0001388126-16-000014.txt : 20160628
0001388126-16-000014.hdr.sgml : 20160628
20160628094046
ACCESSION NUMBER: 0001388126-16-000014
CONFORMED SUBMISSION TYPE: N-CSR
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20160430
FILED AS OF DATE: 20160628
DATE AS OF CHANGE: 20160628
EFFECTIVENESS DATE: 20160628
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: 161734857
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
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22014
Pioneer Diversified High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: April 30
Date of reporting period: May 1, 2015 through April 30, 2016
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, 2016
--------------------------------------------------------------------------------
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 46
Financial Highlights 50
Notes to Financial Statements 52
Report of Independent Registered Public Accounting Firm 67
Trustees, Officers and Service Providers 69
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 1
President's Letter
Dear Shareowner,
Global financial markets began 2016 on shaky footing, delivering the kind of
volatility that challenged investors in 2015. US equities fell by 10% through
the first six weeks of the year, only to recover the losses by the end of the
first quarter. Fixed-income markets were also acutely affected, with concerns
about falling oil prices and a weak global economy leading to a sell-off in
credit-sensitive sectors, especially high-yield bonds, as investors fled to the
perceived safety of government bonds. Like equities, credit markets recovered
much of their lost ground by the end of the first quarter.
Midway through the first quarter, market sentiment shifted, as expectations grew
that major central banks would extend their accommodative monetary policies in
the hopes of driving economic growth. The US Federal Reserve (the Fed) backed
off plans to raise interest rates four times in 2016, and the European Central
Bank announced a more comprehensive asset-purchasing program in the hopes of
encouraging lending, and boosting both inflation and economic growth. The Bank
of Japan also followed a monetary easing path, announcing negative interest
rates in January.
As 2016 moves along, we continue to see central bank policies as generally
supportive of the US economy - for which we maintain an expectation of modest
growth this year - against an overall global economic backdrop that remains
unsettled and points towards generally lower growth. Economies around the world
in both developed and emerging markets are experiencing deep structural changes.
Current challenges include incomplete debt deleveraging in both emerging and
developed markets, where debt levels continue to grow, the transition of many
emerging markets economies from export/investment-driven models to more domestic
demand-driven models, and aging populations, which are reducing productivity and
limiting economic growth potential (primarily in the developed markets but also
in emerging markets such as China). Geopolitical instability on many fronts, the
rising risk of policy mistakes, and market liquidity issues combine to increase
the possibility of sharp swings in asset values. Meanwhile, in the US, as always
in a presidential election year, the political rhetoric of 2016 has the
potential to impact domestic sectors such as health care.
Throughout Pioneer's history, we have believed in the importance of active
management. During periods of market volatility, we view the value of active
management as even more compelling. Our experienced and tenured investment teams
focus 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.
2 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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, 2016
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Fund's historical or future performance are
statements of opinion as of the date of this report. Past performance is no
guarantee of future results.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 3
Portfolio Management Discussion | 4/30/16
Worries about slowing global economic trends as well as weakening prices for oil
and other commodities created a difficult environment for the more credit-
sensitive sectors in the bond markets during most of the 12-month period ended
April 30, 2016. However, signs of some economic progress on the domestic front
led to a recovery in the credit-sensitive sectors over the final 10 weeks of the
period. 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. Note: Mr. Liu became a portfolio manager on the Trust
in September 2015.
Q How did the Trust perform during the 12-month period ended April 30, 2016?
A Pioneer Diversified High Income Trust returned -0.29% at net asset value
and -1.26% at market price during the 12-month period ended April 30, 2016.
During the same 12-month period, the Trust's custom benchmark returned
0.69%. The custom benchmark is based on equal weights of the Bank of
America Merrill Lynch (BofA ML) Global High Yield and Emerging Markets Plus
(GHY and EMP) Index, which returned 1.50% at net asset value during the
12-month period, and the Credit Suisse (CS) Leveraged Loan Index, which
returned -0.13%. 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 31 closed end funds in Lipper's High Yield Closed End Funds Category
(which may or may not be leveraged) was -3.71%, 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 -3.82%.
The shares of the Trust were selling at a 6.2% discount to net asset value
at the end of the period on April 30, 2016.
On April 30, 2016, the 30-day SEC yield on the Trust's shares was 9.03%*.
* 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 | 4/30/16
Q How would you describe the investment environment in the fixed-income
markets during the 12-month period ended April 30, 2016?
A The performance of higher-yielding, credit-sensitive bonds was
disappointing for most of the Trust's fiscal year, although such securities
recovered, somewhat, over the final weeks of the period as investors grew
more hopeful about global economic conditions.
During the early months of the 12-month period, a confluence of factors
combined to dampen investors' optimism about the health of the world
economy. Among the concerns vexing the markets were weakening prices for
oil and other basic commodities, evidence of slowing economic growth in
China, and a resurgent debt crisis in Greece that had the potential to
threaten the wider European economy. The high-yield bond sectors strongly
felt the effects of the market turmoil during that timeframe, with US
high-yield corporate bonds and emerging markets debt, in particular,
struggling due to the fallout from declining prices of oil, metals, and
basic commodities.
Meanwhile, although major central banks such as the European Central Bank
(ECB) and the Bank of Japan adopted more accommodative monetary policies,
the influential US Federal Reserve System (the Fed) appeared to signal its
intent to become less accommodative and to start raising short-term
interest rates in the United States as early as September 2015. The Fed,
though, ended up delaying its anticipated rate hike and kept things
unchanged in September, while advising the financial markets that it would
look closely at a wide range of economic and market trends before
tightening monetary policy. By the time Fed did raise rates by 0.25% in
December 2015, market participants had already become more comfortable with
its interest-rate posture.
The downward move in high-yield and emerging markets bond prices finally
appeared to bottom in February 2016, and the asset classes regained some of
the ground they had lost earlier in the period. Several factors contributed
to the bounce-back in the credit-sensitive sectors, including the Fed's
cautious policy regarding interest rates, additional monetary easing from
the ECB, the willingness of the Chinese government to adopt more
aggressive, pro-growth policies, and a long-awaited rally in global oil and
commodities prices. Securities that are highly sensitive to commodity
prices, including energy industry and mining bonds, were the hardest hit
during the market downturn early in the period, but they recovered sharply
over the latter months as commodity prices rose and investors gravitated
toward the very attractive valuations of those assets relative to their
risks.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 5
In other areas of the market, floating-rate bank loans experienced modest
losses, on a total return basis, during the full 12-month period, while the
performance of insurance-linked securities (ILS) essentially was flat over
the Trust's fiscal year.
Q How did you manage the Trust's portfolio in that environment during the
12-month period ended April 30, 2016?
A During the period, we kept the Trust's portfolio well diversified** among
the four main asset classes in which we typically invest: corporate bonds,
emerging markets debt, floating-rate bank loans, and ILS. Fixed-rate
investments, principally high-yield corporates and emerging markets debt,
accounted for about 53% of the Trust's total investment portfolio as of
period end, with the remaining 47% of the Trust's total investment
portfolio allocated to floating-rate securities, mainly bank loans and ILS.
With regard to specific asset classes, nearly 66% of the Trust's total
investment portfolio was held in corporate bonds and notes as of April 30,
2016, while senior secured bank loans, at 22% of the Trust's total
investment portfolio, represented the portfolio's second-largest asset
allocation. Within the allocation to corporate bonds and notes was a 19%
position in insurance-linked securities, which included quota-share
instruments and event-linked securities.
Finally, we kept the duration of the Trust's portfolio on the short side
(roughly 2.5 years) in anticipation that interest rates will eventually
start to rise. (Duration is a measure of the sensitivity of the price, or
the value of principal, of a fixed-income investment to a change in
interest rates, expressed as a number of years.)
Q What were the primary reasons for the Trust's underperformance of its
customized benchmark during the 12-month period ended April 30, 2016?
A The main reason for the Trust's underperformance of its benchmark during
the period was the use of leverage, or borrowed funds. While the
investments in the Trust's portfolio generated close to a flat return over
the 12-month period, the interest cost of the leverage reduced the Trust's
total return. In addition, the portfolio's moderate allocation to
high-yield energy bonds was another drag on the Trust's benchmark-relative
returns during a period in which energy issues, especially lower-rated
debt, performed poorly. Individual portfolio holdings in energy that hurt
the Trust's benchmark-relative performance during the period included bonds
issued by Penn Virginia, an oil and gas company; refiner MidStates Oil
Refining; Noble Energy, an oil and gas drilling firm; and Williams
Companies, a pipeline enterprise. The bonds of Noble Energy and
** Diversification does not assure a profit nor protect against loss.
6 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
Williams were investment-grade securities when we added them to the Trust's
portfolio, but each suffered downgrades to high-yield status during the
12-month period.
Other detractors from the Trust's benchmark-relative returns during the
period included positions in securities of European banking institutions,
which struggled for two primary reasons. First, investors were worried that
European banks might begin issuing a large supply of new, subordinated
debt; and second, the forthcoming "Brexit" referendum in June, when
citizens of the United Kingdom will decide whether to leave the European
Economic Community, created much uncertainty and negatively affected the
performance of the portfolio's European bank-related holdings.
Q Which of your strategies or individual investments made positive
contributions to the Trust's benchmark-relative returns during the 12-month
period ended April 30, 2016?
A The Trust's overall allocation to ILS proved to have the most significant
positive influence on benchmark-relative performance during the period, as
the property-and-casualty industry experienced relatively few significant
losses from natural events such as hurricanes and earthquakes. The
exception to the general "low claims" trend within ILS was the portfolio's
investment in a MultiCat Mexico bond, a catastrophe bond sponsored by
SwissRe. The bond suffered a 50% loss of principal from the landfall of
Hurricane Patricia on Mexico's West Coast in October 2015.
Investments in floating-rate bank loans also contributed positively to the
Trust's benchmark-relative performance during the period, even though bank
loans, in general, were relatively flat over the full 12 months due to
technical market issues. A decline in the issuance of collateralized loan
obligations (CLOs), which are major investors in bank loans, was the most
notable of those technical issues in the bank-loan market over the period.
Q How did the level of leverage in the Trust change over the 12-month period
ended April 30, 2016?
A The Trust employs leverage through a credit agreement (See Note 9 to the
Financial Statements).
At the end of the 12-month period on April 30, 2016, 29.1% of the Trust's
total managed assets were financed by leverage (or borrowed funds),
compared with 29.5% of the Trust's total managed assets financed by
leverage at the start of the period on May 1, 2015. During the 12-month
period, the Trust reduced borrowing under the revolving credit facility by
a total of $7 million to $57 million as of April 30, 2016. Due to the
overall decline in prices of high yield securities during the period, a
reduction in the overall borrowing on the credit line was necessary in
order to maintain the
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 7
asset coverage requirements specified by the credit agreement. The
percentage of the Trust's managed assets financed by leverage decreased
during the period due to the reduction of borrowings and a decrease in the
values of securities in which the Trust had invested.
Q Did the Trust have any investments in derivative securities during the
12-month period ended April 30, 2016? If so, did those investments have any
effect on the Trust's performance?
A During the period, the Trust did invest in some currency forward
transactions in an attempt to hedge the effects of currency fluctuations on
the value of the portfolio's investments in securities denominated in
foreign currencies. The exposure did not have a material impact on the
Trust's benchmark-relative results.
Q What were the major factors affecting the Trust's distribution during the
12-month period ended April 30, 2016?
A The Trust's distribution was lowered in February 2016 because of a reduced
amount of current income realized by the portfolio's investments. Over the
full 12 months, in a low-interest-rate environment, the rates available on
newer bond investments tended to be lower than the rates offered by older
investments that had either reached maturity or been called away by their
issuers.
Q What is your investment outlook?
A We believe the US economy should be able to grow at a moderate pace of 2.0%
to 2.5% in 2016, despite getting off to a slow start in the first quarter,
when gross domestic product (GDP) struggled to reach 1%. While poor sales
figures and a slowdown in capital spending - both of which are tied to
weakness in the energy markets - played a role in the first quarter's
disappointing GDP figures, we still see persuasive evidence that the
domestic economy is strengthening, as employment growth has been solid
overall and household formation and new-home construction figures have been
encouraging.
While we foresee more growth on the domestic scene, global economic trends
remain mixed. The recovery in Europe is proceeding at a slow pace, and we
are concerned about the threatened exit of Britain from the European
Economic Community, which we mentioned earlier. Meanwhile, the Chinese
economy continues to be a major concern, particularly amid speculation
about the excessive use of leverage. However, we are becoming more
encouraged about growth prospects in selected emerging markets, especially
if oil and other commodity prices did in fact bottom out earlier this year.
8 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
If, as we expect, the domestic economy shows continued improvement, we
think a cautious Fed may further tighten monetary policy, perhaps raising
short-term interest rates once or twice more in 2016. Therefore, we intend
to maintain the Trust's short-duration stance.
We believe a slow-growth environment should be good for the credit-
sensitive markets. Corporate balance sheets continue to look solid and
borrowing costs are not burdensome. Moreover, we do not see any noticeable
signs of increases in debt, or leverage, in the economy, either by
corporations or individual households. When it comes to investing in
corporate bonds, we feel that security selection will be important,
especially as we see some corporations taking shareholder-friendly actions,
such as initiating mergers and increasing dividends. While high-yield
corporate bond prices are not as compelling as they were in February of
this year, prior to the market rally, they remain attractive. Yield
spreads, which measure the differences between the yields of high-yield and
high-quality bonds (typically Treasuries) with similar maturities, remain
wider than long-term averages, and most sectors within high yield (other
than energy, and metals and mining) are seeing improved performance. In
addition, prices remain low relative to current high-yield default rates.
Overall, we do not anticipate a robust rally in high-yield bonds, but we do
see opportunities for continued performance improvement.
Please refer to the Schedule of Investments on pages 14-45 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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 9
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.
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 | 4/30/16
Portfolio Summary | 4/30/16
Portfolio Diversification*
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 66.1%
Senior Secured Floating Rate Loan Interests 21.5%
Collateralized Mortgage Obligations 2.7%
U.S. Government And Agency Obligations 2.1%
Convertible Bonds & Notes 1.7%
Sovereign Debt Obligations 1.4%
Preferred Stocks 1.1%
Treasury Bills 1.0%
Asset Backed Securities 1.0%
Commercial Paper 0.8%
Convertible Preferred Stocks 0.3%
Common Stocks 0.3%
* Includes investments in Insurance Linked Securities totaling 19.4% of total
investment portfolio.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of total long-term holdings)**
1. Fixed Income Trust Series 2013-A, 0.0%, 10/15/97 (144A) 2.75%
----------------------------------------------------------------------------------------------
2. Gullane Segregated Account (Kane SAC, Ltd.), Variable Rate Notes, 11/30/20 1.39
----------------------------------------------------------------------------------------------
3. U.S. Treasury Notes, 0.303%, 10/31/16 1.35
----------------------------------------------------------------------------------------------
4. Gleneagles Segregated Account (Kane SAC, Ltd.), Variable Rate Notes, 11/30/20 1.29
----------------------------------------------------------------------------------------------
5. Pangaea Re Segregated Account (Kane SAC, Ltd.), Series 2016-1, Variable
Rate Notes, 2/1/20 1.06
----------------------------------------------------------------------------------------------
6. Lahinch Segregated Account (Kane SAC, Ltd.), Variable Rate Notes, 6/15/16 1.06
----------------------------------------------------------------------------------------------
7. PI-6 Segregated Account (Kane SAC, Ltd.), Series C, Variable Rate Notes, 7/7/16 1.05
----------------------------------------------------------------------------------------------
8. Queen Street X Re, Ltd., 5.948%, 6/8/18 (144A) (Cat Bond) 1.04
----------------------------------------------------------------------------------------------
9. Gator Re, Ltd., 6.468%, 1/9/17 (144A) (Cat Bond) 1.01
----------------------------------------------------------------------------------------------
10. Tar Heel Re, Ltd., Series 2013-1, Class A, 8.698%, 5/9/16 (144A) (Cat Bond) 0.92
----------------------------------------------------------------------------------------------
** 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 | 4/30/16 11
Prices and Distributions | 4/30/16
Market Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/16 4/30/15
--------------------------------------------------------------------------------
Market Value $15.60 $17.42
--------------------------------------------------------------------------------
(Discount) (6.2)% (5.6)%
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/16 4/30/15
--------------------------------------------------------------------------------
Net Asset Value $16.63 $18.39
--------------------------------------------------------------------------------
Distributions per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
--------------------------------------------------------------------------------
5/1/15 - 4/30/16 $1.50 $ -- $ --
--------------------------------------------------------------------------------
Yields
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/16 4/30/15
--------------------------------------------------------------------------------
30-Day SEC Yield 9.03% 6.38%
--------------------------------------------------------------------------------
The data shown above represents past performance, which is no guarantee of
future results.
12 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
Performance Update | 4/30/16
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 common
shares of Pioneer Diversified High Income Trust during the periods shown,
compared to that of the combined (50%/50%) Bank of America Merrill Lynch Global
High Yield and Emerging Markets Plus Index (BofA ML Global HY and EMP Index) and
the Credit Suisse (CS) Leveraged Loan Index.
Average Annual Total Returns
(As of April 30, 2016)
--------------------------------------------------------------------------------
50% BofA
ML Global
HY and
Net EMP Index/
Asset 50% CS
Value Market Leveraged
Period (NAV) Price Loan Index
--------------------------------------------------------------------------------
Life of Trust
(5/30/2007) 7.18% 5.87% 5.28%
5 years 5.70 3.45 4.41
1 year -0.29 -1.26 0.69
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Diversified 50% BofA ML Global HY and EMP Index
High Income Trust 50% CS Leveraged Loan Index
5/07 $10,000 $10,000
4/08 $ 8,933 $10,923
4/09 $ 6,868 $ 9,335
4/10 $11,899 $12,718
4/11 $14,034 $14,049
4/12 $14,224 $14,599
4/13 $17,065 $16,289
4/14 $18,280 $17,159
4/15 $16,836 $17,312
4/16 $16,624 $17,436
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below NAV due to such factors as interest rate changes
and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Shares of closed-end funds, unlike open-end funds, are not continuously offered.
There is a one-time public offering and, once issued, shares of closed-end funds
are bought and sold in the open market through a stock exchange and frequently
trade at prices lower than their NAV. NAV per common share is total assets less
total liabilities, which include preferred shares or borrowings, as applicable,
divided by the number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends are
assumed to be reinvested at prices obtained through open-market purchases under
the Trust's dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the sale of Trust shares.
Had these fees and taxes been reflected, performance would have been lower.
The BofA ML Global High Yield and Emerging Markets Plus Index is an unmanaged
index that tracks the performance of the below- and border-line investment-grade
global debt markets denominated in the major developed market currencies. The
Index includes sovereign issuers rated BBB1 and lower along with corporate
issues rated BB1 and lower. There are no restrictions on issuer country of
domicile. The CS Leveraged Loan Index is unmanaged and is designed to mirror the
investible universe of the U.S. dollar-denominated leveraged loan market. The CS
Leveraged Loan Index consists of tradable term loans with at least one year to
maturity and rated BBB or lower.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Trust returns, do not reflect any fees, expenses or sales charges. The
indices do not use leverage. It is not possible to invest directly in an index.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 13
Schedule of Investments | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 1.4% of
Net Assets
250,000 American Credit Acceptance Receivables Trust,
Series 2014-2, Class D, 4.96%, 5/10/21 (144A) $ 252,866
200,000 Ascentium Equipment Receivables LLC, Series 2015-1A,
Class E, 5.92%, 6/12/23 (144A) 198,533
299,996 Axis Equipment Finance Receivables III LLC, Series
2015-1A, Class E, 5.27%, 5/20/20 (144A) 286,543
80,239 Continental Airlines Pass Through Trust, Series 1998-1,
Class B, 6.748%, 3/15/17 82,245
290,000(a) GMAT Trust, Series 2013-1A, Class M, 5.0%,
11/25/43 (144A) 278,812
418,932(b) GMAT Trust, Series 2015-1A, Class A1, 4.25%,
9/25/20 (144A) 424,002
400,000(c) NCF Dealer Floorplan Master Trust, Series 2016-1A,
Class C, 8.935%, 3/21/22 (144A) 394,834
------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $1,906,187) $ 1,917,835
------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
3.8% of Net Assets
375,000(c) BAMLL Commercial Mortgage Securities Trust,
Series 2014-INLD, Class F, 2.965%, 12/15/29 (144A) $ 335,895
143,050(a) Bear Stearns Commercial Mortgage Securities Trust,
Series 2005-PWR7, Class B, 5.214%, 2/11/41 142,991
260,000(c) CFCRE Mortgage Trust, Series 2015-RUM, Class E,
5.033%, 7/15/30 (144A) 253,406
500,000(a) Citigroup Commercial Mortgage Trust, Series 2014-GC23,
Class E, 3.208%, 7/10/47 (144A) 293,556
500,000(a) COBALT CMBS Commercial Mortgage Trust, Series
2007-C3, Class C, 5.956%, 5/15/46 446,688
300,000(a) COMM Mortgage Trust, Series 2007-C9, Class H, 6.006%,
12/10/49 (144A) 281,644
250,000(a) COMM Mortgage Trust, Series 2012-CR2, Class E, 5.017%,
8/15/45 (144A) 237,879
500,000(c) CSMC Trust, Series 2015-SAND, Class F, 5.13%,
8/15/30 (144A) 463,902
115,766(c) EQTY Mezzanine Trust, Series 2014-INMZ, Class M,
4.75%, 5/8/31 (144A) 108,401
170,000(c) EQTY Mortgage Trust, Series 2014-INNS, Class E,
3.889%, 5/8/31 (144A) 162,601
64,743 Global Mortgage Securitization, Ltd., Series 2004-A,
Class B1, 5.25%, 11/25/32 (144A) 50,903
126,339 Global Mortgage Securitization, Ltd., Series 2005-A,
Class B3, 5.25%, 4/25/32 (144A) 84,614
127,257 Homeowner Assistance Program Reverse Mortgage
Loan Trust, Series 2013-RM1, Class A, 4.0%,
5/26/53 (144A) 125,667
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- (continued)
150,000 JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2006-CB16, Class AJ, 5.623%, 5/12/45 $ 145,859
550,000(c) JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2014-INN, Class E, 4.033%, 6/15/29 (144A) 532,397
489,343(a) LB-UBS Commercial Mortgage Trust, Series 2006-C1,
Class AJ, 5.276%, 2/15/41 488,050
600,000 ML-CFC Commercial Mortgage Trust, Series 2006-4,
Class AJ, 5.239%, 12/12/49 596,638
500,000(a) Morgan Stanley Capital I Trust, Series 2007-T25,
Class AJ, 5.574%, 11/12/49 492,488
------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $5,374,917) $ 5,243,579
------------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE LOAN
INTERESTS -- 30.2% of Net Assets*(c)
AUTOMOBILES & COMPONENTS -- 2.5%
Auto Parts & Equipment -- 1.7%
493,734 Crowne Group LLC, First Lien Initial Term Loan, 6.0%,
9/30/20 $ 476,454
349,113 Electrical Components International, Inc., Term Loan,
5.75%, 5/28/21 349,766
184,585 Federal-Mogul Corp., Tranche C Term Loan,
4.75%, 4/15/21 176,740
161,698 Key Safety Systems, Inc., Initial Term Loan,
4.75%, 8/29/21 162,001
252,064 MPG Holdco I, Inc., Initial Term Loan, 3.75%, 10/20/21 250,984
178,647 TI Group Automotive Systems LLC, Initial US Term
Loan, 4.5%, 6/30/22 178,647
788,667 Tower Automotive Holdings USA LLC, Refinancing Term
Loan, 4.0%, 4/23/20 788,667
-------------
$ 2,383,259
------------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 0.6%
839,209 Chrysler Group LLC, Term Loan B, 3.5%, 5/24/17 $ 840,330
------------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.2%
287,500 Goodyear Tire & Rubber Co., Second Lien Term Loan,
3.75%, 4/30/19 $ 288,488
-------------
Total Automobiles & Components $ 3,512,077
------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 4.4%
Aerospace & Defense -- 0.3%
121,632 TASC, Inc., First Lien Term Loan, 7.0%, 5/22/20 $ 121,277
228,422 Vencore, Inc., (fka SI Organization, Inc.), Initial First
Lien Term Loan, 5.75%, 11/23/19 228,707
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 15
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Aerospace & Defense -- (continued)
157,600 WP CPP Holdings LLC, Second Lien Term Loan B-1,
8.75%, 4/30/21 $ 137,112
-------------
$ 487,096
------------------------------------------------------------------------------------------------------
Building Products -- 1.3%
911,001 Builders FirstSource, Inc., Term Loan B, 6.0%, 7/29/22 $ 911,429
498,750 Quanex Building Products Corp., Initial Term Loan,
6.25%, 11/2/22 500,620
392,673 Unifrax Holding Co., New Term B Dollar Loan,
4.25%, 11/28/18 373,040
-------------
$ 1,785,089
------------------------------------------------------------------------------------------------------
Construction Machinery & Heavy Trucks -- 0.3%
389,025 Navistar, Inc., Tranche B Term Loan, 6.5%, 8/7/20 $ 369,898
------------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.4%
515,520 WireCo WorldGroup, Inc., Term Loan, 6.0%, 2/15/17 $ 510,042
------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 1.0%
493,192 Doosan Infracore International, Inc. (Doosan Holdings
Europe, Ltd.), Tranche B Term Loan, 4.5%, 5/28/21 $ 487,335
100,419 Faenza Acquisition GmbH (CeramTec Acquisition Corp.),
Dollar Term B-3 Loan, 4.25%, 8/30/20 100,482
329,533 Faenza Acquisition GmbH (CeramTec Acquisition Corp.),
Initial Dollar Term B-1 Loan, 4.25%, 8/30/20 329,739
35,029 Faenza Acquisition GmbH (CeramTec Acquisition Corp.),
Initial Dollar Term B-2 Loan, 4.25%, 8/30/20 35,051
399,694 Filtration Group Corp., Initial Second Lien Term Loan,
8.25%, 11/22/21 393,199
10,605 Kleopatra Holdings 2 SCA, Initial German Borrower
Dollar Term Loan, 5.0%, 4/28/20 10,632
24,816 Kleopatra Holdings 2 SCA, Initial US Borrower Dollar
Term Loan, 5.0%, 4/28/20 24,878
-------------
$ 1,381,316
------------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.7%
497,500 NN, Inc., Initial Term Loan, 5.75%, 10/19/22 $ 495,013
472,574 Xerium Technologies, Inc., New Term Loan,
6.25%, 5/17/19 461,941
-------------
$ 956,954
------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.4%
292,920 AWAS Finance Luxembourg 2012 SA, Term Loan,
3.5%, 7/16/18 $ 293,836
284,593 WESCO Distribution, Inc., Tranche B-1 Loan,
3.75%, 12/12/19 285,482
-------------
$ 579,318
-------------
Total Capital Goods $ 6,069,713
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.5%
Environmental & Facilities Services -- 0.3%
500,000 Granite Acquisition, Inc., Second Lien Term B Loan,
8.25%, 12/19/22 $ 392,500
------------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.2%
120,230 Monitronics International, Inc., 2013 Term Loan B,
4.25%, 3/23/18 $ 115,421
126,931 Protection One, Inc., 2012 Term Loan, 5.0%, 7/1/21 127,301
-------------
$ 242,722
-------------
Total Commercial & Professional Services $ 635,222
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.1%
Leisure Products -- 0.1%
164,514 Bombardier Recreational Products, Inc., Term B
Loan, 3.75%, 1/30/19 $ 164,056
-------------
Total Consumer Durables & Apparel $ 164,056
------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 1.5%
Casinos & Gaming -- 0.2%
296,250 Scientific Games International, Inc., Initial Term B-2
Loan, 6.0%, 10/1/21 $ 292,640
------------------------------------------------------------------------------------------------------
Leisure Facilities -- 0.1%
130,463 Fitness International LLC, Term B Loan, 7.0%, 7/1/20 $ 128,180
------------------------------------------------------------------------------------------------------
Restaurants -- 0.7%
380,419 Landry's, Inc. (fka Landry's Restaurants, Inc.), Term
Loan B, 4.0%, 4/24/18 $ 381,251
529,800 NPC International, Inc., Term Loan, 4.75%, 12/28/18 527,151
-------------
$ 908,402
------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.5%
746,250 KC MergerSub, Inc., First Lien Initial Term Loan,
6.0%, 8/12/22 $ 742,519
-------------
Total Consumer Services $ 2,071,741
------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.3%
Consumer Finance -- 0.1%
214,076 Trans Union LLC, Term B-2 Loan, 3.5%, 4/9/21 $ 213,474
------------------------------------------------------------------------------------------------------
Specialized Finance -- 0.2%
247,500 DBRS, Ltd., Initial Term Loan, 6.25%, 3/4/22 $ 245,489
-------------
Total Diversified Financials $ 458,963
------------------------------------------------------------------------------------------------------
ENERGY -- 0.8%
Coal & Consumable Fuels -- 0.1%
352,500 PT Bumi Resources Tbk, Term Loan, 18.0%, 11/4/16 $ 70,500
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 17
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.3%
479,321 TerraForm AP Acquisition Holdings LLC, Term Loan,
5.0%, 6/27/22 $ 421,802
------------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.2%
444,680 Jonah Energy LLC, Initial Second Lien Term Loan,
7.5%, 5/12/21 $ 307,941
------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.2%
541,453 FR Dixie Acquisition Corp., Term Loan, 5.75%, 12/18/20 $ 257,190
-------------
Total Energy $ 1,057,433
------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.3%
Food Distributors -- 0.3%
395,442 AdvancePierre Foods, Inc., Second Lien Term Loan,
9.5%, 10/10/17 $ 395,195
-------------
Total Food & Staples Retailing $ 395,195
------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.3%
Packaged Foods & Meats -- 0.3%
475,105 Dole Food Co., Inc., Tranche B Term Loan,
4.5%, 11/1/18 $ 475,105
-------------
Total Food, Beverage & Tobacco $ 475,105
------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 3.4%
Health Care Equipment -- 0.5%
500,000 Concentra, Inc., Initial Second Lien Term Loan,
9.0%, 6/1/23 $ 490,150
234,725 Kinetic Concepts, Inc., Dollar E-1 Term Loan,
4.5%, 5/4/18 234,931
-------------
$ 725,081
------------------------------------------------------------------------------------------------------
Health Care Facilities -- 1.5%
233,397 CHS/Community Health Systems, Inc., Incremental
2018 Term F Loan, 3.79%, 12/31/18 $ 232,577
246,916 CHS/Community Health Systems, Inc., Incremental
2019 Term G Loan, 3.75%, 12/31/19 243,572
454,316 CHS/Community Health Systems, Inc., Incremental
2021 Term H Loan, 4.0%, 1/27/21 448,239
193,530 HCA, Inc., Tranche B-6 Term Loan, 3.685%, 3/17/23 195,103
316,125 Kindred Healthcare, Inc., Incremental Term Loan,
4.25%, 4/9/21 315,335
296,947 Steward Health Care System LLC, Term Loan,
6.75%, 4/10/20 292,492
400,304 Surgical Care Affiliates, Inc., Initial Term Loan,
4.25%, 3/17/22 400,805
-------------
$ 2,128,123
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Health Care Services -- 0.9%
343,156 Bioscrip, Inc., Initial Term B Loan, 6.5%, 7/31/20 $ 315,703
205,893 Bioscrip, Inc., Term Loan, 6.5%, 7/31/20 189,422
348,250 HC Group Holdings III, Inc., Initial First Lien Term
Loan, 6.0%, 4/7/22 348,830
200,900 National Mentor Holdings, Inc., Tranche B Term
Loan, 4.25%, 1/31/21 200,712
262,348 Valitas Health Services, Inc., Term Loan B,
6.0%, 6/2/17 158,721
-------------
$ 1,213,388
------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.2%
231,234 Alere, Inc., Term Loan B, 4.25%, 6/20/22 $ 230,385
------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.3%
235,840 IMS Health, Inc., Tranche B-1 Dollar Term Loan,
3.5%, 3/17/21 $ 236,380
375,258(d) Medical Card System, Inc., Term Loan, 1.5%, 5/31/19 243,918
-------------
$ 480,298
-------------
Total Health Care Equipment & Services $ 4,777,275
------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.6%
Household Products -- 0.3%
306,431 Dollar Tree, Inc., Term B-1 Loan, 3.5%, 7/6/22 $ 307,799
185,688 SRAM LLC, First Lien Term Loan, 4.012%, 4/10/20 163,406
-------------
$ 471,205
------------------------------------------------------------------------------------------------------
Personal Products -- 0.3%
100,000 Atrium Innovations, Inc., Second Lien Term Loan,
7.75%, 8/13/21 $ 83,000
207,004 NBTY, Inc., B-2 Term Loan, 3.753%, 10/1/17 207,289
127,867 NBTY, Inc., Term Loan B, 4.0%, 5/5/23 128,426
-------------
$ 418,715
-------------
Total Household & Personal Products $ 889,920
------------------------------------------------------------------------------------------------------
INSURANCE -- 2.6%
Life & Health Insurance -- 0.4%
467,347 Integro, Ltd., Initial Term Loan, 6.75%, 10/31/22 $ 450,990
31,481 Integro, Ltd., Term Loan, 6.75%, 10/31/22 30,380
-------------
$ 481,370
------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.1%
166,909 Alliant Holdings I LLC, Term Loan B, 4.5%, 8/12/22 $ 165,761
------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 2.1%
742,305 Confie Seguros Holding II Co., First Lien Term Loan B,
5.75%, 11/9/18 $ 731,634
593,765 Confie Seguros Holding II Co., Second Lien Term
Loan, 10.25%, 5/8/19 562,592
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 19
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- (continued)
742,500 Hyperion Insurance Group, Ltd., Initial Term B Loan,
5.5%, 4/29/22 $ 738,169
933,969 USI, Inc., Initial Term Loan, 4.25%, 12/27/19 923,754
-------------
$ 2,956,149
-------------
Total Insurance $ 3,603,280
------------------------------------------------------------------------------------------------------
MATERIALS -- 2.0%
Diversified Chemicals -- 0.2%
273,625 Univar USA, Inc., Initial Dollar Term Loan,
4.25%, 7/1/22 $ 270,661
------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.0%+
75,256(e)(f) PT Bakrie & Brothers Tbk, Facility Term Loan B,
8.15%, 11/25/14 $ 15,051
------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.8%
389,223 Tank Holding Corp., Initial Term Loan, 5.25%, 3/16/22 $ 371,708
744,375 Tekni-Plex, Inc., USD Term Loan, 4.5%, 6/1/22 738,172
-------------
$ 1,109,880
------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.3%
488,214 Caraustar Industries, Inc., Incremental Term Loan,
8.0%, 5/1/19 $ 487,197
------------------------------------------------------------------------------------------------------
Paper Products -- 0.3%
287,111 Appvion, Inc., Term Commitment, 6.25%, 6/28/19 $ 274,550
78,935 Exopack Holdings SA, USD Term Loan, 4.5%, 5/8/19 78,343
-------------
$ 352,893
------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.4%
23,810 Chemtura Corp., New Term Loan, 3.5%, 8/29/16 $ 23,899
497,500 Macdermid, Inc. (Platform Specialty Products Corp.),
Term Loan B3, 5.5%, 6/7/20 489,299
-------------
$ 513,198
-------------
Total Materials $ 2,748,880
------------------------------------------------------------------------------------------------------
MEDIA -- 2.9%
Advertising -- 0.6%
940,853 Affinion Group, Inc., Tranche B Term Loan,
6.75%, 4/30/18 $ 831,186
------------------------------------------------------------------------------------------------------
Broadcasting -- 0.9%
270,000 Hubbard Radio LLC, Term Loan, 4.25%, 5/27/22 $ 263,475
300,000 Learfield Communications, Inc., Initial Second Lien
Term Loan, 8.75%, 10/8/21 298,781
295,500 MediArena Acquisition BV (fka AP NMT Acquisition BV),
First Lien Dollar Term B Loan, 6.75%, 8/13/21 253,637
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Broadcasting -- (continued)
457,383 Univision Communications, Inc., Replacement First
Lien Term Loan, 4.0%, 3/1/20 $ 457,873
-------------
$ 1,273,766
------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.0%+
29,497 Cinedigm Digital Funding I LLC, Term Loan,
3.75%, 2/28/18 $ 29,275
------------------------------------------------------------------------------------------------------
Publishing -- 1.4%
510,947 Cengage Learning Acquisitions, Inc., Term Loan,
7.0%, 3/31/20 $ 508,903
322,563 Houghton Mifflin Holdings, Inc., Term Loan,
4.0%, 5/28/21 316,515
92,871 Lee Enterprises, Inc., First Lien Term Loan,
7.25%, 3/31/19 92,694
928,625 McGraw-Hill School Education Holdings LLC, Term B
Loan, 6.25%, 12/18/19 930,076
-------------
$ 1,848,188
-------------
Total Media $ 3,982,415
------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 1.9%
Biotechnology -- 0.5%
719,757 Lantheus Medical Imaging, Inc., Term Loan,
7.0%, 6/30/22 $ 644,182
------------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 1.0%
995,000 Albany Molecular Research, Inc., Term Loan B,
5.75%, 7/16/21 $ 998,731
425,594 Catalent Pharma Solutions, Inc., Dollar Term Loan,
4.25%, 5/20/21 428,154
-------------
$ 1,426,885
------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.4%
548,625 Concordia Healthcare Corp., Initial Dollar Term Loan,
5.25%, 10/21/21 $ 545,539
-------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 2,616,606
------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.9%
Retail REITs -- 0.6%
275,297 DTZ U.S. Borrower LLC, First Lien Initial Term Loan,
4.25%, 11/4/21 $ 275,526
500,000 DTZ U.S. Borrower LLC, Second Lien Initial Term Loan,
9.25%, 11/4/22 501,875
-------------
$ 777,401
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 21
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Specialized REIT -- 0.3%
498,744 Communications Sales & Leasing, Inc. (CSL Capital,
LLC), Term Loan, 5.0%, 10/24/22 $ 490,431
-------------
Total Real Estate $ 1,267,832
------------------------------------------------------------------------------------------------------
RETAILING -- 0.7%
Automotive Retail -- 0.5%
638,750 CWGS Group LLC, Term Loan, 5.75%, 2/20/20 $ 637,952
------------------------------------------------------------------------------------------------------
Computer & Electronics Retail -- 0.1%
42,088(d)(g) Targus Group International, Inc., Tranche A-2 Term
Loan, 15.0% (15.0% PIK 0% cash), 12/31/19 $ 42,088
126,263(d)(g) Targus Group International, Inc., Tranche A-2/B Term
Loan, 14.0% (14.0% PIK 0% cash), 12/31/19 126,263
-------------
$ 168,351
------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.1%
156,899 Petsmart, Inc., Tranche B-1 Loan, 4.25%, 3/11/22 $ 156,587
-------------
Total Retailing $ 962,890
------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.3%
Semiconductor Equipment -- 0.3%
411,904 VAT Lux II S.a.r.l., Term Loan, 4.25%, 2/11/21 $ 404,181
-------------
Total Semiconductors & Semiconductor Equipment $ 404,181
------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 1.7%
Application Software -- 0.9%
495,067 Epiq Systems, Inc., Term Loan, 4.5%, 8/27/20 $ 493,829
210,670 Expert Global Solutions, Inc., Advance First Lien Term
Loan B, 8.5%, 4/3/18 206,983
500,000 Vertafore, Inc., Second Lien Term Loan,
9.75%, 10/27/17 501,625
-------------
$ 1,202,437
------------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 0.8%
245,625 Evergreen Skills Lux S.a.r.l., First Lien Initial Term
Loan, 5.75%, 4/28/21 $ 216,150
621,875 Sitel Worldwide Corp., First Lien Term B-1 Loan,
6.5%, 9/18/21 619,543
270,000 TaxACT, Inc. (H.D. Vest, Inc.), Initial Term Loan,
7.0%, 1/3/23 272,363
-------------
$ 1,108,056
-------------
Total Software & Services $ 2,310,493
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.4%
Communications Equipment -- 0.1%
64,644 CommScope, Inc., Tranche 4 Term Loan,
3.313%, 1/14/18 $ 64,623
------------------------------------------------------------------------------------------------------
Electronic Components -- 0.3%
455,400 Mirion Technologies (Finance) LLC (Mirion
Technologies, Inc.), First Lien Initial Term Loan,
5.75%, 3/31/22 $ 452,364
-------------
Total Technology Hardware & Equipment $ 516,987
------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.8%
Integrated Telecommunication Services -- 0.6%
495,000 GCI Holdings, Inc., Term B Loan, 4.0%, 2/2/22 $ 496,547
351,471 Securus Technologies Holdings, Inc., Term Loan B2,
5.25%, 4/30/20 335,728
-------------
$ 832,275
------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.2%
282,407 Syniverse Holdings, Inc., Initial Term Loan,
4.0%, 4/23/19 $ 228,749
126,139 Syniverse Holdings, Inc., Tranche B Term Loan,
4.0%, 4/23/19 102,173
-------------
$ 330,922
-------------
Total Telecommunication Services $ 1,163,197
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.0%
Marine -- 0.7%
622,129 Commercial Barge Line Co., Initial First Lien Term
Loan, 9.75%, 11/12/20 $ 544,363
471,045 Navios Maritime Partners LP, Term Loan,
5.25%, 6/27/18 416,875
-------------
$ 961,238
------------------------------------------------------------------------------------------------------
Trucking -- 0.3%
494,937 YRC Worldwide, Inc., Initial Term Loan, 8.0%, 2/13/19 $ 445,443
-------------
Total Transportation $ 1,406,681
------------------------------------------------------------------------------------------------------
UTILITIES -- 0.3%
Electric Utilities -- 0.3%
413,537 APLH Holdings Limited Partnership, Term Loan,
6.0%, 4/13/23 $ 412,503
-------------
Total Utilities $ 412,503
------------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING
RATE LOAN INTERESTS
(Cost $43,455,404) $ 41,902,645
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 23
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 92.8% of
Net Assets
AUTOMOBILES & COMPONENTS -- 0.3%
Auto Parts & Equipment -- 0.3%
454,000 International Automotive Components Group SA,
9.125%, 6/1/18 (144A) $ 407,465
-------------
Total Automobiles & Components $ 407,465
------------------------------------------------------------------------------------------------------
BANKS -- 4.6%
Diversified Banks -- 4.6%
525,000 Banco de Galicia y Buenos Aires, 8.75%, 5/4/18 (144A) $ 541,406
400,000(a) Banco Macro SA, 9.75%, 12/18/36 402,000
200,000(a)(h) Banco Santander SA, 6.375% 183,498
325,000(a)(h) Bank of America Corp., 6.25% 326,219
680,000 Banque Ouest Africaine de Developpement, 5.5%,
5/6/21 (144A) 680,816
950,000(a)(h) BNP Paribas SA, 7.625% (144A) 971,375
1,000,000(a)(h) Credit Agricole SA, 7.875% (144A) 960,512
350,000(a)(h) ING Groep NV, 6.5% 322,219
200,000(a)(h) Royal Bank of Scotland Group Plc, 7.5% 186,500
500,000(a)(h) Royal Bank of Scotland Group Plc, 8.0% 479,219
200,000 Sberbank of Russia Via SB Capital SA, 5.25%,
5/23/23 (144A) 193,750
245,000 Trade & Development Bank of Mongolia LLC, 9.375%,
5/19/20 (144A) 227,732
750,000 UBS AG / Stamford CT, 7.625%, 8/17/22 863,437
-------------
Total Banks $ 6,338,683
------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 3.6%
Aerospace & Defense -- 1.0%
400,000 ADS Tactical, Inc., 11.0%, 4/1/18 (144A) $ 411,000
680,000 DynCorp International, Inc., 10.375%, 7/1/17 574,600
435,000 LMI Aerospace, Inc., 7.375%, 7/15/19 419,775
-------------
$ 1,405,375
------------------------------------------------------------------------------------------------------
Agricultural & Farm Machinery -- 0.3%
475,000 Titan International, Inc., 6.875%, 10/1/20 $ 410,875
------------------------------------------------------------------------------------------------------
Building Products -- 0.2%
300,000 USG Corp., 7.875%, 3/30/20 (144A) $ 312,750
------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.0%+
200,000(e) Empresas ICA SAB de CV, 8.9%, 2/4/21 (144A) $ 48,000
------------------------------------------------------------------------------------------------------
Construction Machinery & Heavy Trucks -- 0.3%
360,000 Meritor, Inc., 6.75%, 6/15/21 $ 340,200
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.4%
455,000 JB Poindexter & Co., Inc., 9.0%, 4/1/22 (144A) $ 478,888
------------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.9%
560,000 Apex Tool Group LLC, 7.0%, 2/1/21 (144A) $ 504,000
450,000 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) 441,000
229,061(d)(g) Liberty Tire Recycling LLC, 11.0% (11.0% PIK 0.0%
cash), 3/31/21 (144A) 169,505
150,000 Xerium Technologies, Inc., 8.875%, 6/15/18 132,375
-------------
$ 1,246,880
------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.5%
150,000 H&E Equipment Services, Inc., 7.0%, 9/1/22 $ 151,500
544,000 TRAC Intermodal LLC / TRAC Intermodal Corp.,
11.0%, 8/15/19 588,880
-------------
$ 740,380
-------------
Total Capital Goods $ 4,983,348
------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 1.1%
Commercial Printing -- 0.2%
340,000 Cenveo Corp., 6.0%, 8/1/19 (144A) $ 263,500
------------------------------------------------------------------------------------------------------
Diversified Support Services -- 0.9%
280,000 Broadspectrum, Ltd., 8.375%, 5/15/20 (144A) $ 303,800
950,000 NANA Development Corp., 9.5%, 3/15/19 (144A) 819,375
260,000 TMS International Corp., 7.625%, 10/15/21 (144A) 182,000
-------------
$ 1,305,175
-------------
Total Commercial & Professional Services $ 1,568,675
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.6%
Home Furnishings -- 0.4%
535,000 Tempur Sealy International, Inc., 6.875%, 12/15/20 $ 563,756
------------------------------------------------------------------------------------------------------
Homebuilding -- 0.7%
350,000 Brookfield Residential Properties, Inc., 6.375%,
5/15/25 (144A) $ 315,000
250,000 KB Home, 7.0%, 12/15/21 255,000
340,000 KB Home, 7.625%, 5/15/23 346,800
-------------
$ 916,800
------------------------------------------------------------------------------------------------------
Leisure Products -- 0.5%
695,000 Icon Health & Fitness, Inc., 11.875%,
10/15/16 (144A) $ 672,413
-------------
Total Consumer Durables & Apparel $ 2,152,969
------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.1%
Casinos & Gaming -- 1.0%
832,066(e)(g) Mashantucket Western Pequot Tribe, 6.5%, (5.5%
PIK 1.0% cash), 7/1/36 $ 4,160
365,000 MGM Resorts International, 6.0%, 3/15/23 379,144
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 25
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Casinos & Gaming -- (continued)
100,000 Scientific Games International, Inc., 6.25%, 9/1/20 $ 64,250
1,200,000 Scientific Games International, Inc., 10.0%, 12/1/22 991,800
-------------
$ 1,439,354
------------------------------------------------------------------------------------------------------
Hotels, Resorts & Cruise Lines -- 0.4%
245,000 Viking Cruises, Ltd., 6.25%, 5/15/25 (144A) $ 196,000
325,000 Viking Cruises, Ltd., 8.5%, 10/15/22 (144A) 305,500
-------------
$ 501,500
------------------------------------------------------------------------------------------------------
Leisure Facilities -- 0.5%
EUR 566,487 Cirsa Funding Luxembourg SA, 8.75%, 5/15/18 (144A) $ 651,928
------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 1.2%
1,153,000 Constellis Holdings LLC / Constellis Finance Corp.,
9.75%, 5/15/20 (144A) $ 1,043,465
290,000 Prime Security Services Borrower LLC / Prime
Finance, Inc., 9.25%, 5/15/23 (144A) 300,875
315,000 StoneMor Partners LP / Cornerstone Family Services
of WV, 7.875%, 6/1/21 315,000
-------------
$ 1,659,340
-------------
Total Consumer Services $ 4,252,122
------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 1.8%
Consumer Finance -- 0.7%
445,000 Jefferies Finance LLC / JFIN Co-Issuer Corp.,
7.375%, 4/1/20 (144A) $ 410,512
203,374 Tarjeta Naranja SA, 9.0%, 1/28/17 (144A) 206,730
440,000 TMX Finance LLC / TitleMax Finance Corp., 8.5%,
9/15/18 (144A) 343,200
-------------
$ 960,442
------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.1%
240,000(a)(h) Goldman Sachs Capital II, 4.0% $ 172,944
------------------------------------------------------------------------------------------------------
Specialized Finance -- 1.0%
750,000(c) Bosphorus, Ltd., 3.735%, 8/17/18 (144A) $ 748,500
175,000 Nationstar Mortgage LLC / Nationstar Capital Corp.,
6.5%, 7/1/21 153,563
580,000 Nationstar Mortgage LLC / Nationstar Capital Corp.,
6.5%, 6/1/22 497,350
-------------
$ 1,399,413
-------------
Total Diversified Financials $ 2,532,799
------------------------------------------------------------------------------------------------------
ENERGY -- 8.5%
Integrated Oil & Gas -- 0.2%
MXN 540,000 Petroleos Mexicanos, 7.19%, 9/12/24 (144A) $ 27,627
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- (continued)
325,000 YPF SA, 8.875%, 12/19/18 (144A) $ 348,872
-------------
$ 376,499
------------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.5%
160,000 Drill Rigs Holdings, Inc., 6.5%, 10/1/17 (144A) $ 99,600
442,000 Rowan Cos., Inc., 5.4%, 12/1/42 289,510
62,000 Rowan Cos., Inc., 5.85%, 1/15/44 42,315
320,000 Shelf Drill Holdings, Ltd., 8.625%, 11/1/18 (144A) 227,200
-------------
$ 658,625
------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 0.6%
330,000(c) FTS International, Inc., 8.134%, 6/15/20 (144A) $ 240,900
425,000 McDermott International, Inc., 8.0%, 5/1/21 (144A) 352,750
310,000 Weatherford International, Ltd., 5.95%, 4/15/42 229,400
-------------
$ 823,050
------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 3.5%
100,000 Comstock Resources, Inc., 9.5%, 6/15/20 $ 14,000
360,000 GeoPark Latin America, Ltd., Agencia en Chile,
7.5%, 2/11/20 (144A) 255,600
570,000 Gulfport Energy Corp., 7.75%, 11/1/20 575,700
402,000 Halcon Resources Corp., 12.0%, 2/15/22 (144A) 286,425
600,000 Midstates Petroleum Co., Inc., 9.25%, 6/1/21 9,000
450,000 Novatek OAO via Novatek Finance, Ltd., 4.422%,
12/13/22 (144A) 429,840
355,000 Oasis Petroleum, Inc., 7.25%, 2/1/19 337,250
535,000 PDC Energy, Inc., 7.75%, 10/15/22 553,725
506,000 PetroQuest Energy, Inc., 10.0%, 2/15/21 (144A) 323,840
240,000(e) Quicksilver Resources, Inc., 7.125%, 4/1/16 24
375,000 Rice Energy, Inc., 6.25%, 5/1/22 371,250
870,000 Sanchez Energy Corp., 7.75%, 6/15/21 715,575
150,000 Whiting Petroleum Corp., 5.0%, 3/15/19 132,750
480,000 Whiting Petroleum Corp., 5.75%, 3/15/21 399,600
300,000 WPX Energy, Inc., 7.5%, 8/1/20 285,750
150,000 WPX Energy, Inc., 8.25%, 8/1/23 141,000
-------------
$ 4,831,329
------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 1.6%
669,000 Calumet Specialty Products Partners LP / Calumet
Finance Corp., 6.5%, 4/15/21 $ 461,610
118,000 EnLink Midstream Partners LP, 5.05%, 4/1/45 88,688
344,000 EnLink Midstream Partners LP, 5.6%, 4/1/44 261,975
925,000 Sunoco LP / Sunoco Finance Corp., 6.375%,
4/1/23 (144A) 938,875
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 27
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- (continued)
520,000 Western Refining Logistics LP / WNRL Finance Corp.,
7.5%, 2/15/23 $ 497,900
-------------
$ 2,249,048
------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 2.1%
220,000 Blue Racer Midstream LLC / Blue Racer Finance
Corp., 6.125%, 11/15/22 (144A) $ 194,700
450,000(c) Energy Transfer Partners LP, 3.654%, 11/1/66 265,500
950,000 Genesis Energy LP / Genesis Energy Finance Corp.,
6.75%, 8/1/22 912,047
480,000 Global Partners LP / GLP Finance Corp.,
7.0%, 6/15/23 403,498
170,000 PBF Logistics LP / PBF Logistics Finance Corp.,
6.875%, 5/15/23 164,475
1,175,000 Williams Cos., Inc., 5.75%, 6/24/44 916,500
-------------
$ 2,856,720
-------------
Total Energy $ 11,795,271
------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.3%
Food Retail -- 0.3%
200,000 C&S Group Enterprises LLC, 5.375%, 7/15/22 (144A) $ 192,000
260,000 Tops Holding LLC / Tops Markets II Corp., 8.0%,
6/15/22 (144A) 232,700
-------------
Total Food & Staples Retailing $ 424,700
------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 9.2%
Agricultural Products -- 0.8%
900,000 Pinnacle Operating Corp., 9.0%, 11/15/20 (144A) $ 765,000
520,000 Southern States Cooperative, Inc., 10.0%,
8/15/21 (144A) 327,600
225,000(e) Tonon Luxembourg SA, 10.5%, 5/14/24 (144A) 94,725
-------------
$ 1,187,325
------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 7.1%
225,000 Agrokor DD, 8.875%, 2/1/20 (144A) $ 239,625
EUR 200,000 Agrokor DD, 9.875%, 5/1/19 (144A) 241,250
650,000 Bertin SA / Bertin Finance, Ltd., 10.25%,
10/5/16 (144A) 665,340
500,000(e) CFG Investment SAC, 9.75%, 7/30/19 (144A) 335,000
1,100,000 FAGE Dairy Industry SA / FAGE USA Dairy Industry,
Inc., 9.875%, 2/1/20 (144A) 1,142,625
900,000 JBS Investments GmbH, 7.25%, 4/3/24 (144A) 870,750
515,000 Marfrig Holding Europe BV, 6.875%, 6/24/19 (144A) 509,850
800,000 Marfrig Holding Europe BV, 8.375%, 5/9/18 (144A) 824,000
700,000 Marfrig Holding Europe BV, 11.25%, 9/20/21 (144A) 672,000
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- (continued)
475,000 Marfrig Overseas, Ltd., 9.5%, 5/4/20 (144A) $ 486,875
700,000 MHP SA, 8.25%, 4/2/20 (144A) 626,500
1,600,000 Minerva Luxembourg SA, 7.75%, 1/31/23 (144A) 1,626,000
200,000 Minerva Luxembourg SA, 12.25%, 2/10/22 (144A) 209,750
600,000 Pesquera Exalmar SAA, 7.375%, 1/31/20 (144A) 445,500
640,000 Post Holdings, Inc., 6.75%, 12/1/21 (144A) 670,803
200,000 Post Holdings, Inc., 7.75%, 3/15/24 (144A) 217,500
-------------
$ 9,783,368
------------------------------------------------------------------------------------------------------
Soft Drinks -- 0.3%
355,000 Cott Beverages, Inc., 5.375%, 7/1/22 $ 364,763
------------------------------------------------------------------------------------------------------
Tobacco -- 1.0%
1,645,000 Alliance One International, Inc., 9.875%, 7/15/21 $ 1,369,462
-------------
Total Food, Beverage & Tobacco $ 12,704,918
------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 1.7%
Health Care Facilities -- 1.0%
700,000 Kindred Healthcare, Inc., 6.375%, 4/15/22 $ 640,500
475,000 Universal Hospital Services, Inc., 7.625%, 8/15/20 443,555
285,000 Vizient, Inc., 10.375%, 3/1/24 (144A) 307,800
-------------
$ 1,391,855
------------------------------------------------------------------------------------------------------
Health Care Services -- 0.5%
425,000 BioScrip, Inc., 8.875%, 2/15/21 $ 361,250
235,000 RegionalCare Hospital Partners Holdings, Inc.,
8.25%, 5/1/23 (144A) 244,400
-------------
$ 605,650
------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.2%
275,000 Change Healthcare Holdings, Inc., 11.0%, 12/31/19 $ 292,703
-------------
Total Health Care Equipment & Services $ 2,290,208
------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.8%
Household Products -- 0.6%
EUR 350,000(c) Hydra Dutch Holdings 2BV, 5.251%, 4/15/19 (144A) $ 380,900
460,000 Springs Industries, Inc., 6.25%, 6/1/21 468,050
-------------
$ 848,950
------------------------------------------------------------------------------------------------------
Personal Products -- 0.2%
345,000 Monitronics International, Inc., 9.125%, 4/1/20 $ 294,112
-------------
Total Household & Personal Products $ 1,143,062
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 29
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
INSURANCE -- 31.1%
Insurance Brokers -- 0.0%+
GBP 10,489(c) Towergate Finance Plc, 8.5%, 3/2/20 (144A) $ 15,552
------------------------------------------------------------------------------------------------------
Life & Health Insurance -- 0.0%+
GBP 59,442 TIG FINCO Plc, 8.75%, 4/2/20 (144A) $ 70,334
------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 3.6%
6,000,000(b)(d) Fixed Income Trust, Series 2013-A, 0.0%,
10/15/97 (144A) $ 5,247,802
80,000(a)(h) White Mountains Insurance Group, Ltd., 7.506% (144A) 78,600
-------------
$ 5,326,402
------------------------------------------------------------------------------------------------------
Reinsurance -- 27.5%
500,000(c) Akibare Re, Ltd., 3.239%, 4/7/20 (144A) (Cat Bond) $ 504,000
695,760(i)(j) Altair Re III, Ltd. (Willis Securities, Inc.), Variable
Rate Notes, 6/30/17 113,200
500,000(c) Aozora Re, Ltd., 2.953%, 4/7/20 (144A) (Cat Bond) 501,300
1,000,000(c) Bosphorus Re, Ltd., 2.5%, 5/3/16 (144A)
(Cat Bond) 1,000,000
800,000(i)(j) Carnousite Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 2/19/16 16,320
1,000,000(i)(j) Carnousite Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 11/30/20 1,020,100
750,000(c) Citrus Re, Ltd., 7.5%, 2/25/19 (Cat Bond) (144A) 755,775
EUR 1,000,000(i)(j) Dundonald Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 1/17/17 1,047,538
1,750,000(c) East Lane Re VI, Ltd., 2.75%, 3/14/18 (144A)
(Cat Bond) 1,722,700
250,000(c) Galileo Re, Ltd., 9.0%, 1/8/19 (144A) (Cat Bond) 252,300
250,000(c) Galileo Re, Ltd., 13.5%, 1/8/19 (144A) (Cat Bond) 252,375
2,000,000(c) Gator Re, Ltd., 6.27%, 1/9/17 (144A) (Cat Bond) 1,937,400
2,400,000(i)(j) Gleneagles Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 11/30/20 2,469,120
2,500,000(i)(j) Gullane Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 11/30/20 2,648,500
1,500,000(c) Ibis Re II, Ltd., 4.0%, 6/28/16 (144A) (Cat Bond) 1,500,300
2,000,000(i)(j) Lahinch Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 6/15/16 2,021,400
1,000,000(i)(j) Lahinch Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 5/10/21 962,730
1,750,000(c) Longpoint Re, Ltd. III, 4.2%, 5/18/16 (144A)
(Cat Bond) 1,746,850
1,450,000(i)(j) Lorenz Re, Ltd. (Prime, Ltd.), Variable Rate
Notes, 3/31/18 101,500
1,000,000(c) Merna Reinsurance V, Ltd., 2.0%, 4/7/17 (144A)
(Cat Bond) 996,100
750,000(c) MetroCat Re, Ltd., 4.5%, 8/5/16 (144A) (Cat Bond) 750,450
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
3,000,000(i)(j) Pangaea Re Segregated Account (Kane SAC, Ltd.),
Series 2015-1, Variable Rate Notes, 2/1/19 $ 89,700
2,000,000(i)(j) Pangaea Re Segregated Account (Kane SAC, Ltd.),
Series 2016-1, Variable Rate Notes, 2/1/20 2,026,200
2,004,948(i)(j) PI-6 Segregated Account (Kane SAC, Ltd.), Series C,
Variable Rate Notes, 7/7/16 2,010,161
1,000,000(c) Queen Street VIII Re, Ltd., 6.5%, 6/8/16 (144A)
(Cat Bond) 1,002,100
500,000(c) Queen Street IX Re, Ltd., 5.5%, 6/8/17 (144A)
(Cat Bond) 499,250
2,000,000(c) Queen Street X Re, Ltd., 5.75%, 6/8/18 (144A)
(Cat Bond) 1,996,600
1,000,000(c) Residential Reinsurance 2012, Ltd., 22.0%,
6/6/16 (144A) (Cat Bond) 1,009,600
1,000,000(i)(j) Silverton Re, Ltd. (Aon Benfield Securities, Inc.),
Variable Rate Notes, 9/16/16 (144A) 4,600
1,000,000(i)(j) Silverton Re, Ltd. (Aon Benfield Securities, Inc.),
Variable Rate Notes, 9/18/17 (144A) 41,200
1,000,000(i)(j) Silverton Re, Ltd. (Aon Benfield Securities, Inc.),
Variable Rate Notes, 9/17/18 (144A) 1,040,900
1,000,000(i)(j) St. Andrews Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 1/22/16 19,700
1,000,000(i)(j) St. Andrews Segregated Account (Kane SAC, Ltd.),
Variable Rate Notes, 2/1/18 1,026,700
1,750,000(c) Tar Heel Re, Ltd., Series 2013-1, Class A, 8.5%,
5/9/16 (144A) (Cat Bond) 1,749,825
JPY 150,799,195(i)(j) Tralee Segregated Account (Kane SAC, Ltd.), Variable
Rate Notes, 7/20/17 1,409,993
500,000(c) Vitality Re VI, Ltd., 2.1%, 1/8/18 (144A) (Cat Bond) 498,750
1,000,000(c) Vitality Re VII, Ltd., 2.65%, 1/7/20 (144A) (Cat Bond) 999,700
-------------
$ 37,744,937
-------------
Total Insurance $ 43,157,225
------------------------------------------------------------------------------------------------------
MATERIALS -- 8.5%
Commodity Chemicals -- 0.8%
300,000 Basell Finance Co., BV, 8.1%, 3/15/27 (144A) $ 389,891
175,000 Hexion US Finance Corp., 6.625%, 4/15/20 146,563
600,000 Rain CII Carbon LLC / CII Carbon Corp., 8.0%,
12/1/18 (144A) 516,000
-------------
$ 1,052,454
------------------------------------------------------------------------------------------------------
Construction Materials -- 0.5%
389,000 Cemex Espana Luxembourg, 9.875%, 4/30/19 (144A) $ 408,936
215,000 Cemex SAB de CV, 7.75%, 4/16/26 (144A) 228,975
-------------
$ 637,911
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 31
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 0.5%
55,000 Blue Cube Spinco, Inc., 9.75%, 10/15/23 (144A) $ 62,769
55,000 Blue Cube Spinco, Inc., 10.0%, 10/15/25 (144A) 63,387
660,000 Evolution Escrow Issuer LLC, 7.5%, 3/15/22 (144A) 547,800
-------------
$ 673,956
------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.0%
109,000 Boart Longyear Management Pty, Ltd., 10.0%,
10/1/18 (144A) $ 66,762
300,000 FMG Resources August 2006 Pty, Ltd., 9.75%,
3/1/22 (144A) 315,390
428,716 Mirabela Nickel, Ltd., 9.5%, 6/24/19 158,625
180,000 Prince Mineral Holding Corp., 11.5%, 12/15/19 (144A) 157,050
750,000 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 699,375
-------------
$ 1,397,202
------------------------------------------------------------------------------------------------------
Gold -- 0.0%+
85,000 IAMGOLD Corp., 6.75%, 10/1/20 (144A) $ 68,595
------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.6%
272,594(g) Ardagh Finance Holdings SA, 8.625%, (8.625% PIK
0.0% cash), 6/15/19 (144A) $ 280,772
320,000 Ardagh Packaging Finance Plc / Ardagh Holdings USA,
Inc., 7.25%, 5/15/24 (144A) 320,000
EUR 150,000 Horizon Holdings I SASU, 7.25%, 8/1/23 (144A) 183,144
-------------
$ 783,916
------------------------------------------------------------------------------------------------------
Paper Packaging -- 2.3%
580,000 Coveris Holding Corp., 10.0%, 6/1/18 (144A) $ 578,550
500,000 Reynolds Group Issuer, Inc., 9.0%, 4/15/19 507,500
475,000 Reynolds Group Issuer, Inc., 9.875%, 8/15/19 491,031
EUR 1,365,000 SIG Combibloc Holdings SCA, 7.75%, 2/15/23 (144A) 1,676,384
-------------
$ 3,253,465
------------------------------------------------------------------------------------------------------
Paper Products -- 1.2%
675,000 Appvion, Inc., 9.0%, 6/1/20 (144A) $ 332,438
500,000 Mercer International, Inc., 7.0%, 12/1/19 505,000
840,000 Resolute Forest Products, Inc., 5.875%, 5/15/23 632,100
255,000 Unifrax I LLC / Unifrax Holding Co., 7.5%,
2/15/19 (144A) 202,087
-------------
$ 1,671,625
------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.3%
410,000 A Schulman, Inc., 6.875%, 6/1/23 (144A) $ 411,025
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Steel -- 1.3%
200,000 Allegheny Technologies, Inc., 9.375%, 6/1/19 $ 193,000
250,000 Evraz Group SA, 9.5%, 4/24/18 (144A) 269,140
190,000 JMC Steel Group, Inc., 8.25%, 3/15/18 (144A) 182,400
499,000 Optima Specialty Steel, Inc., 12.5%, 12/15/16 (144A) 414,170
850,000 Ryerson, Inc., 9.0%, 10/15/17 783,063
-------------
$ 1,841,773
-------------
Total Materials $ 11,791,922
------------------------------------------------------------------------------------------------------
MEDIA -- 1.8%
Broadcasting -- 0.1%
400,000 Intelsat Luxembourg SA, 7.75%, 6/1/21 $ 132,000
------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.8%
600,000 Gibson Brands, Inc., 8.875%, 8/1/18 (144A) $ 333,000
225,000 Regal Entertainment Group, 5.75%, 2/1/25 227,812
625,000 WMG Acquisition Corp., 6.75%, 4/15/22 (144A) 618,750
-------------
$ 1,179,562
------------------------------------------------------------------------------------------------------
Publishing -- 0.9%
855,000 Gannett Co., Inc., 6.375%, 10/15/23 $ 923,400
250,000 Trader Corp., 9.875%, 8/15/18 (144A) 259,375
-------------
$ 1,182,775
-------------
Total Media $ 2,494,337
------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 1.3%
Biotechnology -- 0.2%
300,000 ConvaTec Healthcare E SA, 10.5%, 12/15/18 (144A) $ 307,500
------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 1.1%
208,000 DPx Holdings BV, 7.5%, 2/1/22 (144A) $ 210,600
650,000 Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc.,
6.0%, 7/15/23 (144A) 637,813
EUR 450,000 VRX Escrow Corp., 4.5%, 5/15/23 409,660
235,000 VRX Escrow Corp., 5.875%, 5/15/23 (144A) 196,812
-------------
$ 1,454,885
-------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 1,762,385
------------------------------------------------------------------------------------------------------
REAL ESTATE -- 1.0%
Specialized REIT -- 1.0%
1,520,000 Communications Sales & Leasing, Inc. / CSL Capital
LLC, 8.25%, 10/15/23 $ 1,440,200
-------------
Total Real Estate $ 1,440,200
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 33
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
RETAILING -- 1.7%
Automotive Retail -- 0.7%
1,100,000 DriveTime Automotive Group, Inc. / DT Acceptance
Corp., 8.0%, 6/1/21 (144A) $ 990,000
------------------------------------------------------------------------------------------------------
Computer & Electronics Retail -- 0.1%
235,000 Rent-A-Center, Inc., 6.625%, 11/15/20 $ 208,562
------------------------------------------------------------------------------------------------------
Department Stores -- 0.8%
300,000 Argos Merger Sub, Inc., 7.125%, 3/15/23 (144A) $ 306,750
535,000 Grupo Famsa SAB de CV, 7.25%, 6/1/20 (144A) 492,200
350,000 Neiman Marcus Group, Ltd., LLC, 8.0%,
10/15/21 (144A) 304,500
-------------
$ 1,103,450
------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.1%
85,000 Outerwall, Inc., 6.0%, 3/15/19 $ 75,863
-------------
Total Retailing $ 2,377,875
------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.2%
Semiconductors -- 0.2%
165,000 Advanced Micro Devices, Inc., 7.0%, 7/1/24 $ 124,162
240,000 Advanced Micro Devices, Inc., 7.5%, 8/15/22 186,000
-------------
Total Semiconductors & Semiconductor Equipment $ 310,162
------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.1%
Data Processing & Outsourced Services -- 0.1%
225,000 NeuStar, Inc., 4.5%, 1/15/23 $ 184,500
-------------
Total Software & Services $ 184,500
------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.8%
Communications Equipment -- 0.2%
280,000 CommScope Technologies Finance LLC, 6.0%,
6/15/25 (144A) $ 287,000
------------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.2%
315,000 Zebra Technologies Corp., 7.25%, 10/15/22 $ 341,019
------------------------------------------------------------------------------------------------------
Technology Hardware, Storage & Peripherals -- 0.4%
485,000 Diebold, Inc., 8.5%, 4/15/24 (144A) $ 491,062
-------------
Total Technology Hardware & Equipment $ 1,119,081
------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 3.7%
Integrated Telecommunication Services -- 2.0%
1,165,000 Frontier Communications Corp., 8.75%, 4/15/22 $ 1,150,438
290,000 Frontier Communications Corp., 11.0%, 9/15/25 (144A) 292,900
750,000 GCI, Inc., 6.875%, 4/15/25 757,500
600,000 Windstream Corp., 7.5%, 6/1/22 492,000
-------------
$ 2,692,838
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.7%
250,000 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 243,750
300,000 Altice SA, 7.75%, 5/15/22 (144A) 299,250
750,000 Digicel, Ltd., 6.0%, 4/15/21 (144A) 686,250
200,000 Mobile Telesystems OJSC via MTS International
Funding, Ltd., 5.0%, 5/30/23 (144A) 199,750
340,000 Sprint Corp., 7.125%, 6/15/24 255,000
275,000 Sprint Corp., 7.25%, 9/15/21 222,062
250,000 Unison Ground Lease Funding LLC, 5.78%,
3/15/20 (144A) 242,250
RUB 14,100,000 VimpelCom Holdings BV, 9.0%, 2/13/18 (144A) 211,522
-------------
$ 2,359,834
-------------
Total Telecommunication Services $ 5,052,672
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 2.8%
Airlines -- 0.8%
155,000 Intrepid Aviation Group Holdings LLC / Intrepid
Finance Co., 6.875%, 2/15/19 (144A) $ 141,050
450,000 Intrepid Aviation Group Holdings LLC / Intrepid
Finance Co., 8.25%, 7/15/17 (144A) 432,000
500,000 TAM Capital 3, Inc., 8.375%, 6/3/21 (144A) 456,875
-------------
$ 1,029,925
------------------------------------------------------------------------------------------------------
Airport Services -- 0.3%
441,560 Aeropuertos Argentina 2000 SA, 10.75%,
12/1/20 (144A) $ 476,973
------------------------------------------------------------------------------------------------------
Highways & Railtracks -- 0.2%
MXN 4,500,000 Red de Carreteras de Occidente SAPIB de CV, 9.0%,
6/10/28 (144A) $ 261,391
------------------------------------------------------------------------------------------------------
Marine -- 0.3%
500,000 Far East Capital, Ltd., SA, 8.0%, 5/2/18 $ 192,500
375,000 Navios South American Logistics, Inc. / Navios
Logistics Finance US, Inc., 7.25%, 5/1/22 (144A) 225,938
-------------
$ 418,438
------------------------------------------------------------------------------------------------------
Railroads -- 0.6%
390,039(g) AAF Holdings LLC / AAF Finance Co., 12.0%, (12.75%
PIK 12.0% cash), 7/1/19 (144A) $ 384,188
485,000 Florida East Coast Holdings Corp., 6.75%,
5/1/19 (144A) 489,850
-------------
$ 874,038
------------------------------------------------------------------------------------------------------
Trucking -- 0.6%
1,325,000 Jack Cooper Holdings Corp., 9.25%, 6/1/20 (144A) $ 834,750
-------------
Total Transportation $ 3,895,515
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 35
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
UTILITIES -- 3.2%
Electric Utilities -- 1.1%
375,000 ContourGlobal Power Holdings SA, 7.125%,
6/1/19 (144A) $ 371,250
460,000(a) Enel S.p.A., 8.75%, 9/24/73 (144A) 530,725
355,000 PPL Energy Supply LLC, 4.625%, 7/15/19 (144A) 330,150
410,000 PPL Energy Supply LLC, 6.5%, 6/1/25 (144A) 363,908
-------------
$ 1,596,033
------------------------------------------------------------------------------------------------------
Gas Utilities -- 0.5%
230,000 DCP Midstream Operating LP, 5.6%, 4/1/44 $ 185,150
492,450 Transportadora de Gas del Sur SA, 9.625%,
5/14/20 (144A) 509,686
-------------
$ 694,836
------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 1.6%
560,000 NRG Energy, Inc., 6.25%, 5/1/24 $ 546,000
1,065,000 Terraform Global Operating LLC, 9.75%,
8/15/22 (144A) 943,856
200,000 TerraForm Power Operating LLC, 5.875%,
2/1/23 (144A) 174,500
585,000 TerraForm Power Operating LLC, 6.125%,
6/15/25 (144A) 503,100
-------------
$ 2,167,456
-------------
Total Utilities $ 4,458,325
------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $132,520,364) $ 128,638,419
------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 2.5% of
Net Assets
HEALTH CARE EQUIPMENT & SERVICES -- 1.1%
Health Care Equipment -- 1.1%
1,040,000(b) Hologic, Inc., 2.0%, 12/15/37 $ 1,526,850
-------------
Total Health Care Equipment & Services $ 1,526,850
------------------------------------------------------------------------------------------------------
MATERIALS -- 1.2%
Diversified Chemicals -- 1.1%
1,900,000(k) Hercules, Inc., 6.5%, 6/30/29 $ 1,560,299
------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.1%
100,000 Vedanta Resources Jersey, Ltd., 5.5%, 7/13/16 $ 99,700
-------------
Total Materials $ 1,659,999
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 0.2%
Biotechnology -- 0.2%
250,000 Corsicanto, Ltd., 3.5%, 1/15/32 $ 232,188
-------------
Total Pharmaceuticals, Biotechnology & Life Sciences $ 232,188
------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $2,524,576) $ 3,419,037
------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS --
2.9% of Net Assets
2,575,000(c) U.S. Treasury Notes, 0.303%, 10/31/16 $ 2,574,997
1,450,000(c) U.S. Treasury Notes, 0.319%, 4/30/16 1,450,000
-------------
$ 4,024,997
------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $4,024,688) $ 4,024,997
------------------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS -- 2.0% of
Net Assets
Argentina -- 0.7%
282,400 Province of Salta Argentina, 9.5%, 3/16/22 (144A) $ 287,342
360,000 Provincia de Buenos Aires, 9.125%, 3/16/24 (144A) 383,400
230,000 Provincia de Buenos Aires, 9.95%, 6/9/21 (144A) 250,700
-------------
$ 921,442
------------------------------------------------------------------------------------------------------
Ireland -- 0.3%
450,000 Vnesheconombank Via VEB Finance Plc, 6.902%,
7/9/20 (144A) $ 472,500
------------------------------------------------------------------------------------------------------
Kenya -- 0.3%
500,000 Kenya Government International Bond, 6.875%,
6/24/24 (144A) $ 470,050
------------------------------------------------------------------------------------------------------
Mexico -- 0.5%
MXN 8,870,000 Mexican Bonos, 7.75%, 11/13/42 $ 596,661
MXN 326,901 Mexican Udibonos, 3.5%, 12/14/17 19,610
-------------
$ 616,271
------------------------------------------------------------------------------------------------------
Zambia -- 0.2%
300,000 Zambia Government International Bond, 5.375%,
9/20/22 (144A) $ 223,086
------------------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $2,738,186) $ 2,703,349
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 37
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 0.3% of Net Assets
CAPITAL GOODS -- 0.0%+
Industrial Machinery -- 0.0%+
10,289(d)(f) Liberty Tire Recycling LLC $ 103
-------------
Total Capital Goods $ 103
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.0%+
Homebuilding -- 0.0%+
MXN 89,094(f) Desarrolladora Homex SAB de CV $ 17,599
-------------
Total Consumer Durables & Apparel $ 17,599
------------------------------------------------------------------------------------------------------
ENERGY -- 0.0%+
Oil & Gas Exploration & Production -- 0.0%+
15,000(f) PetroQuest Energy, Inc. $ 11,867
-------------
Total Energy $ 11,867
------------------------------------------------------------------------------------------------------
INSURANCE -- 0.0%+
Insurance Brokers -- 0.0%+
GBP 10,233(d)(f) TopCo., Ltd. $ 149
GBP 475(d)(f) Towergate Finance Plc 7
-------------
$ 156
-------------
Total Insurance $ 156
------------------------------------------------------------------------------------------------------
RETAILING -- 0.1%
Computer & Electronics Retail -- 0.1%
42,088(d)(f) Targus Cayman SubCo., Ltd. $ 147,308
-------------
Total Retailing $ 147,308
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.2%
Air Freight & Logistics -- 0.2%
943(f) CEVA Holdings LLC $ 330,159
-------------
Total Transportation $ 330,159
------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $1,102,066) $ 507,192
------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 0.4%
of Net Assets
DIVERSIFIED FINANCIALS -- 0.4%
Other Diversified Financial Services -- 0.4%
470 Bank of America Corp., 7.25% $ 553,801
-------------
Total Diversified Financials $ 553,801
------------------------------------------------------------------------------------------------------
ENERGY -- 0.0%+
Oil & Gas Exploration & Production -- 0.0%+
200 Halcon Resources Corp., 5.75% $ 8,000
-------------
Total Energy $ 8,000
------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $524,900) $ 561,801
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------
Shares Value
------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.6% of Net Assets
BANKS -- 0.4%
Diversified Banks -- 0.4%
500(a) AgStar Financial Services ACA, 6.75% (144A) $ 556,219
-------------
Total Banks $ 556,219
------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.8%
Other Diversified Financial Services -- 0.8%
40,675(a) GMAC Capital Trust I, 6.402% $ 1,019,722
-------------
Total Diversified Financials $ 1,019,722
------------------------------------------------------------------------------------------------------
INSURANCE -- 0.4%
Insurance Brokers -- 0.4%
GBP 452,745(d)(f) Towergate Finance Plc, Class B $ 548,937
------------------------------------------------------------------------------------------------------
Reinsurance -- 0.0%+
15,000(f)(i) Lorenz Re, Ltd. (Aon Benefield Securities, Inc.), Variable
Rate Notes $ 37,500
-------------
Total Insurance $ 586,437
------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $2,106,323) $ 2,162,378
------------------------------------------------------------------------------------------------------
WARRANT -- 0.0%+
INSURANCE -- 0.0%+
Insurance Brokers
GBP 136(d)(f)(r) Towergate Finance Plc $ --
------------------------------------------------------------------------------------------------------
TOTAL WARRANT
(Cost $--) $ --
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($)
------------------------------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS -- 2.4%
of Net Assets
COMMERCIAL PAPER -- 1.0%
490,000 Barclays Bank Plc, 0.35%, 5/2/16 $ 489,988
490,000 BNP Paribas SA, 0.29%, 5/2/16 489,985
490,000 Total SA, 0.33%, 5/2/16 489,986
-------------
$ 1,469,959
------------------------------------------------------------------------------------------------------
TREASURY BILL -- 1.4%
1,920,000(l) U.S. Treasury Bill, 6/2/16 $ 1,919,754
------------------------------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $3,389,722) $ 3,389,713
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 39
Schedule of Investments | 4/30/16 (continued)
------------------------------------------------------------------------------------------------------
Number Strike Expiration
of Contracts Description Counterparty Price Date Value
------------------------------------------------------------------------------------------------------
CALL OPTIONS PURCHASED -- 0.0%+
MXN 18,332(m) Desarrolladora Homex Bank of New York
SAB de CV Mellon Corp. $ --(q) 10/23/22 $ --
MXN 18,332(n) Desarrolladora Homex Bank of New York
SAB de CV Mellon Corp. --(q) 10/23/22 --
-------
$ --
------------------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS PURCHASED
(Premiums paid $0) $ --
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($)
------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 140.3%
(Cost -- $199,667,333) (o)(p) $ 194,470,945
------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (40.3)% $ (55,901,208)
------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $ 138,569,737
======================================================================================================
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, 2016, the value of these securities
amounted to $85,168,626, or 61.5% of total net assets applicable to
common shareowners.
(Cat Bond) Catastrophe or Event-linked bond. At April 30, 2016, the value
of these securities amounted to $19,675,375, or 14.2% of total net
assets applicable to common shareowners. See Notes to Financial
Statement -- 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, 2016.
(a) The interest rate is subject to change periodically. The interest
rate shown is the rate at April 30, 2016.
(b) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specific date. The rate shown is the rate at
April 30, 2016. See Notes to Financial Statements -- Note 1A.
(c) Floating rate note. The rate shown is the coupon rate at April 30,
2016.
(d) Security is valued using fair value methods (other than prices
supplied by independent pricing services).
(e) Security is in default.
(f) Non-income producing.
(g) Payment in Kind (PIK) security which may pay interest in the form of
additional principal amount.
(h) Security is perpetual in nature and has no stated maturity date.
(i) Structured reinsurance investment. At April 30, 2016, the value of
these securities amounted to $18,107,062, or 13.1% of total net
assets applicable to common shareowners. See Notes to Financial
Statements -- Note 1F.
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
(j) Rate to be determined.
(k) Security is priced as a unit.
(l) Security issued with a zero coupon. Income is recognized through
accretion of discount.
(m) Option does not become effective until underlying company's
outstanding common shares reach a market capitalization of MXN 12.5
Billion.
(n) Option does not become effective until underlying company's
outstanding common shares reach a market capitalization of MXN 15.5
Billion.
(o) At April 30, 2016, the net unrealized depreciation on investments
based on cost for federal tax purposes of $201,769,237 was as
follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 6,933,617
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (14,231,909)
------------
Net unrealized depreciation $ (7,298,292)
============
For financial reporting purposes net unrealized depreciation on investments was
$5,196,388 and cost of investments aggregated $199,667,333.
(p) Distributions of Investments by country of issue, as a percentage of
total investments in securities, is as follows:
United States 62.4%
Bermuda 13.6
Cayman Islands 4.6
Luxembourg 4.0
Ireland 2.5
Netherlands 1.9
Argentina 1.8
Canada 1.3
France 1.1
Other (individually less than 1%) 6.8
-----
100.0%
=====
(q) Strike price is 1 Mexican Peso (MXN).
(r) Towergate B Preferred warrants are exercisable into 136 Tig FinCo A
shares.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended April 30, 2016 were as follows:
--------------------------------------------------------------------------------
Purchases Sales
--------------------------------------------------------------------------------
Long-Term U.S. Government $ -- $ 5,924,600
Other Long-Term Securities $70,955,593 $67,940,646
Principal amounts are denominated in U.S. dollars unless otherwise noted.
EUR -- Euro
GBP -- Great British Pound
JPY -- Japanese Yen
MXN -- Mexican Peso
RUB -- Russian Ruble
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels below.
Level 1 - quoted prices in active markets for identical securities.
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risks, etc.). See Notes to Financial Statements -- Note 1A.
Level 3 - significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments). See Noted
to Financial Statements -- Note 1A.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 41
Schedule of Investments | 4/30/16 (continued)
The following is a summary of the inputs used as of April 30, 2016, in valuing
the Trust's investments.
-------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------------------
Asset Backed Securities $ -- $ 1,917,835 $ -- $ 1,917,835
Collateralized Mortgage
Obligations -- 5,243,579 -- 5,243,579
Senior Secured Floating
Rate Loan Interests
Health Care Equipment & Services
Health Care Technology -- 236,380 243,918 480,298
Retailing
Computer & Electronics Retail -- -- 168,351 168,351
All Other Senior Secured Floating
Rate Loan Interests -- 41,253,996 -- 41,253,996
Corporate Bonds & Notes
Capital Goods
Industrial Machinery -- 1,077,375 169,505 1,246,880
Insurance
Property & Casualty Insurance -- 78,600 5,247,802 5,326,402
Reinsurance -- 19,675,375 18,069,562 37,744,937
All Other Corporate Bonds & Notes -- 84,320,200 -- 84,320,200
Convertible Bonds & Notes -- 3,419,037 -- 3,419,037
U.S. Government and
Agency Obligations -- 4,024,997 -- 4,024,997
Sovereign Debt Obligation -- 2,703,349 -- 2,703,349
Common Stocks
Capital Goods
Industrial Machinery -- -- 103 103
Insurance
Insurance Brokers -- -- 156 156
Retailing
Computer & Electronics Retail -- -- 147,308 147,308
Transportation
Air Freight & Logistics -- 330,159 -- 330,159
All Other Common Stocks 29,466 -- -- 29,466
Convertible Preferred Stocks
Energy
Oil & Gas Exploration &
Production -- 8,000 -- 8,000
All Other Convertible Preferred
Stocks 553,801 -- -- 553,801
Preferred Stocks
Banks
Diversified Banks -- 556,219 -- 556,219
Insurance
Insurance Brokers -- -- 548,937 548,937
Reinsurance -- -- 37,500 37,500
All Other Preferred Stocks 1,019,722 -- -- 1,019,722
Warrant -- -- --* --*
Commercial Paper -- 1,469,959 -- 1,469,959
Treasury Bill -- 1,919,754 -- 1,919,754
Call Options Purchased -- --* -- --*
-------------------------------------------------------------------------------------------
Total Investments in
Securities $1,602,989 $168,234,814 $ 24,633,142 $194,470,945
===========================================================================================
* Includes securities that are valued at $0.
The accompanying notes are an integral part of these financial statements.
42 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
-------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------------
Other Financial Instruments
Unrealized appreciation on forward
foreign currency contracts $ -- $ 75 $ -- $ 75
Unrealized depreciation on forward
foreign currency contracts -- (150,172) -- (150,172)
--------------------------------------------------------------------------------------
Total Other Financial
Instruments $ -- $ (150,097) $ -- $ (150,097)
======================================================================================
The following is a summary of the fair valuation of certain of the Trust's
assets and liabilities as of April 30, 2016:
--------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
--------------------------------------------------------------------------------------
Assets:
Foreign currencies, at value $ -- $ 325 $ -- $ 325
Liabilities:
Credit agreement -- (57,000,000) -- (57,000,000)
--------------------------------------------------------------------------------------
Total $ -- $ (56,999,675) $ -- $ (56,999,675)
======================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 43
Schedule of Investments | 4/30/16 (continued)
The following is a reconciliation of assets valued using significant
unobservable inputs (Level 3):
------------------------------------------------------------------------------------------------------------------------------------
Transfers
Change in in and Transfers
Balance Realized unrealized Accrued out of in and Balance
as of gain appreciation discounts/ Level 3 out of as of
4/30/15 (loss)(1) (depreciation)(2) Purchases Sales premiums categories Level 3* 4/30/16
------------------------------------------------------------------------------------------------------------------------------------
Collateralized
Mortgage
Obligations $ 165,062 $ -- $ -- $ -- $ -- $ -- $ -- $(165,062) $ --
Senior Secured
Floating Rate
Loan Interests
Health Care
Equipment &
Services
Health Care
Technology -- -- (86,468) 325,560 -- 4,826 -- -- 243,918
Retailing
Computer &
Electronics
Retail -- -- -- 168,351 -- -- -- -- 168,351
Corporate Bonds
& Notes
Capital Goods
Industrial
Machinery 239,330 4,677 (43,433) 22,061 (56,000) 2,870 -- -- 169,505
Insurance
Insurance
Brokers 16,096 -- -- -- -- -- -- (16,096) --
Life & Health
Insurance 500,600 -- -- -- -- -- -- (500,600) --
Property
& Casualty
Insurance 4,354,042 -- 893,760 -- -- -- -- -- 5,247,802
Reinsurance 22,537,165 (246,576) (6,726,234) 13,051,068 (11,774,073) 208,412 1,019,800 -- 18,069,562
Common Stocks
Capital Goods
Industrial
Machinery 103 -- -- -- -- -- -- -- 103
Insurance
Insurance
Brokers 2,540 -- (4,928) 2,544 -- -- -- -- 156
Reinsurance 1,019,800 -- -- -- -- -- (1,019,800) -- --
Retailing
Computer &
Electronics
Retail -- -- -- 147,308 -- -- -- -- 147,308
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
------------------------------------------------------------------------------------------------------------------------------------
Transfers
Change in in and Transfers
Balance Realized unrealized Accrued out of in and Balance
as of gain appreciation discounts/ Level 3 out of as of
4/30/15 (loss)(1) (depreciation)(2) Purchases Sales premiums categories Level 3* 4/30/16
------------------------------------------------------------------------------------------------------------------------------------
Preferred
Stocks
Insurance
Insurance
Brokers $ 671,036 $ -- $ (794,425) $ 672,326 $ -- $ -- $ -- $ -- $ 548,937
Reinsurance 941,821 5,471 (824,198) -- (85,594) -- -- -- 37,500
Warrants
Insurance
Insurance
Brokers --** -- -- -- -- -- -- -- --**
------------------------------------------------------------------------------------------------------------------------------------
Total $30,447,595 $(236,428) $ (7,585,926) $14,389,218 $(11,915,667) $216,108 $ -- $ (681,758) $24,633,142
====================================================================================================================================
(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, 2016, there were no transfers between Levels 1 and 2. For
the year ended April 30, 2016, securities with aggregate market value of
$681,758 transferred from Level 3 to Level 2 as there were observable
inputs available to determine their value.
** 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, 2016: $(5,269,754).
The following table presents additional information about valuation techniques
and inputs used for investments categorized as Level 3 at April 30, 2016. These
amounts exclude valuations provided by a broker.
------------------------------------------------------------------------------------------------------------------------
Fair Value Valuation Unobservable
Asset Type 4/30/16 Technique (s) Input Value/Range
------------------------------------------------------------------------------------------------------------------------
Senior Secured
Floating Rate Loan Market
Interests $ 412,269 Comparables EBITDA Multiples(1) 4x-5x
------------------------------------------------------------------------------------------------------------------------
Corporate Bonds Market EBITDA Multiples(1) 5.5x-6x
& Notes $5,417,307 Comparables Yield Premium(2) 1.05%
------------------------------------------------------------------------------------------------------------------------
Common Stocks $ 147,567 Market Comparables EBITDA Multiples(1) 4x-6x
------------------------------------------------------------------------------------------------------------------------
Preferred Stocks $ 548,937 Market Comparables EBITDA Multiples(1) 5.5x-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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 45
Statement of Assets and Liabilities | 4/30/16
ASSETS:
Investments in securities, at value (cost $199,667,333) $194,470,945
Foreign currencies, at value (cost $316) 325
Receivables --
Investment securities sold 1,380,254
Interest 2,417,017
Dividends 8,519
Unrealized appreciation on forward foreign currency contracts 75
-------------------------------------------------------------------------------------
Total assets $198,277,135
-------------------------------------------------------------------------------------
LIABILITIES:
Due to custodian $ 394,439
Payables --
Credit agreement 57,000,000
Investment securities purchased 1,837,355
Trustees' fees 529
Administration fee 83,193
Unrealized depreciation on forward foreign currency contracts 150,172
Due to affiliates 133,429
Accrued expenses 108,281
-------------------------------------------------------------------------------------
Total liabilities $ 59,707,398
-------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHAREOWNERS:
Paid-in capital $194,412,035
Distributions in excess of net investment income (632,828)
Accumulated net realized loss on investments and foreign
currency transactions (49,866,524)
Net unrealized depreciation on investments (5,196,388)
Net unrealized depreciation on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies (146,558)
-------------------------------------------------------------------------------------
Net assets applicable to shareowners $138,569,737
-------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $138,569,737/8,332,790 shares $ 16.63
=====================================================================================
The accompanying notes are an integral part of these financial statements.
46 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
Statement of Operations
For the Year Ended 4/30/16
INVESTMENT INCOME:
Interest $ 15,351,798
Dividends 225,046
Loan facility and other income 109,347
--------------------------------------------------------------------------------------------
Total investment income $ 15,686,191
--------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 1,729,061
Administrative expense 118,651
Transfer agent fees 4,270
Shareholder communications expense 11,696
Custodian fees 43,074
Professional fees 83,098
Printing expense 15,204
Trustees' fees 7,600
Pricing fees 33,871
Interest expense 712,815
Miscellaneous 42,449
--------------------------------------------------------------------------------------------
Total expenses $ 2,801,789
--------------------------------------------------------------------------------------------
Net investment income $ 12,884,402
--------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $ (10,383,167)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (418,826) $ (10,801,993)
--------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on:
Investments $ (4,432,031)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 142,606 $ (4,289,425)
--------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions $ (15,091,418)
--------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (2,207,016)
============================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 47
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------
Year Ended Year Ended
4/30/16 4/30/15
----------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income (loss) $ 12,884,402 $ 15,171,206
Net realized gain (loss) on investments and foreign
currency transactions (10,801,993) (7,185,833)
Change in net unrealized appreciation (depreciation) on
investments and foreign currency transactions (4,289,425) (6,329,324)
----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $ (2,207,016) $ 1,656,049
----------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income and previously undistributed net
investment income ($1.50 and $1.83 per share,
respectively) $ (12,499,185) $ (15,241,784)
----------------------------------------------------------------------------------------------
Total distributions to shareowners $ (12,499,185) $ (15,241,784)
----------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ -- $ 250,324
----------------------------------------------------------------------------------------------
Net increase in net assets from Trust share transactions $ -- $ 250,324
----------------------------------------------------------------------------------------------
Net decrease in net assets $ (14,706,201) $ (13,335,411)
NET ASSETS APPLICABLE TO SHAREOWNERS:
Beginning of year $ 153,275,938 $ 166,611,349
----------------------------------------------------------------------------------------------
End of year $ 138,569,737 $ 153,275,938
----------------------------------------------------------------------------------------------
Distributions in excess of net investment income $ (632,828) $ (470,263)
==============================================================================================
The accompanying notes are an integral part of these financial statements.
48 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
Statement of Cash Flows
For the Year Ended 4/30/16
Cash Flows From Operating Activities:
Net decrease in net assets resulting from operations $ (2,207,016)
------------------------------------------------------------------------------------------------
Adjustments to reconcile net decrease in net assets resulting from operations to
net cash and foreign currencies from operating activities:
Inflation indexed bond income $ (456)
Purchases of investment securities (79,848,157)
Proceeds from disposition and maturity of investment securities 87,254,279
Net purchases of temporary cash investments (1,934,722)
Net accretion and amortization of discount/premium on investment securities (580,017)
Change in unrealized depreciation on investments 4,432,031
Change in unrealized appreciation on forward foreign currency contracts and
foreign currency (137,695)
Net realized loss on investments 10,383,167
Decrease in interest receivable 346,293
Increase in dividends receivable (8,519)
Decrease in due to affiliates (17,926)
Increase in trustees' fees payable 155
Increase in administration fees payable 12,755
Decrease in accrued expenses payable (12,796)
Decrease in interest expense payable (5,862)
------------------------------------------------------------------------------------------------
Net cash and foreign currencies from operating activities $ 17,675,514
------------------------------------------------------------------------------------------------
Cash Flows Used in Financing Activities:
Decrease in due to custodian $ (924,493)
Payments on borrowings (7,000,000)
Distributions to shareholders (12,499,185)
------------------------------------------------------------------------------------------------
Net cash and foreign currencies used in financing activities $ (20,423,678)
------------------------------------------------------------------------------------------------
Effect of Foreign Exchange Fluctuations on Cash:
Effect of foreign exchange fluctuations on cash $ 20,756
------------------------------------------------------------------------------------------------
Cash and Foreign Currencies:
Beginning of the year $ 2,727,733
------------------------------------------------------------------------------------------------
End of the year $ 325
================================================================================================
Cash Flow Information:
Cash paid for interest $ 718,677
------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 49
Financial Highlights
----------------------------------------------------------------------------------------------------------------------------
Year
Year Year Year Year Ended
Ended Ended Ended Ended 4/30/12
4/30/16 4/30/15 4/30/14 4/30/13 (Consolidated)
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 18.39 $ 20.03 $ 20.70 $ 19.51 $ 21.01
----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.55 $ 1.82 $ 1.98 $ 2.24 $ 2.10
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (1.81) (1.63) (0.36) 0.99 (1.64)
----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (0.26) $ 0.19 $ 1.62 $ 3.23 $ 0.46
----------------------------------------------------------------------------------------------------------------------------
Distributions to shareowners from:
Net investment income and previously undistributed net
investment income $ (1.50) $ (1.83)* $ (2.29)* $ (2.04) $ (1.96)
----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (1.76) $ (1.64) $ (0.67) $ 1.19 $ (1.50)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (b) $ 16.63 $ 18.39 $ 20.03 $ 20.70 $ 19.51
----------------------------------------------------------------------------------------------------------------------------
Market value, end of period (b) $ 15.60 $ 17.42 $ 20.85 $ 21.82 $ 20.13
============================================================================================================================
Total return at market value (c) (1.26)% (7.90)% 7.12% 19.98% 1.35%
Ratios to average net assets of shareowners:
Total expenses plus interest expense (d)(e) 1.99% 1.85% 1.86% 1.97% 2.04%
Net investment income available to shareowners 9.11% 9.52% 9.88% 11.26% 10.75%
Portfolio turnover 36% 48% 38% 34% 24%
Net assets of shareowners, end of period
(in thousands) $138,570 $153,276 $166,611 $171,646 $ 161,146
The accompanying notes are an integral part of these financial statements.
50 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
----------------------------------------------------------------------------------------------------------------------------
Year
Year Year Year Year Ended
Ended Ended Ended Ended 4/30/12
4/30/16 4/30/15 4/30/14 4/30/13 (Consolidated)
----------------------------------------------------------------------------------------------------------------------------
Total amount of debt outstanding (in thousands) $57,000 $64,000 $67,000 $69,000 $ 69,000
Asset coverage per indebtedness (in thousands) $ 3,431 $ 3,395 $ 3,487 $ 3,488 $ 3,335
============================================================================================================================
* The amount of distributions made to shareowners during the period were in
excess of the net investment income earned by the Trust during the period.
The Trust has accumulated undistributed net investment income which is part
of the Trust's NAV. A portion of the accumulated net investment income was
distributed to shareowners during the period. A decrease in distributions
may have a negative effect on the market value of the Trust's shares.
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(c) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Past
performance is not a guarantee of future results.
(d) Expense ratios do not reflect the effect of distribution payments to
preferred shareowners.
(e) Includes interest expense of 0.50%, 0.43%, 0.45%, 0.48% and 0.56%,
respectively.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 51
Notes to Financial Statements | 4/30/16
1. Organization and Significant Accounting Policies
Pioneer Diversified High Income Trust (the Trust) was organized as a Delaware
statutory trust on January 30, 2007. Prior to commencing operations on May 30,
2007, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended. The investment
objective of the Trust is to seek a high level of current income and the Trust
may, as a secondary objective, also seek capital appreciation to the extent that
it is consistent with its investment objective.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gain or loss on investments during the reporting
period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements:
A. Security Valuation
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. Valuations may be supplemented by dealers and other sources, as
required. 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.
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
52 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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.
Foreign securities are valued in U.S. dollars based on foreign currency
exchange rate quotations supplied by a third party pricing service. 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.
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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 53
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 are
unable to supply prices or for which market prices and/or quotations are
not readily available or are considered to be unreliable are valued by a
fair valuation team comprised of certain personnel of Pioneer Investment
Management, Inc. (PIM), the Trust's investment adviser, pursuant to
procedures adopted by the Trust's Board of Trustees. PIM's fair valuation
team uses fair value methods approved by the Valuation Committee of the
Board of Trustees. PIM's 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, 2016, eleven securities were valued using fair value methods
(in addition to securities valued using prices supplied by independent
pricing services or broker-dealers) representing 4.7% of net assets. The
value of these fair valued securities are $6,526,080.
B. Investment Income and Transactions
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Trust becomes aware of the ex-dividend
date in the exercise of reasonable diligence. Interest income, including
interest on income bearing cash accounts, is recorded on an accrual basis,
net of unrecoverable foreign taxes withheld at the applicable country
rates.
54 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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 April 30, 2016, the Trust did not accrue any interest or penalties with
respect to uncertain tax positions, which if applicable, would be recorded
as an
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 55
income tax expense in the Statement of Operations. Tax returns filed within
the prior three years remain subject to examination by federal and state
tax authorities.
The amount and character of income and capital gain distributions to
shareowners are determined in accordance with federal income tax rules,
which may differ from U.S. generally accepted accounting principles.
Distributions in excess of net investment income or net realized gains are
temporary overdistributions for financial statement and tax purposes.
Capital accounts within the financial statements are adjusted for permanent
book/tax differences to reflect tax character, but are not adjusted for
temporary differences.
At April 30, 2016, the Trust reclassified $231,745 to increase paid-in
capital, $547,782 to increase distributions in excess of net investment
income and $779,527 to decrease 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, 2016, the Trust was permitted to carry forward $1,827,578 of
short-term capital losses and $17,140,030 of long-term capital losses
without limitation. Additionally, at April 30, 2016, the Trust had a net
capital loss carry forward of $23,611,429 of which the following amounts
will expire between 2017 and 2019 if not utilized: $413,150 in 2017,
$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 $377,261 of short-term capital losses and
$6,909,119 of long-term capital losses recognized between November 1, 2015
and April 30, 2016 to its fiscal year ending April 30, 2017.
The tax character of distributions paid to shareowners during the years
ended April 30, 2016 and April 30, 2015 were as follows:
---------------------------------------------------------------------------
2016 2015
---------------------------------------------------------------------------
Distributions paid from:
Ordinary income $12,499,185 $15,241,784
---------------------------------------------------------------------------
Total $12,499,185 $15,241,784
===========================================================================
56 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2016:
---------------------------------------------------------------------------
2016
---------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 1,317,872
Capital loss carryforward (42,579,037)
Late year loss deferrals (7,286,380)
Unrealized depreciation (7,294,753)
---------------------------------------------------------------------------
Total $(55,842,298)
===========================================================================
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the realization for tax purposes of unrealized
gains on investments in passive foreign investment companies, the book/tax
differences in the accrual of income on securities in default, the
difference between book and tax amortization methods and discounts on fixed
income securities and book/tax temporary differences.
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, as defined within the terms of
an event-linked bond occurs, 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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 57
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 for the year ended April
30, 2016 was $0. Purchased option contracts outstanding at period end are
listed within the Schedule of Investments.
58 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 59
subject the Trust to a greater degree of risk than in a developed market.
These risks include disruptive political or economic conditions and the
possible imposition of adverse governmental laws or currency exchange
restrictions.
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
60 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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, a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), manages
the Trust's portfolio. Management fees payable under the Trust's Advisory
Agreement with PIM are calculated daily at the annual rate of 0.85% of the
Trust's average daily managed assets. "Managed assets" means (a) the total
assets of the Trust, including any form of investment leverage, minus (b) all
accrued liabilities incurred in the normal course of operations, which shall not
include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without limitation,
borrowing through a credit facility or the issuance of debt securities), (ii)
the issuance of preferred stock or other similar preference securities, and/or
(iii) any other means. For the year ended April 30, 2016, the net management fee
was 0.85% of the Trust's average daily managed assets, which was equivalent to
1.22% 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,
2016, $216,622 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
Prior to November 2, 2015, Pioneer Investment Management Shareholder Services,
Inc. (PIMSS), a wholly owned indirect subsidiary of UniCredit, through a
sub-transfer agency agreement with American Stock Transfer & Trust Company
(AST), provided substantially all transfer agent and shareowner services related
to the Trust's shares at negotiated rates.
Effective November 2, 2015, 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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 61
4. Forward Foreign Currency Contracts
During the year ended April 30, 2016, 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, 2016 was
$(7,268,582).
Open foreign currency contracts at April 30, 2016, were as follows:
--------------------------------------------------------------------------------------------------
In
Currency Currency Exchange Settlement Unrealized
Sold Deliver Purchased for Counterparty Date Appreciation
--------------------------------------------------------------------------------------------------
GBP 119,117 USD 174,116 JP Morgan 7/05/16 $ 75
(British Chase Bank NA
Pound
Sterling)
--------------------------------------------------------------------------------------------------
Total $ 75
==================================================================================================
--------------------------------------------------------------------------------------------------
In
Currency Currency Exchange Settlement Unrealized
Sold Deliver Purchased for Counterparty Date Depreciation
--------------------------------------------------------------------------------------------------
GBP (British 119,339 USD 165,551 JP Morgan 5/03/16 $ (8,779)
Pound Chase Bank NA
Sterling)
USD 174,083 GBP (British 119,117 JP Morgan 5/03/16 (77)
Pound Chase Bank NA
Sterling)
RUB 6,775,000 USD 100,237 Goldman Sachs 5/13/16 (4,263)
(Russian International
Ruble)
JPY 149,575,028 USD 1,335,791 JP Morgan 5/25/16 (66,550)
(Japanese Chase Bank NA
Yen)
MXN 19,629 USD 1,119 Citibank NA 6/02/16 (18)
(Mexican
Peso)
MXN 9,891,256 USD 557,619 JP Morgan 6/02/16 (15,296)
(Mexican Chase Bank NA
Peso)
EUR (Euro) 3,903,542 USD 4,426,912 JP Morgan 7/28/16 (55,189)
Chase Bank NA
--------------------------------------------------------------------------------------------------
Total $ (150,172)
==================================================================================================
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,
62 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
close-out and set-off provisions which apply upon the occurrence of event of a
default and/or termination event as defined under the relevant ISDA Master
Agreement. The ISDA Master Agreement may also give a party the right to
terminate all transactions traded under such agreement if, among other things,
there is deterioration in the credit quality of the other party. Upon an event
of default or a termination of the ISDA Master Agreement, the non-defaulting
party has the right to close out all transactions under such agreement and to
net amounts owed under each transaction to determine one net amount payable by
one party to the other. The right to close out and net payments across all
transactions under the ISDA Master Agreement could result in a reduction of the
Trust's credit risk to its counterparty equal to any amounts payable by the
Trust under the applicable transactions, if any. However, the Trust's right to
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of
the particular jurisdiction to which a specific ISDA counterparty is subject.
The collateral requirements for derivatives transactions under an ISDA Master
Agreement are governed by a credit support annex to the ISDA Master Agreement.
Collateral requirements are generally determined at the close of business each
day and are typically based on changes in market values for each transaction
under an ISDA Master Agreement and netted into one amount for such agreement.
Generally, the amount of collateral due from or to a counterparty is subject to
threshold (a "minimum transfer amount") before a transfer is required, which may
vary by counterparty. Collateral pledged for the benefit of the Trust and/or
counterparty is held in segregated accounts by the Trust's custodian and cannot
be sold, re-pledged, assigned or otherwise used while pledged. Cash that has
been segregated to cover the Trust's collateral obligations, if any, will be
reported separately in the Statement of Assets and Liabilities as "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, 2016:
------------------------------------------------------------------------------------------
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)
------------------------------------------------------------------------------------------
JP Morgan Chase $75 $(75) $-- $-- $--
Bank NA
------------------------------------------------------------------------------------------
Total $75 $(75) $-- $-- $--
==========================================================================================
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 63
-----------------------------------------------------------------------------------------------------
Derivative
Liabilities
Subject to Derivatives Non-Cash Cash Net Amount
Master Netting Available for Collateral Collateral of Derivative
Counterparty Agreement Offset Pledged (a) Pledged (a) Liabilities (c)
-----------------------------------------------------------------------------------------------------
Citibank NA $ 18 $ -- $ -- $ -- $ 18
Goldman Sachs 4,263 -- -- -- 4,263
International
JP Morgan Chase 145,891 (75) -- -- 145,816
Bank NA
-----------------------------------------------------------------------------------------------------
Total $ 150,172 $(75) $ -- $ -- $ 150,097
=====================================================================================================
(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.
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.
64 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
The fair value of open derivative instruments (not considered to be hedging
instruments for accounting disclosure purposes) by risk exposure at April 30,
2016 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 $-- $-- $ 75 $-- $--
-----------------------------------------------------------------------------------------------
Total Value $-- $-- $ 75 $-- $--
===============================================================================================
Liabilities:
Unrealized
depreciation on
forward foreign
currency contracts $-- $-- $ 150,172 $-- $--
-----------------------------------------------------------------------------------------------
Total Value $-- $-- $ 150,172 $-- $--
===============================================================================================
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, 2016 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* $-- $-- $(250,138) $-- $--
-----------------------------------------------------------------------------------------------
Total Value $-- $-- $(250,138) $-- $--
===============================================================================================
Change in net
unrealized
appreciation
(depreciation) on:
Forward foreign
currency contracts* $-- $-- $ 116,939 $-- $--
-----------------------------------------------------------------------------------------------
Total Value $-- $-- $ 116,939 $-- $--
===============================================================================================
* 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. Bridge Loan Commitments
Bridge loans are designed to provide temporary or "bridge" financing to a
borrower pending the sale of identified assets or the arrangement of longer-term
loans or the issuance and sale of debt obligations.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 65
As of April 30, 2016, the Trust had two bridge loan commitments of $393,116,
which could be extended at the option of the borrower, pursuant to the following
loan agreements:
--------------------------------------------------------------------------------
Unrealized
Appreciation
Borrower Par Cost Value (Depreciation)
--------------------------------------------------------------------------------
CCO Holdings $338,080 $338,080 $338,080 $ --
Charter Communications 55,036 55,036 55,036 --
--------------------------------------------------------------------------------
Total $393,116 $393,116 $393,116 $ --
================================================================================
8. Trust Shares
Transactions in shares of beneficial interest for the year ended April 30, 2016
and the year ended April 30, 2015 were as follows:
--------------------------------------------------------------------------------
4/30/16 4/30/15
--------------------------------------------------------------------------------
Shares outstanding at beginning of period 8,332,790 8,320,167
Reinvestment of distributions -- 12,623
--------------------------------------------------------------------------------
Shares outstanding at end of period 8,332,790 8,332,790
================================================================================
9. Credit Agreement
Effective January 29, 2016, the Trust extended the maturity of its existing
Revolving Credit Facility (the Credit Agreement) with the Bank of Scotia. There
is a $70 million borrowing limit.
At April 30, 2016, the Trust had a borrowing outstanding under the credit
agreement totaling $57,000,000. The interest rate charged at April 30, 2016 was
1.31%. During the year ended April 30, 2016, the average daily balance was
$61,918,256 at an average interest rate of 1.15%. With respect to the credit
agreement, interest expense of $712,815 is included in the Statement of
Operations.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the credit agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities not including any bank loans and
senior securities, from the Trust's total assets and dividing such amount by the
principal amount of the borrowing outstanding.
10. Subsequent Event
A monthly dividend was declared on May 3, 2016 from undistributed and
accumulated net investment income of $0.1150 per share payable May 31, 2016, to
shareowners of record on May 18, 2016.
66 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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, 2016, and the related statements of operations and
cash flows for the year then ended, and the statements of changes in net assets
and the financial highlights for each of the two 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, 2013, and 2012 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, 2016, 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, 2016, and the results of
its operations and its cash flows for the year then ended and the changes in its
net assets and the financial highlights for each of the two 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 22, 2016
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 67
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's investment
objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which has not been
approved by the shareowners. During the period, there have been no changes in
the principal risk factors associated with investment in the Trust. There were
no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its shares
in the open market.
PIM, the Trust's investment adviser, is currently an indirect, wholly owned
subsidiary of UniCredit. On November 11, 2015, UniCredit announced that it
signed a binding master agreement with Banco Santander and affiliates of Warburg
Pincus and General Atlantic (the "Private Equity Firms") with respect to Pioneer
Investments ("Pioneer") and Santander Asset Management ("SAM") (the
"Transaction").
The Transaction, as previously announced by UniCredit, will establish a holding
company, with the name Pioneer Investments, to be owned by UniCredit (50%) and
the Private Equity Firms (50% between them). The holding company will control
Pioneer's U.S. operations, including PIM. The holding company also will own
66.7% of Pioneer's and SAM's combined operations outside the U.S., while Banco
Santander will own directly the remaining 33.3% stake. The closing of the
Transaction is expected to happen in 2016, subject to certain regulatory and
other approvals.
Under the Investment Company Act of 1940, completion of the Transaction will
cause the Trust's current investment advisory agreement with PIM to terminate.
Accordingly, the Trust's Board of Trustees will be asked to approve a new
investment advisory agreement. If approved by the Board, the Trust's new
investment advisory agreement will be submitted to the shareholders of the Trust
for their approval.
68 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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 50 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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 69
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
Chairman of the Board since 2007. Term present); Chairman (2008 - 2013) and Chief Financial Solutions, Inc.
and Trustee expires in 2018. Executive Officer (2008 - 2012), (investor communications
Quadriserv, Inc. (technology products for and securities processing
securities lending industry); and Senior provider for financial
Executive Vice President, The Bank of New services industry) (2009
York (financial and securities services) - present); Director,
(1986 - 2004) Quadriserv, Inc. (2005 -
2013); and Commissioner,
New Jersey State Civil
Service Commission (2011
- present)
----------------------------------------------------------------------------------------------------------------------------------
David R. Bock (72) Class III Trustee since Managing Partner, Federal City Capital Director of New York
Trustee 2007. Term expires in Advisors (corporate advisory services Mortgage Trust
2016. company) (1997 - 2004 and 2008 - present); (publicly-traded mortgage
Interim Chief Executive Officer, Oxford REIT) (2004 - 2009, 2012
Analytica, Inc. (privately-held research - present); Director of
and consulting company) (2010); Executive The Swiss Helvetia Fund,
Vice President and Chief Financial Officer, Inc. (closed-end fund)
I-trax, Inc. (publicly traded health care (2010 - present);
services company) (2004 - 2007); and Director of Oxford
Executive Vice President and Chief Analytica, Inc. (2008 -
Financial Officer, Pedestal Inc. present); and Director of
(internet-based mortgage trading company) Enterprise Community
(2000 - 2002); Private consultant Investment, Inc.
(1995-1997), Managing Director, Lehman (privately-held
Brothers (investment banking firm) affordable housing finance
(1992-1995); and Executive, The World Bank company) (1985 - 2010)
(1979-1992)
----------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (71) Class I Trustee since William Joseph Maier Professor of Political Trustee, Mellon
Trustee 2008. Term expires in Economy, Harvard University (1972 - Institutional Funds
2017. present) Investment Trust and
Mellon Institutional
Funds Master Portfolio
(oversaw 17 portfolios
in fund complex)
(1989-2008)
----------------------------------------------------------------------------------------------------------------------------------
70 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
----------------------------------------------------------------------------------------------------------------------------------
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 (68) Class I Trustee since Founding Director, Vice President and None
Trustee 2007. Term expires in Corporate Secretary, The Winthrop Group,
2017. Inc. (consulting 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 (60) Class III Trustee since Chief Investment Officer, 1199 SEIU Funds Trustee of Pioneer
Trustee 2015. Term expires in (healthcare workers union pension funds) closed-end investment
2016. (2001 - present); Vice President - companies (5 portfolios)
International Investments Group, American (Sept. 2015 - present)
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 (67) Class II Trustee President and Chief Executive Officer, Director of New America
Trustee since 2007. Term Newbury, Piret & Company, Inc. (investment High Income Fund, Inc.
expires in 2018. banking firm) (1981 - present) (closed-end investment
company) (2004 -
present); and Member,
Board of Governors,
Investment Company
Institute (2000 - 2006)
----------------------------------------------------------------------------------------------------------------------------------
Fred J. Ricciardi (69) Class II Trustee Consultant (investment company services) None
Trustee since 2014. Term (2012 - present); Executive Vice President,
expires in 2018. BNY Mellon (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)
----------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 71
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 (54)* Class III Trustee since Chair, Director, CEO and President of Trustee of Pioneer
Trustee, President and 2015.Term expires in Pioneer Investment Management-USA (since closed-end investment
Chief Executive Officer 2016. September 2014); Chair, Director, CEO and companies (5 portfolios)
President of Pioneer Investment Management, (Sept. 2015 - present)
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 (58)* Class I Trustee Director and Executive Vice President None
Trustee since 2014. Term (since 2008) and Chief Investment Officer,
expires in 2017. U.S. (since 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 Trustee because they are officers
or directors of the Trust's investment adviser and certain of its
affiliates.
72 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
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 (51) Since 2007. Serves at Vice President and Associate General None
Secretary and Chief Legal the discretion of the Counsel of Pioneer since January 2008;
Officer Board. Secretary and Chief Legal Officer of all of
the Pioneer Funds since 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 (55) Since 2010. Serves at Fund Governance Director of Pioneer since None
Assistant Secretary the discretion of the December 2006 and Assistant Secretary of
Board. all the 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 (53) Since 2010. Serves at Senior Counsel of Pioneer since May 2013 None
Assistant Secretary the discretion of the and Assistant Secretary of all the Pioneer
Board. Funds since June 2010; and Counsel of
Pioneer from June 2007 to May 2013
----------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (56) Since 2008. Serves at Vice President - Fund Treasury of Pioneer; None
Treasurer and Chief Financial the discretion of the Treasurer of all of the Pioneer Funds since
and Accounting Officer Board. March 2008; Deputy Treasurer of Pioneer
from March 2004 to February 2008; and
Assistant Treasurer of all of the Pioneer
Funds from March 2004 to February 2008
----------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (51) Since 2007. Serves at Director - Fund Treasury of Pioneer; and None
Assistant Treasurer the discretion of the Assistant Treasurer of all of the Pioneer
Board. Funds
----------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 73
Trust Officers (continued)
----------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held With the Trust Length of Service Principal Occupation Held by Officer
----------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (58) Since 2007. Serves at Fund Accounting Manager - Fund Treasury of None
Assistant Treasurer the discretion of the Pioneer; and Assistant Treasurer of all of
Board. the Pioneer Funds
----------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (36) Since 2009. Serves at Fund Administration Manager - Fund Treasury None
Assistant Treasurer the discretion of the of Pioneer since November 2008; Assistant
Board. Treasurer 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 (63) Since 2010. Serves at Chief Compliance Officer of Pioneer and of None
Chief Compliance Officer the discretion of the all the Pioneer Funds since March 2010;
Board. Chief Compliance 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 (45) Since 2007. Serves at Director - Transfer Agency Compliance of None
Anti-Money Laundering Officer the discretion of the Pioneer and Anti-Money Laundering Officer of
Board. all the Pioneer Funds since 2006
----------------------------------------------------------------------------------------------------------------------------------
74 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
This page for your notes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/16 75
This page for your notes.
76 Pioneer Diversified High Income Trust | Annual Report | 4/30/16
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
--------------------------------------------------------------------------------
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site us.pioneerinvestments.com.
The Trust files a complete schedule of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at www.sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
Securities offered through Pioneer Funds Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2016 Pioneer Investments 21909-08-0616
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, 2016 and $51,063 for the year ended April 30, 2015.
(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 2016 or 2015.
(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, 2016 and $9,876 for the year ended April 30, 2015.
(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 2015 or 2014.
(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 2016 and 2015, 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, 2016 and $9,876 for the year ended April 30, 2015.
(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
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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
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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%.
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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.
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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.
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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.
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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.
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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, 2016. 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 11 $16,746,143 N/A N/A
Other Pooled Investment Vehicles 4 $ 5,452,601 N/A N/A
Other Accounts 8 $ 1,690,178 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- ----------
Andrew Feltus Other Registered
Investment Companies 12 $10,689,735 N/A N/A
Other Pooled Investment Vehicles 7 $ 9,130,579 3 $6,114,075
Other Accounts 6 $ 1,493,019 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- ----------
Jonathan Sharkey Other Registered Investment
Companies 3 $ 3,689,871 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
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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, 2016 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 28, 2016
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 28, 2016
By (Signature and Title)* /s/ Mark E. Bradley
Mark E. Bradley, Treasurer & Chief Accounting & Financial Officer
Date June 28, 2016
* 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 28, 2016 /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 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 28, 2016 /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, 2016 (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 28, 2016
/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, 2016 (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 28, 2016
/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;
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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
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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.
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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.
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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
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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.
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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
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