicals -- 0.6% 312,926(d) Allnex (Luxembourg) & Cy SCA (fka AI Chem & Cy SCA), Tranche B-2 Term Loan, 9/13/23 $ 313,708 235,999(d) Allnex (Luxembourg) & Cy SCA (fka AI Chem & Cy SCA), Tranche B-3 Term Loan, 9/13/23 236,589 270,884 Univar USA, Inc., Term B-2 Loan, 3.743%, 7/1/22 271,967 ------------ $ 822,264 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 21 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Diversified Metals & Mining -- 0.3% 497,500 Global Brass and Copper, Inc., Initial Term Loan, 5.25%, 7/18/23 $ 504,651 72,335(g)(h) PT Bakrie & Brothers Tbk, Facility Term Loan B, 8.15%, 9/28/17 7,595 ------------ $ 512,246 ---------------------------------------------------------------------------------------------------------- Forest Products -- 0.2% 248,750 Expera Specialty Solutions LLC, Term Loan B, 5.75%, 11/3/23 $ 250,149 ---------------------------------------------------------------------------------------------------------- Metal & Glass Containers -- 1.3% 600,000(d) Albea Beauty Holdings SA, Facility B, 4/22/24 $ 601,500 10,499 Kleopatra Holdings 2 SCA, Initial German Borrower Dollar Term Loan, 4.397%, 4/28/20 10,603 24,568 Kleopatra Holdings 2 SCA, Initial US Dollar Term Loan, 4.397%, 4/28/20 24,810 497,979 Tank Holding Corp., Initial Term Loan, 5.25%, 3/16/22 500,053 736,875 Tekni-Plex, Inc., USD Term Loan, 4.5%, 6/1/22 739,178 ------------ $ 1,876,144 ---------------------------------------------------------------------------------------------------------- Paper Packaging -- 0.4% 647,472 Caraustar Industries, Inc., Refinancing Term Loan, 6.647%, 3/14/22 $ 653,542 ---------------------------------------------------------------------------------------------------------- Paper Products -- 0.6% 287,111 Appvion, Inc., Term Commitment, 7.75%, 6/28/19 $ 280,292 226,974 Exopack Holdings SA, USD Term Loan, 4.647%, 5/8/19 227,967 170,064 Ranpak Corp., Second Lien Initial Term Loan, 8.25%, 10/3/22 167,513 199,491 Ranpak Corp., Tranche B-1 USD Term Loan, 4.25%, 10/1/21 199,990 ------------ $ 875,762 ---------------------------------------------------------------------------------------------------------- Specialty Chemicals -- 1.0% 290,407 Macdermid, Inc. (Platform Specialty Products Corp.), Tranche B-5 Term Loan, 4.5%, 6/7/20 $ 293,077 648,250 Omnova Solutions, Inc., Term B-2 Loan, 5.25%, 8/25/23 657,164 450,000(d) Tronox Pigments (Netherlands) BV, New Term Loan, 3/19/20 452,921 ------------ $ 1,403,162 ---------------------------------------------------------------------------------------------------------- Steel -- 0.3% 496,256 Zekelman Industries, Inc. (fka JMC Steel Group, Inc.), Term Loan, 4.906%, 6/14/21 $ 502,770 ------------ Total Materials $ 7,947,180 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 22 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- MEDIA -- 2.6% Advertising -- 0.8% 931,253 Affinion Group, Inc., Tranche B Term Loan, 6.75%, 4/30/18 $ 931,170 248,750 CB Poly Investments LLC, First Lien Closing Date Term Loan, 6.25%, 8/16/23 250,616 ------------ $ 1,181,786 ---------------------------------------------------------------------------------------------------------- Broadcasting -- 0.9% 164,188 A-L Parent LLC (aka Learfield Communications)., First Lien Initial Term Loan, 4.25%, 12/1/23 $ 165,727 200,000(d) CSC Holdings LLC (fka CSC Holdings Inc. (Cablevision)), March 2017 Refinancing Term Loan, 7/15/25 200,141 235,833 Hubbard Radio LLC, Term Loan, 4.25%, 5/27/22 237,012 292,500 MediArena Acquisition BV (fka AP NMT Acquisition BV), First Lien Dollar Term B Loan, 6.898%, 8/13/21 260,142 452,523 Univision Communications Inc., First Lien 2017 Replacement Repriced Term Loan, 3.75%, 3/15/24 449,915 ------------ $ 1,312,937 ---------------------------------------------------------------------------------------------------------- Publishing -- 0.9% 319,313 Houghton Mifflin Holdings, Inc., Term Loan, 4.0%, 5/28/21 $ 296,162 46,068 Lee Enterprises, Inc., First Lien Term Loan, 7.25%, 3/31/19 46,299 918,063 McGraw-Hill Global Education Holdings LLC, First Lien Term B Loan, 5.0%, 5/4/22 909,226 ------------ $ 1,251,687 ------------ Total Media $ 3,746,410 ---------------------------------------------------------------------------------------------------------- PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES -- 1.5% Life Sciences Tools & Services -- 0.9% 985,000 Albany Molecular Research, Inc., Term Loan B, 5.906%, 7/16/21 $ 991,772 366,949 Catalent Pharma Solutions, Inc. (fka Cardinal Health 409, Inc.), Dollar Term Loan, 3.75%, 5/20/21 371,689 ------------ $ 1,363,461 ---------------------------------------------------------------------------------------------------------- Pharmaceuticals -- 0.6% 176,271 Concordia Healthcare Corp., Initial Dollar Term Loan, 5.25%, 10/21/21 $ 119,864 500,000 Horizon Pharma, Inc., Term Loan B, 4.75%, 3/22/24 503,750 250,000(d) VRX Escrow Corp., Series F Tranche B Term Loan, 4/1/22 251,589 ------------ $ 875,203 ------------ Total Pharmaceuticals, Biotechnology & Life Sciences $ 2,238,664 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 23 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- REAL ESTATE -- 0.6% Retail REITs -- 0.2% 272,523 DTZ US Borrower LLC, First Lien Initial Term Loan, 4.25%, 11/4/21 $ 274,345 42,553 DTZ US Borrower LLC, Second Lien Initial Term Loan, 9.422%, 11/4/22 42,700 ------------ $ 317,045 ---------------------------------------------------------------------------------------------------------- Specialized REIT -- 0.4% 493,753 Communications Sales & Leasing, Inc. (CSL Capital LLC), Shortfall Term Loan, 4.0%, 10/24/22 $ 494,800 ------------ Total Real Estate $ 811,845 ---------------------------------------------------------------------------------------------------------- RETAILING -- 0.5% Automotive Retail -- 0.4% 637,014 CWGS Group LLC, Term Loan, 4.736%, 11/8/23 $ 642,269 ---------------------------------------------------------------------------------------------------------- Specialty Stores -- 0.1% 155,314 PetSmart, Inc., Tranche B-2 Loan, 4.02%, 3/11/22 $ 143,375 ------------ Total Retailing $ 785,644 ---------------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.5% Semiconductors -- 0.5% 496,173 M/A-COM Technology Solutions Holdings, Inc., Initial Term Loan, 3.989%, 5/7/21 $ 503,616 250,000(d) Micron Technology, Inc., Term Loan, 4/26/22 252,813 ------------ Total Semiconductors & Semiconductor Equipment $ 756,429 ---------------------------------------------------------------------------------------------------------- SOFTWARE & SERVICES -- 2.6% Application Software -- 0.5% 249,392 Greeneden US Holdings I LLC, Tranche B-1 Dollar Term Loan, 5.158%, 12/1/23 $ 251,636 500,000 STG-Fairway Acquisitions, Inc., First Lien Term Loan, 6.397%, 6/30/22 442,500 ------------ $ 694,136 ---------------------------------------------------------------------------------------------------------- Home Entertainment Software -- 0.0%+ 52,000(d) MA FinanceCo., LLC (aka Micro Focus International Plc), Term Loan B3, 4/19/24 $ 52,260 ---------------------------------------------------------------------------------------------------------- Internet Software & Services -- 0.6% 246,875 Avast Holding BV, Initial Refinancing Dollar Term Loan, 4.397%, 9/30/23 $ 249,498 165,000(d) Blucora, Inc., Term Loan B, 4/19/24 165,413
The accompanying notes are an integral part of these financial statements. 24 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Internet Software & Services -- (continued) 249,375 Rackspace Hosting, Inc., First Lien Term Loan B, 4.535%, 11/3/23 $ 251,427 250,000(d) Zayo Group LLC (Zayo Capital, Inc.), 2017 Incremental Refinancing B-2 Term Loan, 1/19/24 251,934 ------------ $ 918,272 ---------------------------------------------------------------------------------------------------------- IT Consulting & Other Services -- 1.3% 185,173 Evergreen Skills Lux S.a.r.l., First Lien Initial Term Loan, 5.75%, 4/28/21 $ 173,947 350,000 Go Daddy Operating Co., LLC (GD Finance Co., Inc.), Initial Term Loan, 3.493%, 2/15/24 351,575 300,000 Rocket Software, Inc., Second Lien Term Loan, 10.647%, 10/14/24 304,782 615,625 Sitel Worldwide Corp., First Lien Term B-1 Loan, 6.688%, 9/18/21 614,663 147,000 TaxACT, Inc. (H.D. Vest, Inc.), Initial Term Loan, 7.0%, 1/3/23 147,551 250,000(d) Tempo Acquisition LLC,Term Loan B, 4/19/24 250,625 ------------ $ 1,843,143 ---------------------------------------------------------------------------------------------------------- Systems Software -- 0.2% 348,000(d) Seattle Spinco, Inc. (aka Micro Focus International Plc), Term Loan B, 4/19/24 $ 349,740 ------------ Total Software & Services $ 3,857,551 ---------------------------------------------------------------------------------------------------------- TECHNOLOGY HARDWARE & EQUIPMENT -- 0.3% Electronic Components -- 0.3% 450,800 Mirion Technologies (Finance) LLC (Mirion Technologies, Inc.), First Lien Initial Term Loan, 5.897%, 3/31/22 $ 452,021 ------------ Total Technology Hardware & Equipment $ 452,021 ---------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES -- 0.9% Integrated Telecommunication Services -- 0.7% 489,746 GCI Holdings, Inc., New Term B Loan, 3.993%, 2/2/22 $ 494,031 486,811 Level 3 Financing, Inc., Tranche B 2024 Term Loan, 3.241%, 2/22/24 489,002 ------------ $ 983,033 ---------------------------------------------------------------------------------------------------------- Wireless Telecommunication Services -- 0.2% 350,000(d) Sprint Communications, Inc., Initial Term Loan, 2/2/24 $ 350,692 ------------ Total Telecommunication Services $ 1,333,725 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 25 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- TRANSPORTATION -- 1.0% Marine -- 0.7% 591,023 Commercial Barge Line Co., Initial Term Loan, 9.75%, 11/12/20 $ 539,308 500,000 Navios Maritime Partners LP (Navios Partners Finance (US) Inc.), Initial Term Loan, 6.13%, 9/14/20 496,459 ------------ $ 1,035,767 ---------------------------------------------------------------------------------------------------------- Trucking -- 0.3% 472,113 YRC Worldwide, Inc., Initial Term Loan, 8.5%, 2/13/19 $ 464,677 ------------ Total Transportation $ 1,500,444 ---------------------------------------------------------------------------------------------------------- UTILITIES -- 1.7% Electric Utilities -- 1.0% 613,246 APLH Holdings, Ltd., Partnership, Term Loan, 5.25%, 4/13/23 $ 618,356 324,188 Talen Energy Supply LLC, Term B-1 Loan, 5.027%, 7/6/23 322,837 500,000(d) TPF II Power LLC (TPF II Convert Midco LLC), Term Loan, 10/2/23 504,220 ------------ $ 1,445,413 ---------------------------------------------------------------------------------------------------------- Independent Power Producers & Energy Traders -- 0.7% 500,000 Dynegy, Inc., Tranche C-1 Term Loan, 4.25%, 2/7/24 $ 500,470 609,214 TerraForm AP Acquisition Holdings LLC, Term Loan, 5.647%, 6/27/22 618,352 ------------ $ 1,118,822 ------------ Total Utilities $ 2,564,235 ---------------------------------------------------------------------------------------------------------- TOTAL SENIOR SECURED FLOATING RATE LOAN INTERESTS (Cost $61,071,020) $ 61,284,239 ---------------------------------------------------------------------------------------------------------- CORPORATE BONDS & NOTES -- 90.7% of Net Assets AUTOMOBILES & COMPONENTS -- 0.7% Auto Parts & Equipment -- 0.7% EUR 165,000(e) IHO Verwaltungs GmbH, 3.25% (4.0% PIK 0.0% cash), 9/15/23 (144A) $ 187,011 EUR 395,000(e) IHO Verwaltungs GmbH, 3.75% (4.5% PIK 0.0% cash), 9/15/26 (144A) 446,721 454,000 International Automotive Components Group SA, 9.125%, 6/1/18 (144A) 441,515 ------------ Total Automobiles & Components $ 1,075,247 ---------------------------------------------------------------------------------------------------------- BANKS -- 5.6% Diversified Banks -- 5.3% 200,000 Access Bank Plc, 10.5%, 10/19/21 (144A) $ 212,372 300,000(b) Banco de Galicia y Buenos Aires, 8.25%, 7/19/26 (144A) 328,029
The accompanying notes are an integral part of these financial statements. 26 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Diversified Banks -- (continued) 525,000 Banco de Galicia y Buenos Aires, 8.75%, 5/4/18 (144A) $ 521,671 200,000(b)(i) Banco Santander SA, 6.375% 203,750 680,000 Banque Ouest Africaine de Developpement, 5.5%, 5/6/21 (144A) 722,609 950,000(b)(i) BNP Paribas SA, 7.625% (144A) 1,031,985 1,000,000(b)(i) Credit Agricole SA, 7.875% (144A) 1,069,820 240,000(b)(i) Goldman Sachs Capital II, 4.0% 204,000 350,000(b)(i) ING Groep NV, 6.5% 359,187 225,000(b)(i) Intesa Sanpaolo S.p.A., 7.7% (144A) 221,906 250,000(b)(i) Royal Bank of Scotland Group Plc, 8.0% 259,375 400,000(b)(i) Royal Bank of Scotland Group Plc, 8.625% 431,800 200,000 Sberbank of Russia Via SB Capital SA, 5.25%, 5/23/23 (144A) 206,500 460,000(b)(i) Societe Generale SA, 7.375% (144A) 486,450 245,000 Trade & Development Bank of Mongolia LLC, 9.375%, 5/19/20 (144A) 263,799 344,000(b) Turkiye Vakiflar Bankasi TAO, 8.0%, 11/1/27 (144A) 357,571 750,000 UBS AG / Stamford CT, 7.625%, 8/17/22 875,625 ------------ $ 7,756,449 ---------------------------------------------------------------------------------------------------------- Thrifts & Mortgage Finance -- 0.3% 450,000 Vnesheconombank Via VEB Finance Plc, 6.902%, 7/9/20 (144A) $ 493,841 ------------ Total Banks $ 8,250,290 ---------------------------------------------------------------------------------------------------------- CAPITAL GOODS -- 2.3% Aerospace & Defense -- 0.2% 250,000 Triumph Group, Inc., 4.875%, 4/1/21 $ 245,000 ---------------------------------------------------------------------------------------------------------- Agricultural & Farm Machinery -- 0.3% 475,000 Titan International, Inc., 6.875%, 10/1/20 $ 488,063 ---------------------------------------------------------------------------------------------------------- Construction & Engineering -- 0.3% 455,000 Tutor Perini Corp., 6.875%, 5/1/25 (144A) $ 477,750 ---------------------------------------------------------------------------------------------------------- Construction Machinery & Heavy Trucks -- 0.2% 360,000 Meritor, Inc., 6.75%, 6/15/21 $ 373,500 ---------------------------------------------------------------------------------------------------------- Industrial Conglomerates -- 0.4% 455,000 JB Poindexter & Co., Inc., 9.0%, 4/1/22 (144A) $ 476,612 155,000 Park-Ohio Industries, Inc., 6.625%, 4/15/27 (144A) 158,875 ------------ $ 635,487 ---------------------------------------------------------------------------------------------------------- Industrial Machinery -- 0.7% 560,000 Apex Tool Group LLC, 7.0%, 2/1/21 (144A) $ 518,000 450,000 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) 464,625 ------------ $ 982,625 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 27 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Trading Companies & Distributors -- 0.2% 150,000 H&E Equipment Services, Inc., 7.0%, 9/1/22 $ 156,840 73,000 TRAC Intermodal LLC / TRAC Intermodal Corp., 11.0%, 8/15/19 77,190 ------------ $ 234,030 ------------ Total Capital Goods $ 3,436,455 ---------------------------------------------------------------------------------------------------------- COMMERCIAL & PROFESSIONAL SERVICES -- 1.1% Commercial Printing -- 0.2% 340,000 Cenveo Corp., 6.0%, 8/1/19 (144A) $ 277,100 ---------------------------------------------------------------------------------------------------------- Diversified Support Services -- 0.7% EUR 475,000 Boing Group Financing Plc, 6.625%, 7/15/19 (144A) $ 523,662 280,000 Broadspectrum, Ltd., 8.375%, 5/15/20 (144A) 292,180 260,000 TMS International Corp., 7.625%, 10/15/21 (144A) 261,950 ------------ $ 1,077,792 ---------------------------------------------------------------------------------------------------------- Security & Alarm Services -- 0.2% 290,000 Prime Security Services Borrower LLC / Prime Finance, Inc., 9.25%, 5/15/23 (144A) $ 316,825 ------------ Total Commercial & Professional Services $ 1,671,717 ---------------------------------------------------------------------------------------------------------- CONSUMER DURABLES & APPAREL -- 0.8% Homebuilding -- 0.8% 135,000 Beazer Homes USA, Inc., 8.75%, 3/15/22 $ 150,187 350,000 Brookfield Residential Properties, Inc., 6.375%, 5/15/25 (144A) 364,875 250,000 KB Home, 7.0%, 12/15/21 279,375 340,000 KB Home, 7.625%, 5/15/23 376,550 ------------ Total Consumer Durables & Apparel $ 1,170,987 ---------------------------------------------------------------------------------------------------------- CONSUMER SERVICES -- 4.3% Casinos & Gaming -- 1.7% EUR 750,000 Intralot Capital Luxembourg SA, 6.75%, 9/15/21 (144A) $ 861,329 882,412(e)(g) Mashantucket Western Pequot Tribe, 6.5% (5.5% PIK 1.0% cash), 7/1/36 10,765 365,000 MGM Resorts International, 6.0%, 3/15/23 398,763 100,000 Scientific Games International, Inc., 6.25%, 9/1/20 96,250 1,050,000 Scientific Games International, Inc., 10.0%, 12/1/22 1,139,250 ------------ $ 2,506,357 ---------------------------------------------------------------------------------------------------------- Hotels, Resorts & Cruise Lines -- 0.9% 320,000 Hilton Grand Vacations Borrower LLC / Hilton Grand Vacations Borrower, Inc., 6.125%, 12/1/24 (144A) $ 340,800 250,000 Silversea Cruise Finance Ltd., 7.25%, 2/1/25 (144A) 265,000 245,000 Viking Cruises, Ltd., 6.25%, 5/15/25 (144A) 235,812 525,000 Viking Cruises, Ltd., 8.5%, 10/15/22 (144A) 548,625 ------------ $ 1,390,237 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 28 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Restaurants -- 0.4% 495,000 Landry's, Inc., 6.75%, 10/15/24 (144A) $ 518,513 ---------------------------------------------------------------------------------------------------------- Specialized Consumer Services -- 1.3% 1,153,000 Constellis Holdings LLC / Constellis Finance Corp., 9.75%, 5/15/20 (144A) $ 1,240,397 160,000 Monitronics International, Inc., 9.125%, 4/1/20 155,200 540,000 StoneMor Partners LP / Cornerstone Family Services of WV, 7.875%, 6/1/21 534,951 ------------ $ 1,930,548 ------------ Total Consumer Services $ 6,345,655 ---------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS -- 1.9% Consumer Finance -- 1.3% 600,000 Credito Real SAB de CV SOFOM ER, 7.25%, 7/20/23 (144A) $ 626,250 445,000 Jefferies Finance LLC / JFIN Co-Issuer Corp., 7.375%, 4/1/20 (144A) 455,012 345,000 Navient Corp., 6.625%, 7/26/21 365,269 440,000 TMX Finance LLC / TitleMax Finance Corp., 8.5%, 9/15/18 (144A) 413,600 ------------ $ 1,860,131 ---------------------------------------------------------------------------------------------------------- Specialized Finance -- 0.5% 175,000 Nationstar Mortgage LLC / Nationstar Capital Corp., 6.5%, 7/1/21 $ 177,625 580,000 Nationstar Mortgage LLC / Nationstar Capital Corp., 6.5%, 6/1/22 582,900 ------------ $ 760,525 ---------------------------------------------------------------------------------------------------------- Supranational -- 0.1% IDR 2,730,000,000 European Investment Bank, 7.2%, 7/9/19 (144A) $ 205,974 ------------ Total Diversified Financials $ 2,826,630 ---------------------------------------------------------------------------------------------------------- ENERGY -- 12.7% Integrated Oil & Gas -- 1.1% 145,000 Ascent Resources Utica Holdings LLC / ARU Finance Corp., 10.0%, 4/1/22 (144A) $ 149,894 410,000 Petrobras Global Finance BV, 6.25%, 3/17/24 424,145 650,000 Petrobras Global Finance BV, 7.375%, 1/17/27 698,945 MXN 540,000 Petroleos Mexicanos, 7.19%, 9/12/24 (144A) 25,261 325,000 YPF SA, 8.875%, 12/19/18 (144A) 351,748 ------------ $ 1,649,993 ---------------------------------------------------------------------------------------------------------- Oil & Gas Drilling -- 0.6% 442,000 Rowan Cos., Inc., 5.4%, 12/1/42 $ 333,710 62,000 Rowan Cos., Inc., 5.85%, 1/15/44 48,670 289,904 Shelf Drilling Holdings Ltd., 9.5%, 11/2/20 (144A) 288,455
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 29 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Oil & Gas Drilling -- (continued) 160,000 Trinidad Drilling, Ltd., 6.625%, 2/15/25 (144A) $ 161,200 ------------ $ 832,035 ---------------------------------------------------------------------------------------------------------- Oil & Gas Equipment & Services -- 1.0% 540,000 Archrock Partners LP / Archrock Partners Finance Corp., 6.0%, 10/1/22 $ 538,650 425,000 McDermott International, Inc., 8.0%, 5/1/21 (144A) 442,212 310,000 Weatherford International, Ltd., 5.95%, 4/15/42 271,250 105,000 Weatherford International, Ltd., 8.25%, 6/15/23 113,794 ------------ $ 1,365,906 ---------------------------------------------------------------------------------------------------------- Oil & Gas Exploration & Production -- 5.5% 300,000 Alta Mesa Holdings LP / Alta Mesa Finance Services Corp., 7.875%, 12/15/24 (144A) $ 315,000 200,000 California Resources Corp., 8.0%, 12/15/22 (144A) 153,000 200,000 Chesapeake Energy Corp., 8.0%, 1/15/25 (144A) 197,750 250,000 Extraction Oil & Gas Holdings LLC / Extraction Finance Corp., 7.875%, 7/15/21 (144A) 261,875 360,000 GeoPark Latin America, Ltd., Agencia en Chile, 7.5%, 2/11/20 (144A) 361,800 410,000 Great Western Petroleum LLC / Great Western Finance, Inc., 9.0%, 9/30/21 (144A) 424,350 740,000 Gulfport Energy Corp., 6.0%, 10/15/24 (144A) 728,900 450,000 Gulfport Energy Corp., 6.375%, 5/15/25 (144A) 448,312 275,000 Halcon Resources Corp., 6.75%, 2/15/25 (144A) 264,000 402,000 Halcon Resources Corp., 12.0%, 2/15/22 (144A) 467,827 420,000 MEG Energy Corp., 6.5%, 1/15/25 (144A) 414,750 450,000 Novatek OAO via Novatek Finance Ltd., 4.422%, 12/13/22 (144A) 460,157 390,000 Oasis Petroleum, Inc., 6.875%, 3/15/22 394,875 470,000 PDC Energy, Inc., 7.75%, 10/15/22 493,500 523,457(e) PetroQuest Energy, Inc., 10.0% (9.0% PIK 1.0% cash), 2/15/21 (144A) 382,124 375,000 Rice Energy, Inc., 6.25%, 5/1/22 392,111 870,000 Sanchez Energy Corp., 7.75%, 6/15/21 841,725 150,000 Whiting Petroleum Corp., 5.0%, 3/15/19 151,500 480,000 Whiting Petroleum Corp., 5.75%, 3/15/21 477,600 300,000 WPX Energy, Inc., 7.5%, 8/1/20 318,000 150,000 WPX Energy, Inc., 8.25%, 8/1/23 167,250 ------------ $ 8,116,406 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 30 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Oil & Gas Refining & Marketing -- 0.5% 669,000 Calumet Specialty Products Partners LP / Calumet Finance Corp., 6.5%, 4/15/21 $ 565,305 200,000 PBF Holding Co., LLC / PBF Finance Corp., 7.0%, 11/15/23 203,000 ------------ $ 768,305 ---------------------------------------------------------------------------------------------------------- Oil & Gas Storage & Transportation -- 4.0% 220,000 Blue Racer Midstream LLC / Blue Racer Finance Corp., 6.125%, 11/15/22 (144A) $ 225,500 200,000 Cheniere Corpus Christi Holdings LLC, 7.0%, 6/30/24 (144A) 223,476 230,000 DCP Midstream Operating LP, 5.6%, 4/1/44 219,650 450,000(a) Energy Transfer Partners LP, 4.187%, 11/1/66 385,312 118,000 EnLink Midstream Partners LP, 5.05%, 4/1/45 111,714 344,000 EnLink Midstream Partners LP, 5.6%, 4/1/44 350,048 950,000 Genesis Energy LP / Genesis Energy Finance Corp., 6.75%, 8/1/22 977,312 480,000 Global Partners LP / GLP Finance Corp., 7.0%, 6/15/23 475,200 170,000 PBF Logistics LP / PBF Logistics Finance Corp., 6.875%, 5/15/23 174,250 925,000 Sunoco LP / Sunoco Finance Corp., 6.375%, 4/1/23 (144A) 985,125 520,000 Western Refining Logistics LP / WNRL Finance Corp., 7.5%, 2/15/23 561,600 1,175,000 Williams Cos., Inc., 5.75%, 6/24/44 1,216,125 ------------ $ 5,905,312 ------------ Total Energy $ 18,637,957 ---------------------------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING -- 0.3% Food Retail -- 0.3% 200,000 C&S Group Enterprises LLC, 5.375%, 7/15/22 (144A) $ 197,500 260,000 Tops Holding LLC / Tops Markets II Corp., 8.0%, 6/15/22 (144A) 227,500 ------------ Total Food & Staples Retailing $ 425,000 ---------------------------------------------------------------------------------------------------------- FOOD, BEVERAGE & TOBACCO -- 7.1% Agricultural Products -- 0.5% 900,000 Pinnacle Operating Corp., 9.0%, 11/15/20 (144A) $ 693,000 225,000(g) Tonon Luxembourg SA, 10.5%, 5/14/24 (144A) 101,250 ------------ $ 794,250 ---------------------------------------------------------------------------------------------------------- Packaged Foods & Meats -- 5.6% 500,000(g) CFG Investment SAC, 9.75%, 7/30/19 (144A) $ 432,500 900,000 JBS Investments GmbH, 7.25%, 4/3/24 (144A) 941,625 515,000 Marfrig Holding Europe BV, 6.875%, 6/24/19 (144A) 534,802 975,000 Marfrig Holding Europe BV, 8.0%, 6/8/23 (144A) 1,034,709
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 31 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Packaged Foods & Meats -- (continued) 800,000 Marfrig Holding Europe BV, 8.375%, 5/9/18 (144A) $ 832,000 700,000 Marfrig Holding Europe BV, 11.25%, 9/20/21 (144A) 700,875 700,000 MHP SA, 8.25%, 4/2/20 (144A) 728,000 580,000 Minerva Luxembourg SA, 6.5%, 9/20/26 (144A) 575,644 1,600,000 Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 1,682,000 600,000 Pesquera Exalmar SAA, 7.375%, 1/31/20 (144A) 513,000 200,000 Post Holdings, Inc., 7.75%, 3/15/24 (144A) 222,250 ------------ $ 8,197,405 ---------------------------------------------------------------------------------------------------------- Soft Drinks -- 0.2% 355,000 Cott Beverages, Inc., 5.375%, 7/1/22 $ 367,869 ---------------------------------------------------------------------------------------------------------- Tobacco -- 0.8% 160,000 Alliance One International, Inc., 8.5%, 4/15/21 (144A) $ 166,000 1,150,000 Alliance One International, Inc., 9.875%, 7/15/21 993,025 ------------ $ 1,159,025 ------------ Total Food, Beverage & Tobacco $ 10,518,549 ---------------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SERVICES -- 1.8% Health Care Facilities -- 1.5% 700,000 Kindred Healthcare, Inc., 6.375%, 4/15/22 $ 676,375 445,000 RegionalCare Hospital Partners Holdings, Inc., 8.25%, 5/1/23 (144A) 473,424 455,000 Team Health Holdings, Inc., 6.375%, 2/1/25 (144A) 444,194 630,000 Universal Hospital Services, Inc., 7.625%, 8/15/20 638,663 ------------ $ 2,232,656 ---------------------------------------------------------------------------------------------------------- Health Care Services -- 0.3% 425,000 BioScrip, Inc., 8.875%, 2/15/21 $ 359,125 ------------ Total Health Care Equipment & Services $ 2,591,781 ---------------------------------------------------------------------------------------------------------- HOUSEHOLD & PERSONAL PRODUCTS -- 0.3% Household Products -- 0.3% 460,000 Springs Industries, Inc., 6.25%, 6/1/21 $ 474,375 ------------ Total Household & Personal Products $ 474,375 ---------------------------------------------------------------------------------------------------------- INSURANCE -- 26.2% Insurance Brokers -- 0.0%+ GBP 10,489(a) Towergate Finance Plc, 8.5%, 3/2/20 (144A) $ 13,882 ---------------------------------------------------------------------------------------------------------- Property & Casualty Insurance -- 4.4% 6,000,000(c)(f) Fixed Income Trust Series 2013-A, 0.0%, 10/15/97 (144A) $ 5,865,558 EUR 250,000(a) Horse Capital I DAC, 6.25%, 6/15/20 (144A) 273,926 EUR 250,000(a) Horse Capital I DAC, 12.0%, 6/15/20 (144A) 273,953 80,000(b)(i) Sirius International Group, Ltd., 7.506% (144A) 81,600
The accompanying notes are an integral part of these financial statements. 32 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Property & Casualty Insurance -- (continued) GBP 59,442 TIG FINCO Plc, 8.75%, 4/2/20 (144A) $ 74,814 ------------ $ 6,569,851 ---------------------------------------------------------------------------------------------------------- Reinsurance -- 21.8% 300,000(a) Aozora Re, Ltd., 3.43%, 4/7/21 (144A) (Cat Bond) $ 299,880 500,000(a) Aozora Re, Ltd., 3.459%, 4/7/20 (144A) (Cat Bond) 509,700 750,000(a) Bosphorus Re, Ltd., 4.341%, 8/17/18 (144A) (Cat Bond) 762,075 400,000(a) Caelus Re V, Ltd., Series C, 1.379%, 6/5/20 (144A) (Cat Bond) 400,000 375,000(a) Caelus Re V, Ltd., Series D, 1.379%, 6/5/20 (144A) (Cat Bond) 375,000 800,000(j)(k) Carnoustie Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 12/31/17 16,320 1,000,000(j)(k) Carnoustie Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/20 108,200 1,000,000(j)(k) Carnoustie Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/21 1,012,700 750,000(a) Citrus Re, Ltd., 8.292%, 2/25/19 (144A) (Cat Bond) 768,675 650,000(j)(k) Cyprus Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 7/10/17 578,370 1,750,000(a) East Lane Re VI, Ltd., 3.447%, 3/14/18 (144A) (Cat Bond) 1,754,375 1,000,000(j)(k) Eden Re II, Ltd., Variable Rate Notes, 3/22/21 (144A) 1,026,300 250,000(a) Galilei Re, Ltd., 9.012%, 1/8/21 (144A) (Cat Bond) 247,725 250,000(a) Galilei Re, Ltd., 14.228%, 1/8/20 (144A) (Cat Bond) 248,475 250,000(a) Galilei Re, Ltd., 14.262%, 1/8/21 (144A) (Cat Bond) 249,700 250,000(a) Galileo Re, Ltd., 9.517%, 1/8/19 (144A) (Cat Bond) 250,425 250,000(a) Galileo Re, Ltd., 14.037%, 1/8/19 (144A) (Cat Bond) 251,100 157,500(a) Gator Re, Ltd., 1.297%, 5/9/17 (144A) (Cat Bond) 197 2,400,000(j)(k) Gleneagles Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/20 403,680 1,500,000(j)(k) Gleneagles Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/21 1,521,300 2,500,000(j)(k) Gullane Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/20 104,750 2,500,000(j)(k) Gullane Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 11/30/21 2,542,750 750,000(a) Integrity Re, Ltd., Series A, 0.5%, 6/10/20 (144A) (Cat Bond) 750,000 500,000(a) Integrity Re, Ltd., Series C, 0.5%, 6/10/20 (144A) (Cat Bond) 499,515 500,000(a) Kilimanjaro II Re, Ltd., 8.617%, 4/20/21 (144A) (Cat Bond) 503,600
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 33 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Reinsurance -- (continued) 500,000(a) Kilimanjaro II Re, Ltd., 11.117%, 4/20/21 (144A) (Cat Bond) $ 502,400 1,000,000(j)(k) Lahinch Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 5/10/21 17,800 1,450,000(j)(k) Lorenz Re, Ltd. (Prime, Ltd.), Variable Rate Notes, 3/31/18 8,410 1,000,000(j)(k) Lorenz Re 2017, Ltd. (Prime, Ltd.), Variable Rate Notes, 3/31/20 1,006,000 500,000(a) Merna Re, Ltd., 2.792%, 4/8/20 (144A) (Cat Bond) 500,000 500,000(a) Nakama Re, Ltd., 3.246%, 10/13/21 (144A) (Cat Bond) 508,200 3,000,000(j)(k) Pangaea Re Segregated Account (Artex SAC, Ltd.), Series 2015-1, Variable Rate Notes, 2/1/19 13,500 2,000,000(j)(k) Pangaea Re Segregated Account (Artex SAC, Ltd.), Series 2016-1, Variable Rate Notes, 2/1/20 278,000 2,000,000(j)(k) Pangaea Re Segregated Account (Artex SAC, Ltd.), Series 2017-1, Variable Rate Notes, 11/30/21 2,055,000 400,000(a) Pelican IV Re, Ltd., 3.68%, 5/5/20 (144A) (Cat Bond) 399,720 1,600,000(j)(k) Portrush 2016 Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 6/15/17 365,280 500,000(a) Queen Street IX Re, Ltd., 6.297%, 6/8/17 (144A) (Cat Bond) 500,350 2,000,000(a) Queen Street X Re, Ltd., 6.547%, 6/8/18 (144A) (Cat Bond) 2,010,000 500,000(l) Residential Reinsurance 2016 Ltd., 12/6/17 (144A) (Cat Bond) 470,700 700,000(j)(k) Resilience Re, Ltd., Variable Rate Notes, 1/8/18 664,300 1,000,000(j)(k) Resilience Re, Ltd., Variable Rate Notes, 6/2/17 1,001,800 AUD 300,000(j)(k) Rewire Securities LLC, Variable Rate Notes, 7/10/17 198,233 1,250,000(j)(k) Shenandoah Re, Ltd., Variable Rate Notes, 7/7/17 1,237,125 1,000,000(j)(k) Silverton Re, Ltd. (Aon Benfield Securities, Inc.), Variable Rate Notes, 9/18/17 (144A) 2,000 1,000,000(j)(k) Silverton Re, Ltd. (Aon Benfield Securities, Inc.), Variable Rate Notes, 9/17/18 (144A) 48,800 1,000,000(j)(k) Silverton Re, Ltd. (Aon Benfield Securities, Inc.), Variable Rate Notes, 9/16/19 (144A) 1,037,800 1,000,000(j)(k) St. Andrews Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 12/31/17 19,700 1,000,000(j)(k) St. Andrews Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 2/1/18 140,600 1,000,000(j)(k) St. Andrews Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 2/1/19 1,019,000 JPY 150,799,195(j)(k) Tralee Segregated Account (Artex SAC, Ltd.), Variable Rate Notes, 7/20/17 1,347,838 500,000(a) Vitality Re VI, Ltd., 2.897%, 1/8/18 (144A) (Cat Bond) 500,100
The accompanying notes are an integral part of these financial statements. 34 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Reinsurance -- (continued) 1,000,000(a) Vitality Re VII, Ltd., 3.447%, 1/7/20 (144A) (Cat Bond) $ 1,019,500 ------------ $ 32,056,968 ------------ Total Insurance $ 38,640,701 ---------------------------------------------------------------------------------------------------------- MATERIALS -- 7.0% Commodity Chemicals -- 1.0% 300,000 Basell Finance Co., BV, 8.1%, 3/15/27 (144A) $ 401,381 175,000 Hexion US Finance Corp., 6.625%, 4/15/20 165,375 336,000 Rain CII Carbon LLC / CII Carbon Corp., 7.25%, 4/1/25 (144A) 336,840 545,000 Rain CII Carbon LLC / CII Carbon Corp., 8.0%, 12/1/18 (144A) 545,000 ------------ $ 1,448,596 ---------------------------------------------------------------------------------------------------------- Construction Materials -- 0.2% 215,000 Cemex SAB de CV, 7.75%, 4/16/26 (144A) $ 245,100 ---------------------------------------------------------------------------------------------------------- Copper -- 0.3% 465,000 Freeport-McMoRan, Inc., 3.55%, 3/1/22 $ 437,100 ---------------------------------------------------------------------------------------------------------- Diversified Chemicals -- 1.1% 55,000 Blue Cube Spinco, Inc., 9.75%, 10/15/23 $ 66,550 55,000 Blue Cube Spinco, Inc., 10.0%, 10/15/25 67,787 200,000 CVR Partners LP / CVR Nitrogen Finance Corp., 9.25%, 6/15/23 (144A) 204,250 500,000 Evolution Escrow Issuer LLC, 7.5%, 3/15/22 (144A) 522,500 825,000 Koks OAO Via Koks Finance Ltd., 7.5%, 5/4/22 (144A) 828,878 ------------ $ 1,689,965 ---------------------------------------------------------------------------------------------------------- Diversified Metals & Mining -- 1.6% 109,000 Boart Longyear Management Pty, Ltd., 10.0%, 10/1/18 (144A) $ 84,475 300,000 FMG Resources August 2006 Pty, Ltd., 9.75%, 3/1/22 (144A) 345,187 200,000 Hudbay Minerals, Inc., 7.25%, 1/15/23 (144A) 212,750 180,000 Prince Mineral Holding Corp., 11.5%, 12/15/19 (144A) 185,400 70,000 Teck Resources, Ltd., 8.5%, 6/1/24 (144A) 81,112 160,000 Vale Overseas, Ltd., 6.25%, 8/10/26 174,848 375,000 Vedanta Resources Plc, 6.375%, 7/30/22 (144A) 380,063 750,000 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 820,350 ------------ $ 2,284,185 ---------------------------------------------------------------------------------------------------------- Forest Products -- 0.2% 390,000 Eldorado International Finance GmbH, 8.625%, 6/16/21 (144A) $ 337,545 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 35 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Metal & Glass Containers -- 0.4% 100,000(e) ARD Finance SA, 7.125% (7.875% PIK 0.0% cash), 9/15/23 (144A) $ 103,750 320,000 Ardagh Packaging Finance Plc / Ardagh Holdings USA, Inc., 7.25%, 5/15/24 (144A) 348,400 EUR 150,000 Horizon Holdings I SASU, 7.25%, 8/1/23 (144A) 174,582 ------------ $ 626,732 ---------------------------------------------------------------------------------------------------------- Paper Packaging -- 1.1% EUR 1,365,000 SIG Combibloc Holdings SCA, 7.75%, 2/15/23 (144A) $ 1,594,598 ---------------------------------------------------------------------------------------------------------- Paper Products -- 0.4% 675,000 Appvion, Inc., 9.0%, 6/1/20 (144A) $ 391,500 207,000 Resolute Forest Products, Inc., 5.875%, 5/15/23 197,167 ------------ $ 588,667 ---------------------------------------------------------------------------------------------------------- Specialty Chemicals -- 0.5% 410,000 A Schulman, Inc., 6.875%, 6/1/23 $ 432,550 150,000 Koppers, Inc., 6.0%, 2/15/25 (144A) 157,125 160,000 Tronox Finance LLC, 6.375%, 8/15/20 162,600 ------------ $ 752,275 ---------------------------------------------------------------------------------------------------------- Steel -- 0.2% 250,000 Evraz Group SA, 9.5%, 4/24/18 (144A) $ 266,875 ------------ Total Materials $ 10,271,638 ---------------------------------------------------------------------------------------------------------- MEDIA -- 1.8% Advertising -- 0.2% 270,000 MDC Partners, Inc., 6.5%, 5/1/24 (144A) $ 263,250 ---------------------------------------------------------------------------------------------------------- Broadcasting -- 0.2% 315,000 CSC Holdings LLC, 5.5%, 4/15/27 (144A) $ 325,631 ---------------------------------------------------------------------------------------------------------- Cable & Satellite -- 0.2% 220,000 DISH DBS Corp., 7.75%, 7/1/26 $ 257,675 78,000 Intelsat Connect Finance SA, 12.5%, 4/1/22 (144A) 68,640 ------------ $ 326,315 ---------------------------------------------------------------------------------------------------------- Movies & Entertainment -- 0.6% 600,000 Gibson Brands, Inc., 8.875%, 8/1/18 (144A) $ 540,750 225,000 Regal Entertainment Group, 5.75%, 2/1/25 234,000 ------------ $ 774,750 ---------------------------------------------------------------------------------------------------------- Publishing -- 0.6% 855,000 Gannett Co., Inc., 6.375%, 10/15/23 $ 908,438 ------------ Total Media $ 2,598,384 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 36 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES -- 1.6% Pharmaceuticals -- 1.6% 208,000 DPx Holdings BV, 7.5%, 2/1/22 (144A) $ 220,220 650,000 Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc., 6.0%, 7/15/23 (144A) 569,563 240,000 Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc., 6.0%, 2/1/25 (144A) 202,680 225,000 Horizon Pharma, Inc., 6.625%, 5/1/23 222,469 70,000 Horizon Pharma, Inc. / Horizon Pharma USA, Inc., 8.75%, 11/1/24 (144A) 72,888 EUR 345,000 VRX Escrow Corp., 4.5%, 5/15/23 (144A) 264,168 EUR 450,000 VRX Escrow Corp., 4.5%, 5/15/23 344,567 430,000 VRX Escrow Corp., 7.0%, 3/15/24 (144A) 438,600 ------------ Total Pharmaceuticals, Biotechnology & Life Sciences $ 2,335,155 ---------------------------------------------------------------------------------------------------------- REAL ESTATE -- 1.1% Specialized REIT -- 1.1% 1,520,000 Communications Sales & Leasing, Inc. / CSL Capital LLC, 8.25%, 10/15/23 $ 1,622,129 ------------ Total Real Estate $ 1,622,129 ---------------------------------------------------------------------------------------------------------- RETAILING -- 0.8% Department Stores -- 0.8% 655,000 Grupo Kaltex SA de CV, 8.875%, 4/11/22 (144A) $ 650,415 350,000 Neiman Marcus Group, Ltd., LLC, 8.0%, 10/15/21 (144A) 204,750 300,000 PetSmart, Inc., 7.125%, 3/15/23 (144A) 274,125 ------------ Total Retailing $ 1,129,290 ---------------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.2% Semiconductors -- 0.2% 200,000 Micron Technology, Inc., 5.5%, 2/1/25 $ 209,000 150,000 Micron Technology, Inc., 5.625%, 1/15/26 (144A) 158,625 ------------ Total Semiconductors & Semiconductor Equipment $ 367,625 ---------------------------------------------------------------------------------------------------------- SOFTWARE & SERVICES -- 0.6% IT Consulting & Other Services -- 0.6% 130,000 Diamond 1 Finance Corp. / Diamond 2 Finance Corp., 7.125%, 6/15/24 (144A) $ 143,694 635,000 Rackspace Hosting, Inc., 8.625%, 11/15/24 (144A) 672,306 ------------ Total Software & Services $ 816,000 ---------------------------------------------------------------------------------------------------------- TECHNOLOGY HARDWARE & EQUIPMENT -- 0.9% Communications Equipment -- 0.2% 280,000 CommScope Technologies Finance LLC, 6.0%, 6/15/25 (144A) $ 298,550 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 37 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Electronic Equipment & Instruments -- 0.3% 315,000 Zebra Technologies Corp., 7.25%, 10/15/22 $ 340,594 ---------------------------------------------------------------------------------------------------------- Technology Hardware, Storage & Peripherals -- 0.4% 560,000 Diebold Nixdorf, Inc., 8.5%, 4/15/24 $ 624,400 ------------ Total Technology Hardware & Equipment $ 1,263,544 ---------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES -- 4.2% Integrated Telecommunication Services -- 2.1% 300,000 Cincinnati Bell, Inc., 7.0%, 7/15/24 (144A) $ 317,550 1,165,000 Frontier Communications Corp., 8.75%, 4/15/22 1,123,864 290,000 Frontier Communications Corp., 11.0%, 9/15/25 279,487 750,000 GCI, Inc., 6.875%, 4/15/25 806,250 600,000 Windstream Corp., 7.5%, 6/1/22 583,500 ------------ $ 3,110,651 ---------------------------------------------------------------------------------------------------------- Wireless Telecommunication Services -- 2.1% 250,000 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 270,000 300,000 Altice SA, 7.75%, 5/15/22 (144A) 318,789 225,000 Digicel Group, Ltd., 8.25%, 9/30/20 (144A) 205,875 750,000 Digicel, Ltd., 6.0%, 4/15/21 (144A) 712,500 200,000 Mobile Telesystems OJSC via MTS International Funding, Ltd., 5.0%, 5/30/23 (144A) 207,770 340,000 Sprint Corp., 7.125%, 6/15/24 370,814 485,000 Sprint Corp., 7.25%, 9/15/21 530,469 250,000 Unison Ground Lease Funding LLC, 5.78%, 3/15/20 (144A) 247,332 RUB 14,100,000 VimpelCom Holdings BV, 9.0%, 2/13/18 (144A) 247,240 ------------ $ 3,110,789 ------------ Total Telecommunication Services $ 6,221,440 ---------------------------------------------------------------------------------------------------------- TRANSPORTATION -- 2.5% Airlines -- 1.0% 155,000 Intrepid Aviation Group Holdings LLC / Intrepid Finance Co., 6.875%, 2/15/19 (144A) $ 148,025 450,000 Intrepid Aviation Group Holdings LLC / Intrepid Finance Co., 8.25%, 7/15/17 (144A) 448,875 300,000 Latam Finance Ltd., 6.875%, 4/11/24 (144A) 304,800 500,000 TAM Capital 3, Inc., 8.375%, 6/3/21 (144A) 518,125 ------------ $ 1,419,825 ---------------------------------------------------------------------------------------------------------- Airport Services -- 0.2% 200,000 Aeropuertos Dominicanos Siglo XXI SA, 6.75%, 3/30/29 (144A) $ 214,176 ---------------------------------------------------------------------------------------------------------- Highways & Railtracks -- 0.3% MXN 4,500,000 Red de Carreteras de Occidente SAPIB de CV, 9.0%, 6/10/28 (144A) $ 229,549
The accompanying notes are an integral part of these financial statements. 38 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- Highways & Railtracks -- (continued) 260,000 Rumo Luxembourg S.a.r.l., 7.375%, 2/9/24 (144A) $ 270,920 ------------ $ 500,469 ---------------------------------------------------------------------------------------------------------- Marine -- 0.4% 300,000(g) Far East Capital, Ltd., SA, 8.0%, 5/2/18 $ 198,000 375,000 Navios South American Logistics, Inc. / Navios Logistics Finance US, Inc., 7.25%, 5/1/22 (144A) 370,312 ------------ $ 568,312 ---------------------------------------------------------------------------------------------------------- Railroads -- 0.6% 415,299(e) AAF Holdings LLC / AAF Finance Co., 12.0% (12.75% PIK 12.0% cash), 7/1/19 (144A) $ 435,026 485,000 Florida East Coast Holdings Corp., 6.75%, 5/1/19 (144A) 498,580 ------------ $ 933,606 ------------ Total Transportation $ 3,636,388 ---------------------------------------------------------------------------------------------------------- UTILITIES -- 4.9% Electric Utilities -- 1.9% 575,000 Centrais Eletricas Brasileiras SA, 5.75%, 10/27/21 $ 588,800 460,000(b) Enel S.p.A, 8.75%, 9/24/73 (144A) 538,200 225,000 Stoneway Capital Corp., 10.0%, 3/1/27 (144A) 236,250 1,840,000 Talen Energy Supply LLC, 6.5%, 6/1/25 1,462,800 ------------ $ 2,826,050 ---------------------------------------------------------------------------------------------------------- Gas Utilities -- 0.9% 465,000 Ferrellgas LP / Ferrellgas Finance Corp., 6.75%, 6/15/23 $ 448,725 400,000 Ferrellgas LP / Ferrellgas Finance Corp., 8.625%, 6/15/20 (144A) 388,500 492,450 Transportadora de Gas del Sur SA, 9.625%, 5/14/20 (144A) 530,650 ------------ $ 1,367,875 ---------------------------------------------------------------------------------------------------------- Independent Power Producers & Energy Traders -- 2.1% 570,000 NRG Energy, Inc., 6.625%, 1/15/27 $ 564,300 320,000 NRG Energy, Inc., 7.25%, 5/15/26 327,200 236,050 NSG Holdings LLC / NSG Holdings, Inc., 7.75%, 12/15/25 (144A) 253,754 1,065,000 TerraForm Global Operating LLC, 9.75%, 8/15/22 (144A) 1,182,150 125,000(c) TerraForm Power Operating LLC, 6.375%, 2/1/23 (144A) 129,219 585,000(c) TerraForm Power Operating LLC, 6.625%, 6/15/25 (144A) 618,637 ------------ $ 3,075,260 ------------ Total Utilities $ 7,269,185 ---------------------------------------------------------------------------------------------------------- TOTAL CORPORATE BONDS & NOTES (Cost $126,375,716) $133,596,122 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 39 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) Value ---------------------------------------------------------------------------------------------------------- CONVERTIBLE BOND -- 1.2% of Net Assets MATERIALS -- 1.2% Diversified Chemicals -- 1.2% 1,900,000(m) Hercules LLC, 6.5%, 6/30/29 $ 1,843,000 ------------ Total Materials $ 1,843,000 ---------------------------------------------------------------------------------------------------------- TOTAL CONVERTIBLE BOND (Cost $1,232,746) $ 1,843,000 ---------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT AND AGENCY OBLIGATION -- 3.4% of Net Assets 5,000,000(a) U.S. Treasury Notes, 1.012%, 4/30/18 $ 5,008,920 ---------------------------------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATION (Cost $5,001,029) $ 5,008,920 ---------------------------------------------------------------------------------------------------------- SOVEREIGN DEBT OBLIGATIONS -- 2.4% of Net Assets Argentina -- 2.0% 235,182 Province of Salta Argentina, 9.5%, 3/16/22 (144A) $ 249,881 360,000 Provincia de Buenos Aires, 9.125%, 3/16/24 (144A) 408,780 230,000 Provincia de Buenos Aires, 9.95%, 6/9/21 (144A) 265,696 820,000 Provincia de Entre Rios Argentina, 8.75%, 2/8/25 (144A) 837,778 1,135,000 Provincia del Chubut Argentina, 7.75%, 7/26/26 (144A) 1,142,298 ------------ $ 2,904,433 ---------------------------------------------------------------------------------------------------------- Kenya -- 0.3% 500,000 Kenya Government International Bond, 6.875%, 6/24/24 (144A) $ 506,350 ---------------------------------------------------------------------------------------------------------- Mexico -- 0.1% MXN 970,000 Mexican Bonos, 7.75%, 11/13/42 $ 52,282 MXN 344,881 Mexican Udibonos, 3.5%, 12/14/17 18,303 ------------ $ 70,585 ---------------------------------------------------------------------------------------------------------- TOTAL SOVEREIGN DEBT OBLIGATIONS (Cost $3,269,366) $ 3,481,368 ---------------------------------------------------------------------------------------------------------- TAX EXEMPT OBLIGATION -- 0.2% of Net Assets (n) Mississippi -- 0.2% 250,000(b) Mississippi Business Finance Corp., Chevron USA, Inc., Project, Series G, 0.87%, 12/1/30 $ 250,000 ---------------------------------------------------------------------------------------------------------- TOTAL TAX EXEMPT OBLIGATION (Cost $250,000) $ 250,000 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 40 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
----------------------------------------------------------------------------------------------------------- Shares Value ----------------------------------------------------------------------------------------------------------- COMMON STOCKS -- 0.2% of Net Assets CAPITAL GOODS -- 0.0%+ Industrial Machinery -- 0.0%+ 10,289(f)(h) Liberty Tire Recycling LLC $ 103 ------------ Total Capital Goods $ 103 ---------------------------------------------------------------------------------------------------------- CONSUMER DURABLES & APPAREL -- 0.0%+ Homebuilding -- 0.0%+ 89,094(h) Desarrolladora Homex SAB de CV $ 8,605 ------------ Total Consumer Durables & Apparel $ 8,605 ---------------------------------------------------------------------------------------------------------- ENERGY -- 0.0%+ Oil & Gas Exploration & Production -- 0.0%+ 273(h) Midstates Petroleum Co., Inc. $ 5,067 11,059(h) PetroQuest Energy, Inc. 25,989 ------------ Total Energy $ 31,056 ---------------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SERVICES -- 0.0%+ Health Care Technology -- 0.0%+ 69,875(f)(h) Medical Card System, Inc. $ 699 ------------ Total Health Care Equipment & Services $ 699 ---------------------------------------------------------------------------------------------------------- RETAILING -- 0.0%+ Computer & Electronics Retail -- 0.0%+ 42,088(f)(h) Targus Cayman SubCo., Ltd. $ 40,825 ------------ Total Retailing $ 40,825 ---------------------------------------------------------------------------------------------------------- TRANSPORTATION -- 0.2% Air Freight & Logistics -- 0.2% 943(h) CEVA Holdings LLC $ 204,793 ------------ Total Transportation $ 204,793 ---------------------------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $1,137,301) $ 286,081 ---------------------------------------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCK -- 0.6% of Net Assets BANKS -- 0.6% Diversified Banks -- 0.6% 770(i) Bank of America Corp., 7.25% $ 934,333 ------------ Total Banks $ 934,333 ---------------------------------------------------------------------------------------------------------- TOTAL CONVERTIBLE PREFERRED STOCK (Cost $739,352) $ 934,333 ---------------------------------------------------------------------------------------------------------- PREFERRED STOCKS -- 1.1% of Net Assets BANKS -- 0.4% Diversified Banks -- 0.4% 500(b)(i) AgStar Financial Services ACA, 6.75% (144A) $ 535,437 ------------ Total Banks $ 535,437 ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 41 Schedule of Investments | 4/30/17 (continued)
---------------------------------------------------------------------------------------------------------- Shares Value ---------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS -- 0.7% Other Diversified Financial Services -- 0.7% 40,675(b) GMAC Capital Trust I, 6.824%, 2/15/40 $ 1,035,586 ------------ Total Diversified Financials $ 1,035,586 ---------------------------------------------------------------------------------------------------------- TOTAL PREFERRED STOCKS (Cost $1,433,997) $ 1,571,023 ---------------------------------------------------------------------------------------------------------- WARRANT -- 0.0%+ of Net Assets ENERGY -- 0.0%+ Oil & Gas Exploration & Production -- 0.0%+ 1,934(h)(o) Midstates Petroleum Co., Inc., Expires 4/21/20 $ -- ------------ Total Energy $ -- ---------------------------------------------------------------------------------------------------------- TOTAL WARRANT (Cost $--) $ -- ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- Principal Amount USD ($) ---------------------------------------------------------------------------------------------------------- TEMPORARY CASH INVESTMENT -- 0.3% of Net Assets TREASURY BILL -- 0.3% 500,000(l) U.S. Treasury Bill, 5/11/17 $ 499,908 ---------------------------------------------------------------------------------------------------------- TOTAL TEMPORARY CASH INVESTMENT (Cost $499,894) $ 499,908 ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- Number of Strike Expiration Contracts Description Counterparty Price Date ---------------------------------------------------------------------------------------------------------- CALL OPTIONS PURCHASED -- 0.0%+ 18,332(p) Desarrolladora Bank of New York $--(r) 10/23/22 $ -- Homex Mellon Corp. SAB de CV 18,332(q) Desarrolladora Bank of New York --(r) 10/23/22 -- Homex Mellon Corp. SAB de CV $ -- ---------------------------------------------------------------------------------------------------------- TOTAL CALL OPTIONS PURCHASED (Premium paid $0) $ -- ---------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 146.6% (Cost -- $208,290,093) (s)(t) $215,938,858 ---------------------------------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- (46.6)% $(68,629,490) ---------------------------------------------------------------------------------------------------------- NET ASSETS -- 100.0% $147,309,368 ==========================================================================================================
REIT Real Estate Investment Trust. (144A) Security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers in a transaction exempt from registration. At April 30, 2017, the value of these securities amounted to $91,732,544, or 62.3% of net assets. The accompanying notes are an integral part of these financial statements. 42 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 (Cat Bond) Catastrophe or Event-linked bond. At April 30, 2017, the value of these securities amounted to $14,281,412, or 9.7% of net assets. See Notes to Financial Statements -- Note 1F. + Amount rounds to less than 0.1%. * Senior secured floating rate loan interests in which the Trust invests generally pay interest at rates that are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as LIBOR (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 April 30, 2017. (a) Floating rate note. The rate shown is the coupon rate at April 30, 2017. (b) The interest rate is subject to change periodically. The interest rate shown is the rate at April 30, 2017. (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 April 30, 2017. (d) This term loan will settle after April 30, 2017, at which time the interest rate will be determined. (e) Payment in Kind (PIK) security which may pay interest in the form of additional principal amount. (f) Security is valued using fair value methods (other than prices supplied by independent pricing services). See Notes to Financial Statements -- Note 1A. (g) Security is in default. (h) Non-income producing. (i) Security is perpetual in nature and has no stated maturity date. (j) Structured reinsurance investment. At April 30, 2017, the value of these securities amounted to $17,775,556, or 12.1% of net assets. See Notes to Financial Statement -- Note 1F. (k) Rate to be determined. (l) Security issued with a zero coupon. Income is recognized through accretion of discount. (m) Security is priced as a unit. (n) Consists of Revenue Bonds unless otherwise indicated. (o) Midstates Petroleum warrants are exercisable into 1,934 shares. (p) Option does not become effective until underlying company's outstanding common shares reach a market capitalization of MXN 12.5 Billion. (q) Option does not become effective until underlying company's outstanding common shares reach a market capitalization of MXN 15.5 Billion. (r) Strike price is 1 Mexican Peso (MXN). (s) At April 30, 2017, the net unrealized appreciation on investments based on cost for federal tax purposes of $210,551,694 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $12,082,978 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (6,695,814) ------------ Net unrealized appreciation $ 5,387,164 ============
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 43 Schedule of Investments | 4/30/17 (continued) (t) Distributions of Investments by country of issue, as a percentage of long-term holdings based on country of domicile, is as follows:
United States 64.4% Bermuda 11.6 Luxembourg 3.5 Netherlands 2.9 Ireland 2.9 Cayman Islands 2.7 Argentina 2.3 France 1.3 Canada 1.0 Other (individually less than 1%) 7.4 ------ 100.0% ======
Purchases and sales of securities (excluding temporary cash investments) for the year ended April 30, 2017 were as follows:
-------------------------------------------------------------------------------- Purchases Sales -------------------------------------------------------------------------------- Long-Term U.S. Government $ 12,336,712 $11,365,707 Other Long-Term Securities $111,762,918 $99,964,885
The Trust is permitted to engage in purchase and sale transactions ("cross trades") with certain funds and accounts for which Pioneer Investment Management, Inc. (PIM) serves as the investment adviser, as set forth in Rule 17a-7 under the Investment Company Act of 1940, pursuant to procedures adopted by the Board of Trustees. Under these procedures, cross trades are effected at current market prices. During the year ended April 30, 2017, the Trust engaged in purchases and sales pursuant to these procedures amounting to $0 and $208,342, respectively resulting in a gain of $7,750. Principal amounts are denominated in U.S. dollars unless otherwise noted. AUD -- Australian Dollar EUR -- Euro GBP -- Great British Pound IDR -- Indonesian Rupiah JPY -- Japanese Yen MXN -- Mexican Peso RUB -- Russian Ruble Various inputs are used in determining the value of the Trust's investments. These inputs are summarized in the three broad levels below. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Trust's own assumptions in determining fair value of investments). See Notes to Financial Statements -- Note 1A. The accompanying notes are an integral part of these financial statements. 44 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 The following is a summary of the inputs used as of April 30, 2017, in valuing the Trust's investments.
--------------------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total --------------------------------------------------------------------------------------------- Asset Backed Securities $ -- $ 1,451,767 $ -- $ 1,451,767 Collateralized Mortgage Obligations -- 603,798 -- 603,798 Commercial Mortgage-Backed Securities -- 5,128,299 -- 5,128,299 Senior Secured Floating Rate Loan Interests Capital Goods Aerospace & Defense -- 1,536,478 997,500 2,533,978 Health Care Equipment & Services Health Care Technology -- 422,346 243,918 666,264 All Other Senior Secured Floating Rate Loan Interests -- 58,083,997 -- 58,083,997 Corporate Bonds & Notes Insurance Property & Casualty Insurance -- 704,293 5,865,558 6,569,851 Reinsurance -- 14,281,412 17,775,556 32,056,968 All Other Corporate Bonds & Notes -- 94,969,303 -- 94,969,303 Convertible Bond -- 1,843,000 -- 1,843,000 U.S. Government and Agency Obligation -- 5,008,920 -- 5,008,920 Sovereign Debt Obligations -- 3,481,368 -- 3,481,368 Tax Exempt Obligation -- 250,000 -- 250,000 Common Stocks Capital Goods Industrial Machinery -- -- 103 103 Health Care Equipment & Services Health Care Technology -- -- 699 699 Retailing Computer & Electronics Retail -- -- 40,825 40,825 Transportation Air Freight & Logistics -- 204,793 -- 204,793 All Other Common Stocks 39,661 -- -- 39,661 Convertible Preferred Stock 934,333 -- -- 934,333 Preferred Stocks Banks Diversified Banks -- 535,437 -- 535,437 All Other Preferred Stocks 1,035,586 -- -- 1,035,586 Warrant -- --* -- --* Treasury Bill -- 499,908 -- 499,908 Call Options Purchased -- --* -- --* --------------------------------------------------------------------------------------------- Total Investments in Securities $2,009,580 $189,005,119 $ 24,924,159 $215,938,858 =============================================================================================
* Includes securities that are valued $0. The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 45 Schedule of Investments | 4/30/17 (continued)
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Other Financial Instruments Unrealized appreciation on forward foreign currency contracts $ -- $27,604 $ -- $27,604 Unrealized depreciation on forward foreign currency contracts -- (6,049) -- (6,049) -------------------------------------------------------------------------------- Total Other Financial Instruments $ -- $21,555 $ -- $21,555 ================================================================================
The following is a reconciliation of assets valued using significant unobservable inputs (Level 3):
---------------------------------------------------------------------------------------------------------------------------------- Change in Transfers Balance Realized unrealized Accrued in and Balance as of gain appreciation discounts/ out of as of 4/30/16 (loss)(1) (depreciation)(2) Purchases Sales premiums Level 3* 4/30/17 ---------------------------------------------------------------------------------------------------------------------------------- Senior Secured Floating Rate Loan Interests Capital Goods Aerospace & Defense $ -- $ 24 $ 9,365 $ 990,000 $ (2,500) $ 611 $ -- $ 997,500 Health Care Equipment & Services Health Care Technology 243,918 -- (14,559) -- -- 14,559 -- 243,918 Retailing Computer & Electronics Retail 168,351 (38,081) (2,666) 30,863 (158,467) -- -- -- Corporate Bonds & Notes Capital Goods Industrial Machinery 169,505 (66,689) 43,904 12,598 (160,099) 781 -- -- Insurance Property & Casualty Insurance 5,247,802 -- 595,550 -- -- 22,206 -- 5,865,558 Reinsurance 18,069,562 (46,286) 768,369 15,990,387 (17,016,618) 10,142 -- 17,775,556
The accompanying notes are an integral part of these financial statements. 46 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
------------------------------------------------------------------------------------------------------------------------------------ Change in Transfers Balance Realized unrealized Accrued in and Balance as of gain appreciation discounts/ out of as of 4/30/16 (loss)(1) (depreciation)(2) Purchases Sales premiums Level 3* 4/30/17 ------------------------------------------------------------------------------------------------------------------------------------ Common Stocks Capital Goods Industrial Machinery $ 103 $ -- $ -- $ -- $ -- $ -- $ -- $ 103 Health Care Equipment & Services Health Care Technology -- -- -- 699 -- -- -- 699 Insurance Insurance Brokers 156 7,090 2,388 -- (9,634) -- -- -- Retailing Computer & Electronics Retail 147,308 -- (106,483) -- -- -- -- 40,825 Preferred Stocks Insurance Insurance Brokers 548,937 (246,334) 123,389 -- (425,992) -- -- -- Reinsurance 37,500 -- (37,500) -- -- -- -- -- Warrant Insurance Insurance Brokers --** -- -- -- --** -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total $24,633,142 $ (390,276) $ 1,381,757 $ 17,024,547 $(17,773,310) $ 48,299 $ -- $24,924,159 ====================================================================================================================================
(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. * Transfers are calculated on the beginning of period value. For the year ended April 30, 2017, there were no transfers between Levels 1, 2 and 3. ** Includes securities that are valued at $0. Net change in unrealized depreciation of Level 3 investments still held and considered Level 3 at April 30, 2017: $1,429,426. The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 47 Schedule of Investments | 4/30/17 (continued) The following table presents additional information about valuation techniques and inputs used for investments categorized as Level 3 at April 30, 2017. These amounts exclude valuations provided by a broker.
--------------------------------------------------------------------------------------------------------- Fair Value Valuation Unobservable Value/ Asset Type 4/30/17 Technique (s) Input Range --------------------------------------------------------------------------------------------------------- Senior Secured Floating Rate EBITDA Multiples(1) 4.7x Loan Interests $1,241,418 Market Comparables Yield Comparables 6.54%-9.03% --------------------------------------------------------------------------------------------------------- Corporate Bonds & Notes $5,865,558 Market Comparables Yield Premiums(2) 1.05% --------------------------------------------------------------------------------------------------------- Common Stocks $ 41,627 Market Comparables EBITDA Multiples(1) 4x-6x ---------------------------------------------------------------------------------------------------------
(1) An increase in this unobservable input would result in a higher fair value measurement, while a decrease would result in a lower fair value measurement. (2) An increase in this unobservable input would result in a lower fair value measurement, while a decrease would result in a higher fair value measurement. The accompanying notes are an integral part of these financial statements. 48 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Statement of Assets and Liabilities | 4/30/17
ASSETS: Investments in securities, at value (cost $208,290,093) $215,938,858 Foreign currencies, at value (cost $13,192) 14,137 Receivables -- Investment securities sold 136,887 Interest 2,141,903 Dividends 13,956 Unrealized appreciation on forward foreign currency contracts 27,604 Prepaid expenses 52 -------------------------------------------------------------------------------------- Total assets $218,273,397 ====================================================================================== LIABILITIES: Due to custodian $ 658,881 Payables -- Credit agreement 57,000,000 Investment securities purchased 13,026,530 Trustees' fees 618 Administration fee 83,767 Unrealized depreciation on forward foreign currency contracts 6,049 Due to affiliates 141,558 Accrued expenses and other liabilities 46,626 -------------------------------------------------------------------------------------- Total liabilities $ 70,964,029 ====================================================================================== NET ASSETS: Paid-in capital $193,998,881 Distributions in excess of net investment income (1,231,618) Accumulated net realized loss on investments and foreign currency transactions (53,131,386) Net unrealized appreciation on investments 7,648,765 Net unrealized appreciation on forward foreign currency contracts and other assets and liabilities denominated in foreign currencies 24,726 -------------------------------------------------------------------------------------- Net assets $147,309,368 ====================================================================================== NET ASSET VALUE PER SHARE: No par value (unlimited number of shares authorized) Based on $147,309,368 / 8,332,790 shares $ 17.68 ======================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 49 Statement of Operations For the Year Ended 4/30/17
INVESTMENT INCOME: Interest $ 13,386,731 Dividends 140,742 Loan facility and other income 290,271 ---------------------------------------------------------------------------------------------------- Total investment income $ 13,817,744 ==================================================================================================== EXPENSES: Management fees $ 1,703,009 Administrative expense 116,589 Transfer agent fees 14,271 Shareholder communications expense 11,403 Custodian fees 38,773 Professional fees 105,311 Printing expense 13,676 Trustees' fees 7,521 Pricing fees 33,994 Interest expense 892,656 Miscellaneous 102,298 ---------------------------------------------------------------------------------------------------- Total expenses $ 3,039,501 ---------------------------------------------------------------------------------------------------- Net investment income $ 10,778,243 ==================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on: Investments $ (3,357,052) Forward foreign currency contracts and other assets and liabilities denominated in foreign currencies 326,219 $ (3,030,833) ---------------------------------------------------------------------------------------------------- Change in net unrealized appreciation on: Investments $ 12,845,153 Forward foreign currency contracts and other assets and liabilities denominated in foreign currencies 171,284 $ 13,016,437 ---------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments and foreign currency transactions $ 9,985,604 ---------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 20,763,847 ====================================================================================================
The accompanying notes are an integral part of these financial statements. 50 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Statements of Changes in Net Assets
------------------------------------------------------------------------------------- Year Year Ended Ended 4/30/17 4/30/16 ------------------------------------------------------------------------------------- FROM OPERATIONS: Net investment income (loss) $ 10,778,243 $ 12,884,402 Net realized gain (loss) on investments and foreign currency transactions (3,030,833) (10,801,993) Change in net unrealized appreciation (depreciation) on investments and foreign currency transactions 13,016,437 (4,289,425) ------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 20,763,847 $ (2,207,016) ------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREOWNERS: Net investment income and previously undistributed net investment income ($1.44 and $1.50 per share, respectively) $ (12,024,216) $ (12,499,185) ------------------------------------------------------------------------------------- Total distributions to shareowners $ (12,024,216) $ (12,499,185) ------------------------------------------------------------------------------------- Net increase (decrease) in net assets $ 8,739,631 $ (14,706,201) NET ASSETS: Beginning of year $ 138,569,737 $ 153,275,938 ------------------------------------------------------------------------------------- End of year $ 147,309,368 $ 138,569,737 ------------------------------------------------------------------------------------- Distributions in excess of net investment income $ (1,231,618) $ (632,828) =====================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 51 Statement of Cash Flows For the Year Ended 4/30/17
Cash Flows From Operating Activities: Net increase in net assets resulting from operations $ 20,763,847 ------------------------------------------------------------------------------------------------- Adjustments to reconcile net increase in net assets resulting from operations to net cash and foreign currencies from operating activities: Purchases of investment securities $ (120,004,281) Proceeds from disposition and maturity of investment securities 118,397,586 Net proceeds from temporary cash investments 2,889,828 Net accretion and amortization of discount/premium on investment securities (830,403) Change in unrealized appreciation on investments (12,845,153) Change in unrealized appreciation on forward foreign currency contracts and foreign currency (172,588) Net realized loss on investments 3,357,052 Decrease in interest receivable 275,114 Increase in dividends receivable (5,437) Increase in prepaid expenses (52) Increase in due to affiliates 8,129 Increase in trustees' fees payable 89 Increase in administration fees payable 574 Decrease in accrued expenses payable (61,655) ------------------------------------------------------------------------------------------------- Net cash and foreign currencies from operating activities $ 11,772,650 ------------------------------------------------------------------------------------------------- Cash Flows Used in Financing Activities: Increase in due to custodian $ 264,442 Distributions to shareowners (12,024,216) ------------------------------------------------------------------------------------------------- Net cash and foreign currencies used in financing activities $ (11,759,774) ------------------------------------------------------------------------------------------------- Effect of Foreign Exchange Fluctuations on Cash: Effect of foreign exchange fluctuations on cash $ 936 ------------------------------------------------------------------------------------------------- Cash and Foreign Currencies: Beginning of the year $ 325 ------------------------------------------------------------------------------------------------- End of the year $ 14,137 ================================================================================================= Cash Flow Information: Cash paid for interest $ 892,656 -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 52 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Financial Highlights
--------------------------------------------------------------------------------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 4/30/17 4/30/16 4/30/15 4/30/14 4/30/13 --------------------------------------------------------------------------------------------------------------------------------- Per Share Operating Performance Net asset value, beginning of period $ 16.63 $ 18.39 $ 20.03 $ 20.70 $ 19.51 --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: (a) Net investment income $ 1.29 $ 1.55 $ 1.82 $ 1.98 $ 2.24 Net realized and unrealized gain (loss) on investments and foreign currency transactions 1.20 (1.81) (1.63) (0.36) 0.99 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 2.49 $ (0.26) $ 0.19 $ 1.62 $ 3.23 --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners from: Net investment income and previously undistributed net investment income $ (1.44)* $ (1.50) $ (1.83)* $ (2.29)* $ (2.04) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.05 $ (1.76) $ (1.64) $ (0.67) $ 1.19 --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 17.68 $ 16.63 $ 18.39 $ 20.03 $ 20.70 --------------------------------------------------------------------------------------------------------------------------------- Market value, end of period $ 16.70 $ 15.60 $ 17.42 $ 20.85 $ 21.82 ================================================================================================================================= Total return at net asset value (b) 16.20% (1.01)% 1.21% 8.47% 17.38% Total return at market value (b) 17.01% (1.26)% (7.90)% 7.12% 19.98% Ratios to average net assets of shareowners: Total expenses plus interest expense (c) 2.12% 1.99% 1.85% 1.86% 1.97% Net investment income available to shareowners 7.52% 9.11% 9.52% 9.88% 11.26% Portfolio turnover 58% 36% 48% 38% 34% Net assets, end of period (in thousands) $147,309 $138,570 $153,276 $166,611 $171,646 =================================================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 53 Financial Highlights (continued)
--------------------------------------------------------------------------------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 4/30/17 4/30/16 4/30/15 4/30/14 4/30/13 --------------------------------------------------------------------------------------------------------------------------------- Total amount of debt outstanding (in thousands) $57,000 $57,000 $64,000 $67,000 $69,000 Asset coverage per indebtedness (in thousands) $ 3,584 $ 3,431 $ 3,395 $ 3,487 $ 3,488 =================================================================================================================================
* The amount of distributions made to shareowners during the year were in excess of the net investment income earned by the Trust during the year. The Trust has accumulated undistributed net investment income which is part of the Trust's NAV. A portion of the accumulated net investment income was distributed to shareowners during the period. (a) The per common share data presented above is based upon the average common shares outstanding for the periods presented. (b) Total investment return is calculated assuming a purchase of common shares at the current net asset value or market value on the first day and a sale at the current net asset value or market value on the last day of the periods reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Trust's dividend reinvestment plan. Total investment return does not reflect brokerage commissions. Past performance is not a guarantee of future results. (c) Includes interest expense of 0.62%, 0.50%, 0.43%, 0.45% and 0.48%, respectively. The accompanying notes are an integral part of these financial statements. 54 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Notes to Financial Statements | 4/30/17 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 (U.S. GAAP) that require the management of the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income, expenses and gain or loss on investments during the reporting period. Actual results could differ from those estimates. The Trust is an investment company and follows investment company accounting and reporting guidance under U.S. GAAP. The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements: A. Security Valuation The net asset value of the Trust is computed once daily, on each day the New York Stock Exchange (NYSE) is open, as of the close of regular trading on the NYSE. Fixed income securities are valued by using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers, Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis of current market prices for other debt securities, historical trading patterns in the market for fixed income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an independent third party pricing service. When independent third party pricing services are unable to supply prices, or when prices or market quotations are considered to be unreliable, the value of that security may be determined using quotations from one or more broker-dealers. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 55 Loan interests are valued in accordance with guidelines established by the Board of Trustees at the mean between the last available bid and asked prices from one or more brokers or dealers as obtained from Loan Pricing Corporation, an independent third party pricing service. If price information is not available from Loan Pricing Corporation, or if the price information is deemed to be unreliable, price information will be obtained from an alternative loan interest pricing service. If no reliable price quotes are available from either the primary or alternative pricing service, broker quotes will be solicited. Event-linked bonds or catastrophe bonds are valued at the bid price obtained from an independent third party pricing service. Other insurance linked securities (including sidecars, collateralized reinsurance and industry loss warranties) may be valued at the bid price obtained from an independent pricing service, or through a third party using a pricing matrix, insurance industry valuation models, or other fair value methods or techniques to provide an estimated value of the instrument. Equity securities that have traded on an exchange are valued by using the last sale price on the principal exchange where they are traded. Equity securities that have not traded on the date of valuation, or securities for which sale prices are not available, generally are valued using the mean between the last bid and asked prices or, if both last bid and asked prices are not available, at the last quoted bid price. Last sale and bid and asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, prices are typically determined by independent third party pricing services using a variety of techniques and methods. The value of foreign securities is translated in U.S. dollars based on foreign currency exchange rate quotations supplied by a third party pricing source. Trading in non-U.S. equity securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Trust's shares are determined as of such times. The Trust may use a fair value model developed by an independent pricing service to value non-U.S. equity securities. Option contracts are generally valued at the mean between the last bid and ask prices on the principal exchange where they are traded. Over-the-counter ("OTC") options and options on swaps ("swaptions") are valued using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers, Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. 56 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Forward foreign currency exchange contracts are valued daily using the foreign exchange rate or, for longer term forward contract positions, the spot currency rate, in each case provided by a third party pricing service. Contracts whose forward settlement date falls between two quoted days are valued by interpolation. Shares of open-end registered investment companies (including money market mutual funds) are valued at such funds' net asset value. Repurchase agreements are valued at par. Cash may include overnight time deposits at approved financial institutions. Securities or loan interests for which independent pricing services or broker-dealers are unable to supply prices or for which market prices and/or quotations are not readily available or are considered to be unreliable are valued by a fair valuation team comprised of certain personnel of Pioneer Investment Management, Inc. (PIM), the Trust's investment adviser and wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), 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 fair valuation team is responsible for monitoring developments that may impact fair valued securities and for discussing and assessing fair values on an ongoing basis, and at least quarterly, with the Valuation Committee of the Board of Trustees. Inputs used when applying fair value methods to value a security may include credit ratings, the financial condition of the company, current market conditions and comparable securities. The Trust may use fair value methods if it is determined that a significant event has occurred after the close of the exchange or market on which the security trades and prior to the determination of the Trust's net asset value. Examples of a significant event might include political or economic news, corporate restructurings, natural disasters, terrorist activity or trading halts. Thus, the valuation of the Trust's securities may differ significantly from exchange prices and such differences could be material. At April 30, 2017, six securities were valued using fair value methods (in addition to securities valued using prices supplied by independent pricing services, broker-dealers or using a third party insurance pricing model) representing 4.9% of net assets. The value of these fair valued securities are $7,148,603. 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 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 57 data in the exercise of reasonable diligence. Interest income, including interest on income bearing cash accounts, is recorded on an accrual basis, net of unrecoverable foreign taxes withheld at the applicable country rates. Discounts and premiums on purchase prices of debt securities are accreted or amortized, respectively, daily, into interest income on an effective yield to maturity basis with a corresponding increase or decrease in the cost basis of the security. Premiums and discounts related to certain mortgage-backed securities are amortized or accreted in proportion to the monthly paydowns. Security transactions are recorded as of trade date. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. 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 4). E. Federal Income Taxes It is the Trust's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income and net realized capital gains, if any, to its shareowners. Therefore, no federal income tax provision is required. As of 58 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 April 30, 2017, the Trust did not accrue any interest or penalties with respect to uncertain tax positions, which if applicable, would be recorded as an income tax expense in the Statement of Operations. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities. The amount and character of income and capital gain distributions to shareowners are determined in accordance with federal income tax rules, which may differ from U.S. GAAP. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement and tax purposes. Capital accounts within the financial statements are adjusted for permanent book/tax differences to reflect tax character, but are not adjusted for temporary differences. At April 30, 2017, the Trust reclassified $413,154 to decrease paid-in capital, $647,183 to decrease distributions in excess of net investment income and $234,029 to increase accumulated net realized loss on investments to reflect permanent book/tax differences. These adjustments have no impact on the net assets or results of operations. At April 30, 2017, the Trust was permitted to carry forward $1,824,081 of short-term capital losses and $25,450,534 of long-term capital losses without limitation. Additionally, at April 30, 2017, the Trust had a net capital loss carry forward of $23,198,279 of which the following amounts will expire between 2018 and 2019 if not utilized: $21,948,862 in 2018 and $1,249,417 in 2019. Since unlimited losses are required to be used first, loss carry forwards that are subject to expiration may be more likely to expire unused. The Trust has elected to defer $2,656,724 of long-term capital losses recognized between November 1, 2016 and April 30, 2017, to its fiscal year ending April 30, 2018. The tax character of distributions paid to shareowners during the years ended April 30, 2017 and April 30, 2016 were as follows:
--------------------------------------------------------------------------- 2017 2016 --------------------------------------------------------------------------- Distributions paid from: Ordinary income $12,024,216 $12,499,185 --------------------------------------------------------------------------- Total $12,024,216 $12,499,185 ===========================================================================
Pioneer Diversified High Income Trust | Annual Report | 4/30/17 59 The following shows the components of distributable earnings (losses) on a federal income tax basis at April 30, 2017:
--------------------------------------------------------------------------- 2017 --------------------------------------------------------------------------- Distributable earnings: Undistributed ordinary income $ 1,049,770 Capital loss carryforward (50,472,894) Late year loss deferrals (2,656,724) Other book/tax temporary differences (2,283,156) Unrealized appreciation 7,673,491 --------------------------------------------------------------------------- Total $(46,689,513) ===========================================================================
The difference between book-basis and tax-basis unrealized depreciation is primarily attributable to the realization for tax purposes of unrealized gains on investments in passive foreign investment companies, the book/tax differences in the accrual of income on securities in default, the difference between book and tax amortization methods and discounts on fixed income securities. F. Insurance-Linked Securities (ILS) The Trust invests in event-linked bonds. Event-linked bonds are floating rate debt obligations for which the return of principal and the payment of interest are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. The trigger event's magnitude may be based on losses to a company or industry, industry indexes or readings of scientific instruments, or may be based on specified actual losses. If a trigger event occurs, as defined within the terms of an event-linked bond, the Trust may lose a portion or all of its accrued interest and/or principal invested in such event-linked bond. The Trust is entitled to receive principal and interest payments so long as no trigger event occurs of the description and magnitude specified by the instrument. In addition to the specified trigger events, event-linked bonds may expose the Trust to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. The Trust's investments in ILS may include special purpose vehicles ("SPVs") or similar instruments structured to comprise a portion of a reinsurer's catastrophe-oriented business, known as quota share instruments (sometimes referred to as reinsurance sidecars), or to provide reinsurance relating to specific risks to insurance or reinsurance companies through a collateralized instrument, known as collateralized reinsurance. Structured reinsurance investments also may include industry loss warranties ("ILWs"). A traditional ILW takes the form of a bilateral reinsurance contract, but there are also products that take the form of derivatives, collateralized structures, or exchange traded instruments. 60 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Structured reinsurance investments, including quota share instruments, collateralized reinsurance investments and ILWs, generally are subject to the same risks as event-linked bonds. In addition, where the instruments are based on the performance of underlying reinsurance contracts, the Trust has limited transparency into the individual underlying contracts and therefore must rely upon the risk assessment and sound underwriting practices of the issuer. Accordingly, it may be more difficult for PIM to fully evaluate the underlying risk profile of the Trust's structured reinsurance investments and therefore the Trust's assets are placed at greater risk of loss than if PIM had more complete information. Structured reinsurance instruments generally will be considered illiquid securities by the Trust. These securities may be difficult to purchase, sell or unwind. Illiquid securities also may be difficult to value. If the Trust is forced to sell an illiquid asset, the Trust may be forced to sell at a loss. G. Purchased Options The Trust may purchase put and call options to seek increase total return. Purchased call and put options entitle the Trust to buy and sell a specified number of shares or units of a particular security, currency or index at a specified price at a specific date or within a specific period of time. Upon the purchase of a call or put option, the premium paid by the Trust is included in the Statement of Assets and Liabilities as an investment. All premiums are marked-to-market daily, and any unrealized gains or losses are recorded in the Trust's financial statements. As the purchaser of an index option, the Trust has the right to receive a cash payment equal to any depreciation in the value of the index below the strike price of the option (in the case of a put) or equal to any appreciation in the value of the index over the strike price of the option (in the case of a call) as of the valuation date of the option. Premiums paid for purchased calls and put options which have expired are treated as realized losses on investments in the Statement of Operations. Upon the exercise or closing of a purchased put option, the premium is offset against the proceeds on the sale of the underlying security or financial instrument in order to determine the realized gain or loss on investments. Upon the exercise or closing of a purchased call option, the premium is added to the cost of the security or financial instrument. The risk associated with purchasing options is limited to the premium originally paid. The average value of purchased options open during the year ended April 30, 2017 was $0. Purchased option contracts outstanding at period end are listed within the Schedule of Investments. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 61 H. 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. The value of securities held by the Trust may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political or regulatory conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. In the past several years, financial markets have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. These conditions may continue, recur, worsen or spread. The Trust invests in below investment grade (high yield) debt securities, floating rate loans and event-linked bonds sometimes referred to as "catastrophe" bonds or "insurance-linked" bonds. The Trust may invest in securities and other obligations of any credit quality, including those that are rated below investment grade, or are unrated but are determined by the 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. Certain securities in which the Trust invests, including floating rate loans, once sold, may not settle for an extended period (for example, several weeks or even longer). The Trust will not receive its sale proceeds until that time, which may constrain the Trust's ability to meet its obligations. The Trust may invest in securities of issuers that are in default or that are in bankruptcy. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Any secondary market may be subject to irregular trading activity and extended settlement periods. The Trust's investments in certain foreign markets or countries with limited developing markets may subject the Trust to a greater degree of risk than in a developed market. These risks include disruptive political or economic conditions and the possible 62 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 imposition of adverse governmental laws or currency exchange restrictions. The Trust may invest up to 50% of its total assets in illiquid securities. Illiquid securities are securities that cannot be disposed of by the Trust within seven days in the ordinary course of business at approximately the amounts which the Trust values the securities. Interest rates in the U.S. recently have been historically low, so the Trust faces a heightened risk that interest rates may rise. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities. I. Automatic Dividend Reinvestment Plan All shareowners whose shares are registered in their own names automatically participate in the Automatic Dividend Reinvestment Plan (the Plan), under which participants receive all dividends and capital gain distributions (collectively, dividends) in full and fractional shares of the Trust in lieu of cash. Shareowners may elect not to participate in the Plan. Shareowners not participating in the Plan receive all dividends and capital gain distributions in cash. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notifying American Stock Transfer & Trust Company, the agent for shareowners in administering the Plan (the Plan Agent), in writing prior to any dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. If a shareowner's shares are held in the name of a brokerage firm, bank or other nominee, the shareowner can ask the firm or nominee to participate in the Plan on the shareowner's behalf. If the firm or nominee does not offer the Plan, dividends will be paid in cash to the shareowner of record. A firm or nominee may reinvest a shareowner's cash dividends in shares of the Trust on terms that differ from the terms of the Plan. Whenever the Trust declares a dividend on shares payable in cash, participants in the Plan will receive the equivalent in shares acquired by the Plan Agent either (i) through receipt of additional unissued but authorized shares from the Trust or (ii) by purchase of outstanding shares on the New York Stock Exchange or elsewhere. If, on the payment date for any dividend, the net asset value per share is equal to or less than the market price per share plus estimated brokerage trading fees (market premium), the Plan Agent will invest the dividend amount in newly issued shares. The number of newly issued shares to be credited to each account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance does not exceed 5%. If, on the payment date for any dividend, the net asset value per share is greater Pioneer Diversified High Income Trust | Annual Report | 4/30/17 63 than the market value (market discount), the Plan Agent will invest the dividend amount in shares acquired in open-market purchases. There are no brokerage charges with respect to newly issued shares. However, each participant will pay a pro rata share of brokerage trading fees incurred with respect to the Plan Agent's open-market purchases. Participating in the Plan does not relieve shareowners from any federal, state or local taxes which may be due on dividends paid in any taxable year. Shareowners holding Plan shares in a brokerage account may be able to transfer the shares to another broker and continue to participate in the Plan. 2. Management Agreement PIM 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 year ended April 30, 2017, the net management fee was 0.85% of the Trust's average daily managed assets, which was equivalent to 1.19% 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 April 30, 2017, $225,325 was payable to PIM related to management costs, administrative costs and certain other services is included in "Due to affiliates" and "Administration fee" on the Statement of Assets and Liabilities. 3. Transfer Agent American Stock Transfer & Trust Company (AST) serves as the transfer agent with respect to the Trust's shares. The Trust pays AST an annual fee, as is agreed to from time to time by the Trust and AST, for providing such services. In addition, the Trust reimbursed the transfer agent for out-of-pocket expenses incurred by the transfer agent related to shareowner communications activities such as proxy and statement mailings and outgoing calls. 64 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 4. Forward Foreign Currency Contracts During the year ended April 30, 2017, the Trust had entered into various forward foreign currency contracts that obligate the Trust to deliver or take delivery of currencies at specified future maturity dates. Alternatively, prior to the settlement date of a forward foreign currency contract, the Trust may close out such contract by entering into an offsetting contract. The average value of contracts open during the year ended April 30, 2017 was $(6,414,984). Open foreign currency contracts at April 30, 2017, were as follows:
---------------------------------------------------------------------------------------------- In Currency Currency Exchange Settlement Unrealized Sold Deliver Purchased for Counterparty Date Appreciation ---------------------------------------------------------------------------------------------- KRW 1,518,990,000 USD 1,364,464 Bank of New York 6/30/17 $27,604 ---------------------------------------------------------------------------------------------- Total $27,604 ==============================================================================================
---------------------------------------------------------------------------------------------- In Currency Currency Exchange Settlement Unrealized Sold Deliver Purchased for Counterparty Date Depreciation ---------------------------------------------------------------------------------------------- EUR 4,391,161 USD 4,801,120 Goldman Sachs 7/31/17 $(6,049) International ---------------------------------------------------------------------------------------------- Total $(6,049) ==============================================================================================
EUR Euro KRW Korean Won 5. Assets and Liabilities Offsetting The Trust has entered into an International Swaps and Derivatives Association, Inc. Master Agreement ("ISDA Master Agreement") or similar agreement with substantially all its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Trust and a counterparty that governs the trading of certain OTC derivatives and typically contains, among other things, close-out and set-off provisions which apply upon the occurrence of event of a default and/or termination event as defined under the relevant ISDA Master Agreement. The ISDA Master Agreement may also give a party the right to terminate all transactions traded under such agreement if, among other things, there is deterioration in the credit quality of the other party. Upon an event of default or a termination of the ISDA Master Agreement, the non-defaulting party has the right to close out all transactions under such agreement and to net amounts owed under each transaction to determine one net amount payable by one party to the other. The right to close out and net payments across all transactions under the ISDA Master Agreement could result in a reduction of the Trust's credit risk to its counterparty equal to any amounts payable by the Trust under the applicable transactions, if any. However, the Pioneer Diversified High Income Trust | Annual Report | 4/30/17 65 Trust's right to setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific ISDA counterparty is subject. The collateral requirements for derivatives transactions under an ISDA Master Agreement are governed by a credit support annex to the ISDA Master Agreement. Collateral requirements are generally determined at the close of business each day and are typically based on changes in market values for each transaction under an ISDA Master Agreement and netted into one amount for such agreement. Generally, the amount of collateral due from or to a counterparty is subject to threshold (a "minimum transfer amount") before a transfer is required, which may vary by counterparty. Collateral pledged for the benefit of the Trust and/or counterparty is held in segregated accounts by the Trust's custodian and cannot be sold, re-pledged, assigned or otherwise used while pledged. Cash that has been segregated to cover the Trust's collateral obligations, if any, will be reported separately in the Statement of Assets and Liabilities as "Restricted Cash". Securities pledged by the Trust as collateral, if any, are identified as such in the Schedule of Investments. Financial instruments subject to an enforceable master netting agreement such as an ISDA Master Agreement have not been offset on the Statement of Assets and Liabilities. The following charts show gross assets and liabilities of the Trust as of April 30, 2017:
---------------------------------------------------------------------------------------------------- Derivative Assets Subject to Derivatives Non-Cash Cash Net Amount Master Netting Available Collateral Collateral of Derivative Counterparty Agreement for Offset Received (a) Received (a) Assets (b) ---------------------------------------------------------------------------------------------------- Bank of New York $27,604 $-- $-- $-- $27,604 ---------------------------------------------------------------------------------------------------- Total $27,604 $-- $-- $-- $27,604 ====================================================================================================
----------------------------------------------------------------------------------------------------- Derivative Liabilities Subject to Derivatives Non-Cash Cash Net Amount Master Netting Available Collateral Collateral of Derivative Counterparty Agreement for Offset Pledged (a) Pledged (a) Liabilities (c) ----------------------------------------------------------------------------------------------------- Goldman Sachs $(6,049) $-- $-- $-- $(6,049) International ----------------------------------------------------------------------------------------------------- Total $(6,049) $-- $-- $-- $(6,049) =====================================================================================================
(a) The amount presented here may be less than the total amount of collateral received/pledged as the net amount of derivative assets and liabilities cannot be less than $0. (b) Represents the net amount due from the counterparty in the event of default. (c) Represents the net amount payable to the counterparty in the event of default. 66 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 6. Additional Disclosures about Derivative Instruments and Hedging Activities The Trust's use of derivatives subjects it to the following risks: Interest rate risk relates to the fluctuations in the value of interest-bearing securities due to changes in the prevailing levels of market interest rates. Credit risk relates to the ability of the issuer of a financial instrument to make further principal or interest payments on an obligation or commitment that it has to the Trust. Foreign exchange rate risk relates to fluctuations in the value of an asset or liability due to changes in currency exchange rates. Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. Commodity risk relates to the risk that the value of a commodity or commodity index will fluctuate based on increases or decreases in the commodities market and factors specific to a particular industry or commodity. The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) by risk exposure at April 30, 2017 was as follows:
-------------------------------------------------------------------------------------------- Statement of Assets and Liabilities Interest Credit Foreign Equity Commodity Rate Risk Risk Exchange Risk Risk Risk -------------------------------------------------------------------------------------------- Assets: Unrealized appreciation on forward foreign currency contracts $-- $-- $27,604 $-- $-- -------------------------------------------------------------------------------------------- Total Value $-- $-- $27,604 $-- $-- ============================================================================================ Liabilities: Unrealized depreciation on forward foreign currency contracts $-- $-- $6,049 $-- $-- -------------------------------------------------------------------------------------------- Total Value $-- $-- $6,049 $-- $-- ============================================================================================
Pioneer Diversified High Income Trust | Annual Report | 4/30/17 67 The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations by risk exposure at April 30, 2017 was as follows:
----------------------------------------------------------------------------------------------- Statement of Operations Interest Credit Foreign Equity Commodity Rate Risk Risk Exchange Risk Risk Risk ----------------------------------------------------------------------------------------------- Net realized gain (loss): Forward foreign currency contracts* $-- $-- $402,931 $-- $-- ----------------------------------------------------------------------------------------------- Total Value $-- $-- $402,931 $-- $-- =============================================================================================== Change in net unrealized appreciation (depreciation) on: Forward foreign currency contracts* $-- $-- $171,652 $-- $-- ----------------------------------------------------------------------------------------------- Total Value $-- $-- $171,652 $-- $-- ===============================================================================================
* Included in the amount shown on the Statement of Operations as forward foreign currency contracts and other assets and liabilities denominated in foreign currencies. 7. Trust Shares Transactions in shares of beneficial interest for the year ended April 30, 2017 and the year ended April 30, 2016 were as follows:
-------------------------------------------------------------------------------- 4/30/17 4/30/16 -------------------------------------------------------------------------------- Shares outstanding at beginning of year 8,332,790 8,332,790 -------------------------------------------------------------------------------- Shares outstanding at end of year 8,332,790 8,332,790 ================================================================================
8. Credit Agreement Effective January 27, 2017, the Trust extended the maturity of its existing Revolving Credit Facility (the Credit Agreement) with the Bank of Scotia to January 27, 2020. There is a $70 million borrowing limit. At April 30, 2017, the Trust had a borrowing outstanding under the credit agreement totaling $57,000,000. The interest rate charged at April 30, 2017 was 1.60%. During the year ended April 30, 2017, the average daily balance was $57,000,000 at an average interest rate of 1.57%. Interest expense of $892,656 in connection with the credit agreement is included in the Statement of Operations. 68 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 The Trust is required to maintain 300% asset coverage with respect to amounts outstanding under the credit agreement. Asset coverage is calculated by subtracting the Trust's total liabilities not including any bank loans and senior securities, from the Trust's total assets and dividing such amount by the principal amount of the borrowing outstanding. 9. Subsequent Events A monthly dividend was declared on May 3, 2017 from undistributed and accumulated net investment income of $0.1150 per share payable May 31, 2017, to shareowners of record on May 17, 2017. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 69 Report of Independent Registered Public Accounting Firm To the Board of Trustees and the Shareowners of Pioneer Diversified High Income Trust: -------------------------------------------------------------------------------- We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Pioneer Diversified High Income Trust (the "Trust"), as of April 30, 2017, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the years ended April 30, 2014, and 2013, were audited by other auditors. Those auditors expressed an unqualified opinion on those financial highlights in their report dated June 25, 2014. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2017, by correspondence with the custodian, brokers and agent banks; where replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Pioneer Diversified High Income Trust as of April 30, 2017, and the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP Boston, Massachusetts June 19, 2017 70 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 ADDITIONAL INFORMATION Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Trust may purchase, from time to time, its shares in the open market. Pioneer Investment Management, Inc. (the "Adviser"), the Trust's investment adviser, is currently an indirect, wholly owned subsidiary of UniCredit S.p.A. ("UniCredit"). On December 12, 2016, UniCredit announced that it has entered into a binding agreement for the sale of its Pioneer Investments business, which includes the Adviser, to Amundi (the "Transaction"). Amundi is headquartered in Paris, France, and, as of September 30, 2016, had more than $1.1 trillion in assets under management worldwide. The closing of the Transaction is expected to happen in 2017, subject to certain regulatory and antitrust approvals, and other conditions. Under the Investment Company Act of 1940, the closing of the Transaction will cause the Trust's current investment advisory agreement with the Adviser to terminate. Accordingly, the Trust's Board of Trustees has approved a new investment advisory agreement for the Trust, which has been submitted to the shareholders of the Trust for their approval. Change in Independent Registered Public Accounting Firm Deloitte & Touche LLP, the Trust's independent registered public accounting firm, has informed the Board that it will no longer be independent with respect to the Trust upon the completion of the Transaction and, accordingly, that it intends to resign as the Trust's independent registered public accounting firm upon the completion of the Transaction. The Board will engage a new independent registered public accounting firm for the Trust upon the completion of the Transaction. During the periods that Deloitte & Touche LLP has served as the Trust's independent registered public accounting firm, including the Trust's two most recent fiscal years, Deloitte & Touche LLP's reports on the Trust's financial statements have not contained an adverse opinion or disclaimer of opinion and have not been qualified or modified as to uncertainty, audit scope or accounting principles. Further, there have been no disagreements with Deloitte & Touche 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 Deloitte & Touche LLP, would have caused Deloitte & Touche 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. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 71 Approval of New and Interim Management Agreements Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to Pioneer Diversified High Income Trust (the Trust) pursuant to an investment management agreement between PIM and the Trust. PIM is the principal U.S. asset management business of Pioneer Investments, a group of companies owned by Pioneer Global Asset Management S.p.A. ("PGAM"). PGAM is a wholly-owned subsidiary of UniCredit S.p.A. ("UniCredit"). UniCredit and PGAM have entered into a binding agreement to sell Pioneer Investments, including PIM, to Amundi (the "Transaction"). Upon the consummation of the transaction, PIM will become an indirect wholly-owned subsidiary of Amundi and Amundi's wholly-owned subsidiary, Amundi USA, Inc. The closing of the Transaction is expected to happen in 2017. Under the Investment Company Act of 1940, the Trust's current investment management agreement (the "Current Management Agreement") will terminate automatically upon the consummation of the Transaction. In order for PIM to continue to manage the Trust after the consummation of the Transaction, the Trustees and shareholders of the Trust must approve a new investment management agreement for the Trust (the "New Management Agreement"). As discussed below, the Board of Trustees of the Trust approved the New Management Agreement at a meeting held on March 6-7, 2017. The New Management Agreement has been submitted to the shareholders of the Trust for their approval at a meeting to be held on June 13, 2017. If the shareholders of the Trust do not approve the New Management Agreement and the Transaction is completed, an interim investment management agreement between PIM and the Trust (the "Interim Management Agreement") will take effect upon the closing of the Transaction. The Board of Trustees of the Trust also approved the Interim Management Agreement at the March 6-7, 2017 meeting. Board Evaluation of the New and Interim Management Agreements The Board evaluated the Transaction and the New Management Agreement and Interim Management Agreement for the Trust. In connection with their evaluation of the Transaction and the New Management Agreement for the Trust, the Trustees requested such information as they deemed reasonably necessary, including: (a) the structure of the Transaction and the strategy underlying the Transaction; (b) the anticipated benefits of the Transaction to the Trust and its shareholders; (c) the post-Transaction plans for PIM, including Amundi's plans for integration of Pioneer Investments and PIM with its existing asset management businesses and plans for the future development of PIM; (d) the effect of the Transaction on the ongoing services provided to 72 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 the Trust, including the need to select a new independent registered public accounting firm for the Trust, and any plans to modify the operations of the Trust; (e) the stability and continuity of PIM's management and key employees, including compensation and benefits to PIM's key employees, and retention plans and incentive plan structure; (f) the post-Transaction indebtedness and financial resources of PIM; (g) Amundi's legal and operational structure, its principal shareholders and senior management, its investment management, risk management, administrative, legal and compliance functions; (h) certain regulatory matters relating to Amundi's affiliates; and (i) Amundi's commitment to the United States, including the role of PIM in the larger Amundi business. The Trustees also requested and obtained the following information in connection with their evaluation of the Transaction and the New Management Agreement for the Trust: (i) memoranda provided by Fund counsel that summarized the legal standards and other considerations that are relevant to the Trustees in their deliberations regarding the New Management Agreement; (ii) the qualifications of the investment management teams for the Trust, as well as the level of investment by the Trust's portfolio managers in the Trust; (iii) the Trust's management fees and total expense ratios, the financial statements of PIM and its pre- and post-Transaction parent companies, profitability analyses from PIM, and analyses from PIM as to possible economies of scale; (iv) the profitability of the institutional business of PIM and PIM's affiliate, Pioneer Institutional Asset Management, Inc. ("PIAM") as compared to that of PIM's fund management business; and (v) the differences between the fees and expenses of the Trust and the fees and expenses of PIM's and PIAM's institutional accounts, as well as the different services provided by Adviser to the Trust and by PIM and PIAM to the institutional accounts. In addition, the Trustees considered the information provided at regularly scheduled meetings throughout the year regarding the Trust's performance and risk attributes, including through meetings with investment management personnel, and took into account other information related to the Trust provided to the Trustees at regularly scheduled meetings. The Trustees also considered information they had received in their review of the continuance of the Current Management Agreement for the Trust in September 2016. At meetings held on January 9, 2017 and January 10, 2017, the Trustees met with representatives of Amundi and PGAM, including separate meetings of the Trustees who are not "interested persons" of the Fund Complex ("Independent Trustees") and counsel with representatives of Amundi and PGAM, and subsequently with representatives of Amundi. In those meetings, they received an extensive presentation from the representatives of Amundi, including the chief executive officer of Amundi, describing Amundi's background and history, its global asset management activities, the growth of Pioneer Diversified High Income Trust | Annual Report | 4/30/17 73 its business, and its status as the largest asset management firm in Europe and one of the largest globally; its capital structure and financial resources, including information as to the financing of the Transaction; its principal investors, including its majority investor Credit Agricole S.A., and Credit Agricole's long-term commitment to the asset management business; the philosophy and strategy underlying the Transaction and the complementarity of Amundi's and Pioneer Investments' respective asset management businesses; Amundi's various operating and investment committees and how they would likely interact with PIM; the proposed integration process, including the progress to date and the establishment of various integration work streams; Amundi's plans for management of PIM; Amundi's philosophy as to compensation of key employees and its general intentions with respect to incentive plans for key employees of PIM; Amundi's preliminary plans to achieve cost and other synergies; and opportunities to further develop the business of PIM and PIAM, including in the area of institutional asset management, and how that would benefit shareholders of the Pioneer Funds. In those meetings, the representatives of Amundi confirmed their intention that the Chief Executive Officer and Chief Investment Officer of PIM would remain in their current positions, and confirmed that they do not currently foresee major changes in the day-to-day investment management operations of PIM with respect to the Trust as a direct result of the Transaction. They discussed incentive arrangements for key personnel that would continue after the closing of the Transaction and their plans to establish a new long-term incentive plan following the closing. They also generally discussed ways in which PIM could potentially draw on the expanded global resources of Amundi post-Transaction. At those meetings, the Independent Trustees identified certain areas to which they requested further information, including as to trading and execution of securities transactions, research and portfolio management and potential changes in investment process, particularly where asset classes managed by PIM would overlap with asset classes managed by Amundi, the continued availability of resources currently at Pioneer Investments or elsewhere within Amundi to assist in management of certain Funds, and any anticipated significant changes in operations. The Independent Trustees considered the uncertainty as to whether the Trust's independent registered public accounting firm could continue to act in that capacity after the closing of the Transaction. The Independent Trustees also met with counsel to review the information they had received to date and to discuss next steps. Subsequently, the Trustees received further information from Amundi, including written responses to questions raised by the Independent Trustees, and received from PIM the information requested of it. The Independent Trustees reviewed the information provided with counsel at telephonic meetings held on February 16, 2017 and February 27, 2017. The Trustees held 74 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 a special in-person Board meeting on March 6-7, 2017 for further consideration of the New Management Agreements, the Interim Management Agreements and the Transaction. The Trustees met again with senior executives of Amundi at the March 6-7, 2017 meeting. At the March 6-7, 2017 meeting, based on their evaluation of the information provided by PIM and Amundi, the Trustees including the Independent Trustees voting separately, approved the New Management Agreement and the Interim Management Agreement for the Trust. In considering the New Management Agreement for the Trust, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in their determinations. The Trustees considered the same factors with respect to the Interim Management Agreement for the Trust. 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 and that are expected to be provided by PIM to the Trust following the consummation of the Transaction. The Trustees reviewed the terms of the New Management Agreement, and noted that such terms are substantially similar to the terms of the Current Management Agreement, except for different execution dates, effective dates and termination dates. The Trustees 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-investment resources and personnel of PIM that are 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 Fund officers) and other resources that are necessary for the Trust's business management and operations and that PIM would continue to provide those investment management and research services and resources to the Trust following the consummation of the Transaction. The Trustees also considered that, as administrator, PIM would continue to be responsible for the administration of the Trust's business and other affairs. The Trustees considered the fees to be paid to PIM for the provision of administration services. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 75 The Trustees considered that Deloitte & Touche LLP has informed the Board that it will no longer be independent with respect to the Trust upon the completion of the Transaction and, accordingly, that it will be necessary for the Board to engage a new independent registered public accounting firm for the Trust. The Trustees considered that the Transaction is not expected to have a material adverse impact on the nature, scope and overall quality of services provided to the Trust and its shareholders, including investment management, risk management, administrative, compliance, legal and other services, as a result of the Transaction. In that regard, the Trustees considered that Amundi is one of the largest asset managers globally, and that PIM may have access to additional research and portfolio management capabilities as a result of the Transaction and that PIM, as part of Amundi, is expected to have an enhanced global presence that may contribute to an increase in the overall scale and resources of PIM. Furthermore, in considering whether the Transaction would be expected to have a material adverse impact on the nature, scope and overall quality of services provided to the Trust and its shareholders, the Trustees considered the statements by representatives of Amundi that they expect the Chief Executive Officer and Chief Investment Officer of PIM to remain in their current positions and that they do not currently foresee major changes in the day-to-day investment management operations of PIM as a direct result of the Transaction, or the risk management, legal or compliance services provided by PIM, with respect to the Trust. They further considered the current incentive arrangements for key personnel of PIM that would continue after the closing of the Transaction. They also noted Amundi's stated intention to establish a new long-term incentive plan following the closing. The Trustees also took into account their experience in evaluating the proposed combination of Pioneer Investments and Santander Asset Management, which was announced in September, 2014 and abandoned in July, 2016. In light of, among other things, this experience, the Trustees determined that they were not able to identify any realistic alternatives to approving the New Management Agreement that would provide the level of services to the Trust and its shareholders that are expected to be provided by PIM after the closing of the Transaction. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that PIM would continue to provide to the Trust under the New Management Agreement would be satisfactory and consistent with the terms of the New Management Agreement. 76 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Performance of the Trust In considering the Trust's performance, the Trustees regularly reviewed and discussed throughout the year data prepared by PIM and information comparing the Trust's performance with the performance of its peer group of funds, as classified by each of Morningstar, Inc. (Morningstar) and Lipper, and the performance of the Trust's benchmark index. They also discussed the Trust's performance with PIM on a regular basis. The Trustees' regular reviews and discussions were factored into the Trustees' deliberations concerning the approval of the New Management Agreement. Management Fee and Expenses The Trustees noted that the stated management fees to be paid by the Trust are identical under the Current Management Agreement and the New Management Agreement. 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. In all quintile rankings referred to below, first quintile is most favorable to the Trust's shareowners. To the extent applicable, the Trustees also considered the impact of transfer agency, sub-transfer agency, and other non-management fee expenses on the expense ratios of the Trust. The Trustees noted that they separately review the Trust's transfer agency, sub-transfer agency and intermediary arrangements and that the results of the most recent such review were considered in the consideration of the Trust's expense ratio. The Trustees considered that the Fund's management fee (based on managed assets) as of September 30, 2016 was in the second quintile relative to the management fees paid by other funds in its Strategic Insight peer group for the comparable period. The Trustees considered that the expense ratio (based on managed assets) of the Fund's common shares as of September 30, 2016 was in the second quintile relative to its Strategic Insight peer group for the comparable period. The Trustees reviewed management fees charged by PIM and PIAM to institutional and other clients, including publicly offered European funds sponsored by PIM's affiliates, 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 PIM's and PIAM's costs in providing services to the other clients and considered the differences in management fees and profit margins for fund and Pioneer Diversified High Income Trust | Annual Report | 4/30/17 77 non-fund services. In evaluating the fees associated with PIM's and PIAM's client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Trust and other 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 both the Current Management Agreement and the New Management Agreement, PIM would perform 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 risks associated with PIM's management of the Trust and PIM's and PIAM's management of the other client accounts. The Trustees concluded that the management fee payable by the Trust to PIM was reasonable in relation to the nature and quality of the services to be provided by PIM. 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, including the profit margins, realized by PIM and PIAM 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 PIM's views relating to economies of scale in connection with the Pioneer Funds as fund assets grow and the extent to which any such economies of scale are shared with the Trust and Fund shareholders. The Trustees recognize that economies of scale are difficult to identify and quantify, and that, among other factors that may be relevant, are the following: fee levels, expense subsidization, investment by PIM in research and analytical capabilities and PIM's commitment and resource allocation to the Trust. The Trustees noted that profitability also may be an indicator of the availability of any economies of scale, although profitability may vary for other reasons including due to reductions in expenses. The Trustees concluded that economies of scale, if any, were being appropriately shared with the Trust. 78 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Other Benefits The Trustees considered the other benefits that PIM enjoys from its relationship with the Trust. The Trustees considered the character and amount of fees paid or to be paid by the Trust, other than under the Current Management Agreement or the New Management 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. To the extent applicable, the Trustees also considered the benefits to the Trust and to PIM and its affiliates from the use of "soft" commission dollars generated by the Trust to pay for research and brokerage services. The Trustees considered that following the completion of the Transaction, PIM will be the principal U.S. asset management business of Amundi, and that Amundi's worldwide asset management business will manage over $1.38 trillion in assets (including the Pioneer Funds). This may create opportunities for PIM, PIAM and Amundi that derive from PIM's relationships with the Trust, including Amundi's ability to market the services of PIM globally. The Trustees noted that PIM may have access to additional research capabilities as a result of the Transaction and Amundi's enhanced global presence that may contribute to an increase of the overall scale of PIM. The Trustees considered that PIM and the Trust are expected to receive reciprocal intangible benefits from the relationship, including mutual brand recognition and, for the Trust, direct and indirect access to the resources of a large global asset manager. The Trustees concluded that any such benefits received by PIM as a result of its relationship with the Trust were reasonable. Conclusion After consideration of the factors described above as well as other factors, the Trustees, including the Independent Trustees, concluded that the New Management Agreement and the Interim Management Agreement for the Trust, including the fees payable thereunder, were fair and reasonable and voted to approve the New Management Agreement and the Interim Management Agreement, and to recommend that shareholders approve the New Management Agreement. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 79 Trustees, Officers and Service Providers Investment Adviser Pioneer Investment Management, Inc. Custodian and Sub-Administrator Brown Brothers Harriman & Co. Independent Registered Public Accounting Firm Deloitte & Touche LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Morgan, Lewis & Bockius LLP Shareowner Services and Transfer Agent American Stock Transfer & Trust Company Proxy Voting Policies and Procedures of the Fund are available without charge, upon request, by calling our toll free number (1-800-225-6292). Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is publicly available to shareowners at us.pioneerinvestments.com. This information is also available on the Securities and Exchange Commission's web site at www.sec.gov. Trustees and Officers The Trust's Trustees and officers are listed below, together with their principal occupations during at least the past five years. Trustees who are interested persons of the Trust within the meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are not interested persons of the Trust are referred to as Independent Trustees. Each of the Trustees serves as a trustee of each of the 46 U.S. registered investment portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds"). The address for all Trustees and all officers of the Trust is 60 State Street, Boston, Massachusetts 02109. The Statement of Additional Information of the Fund includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-225-6292. 80 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Independent Trustees
------------------------------------------------------------------------------------------------------------------------------------ Name, Age and Term of Office and Other Directorships Position Held With the Trust Length of Service Principal Occupation Held by Trustee ------------------------------------------------------------------------------------------------------------------------------------ Thomas J. Perna (66) Class II Trustee Private investor (2004 - 2008 and 2013 - Director, Broadridge Financial Chairman of the Board since 2007. Term present); Chairman (2008 - 2013) and Chief Solutions, Inc. (investor and Trustee expires in 2018. Executive Officer (2008 - 2012), Quadriserv, communications and securities Inc. (technology products for securities lending processing provider for industry); and Senior Executive Vice President, financial services industry) The Bank of New York (financial and securities (2009 - present); Director, services) (1986 - 2004) Quadriserv, Inc. (2005 - 2013); and Commissioner, New Jersey State Civil Service Commission (2011 - 2015) ------------------------------------------------------------------------------------------------------------------------------------ David R. Bock (73) Class III Trustee Managing Partner, Federal City Capital Advisors Director of New York Mortgage Trustee since 2007. Term (corporate advisory services company) (1997 - Trust (publicly-traded mortgage expires in 2019. 2004 and 2008 - present); Interim Chief REIT) (2004 - 2009, 2012 - Executive Officer, Oxford Analytica, Inc. present); Director of The Swiss (privately-held research and consulting company) Helvetia Fund, Inc. (closed-end (2010); Executive Vice President and Chief fund) (2010 - present); Financial Officer, I-trax, Inc. (publicly traded Director of Oxford Analytica, health care services company) (2004 - 2007); and Inc. (2008 - present); and Executive Vice President and Chief Financial Director of Enterprise Officer, Pedestal Inc. (internet-based mortgage Community Investment, Inc. trading company) (2000 - 2002); Private (privately-held affordable consultant (1995-1997), Managing Director, housing finance company) (1985 Lehman Brothers (investment banking firm) - 2010) (1992-1995); and Executive, The World Bank (1979-1992) ------------------------------------------------------------------------------------------------------------------------------------ Benjamin M. Friedman (72) Class I Trustee William Joseph Maier Professor of Political Trustee, Mellon Institutional Trustee since 2008. Term Economy, Harvard University (1972 - present) Funds Investment Trust and expires in 2017. Mellon Institutional Funds Master Portfolio (oversaw 17 portfolios in fund complex) (1989-2008) ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/17 81 Independent Trustees (continued)
---------------------------------------------------------------------------------------------------------------------------------- Name, Age and Term of Office and Other Directorships Position Held With the Trust Length of Service Principal Occupation Held by Trustee ------------------------------------------------------------------------------------------------------------------------------------ Margaret B.W. Graham (69) Class I Trustee Founding Director, Vice President and Corporate None Trustee since 2007. Term Secretary, The Winthrop Group, Inc. (consulting expires in 2017. firm) (1982 - present); Desautels Faculty of Management, McGill University (1999 - present); and Manager of Research Operations and Organizational Learning, Xerox PARC, Xerox's advance research center (1990-1994) ------------------------------------------------------------------------------------------------------------------------------------ Lorraine H. Monchak (61) Class III Trustee Chief Investment Officer, 1199 SEIU Funds None Trustee since 2015. Term (healthcare workers union pension funds) (2001 - expires in 2019. present); Vice President - International Investments Group, American International Group, Inc. (insurance company) (1993 - 2001); Vice President Corporate Finance and Treasury Group, Citibank, N.A. (1980 - 1986 and 1990 - 1993); Vice President - Asset/Liability Management Group, Federal Farm Funding Corporation (government-sponsored issuer of debt securities) (1988 - 1990); Mortgage Strategies Group, Shearson Lehman Hutton, Inc. (investment bank) (1987 - 1988); and Mortgage Strategies Group, Drexel Burnham Lambert, Ltd. (investment bank) (1986 - 1987) ------------------------------------------------------------------------------------------------------------------------------------ Marguerite A. Piret (68) Class II Trustee President and Chief Executive Officer, Newbury Director of New America High Trustee since 2007. Term Piret Company (investment banking firm) (1981 - Income Fund, Inc. (closed-end expires in 2018. present) investment company) (2004 - present); and Member, Board of Governors, Investment Company Institute (2000 - 2006) ------------------------------------------------------------------------------------------------------------------------------------ Fred J. Ricciardi (70) Class II Trustee Consultant (investment company services) (2012 - None Trustee since 2014. Term present); Executive Vice President, BNY Mellon expires in 2018. (financial and investment company services) (1969 - 2012); Director, BNY International Financing Corp. (financial services) (2002 - 2012); and Director, Mellon Overseas Investment Corp. (financial services) (2009 - 2012) ------------------------------------------------------------------------------------------------------------------------------------
82 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 Interested Trustees
------------------------------------------------------------------------------------------------------------------------------------ Name, Age and Term of Office and Other Directorships Position Held With the Trust Length of Service Principal Occupation Held by Trustee ------------------------------------------------------------------------------------------------------------------------------------ Lisa M. Jones (55)* Class III Trustee Chair, Director, CEO and President of Pioneer None Trustee, President and since 2015. Term Investment Management-USA (PIM-USA) (since Chief Executive Officer expires in 2019. September 2014); Chair, Director, CEO and President of Pioneer Investment Management, Inc. (since September 2014); Chair, Director, CEO and President of Pioneer Funds Distributor, Inc. (since September 2014); Chair, Director, CEO and President of Pioneer Institutional Asset Management, Inc. (since September 2014); and Chair, Director, and CEO of Pioneer Investment Management Shareholder Services, Inc. (since September 2014); Managing Director, Morgan Stanley Investment Management (2010 - 2013); and Director of Institutional Business, CEO of International, Eaton Vance Management (2005 - 2010) ------------------------------------------------------------------------------------------------------------------------------------ Kenneth J. Taubes (59)* Class I Trustee Director and Executive Vice President (since None Trustee since 2014. Term 2008) and Chief Investment Officer, U.S. (since expires in 2017. 2010) of PIM-USA; Executive Vice President of Pioneer (since 2008); Executive Vice President of Pioneer Institutional Asset Management, Inc. (since 2009); and Portfolio Manager of Pioneer (since 1999) ------------------------------------------------------------------------------------------------------------------------------------
* Ms. Jones and Mr. Taubes are Interested Trustees because they are officers or directors of the Trust's investment adviser and certain of its affiliates. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 83 Trust Officers
------------------------------------------------------------------------------------------------------------------------------------ Name, Age and Term of Office and Other Directorships Position Held With the Trust Length of Service Principal Occupation Held by Officer ------------------------------------------------------------------------------------------------------------------------------------ Christopher J. Kelley Since 2007. Serves Vice President and Associate General Counsel of None (52) at the discretion Pioneer since January 2008; Secretary and Chief Secretary and of the Board. Legal Officer of all of the Pioneer Funds since Chief Legal Officer June 2010; Assistant Secretary of all of the Pioneer Funds from September 2003 to May 2010; and Vice President and Senior Counsel of Pioneer from July 2002 to December 2007 ------------------------------------------------------------------------------------------------------------------------------------ Carol B. Hannigan (56) Since 2010. Serves Fund Governance Director of Pioneer since None Assistant Secretary at the discretion December 2006 and Assistant Secretary of all the of the Board. Pioneer Funds since June 2010; Manager - Fund Governance of Pioneer from December 2003 to November 2006; and Senior Paralegal of Pioneer from January 2000 to November 2003 ------------------------------------------------------------------------------------------------------------------------------------ Thomas Reyes (54) Since 2010. Serves Senior Counsel of Pioneer since May 2013 and None Assistant Secretary at the discretion Assistant Secretary of all the Pioneer Funds of the Board. since June 2010; and Counsel of Pioneer from June 2007 to May 2013 ------------------------------------------------------------------------------------------------------------------------------------ Mark E. Bradley (57) Since 2008. Serves Vice President - Fund Treasury of Pioneer; None Treasurer and Chief at the discretion Treasurer of all of the Pioneer Funds since March Financial of the Board. 2008; Deputy Treasurer of Pioneer from March 2004 and Accounting Officer to February 2008; and Assistant Treasurer of all of the Pioneer Funds from March 2004 to February 2008 ------------------------------------------------------------------------------------------------------------------------------------ Luis I. Presutti (52) Since 2007. Serves Director - Fund Treasury of Pioneer; and None Assistant Treasurer at the discretion Assistant Treasurer of all of the Pioneer Funds of the Board. ------------------------------------------------------------------------------------------------------------------------------------ Gary Sullivan (59) Since 2007. Serves Fund Accounting Manager - Fund Treasury of None Assistant Treasurer at the discretion Pioneer; and Assistant Treasurer of all of the of the Board. Pioneer Funds ------------------------------------------------------------------------------------------------------------------------------------
84 Pioneer Diversified High Income Trust | Annual Report | 4/30/17
------------------------------------------------------------------------------------------------------------------------------------ Name, Age and Term of Office and Other Directorships Position Held With the Trust Length of Service Principal Occupation Held by Officer ------------------------------------------------------------------------------------------------------------------------------------ David F. Johnson (37) Since 2009. Serves Fund Administration Manager - Fund Treasury of None Assistant Treasurer at the discretion Pioneer since November 2008; Assistant Treasurer of the Board. of all of the Pioneer Funds since January 2009; and Client Service Manager - Institutional Investor Services at State Street Bank from March 2003 to March 2007 ------------------------------------------------------------------------------------------------------------------------------------ Jean M. Bradley (64) Since 2010. Serves Chief Compliance Officer of Pioneer and of all the None Chief Compliance Officer at the discretion Pioneer Funds since March 2010; Chief Compliance of the Board. Officer of Pioneer Institutional Asset Management, Inc. since January 2012; Chief Compliance Officer of Vanderbilt Capital Advisors, LLC since July 2012: Director of Adviser and Portfolio Compliance at Pioneer since October 2005; and Senior Compliance Officer for Columbia Management Advisers, Inc. from October 2003 to October 2005 ------------------------------------------------------------------------------------------------------------------------------------ Kelly O'Donnell (46) Since 2007. Serves Director - Transfer Agency Compliance of Pioneer None Anti-Money Laundering at the discretion and Anti-Money Laundering Officer of all the Officer of the Board. Pioneer Funds since 2006 ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/17 85 This page is for your notes. 86 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 This page is for your notes. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 87 This page is for your notes. 88 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 This page is for your notes. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 89 This page is for your notes. 90 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 This page is for your notes. Pioneer Diversified High Income Trust | Annual Report | 4/30/17 91 This page is for your notes. 92 Pioneer Diversified High Income Trust | Annual Report | 4/30/17 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 15(th) 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) 2017 Pioneer Investments 21909-09-0617 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. The audit fees for the Trust were $53,954 payable to Deloitte & Touche LLP for the year ended April 30, 2017 and $51,063 for the year ended April 30, 2016. (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. There were no audit-related services in 2017 or 2016. (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. The tax fees for the Trust were $9,904 payable to Deloitte & Touche LLP for the year ended April 30, 2017 and $9,876 for the year ended April 30, 2016. (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. There were no other fees in 2017 or 2016. (e) (1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. PIONEER FUNDS APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES PROVIDED BY THE INDEPENDENT AUDITOR SECTION I - POLICY PURPOSE AND APPLICABILITY The Pioneer Funds recognize the importance of maintaining the independence of their outside auditors. Maintaining independence is a shared responsibility involving Pioneer Investment Management, Inc ("PIM"), the audit committee and the independent auditors. The Funds recognize that a Fund's independent auditors: 1) possess knowledge of the Funds, 2) are able to incorporate certain services into the scope of the audit, thereby avoiding redundant work, cost and disruption of Fund personnel and processes, and 3) have expertise that has value to the Funds. As a result, there are situations where it is desirable to use the Fund's independent auditors for services in addition to the annual audit and where the potential for conflicts of interests are minimal. Consequently, this policy, which is intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and procedures to be followed by the Funds when retaining the independent audit firm to perform audit, audit-related tax and other services under those circumstances, while also maintaining independence. Approval of a service in accordance with this policy for a Fund shall also constitute approval for any other Fund whose pre-approval is required pursuant to Rule 210.2-01(c)(7)(ii). In addition to the procedures set forth in this policy, any non-audit services that may be provided consistently with Rule 210.2-01 may be approved by the Audit Committee itself and any pre-approval that may be waived in accordance with Rule 210.2-01(c)(7)(i)(C) is hereby waived. Selection of a Fund's independent auditors and their compensation shall be determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY ---------------- -------------------------------- ------------------------------------------------- SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES CATEGORY ---------------- -------------------------------- ------------------------------------------------- I. AUDIT Services that are directly o Accounting research assistance SERVICES related to performing the o SEC consultation, registration independent audit of the Funds statements, and reporting o Tax accrual related matters o Implementation of new accounting standards o Compliance letters (e.g. rating agency letters) o Regulatory reviews and assistance regarding financial matters o Semi-annual reviews (if requested) o Comfort letters for closed end offerings ---------------- -------------------------------- ------------------------------------------------- II. Services which are not o AICPA attest and agreed-upon procedures AUDIT-RELATED prohibited under Rule o Technology control assessments SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments and are related extensions of o Enterprise security architecture the audit services support the assessment audit, or use the knowledge/expertise gained from the audit procedures as a foundation to complete the project. In most cases, if the Audit-Related Services are not performed by the Audit firm, the scope of the Audit Services would likely increase. The Services are typically well-defined and governed by accounting professional standards (AICPA, SEC, etc.) ---------------- -------------------------------- ------------------------------------------------- ------------------------------------- ------------------------------------ AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY ------------------------------------- ------------------------------------ o "One-time" pre-approval o A summary of all such for the audit period for all services and related fees pre-approved specific service reported at each regularly subcategories. Approval of the scheduled Audit Committee independent auditors as meeting. auditors for a Fund shall constitute pre approval for these services. ------------------------------------- ------------------------------------ o "One-time" pre-approval o A summary of all such for the fund fiscal year within services and related fees a specified dollar limit (including comparison to for all pre-approved specified dollar limits) specific service subcategories reported quarterly. o Specific approval is needed to exceed the pre-approved dollar limit for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) o Specific approval is needed to use the Fund's auditors for Audit-Related Services not denoted as "pre-approved", or to add a specific service subcategory as "pre-approved" ------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED ----------------------- --------------------------- ----------------------------------------------- SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES DESCRIPTION ----------------------- --------------------------- ----------------------------------------------- III. TAX SERVICES Services which are not o Tax planning and support prohibited by the Rule, o Tax controversy assistance if an officer of the Fund o Tax compliance, tax returns, excise determines that using the tax returns and support Fund's auditor to provide o Tax opinions these services creates significant synergy in the form of efficiency, minimized disruption, or the ability to maintain a desired level of confidentiality. ----------------------- --------------------------- ----------------------------------------------- ------------------------------------- ------------------------- AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY ------------------------------------- ------------------------- ------------------------------------- ------------------------- o "One-time" pre-approval o A summary of for the fund fiscal year all such services and within a specified dollar limit related fees (including comparison to specified dollar limits) reported quarterly. o Specific approval is needed to exceed the pre-approved dollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) o Specific approval is needed to use the Fund's auditors for tax services not denoted as pre-approved, or to add a specific service subcategory as "pre-approved" ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED ----------------------- --------------------------- ----------------------------------------------- SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES DESCRIPTION ----------------------- --------------------------- ----------------------------------------------- IV. OTHER SERVICES Services which are not o Business Risk Management support prohibited by the Rule, o Other control and regulatory A. SYNERGISTIC, if an officer of the Fund compliance projects UNIQUE QUALIFICATIONS determines that using the Fund's auditor to provide these services creates significant synergy in the form of efficiency, minimized disruption, the ability to maintain a desired level of confidentiality, or where the Fund's auditors posses unique or superior qualifications to provide these services, resulting in superior value and results for the Fund. ----------------------- --------------------------- ----------------------------------------------- --------------------------------------- ------------------------ AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY ------------------------------------- -------------------------- o "One-time" pre-approval o A summary of for the fund fiscal year within all such services and a specified dollar limit related fees (including comparison to specified dollar limits) reported quarterly. o Specific approval is needed to exceed the pre-approved dollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) o Specific approval is needed to use the Fund's auditors for "Synergistic" or "Unique Qualifications" Other Services not denoted as pre-approved to the left, or to add a specific service subcategory as "pre-approved" ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED ----------------------- ------------------------- ----------------------------------------------- SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES DESCRIPTION ----------------------- ------------------------- ----------------------------------------------- PROHIBITED SERVICES Services which result 1. Bookkeeping or other services in the auditors losing related to the accounting records or independence status financial statements of the audit under the Rule. client* 2. Financial information systems design and implementation* 3. Appraisal or valuation services, fairness* opinions, or contribution-in-kind reports 4. Actuarial services (i.e., setting actuarial reserves versus actuarial audit work)* 5. Internal audit outsourcing services* 6. Management functions or human resources 7. Broker or dealer, investment advisor, or investment banking services 8. Legal services and expert services unrelated to the audit 9. Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible ----------------------- ------------------------- ----------------------------------------------- ------------------------------------------- ------------------------------ AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE REPORTING POLICY ------------------------------------------- ------------------------------ o These services are not to be o A summary of all performed with the exception of the(*) services and related services that may be permitted fees reported at each if they would not be subject to audit regularly scheduled procedures at the audit client (as Audit Committee meeting defined in rule 2-01(f)(4)) level will serve as continual the firm providing the service. confirmation that has not provided any restricted services. ------------------------------------------- ------------------------------
-------------------------------------------------------------------------------- GENERAL AUDIT COMMITTEE APPROVAL POLICY: o For all projects, the officers of the Funds and the Fund's auditors will each make an assessment to determine that any proposed projects will not impair independence. o Potential services will be classified into the four non-restricted service categories and the "Approval of Audit, Audit-Related, Tax and Other Services" Policy above will be applied. Any services outside the specific pre-approved service subcategories set forth above must be specifically approved by the Audit Committee. o At least quarterly, the Audit Committee shall review a report summarizing the services by service category, including fees, provided by the Audit firm as set forth in the above policy. -------------------------------------------------------------------------------- (2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. Non-Audit Services Beginning with non-audit service contracts entered into on or after May 6, 2003, the effective date of the new SEC pre-approval rules, the Trust's audit committee is required to pre-approve services to affiliates defined by SEC rules to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Trust. For the years ended April 30 2017 and 2016, there were no services provided to an affiliate that required the Trust's audit committee pre-approval. (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. The aggregate non-audit fees for the Trust were $9,904 payable to Deloitte & Touche LLP for the year ended April 30, 2017 and $9,876 for the year ended April 30, 2016. (h) Disclose whether the registrants audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrants investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. The Fund's audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the Affiliates (as defined) that were not pre- approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS (a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17 CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant's audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state. N/A (b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption from the listing standards for audit committees. N/A ITEM 6. SCHEDULE OF INVESTMENTS. File Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in 210.1212 of Regulation S-X [17 CFR 210.12-12], unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form. Included in Item 1 ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company's investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company's investment adviser, or any other third party, that the company uses, or that are used on the company's behalf, to determine how to vote proxies relating to portfolio securities. Proxy Voting Policies and Procedures of Pioneer Investment Management, Inc. VERSION DATED July, 2004 Overview Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes each of its client's duties of care and loyalty with respect to all services undertaken on the client's behalf, including proxy voting. When Pioneer has been delegated proxy-voting authority for a client, the duty of care requires Pioneer to monitor corporate events and to vote the proxies. To satisfy its duty of loyalty, Pioneer must place its client's interests ahead of its own and must cast proxy votes in a manner consistent with the best interest of its clients. Pioneer will vote all proxies presented in a timely manner. The Proxy Voting Policies and Procedures are designed to complement Pioneer's investment policies and procedures regarding its general responsibility to monitor the performance and/or corporate events of companies that are issuers of securities held in accounts managed by Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a number of issues solicited by companies held by Pioneer's clients. The policies are guidelines that provide a general indication on how Pioneer would vote but do not include all potential voting scenarios. Pioneer's Proxy Voting Procedures detail monitoring of voting, exception votes, and review of conflicts of interest and ensure that case-by-case votes are handled within the context of the overall guidelines (i.e. best interest of client). The overriding goal is that all proxies for US and non-US companies that are received promptly will be voted in accordance with Pioneer's policies or specific client instructions. All shares in a company held by Pioneer-managed accounts will be voted alike, unless a client has given us specific voting instructions on an issue or has not delegated authority to us or the Proxy Voting Oversight Group determines that the circumstances justify a different approach. Pioneer does not delegate the authority to vote proxies relating to its clients to any of its affiliates, which include other subsidiaries of UniCredito. Any questions about these policies and procedures should be directed to the Proxy Coordinator. 1 Proxy Voting Procedures Proxy Voting Service Pioneer has engaged an independent proxy voting service to assist in the voting of proxies. The proxy voting service works with custodians to ensure that all proxy materials are received by the custodians and are processed in a timely fashion. To the extent applicable, the proxy voting service votes all proxies in accordance with the proxy voting policies established by Pioneer. The proxy voting service will refer proxy questions to the Proxy Coordinator (described below) for instructions under circumstances where: (1) the application of the proxy voting guidelines is unclear; (2) a particular proxy question is not covered by the guidelines; or (3) the guidelines call for specific instructions on a case-by-case basis. The proxy voting service is also requested to call to the Proxy Coordinator's attention specific proxy questions that, while governed by a guideline, appear to involve unusual or controversial issues. Pioneer reserves the right to attend a meeting in person and may do so when it determines that the company or the matters to be voted on at the meeting are strategically important to its clients. Proxy Coordinator Pioneer's Director of Investment Operations (the "Proxy Coordinator") coordinates the voting, procedures and reporting of proxies on behalf of Pioneer's clients. The Proxy Coordinator will deal directly with the proxy voting service and, in the case of proxy questions referred by the proxy voting service, will solicit voting recommendations and instructions from the Director of Portfolio Management US or, to the extent applicable, investment sub-advisers. The Proxy Coordinator is responsible for ensuring that these questions and referrals are responded to in a timely fashion and for transmitting appropriate voting instructions to the proxy voting service. The Proxy Coordinator is responsible for verifying with the Compliance Department whether Pioneer's voting power is subject to any limitations or guidelines issued by the client (or in the case of an employee benefit plan, the plan's trustee or other fiduciaries). Referral Items From time to time, the proxy voting service will refer proxy questions to the Proxy Coordinator that are described by Pioneer's policy as to be voted on a case-by-case basis, that are not covered by Pioneer's guidelines or where Pioneer's guidelines may be unclear with respect to the matter to be voted on. Under such certain circumstances, the Proxy Coordinator will seek a written voting recommendation from the Director of Portfolio Management US. Any such recommendation will include: (i) the manner in which the proxies should be voted; (ii) the rationale underlying any such decision; and (iii) the disclosure of any contacts or communications made between Pioneer and any outside parties concerning the proxy proposal prior to the time that the voting instructions are provided. In addition, the Proxy Coordinator will ask the Compliance Department to review the question for any actual or apparent conflicts of interest as described below under "Conflicts of 2 Interest." The Compliance Department will provide a "Conflicts of Interest Report," applying the criteria set forth below under "Conflicts of Interest," to the Proxy Coordinator summarizing the results of its review. In the absence of a conflict of interest, the Proxy Coordinator will vote in accordance with the recommendation of the Director of Portfolio Management US. If the matter presents a conflict of interest for Pioneer, then the Proxy Coordinator will refer the matter to the Proxy Voting Oversight Group for a decision. In general, when a conflict of interest is present, Pioneer will vote according to the recommendation of the Director of Portfolio Management US where such recommendation would go against Pioneer's interest or where the conflict is deemed to be immaterial. Pioneer will vote according to the recommendation of its proxy voting service when the conflict is deemed to be material and the Pioneer's internal vote recommendation would favor Pioneer's interest, unless a client specifically requests Pioneer to do otherwise. When making the final determination as to how to vote a proxy, the Proxy Voting Oversight Group will review the report from the Director of Portfolio Management US and the Conflicts of Interest Report issued by the Compliance Department. Conflicts of Interest A conflict of interest occurs when Pioneer's interests interfere, or appear to interfere with the interests of Pioneer's clients. Occasionally, Pioneer may have a conflict that can affect how its votes proxies. The conflict may be actual or perceived and may exist when the matter to be voted on concerns: o An affiliate of Pioneer, such as another company belonging to the UniCredito Italiano S.p.A. banking group (a "UniCredito Affiliate"); o An issuer of a security for which Pioneer acts as a sponsor, advisor, manager, custodian, distributor, underwriter, broker, or other similar capacity (including those securities specifically declared by PGAM to present a conflict of interest for Pioneer); o An issuer of a security for which UniCredito has informed Pioneer that a UniCredito Affiliate acts as a sponsor, advisor, manager, custodian, distributor, underwriter, broker, or other similar capacity; or o A person with whom Pioneer (or any of its affiliates) has an existing, material contract or business relationship that was not entered into in the ordinary course of Pioneer's business. o Pioneer will abstain from voting with respect to companies directly or indirectly owned by UniCredito Italiano Group, unless otherwise directed by a client. In addition, Pioneer will inform PGAM Global Compliance and the PGAM Independent Directors before exercising such rights. Any associate involved in the proxy voting process with knowledge of any apparent or actual conflict of interest must disclose such conflict to the Proxy Coordinator and the Compliance Department. The Compliance Department will review each item referred to Pioneer to determine whether an actual or potential conflict of interest with Pioneer exists in connection with the proposal(s) to be voted upon. The review will be conducted by comparing the apparent parties affected by the proxy proposal being 3 voted upon against the Compliance Department's internal list of interested persons and, for any matches found, evaluating the anticipated magnitude and possible probability of any conflict of interest being present. For each referral item, the determination regarding the presence or absence of any actual or potential conflict of interest will be documented in a Conflicts of Interest Report to the Proxy Coordinator. Securities Lending In conjunction with industry standards Proxies are not available to be voted when the shares are out on loan through either Pioneer's lending program or a client's managed security lending program. However, Pioneer will reserve the right to recall lent securities so that they may be voted according to the Pioneer's instructions. If a portfolio manager would like to vote a block of previously lent shares, the Proxy Coordinator will work with the portfolio manager and Investment Operations to recall the security, to the extent possible, to facilitate the vote on the entire block of shares. Share-Blocking "Share-blocking" is a market practice whereby shares are sent to a custodian (which may be different than the account custodian) for record keeping and voting at the general meeting. The shares are unavailable for sale or delivery until the end of the blocking period (typically the day after general meeting date). Pioneer will vote in those countries with "share-blocking." In the event a manager would like to sell a security with "share-blocking", the Proxy Coordinator will work with the Portfolio Manager and Investment Operations Department to recall the shares (as allowable within the market time-frame and practices) and/or communicate with executing brokerage firm. A list of countries with "share-blocking" is available from the Investment Operations Department upon request. Record Keeping The Proxy Coordinator shall ensure that Pioneer's proxy voting service: o Retains a copy of the proxy statement received (unless the proxy statement is available from the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system); o Retains a record of the vote cast; o Prepares Form N-PX for filing on behalf of each client that is a registered investment company; and o Is able to promptly provide Pioneer with a copy of the voting record upon its request. 4 The Proxy Coordinator shall ensure that for those votes that may require additional documentation (i.e. conflicts of interest, exception votes and case-by-case votes) the following records are maintained: o A record memorializing the basis for each referral vote cast; o A copy of any document created by Pioneer that was material in making the decision on how to vote the subject proxy; and o A copy of any conflict notice, conflict consent or any other written communication (including emails or other electronic communications) to or from the client (or in the case of an employee benefit plan, the plan's trustee or other fiduciaries) regarding the subject proxy vote cast by, or the vote recommendation of, Pioneer. o Pioneer shall maintain the above records in the client's file for a period not less than ten (10) years. Disclosure Pioneer shall take reasonable measures to inform its clients of the process or procedures clients must follow to obtain information regarding how Pioneer voted with respect to assets held in their accounts. In addition, Pioneer shall describe to clients its proxy voting policies and procedures and will furnish a copy of its proxy voting policies and procedures upon request. This information may be provided to clients through Pioneer's Form ADV (Part II) disclosure, by separate notice to the client, or through Pioneer's website. Proxy Voting Oversight Group The members of the Proxy Voting Oversight Group are Pioneer's: Director of Portfolio Management US, Head of Investment Operations, and Director of Compliance. Other members of Pioneer will be invited to attend meetings and otherwise participate as necessary. The Head of Investment Operations will chair the Proxy Voting Oversight Group. The Proxy Voting Oversight Group is responsible for developing, evaluating, and changing (when necessary) Pioneer's Proxy Voting Policies and Procedures. The group meets at least annually to evaluate and review these policies and procedures and the services of its third-party proxy voting service. In addition, the Proxy Voting Oversight Group will meet as necessary to vote on referral items and address other business as necessary. Amendments Pioneer may not amend its Proxy Voting Policies And Procedures without the prior approval of the Proxy Voting Oversight Group and its corporate parent, Pioneer Global Asset Management S.p.A 5 Proxy Voting Policies Pioneer's sole concern in voting proxies is the economic effect of the proposal on the value of portfolio holdings, considering both the short- and long-term impact. In many instances, Pioneer believes that supporting the company's strategy and voting "for" management's proposals builds portfolio value. In other cases, however, proposals set forth by management may have a negative effect on that value, while some shareholder proposals may hold the best prospects for enhancing it. Pioneer monitors developments in the proxy-voting arena and will revise this policy as needed. All proxies that are received promptly will be voted in accordance with the specific policies listed below. All shares in a company held by Pioneer-managed accounts will be voted alike, unless a client has given us specific voting instructions on an issue or has not delegated authority to us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting Oversight Group, which consists of the Director of Portfolio Management US, the Director of Investment Operations (the Proxy Coordinator), and the Director of Compliance. Pioneer has established Proxy Voting Procedures for identifying and reviewing conflicts of interest that may arise in the voting of proxies. Clients may request, at any time, a report on proxy votes for securities held in their portfolios and Pioneer is happy to discuss our proxy votes with company management. Pioneer retains a proxy voting service to provide research on proxy issues and to process proxy votes. Administrative While administrative items appear infrequently in U.S. issuer proxies, they are quite common in non-U.S. proxies. We will generally support these and similar management proposals: o Corporate name change. o A change of corporate headquarters. o Stock exchange listing. o Establishment of time and place of annual meeting. o Adjournment or postponement of annual meeting. o Acceptance/approval of financial statements. o Approval of dividend payments, dividend reinvestment plans and other dividend-related proposals. o Approval of minutes and other formalities. 6 o Authorization of the transferring of reserves and allocation of income. o Amendments to authorized signatories. o Approval of accounting method changes or change in fiscal year-end. o Acceptance of labor agreements. o Appointment of internal auditors. Pioneer will vote on a case-by-case basis on other routine business; however, Pioneer will oppose any routine business proposal if insufficient information is presented in advance to allow Pioneer to judge the merit of the proposal. Pioneer has also instructed its proxy voting service to inform Pioneer of its analysis of any administrative items inconsistent, in its view, with supporting the value of Pioneer portfolio holdings so that Pioneer may consider and vote on those items on a case-by-case basis. Auditors We normally vote for proposals to: o Ratify the auditors. We will consider a vote against if we are concerned about the auditors' independence or their past work for the company. Specifically, we will oppose the ratification of auditors and withhold votes from audit committee members if non-audit fees paid by the company to the auditing firm exceed the sum of audit fees plus audit-related fees plus permissible tax fees according to the disclosure categories proposed by the Securities and Exchange Commission. o Restore shareholder rights to ratify the auditors. We will normally oppose proposals that require companies to: o Seek bids from other auditors. o Rotate auditing firms, except where the rotation is statutorily required or where rotation would demonstrably strengthen financial disclosure. o Indemnify auditors. o Prohibit auditors from engaging in non-audit services for the company. Board of Directors On issues related to the board of directors, Pioneer normally supports management. We will, however, consider a vote against management in instances where corporate performance has been very poor or where the board appears to lack independence. 7 General Board Issues Pioneer will vote for: o Audit, compensation and nominating committees composed of independent directors exclusively. o Indemnification for directors for actions taken in good faith in accordance with the business judgment rule. We will vote against proposals for broader indemnification. o Changes in board size that appear to have a legitimate business purpose and are not primarily for anti-takeover reasons. o Election of an honorary director. We will vote against: o Minimum stock ownership by directors. o Term limits for directors. Companies benefit from experienced directors, and shareholder control is better achieved through annual votes. o Requirements for union or special interest representation on the board. o Requirements to provide two candidates for each board seat. We will vote on a case-by case basis on these issues: o Separate chairman and CEO positions. We will consider voting with shareholders on these issues in cases of poor corporate performance. Elections of Directors In uncontested elections of directors we will vote against: o Individual directors with absenteeism above 25% without valid reason. We support proposals that require disclosure of director attendance. o Insider directors and affiliated outsiders who sit on the audit, compensation, stock option or nominating committees. For the purposes of our policy, we accept the definition of affiliated directors provided by our proxy voting service. We will also vote against: o Directors who have failed to act on a takeover offer where the majority of shareholders have tendered their shares. o Directors who appear to lack independence or are associated with very poor corporate performance. 8 We will vote on a case-by case basis on these issues: o Re-election of directors who have implemented or renewed a dead-hand or modified dead-hand poison pill (a "dead-hand poison pill" is a shareholder rights plan that may be altered only by incumbent or "dead " directors. These plans prevent a potential acquirer from disabling a poison pill by obtaining control of the board through a proxy vote). o Contested election of directors. o Prior to phase-in required by SEC, we would consider supporting election of a majority of independent directors in cases of poor performance. o Mandatory retirement policies. o Directors who have ignored a shareholder proposal that has been approved by shareholders for two consecutive years. Takeover-Related Measures Pioneer is generally opposed to proposals that may discourage takeover attempts. We believe that the potential for a takeover helps ensure that corporate performance remains high. Pioneer will vote for: o Cumulative voting. o Increase ability for shareholders to call special meetings. o Increase ability for shareholders to act by written consent. o Restrictions on the ability to make greenmail payments. o Submitting rights plans to shareholder vote. o Rescinding shareholder rights plans ("poison pills"). o Opting out of the following state takeover statutes: o Control share acquisition statutes, which deny large holders voting rights on holdings over a specified threshold. o Control share cash-out provisions, which require large holders to acquire shares from other holders. o Freeze-out provisions, which impose a waiting period on large holders before they can attempt to gain control. o Stakeholder laws, which permit directors to consider interests of non-shareholder constituencies. 9 o Disgorgement provisions, which require acquirers to disgorge profits on purchases made before gaining control. o Fair price provisions. o Authorization of shareholder rights plans. o Labor protection provisions. o Mandatory classified boards. We will vote on a case-by-case basis on the following issues: o Fair price provisions. We will vote against provisions requiring supermajority votes to approve takeovers. We will also consider voting against proposals that require a supermajority vote to repeal or amend the provision. Finally, we will consider the mechanism used to determine the fair price; we are generally opposed to complicated formulas or requirements to pay a premium. o Opting out of state takeover statutes regarding fair price provisions. We will use the criteria used for fair price provisions in general to determine our vote on this issue. o Proposals that allow shareholders to nominate directors. We will vote against: o Classified boards, except in the case of closed-end mutual funds. o Limiting shareholder ability to remove or appoint directors. We will support proposals to restore shareholder authority in this area. We will review on a case-by-case basis proposals that authorize the board to make interim appointments. o Classes of shares with unequal voting rights. o Supermajority vote requirements. o Severance packages ("golden" and "tin" parachutes). We will support proposals to put these packages to shareholder vote. o Reimbursement of dissident proxy solicitation expenses. While we ordinarily support measures that encourage takeover bids, we believe that management should have full control over corporate funds. o Extension of advance notice requirements for shareholder proposals. o Granting board authority normally retained by shareholders (e.g., amend charter, set board size). o Shareholder rights plans ("poison pills"). These plans generally allow shareholders to buy additional shares at a below-market price in the event of a change in control and may deter some bids. 10 Capital Structure Managements need considerable flexibility in determining the company's financial structure, and Pioneer normally supports managements' proposals in this area. We will, however, reject proposals that impose high barriers to potential takeovers. Pioneer will vote for: o Changes in par value. o Reverse splits, if accompanied by a reduction in number of shares. o Share repurchase programs, if all shareholders may participate on equal terms. o Bond issuance. o Increases in "ordinary" preferred stock. o Proposals to have blank-check common stock placements (other than shares issued in the normal course of business) submitted for shareholder approval. o Cancellation of company treasury shares. We will vote on a case-by-case basis on the following issues: o Reverse splits not accompanied by a reduction in number of shares, considering the risk of delisting. o Increase in authorized common stock. We will make a determination considering, among other factors: o Number of shares currently available for issuance; o Size of requested increase (we would normally approve increases of up to 100% of current authorization); o Proposed use of the additional shares; and o Potential consequences of a failure to increase the number of shares outstanding (e.g., delisting or bankruptcy). o Blank-check preferred. We will normally oppose issuance of a new class of blank-check preferred, but may approve an increase in a class already outstanding if the company has demonstrated that it uses this flexibility appropriately. o Proposals to submit private placements to shareholder vote. o Other financing plans. We will vote against preemptive rights that we believe limit a company's financing flexibility. 11 Compensation Pioneer supports compensation plans that link pay to shareholder returns and believes that management has the best understanding of the level of compensation needed to attract and retain qualified people. At the same time, stock-related compensation plans have a significant economic impact and a direct effect on the balance sheet. Therefore, while we do not want to micromanage a company's compensation programs, we will place limits on the potential dilution these plans may impose. Pioneer will vote for: o 401(k) benefit plans. o Employee stock ownership plans (ESOPs), as long as shares allocated to ESOPs are less than 5% of outstanding shares. Larger blocks of stock in ESOPs can serve as a takeover defense. We will support proposals to submit ESOPs to shareholder vote. o Various issues related to the Omnibus Budget and Reconciliation Act of 1993 (OBRA), including: o Amendments to performance plans to conform with OBRA; o Caps on annual grants or amendments of administrative features; o Adding performance goals; and o Cash or cash-and-stock bonus plans. o Establish a process to link pay, including stock-option grants, to performance, leaving specifics of implementation to the company. o Require that option repricings be submitted to shareholders. o Require the expensing of stock-option awards. o Require reporting of executive retirement benefits (deferred compensation, split-dollar life insurance, SERPs, and pension benefits). o Employee stock purchase plans where the purchase price is equal to at least 85% of the market price, where the offering period is no greater than 27 months and where potential dilution (as defined below) is no greater than 10%. 12 We will vote on a case-by-case basis on the following issues: o Executive and director stock-related compensation plans. We will consider the following factors when reviewing these plans: o The program must be of a reasonable size. We will approve plans where the combined employee and director plans together would generate less than 15% dilution. We will reject plans with 15% or more potential dilution. Dilution = (A + B + C) / (A + B + C + D), where A = Shares reserved for plan/amendment, B = Shares available under continuing plans, C = Shares granted but unexercised and D = Shares outstanding. o The plan must not: o Explicitly permit unlimited option repricing authority or that have repriced in the past without shareholder approval. o Be a self-replenishing "evergreen" plan, plans that grant discount options and tax offset payments. o We are generally in favor of proposals that increase participation beyond executives. o We generally support proposals asking companies to adopt rigorous vesting provisions for stock option plans such as those that vest incrementally over, at least, a three- or four-year period with a pro rata portion of the shares becoming exercisable on an annual basis following grant date. o We generally support proposals asking companies to disclose their window period policies for stock transactions. Window period policies ensure that employees do not exercise options based on insider information contemporaneous with quarterly earnings releases and other material corporate announcements. o We generally support proposals asking companies to adopt stock holding periods for their executives. o All other employee stock purchase plans. o All other compensation-related proposals, including deferred compensation plans, employment agreements, loan guarantee programs and retirement plans. o All other proposals regarding stock compensation plans, including extending the life of a plan, changing vesting restrictions, repricing options, lengthening exercise periods or accelerating distribution of awards and pyramiding and cashless exercise programs. 13 We will vote against: o Pensions for non-employee directors. We believe these retirement plans reduce director objectivity. o Elimination of stock option plans. We will vote on a case-by case basis on these issues: o Limits on executive and director pay. o Stock in lieu of cash compensation for directors. Corporate Governance Pioneer will vote for: o Confidential Voting. o Equal access provisions, which allow shareholders to contribute their opinion to proxy materials. o Proposals requiring directors to disclose their ownership of shares in the company. We will vote on a case-by-case basis on the following issues: o Change in the state of incorporation. We will support reincorporations supported by valid business reasons. We will oppose those that appear to be solely for the purpose of strengthening takeover defenses. o Bundled proposals. We will evaluate the overall impact of the proposal. o Adopting or amending the charter, bylaws or articles of association. o Shareholder appraisal rights, which allow shareholders to demand judicial review of an acquisition price. We will vote against: o Shareholder advisory committees. While management should solicit shareholder input, we prefer to leave the method of doing so to management's discretion. o Limitations on stock ownership or voting rights. o Reduction in share ownership disclosure guidelines. 14 Mergers and Restructurings Pioneer will vote on the following and similar issues on a case-by-case basis: o Mergers and acquisitions. o Corporate restructurings, including spin-offs, liquidations, asset sales, joint ventures, conversions to holding company and conversions to self-managed REIT structure. o Debt restructurings. o Conversion of securities. o Issuance of shares to facilitate a merger. o Private placements, warrants, convertible debentures. o Proposals requiring management to inform shareholders of merger opportunities. We will normally vote against shareholder proposals requiring that the company be put up for sale. Mutual Funds Many of our portfolios may invest in shares of closed-end mutual funds or exchange-traded funds. The non-corporate structure of these investments raises several unique proxy voting issues. Pioneer will vote for: o Establishment of new classes or series of shares. o Establishment of a master-feeder structure. Pioneer will vote on a case-by-case on: o Changes in investment policy. We will normally support changes that do not affect the investment objective or overall risk level of the fund. We will examine more fundamental changes on a case-by-case basis. o Approval of new or amended advisory contracts. o Changes from closed-end to open-end format. o Authorization for, or increase in, preferred shares. o Disposition of assets, termination, liquidation, or mergers. o Classified boards of closed-end mutual funds, but will typically support such proposals. 15 Social Issues Pioneer will abstain on stockholder proposals calling for greater disclosure of corporate activities with regard to social issues. "Social Issues" may generally be described as shareholder proposals for a company to: o Conduct studies regarding certain issues of public concern and interest; o Study the feasibility of the company taking certain actions with regard to such issues; or o Take specific action, including ceasing certain behavior and adopting company standards and principles, in relation to issues of public concern and interest. We believe these issues are important and should receive management attention. Pioneer will vote against proposals calling for substantial changes in the company's business or activities. We will also normally vote against proposals with regard to contributions, believing that management should control the routine disbursement of funds. 16 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. ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS The table below indicates, for the portfolio managers of the fund, information about the accounts other than the fund over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of April 30, 2017. For purposes of the table, "Other Pooled Investment Vehicles" may include investment partnerships, undertakings for collective investments in transferable securities ("UCITS") and other non-U.S. investment funds and group trusts, and "Other Accounts" may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts but generally do not include the portfolio manager's personal investment accounts or those which the manager may be deemed to own beneficially under the code of ethics. Certain funds and other accounts managed by the portfolio manager may have substantially similar investment strategies.
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S) ------------------- ---------------------------------- ----------- ----------------- ---------------- -------------- Charles Melchreit Other Registered Investment Companies 10 $15,880,652 N/A N/A Other Pooled Investment Vehicles 7 $ 5,941,015 1 $3,855,424 Other Accounts 8 $ 1,794,639 N/A N/A ------------------- ---------------------------------- -- ----------- ---------------- ---------- Andrew Feltus Other Registered Investment Companies 10 $ 8,725,989 N/A N/A Other Pooled Investment Vehicles 6 $10,473,496 3 $7,507,909 Other Accounts 6 1,496,475 N/A N/A ------------------- ---------------------------------- -- ----------- ---------------- ---------- Jonathan Sharkey Other Registered Investment Companies 3 $ 4,563,755 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 0 $ 0 N/A N/A ------------------- ---------------------------------- -- ----------- ---------------- ----------
POTENTIAL CONFLICTS OF INTEREST When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, Pioneer does not believe that any material conflicts are likely to arise out of a portfolio manager's responsibility for the management of the fund as well as one or more other accounts. Although Pioneer has adopted procedures that it believes are reasonably designed to detect and prevent violations of the federal securities laws and to mitigate the potential for conflicts of interest to affect its portfolio management decisions, there can be no assurance that all conflicts will be identified or that all procedures will be effective in mitigating the potential for such risks. Generally, the risks of such conflicts of interest are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. Pioneer has structured its compensation arrangements in a manner that is intended to limit such potential for conflicts of interest. See "Compensation of Portfolio Managers" below. o A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial 0 public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation of the initial public offering. Generally, investments for which there is limited availability are allocated based upon a range of factors including available cash and consistency with the accounts' investment objectives and policies. This allocation methodology necessarily involves some subjective elements but is intended over time to treat each client in an equitable and fair manner. Generally, the investment opportunity is allocated among participating accounts on a pro rata basis. Although Pioneer believes that its practices are reasonably designed to treat each client in an equitable and fair manner, there may be instances where a fund may not participate, or may participate to a lesser degree than other clients, in the allocation of an investment opportunity. o A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security on the same day for more than one account, the trades typically are "bunched," which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, Pioneer will place the order in a manner intended to result in as favorable a price as possible for such client. o A portfolio manager could favor an account if the portfolio manager's compensation is tied to the performance of that account to a greater degree than other accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager's bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if Pioneer receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager's compensation. o A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. o If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest could arise. For example, if a portfolio manager purchases a security for one account and sells the same security for another account, such trading pattern may disadvantage either the account that is long or short. In making portfolio manager assignments, Pioneer seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. COMPENSATION OF PORTFOLIO MANAGERS Pioneer has adopted a system of compensation for portfolio managers that seeks to align the financial interests of the portfolio managers with those of shareholders of the accounts (including Pioneer funds) the portfolio managers manage, as well as with the financial performance of Pioneer. The compensation 1 program for all Pioneer portfolio managers includes a base salary (determined by the rank and tenure of the employee) and an annual bonus program, as well as customary benefits that are offered generally to all full-time employees. Base compensation is fixed and normally reevaluated on an annual basis. Pioneer seeks to set base compensation at market rates, taking into account the experience and responsibilities of the portfolio manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving superior investment performance and align the interests of the investment professional with those of shareholders, as well as with the financial performance of Pioneer. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be in excess of base salary. The annual bonus is based upon a combination of the following factors: o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance calculation is based on pre-tax investment performance of all of the accounts managed by the portfolio manager (which includes the fund and any other accounts managed by the portfolio manager) over a one-year period (20% weighting) and four-year period (80% weighting), measured for periods ending on December 31. The accounts, which include the fund, are ranked against a group of mutual funds with similar investment objectives and investment focus (60%) and a broad-based securities market index measuring the performance of the same type of securities in which the accounts invest (40%), which, in the case of the fund, is the Merrill Lynch Global High Yield and Emerging Markets Index and the CSFB Leveraged Loan Index. As a result of these two benchmarks, the performance of the portfolio manager for compensation purposes is measured against the criteria that are relevant to the portfolio manager's competitive universe. o QUALITATIVE PERFORMANCE. The qualitative performance component with respect to all of the accounts managed by the portfolio manager includes objectives, such as effectiveness in the areas of teamwork, leadership, communications and marketing, that are mutually established and evaluated by each portfolio manager and management. o PIONEER RESULTS AND BUSINESS LINE RESULTS. Pioneer's financial performance, as well as the investment performance of its investment management group, affect a portfolio manager's actual bonus by a leverage factor of plus or minus (+/-) a predetermined percentage. The quantitative and qualitative performance components comprise 80% and 20%, respectively, of the overall bonus calculation (on a pre-adjustment basis). A portion of the annual bonus is deferred for a specified period and may be invested in one or more Pioneer funds. Certain portfolio managers participate in other programs designed to reward and retain key contributors. Senior executives or other key employees are granted performance units based on the stock price performance of UniCredit and the financial performance of Pioneer Global Asset Management S.p.A., which are affiliates of Pioneer. Portfolio managers also may participate in a deferred compensation program, whereby deferred amounts are invested in one or more Pioneer funds. SHARE OWNERSHIP BY PORTFOLIO MANAGERS The following table indicates as of April 30, 2017 the value, within the indicated range, of shares beneficially owned by the portfolio managers of the fund.
BENEFICIAL OWNERSHIP NAME OF PORTFOLIO MANAGER OF THE FUND* --------------------------- --------------------- Charles Melchreit A --------------------------- --------------------- Andrew Feltus E --------------------------- --------------------- Jonathan Sharkey B --------------------------- ---------------------
* Key to Dollar Ranges 2 A. None B. $1 - $10,000 C. $10,001 - $50,000 D. $50,001 - $100,000 E. $100,001 - $500,000 F. $500,001 - $1,000,000 G. Over $1,000,000
3 - The significant investment strategies for Pioneer Diversified High Income Trust (a closed-end fund) and certain other similarly managed accounts with investment objectives of a high level of current income, with a potential for capital appreciation as a secondary objective. The fund invests in a unique blend of higher yielding asset classes, including global high yield bonds, leveraged bank loans and event-linked bonds (cat bonds). Under normal market conditions, the fund invests at least 80% of its managed assets (net assets plus borrowings or other leverage for investment purposes) in diversified portfolio of below investment grade (high yield) debt securities, loans and preferred stocks. The fund allocates its investments principally among three sectors of the fixed income securities markets: (i) below investment grade debt securities and preferred stocks of U.S. and non-U.S. issuers, including governmental and corporate issuers in emerging markets ("global high yield debt securities"), (ii) floating rate loans and (iii) "event-linked" bonds, which sometimes are referred to as "insurance-linked" or "catastrophe" bonds. PIM believes that this actively managed, diversified portfolio of asset classes - global high yield debt securities, floating rate loans and event-linked bonds - may provide investors with a range of potential benefits across various market cycles and under various market conditions. These benefits include, among others, the potential to provide investors with a relatively high level of current income without undue risk as a result of the low correlation among these asset classes, reduced volatility due to limited exposure to interest rate and duration risk, as well as a favorable risk return profile. Specifically, the floating rate feature of both floating rate loans and event-linked bonds serves to reduce sensitivity to changes in prevailing interest rates. In addition, the introduction of event-linked bonds to the diversified portfolio enhances these benefits by reducing volatility, while providing the potential for above average returns. Moreover, the fund's investments in event-linked bonds offer investors access to a unique asset class that otherwise may be unavailable to them. The fund does not have a policy of maintaining a specific average credit quality or a targeted maturity range for its portfolio. The fund may invest any portion of its assets in securities and other instruments of non-U.S. issuers, including emerging market issuers, and may engage in certain strategic transactions. PIM is responsible for managing the fund's overall investment program, including allocating the fund's investments among the different asset classes and managing the fund's investments in global high income debt securities and floating rate loans. PIM considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the fund's investment objectives. PIM selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and rating, sector and issuer diversification. PIM also employs due diligence and fundamental quantitative and qualitative research to assess an issuer's credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management ability. PIM may sell a portfolio security when it believes the security no longer will contribute to meeting the fund's investment objectives. PIM makes that determination based on the same criteria it uses to select portfolio securities. In making these portfolio decisions, PIM relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to a wide variety of research. The fund may use financial leverage on an ongoing basis for investment purposes by borrowing from banks through a revolving credit facility. Leverage creates special risks not associated with unleveraged funds having a similar investment objectives and policies. These include the possibility of higher volatility of both the net asset value of the fund and the value of assets serving as asset coverage for the preferred shares. 4 ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. (a) If the registrant is a closed-end management investment company, in the following tabular format, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any affiliated purchaser, as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant's equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781). During the period covered by this report, there were no purchases made by or on behalf of the registrant or any affiliated purchaser as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934 (the Exchange Act), of shares of the registrants equity securities that are registered by the registrant pursuant to Section 12 of the Exchange Act. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15)) of Schedule 14A (17 CFR 240.14a-101), or this Item. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors since the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R of Schedule 14(A) in its definitive proxy statement, or this item. ITEM 11. CONTROLS AND PROCEDURES. (a) Disclose the conclusions of the registrant's principal executive and principal financials officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures are effective based on the evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. (b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that occured during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. There were no significant changes in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. The registrant's principal executive officer and principal financial officer, however, voluntarily are reporting the following information: In August of 2006 the registrant's investment adviser enhanced its internal procedures for reporting performance information required to be included in prospectuses. Those enhancements involved additional internal controls over the appropriateness of performance data generated for this purpose. Such enhancements were made following an internal review which identified prospectuses relating to certain classes of shares of a limited number of registrants where, inadvertently, performance information not reflecting the deduction of applicable sales charges was included. Those prospectuses were revised, and the revised prospectuses were distributed to shareholders. ITEM 12. EXHIBITS. (a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. (2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) , exactly as set forth below: Filed herewith. SIGNATURES [See General Instruction F] Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Pioneer Diversified High Income Trust By (Signature and Title)* /s/ Lisa M. Jones Lisa M. Jones, President & Chief Executive Officer Date June 27, 2017 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Lisa M. Jones Lisa M. Jones, President & Chief Executive Officer Date June 27, 2017 By (Signature and Title)* /s/ Mark E. Bradley Mark E. Bradley, Treasurer & Chief Accounting & Financial Officer Date June 27, 2017 * Print the name and title of each signing officer under his or her signature. EX-99 2 cert.txt CERTIFICATIONS -------------- I, Lisa M. Jones, certify that: 1. I have reviewed this report on Form N-CSR of Pioneer Diversified High Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 27, 2017 /s/ Lisa M. Jones Lisa M. Jones President and Chief Executive Officer CERTIFICATIONS -------------- I, Mark E. Bradley, certify that: 1. I have reviewed this report on Form N-CSR of Pioneer Diversified High Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 27, 2017 /s/ Mark E. Bradley Mark E. Bradley Treasurer & Chief Accounting & Financial Officer SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Pioneer Diversified High Income Trust (the "Trust"), hereby certifies, to the best of his knowledge, that the Trust's Report on Form N-CSR for the period ended April 30, 2017 (the "Report") fully complies with the requirements of Section 13 (a) or 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Dated: June 27, 2017 /s/ Lisa M. Jones Lisa M. Jones President and Chief Executive Officer This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or a separate disclosure document. A signed original of this written statement required by section 906 has been provided to the Trust and will be retained by the Trust and furnished to the SEC or its staff upon request. SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Pioneer Diversified High Income Trust (the "Trust"), hereby certifies, to the best of his knowledge, that the Trust's Report on Form N-CSR for the period ended April 30, 2017 (the "Report") fully complies with the requirements of Section 13 (a) or 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Dated: June 27, 2017 /s/ Mark E. Bradley Mark E. Bradley Treasurer & Chief Accounting & Financial Officer This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or a separate disclosure document. A signed original of this written statement required by section 906 has been provided to the Trust and will be retained by the Trust and furnished to the SEC or its staff upon request. EX-99 3 CodeofEthics.txt CODE OF ETHICS FOR SENIOR OFFICERS POLICY This Code of Ethics for Senior Officers (this "Code") sets forth the policies, practices and values expected to be exhibited by Senior Officers of the Pioneer Funds (collectively, the "Funds" and each, a "Fund"). This Code does not apply generally to officers and employees of service providers to the Funds, including Pioneer Investment Management, Inc. ("Pioneer"), unless such officers and employees are also Senior Officers. The term "Senior Officers" shall mean the principal executive officer, principal financial officer, principal accounting officer and controller of the Funds, although one person may occupy more than one such office. Each Senior Officer is identified by title in Exhibit A to this Code. The Chief Compliance Officer ("CCO") of the Pioneer Funds is primarily responsible for implementing and monitoring compliance with this Code, subject to the overall supervision of the Board of Trustees of the Funds (the "Board"). The CCO has the authority to interpret this Code and its applicability to particular situations. Any questions about this Code should be directed to the CCO or his or her designee. PURPOSE The purposes of this Code are to: . Promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; . Promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; ------------------------------------------------------------------------------- 1 Last revised January 17, 2014 . Promote compliance with applicable laws and governmental rules and regulations; . Promote the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and . Establish accountability for adherence to the Code. Each Senior Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. RESPONSIBILITIES OF SENIOR OFFICERS Conflicts of Interest A "conflict of interest" occurs when a Senior Officer's private interests interfere in any way - or even appear to interfere - with the interests of or his/her service to a Fund. A conflict can arise when a Senior Officer takes actions or has interests that may make it difficult to perform his or her Fund work objectively and effectively. Conflicts of interest also arise when a Senior Officer or a member of his/her family receives improper personal benefits as a result of the Senior Officer's position with the Fund. Certain conflicts of interest arise out of the relationships between Senior Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the "ICA"), and the Investment Advisers Act of 1940, as amended (the "IAA"). For example, Senior Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Funds because of their status as "affiliated persons" of the Funds. The Fund's and Pioneer's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace such policies and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise as a result of the contractual relationship between the Fund and Pioneer because the Senior Officers are officers or employees of both. As a result, this Code recognizes that Senior Officers will, in the normal course of their duties (whether formally for a Fund or for Pioneer, or for both), be involved in establishing policies and implementing decisions that will have different effects on Pioneer and the Fund. The participation of Senior Officers in such activities is inherent in the contractual relationship between a Fund and Pioneer and is consistent with the performance by the Senior Officers of their duties as officers of the Fund and, if addressed in conformity with the provisions of the ICA and the IAA, will be deemed to have been handled ethically. In addition, it is recognized by the Board that Senior Officers may also be officers of investment companies other than the Pioneer Funds. Other conflicts of interest are covered by this Code, even if such conflicts of interest are not subject to provisions of the ICA or the IAA. In reading the following examples of conflicts of interest under this Code, Senior Officers should keep in mind that such a list cannot ever be exhaustive or cover every possible ------------------------------------------------------------------------------- 2 Last revised January 17, 2014 scenario. It follows that the overarching principle is that the personal interest of a Senior Officer should not be placed improperly before the interest of a Fund. Each Senior Officer must: . Not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Fund whereby the Senior Officer would benefit personally to the detriment of the Fund; . Not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Senior Officer rather than the benefit of the Fund; and . Report at least annually any affiliations or other relationships that give rise to conflicts of interest. Any material conflict of interest situation should be approved by the CCO, his or her designee or the Board. Examples of these include: . Service as a director on the board of any public or private company; . The receipt of any gift with a value in excess of an amount established from time to time by Pioneer's Business Gift and Entertainment Policy from any single non-relative person or entity. Customary business lunches, dinners and entertainment at which both the Senior Officer and the giver are present, and promotional items of insignificant value are exempt from this prohibition; . The receipt of any entertainment from any company with which a Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; . Any ownership interest in, or any consulting or employment relationship with, any of a Fund's service providers other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; and . A direct or indirect financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Senior Officer's employment, such as compensation or equity ownership. ------------------------------------------------------------------------------- 3 Last revised January 17, 2014 Corporate Opportunities Senior Officers may not (a) take for themselves personally opportunities that are discovered through the use of a Fund's property, information or position; (b) use a Fund's property, information, or position for personal gain; or (c) compete with a Fund. Senior Officers owe a duty to the Funds to advance their legitimate interests when the opportunity to do so arises. Confidentiality Senior Officers should maintain the confidentiality of information entrusted to them by the Funds, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Funds, if disclosed. Fair dealing with Fund shareholders, suppliers, and competitors Senior Officers should endeavor to deal fairly with the Funds' shareholders, suppliers, and competitors. Senior Officers should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice. Senior Officers should not knowingly misrepresent or cause others to misrepresent facts about a Fund to others, whether within or outside the Fund, including to the Board, the Funds' auditors or to governmental regulators and self-regulatory organizations. Compliance with Law Each Senior Officer must not knowingly violate any law, rule and regulation applicable to his or her activities as an officer of the Funds. In addition, Senior Officers are responsible for understanding and promoting compliance with the laws, rules and regulations applicable to his or her particular position and by persons under the Senior Officer's supervision. Senior Officers should endeavor to comply not only with the letter of the law, but also with the spirit of the law. Disclosure Each Senior Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Funds. Each Senior Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers of the Funds and Pioneer with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents a Fund files with, or submits to, the SEC and in other public communications made by the Funds. INITIAL AND ANNUAL CERTIFICATIONS Upon becoming a Senior Officer the Senior Officer is required to certify that he or she has received, read, and understands this Code. On an annual basis, each Senior Officer must certify that he or she has complied with all of the applicable requirements of this Code. ------------------------------------------------------------------------------- 4 Last revised January 17, 2014 ADMINISTRATION AND ENFORCEMENT OF THE CODE Report of Violations Pioneer relies on each Senior Officer to report promptly if he or she knows of any conduct by a Senior Officer in violation of this Code. All violations or suspected violations of this Code must be reported to the CCO or a member of Pioneer's Legal and Compliance Department. Failure to do so is itself a violation of this Code. Investigation of Violations Upon notification of a violation or suspected violation, the CCO or other members of Pioneer's Compliance Department will take all appropriate action to investigate the potential violation reported. If, after such investigation, the CCO believes that no violation has occurred, the CCO and Compliance Department is not required to take no further action. Any matter the CCO believes is a violation will be reported to the Independent Trustees. If the Independent Trustees concur that a violation has occurred, they will inform and make a recommendation to the full Board. The Board shall be responsible for determining appropriate action. The Funds, their officers and employees, will not retaliate against any Senior Officer for reports of potential violations that are made in good faith and without malicious intent. The CCO or his or her designee is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. The CCO or his or her designee shall make inquiries regarding any potential conflict of interest. Violations and Sanctions Compliance with this Code is expected and violations of its provisions will be taken seriously and could result in disciplinary action. In response to violations of the Code, the Board may impose such sanctions as it deems appropriate within the scope of its authority over Senior Officers, including termination as an officer of the Funds. Waivers from the Code The Independent Trustees will consider any approval or waiver sought by any Senior Officer. The Independent Trustees will be responsible for granting waivers, as appropriate. Any change to or waiver of this Code will, to the extent required, be disclosed as provided by SEC rules. OTHER POLICIES AND PROCEDURES This Code shall be the sole Code of Ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. The Funds', Pioneer's, and Pioneer Funds Distributor, Inc.'s Codes of Ethics under Rule 17j-1 under the ICA and Rule 204A-1 of the IAA are separate requirements applying to the Senior Officers and others, and are not a part of this Code. To the extent any other policies and procedures of the Funds, Pioneer or Pioneer ------------------------------------------------------------------------------- 5 Last revised January 17, 2014 Fund Distributor, Inc. overlap or conflict with the provisions of the this Code, they are superseded by this Code. SCOPE OF RESPONSIBILITIES A Senior Officer's responsibilities under this Code are limited to Fund matters over which the Senior Officer has direct responsibility or control, matters in which the Senior Officer routinely participates, and matters with which the Senior Officer is otherwise involved. In addition, a Senior Officer is responsible for matters of which the Senior Officer has actual knowledge. AMENDMENTS This Code other than Exhibit A may not be amended except in a writing that is specifically approved or ratified by a majority vote of the Board, including a majority of the Independent Trustees. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Board and their counsel or to Pioneer's Legal and Compliance Department. INTERNAL USE This Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion. ------------------------------------------------------------------------------- 6 Last revised January 17, 2014 EXHIBIT A - SENIOR OFFICERS OF THE PIONEER FUNDS President (Principal Executive Officer) Treasurer (Principal Financial Officer) Code of Ethics for Senior Officers -------------------------------------------------------------------------------