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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, 2012 through April 30, 2013
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 SHAREOWNERS.
Pioneer Diversified
High Income Trust
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Annual Report | April 30, 2013
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Ticker Symbol: HNW
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 10
Prices and Distributions 11
Performance Update 12
Schedule of Investments 13
Financial Statements 45
Financial Highlights 49
Notes to Financial Statements 51
Report of Independent Registered Public Accounting Firm 61
Approval of Investment Advisory Agreement 63
Trustees, Officers and Service Providers 67
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 1
President's Letter
Dear Shareowner,
Pioneer continues to see only modest economic growth in the U.S. Employment
continues to rise, albeit slowly, and we believe it will continue to do so in
2013, barring a negative shock to the system. The housing and auto sectors
continue to recover, benefiting from record-low interest rates. Banks'
willingness to lend to consumers and businesses also continues to rise, broad
measures of inflation remain subdued, and, if the weather cooperates in 2013,
food prices should come back down. And, while corporate profit growth has
slowed, profits remain high and many U.S. companies continue to both pay and
increase dividends*. Offsetting some of these positives are the continued
contraction of fiscal policy in Washington and a recessionary Europe.
The Federal Reserve's aggressive monetary policy has driven Treasury yields to
generational lows and supported investments in all financial assets, including
equities and high-yield corporate bonds. For example, the Standard & Poor's 500
Index (the S&P 500), a broad measure of the U.S. stock market, returned 15.99%
for the full calendar year ended December 31, 2012, and the Bank of America
Merrill Lynch High Yield Master II Index (the High Yield Index), which measures
the performance of high-yield corporate bonds, returned 15.59% for the same
12-month period. On the other hand, the Barclays Aggregate Bond Index (the
Aggregate Index), which tracks the performance of a higher-quality bond
universe, gained 4.22% for the 12 months ended December 31, 2012; the
safer-still Barclays Government Credit Index (the Government/Credit Index)
returned 4.82%; and 3-month Treasury bills, generally regarded as essentially
"risk free" by the markets, returned just 0.09% in 2012. "Risky" assets
outperformed again in the first quarter of 2013, as the S&P 500 returned 10.60%
and the High Yield Index returned 2.89%. In contrast, the Aggregate Index
returned -0.12% in the first quarter, the Government Credit Index returned
-0.16%, and Treasury bills returned 0.02%.
Despite generally improving economic conditions and a rising stock market,
global economies and investors still face daunting challenges as 2013 moves
forward, although we remain cautiously optimistic. U.S. fiscal policy remains
unsettled, and we feel the U.S. government could be at risk of credit rating
downgrades from one or more of the major ratings agencies if the uncertainties
persist. The Federal Reserve continues to provide extraordinary support to the
U.S. economy and the bond market, but will not do so indefinitely. Europe has
made progress, but has not yet resolved its sovereign-debt/banking problem, nor
has the region been able to exit recession. Japan recently has unveiled
* Dividends are not guaranteed.
2 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
aggressive and unconventional monetary and fiscal policies, but the country
continues to face issues such as high levels of debt as well as an aging
population. China and other emerging economies, while generally in better
shape than most "developed" markets, also face a range of challenges.
While most of the risks outlined here are widely recognized and may already be
"priced in" to the market, we believe investors should continue to expect market
volatility.
At Pioneer, we have long advocated the benefits of staying diversified and
investing for the long term. And while diversification does not assure a profit
or protect against loss in a declining market, we believe there are still
opportunities for prudent investors to earn attractive returns. Our advice, as
always, is to work closely with a trusted financial advisor to discuss your
goals and work together to develop an investment strategy that meets your
individual needs, keeping in mind that there is no single best strategy that
works for every investor.
Pioneer's investment teams have, since 1928, sought out attractive opportunities
in global equity and bond markets, using in-depth research to identify
undervalued individual securities, and using thoughtful risk management to
construct portfolios which balance potential risks and reward in an
ever-changing world.
We encourage you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
us.pioneerinvestments.com. We greatly appreciate your trust in us, and we thank
you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes. Past performance is no guarantee of
future results, and there is no guarantee that market forecasts discussed will
be realized.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 3
Portfolio Management Discussion | 4/30/13
Lower-quality, higher-yielding fixed-income securities performed well throughout
the world during the 12-month period ended April 30, 2013, as investors gained
more confidence about the strength of the global economic recovery. In the
following interview, Andrew Feltus discusses the factors that affected the
performance of Pioneer Diversified High Income Trust during the 12-month period.
A senior vice president and portfolio manager at Pioneer, Mr. Feltus is
responsible for the day-to-day management of the Trust.
Q How did Pioneer Diversified High Income Trust perform during the 12-month
period ended April 30, 2013?
A Pioneer Diversified High Income Trust returned 17.38% at net asset value and
19.98% at market price during the 12-month period ended April 30, 2013.
During the same period, the Trust's custom benchmark returned 11.59%. The
custom benchmark is based on equal weightings of the Bank of America Merrill
Lynch (BofA ML) Global High Yield and Emerging Markets Plus Index, which
returned 14.95% during the 12-month period, and the Credit Suisse Leveraged
Loan Index, which returned 8.23%. Unlike the Trust, the custom benchmark
does not use leverage. While use of leverage increases investment
opportunity, it also increases investment risk. In addition, during the same
12-month period, the average return (at market price) of the 40 closed-end
funds in Lipper's High Current Yield Closed End Funds category (which may or
may not be leveraged) was 14.55%.
The shares of the Trust were selling at a 5.4% premium to net asset value at
the end of the 12-month period on April 30, 2013.
On April 30, 2013, the standardized 30-day SEC yield on the Trust's shares
was 8.79%.
Q How would you describe the investment environment during the 12-month period
ended April 30, 2013?
A Credit-sensitive securities performed strongly during the period, led by
U.S. high-yield bonds and emerging market debt, as worries about debt
problems in Europe and weakening economic growth in China subsided and the
markets grew more confident that economies around the world would improve.
The growing confidence, in turn, led to underperformance by U.S. Treasuries
and other higher-quality, but lower-yielding investments.
The period actually got off to a slow start in the spring and early summer
of 2012, as several problem areas concerned investors. They included
evidence of weakness in the U.S. economy, slowing economic growth in China
and the continuing government-debt crisis in Europe. Credit-sensitive
securities
4 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
underperformed for most of the summer of 2012, but market sentiment began to
improve in August when the new leader of the European Central Bank (ECB)
declared that the bank would do "whatever it takes" to protect the European
Union and the euro currency. Subsequent to the ECB's announcement, the U.S.
Federal Reserve System (the Fed) announced its third round of quantitative
easing through the purchasing of mortgage-backed securities in the open
market. Additionally, Chinese officials announced that they, too, were
lowering short-term interest rates and easing credit conditions.
The actions of the central banks and other governmental authorities helped
trigger a sharp rally in the financial markets, and high-yield and other
credit-sensitive securities performed well in the months that followed.
Strong growth trends in select emerging markets added to the rally, and,
although global economic data was somewhat mixed during the first quarter of
2013, the markets took encouragement from the election results in Japan,
which brought new leadership that favored more aggressive economic stimulus
through government and central bank intervention. The policies included a
more accommodative monetary stance by the Bank of Japan, to which a new
governor was appointed.
In the United States, meanwhile, progress in the manufacturing and housing
sectors strengthened investors' confidence. While the markets did not appear
to worry about how disagreements over the country's fiscal policy could
affect the U.S. economy, temporary measures agreed upon by Congress and the
President calmed fears enough to allow the rally in credit-sensitive
securities to continue through the end of the 12-month period. In addition,
investors appeared to take comfort from signs of increased fiscal
consolidation by the U.S. government at a time when the private sector
appeared to be strengthening.
Q What types of investments or strategies had the biggest impact on the
Trust's performance during the 12-month period ended April 30, 2013?
A The Trust's exposure to higher-yielding investments, including U.S. and
foreign high-yield corporate bonds as well as select emerging market
securities, helped drive performance during the 12-month period. Meanwhile
the Trust's use of leverage, or borrowed funds, magnified the positive
benefits of a rising market for credit-sensitive securities. While the Trust
held just a small position in non-U.S. currencies at the end of the 12-month
period, exposures to the currencies of Mexico, Russia, and higher-yielding
emerging market nations such as Nigeria and Ghana had a positive influence
on performance. For diversification purposes and to help protect the Trust's
portfolio against the risk of rising interest rates, the Trust also had
healthy allocations to floating-rate, credit-linked securities, including
bank loans and event-linked ("catastrophe") bonds issued by
property-and-casualty
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 5
insurers. While the floating-rate investments did not help the Trust's
benchmark-relative performance, as they lagged the returns generated by
high-yield corporates, the investments still produced solid, positive
results and contributed to the Trust's absolute performance. While both bank
loans and catastrophe bonds benefited from strong demand and positive asset
flows for most of the 12-month period, each asset class faced its own
challenges. The performance of bank loans was affected when many loans were
refinanced at lower interest rates, while catastrophe bonds experienced
periods of price declines, most notably following the ravages inflicted by
"Superstorm Sandy" along the U.S. eastern seaboard in October 2012.
At the end of the period, on April 30, 2013, roughly 33% of the Trust's
total investment portfolio was allocated to U.S. high-yield corporate bonds.
In addition, nearly 19% of the Trust's total investment portfolio was
invested in floating-rate bank loans, and 17% of the Trust's total
investment portfolio was allocated to catastrophe bonds. The Trust also had
a combined 22% of its total investment portfolio allocated to international
high-yield debt from developed nations as well as debt from the emerging
markets.
Q Which individual investments had the biggest effects on the Trust's
performance during the 12-month period ended April 30, 2013?
A The Trust realized good performance from many investments in both U.S.
high-yield and emerging market high-yield debt.
Burger King, the fast-food chain, launched an initial public stock offering
(IPO) near the end of the 12-month period, and the restructuring resulted in
healthy appreciation of the Trust's holdings of high-yield Burger King
bonds. Fage, a yogurt company with operations in both the United States and
Greece, issued new debt and improved its financial structure during the
period, resulting in gains in the price of the existing debt held in the
Trust's portfolio. The Trust's holdings of the high-yield debt of Mirabela
Nickel, a materials company, also gained in value as the company expanded
its mining operations. In the emerging markets, the Trust enjoyed
particularly strong performance from holdings of bonds of two Brazilian beef
companies: Minerva and Marfrig. Earnings of both companies grew as the price
of beef rose and exports increased.
Another contributor to the Trust's performance during the period was a bank
loan to Medical Card Systems, a health care services company operating in
Puerto Rico. The value of the loans appreciated as the company improved its
earnings after going through some earlier struggles.
There were some underperforming holdings held by the Trust during the
period, including the bonds of James River Coal, which declined in value as
demand for coal weakened. The continued poor environment in the construction
industry affected the Trust's holdings of New Enterprise Stone,
6 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
which supplies aggregate materials for building projects. The company's
problems were aggravated when it was late in releasing its financial
reports. However, New Enterprise has appointed a new chief financial
officer, and we continue to have confidence in the underlying fundamental
value of the company's assets. The Trust's holdings of the bonds of CEVA, a
logistics and shipping company with significant exposure to Europe, also
underperformed during the fiscal year ended April 30, 2013. However, we have
become more encouraged since the company restructured its finances late in
the 12-month period and issued new subordinated debt. In the emerging
markets, holdings of Mexican home-builders Urbi and Homex both detracted
from the Trust's results as their business models were affected by new
government housing policies.
The Trust's disappointing investments also included one bank loan to
Lodgenet, a U.S. company that provides video and internet services to the
hotel industry. Lodgenet's operating results were hurt by the effects of
growing use of new communications technologies, including tablets and smart
phones, which have reduced demand for traditional hotel communication
services.
Q Did the use of derivatives affect the Trust performance during the 12-month
ended April 30, 2013?
A The Trust did invest in currency forward contracts to reduce the risks posed
by changes in the relative values of different currencies. The use of those
derivatives had a minimal impact on performance.
Q How did the level of leverage in the Trust change during the 12-month period
ended April 30, 2013?
A At the end of the 12-month period on April 30, 2013, the 28.7% of the
Trust's total managed assets were financed by leverage, compared with 30.0%
of the Trust's total managed assets financed by leverage at the start of the
fiscal year on May 1, 2012. The decrease was due to an increase in the value
of securities in which the Trust had invested.
Q What is your investment outlook?
A We believe global economies will continue to grow, although at modest pace,
allowing the world's major central banks, including the Fed, to maintain
their accommodative, low-interest-rate policies. That should create a good
environment for credit-sensitive securities, in particular. Our outlook is
not so optimistic for very high-quality, lower-yielding government
securities, including U.S. Treasuries. Their prices appear high, and they
are realizing negative yields when inflation is taken into consideration
("real yields"). If market interest rates rise, Treasury values will suffer
and potentially affect other sectors of the bond market.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 7
To help mitigate the risks of rising interest rates, we have added to the
Trust's positions in floating-rate investments, including bank loans,
catastrophe bonds and floating-rate bonds. Floating-rate investments offer
the potential for rising yields as interest rates go up. Moreover, bank
loans offer the additional protection of being senior to other fixed-income
securities in the debt structure, and so holders of bank loans typically
would be the first to be paid in any corporate bankruptcy or debt
restructuring.
In addition to corporate debt, we also expect to look for additional
opportunities in some emerging market currencies, where values look
appealing. We intend to keep the Trust's portfolio well diversified* across
different sectors.
Going forward, we think individual security selection is likely to become
even more important to generating solid performance in the fixed-income
market. We believe that should play to Pioneer's strengths, as we place
great emphasis on the analysis of the business fundamentals and
credit-worthiness of individual companies.
Please refer to the Schedule of Investments on pages 13-44 for a full listing of
Trust securities.
* Diversification does not assure a profit nor protect against loss in a
declining market.
8 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Investments in high-yield or lower-rated securities are subject to greater-than-
average risk. The Trust may invest in securities of issuers that are in default
or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of debt securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities in the Trust generally will rise. Investments in the Trust are
subject to possible loss due to the financial failure of the issuers of the
underlying securities and the issuers' inability to meet their debt obligations.
The Trust may invest up to 50% of its total assets in illiquid securities.
Illiquid securities may be difficult to dispose of at a fair price at the times
when the Trust believes it is desirable to do so and their market price 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 will not be
sufficient to cover the cost of leverage, which may adversely affect the return
for shareholders.
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.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 9
Portfolio Summary | 4/30/13
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 71.6%
Senior Secured Floating Rate Loan Interests 18.5%
Convertible Bonds & Notes 1.8%
Temporary Cash Investments 1.6%
Sovereign Debt Obligations 1.5%
Preferred Stocks 1.3%
Collateralized Mortgage Obligations 1.1%
Asset Backed Securities 1.1%
Common Stocks 0.8%
Convertible Preferred Stock 0.3%
Treasury Bills 0.2%
Commercial Mortgage-Backed Securities 0.2%
Right/Warrant* 0.0%
* Amount is less than 0.1%
Portfolio Quality
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(As a percentage of total investment portfolio; based on Standard & Poor's
ratings (S&P))
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
AA 0.2%
A 0.4%
BBB 3.9%
BB 16.9%
B 45.8%
CCC 15.5%
CC 0.3%
C 0.2%
D 0.6%
NR 16.2%
Bond ratings are ordered highest to lowest in portfolio. Based on S&P's
measures, AAA (highest possible rating) through BBB are considered investment
grade; BB or lower ratings are considered non-investment grade. Cash equivalents
and some bonds may not be rated.
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
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(As a percentage of total long-term holdings)*
1. Fixed Income Trust Series 2013-A, 0.0%, 10/15/97 (144A) 1.60%
--------------------------------------------------------------------------------
2. Alliance One International, Inc., 10.0%, 7/15/16 0.91
--------------------------------------------------------------------------------
3. Queen Street IV Capital, Ltd., 7.546%, 4/9/15 (144A) 0.86
--------------------------------------------------------------------------------
4. Altair Re, 0.0% 0.85
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5. Caelus Re, Ltd., 5.301%, 3/7/16 (144A) 0.85
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6. Montana Re, Ltd., 16.681%, 1/8/14 (144A) 0.85
--------------------------------------------------------------------------------
7. Successor X, Ltd., 14.683%, 1/7/14 (144A) 0.85
--------------------------------------------------------------------------------
8. AMC Entertainment, Inc., 9.75%, 12/1/20 0.85
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9. Successor X, Ltd., 16.183%, 1/7/14 (144A) 0.84
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10. INEOS Group Holdings SA, 7.875%, 2/15/16 (144A) 0.78
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* This list excludes temporary cash investments and derivative instruments.
The portfolio is actively managed, and current holdings may be different.
The holdings listed should not be considered recommendations to buy or sell
any security listed.
10 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Prices and Distributions | 4/30/13
Market Value per Common Share
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4/30/13 4/30/12
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$21.82 $20.13
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Premium 5.4% 3.2%
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Net Asset Value per Common Share
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--------------------------------------------------------------------------------
4/30/13 4/30/12
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$20.70 $19.51
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Distributions per Common Share
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Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
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5/1/12 - 4/30/13 $ 2.04 $ -- $ --
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Pioneer Diversified High Income Trust | Annual Report | 4/30/13 11
Performance Update | 4/30/13
Investment Returns
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The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in common
shares of Pioneer Diversified High Income Trust, 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, 2013)
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Net Asset Market
Period Value (NAV) Price
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Life-of-Trust
(5/30/07) 9.32% 9.44%
5 Years 10.99 13.81
1 Year 17.38 19.98
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Market Value of $10,000 Investment
Pioneer Diversified 50% BofA ML Global HY and EMP Index
High Income Trust 50% CS Leveraged Loan Index
5/31/2007 $ 10,000 $ 10,000
4/30/2008 $ 8,933 $ 9,879
4/30/2009 $ 6,868 $ 8,422
4/30/2010 $ 11,899 $ 11,487
4/30/2011 $ 14,034 $ 12,708
4/30/2012 $ 14,224 $ 13,210
4/30/2013 $ 17,065 $ 14,786
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.
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 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 includes bank borrowing, 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 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.
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 employ leverage. It is not possible to invest directly in an
index.
12 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Schedule of Investments | 4/30/13
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES --
1.5% of Net Assets
874,203(a) CCC/Caa1 Aircraft Finance Trust, Series 1999-1A,
Class A1, 0.679%, 5/15/24 (144A) $ 402,133
187(a) B-/Ba3 Aircraft Finance Trust, Series 1999-1A,
Class A2, 0.699%, 5/15/24 (144A) 169
450,000(a) AA+/A3 Bear Stearns Asset Backed Securities Trust,
Series 2004-BO1, Class M3, 1.25%, 10/25/34 426,279
100,000 BB/NR CarNow Auto Receivables Trust, Series 2012-1A,
Class D, 6.9%, 11/15/16 (144A) 100,286
699,000(a) CCC/Caa2 Carrington Mortgage Loan Trust,
Series 2007-FRE1, Class A2, .4%, 2/25/37 617,299
102,855(a) B-/B3 GSAMP Trust, Series 2006-HE8, Class A2B,
0.33%, 1/25/37 97,597
431,925(a) CCC/Caa3 Morgan Stanley Home Equity Loan Trust,
Series 2007-2, Class A1, 0.3%, 4/25/37 349,060
195,529 BB/NR Westgate Resorts LLC, Series 2012-2A,
Class C, 9.0%, 1/20/25 (144A) 199,072
446,515 NR/NR Westgate Resorts LLC, Series 2012-BA,
Class A, 9.5%, 2/20/25 (144A) 448,694
--------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $2,508,875) $ 2,640,589
--------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 1.6% of Net Assets
200,000(b) CCC/B3 Credit Suisse First Boston Mortgage
Securities Corp., Series 2004-C4, Class E,
5.135%, 10/15/39 (144A) $ 188,041
300,000 NR/NR Extended Stay America Trust, Series 2013-
ESHM, Class M, 7.625%, 12/5/19 (144A) 323,292
237,499 CCC/Caa3 Global Mortgage Securitization Ltd.,
Series 2005-A, Class B3, 5.25%, 4/25/32 210,746
375,000(a) NR/Ba2 GS Mortgage Securities Corp. II, Series
2013-KYO, Class E, 3.8%, 11/8/29 (144A) 376,743
170,977(b) B/NR GSR Mortgage Loan Trust, Series 2004-3F,
Class B1, 5.732%, 2/25/34 166,722
853,082(a) B/Ba2 Impac CMB Trust, Series 2004-9, Class
1A1, 0.96%, 1/25/35 812,296
556,571(b) BB/NR LB-UBS Commercial Mortgage Trust 2006-
C1, Series 2006-C1, Class AJ, 5.276%, 2/15/41 554,066
91,021(a) NR/NR WaMu Mortgage Pass Through Certificates,
Series 2006-AR16, Class 3A1, 4.658%,
12/25/36 85,812
--------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $2,613,113) $ 2,717,718
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 13
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 0.3% of Net Assets
150,000(b) NR/Baa2 Bear Stearns Commercial Mortgage
Securities Trust, Series 2005-PWR7, Class B,
5.214%, 2/11/41 $ 154,021
250,000(b) NR/Baa3 COMM 2012-CCRE2 Mortgage Trust,
Series 2012-CR2, Class E, 5.02%,
8/15/45 (144A) 255,588
173,369(a) NR/Ba1 JP Morgan Chase Commercial Mortgage
Securities Corp., Series 2006-FL2A, Class G,
0.559%, 11/15/18 (144A) 163,398
--------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL MORTGAGE-BACKED
SECURITIES
(Cost $503,720) $ 573,007
--------------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE LOAN
INTERESTS -- 25.7% of Net Assets*
AUTOMOBILES & COMPONENTS -- 2.4%
Auto Parts & Equipment -- 1.2%
137,644 B/B1 Federal-Mogul Corp., Tranche B Term Loan,
2.138%, 12/29/14 $ 130,790
70,226 B/B1 Federal-Mogul Corp., Tranche C Term Loan,
2.138%, 12/29/15 66,730
249,375 B+/B1 Metaldyne LLC, USD Term Loan, 5.0%,
12/18/18 254,674
282,863 NR/NR TI Group Automotive Systems, LLC,
Additional Term Loan, 5.5%, 3/28/19 287,813
216,965 BB/Ba2 Tomkins, LLC, Term Loan B-2, 3.75%,
9/29/16 220,491
980,000 NR/NR Tower Automotive Holdings USA, LLC Initial
Term Loan, 5.75%, 4/23/20 997,150
141,406 B+/Ba2 UCI International, Inc., (United Components)
Term Loan, 5.5%, 7/26/17 142,908
---------------
$ 2,100,556
--------------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 0.9%
1,473,750 BB/Ba1 Chrysler Group LLC, Tranche B Term Loan,
6.0%, 5/24/17 $ 1,498,714
--------------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.3%
575,000 BB/Ba1 Goodyear Tire & Rubber Co., Extended
Second Lien Term Loan, 4.75%, 4/30/19 $ 582,065
---------------
Total Automobiles & Components $ 4,181,335
--------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 2.8%
Aerospace & Defense -- 1.0%
837,841 B-/B2 DAE Aviation Holdings, Inc., Tranche B-1
Loan, 6.25%, 11/2/18 $ 846,743
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Aerospace & Defense -- (continued)
195,179 B+/B2 Hunter Defense Technologies, Inc., Term
Loan, 3.54%, 8/22/14 $ 186,883
379,822 B/B2 Standard Aero, Ltd., Tranche B-2 Loan,
6.25%, 11/2/18 383,858
323,651 BB-/B1 TASC, Inc., New Tranche B Term Loan, 4.5%,
12/18/15 325,673
---------------
$ 1,743,157
--------------------------------------------------------------------------------------------------------
Construction & Farm Machinery &
Heavy Trucks -- 0.6%
94,295 BB/Ba2 Manitowoc Co., Inc., Term Loan B, 4.25%,
11/13/17 $ 95,650
390,000 BB-/NR Navistar International Corp., Tranche B,
Term Loan, 5.75%, 8/17/17 394,875
480,996 B+/B2 Waupaca Foundry, Inc., Term Loan, 4.5%,
6/29/17 486,407
---------------
$ 976,932
--------------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.3%
562,175 BB-/Ba2 WireCo WorldGroup, Inc., Term Loan, 6.0%,
2/15/17 $ 570,608
--------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.9%
437,055 BBB-/Ba2 AWAS Finance Luxembourg 2012 SA, Term
Loan, 4.75%, 7/16/18 $ 443,065
1,137,150 B+/Ba3 WESCO Distribution, Inc., Tranche B-1 Loan,
4.5%, 12/12/19 1,150,061
---------------
$ 1,593,126
---------------
Total Capital Goods $ 4,883,823
--------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL
SERVICES -- 0.8%
Commercial Printing -- 0.1%
133,333 NR/NR Cenveo Corp., Term Loan B, 6.25%, 2/13/17 $ 134,917
--------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.6%
1,059,943 CCC-/Caa2 Synagro Technologies, Inc., First Lien Term
Loan, 2.28%, 4/2/14 $ 1,044,044
--------------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.1%
206,347 B+/B1 Protection One, Inc., Term Loan, 4.25%,
2/21/19 $ 209,700
---------------
Total Commercial & Professional Services $ 1,388,661
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 15
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.1%
Textiles -- 0.1%
141,978 NR/Ba3 Klockner Pentaplast of America, Inc.,
(Kleopatra Acquisition Corp.), Term Loan B-1,
5.75%, 12/21/16 $ 144,552
---------------
Total Consumer Durables & Apparel $ 144,552
--------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 1.2%
Hotels, Resorts & Cruise Lines -- 0.5%
864,063 BB-/Ba2 Seven Seas Cruises, Inc., B-1 Term Loan,
4.75%, 12/21/18 $ 877,024
--------------------------------------------------------------------------------------------------------
Restaurants -- 0.7%
545,865 B+/B1 Landry's, Inc., Term Loan B, 4.75%, 4/24/18 $ 554,394
544,825 NR/Ba3 NPC International, Inc., Term Loan, 4.5%,
12/28/18 553,678
---------------
$ 1,108,072
---------------
Total Consumer Services $ 1,985,096
--------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.5%
Consumer Finance -- 0.2%
323,740 B/B3 Springleaf Financial Funding Co., Initial
Term Loan, 5.5%, 5/10/17 $ 325,561
--------------------------------------------------------------------------------------------------------
Other Diversified Financial Services -- 0.3%
72,253 NR/NR Long Haul Holdings, Ltd., Facility Term Loan
A, 0.0%, 4/22/13 $ 40,462
57,668 NR/NR PT Bakrie & Brothers Tbk, Facility Term Loan
B, 0.0%, 4/22/13 32,294
426,037 B/NR WideOpenWest Finance, LLC, Term Loan B,
6.0%, 4/1/19 432,465
---------------
$ 505,221
---------------
Total Diversified Financials $ 830,782
--------------------------------------------------------------------------------------------------------
ENERGY -- 1.2%
Coal & Consumable Fules -- 0.6%
567,813 B+/B2 Preferred Proppants LLC, Initial Term Loan
B, 9.0%, 12/15/16 $ 539,422
450,000 NR/NR PT Bumi Resources Tbk, Term Loan, 11.2%,
8/7/13 440,100
---------------
$ 979,522
--------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.6%
400,000 BB-/Ba3 Chesapeake Energy Corp., Term Loan,
5.75%, 12/2/17 $ 414,719
650,000 B/B1 Samson Investment Co., Initial Term Loan,
6.0%, 9/25/18 658,531
---------------
$ 1,073,250
---------------
Total Energy $ 2,052,772
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.7%
Packaged Foods & Meats -- 0.7%
239,091 B/B1 Del Monte Foods Co., Initial Term Loan,
4.0%, 3/8/18 $ 241,307
940,000 B-/NR New HB Acquisition, LLC Term B Loan,
6.75%, 4/9/20 965,263
---------------
Total Food, Beverage & Tobacco $ 1,206,570
--------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT &
SERVICES -- 3.2%
Health Care Equipment & Services -- 0.1%
241,942 BB-/Ba2 Kinetic Concepts, Inc., Dollar C-1 Term Loan,
5.5%, 5/4/18 $ 246,630
--------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.9%
983,916 BB/Ba3 CHS/Community Health Systems, Inc.,
Extended Term Loan, 3.787%, 1/25/17 $ 994,982
198,040 BB/Ba3 HCA, Inc., Tranche B-2 Term Loan, 3.534%,
3/31/17 198,853
82,579 NR/NR HCA, Inc., Tranche B-4 Term Loan, 2.948%,
5/1/18 82,889
324,188 B+/Ba3 Kindred Healthcare, Inc., Incremental Term
Loan, 5.25%, 6/1/18 327,632
---------------
$ 1,604,356
--------------------------------------------------------------------------------------------------------
Health Care Services -- 1.3%
377,708 B+/B2 AccentCare, Inc., Term Loan, 6.5%, 12/22/16 $ 264,396
345,706 B+/B1 Gentiva Health Services, Inc., Term Loan B-1,
6.5%, 8/17/16 348,586
341,123 B/Ba3 Inventiv Health, Inc., Consolidated Term
Loan, 7.5%, 8/4/16 338,849
401,801 NR/NR National Mentor Holdings, Inc., Tranche B-1
Term Loan, 6.5%, 2/9/17 407,828
243,289 B/B2 National Specialty Hospitals, Inc., Initial
Term Loan, 8.25%, 2/3/17 243,289
295,506 B/B1 Valitas Health Services, Inc., Term Loan B, 296,984
5.75%, 6/2/17
491,250 NR/B3 Virtual Radiologic Corp., Term Loan B,
7.75%, 12/22/16 349,401
---------------
$ 2,249,333
--------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.4%
240,112 B+/NR Alere, Inc., Term Loan B, 4.25%, 6/30/17 $ 242,413
367,225 B+/B1 Bausch & Lomb, Inc., Parent Term Loan,
5.25%, 5/17/19 370,266
---------------
$ 612,679
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 17
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.5%
240,945 NR/NR IMS Health, Inc., Tranche B-1 Dollar Term
Loan, 3.75%, 9/1/17 $ 243,204
366,105 CCC/Caa3 Medical Card System, Inc., Term Loan,
11.7%, 9/17/15 364,275
25,510 B/NR Physician Oncology Services LP, Delayed
Draw Term Loan, 8.0%, 1/31/17 25,510
209,980 B/B2 Physician Oncology Services LP, Effective
Date Term Loan, 8.0%, 1/31/17 209,980
---------------
$ 842,969
---------------
Total Health Care Equipment & Services $ 5,555,967
--------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.9%
Household Products -- 0.5%
440,000 NR/NR SRAM LLC, First Lien Term Loan, 4.0%,
4/10/20 $ 441,100
434,149 B-/B2 Wash MultiFamily Laundry Systems LLC,
U.S. Term Loan, 5.25%, 2/21/19 439,575
---------------
$ 880,675
--------------------------------------------------------------------------------------------------------
Personal Products -- 0.4%
272,251 B/NR Monitronics International, Inc., Term Loan B,
4.25%, 3/23/18 $ 276,676
215,357 BB-/NR NBTY, Inc., B-2 Term Loan, 3.5%, 10/1/17 218,049
208,828 B+/Ba2 Revlon Consumer Products Corp.,
Replacement Term Loan, 4.0%, 11/20/17 212,287
---------------
$ 707,012
---------------
Total Household & Personal Products $ 1,587,687
--------------------------------------------------------------------------------------------------------
INSURANCE -- 1.4%
Insurance Brokers -- 0.8%
578,550 B-/B1 Alliant Holdings, I LLC, Initial Term Loan,
5.0%, 12/20/19 $ 586,686
679,107 B+/B1 HUB International, Ltd., 2017 Initial Term
Loan, 3.706%, 6/13/17 687,172
---------------
$ 1,273,858
--------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 0.6%
600,000 CCC/Caa2 Confie Seguros Holding II Co., Second Lien
Term Loan, 10.25%, 5/8/19 $ 615,750
453,863 B-/B1 USI Holdings Corp., Initial Term Loan,
5.25%, 12/27/19 460,292
---------------
$ 1,076,042
---------------
Total Insurance $ 2,349,900
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
MATERIALS -- 1.3%
Commodity Chemicals -- 0.1%
198,004 BB-/B1 Taminco Global Chemical Corp., Tranche B-
2 Dollar Term Loan, 4.25%, 2/15/19 $ 200,603
--------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 0.2%
342,126 B+/B2 Univar, Inc., Term Loan B, 5.0%, 6/30/17 $ 344,716
--------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.3%
512,577 NR/B1 Tank Holding Corp., Initial Term Loan,
4.25%, 7/9/19 $ 515,461
--------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.3%
456,863 B/B2 Exopack LLC/Cello-Foil Products, Inc., Term
Loan B, 6.5%, 5/31/17 $ 463,715
--------------------------------------------------------------------------------------------------------
Precious Metals & Minerals -- 0.1%
183,375 BB-/B1 Fairmount Minerals, Ltd., Tranche B Term
Loan, 5.25%, 3/15/17 $ 185,495
--------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.3%
248,694 BB+/Ba1 Chemtura Corp., Facility Term Loan, 5.5%,
8/29/16 $ 252,735
344,239 BB+/Ba1 Huntsman International LLC, Extended Term
B Loan, 2.743%, 4/19/17 346,575
---------------
$ 599,310
---------------
Total Materials $ 2,309,300
--------------------------------------------------------------------------------------------------------
MEDIA -- 1.7%
Advertising -- 0.6%
970,038 B+/Ba3 Affinion Group, Inc., Tranche B Term Loan,
6.5%, 10/9/16 $ 955,833
--------------------------------------------------------------------------------------------------------
Broadcasting -- 0.8%
532,207 B/B2 FoxCo Acquisition Sub LLC, Initial Term
Loan, 5.5%, 7/14/17 $ 542,075
404,958 BB-/Ba3 TWCC Holding Corp., Term Loan, 3.5%,
2/13/17 411,336
471,717 B+/B2 Univision Communications, Inc., 2013
Converted Extended First-Lien Term Loan,
4.75%, 3/1/20 477,065
---------------
$ 1,430,476
--------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.3%
122,493 NR/Baa3 Cinedigm Digital Funding I LLC, Term Loan,
3.75%, 2/28/18 $ 123,258
571,003 D/NR Lodgenet Interactive Corp., Closing Date
Term Loan, 6.75%, 3/28/18 439,673
---------------
$ 562,931
---------------
Total Media $ 2,949,240
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 19
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 1.9%
Biotechnology -- 0.8%
488,750 BB/B2 Aptalis Pharma, Inc., Term Loan B-1, 5.5%,
2/11/17 $ 493,485
112,703 BBB-/Ba3 Warner Chilcott Co., LLC, Term Loan B-2,
4.25%, 3/15/18 114,547
456,506 BBB-/Ba3 Warner Chilcott Corp., Term Loan B-1,
4.25%, 3/15/18 463,979
250,631 BBB-/Ba3 WC Luxco S.a.r.l., Term Loan B-3, 4.25%,
3/15/18 254,734
---------------
$ 1,326,745
--------------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.8%
1,303,351 BB-/Ba3 Catalent Pharma, Inc., Dollar Term Loan,
3.698%, 9/15/16 $ 1,313,941
--------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.3%
592,428(c) NR/NR K-V Pharmaceutical Co., DIP Facility, 11.0%,
12/28/13 $ 574,655
---------------
Total Pharmaceuticals, Biotechnology
& Life Sciences $ 3,215,341
--------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.1%
Real Estate Development -- 0.1%
193,750 B-/Ba3 Ozburn-Hessey Holding Co., LLC, First Lien
Term Loan, 8.25%, 4/8/16 $ 194,476
---------------
Total Real Estate $ 194,476
--------------------------------------------------------------------------------------------------------
RETAILING -- 0.5%
Computer & Electronics Retail -- 0.5%
884,251 B/B2 Targus Group International, Inc., Term Loan,
11.0%, 5/24/16 $ 888,673
---------------
Total Retailing $ 888,673
--------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.3%
Semiconductor Equipment -- 0.3%
585,466 BB-/B1 Aeroflex, Inc., Tranche B Term Loan, 5.75%,
5/9/18 $ 594,797
---------------
Total Semiconductors &
Semiconductor Equipment $ 594,797
--------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.7%
Application Software -- 1.9%
700,000 B+/B1 Applied Systems, Inc., Second Lien Term
Loan, 8.25%, 6/8/17 $ 705,250
670,342 B-/Ba3 Expert Global Solutions, Inc., Advance First
Lien Term Loan B, 8.5%, 4/3/18 680,677
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Application Software -- (continued)
430,650 NR/B2 Houghton Mifflin Co., Term Loan, 7.25%,
5/22/18 $ 434,149
947,626 BB+/Baa2 Nuance Communications, Inc., Term Loan C,
3.2%, 3/31/16 955,562
500,000 CCC+/Caa1 Vertafore, Inc., Second Lien Term Loan,
9.75%, 10/29/17 515,000
---------------
$ 3,290,638
--------------------------------------------------------------------------------------------------------
Data Processing & Outsourced
Services -- 0.1%
212,143 BBB/Ba2 Vantiv LLC, Tranche B Term Loan, 3.75%,
3/27/19 $ 213,270
--------------------------------------------------------------------------------------------------------
Internet Software & Services -- 0.2%
245,000 BB+/Ba3 Autotrader.com, Inc., Tranche B-1 Term
Loan, 4.0%, 12/15/16 $ 248,061
--------------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 0.5%
823,970 BB/Ba3 SunGuard Data Systems, Inc., Tranche C
Term Loan, 3.95%, 2/28/17 $ 829,978
---------------
Total Software & Services $ 4,581,947
--------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE &
EQUIPMENT -- 0.4%
Communications Equipment -- 0.1%
241,914 BB/Ba3 CommScope, Inc., Tranche 1 Term Loan,
3.75%, 1/14/18 $ 245,392
--------------------------------------------------------------------------------------------------------
Electronic Components -- 0.3%
477,897 B/B2 Scitor Corp., Term Loan, 5.0%, 2/15/17 $ 477,896
---------------
Total Technology Hardware & Equipment $ 723,288
--------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.5%
Integrated Telecommunication Services -- 0.5%
792,855 NR/NR West Corp., Tranche B-8 Term Loan, 0.0%,
6/30/18 $ 806,627
---------------
Total Telecommunication Services $ 806,627
--------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.8%
Air Freight & Logistics -- 0.8%
439,482 B/B1 Ceva Group Plc, Dollar Tranche B Pre-Funded
L/C Term Loan, 0.183%, 8/31/16 $ 410,366
919,588 B-/B1 Ceva Group Plc, U.S. Tranche B Term Loan,
7.276%, 8/31/16 883,571
---------------
Total Transportation $ 1,293,937
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 21
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
UTILITIES -- 0.3%
Electric Utilities -- 0.3%
629,720 CCC/Caa3 Texas Competitive Electric Holdings Co.,
LLC, 2017 Term Loan, 4.731%, 10/10/17 $ 464,104
---------------
Total Utilities $ 464,104
--------------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING
RATE LOAN INTERESTS
(Cost $43,901,072) $ 44,188,875
--------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES --
99.9% of Net Assets
AUTOMOBILES & COMPONENTS -- 0.4%
Auto Parts & Equipment -- 0.4%
350,000 B/Caa1 International Automotive Components
Group SA, 9.125%, 6/1/18 (144A) $ 349,563
279,000 B+/B1 Tower Automotive Holdings USA LLC / TA
Holdings Finance, Inc., 10.625%, 9/1/17 (144A) 296,789
---------------
Total Automobiles & Components $ 646,352
--------------------------------------------------------------------------------------------------------
BANKS -- 1.5%
Diversified Banks -- 0.6%
525,000 B-/B3 Banco de Galicia y Buenos Aires, 8.75%,
5/4/18 (144A) $ 456,750
500,000(b) NR/Caa3 Banco Macro SA, 9.75%, 12/18/36 362,500
200,000 NR/Ba2 Turkiye IS Bankasi AS, 6.0%, 10/24/22 (144A) 218,500
---------------
$ 1,037,750
--------------------------------------------------------------------------------------------------------
Regional Banks -- 0.9%
600,000(b)(d) BBB/Baa3 PNC Financial Services Group, Inc., 8.25% $ 601,205
750,000 BBB-/NR UBS AG/Stamford CT, 7.625%, 8/17/22 869,658
---------------
$ 1,470,863
---------------
Total Banks $ 2,508,613
--------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 6.9%
Aerospace & Defense -- 0.8%
600,000 B-/Caa1 ADS Tactical, Inc., 11.0%, 4/1/18 (144A) $ 597,000
870,000 B-/B2 DynCorp International, Inc., 10.375%, 7/1/17 859,125
---------------
$ 1,456,125
--------------------------------------------------------------------------------------------------------
Building Products -- 0.8%
850,000 CC/Caa3 New Enterprise Stone & Lime Co., Inc.,
11.0%, 9/1/18 $ 563,125
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Building Products -- (continued)
300,000 BB-/B2 USG Corp., 7.875%, 3/30/20 (144A) $ 341,250
365,000 BB-/B2 USG Corp., 9.75%, 8/1/14 (144A) 400,588
---------------
$ 1,304,963
--------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.8%
900,000 B+/B1 Empresas ICA S.A.B. de C.V., 8.9%, 2/4/21
(144A) $ 873,000
500,000 BB-/NR OAS Investments GMBH, 8.25%, 10/19/19
(144A) 523,500
---------------
$ 1,396,500
--------------------------------------------------------------------------------------------------------
Construction & Farm Machinery &
Heavy Trucks -- 0.9%
660,000 CCC+/B3 Navistar International Corp., 8.25%,
11/1/21 $ 687,225
300,000 NR/NR OSX 3 Leasing BV, 9.25%, 3/20/15 (144A) 277,500
160,000 CCC/Caa1 Stanadyne Holdings, Inc., 10.0%, 8/15/14 159,000
500,000(e) CCC-/Caa3 Stanadyne Holdings, Inc., 12.0%, 2/15/15 349,375
---------------
$ 1,473,100
--------------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.5%
750,000 B/B3 WireCo WorldGroup, Inc., 9.5%, 5/15/17 $ 776,250
--------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.3%
455,000 B+/B2 JB Poindexter & Co., Inc., 9.0%, 4/1/22
(144A) $ 478,319
EUR 80,000 BB-/Ba3 Mark IV Europe Lux SCA / Mark IV USA
SCA, 8.875%, 12/15/17 (144A) 114,343
---------------
$ 592,662
--------------------------------------------------------------------------------------------------------
Industrial Machinery -- 1.5%
450,000 B/B2 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) $ 496,125
500,000(f) NR/WR Indalex Holding Corp., 11.5%, 2/1/14 3,750
335,000 B/Caa2 Liberty Tire Recycling, 11.0%, 10/1/16 (144A) 343,375
875,000 CCC+/Caa2 Mueller Water Products, Inc., 7.375%, 6/1/17 899,062
665,000 B/NR WPE International Cooperatief UA, 10.375%,
9/30/20 (144A) 608,475
150,000 B/B3 Xerium Technologies, Inc., 8.875%, 6/15/18 153,375
$ 2,504,162
--------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 1.3%
1,052,000 B-/B3 INTCOMEX, Inc., 13.25%, 12/15/14 $ 1,062,520
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 23
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Trading Companies &
Distributors -- (continued)
1,090,000 B-/B3 TRAC Intermodal LLC / TRAC Intermodal
Corp., 11.0%, 8/15/19 (144A) $ 1,199,000
---------------
$ 2,261,520
---------------
Total Capital Goods $ 11,765,282
--------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL
SERVICES -- 0.4%
Diversified Support Services -- 0.4%
750,000 B+/B3 NANA Development Corp., 9.5%, 3/15/19
(144A) $ 751,875
--------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.0%
700,000(f) NR/WR Old AII, Inc., 10.0%, 12/15/16 $ 1,400
---------------
Total Commercial & Professional Services $ 753,275
--------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 3.1%
Home Furnishings -- 0.3%
535,000 B+/B3 Tempur-Pedic International, Inc., 6.875%,
12/15/20 (144A) $ 583,819
--------------------------------------------------------------------------------------------------------
Homebuilding -- 0.7%
530,000 CCC/Caa2 Beazer Homes USA, Inc., 9.125%, 6/15/18 $ 581,675
605,000 NR/B2 Desarrolladora Homex SAB de CV, 9.5%,
12/11/19 (144A) 366,025
500,000 NR/Caa2 Urbi Desarrollos Urbanos SAB de CV,
9.75%, 2/3/22 (144A) 152,500
---------------
$ 1,100,200
--------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 1.4%
500,000 CCC+/Caa2 Reynolds Group Issuer, Inc., 9.0%, 4/15/19 $ 540,000
475,000 CCC+/Caa2 Reynolds Group Issuer, Inc., 9.875%,
8/15/19 533,187
1,000,000 CCC+/B3 Yankee Candle Co., Inc., 9.75%, 2/15/17 1,036,260
350,000(c) CCC+/Caa1 YCC Holdings LLC / Yankee Finance, Inc.,
10.25%, 2/15/16 361,379
---------------
$ 2,470,826
--------------------------------------------------------------------------------------------------------
Leisure Products -- 0.7%
EUR 275,000 CCC/Caa2 Heckler & Koch GmbH, 9.5%, 5/15/18
(144A) $ 339,682
1,000,000 CCC+/B3 Icon Health & Fitness, Inc., 11.875%,
10/15/16 (144A) 837,500
---------------
$ 1,177,182
---------------
Total Consumer Durables & Apparel $ 5,332,027
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 4.9%
Business Services -- 0.7%
750,000 B/B2 Sitel LLC / Sitel Finance Corp., 11.0%,
8/1/17 (144A) $ 804,375
500,000 B-/Caa2 Sitel LLC / Sitel Finance Corp., 11.5%, 4/1/18 333,750
---------------
$ 1,138,125
--------------------------------------------------------------------------------------------------------
Casinos & Gaming -- 1.8%
500,000(f) NR/WR Buffalo Thunder Development Authority,
9.375%, 12/15/14 (144A) $ 135,000
EUR 1,155,000 CCC/Caa3 Codere Finance Luxembourg SA, 8.25%,
6/15/15 (144A) 1,215,799
500,000 CCC/Caa3 Codere Finance Luxembourg SA, 9.25%,
2/15/19 (144A) 365,000
90,000 NR/NR Little Traverse Bay Bands of Odawa Indians,
9.0%, 8/31/20 (144A) 87,300
1,615,000(f)(h) NR/WR Mashantucket Western Pequot Tribe, 8.5%,
11/15/15 (144A) 113,050
EUR 500,000 CCC+/Caa1 Peermont Global, Ltd., 7.75%, 4/30/14 (144A) 643,097
450,000 BB-/B1 Scientific Games International, Inc., 9.25%,
6/15/19 496,125
---------------
$ 3,055,371
--------------------------------------------------------------------------------------------------------
Hotels, Resorts & Cruise Lines -- 0.5%
400,000 CCC+/B2 Seven Seas Cruises S de RL LLC, 9.125%,
5/15/19 $ 437,500
325,000 B+/B3 Viking Cruises, Ltd., 8.5%, 10/15/22 (144A) 363,187
---------------
$ 800,687
--------------------------------------------------------------------------------------------------------
Leisure Facilities -- 0.6%
EUR 800,000 B+/B3 Cirsa Funding Luxembourg S.A., 8.75%,
5/15/18 (144A) $ 1,100,009
--------------------------------------------------------------------------------------------------------
Restaurants -- 0.9%
1,235,000(e) B-/Caa1 Burger King Capital Holdings LLC, 0.0%,
4/15/19 (144A) $ 1,075,994
400,000 B/B3 Burger King Corp., 9.875%, 10/15/18 455,500
---------------
$ 1,531,494
--------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.4%
150,000 B/B2 Avis Budget Car Rental LLC / Avis Budget
Finance, Inc., 9.625%, 3/15/18 $ 168,189
500,000 B-/B3 StoneMor Operating LLC, 10.25%, 12/1/17 533,750
---------------
$ 701,939
---------------
Total Consumer Services $ 8,327,625
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 25
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 4.7%
Asset Management & Custody Banks -- 0.4%
590,000 BBB-/Baa3 Janus Capital Group, Inc., 6.7%, 6/15/17 $ 683,139
--------------------------------------------------------------------------------------------------------
Consumer Finance -- 0.6%
445,000 B+/B1 Jefferies Finance LLC / JFIN Co-Issuer Corp.,
7.375%, 4/1/20 (144A) $ 462,800
610,000 NR/NR Tarjeta Naranja SA, 9.0%, 1/28/17 (144A) 573,400
---------------
$ 1,036,200
--------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
450,000(a) BB+/Ba2 Goldman Sachs Capital II, 4.0%, 6/1/43 $ 383,850
--------------------------------------------------------------------------------------------------------
Multi-Sector Holdings -- 0.4%
600,000 B/B2 Constellation Enterprises LLC, 10.625%,
2/1/16 (144A) $ 636,750
--------------------------------------------------------------------------------------------------------
Other Diversified Financial Services -- 2.9%
625,000 NR/B3 DTEK Finance PLC, 7.875%, 4/4/18 (144A) $ 617,812
6,000,000(e)(g)(h) BBB/NR Fixed Income Trust Series 2013-A, 0.0%,
10/15/97 (144A) 3,754,107
300,000(d) BB/NR Magnesita Finance, Ltd., 8.625% (144A) 321,681
250,000 NR/NR Unison Ground Lease Funding LLC, 5.78%,
3/15/20 (144A) 250,222
---------------
$ 4,943,822
--------------------------------------------------------------------------------------------------------
Specialized Finance -- 0.2%
425,000 B+/B2 National Money Mart Co., 10.375%,
12/15/16 $ 457,406
---------------
Total Diversified Financials $ 8,141,167
--------------------------------------------------------------------------------------------------------
ENERGY -- 12.2%
Coal & Consumable Fuels -- 1.2%
850,000 B/B2 Bumi Capital Pte, Ltd., 12.0%, 11/10/16
(144A) $ 728,875
1,000,000 B/Caa1 Foresight Energy LLC / Foresight Energy
Corp., 9.625%, 8/15/17 (144A) 1,085,000
400,000 CCC+/B3 James River Coal Co., 7.875%, 4/1/19 166,000
---------------
$ 1,979,875
--------------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 1.1%
1,000,000 CCC+/Caa3 Ocean Rig UDW, Inc., 9.5%, 4/27/16 (144A) $ 1,055,000
500,000 B+/B2 Pioneer Energy Services Corp., 9.875%,
3/15/18 549,375
320,000 B/B1 Shelf Drill Holdings, Ltd., 8.625%, 11/1/18
(144A) 342,400
---------------
$ 1,946,775
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 1.5%
1,358,000 B+/B1 American Petroleum Tankers Parent LLC /
AP Tankers Co., 10.25%, 5/1/15 $ 1,392,806
448,000 B/B3 Expro Finance Luxembourg SCA, 8.5%,
12/15/16 (144A) 478,240
330,000 B/Caa1 Forbes Energy Services, Ltd., 9.0%, 6/15/19 325,875
330,000 B/B3 Seitel, Inc., 9.5%, 4/15/19 (144A) 344,025
---------------
$ 2,540,946
--------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 8.2%
520,000 CCC+/Caa1 Athlon Holdings LP / Athlon Finance Corp.,
7.375%, 4/15/21 (144A) $ 547,300
505,000 BB-/B1 Berry Petroleum Co., 10.25%, 6/1/14 545,400
100,000 B-/B3 Comstock Resources, Inc., 7.75%, 4/1/19 107,000
500,000 B-/B3 Comstock Resources, Inc., 9.5%, 6/15/20 562,500
600,000 B/B2 EP Energy LLC / EP Energy Finance, Inc.,
9.375%, 5/1/20 699,000
280,000(c) B/B3 EPE Holdings LLC / EP Energy Bond Co.,
Inc., 8.125%, 12/15/17 (144A) 298,200
920,000 B-/B2 Forest Oil Corp., 7.5%, 9/15/20 (144A) 979,800
360,000 B/NR GeoPark Latin America Ltd., Agencia en
Chile, 7.5%, 2/11/20 (144A) 371,700
570,000 CCC+/B3 Gulfport Energy Corp., 7.75%, 11/1/20
(144A) 614,175
650,000 CCC+/Caa1 Halcon Resources Corp., 9.75%, 7/15/20
(144A) 710,125
444,000 B/B2 Linn Energy LLC / Linn Energy Finance
Corp., 11.75%, 5/15/17 472,860
410,000 B-/Caa1 Memorial Production Partners LP /
Memorial Production Finance Corp.,
7.625%, 5/1/21 (144A) 418,200
455,000 B-/Caa1 Midstates Petroleum Co., Inc., 10.75%,
10/1/20 (144A) 500,500
800,000 B+/NR MIE Holdings Corp., 9.75%, 5/12/16
(144A) 868,000
200,000 NR/NR National JSC Naftogaz of Ukraine, 9.5%,
9/30/14 207,420
1,440,000 B-/Caa1 Northern Oil & Gas, Inc., 8.0%, 6/1/20 1,504,800
NOK 2,500,000 NR/NR Norwegian Energy Co., AS, 12.9%, 11/20/14 448,752
535,000 B-/B3 PDC Energy, Inc., 7.75%, 10/15/22 (144A) 584,488
480,000 B-/Caa1 Penn Virginia Corp., 8.5%, 5/1/20 (144A) 482,400
280,000 CCC+/Caa1 PetroBakken Energy, Ltd., 8.625%, 2/1/20
(144A) 288,400
480,000 B-/Caa1 QR Energy LP / QRE Finance Corp., 9.25%,
8/1/20 517,200
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 27
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Oil & Gas Exploration &
Production -- (continued)
240,000 CCC/Caa1 Quicksilver Resources, Inc., 7.125%, 4/1/16 $ 228,000
700,000 B-/B3 Resolute Energy Corp., 8.5%, 5/1/20 752,500
472,000 B+/B2 Rosetta Resources, Inc., 9.5%, 4/15/18 522,740
200,000 B-/B3 Samson Investment Co., 9.75%, 2/15/20
(144A) 212,500
335,000 CCC+/Caa1 Talos Production LLC / Talos Production
Finance, Inc., 9.75%, 2/15/18 (144A) 329,975
CAD 315,000 B/NR Trilogy Energy Corp., 7.25%, 12/13/19
(144A) 325,113
---------------
$ 14,099,048
--------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 0.2%
450,000(b) BB/Ba1 Southern Union Co., 3.292%, 11/1/66 $ 392,062
---------------
Total Energy $ 20,958,706
--------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 7.6%
Agricultural Products -- 1.0%
1,127,000 B/B3 Southern States Cooperative, Inc., 11.25%,
5/15/15 (144A) $ 1,184,759
500,000 B/NR Tonon Bioenergia SA, 9.25%, 1/24/20 (144A) 518,750
---------------
$ 1,703,509
--------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 5.4%
225,000 B/B2 Agrokor DD, 8.875%, 2/1/20 (144A) $ 251,325
EUR 200,000 B/B2 Agrokor DD, 9.875%, 5/1/19 (144A) 298,687
650,000 BB/Ba3 Bertin SA / Bertin Finance, Ltd., 10.25%,
10/5/16 (144A) 739,375
500,000 B+/B1 CFG Investment SAC, 9.75%, 7/30/19 (144A) 457,500
305,000 B/B1 Chiquita Brands International, Inc. /
Chiquita Brands LLC, 7.875%, 2/1/21 (144A) 327,112
491,000 B+/B2 Corporacion Pesquera Inca SAC, 9.0%,
2/10/17 (144A) 526,843
1,100,000 B/B3 FAGE Dairy Industry SA/FAGE USA Dairy
Industry, Inc., 9.875%, 2/1/20 (144A) 1,215,500
224,421(f)(h) NR/NR Independencia International, Ltd., 12.0%,
12/30/16 (144A) 561
800,000 B/B2 Marfrig Holding Europe BV, 8.375%,
5/9/18 (144A) 712,000
475,000 B/B2 Marfrig Overseas, Ltd., 9.5%, 5/4/20 (144A) 432,250
700,000 B+/B2 Marfrig Overseas, Ltd., 9.625%, 11/16/16
(144A) 661,500
700,000 B/NR MHP SA, 8.25%, 4/2/20 (144A) 691,155
1,600,000 BB-/B1 Minerva Luxembourg SA, 7.75%, 1/31/23
(144A) 1,708,320
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- (continued)
200,000 BB-/B1 Minerva Luxembourg SA, 12.25%, 2/10/22
(144A) $ 247,000
600,000 B+/B2 Pesquera Exalmar SAA, 7.375%, 1/31/20
(144A) 596,100
300,000 B/Caa1 Pilgrim's Pride Corp., 7.875%, 12/15/18 325,500
---------------
$ 9,190,728
--------------------------------------------------------------------------------------------------------
Tobacco -- 1.2%
2,015,000 B-/B3 Alliance One International, Inc., 10.0%,
7/15/16 $ 2,139,728
---------------
Total Food, Beverage & Tobacco $ 13,033,965
--------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 4.7%
Health Care Equipment & Services -- 1.1%
915,000 CCC+/Caa2 Accellent, Inc., 10.0%, 11/1/17 $ 871,537
875,000 B+/B2 Physio-Control International, Inc., 9.875%,
1/15/19 (144A) 999,688
---------------
$ 1,871,225
--------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.5%
600,000 B-/B3 Kindred Healthcare, Inc., 8.25%, 6/1/19 $ 617,250
200,000 CCC+/Caa1 United Surgical Partners, 9.0%, 4/1/20 226,000
---------------
$ 843,250
--------------------------------------------------------------------------------------------------------
Health Care Services -- 2.3%
378,000 B-/Caa1 BioScrip, Inc., 10.25%, 10/1/15 $ 399,262
476,000 CCC+/Caa2 Gentiva Health Services, Inc., 11.5%,
9/1/18 495,040
1,000,000 CCC+/Caa2 Rural / Metro Corp., 10.125%, 7/15/19
(144A) 1,029,375
796,459 CCC+/B3 Surgical Care Affiliates, Inc., 8.875%,
7/15/15 (144A) 806,415
1,170,000 CCC+/Caa1 Surgical Care Affiliates, Inc., 10.0%,
7/15/17 (144A) 1,219,725
---------------
$ 3,949,817
--------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.6%
455,000 B/Caa1 Bausch & Lomb, Inc., 9.875%, 11/1/15 $ 470,356
500,000 B-/Caa2 Immucor, Inc., 11.125%, 8/15/19 573,750
---------------
$ 1,044,106
--------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.2%
275,000 CCC+/Caa1 Emdeon, Inc., 11.0%, 12/31/19 $ 321,063
---------------
Total Health Care Equipment & Services $ 8,029,461
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 29
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
INSURANCE -- 24.2%
Insurance Brokers -- 1.1%
1,000,000 CCC+/Caa2 HUB International, Ltd., 8.125%, 10/15/18
(144A) $ 1,076,250
GBP 475,000 NR/Caa2 Towergate Finance Plc, 10.5%, 2/15/19 (144A) 781,910
---------------
$ 1,858,160
--------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.6%
1,000,000(b) BB/Baa3 Liberty Mutual Group, Inc., 7.0%, 3/15/37
(144A) $ 1,032,500
--------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 0.0%+
80,000(b)(d) BB+/Ba2 White Mountains Insurance Group, Ltd.,
7.506% (144A) $ 84,677
--------------------------------------------------------------------------------------------------------
Reinsurance -- 22.5%
EUR 750,000(a) BB/NR ATLAS Reinsurance VII, 3.65%, 1/7/16
(144A) $ 1,005,304
250,000(a) BB-/NR ATLAS Reinsurance VII, 8.154%, 1/7/16
(144A) 256,300
EUR 500,000(a) B-/NR ATLAS VI Capital, Ltd., 10.5%, 4/7/14 (144A) 675,466
1,000,000(a) BB+/NR Bosphorus 1 Re Ltd., 2.551%, 5/3/16 (144A) 1,000,200
500,000(a) NR/NR Caelus Re 2013, Ltd., 6.901%, 4/7/17 (144A) 501,950
2,000,000(a) BB-/NR Caelus Re, Ltd., 5.301%, 3/7/16 (144A) 2,006,400
900,000(a) NR/Ba2 Combine Re, Ltd., 10.051%, 1/7/15 (144A) 971,370
750,000(a) NR/NR Combine Re, Ltd., 17.801%, 1/7/15 (144A) 846,825
500,000(a) BB-/NR Compass Re, Ltd., 10.301%, 1/8/15 (144A) 520,100
500,000(a) B+/NR Compass Re, Ltd., 11.301%, 1/8/15 (144A) 513,000
1,000,000(a) BB+/NR Foundation Re III, Ltd., 5.051%, 2/25/15 1,033,100
1,000,000(a) BB/NR Foundation Re III, Ltd., 5.801%, 2/3/14
(144A) 1,006,900
1,300,000(a) B-/NR Ibis Re II, Ltd., 13.546%, 2/5/15 (144A) 1,308,450
1,000,000(a) BB+/NR Kibou, Ltd., 5.301%, 2/16/15 (144A) 1,043,800
1,000,000(a) B/NR Montana Re, Ltd., 12.181%, 1/8/14 (144A) 982,100
2,000,000(a) NR/NR Montana Re, Ltd., 16.681%, 1/8/14 (144A) 2,001,000
975,000(a) B-/NR Mythen Re, Ltd., 11.94%, 11/10/16 (144A) 957,158
500,000(a) B+/NR Mythen Re, Ltd. Series 2012-2 Class A,
8.71%, 1/5/17 (144A) 516,050
1,500,000(a) NR/B2 Mythen, Ltd., 11.216%, 5/7/15 (144A) 1,629,450
1,250,000(a) NR/NR Pelican Re, Ltd., 6.046%, 5/15/17 (144A) 1,250,000
500,000(a) NR/NR Pelican Re, Ltd., 13.796%, 4/13/15 (144A) 534,100
1,200,000(a) BB-/NR Queen Street II Capital, Ltd., 7.546%,
4/9/14 (144A) 1,209,840
2,000,000(a) BB-/NR Queen Street IV Capital, Ltd., 7.546%,
4/9/15 (144A) 2,023,200
250,000(a) B/NR Queen Street VII Capital, Ltd., 8.646%,
4/8/16 (144A) 251,025
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Reinsurance (continued)
1,250,000(a) B-/NR Residential Reinsurance 2011, Ltd.,
12.046%, 6/6/15 (144A) $ 1,290,375
250,000(a) NR/NR Residential Reinsurance 2012, Ltd.,
12.796%, 12/6/16 (144A) 259,200
1,250,000(a) NR/NR Residential Reinsurance 2012, Ltd.,
19.046%, 12/6/16 (144A) 1,301,875
1,000,000(a) NR/NR Residential Reinsurance 2012, Ltd.,
22.046%, 6/6/16 (144A) 1,048,100
1,000,000(g) NR/NR Sector Re V, Ltd., 0.0%, 12/1/17 (144A) 1,068,000
1,500,000(g) NR/NR Sector Re V, Ltd., 0.0%, 3/1/18 (144A) 1,520,700
500,000(a) NR/B2 Successor X, Ltd., 11.046%, 1/27/15 (144A) 514,100
1,500,000(a) B-/NR Successor X, Ltd., 11.296%, 11/10/15
(144A) 1,512,450
2,000,000(a) B-/NR Successor X, Ltd., 14.683%, 1/7/14 (144A) 1,998,200
2,000,000(a) NR/NR Successor X, Ltd., 16.183%, 1/7/14 (144A) 1,977,200
1,000,000(a) NR/NR Successor X, Ltd., 16.546%, 1/27/15
(144A) 1,035,600
1,000,000(a) B+/NR Tar Heel Re Ltd., 8.546%, 5/9/16 (144A) 1,031,000
$ 38,599,888
---------------
Total Insurance $ 41,575,225
--------------------------------------------------------------------------------------------------------
MATERIALS -- 13.0%
Commodity Chemicals -- 0.5%
300,000 BBB-/WR Basell Finance Co. BV, 8.1%, 3/15/27 (144A) $ 413,250
EUR 250,000 CCC/B3 KP Germany Erste GmbH, 11.625%,
7/15/17 (144A) 371,779
---------------
$ 785,029
--------------------------------------------------------------------------------------------------------
Construction Materials -- 0.8%
865,000 C/Caa3 AGY Holding Corp., 11.0%, 11/15/14 $ 445,475
389,000 B/NR Cemex Espana Luxembourg, 9.875%,
4/30/19 (144A) 445,405
400,000 B/NR Cemex Finance LLC, 9.5%, 12/14/16 (144A) 430,000
100,000 B/NR Cemex SAB de CV, 9.0%, 1/11/18 (144A) 109,000
---------------
$ 1,429,880
--------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 1.2%
EUR 1,375,000 B-/Caa1 INEOS Group Holdings SA, 7.875%,
2/15/16 (144A) $ 1,838,625
275,000 CC/Caa1 Momentive Performance Materials, Inc.,
9.0%, 1/15/21 238,562
---------------
$ 2,077,187
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 31
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.6%
300,000 CCC/Caa2 Midwest Vanadium Pty., Ltd., 11.5%,
2/15/18 (144A) $ 195,000
650,000 B-/Caa1 Mirabela Nickel, Ltd., 8.75%, 4/15/18 (144A) 552,500
550,000 CCC+/B3 Molycorp, Inc., 10.0%, 6/1/20 539,000
400,000 B+/B2 Mongolian Mining Corp., 8.875%, 3/29/17
(144A) 409,520
180,000 B/Caa1 Prince Mineral Holding Corp., 11.5%,
12/15/19 (144A) 200,700
750,000 BB/Ba3 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 858,750
---------------
$ 2,755,470
--------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 0.9%
560,882(c) CCC+/Caa1 Ardagh Finance SA, 11.125%, 6/1/18 (144A) $ 631,693
EUR 250,000 CCC+/B3 Ardagh Glass Finance Plc, 8.75%, 2/1/20
(144A) 351,977
EUR 255,000 B+/Ba3 Ardagh Glass Finance Plc, 9.25%, 7/1/16
(144A) 355,661
175,000 CCC+/B3 BWAY Holdings Co., 10.0%, 6/15/18 196,000
---------------
$ 1,535,331
--------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.7%
750,103(e) NR/NR Bio Pappel SAB de CV, 7.0%, 8/27/16 $ 738,851
500,000 B-/Caa1 Pretium Packaging LLC / Pretium Finance,
Inc., 11.5%, 4/1/16 542,500
---------------
$ 1,281,351
--------------------------------------------------------------------------------------------------------
Paper Products -- 2.4%
500,000 B+/B1 Appleton Papers, Inc., 10.5%, 6/15/15
(144A) $ 528,750
200,000 CCC+/B3 Appleton Papers, Inc., 11.25%, 12/15/15 228,000
580,000 CCC+/Caa2 Exopack Holdings Corp., 10.0%, 6/1/18 585,800
186,000 B+/B1 Grupo Papelero Scribe SA de CV, 8.875%,
4/7/20 (144A) 184,140
344,000 B+/B3 Mercer International, Inc., 9.5%, 12/1/17 374,960
840,000 BB-/Ba3 Resolute Forest Products, Inc., 5.875%,
5/15/23 (144A) 829,500
392,000 BB/Ba3 Resolute Forest Products, Inc., 10.25%,
10/15/18 457,856
545,000 BB/Ba2 Sappi Papier Holding GmbH, 8.375%,
6/15/19 (144A) 610,400
255,000 B-/Caa1 Unifrax I LLC / Unifrax Holding Co., 7.5%,
2/15/19 (144A) 265,200
---------------
$ 4,064,606
--------------------------------------------------------------------------------------------------------
Precious Metals & Minerals -- 0.3%
500,000 BB-/Ba3 ALROSA Finance SA, 8.875%, 11/17/14
(144A) $ 549,700
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Steel -- 4.6%
750,000 B+/B3 AM Castle & Co., 12.75%, 12/15/16 $ 886,875
250,000 B+/B3 APERAM, 7.375%, 4/1/16 (144A) 252,500
350,000 B/Caa1 Atkore International, Inc., 9.875%, 1/1/18 385,438
450,000 B/B3 Essar Steel Algoma, Inc., 9.375%, 3/15/15
(144A) 427,500
1,245,000 CCC/Caa2 Essar Steel Algoma, Inc., 9.875%, 6/15/15
(144A) 983,550
250,000 B+/B1 Evraz Group SA, 9.5%, 4/24/18 (144A) 281,375
900,000 B/Caa1 Ferrexpo Finance Plc, 7.875%, 4/7/16
(144A) 893,250
900,000 NR/B3 Metinvest BV, 8.75%, 2/14/18 (144A) 918,000
600,000 NR/B3 Metinvest BV, 10.25%, 5/20/15 (144A) 640,500
585,000 B/B2 Optima Specialty Steel, Inc., 12.5%,
12/15/16 (144A) 637,650
750,000 B-/B3 Permian Holdings, Inc., 10.5%, 1/15/18
(144A) 774,375
750,000 CCC+/Caa2 Ryerson, Inc., 9.0%, 10/15/17 (144A) 817,500
---------------
$ 7,898,513
---------------
Total Materials $ 22,377,067
--------------------------------------------------------------------------------------------------------
MEDIA -- 4.9%
Advertising -- 0.7%
1,100,000 NR/B3 Good Sam Enterprises LLC, 11.5%, 12/1/16 $ 1,175,625
--------------------------------------------------------------------------------------------------------
Broadcasting -- 2.8%
400,000 CCC+/Caa2 Intelsat Luxembourg SA, 7.75%, 6/1/21
(144A) $ 422,000
EUR 150,000 B+/B1 Nara Cable Funding II Ltd., 8.5%, 3/1/20
(144A) 217,107
400,000 B+/B1 Nara Cable Funding, Ltd., 8.875%,
12/1/18 (144A) 496,897
430,000 B-/B3 Telesat Canada / Telesat LLC, 12.5%,
11/1/17 457,412
1,655,000 B/B3 Townsquare Radio LLC / Townsquare
Radio, Inc., 9.0%, 4/1/19 (144A) 1,808,088
990,000 CCC+/Caa1 Truven Health Analytics, Inc., 10.625%,
6/1/20 (144A) 1,133,550
EUR 200,000 B+/B1 TVN Finance Corp. II AB, 10.75%,
11/15/17 (144A) 286,844
---------------
$ 4,821,898
--------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 1.2%
1,710,000 CCC+/Caa1 AMC Entertainment, Inc., 9.75%, 12/1/20 $ 1,987,875
200,000 CCC+/Caa1 Production Resource Group, Inc., 8.875%,
5/1/19 160,000
---------------
$ 2,147,875
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 33
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Publishing -- 0.2%
245,000 B-/B3 Interactive Data Corp., 10.25%, 8/1/18 $ 278,688
---------------
Total Media $ 8,424,086
--------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY
& LIFE SCIENCES -- 1.5%
Biotechnology -- 0.8%
300,000 B/Caa1 ConvaTec Healthcare E SA, 10.5%,
12/15/18 (144A) $ 337,500
1,043,000 B/Caa2 Lantheus Medical Imaging, Inc., 9.75%,
5/15/17 1,032,570
---------------
$ 1,370,070
--------------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.0%+
61,297 B/Caa1 Catalent Pharma Solutions, Inc., 9.5%,
4/15/15 $ 61,450
--------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.7%
1,215,000(f) NR/NR KV Pharmaceutical Co., 12.0%, 3/15/15 $ 1,154,250
---------------
Total Pharmaceuticals, Biotechnology
& Life Sciences $ 2,585,770
--------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.3%
Diversified REIT's -- 0.1%
200,000 B/Ba3 CNL Lifestyle Properties, Inc., 7.25%, 4/15/19 $ 202,500
--------------------------------------------------------------------------------------------------------
Real Estate Operating Companies -- 0.2%
410,000 B-/NR IRSA Inversiones y Representaciones SA,
8.5%, 2/2/17 (144A) $ 379,250
---------------
Total Real Estate $ 581,750
--------------------------------------------------------------------------------------------------------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT -- 0.5%
Semiconductor Equipment -- 0.2%
465,000 B+/Caa1 MEMC Electronic Materials, Inc., 7.75%,
4/1/19 $ 432,450
--------------------------------------------------------------------------------------------------------
Semiconductors -- 0.3%
500,000 B/B2 Advanced Micro Devices, 7.5%, 8/15/22
(144A) $ 478,750
---------------
Total Semiconductors &
Semiconductor Equipment $ 911,200
--------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 1.4%
Application Software -- 0.4%
559,000 CCC-/Caa2 Allen Systems Group, Inc., 10.5%,
11/15/16 (144A) $ 354,965
415,000 B-/B3 Interface Security Systems Holdings, Inc. /
Interface Security Systems LLC, 9.25%,
1/15/18 (144A) 430,562
---------------
$ 785,527
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Data Processing & Outsourced
Services -- 0.4%
404,000 B-/Caa1 First Data Corp., 8.25%, 1/15/21 (144A) $ 429,250
250,000 B-/Caa1 First Data Corp., 10.625%, 6/15/21 (144A) 257,188
---------------
$ 686,438
--------------------------------------------------------------------------------------------------------
Systems Software -- 0.6%
999,506(c)(h) NR/NR Pegasus Solutions, Inc., 13.0%, 4/15/14
(144A) $ 959,526
---------------
Total Software & Services $ 2,431,491
--------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE &
EQUIPMENT -- 0.3%
Computer Storage & Peripherals -- 0.3%
415,000 BBB/Baa3 Seagate Technology International, Inc.,
10.0%, 5/1/14 (144A) $ 435,750
---------------
Total Technology Hardware & Equipment $ 435,750
--------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.4%
Alternative Carriers -- 0.3%
350,000 NR/WR PAETEC Holding Corp., 9.875%, 12/1/18 $ 402,500
--------------------------------------------------------------------------------------------------------
Integrated Telecommunication
Services -- 0.4%
388,000 CCC+/B3 Cincinnati Bell, Inc., 8.75%, 3/15/18 $ 395,760
300,000 BB-/Ba2 Frontier Communications Corp., 8.75%,
4/15/22 337,500
---------------
$ 733,260
--------------------------------------------------------------------------------------------------------
Wireless Telecommunication
Services -- 1.7%
300,000 NR/Caa1 Digicel Group, Ltd., 10.5%, 4/15/18 (144A) $ 332,250
750,000 CCC/Caa1 NII Capital Corp., 10.0%, 8/15/16 772,500
1,115,000 BB/Ba3 Vimpel Communications Via VIP Finance
Ireland, Ltd. OJSC, 9.125%, 4/30/18 (144A) 1,339,004
RUB 14,400,000 BB/Ba3 VimpelCom Holdings BV, 9.0%, 2/13/18
(144A) 484,554
---------------
$ 2,928,308
---------------
Total Telecommunication Services $ 4,064,068
--------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 3.4%
Air Freight & Logistics -- 0.5%
1,329,000 D/C CEVA Group Plc, 11.5%, 4/1/18 (144A) $ 863,850
--------------------------------------------------------------------------------------------------------
Airlines -- 1.0%
81,268 BB+/Ba2 Continental Airlines 1998-1 Class B Pass
Through Trust, 6.748%, 3/15/17 $ 85,535
250,000 BB+/Ba3 Delta Air Lines 2010-1 Class B Pass
Through Trust, 6.375%, 1/2/16 260,625
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 35
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Airlines -- (continued)
1,000,000 B-/NR Gol Finance, 9.25%, 7/20/20 (144A) $ 892,500
500,000 BB-/NR TAM Capital 3, Inc., 8.375%, 6/3/21 (144A) 555,000
---------------
$ 1,793,660
--------------------------------------------------------------------------------------------------------
Airport Services -- 0.3%
546,000 B-/B3 Aeropuertos Argentina 2000 SA, 10.75%,
12/1/20 (144A) $ 511,875
--------------------------------------------------------------------------------------------------------
Marine -- 0.5%
200,000 NR/NR Far Eastern Shipping Co., 8.0%, 5/2/18
(144A) $ 201,227
525,000 B+/B3 Navios South American Logistics, Inc./Navios
Logistics Finance US, Inc., 9.25%, 4/15/19 573,562
---------------
$ 774,789
--------------------------------------------------------------------------------------------------------
Railroads -- 0.2%
310,254(c) CCC/Caa3 Florida East Coast Holdings Corp., 10.5%,
8/1/17 $ 322,664
--------------------------------------------------------------------------------------------------------
Trucking -- 0.9%
450,000 BB-/Ba3 Aeropuertos Dominicanos Siglo XXI SA,
9.25%, 11/13/19 (144A) $ 488,250
425,000 B+/B3 Swift Services Holdings, Inc., 10.0%, 11/15/18 486,625
550,000 B/B3 Syncreon Global Ireland, Ltd., 9.5%, 5/1/18
(144A) 585,750
$ 1,560,625
---------------
Total Transportation $ 5,827,463
--------------------------------------------------------------------------------------------------------
UTILITIES -- 1.6%
Electric Utilities -- 0.6%
750,000 CCC/NR Cia de Energia Electrica en Alta Tension
Transener SA, 9.75%, 8/15/21 (144A) $ 326,250
419,000 NR/Caa1 Empresa Distrbuidora Y Comercializadora
Norte, 9.75%, 10/25/22 (144A) 194,835
225,000 BBB-/Ba1 PNM Resources, Inc., 9.25%, 5/15/15 256,219
240,000 CCC/Caa3 Texas Competitive Electric Holdings Co., LLC/
TCEH Finance, Inc., 11.5%, 10/1/20 (144A) 189,000
---------------
$ 966,304
--------------------------------------------------------------------------------------------------------
Gas Utilities -- 0.6%
1,135,000 B-/B3 Transportadora de Gas del Sur SA, 7.875%,
5/14/17 (144A) $ 981,775
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Independent Power Producers &
Energy Traders -- 0.4%
750,000 B/B1 InterGen NV, 9.0%, 6/30/17 (144A) $ 759,375
---------------
Total Utilities $ 2,707,454
--------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $169,066,886) $ 171,417,797
--------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES --
2.6% of Net Assets
DIVERSIFIED FINANCIALS -- 0.1%
Asset Management & Custody Banks -- 0.1%
120,000 BBB/NR Apollo Investment Corp., 5.75%, 1/15/16 $ 128,025
---------------
Total Diversified Financials $ 128,025
--------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 0.9%
Health Care Equipment & Services -- 0.7%
1,040,000(e) B+/NR Hologic, Inc., 2.0%, 12/15/37 $ 1,188,200
--------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.2%
405,000 B/NR LifePoint Hospitals, Inc., 3.5%, 5/15/14 $ 438,918
--------------------------------------------------------------------------------------------------------
Health Care Services -- 0.0%+
15,000 B+/B2 Omnicare, Inc., 3.25%, 12/15/35 $ 15,300
---------------
Total Health Care Equipment & Services $ 1,642,418
--------------------------------------------------------------------------------------------------------
MATERIALS -- 1.0%
Diversified Chemicals -- 0.9%
1,900,000(j) B+/NR Hercules, Inc., 6.5%, 6/30/29 $ 1,606,640
--------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.1%
100,000 BB/NR Vedanta Resources Jersey, Ltd., 5.5%, 7/13/16 $ 103,300
---------------
Total Materials $ 1,709,940
--------------------------------------------------------------------------------------------------------
MEDIA -- 0.4%
Movies & Entertainment -- 0.4%
659,000 B-/NR Live Nation Entertainment, Inc., 2.875%,
7/15/27 $ 663,119
Total Media $ 663,119
--------------------------------------------------------------------------------------------------------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT -- 0.2%
Semiconductors -- 0.2%
150,000 NR/NR JA Solar Holdings Co., Ltd., 4.5%, 5/15/13 $ 141,750
250,000 NR/NR ReneSola, Ltd., 4.125%, 3/15/18 (144A) 128,594
---------------
Total Semiconductors &
Semiconductor Equipment $ 270,344
--------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $3,454,438) $ 4,413,846
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 37
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS --
2.4% of Net Assets
Argentina -- 0.2%
400,000 B-/NR Province of Salta Argentina, 9.5%,
3/16/22 (144A) $ 356,116
--------------------------------------------------------------------------------------------------------
Brazil -- 0.3%
BRL 750,000 BBB/Baa2 Brazilian Government International Bond,
10.25%, 1/10/28 $ 467,520
--------------------------------------------------------------------------------------------------------
Ghana -- 0.1%
GHS 300,000 NR/NR Ghana Government Bond, 21.0%, 10/26/15 $ 159,564
--------------------------------------------------------------------------------------------------------
Mexico -- 0.6%
MXN 9,370,000 A-/Baa1 Mexican Bonos, 7.5%, 6/3/27 $ 1,045,111
--------------------------------------------------------------------------------------------------------
Nigeria -- 0.6%
NGN 74,000,000 NR/NR Nigeria Government Bond, 16.0%, 6/29/19 $ 546,523
NGN 57,000,000 Nigeria Treasury Bills, 11.852%, 2/6/14 332,065
NGN 22,000,000 Nigeria Treasury Bills, 11.98%, 4/10/14 126,114
---------------
$ 1,004,702
---------------
$ 1,004,702
--------------------------------------------------------------------------------------------------------
Ukraine -- 0.6%
900,000 B/B3 Ukraine Government International Bond,
6.75%, 11/14/17 (144A) $ 952,500
--------------------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $3,180,458) $ 3,985,513
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Shares
--------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 1.1% of Net Assets
DIVERSIFIED FINANCIALS -- 0.0%+
Other Diversified Financial Services -- 0.0%+
731(k) BTA Bank JSC (G.D.R.) (144A) $ 531
---------------
Total Diversified Financials $ 531
--------------------------------------------------------------------------------------------------------
ENERGY -- 0.0%+
Oil & Gas Drilling -- 0.0%+
1,109(k) Rowan Companies, Plc, Class A $ 36,076
---------------
Total Energy $ 36,076
--------------------------------------------------------------------------------------------------------
INSURANCE -- 0.9%
Reinsurance -- 0.9%
15,000(g)(k) Lorenz Re, Ltd. $ 1,500,000
---------------
Total Insurance $ 1,500,000
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
--------------------------------------------------------------------------------------------------------
S&P/Moody's
Ratings
Shares (unaudited) Value
--------------------------------------------------------------------------------------------------------
MATERIALS -- 0.0%+
Forest Products -- 0.0%+
CAD 13,963(k) Ainsworth Lumber Co. Ltd. $ 54,042
---------------
Total Materials $ 54,042
--------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.0%+
Systems Software -- 0.0%+
2,114(h)(k) Perseus Holding Corp. $ 5,285
---------------
Total Software & Services $ 5,285
--------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.2%
Marine -- 0.2%
247,509(h)(k) Horizon Lines, Inc., Class A $ 346,513
---------------
Total Transportation $ 346,513
--------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $2,255,909) $ 1,942,447
--------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK --
0.4% of Net Assets
DIVERSIFIED FINANCIALS -- 0.4%
Other Diversified Financial Services -- 0.4%
470(d) Bank of America Corp., 7.25% $ 585,000
---------------
Total Diversified Financials $ 585,000
--------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $382,900) $ 585,000
--------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.9% of
Net Assets
DIVERSIFIED FINANCIALS -- 0.6%
Other Diversified Financial Services --
(continued) -- 0.6%
40,675(b) GMAC Capital Trust I, 8.125% $ 1,114,088
---------------
Total Diversified Financials $ 1,114,088
--------------------------------------------------------------------------------------------------------
INSURANCE -- 1.2%
Reinsurance -- 1.2%
2,000,000(g)(k) Altair Re, 0.0% $ 2,009,600
---------------
Total Insurance $ 2,009,600
--------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.1%
Data Processing & Outsourced
Services -- 0.1%
1,110(h)(k) Perseus Holding Corp., 14.0% $ 91,575
---------------
Total Software & Services $ 91,575
--------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $2,933,996) $ 3,215,263
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 39
Schedule of Investments | 4/30/13 (continued)
--------------------------------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------------------------------
RIGHT/WARRANT -- 0.0%+ of
Net Assets
AUTOMOBILES & COMPONENTS -- 0.0%+
Auto Parts & Equipment -- 0.0%+
86(k) Lear Corp., Expires 11/9/14 $ 9,860
---------------
Total Automobiles & Components $ 9,860
--------------------------------------------------------------------------------------------------------
TOTAL RIGHT/WARRANT
(Cost $4,645) $ 9,860
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Principal
Amount
--------------------------------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS --
2.2% -- of Net Assets
REPURCHASE AGREEMENT: 2.2%
3,850,000 Bank of Nova Scotia, Inc, 0.16%, dated 5/1/13,
repurchase price of $3,850,000 plus accrued
interest on 5/1/13 collateralized by $3,927,108
U.S. Treasury Notes, 0.0%, 10/31/14. $ 3,850,000
--------------------------------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $3,850,000) 3,850,000
--------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 139.6%
(Cost -- $235,114,542) (l) 239,539,915
--------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (39.6)% $ (67,893,829)
--------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
COMMON SHAREOWNERS -- 100.0% $ 171,646,086
--------------------------------------------------------------------------------------------------------
+ Amount rounds to less than 0.1%.
NR Security not rated by S&P or Moody's.
WR Rating withdrawn by either S&P or Moody's.
(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, 2013, the value of these securities
amounted to $127,732,746, or 74.4% of total net assets applicable to
common shareowners.
* Senior secured floating rate loan interests in which the Trust
invests generally pay interest at rates that are periodically
redetermined by reference to a base lending plus a premium. These
base lending rates are generally (i) the lending rate offered by one
or more major European banks, such as LIBOR (London InterBank
Offered Rate), (ii) the prime rate offered by one or more major
United States banks, (iii) the certificate of deposit or (iv) other
base lending rates used by commercial lenders. The interest rate
shown is the rate accruing at April 30, 2013.
(a) Floating rate note. The rate shown is the coupon rate at April 30,
2013.
(b) The interest rate is subject to change periodically. The interest is
shown is the rate at April 30, 2013.
(c) Payment in Kind (PIK) security which may pay interest in the form of
additional principal amount.
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
(d) Security is perpetual in nature and has no stated maturity date.
(e) 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, 2013.
(f) Security is in default and is non income producing.
(g) Security is valued using fair value methods (other than prices
supplied by independent pricing services). See Notes to Financial
Statements -- Note 1A.
(h) Indicates a security that has been deemed as illiquid. As of April
30, 2013, the aggregate cost of illiquid securities in the Trust's
portfolio was $6,984,703. As of that date, the aggregate value of
illiquid securities in the Trust's portfolio of $5,270,617
represented 3.1% of total net assets applicable to common
shareowners.
(i) Security issued with a zero coupon. Income is recognized through
accretion of discount.
(j) Security is priced as a unit.
(k) Non-income producing.
(l) At April 30, 2013, the net unrealized gain on investments based on
cost for federal tax purposes of $237,218,965 was as follows:
Aggregate gross unrealized gain for all investments in which there
is an excess of value over tax cost $ 14,247,066
Aggregate gross unrealized loss for all investments in which there
is an excess of tax cost over value (11,926,116)
-------------
Net unrealized gain $ 2,320,950
=============
For financial reporting purposes net unrealized gain on investments was
$4,425,373 and cost of investments aggregated $235,114,542.
(m) Distributions of Investments by country of issue (excluding
temporary cash investments), as a percentage of total investments in
securities, is as follows:
United States 60.3%
Cayman Islands 13.8
Luxembourg 4.5
Ireland 3.4
Bermuda 3.0
Netherlands 2.0
United Kingdom 1.8
Argentina 1.5
Canada 1.3
Mexico 1.5
Other (individually less than 1%) 6.9
------
100.0%
======
Purchases and sales of securities (excluding temporary cash investments) for the
year ended April 30, 2013 aggregated $90,921,554 and $75,824,792, respectively.
Glossary of Terms:
(G.D.R.) Global Depositary Receipt
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 41
Schedule of Investments | 4/30/13 (continued)
Principal amounts are denominated in U.S. dollars unless otherwise noted.
BRL -- Brazilian Real
CAD -- Canadian Dollar
EUR -- Euro
GBP -- Great British Pound
GHS -- Ghanaian Cedis
NGN -- Nigerian Naira
NOK -- Norwegian Krone
MXN -- Mexican Peso
RUB -- Russian Rubles
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels below.
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds credit
risks, etc.) See Notes to Financial Statements -- Note 1A.
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments) See Notes
to Financial Statements -- Note 1A.
Generally, equity securities are categorized as Level 1, fixed income securities
and senior loans are categorized as Level 2, and securities valued using fair
value methods (other than prices supplied by independent pricing services) as
level 3. See Notes to Financial Statements -- Note 1A.
The accompanying notes are an integral part of these financial statements.
42 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
The following is a summary of the inputs used as of April 30, 2013, in valuing
the Trust's investments.
------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------------------
Asset Backed Securities $ - $ 2,640,589 $ - $ 2,640,589
Collateralized Mortgage Obligations - 2,717,718 - 2,717,718
Commercial Mortgage-Backed
Securities - 573,007 - 573,007
Senior Secured Floating Rate Loan - 44,188,875 - 44,188,875
Interests
Corporate Bonds & Notes
Environmental & Facilities Services - 1,400 - 1,400
Other Diversified Financial Services - 1,189,715 3,754,107 4,943,822
All Other - 163,883,875 2,588,700 166,472,575
Convertible Bonds & Notes - 4,413,846 - 4,413,846
Sovereign Debt Obligations - 3,985,513 - 3,985,513
Common Stocks
Reinsurance - - 1,500,000 1,500,000
Systems Software - 5,285 - 5,285
All Other 437,162 - - 437,162
Convertible Preferred Stock 585,000 - - 585,000
Preferred Stocks
Reinsurance - - 2,009,600 2,009,600
Data Processing & Outsourced
Services - 91,575 - 91,575
All Other 1,114,088 - - 1,114,088
Right/Warrant
Auto Parts & Equipment 9,860 - - 9,860
Temporary Cash Investments
Repurchase Agreement - 3,850,000 - 3,850,000
------------------------------------------------------------------------------------------------
Total Investments in Securities $ 2,146,110 $227,541,398 $9,852,407 $239,539,915
================================================================================================
Other Financial Instruments
Forward Foreign Currency
Contracts $ - $ (116,987) $ - $ (116,987)
------------------------------------------------------------------------------------------------
Total Other Financial Instruments $ - $ (116,987) $ - $ (116,987)
================================================================================================
At April 30, 2013 a security valued at $531 was transferred from Level 2 to
Level 1.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 43
Schedule of Investments | 4/30/13 (continued)
The following is a reconciliation of assets valued using significant
unobservable inputs (level 3):
-----------------------------------------------------------------------------------------------------------------------------------
Change in
Balance Realized Unrealized Accrued Transfers Transfers Balance
as of gain appreciation discounts/ in to out of as of
4/30/12 (loss)(1) (depreciation)(1) Purchases Sales premiums Level 3* Level 3* 4/30/13
-----------------------------------------------------------------------------------------------------------------------------------
Corporate Bonds & Notes
Other Diversified
Financial
Services $ -- $ -- $ 440,564 $3,310,440 $ -- $ 3,103 $ -- $ -- $ 3,754,107
All Other -- -- 88,700 2,500,000 -- -- -- -- 2,588,700
Convertible Bonds & Notes
Marine 296,699 (328,429) 432,865 21,875 (429,275) 6,265 -- -- --
Common Stocks
Diversified
Metals & Mining 244,923 (256,251) 52,149 -- (40,821) -- -- -- --
Reinsurance -- -- -- 1,500,000 -- -- -- -- 1,500,000
Preferred Stocks
Reinsurance -- -- 9,600 2,000,000 -- -- -- -- 2,009,600
-----------------------------------------------------------------------------------------------------------------------------------
Total $ 541,622 $ (584,680) $1,023,878 $9,332,315 $ (470,096) $ 9,368 $ -- $ -- $ 9,852,407
===================================================================================================================================
* Transfers are calculated on the beginning of period values.
(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 gain (loss) from investments in the Statement of
Operations.
Net change in unrealized appreciation of Level 3 investments still held and
considered Level 3 at 4/30/13: $538,864.
The following table presents additional information about valuation techniques
and inputs used for investments that were measured at fair value and categorized
as Level 3 at April 30, 2013:
Fair Value Valuation Unobservable Value/
4/30/13 Technique(s) Input Range
==============================================================================================
Corporate Bonds & Notes $2,588,700 Third Party Vendor Broker Quote $101.38-106.80
per bond
----------------------------------------------------------------------------------------------
Corporate Bonds & Notes** $3,754,107 Market Yield premium 1.05%
Comparables
----------------------------------------------------------------------------------------------
Common Stocks $1,500,000 Third Party Vendor Broker Quote $100 per share
==============================================================================================
Preferred Stocks $2,009,600 Third Party Vendor Broker Quote $1.0048
per share
----------------------------------------------------------------------------------------------
** Fixed Income Trust Series: The significant unobservable input used in the
fair value measurement of corporate bonds and notes is yield premium.
Significant increases (decreases) in this input could result in a
significantly higher (lower) fair value measurement.
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Statement of Assets and Liabilities | 4/30/13
ASSETS:
Investments in securities, at value (cost $235,114,542) $239,539,915
Foreign currencies, at value (cost $712,330) 720,464
Receivables --
Investment securities sold 1,609,759
Interest receivable 4,068,907
Unrealized appreciation on forward foreign currency portfolio
hedge contracts 38,192
Reinvestment of distributions 43,593
Prepaid expenses 11
Other assets 69,159
--------------------------------------------------------------------------------------
Total assets $246,090,000
--------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Notes payable $ 69,000,000
Investment securities purchased 3,526,016
Unrealized depreciation on forward foreign currency portfolio
hedge contracts 155,178
Due to custodian 1,380,263
Due to affiliates 184,207
Administration fee payable 59,421
Accrued interest expense 3,700
Accrued expenses 135,129
--------------------------------------------------------------------------------------
Total liabilities $ 74,443,914
--------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $193,806,108
Undistributed net investment income 956,803
Accumulated net realized loss on investment and foreign currency
transactions (27,434,538)
Net unrealized appreciation on investments 4,425,373
Net unrealized depreciation on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies (107,660)
--------------------------------------------------------------------------------------
Net assets applicable to common shareowners $171,646,086
--------------------------------------------------------------------------------------
NET ASSET VALUE PER COMMON SHARE:
No par value (unlimited number of shares authorized)
Based on $171,646,086 /8,290,790 common shares $ 20.70
======================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 45
Statement of Operations
For the Year Ended 4/30/13
INVESTMENT INCOME:
Interest $21,254,196
Dividends (net of foreign taxes withheld $33) 119,643
Facility and other fees 390,054
--------------------------------------------------------------------------------------
Total Investment Income $21,763,893
--------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 1,984,810
Administrative reimbursements 151,367
Transfer agent fees and expenses 16,810
Shareowner communication expenses 13,537
Custodian fees 33,092
Registration fees 11,668
Professional fees 100,817
Printing expenses 25,900
Trustees' fees 7,448
Pricing fees 30,849
Miscellaneous 76,140
--------------------------------------------------------------------------------------
Net operating expenses $ 2,452,438
--------------------------------------------------------------------------------------
Interest expense $ 784,519
--------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 3,236,957
--------------------------------------------------------------------------------------
Net investment income $18,526,936
--------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments $ 250,207
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 83,846 $ 334,053
--------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on:
Investments $ 8,005,811
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (73,197) $ 7,932,614
--------------------------------------------------------------------------------------
Net gain on investments and foreign currency transactions $ 8,266,667
--------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $26,793,603
======================================================================================
The accompanying notes are an integral part of these financial statements.
46 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Statements of Changes in Net Assets
-------------------------------------------------------------------------------------------
Year Ended
Year Ended 4/30/12
4/30/13 (Consolidated)
-------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 18,526,936 $ 17,329,304
Net realized gain (loss) on investments and foreign
currency transactions 334,053 (3,968,113)
Change in unrealized appreciation (depreciation) on
investments and foreign currency transactions 7,932,614 (9,604,483)
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 26,793,603 $ 3,756,708
-------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income ($2.04 and $1.96 per
share, respectively) $ (16,884,599) $ (16,161,281)
-------------------------------------------------------------------------------------------
Total distributions to common shareowners $ (16,884,599) $ (16,161,281)
-------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 591,527 $ 668,357
-------------------------------------------------------------------------------------------
Net increase in net assets from Trust
share transactions $ 591,527 $ 668,357
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 10,500,531 $ (11,736,216)
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of year 161,145,555 172,881,771
-------------------------------------------------------------------------------------------
End of year $ 171,646,086 $ 161,145,555
-------------------------------------------------------------------------------------------
Undistributed (distributions in excess of) net
investment income $ 956,803 $ (196,572)
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 47
Statement of Cash Flows
For the Year Ended April 30, 2013
Cash Flows From Operating Activities
Net increase in net assets resulting from operations $ 26,793,603
---------------------------------------------------------------------------------------------
Adjustment to reconcile Net increase in net assets resulting from operations
to Net Cash and Foreign Currency provided by Operating Activities
Purchase of investments securities $ (733,459,248)
Proceeds from disposition of investment securities 726,290,932
Net accretion and amortization of discount/premium on
corporate debt obligations and short term investments (1,271,143)
Increase in receivable for investments sold (246,966)
Increase in Interest and foreign tax reclaim receivable (41,740)
Decrease in prepaid expenses 13,354
Decrease in other assets (69,159)
Decrease in accrued interest payable (59,734)
Increase in payable for investments purchased 1,781,958
Increase in due to affiliates (33,280)
Decrease in Administrative fee payable 59,421
Increase in accrued expenses 4,406
Decrease in dividends to shareowners (1,321,798)
Increase in due to custodian 1,380,263
Increase in reinvestment of distributions (43,593)
Decrease in unamortized facility fees (714)
Change in unrealized appreciation of investments (8,005,811)
Change in unrealized depreciation of foreign
currency transactions 73,197
Net realized gain from investments (250,207)
Net realized gain of foreign currency contracts and other foreign
denominated currencies (83,846)
---------------------------------------------------------------------------------------------
Net cash and foreign currency provided by operating activities $ 11,509,895
---------------------------------------------------------------------------------------------
Cash flows Used Financing Activities:
Reinvestment of distributions $ 591,527
Cash dividends paid to common shareholders (16,884,599)
---------------------------------------------------------------------------------------------
Net cash flow used in financing activities $ (16,293,072)
---------------------------------------------------------------------------------------------
Cash and Foreign Currency
Beginning of the year $ 5,503,641
---------------------------------------------------------------------------------------------
End of year $ 720,464
---------------------------------------------------------------------------------------------
Cash Flow Information
Cash paid for interest $ 780,819
---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
48 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------
Year Year
Year Ended Ended Year Year
Ended 4/30/12 4/30/11 Ended Ended
4/30/13 (Consolidated) (Consolidated) 4/30/10 4/30/09
------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of year $ 19.51 $ 21.01 $ 20.17 $ 13.94 $ 22.02
------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:(a)
Net investment income $ 2.24 $ 2.10 $ 2.03 $ 1.76 $ 2.10
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.99 (1.64) 0.73 6.48 (7.67)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 3.23 $ 0.46 $ 2.76 $ 8.24 $ (5.57)
------------------------------------------------------------------------------------------------------------------------------
Distributions to common shareowners from:
Net investment income (2.04) (1.96) (1.92) (1.69) (2.47)
Tax return of capital -- -- -- (0.32) (0.04)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 1.19 $ (1.50) $ 0.84 $ 6.23 $ (8.08)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year(b) $ 20.70 $ 19.51 $ 21.01 $ 20.17 $ 13.94
------------------------------------------------------------------------------------------------------------------------------
Market value, end of year(b) $ 21.82 $ 20.13 $ 21.95 $ 20.46 $ 13.23
==============================================================================================================================
Total return at market value(c) 19.98% 1.35% 17.95% 73.25% (23.11)%
Ratios to average net assets
Net operating expenses 1.49% 1.48% 1.62% 1.39% 1.38%
Interest expense 0.48% 0.56% 0.58% 0.83% 1.14%
Net expenses 1.97% 2.04% 2.20% 2.22% 2.52%
Net investment income 11.26% 10.75% 10.02% 9.84% 12.27%
Portfolio turnover 34% 24% 30% 24% 25%
Net assets, end of year (in thousands) $171,646 $161,146 $172,882 $165,281 $113,812
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 49
Financial Highlights (continued)
---------------------------------------------------------------------------------------------------------------------------
Year Year
Year Ended Ended Year Year
Ended 4/30/12 4/30/11 Ended Ended
4/30/13 (Consolidated) (Consolidated) 4/30/10 4/30/09
---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets before waivers and reimbursements
of expenses
Net operating expenses 1.49% 1.48% 1.64% 1.61% 1.68%
Interest expense 0.48% 0.56% 0.58% 0.83% 1.14%
Net expenses 1.97% 2.04% 2.22% 2.44% 2.82%
Net investment income 11.26% 10.75% 10.00% 9.62% 11.97%
===========================================================================================================================
(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.
The accompanying notes are an integral part of these financial statements.
50 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Notes to Financial Statements | 4/30/13
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 provide 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
year. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Investments in 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.
Senior floating rate loan interests (senior loans) for which no reliable
price quotes are available will be valued by Loan Pricing Corporation
through the use of pricing matrices to determine valuations. Fixed income
securities with remaining maturities of more than sixty days are valued at
prices supplied by independent pricing services, which consider such factors
as market prices, market events, quotations from one or more brokers,
Treasury spreads, yields, maturities and ratings. Valuations may be
supplemented by dealers and other sources, as required. Equity securities
that have traded on an exchange are valued at the last sale price on the
principal exchange where they are traded. Equity securities that have not
traded on the date of valuation or securities for which sale prices are not
available, generally are valued using the mean between the last bid and
asked prices. Short-term fixed income securities with remaining maturities
of sixty days or less generally are valued at amortized cost. Shares of
money market mutual funds are valued at such funds' net asset value.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 51
Trading in foreign securities is substantially completed each day at various
times prior to the close of the New York Stock Exchange ("NYSE"). The values
of such securities used in computing the net asset value of the Trust's
shares are determined as of such times.
Securities or loans interests for which market prices and/or quotations are
not readily available or are considered to be unreliable are valued by or at
the direction or with the approval of the Valuation Committee using fair
value methods pursuant to procedures adopted by the Board of Trustees. The
Valuation Committee is comprised of certain members of the Board of
Trustees. 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 from exchange prices and such differences could be material. Pioneer
Investment Management, Inc. (PIM) 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.
At April 30, 2013, one security was valued using fair value methods (in
addition to four securities valued using prices supplied by independent
pricing services) representing 5.7% of net assets. 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.
Discounts and premiums on debt securities are accreted or amortized,
respectively, daily, into interest income on an effective yield to maturity
basis with a corresponding increase or decrease in the cost basis of the
security. Premiums and discounts related to certain mortgage-backed
securities are amortized or accreted in proportion to the monthly paydowns.
Interest income, including interest or income bearing cash accounts, is
recorded on an accrual basis, net of unrecoverable foreign taxes withheld at
the applicable country rates.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Trust becomes aware of the ex-dividend data in
the exercise of reasonable diligence. Gains and losses on sales of
investments are calculated on the identified cost method for both financial
reporting and federal income tax purposes.
52 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
B. 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 market prices of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. 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 gains or losses are recorded in
the Trust's financial statements. The Trust records realized gains and
losses at the time a portfolio hedge is offset by entry into a closing
transaction or extinguished by delivery of the currency. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contracts and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar
(see Note 5).
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. As of
April 30, 2013, the Fund did not have any interest and penalties related to
uncertain tax positions, which, if applicable, would be recorded as an
income tax expense on Statement of Operations.Tax years for the prior three
fiscal 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 purposes resulting from
differences in the recognition or classification of income or distributions
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, 2013,
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 53
the Trust reclassified $488,962 to decrease undistributed net investment
income, $490,275 to decrease accumulated net realized loss on investments
and foreign currency transactions and $1,313 to decrease paid-in capital to
reflect permanent book/tax differences. The reclassification has no impact
on the net assets of the Trust and presents the Trust's capital accounts on
a tax basis.
At April 30, 2013, the Trust was permitted to carry forward $595,129 of
short-term losses and $2,699,624 of long term losses under the Regulated
Investment Company Modernization Act of 2010 without limitation.
Additionally, at April 30, 2013, the Trust had a net capital loss carry
forward of $23,843,173 of which the following amounts will expire between
2016 and 2019 if not utilized: $231,744 in 2016, $413,150 in 2017,
$21,948,862 in 2018, and $1,249,417 in 2019. Since unlimited losses are
required to be utilized prior to losses incurred in pre-enactment years,
pre-enactment capital loss carryforwards may be more likely to expire
unused.
The tax character of current year distributions payable to shareowners
during the years ended April 30, 2013 and April 30, 2012 was as follows:
----------------------------------------------------------------------------
2013 2012
----------------------------------------------------------------------------
Distributions paid from:
Ordinary income $16,884,599 $16,161,281
----------------------------------------------------------------------------
Total $16,884,599 $16,161,281
============================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2013:
----------------------------------------------------------------------------
2013
----------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 2,655,775
Capital loss carryforward (27,137,926)
Unrealized appreciation 2,322,129
----------------------------------------------------------------------------
Total $(22,160,022)
============================================================================
The difference between book-basis and tax-basis unrealized appreciation is
primarily attributable to the tax deferral of losses on wash sales, the
realization for tax purposes of unrealized gains on investments in passive
foreign investment companies, the book/tax differences in the accrual of
income on securities in default, the difference between book and tax
amortization methods for premiums and discounts on fixed income
securities and other temporary book/tax differences.
54 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
E. 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 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. These securities involve greater risk of loss, are subject to
greater price volatility, and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities. The Trust
may invest in securities of issuers that are in default or that are in
bankruptcy.
The Trust's investments in certain foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than
would investments in a developed market. These risks include disruptive
political or economic conditions and the possible imposition of adverse
governmental laws or currency exchange restrictions.
F. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest, is
required to be equal to or in excess of the repurchase price. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Trust's custodian or a subcustodian of the Trust. The Trust's
investment adviser, Pioneer Investment Management, Inc. (PIM), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
G. Automatic Dividend Reinvestment Plan
All common shareowners whose shares are registered in their own names
automatically participate in the Automatic Dividend Reinvestment Plan (the
Plan), under which participants receive all dividends and capital gain
distributions (collectively, dividends) in full and fractional common shares
of the Trust in lieu of cash. Shareowners may elect not to participate in
the Plan. Shareowners not participating in the Plan receive all dividends
and capital
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 55
gain distributions in cash. Participation in the Plan is completely
voluntary and may be terminated or resumed at any time without penalty by
notifying American Stock Transfer & Trust Company, the agent for shareowners
in administering the Plan (the Plan Agent), in writing prior to any dividend
record date; otherwise such termination or resumption will be effective with
respect to any subsequently declared dividend or other distribution.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate in
the Plan on the shareowner's behalf. If the firm or nominee does not offer
the Plan, dividends will be paid in cash to the shareowner of record. A firm
or nominee may reinvest a shareowner's cash dividends in common shares of
the Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional unissued
but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend, the net asset value per common share
is equal to or less than the market price per share plus estimated brokerage
trading fees (market premium), the Plan Agent will invest the dividend
amount in newly issued common shares. The number of newly issued common
shares to be credited to each account will be determined by dividing the
dollar amount of the dividend by the net asset value per common share on the
date the shares are issued, provided that the maximum discount from the then
current market price per share on the date of issuance does not exceed 5%.
If, on the payment date for any dividend, the net asset value per common
share is greater than the market value (market discount), the Plan Agent
will invest the dividend amount in common shares acquired in open-market
purchases. There are no brokerage charges with respect to newly issued
common shares. However, each participant will pay a pro rata share of
brokerage trading fees incurred with respect to the Plan Agent's open-market
purchases. Participating in the Plan does not relieve shareowners from any
federal, state or local taxes which may be due on dividends paid in any
taxable year. Shareowners holding Plan shares in a brokerage account may not
be able to transfer the shares to another broker and continue to participate
in the Plan.
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
56 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
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 of 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, 2013, the net management fee
was 0.85% of the Trust's average daily managed assets, which was equivalent to
0.60% 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,
2013 $243,628 was payable to PIM related to management costs, administrative
costs and certain other reimbursements and is included in "Due to affiliates"
and "Administration fee" on the Statement of Assets and Liabilities.
Effective May 1, 2012, PIM has retained Brown Brothers Harriman & Co. (BBH) to
provide certain administrative and accounting services to the Trust on its
behalf. For such services, the Trust pays BBH a monthly fee at an annual rate of
0.025% of the Trust's average daily managed assets subject to a minimum monthly
fee of $6,250. Previously, PIM had retained State Street Bank and Trust Company
(State Street) to provide such services. PIM paid State Street a monthly fee at
an annual rate of 0.07% of the Trust's average daily managed assets up to $500
million and 0.03% for average daily managed assets in excess of $500 million,
subject to a minimum monthly fee of $10,000.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly owned
indirect subsidiary of UniCredit, through a sub-transfer agency agreement with
American Stock Transfer & Trust Company, provides substantially all transfer
agent and shareowner services related to the Trust at negotiated rates.
In addition, the Trust reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareowner communications activities such as proxy and
statement mailings and outgoing phone calls.
4. Expense Offset Arrangement
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Trust's custodian expenses. For the year ended April 30, 2013, the Trust
expenses were not reduced under such an arrangement.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 57
5. Forward Foreign Currency Contracts
During the year ended April 30, 2013, the Trust 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, 2013 was $5,351,082. At April 30,
2013, the Trust had no outstanding settlement contracts.
Open portfolio hedges at April 30, 2013, were as follows:
-------------------------------------------------------------------------------------------
Net
Contracts In Net
to Receive/ Exchange Settlement Unrealized
Currency (Deliver) For US$ Date US$ Value Gain/(Loss)
-------------------------------------------------------------------------------------------
EUR
(European
Dollar) (3,540,000) (4,585,606) 9/27/13 (4,663,153) (77,547)
EUR
(European
Dollar) (1,000,000) (1,319,818) 4/25/14 (1,306,588) (13,231)
GBP
(Pound
Sterling) (405,000) (654,128) 5/15/13 (628,887) 25,241
GBP
(Pound
Sterling) (55,000) (85,391) 8/15/13 (85,360) 31
JPY
(Japanese
Yen) (110,000,000) (1,128,309) 5/22/13 (1,115,515) (12,794)
JPY
(Japanese
Yen) 55,000,000 589,293 5/22/13 564,154 (25,139)
JPY
(Japanese
Yen) (55,000,000) (564,154) 5/22/13 (589,370) (25,216)
KES
(Kenyan
Shilling) 5,226,563 58,594 5/14/13 62,203 3,609
KES
(Kenyan
Shilling) (5,226,563) (60,951) 5/14/13 (62,203) (1,252)
KRW
(Korean
Won) 260,000,000 228,160 5/15/13 235,908 7,747
NGN
(Nigerian
Naira) 28,000,000 173,365 6/19/13 174,929 1,564
-------------------------------------------------------------------------------------------
Total $ (116,987)
-------------------------------------------------------------------------------------------
6. Loan Agreement
Effective February 3, 2012, the Trust extended the maturity of its existing
Revolving Credit Facility (the Credit Agreement) with the Bank of Nova Scotia;
the amount of the facility remains at $75 million.
58 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
At April 30, 2013, the Trust had a borrowing outstanding under the Credit
Agreement totaling $69,000,000. The interest rate charged at April 30, 2013 was
1.10.%. During the year ended April 30, 2013, the average daily balance was
$69,000,000 at a weighted average interest rate of 1.12%. With respect to the
loan, interest expense of $784,519 is included in the Statement of Operations.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the Credit Agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities, not including any bank loans and
senior securities, from the Trust's total assets and dividing such amount by the
principal amount of the borrowings outstanding. As of the date indicated below,
the Trust's debt outstanding and asset coverage were as follows:
--------------------------------------------------------------------------------
Total Amount Asset coverage
of Debt Per $1,000 of
Date Outstanding Indebtedness
--------------------------------------------------------------------------------
April 30, 2013 $69,000,000 $3,488
================================================================================
7. Unfunded Loan Commitments
As of April 30, 2013, the Trust had no unfunded loan commitments.
The Trust had the following bridge loan commitment outstanding as of April 30,
2013:
--------------------------------------------------------------------------------
Unrealized
Borrower Par Cost Value Gain(Loss)
--------------------------------------------------------------------------------
Constellation Brands, Inc. $900,000 $900,000 $900,000 $ -
--------------------------------------------------------------------------------
8. Basis for Consolidation of the Financial Statements
The consolidated financial statements of the Trust as of April 30, 2012 included
the accounts of the Blaze Holding HINCT, Inc. (the "Subsidiary"). All
intercompany accounts and transactions have been eliminated in consolidation.
The Subsidiary, a Delaware corporation, was incorporated on February 10, 2011
and was wholly-owned and controlled by the Trust. The Subsidiary acted as
investment vehicle for the Trust's interest in Blaze Recycling and Metals LLC,
Class A Units (Blaze").
On November 27, 2012, the Subsidiary sold its interest in Blaze, and liquidated
on December 31, 2012. The disposition of this investment resulted in a
recognized loss of $256,250, which is reflected as part of the Net Realized Gain
(Loss) on Investments in the Statement of Operations. The investment in the
Subsidiary had no other impact on the Trust's operations. As a result, the
financial statements as of April 30, 2013 are not consolidated.
9. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 59
Transactions in common shares of beneficial interest for the year ended April
30, 2013 and April 30, 2012 were as follows:
--------------------------------------------------------------------------------
4/30/13 4/30/12
--------------------------------------------------------------------------------
Shares outstanding at beginning of year 8,261,236 8,227,194
Reinvestment of distributions 29,554 34,042
--------------------------------------------------------------------------------
Shares outstanding at end of year 8,290,790 8,261,236
================================================================================
10. Additional Disclosures about Derivative Instruments and Hedging Activities:
Values of derivative instruments as of April 30, 2013 were as follows:
------------------------------------------------------------------------------------
Derivatives Not
Accounted for as
Hedging Instruments Asset Derivatives 2013 Liabilities Derivatives 2013
Under Accounting ---------------------------- -----------------------------
Standards Codification Balance Sheet Balance Sheet
(ASC) 815 Location Value Location Value
------------------------------------------------------------------------------------
Forward Foreign
Exchange Currency
Contracts Receivables $38,192 Payables $(155,178)
------------------------------------------------------------------------------------
Total $38,192 $(155,178)
------------------------------------------------------------------------------------
The effect of derivative instruments on the Statement of Operations for the year
ended April 30, 2013 was as follows:
------------------------------------------------------------------------------------------
Derivatives Not Change in
Accounted for as Realized Unrealized
Hedging Instruments Gain on Gain or (Loss)
Under Accounting Location of Gain or (Loss) Derivatives on Derivatives
Standards Codification on Derivatives Recognized Recognized Recognized
(ASC) 815 in Income in Income in Income
------------------------------------------------------------------------------------------
Forward foreign Net realized gain on forward $268,452
currency portfolio foreign currency contracts
hedge contracts and other assets and liabilities
denominated in foreign currencies
------------------------------------------------------------------------------------------
Forward foreign Change in net unrealized gain $(85,157)
currency portfolio (loss) on forward foreign currency
hedge contracts contracts and other assets and
liabilites denominated in
foreign currencies
------------------------------------------------------------------------------------------
11. Subsequent Events
The Board of Trustees of the Trust declared on May 2, 2013 a dividend from
undistributed net investment income of $0.1600 per common share payable May 31,
2013, to shareowners of record on May 16, 2013.
60 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
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 of Pioneer
Diversified High Income Trust (the "Trust"), including the schedule of
investments, as of April 30, 2013, and the related statements of operations and
cash flows for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and the financial highlights for
each of the five 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.
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. We were
not engaged to perform an audit of the Trust's 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 and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of April 30, 2013, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. 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 at April 30, 2013, the results of its
operations and cash flows for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with U.S.
generally accepted accounting principles.
Ernst & Young LLP
Boston, Massachusetts
June 24, 2013
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 61
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.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
IMPORTANT TAX INFORMATION (unaudited)
Interest-Related Dividends for Non-U.S. Residents 59.47%*
* Represents the portion of the taxable ordinary income dividends eligible for
tax exemption form U.S. withholding tax for non-resident aliens and foreign
corporations.
62 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Approval of Investment Advisory Agreement
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Diversified High Income Trust (the Trust) pursuant to an investment
advisory agreement between PIM and the Trust. In order for PIM to remain the
investment adviser of the Trust, the Trustees of the Trust must determine
annually whether to renew the investment advisory agreement for the Trust.
The contract review process began in March 2012 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the process.
In July 2012, the Trustees approved the format of the contract review materials
and submitted their formal request to PIM to furnish information necessary to
evaluate the terms of the investment advisory agreement. The contract review
materials were provided to the Trustees in July 2012 and September 2012. After
reviewing and discussing the materials, the Trustees submitted a request for
additional information to PIM, and materials were provided in response to this
request. Meetings of the Independent Trustees of the Trust were held in July,
September, October, and November, 2012 to review and discuss the contract review
materials. In addition, the Trustees took into account the information related
to the Trust provided to the Trustees at each regularly scheduled meeting.
At a meeting held on November 13, 2012, based on their evaluation of the
information provided by PIM and third parties, the Trustees of the Trust,
including the Independent Trustees voting separately, unanimously approved the
renewal of the investment advisory agreement for another year. In considering
the renewal of the investment advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. The Trustees did not identify any single factor as the
controlling factor in determining to approve the renewal of the agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust. The Trustees reviewed the terms of the investment
advisory agreement. The Trustees also reviewed PIM's investment approach for the
Trust, its research process and its process for trade execution. The Trustees
considered the resources of PIM and the personnel of PIM who provide investment
management services to the Trust. The Trustees considered the non-investment
resources and personnel of PIM involved in PIM's services to the Trust,
including PIM's compliance and legal resources and personnel.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 63
The Trustees also considered the substantial attention and high priority given
by PIM's senior management to the Pioneer fund complex. In addition, the
Trustees considered PIM's plans to increase resources in its investment
management function and other enhancements to PIM's advisory capabilities.
The Trustees considered that PIM supervises and monitors the performance of the
Trust's service providers and provides the Trust with personnel (including Trust
officers) and other resources that are necessary for the Trust's business
management and operations. The Trustees also considered that, as administrator,
PIM is responsible for the administration of the Trust's business and other
affairs. The Trustees considered the fees paid to PIM for the provision of
administration services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had been provided by PIM to the Trust were
satisfactory and consistent with the terms of the investment advisory agreement.
Performance of the Trust
The Trustees considered the performance results of the Trust over various time
periods. They reviewed information comparing the Trust's performance with the
performance of its peer group of funds as classified by Morningstar, Inc.
(Morningstar), an independent provider of investment company data, and with the
performance of the Trust's benchmark index. The Trustees considered that the
Trust's annualized total return was in the fourth quintile of its Morningstar
category for the one and five year periods ended June 30, 2012, and in the
second quintile of its Morningstar category for the three year period ended June
30, 2012 (In all quintile rankings referred to throughout this disclosure, first
quintile is most favorable to the Trust's shareowners. Thus, highest relative
performance would be first quintile and lowest relative expenses would also be
first quintile.) The Trustees considered that the Trust's twelve month average
gross portfolio yield (using month end 30 day effective yields) exceeded the
twelve month average yield of the Trust's benchmark index. The Trustees also
reviewed data provided by PIM showing how leverage had benefited the Trust's
common shareholders. The Trustees discussed the Trust's performance record. They
indicated that they were satisfied with the discussions with PIM with respect to
the Trust's performance.
Management Fee and Expenses
The Trustees considered information on the fees and expenses of the Trust in
comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the Independent Trustees
for this purpose using data provided by Strategic Insight Mutual Fund Research
and Consulting, LLC (Strategic Insight), an independent third party. The
Trustees considered that the Trust's management fee rate (based on
64 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
managed assets) for the twelve months ended June 30, 2012 was in the fifth
quintile relative to the management fees paid by other funds in its Strategic
Insight peer group for the comparable period. The Trustees also considered that
the Trust's expense ratio (based on managed assets) for the twelve months ended
June 30, 2012 was in the fifth quintile relative to its Strategic Insight peer
group for the comparable period. The Trustees noted and discussed reasons that
the Trust's management fee and expense ratio were high relative to the
management fees and expense ratios of other funds in the Trust's Strategic
Insight peer group. The Trustees noted the investment management expertise and
resources required to implement the Trust's investment strategy given the
multiple asset classes in which the Trust invests. The Trustees also considered
that the Trust did not have a clear cut peer group, noting that other funds in
the peer group invested primarily in traditional high yield bonds. The Trustees
considered information presented by PIM regarding management fees paid by two
multi-sector closed-end funds that were launched in 2012, noting that the
Trust's management fee compared favorably to the management fees paid by those
funds.
The Trustees reviewed management fees charged by PIM and PIM's affiliate,
Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to
institutional and other clients, including publicly offered European funds
sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment
companies (in a sub-advisory capacity), and unaffiliated foreign and domestic
separate accounts. The Trustees also considered PIM's costs in providing
services to the Trust and Pioneer's costs in providing services to the other
clients and considered the differences in management fees and profit margins for
Trust and non-Trust services. In evaluating the fees associated with Pioneer's
client accounts, the Trustees took into account the respective demands,
resources and complexity associated with the Trust and client accounts. The
Trustees noted that in some instances the fee rates for those clients were lower
than the management fee for the Trust and considered that, under the investment
advisory agreement with the Trust, PIM performs additional services for the
Trust that it does not provide to those other clients or services that are
broader in scope, including oversight of the Trust's other service providers and
activities related to compliance and the extensive regulatory and tax regimes to
which the Trust is subject. The Trustees also considered the different
entrepreneurial risks associated with PIM's management of the Trust and
Pioneer's management of the other client accounts. The Trustees concluded that
the management fee payable by the Trust to PIM was reasonable in relation to the
nature and quality of the services provided by PIM.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 65
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
concluded that PIM's profitability with respect to the management of the Trust
was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is a
closed-end fund that has not raised additional capital, the Trustees concluded
that economies of scale were not a relevant consideration in the renewal of the
investment advisory agreement.
Other Benefits
The Trustees considered the other benefits to PIM from its relationship with the
Trust. The Trustees considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services provided
by PIM and its affiliates. The Trustees further considered the revenues and
profitability of PIM's businesses other than the fund business. The Trustees
considered the intangible benefits to PIM by virtue of its relationship with the
Trust and the other Pioneer funds. The Trustees concluded that the receipt of
these benefits was reasonable in the context of the overall relationship between
PIM and the Trust.
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of the investment advisory agreement for the Trust.
66 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Bingham McCutchen LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust 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 on the following pages, 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 56 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 Trust 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 | 4/30/13 67
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 (62) Class II Trustee Chairman and Chief Executive Officer, Director, Broadridge Financial
Chairman of the Board since 2007. Term Quadriserv, Inc. (technology products Solutions, Inc. (investor
and Trustee expires in 2015. for Quadriserv, Inc. (technology communications and securities
products for present); Private processing provider for financial
investor (2004 - 2008); and Senior services industry) (2009 -
Executive Vice President, The Bank of present); Director, Quadriserv,
New York (financial and securities Inc. (2005 - present); and
services) (1986 - 2004) Commissioner, New Jersey State
Civil Service Commission (2011 -
present)
------------------------------------------------------------------------------------------------------------------------------
David R. Bock (69) Class III Trustee Managing Partner, Federal City Director of Enterprise Community
Trustee since 2007. Term Capital Advisors (corporate advisory Investment, Inc. (privately-held
expires in 2013. services company) (1997 - 2004 and affordable housing finance company)
2008 - present); Interim Chief (1985 - 2010); Director of Oxford
Executive Officer, Oxford Analytica, Analytica, Inc. (2008 - present);
Inc. (privately held research and Director of The Swiss Helvetia
consulting company) (2010); Executive Fund, Inc. (closed-end fund) (2010
Vice President and Chief Financial - present); and Director of New
Officer, I-trax, Inc. (publicly traded York Mortgage Trust (publicly
health care services company) (2004 - traded mortgage REIT) (2004 -
2007); and Executive Vice President 2009, 2012 - present)
and Chief Financial Officer, Pedestal
Inc. (internet-based mortgage trading
company) (2000 - 2002)
------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (68) Class I Trustee William Joseph Maier Professor of Trustee, Mellon Institutional
Trustee since 2008. Term Political Economy, Harvard University Funds Investment Trust and Mellon
expires in 2014. (1972 - present) Institutional Funds Master
Portfolio (oversaw 17 portfolios
in fund complex) (1989-2008)
------------------------------------------------------------------------------------------------------------------------------
68 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
------------------------------------------------------------------------------------------------------------------------------
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 (65) Class I Trustee Founding Director, Vice President and None
Trustee since 2007. Corporate Secretary, The Winthrop
Term expires in Group, Inc. (consulting firm)
2014. (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)
------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (64) Class II Trustee President and Chief Executive Officer, Director of New America High
Trustee since 2007. Newbury, Piret & Company, Inc. Income Fund, Inc. (closed-end
Term expires in (investment banking firm) (1981 - investment company) (2004 -
2015. Elected present) present); and member, Board of
by Preferred Governors, Investment Company
Shares only. Institute (2000 - 2006)
------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (84) Class III Trustee Senior Counsel, Sullivan & Cromwell Director, The Swiss Helvetia Fund,
Trustee since 2007. Term LLP (law firm) (1998 - present); and Inc. (closed-end investment
expires in 2013. Partner, Sullivan & Cromwell LLP company); and Director, Invesco,
(prior to 1998) Ltd. (formerly AMVESCAP, PLC)
(investment manager) (1997-2005)
------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 69
Interested Trustees
--------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Trustee
--------------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Jr. (86)* Class III Trustee since Non-Executive Chairman and a director None
Trustee, President and Chief 2007. Term expires in of Pioneer Investment Management USA
Executive Officer of the Trust 2013. Elected by Inc. ("PIM-USA"); Chairman and a
Preferred Shares only. director of Pioneer; Chairman and
Director of Pioneer Institutional
Asset Management, Inc. (since 2006);
Director of Pioneer Alternative
Investment Management Limited
(Dublin) (until October 2011);
President and a director of Pioneer
Alternative Investment Management
(Bermuda) Limited and affiliated
funds; Deputy Chairman and a director
of Pioneer Global Asset Management
S.p.A. ("PGAM") (until April 2010);
Director of Nano-C, Inc. (since
2003); Director of Cole Management
Inc. (2004 - 2011); Director of
Fiduciary Counseling, Inc. (until
December 2011); President of all of
the Pioneer Funds; and Retired
Partner, Wilmer Cutler Pickering Hale
and Dorr LLP
--------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (54)* Class I Trustee since Director, CEO and President of None
Trustee and Executive 2007. Term expires in PIM-USA (since February 2007);
Vice President 2014. Director and President of Pioneer and
Pioneer Institutional Asset
Management, Inc. (since February
2007); Executive Vice President of
all of the Pioneer Funds (since March
2007); Director of PGAM (2007 -
2010); Head of New Europe Division,
PGAM (2000 - 2005); and Head of New
Markets Division, PGAM (2005 - 2007)
--------------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are
officers or directors of the Trust's investment adviser and certain of its
affiliates.
70 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
Trust Officers
------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (48) Since 2010. Serves at Vice President and Associate General None
Secretary and Chief the discretion of the Counsel of Pioneer since January
Legal Officer Board. 2008; 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 (52) Since 2010. Serves at Fund Governance Director of Pioneer None
Assistant Secretary the discretion of the since December 2006 and Assistant
Board. Secretary of 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 (50) Since 2010. Serves at Counsel of Pioneer since June 2007 None
Assistant Secretary the discretion of the and Assistant Secretary of all the
Board. Pioneer Funds since June 2010; and
Vice President and Counsel at State
Street Bank from October 2004 to June
2007
------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (53) Since 2008. Serves at Vice President - Fund Treasury of None
Treasurer and Chief the discretion of the Pioneer; Treasurer of all of the
Financial and Accounting Board. Pioneer Funds since March 2008;
Officer of the Trust 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 (47) Since 2007. Serves at Assistant Vice President - Fund None
Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant
Board. Treasurer of all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (54) Since 2007. Serves at Fund Accounting Manager - Fund None
Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant
Board. Treasurer of all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 71
Trusty officer (continued)
------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (33) Since 2009. Serves at Fund Administration Manager - Fund None
Assistant Treasurer the discretion of the Treasury of Pioneer since November
Board. 2008; Assistant 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 (60) Since 2010. Serves at Chief Compliance Officer of Pioneer None
Chief Compliance Officer the discretion of the and of all the Pioneer Funds since
Board. March 2010; 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 (42) Since 2007. Serves at Director - Transfer Agency Compliance None
Anti-Money Laundering Officer the discretion of the of Pioneer and Anti-Money Laundering
Board. Officer of all the Pioneer funds since
2006
------------------------------------------------------------------------------------------------------------------------------
72 Pioneer Diversified High Income Trust | Annual Report | 4/30/13 73
This page for your notes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 73
This page for your notes.
74 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
This page for your notes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/13 75
This page for your notes.
76 Pioneer Diversified High Income Trust | Annual Report | 4/30/13
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) 2013 Pioneer Investments 21909-05-0613
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 10(a), 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.
Audit Fees
Fees for audit services provided to the Trust, including
fees associated with the filings to update its Form N-2 and
issuance of comfort letters, totaled approximately $42,076
in 2013 and $51,700 in 2012.
(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.
Audit-Related Fees
There were no audit-related fees for 2013 and
2012.
(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.
Tax Fees
Fees for tax compliance services, primarily for tax returns,
totaled approximately $8,290 and $8,290 for 2013 and
2012, respectively.
(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.
Other Fees
There were no other fees for 2013 and
2012.
(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, 2013 and 2012, 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 accountant's 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 registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
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 and affiliates, as
previously defined, totaled approximately $8,290 in 2013
and $8,290 in 2012.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's 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 Trust'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 registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
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)).
(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 I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
9. PORTFOLIO MANAGEMENT
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, 2013. For purposes of the
table, "Other Pooled Investment Vehicles" may include investment partnerships,
undertakings for collective investments in transferable securities ("UCITS")
and other non-U.S. investment funds and group trusts, and "Other Accounts" may
include separate accounts for institutions or individuals, insurance company
general or separate accounts, pension funds and other similar institutional
accounts but generally do not include the portfolio manager's personal
investment accounts or those which the manager may be deemed to own
beneficially under the code of ethics. Certain funds and other accounts managed
by the portfolio manager may have substantially similar investment strategies.
NUMBER OF ASSETS
ACCOUNTS MANAGED
MANAGED FOR FOR WHICH
WHICH ADVISORY ADVISORY
NUMBER OF FEE IS FEE IS
NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE-
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S)
------------------- ---------------------------------- ----------- ----------------- ---------------- --------------
Charles Melchreit Other Registered Investment
Companies 10 $12,598,052 N/A N/A
Other Pooled Investment Vehicles 2 $ 557,041 N/A N/A
Other Accounts 4 $ 1,192,643 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- --------------
Andrew Feltus Other Registered
Investment Companies 9 $14,320,352 N/A N/A
Other Pooled Investment Vehicles 3 $ 5,339,967 N/A N/A
Other Accounts 1 $ 667,602 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- --------------
Jonathan Sharkey Other Registered Investment
Companies 3 $ 244,009 N/A N/A
Other Pooled Investment Vehicles 0 $ 0 N/A N/A
Other Accounts 1 $ 51,112 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- --------------
POTENTIAL CONFLICTS OF INTEREST
When a portfolio manager is responsible for the management of more than one
account, the potential arises for the portfolio manager to favor one account
over another. The principal types of potential conflicts of interest that may
arise are discussed below. For the reasons outlined below, Pioneer does not
believe that any material conflicts are likely to arise out of a portfolio
manager's responsibility for the management of the fund as well as one or more
other accounts. Although Pioneer has adopted procedures that it believes are
reasonably designed to detect and prevent violations of the federal securities
laws and to mitigate the potential for conflicts of interest to affect its
portfolio management decisions, there can be no assurance that all conflicts
will be identified or that all procedures will be effective in mitigating the
potential for such risks. Generally, the risks of such conflicts of interest
are increased to the extent that a portfolio manager has a financial incentive
to favor one account over another. Pioneer has structured its compensation
arrangements in a manner that is intended to limit such potential for conflicts
of interest. See "Compensation of Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating new
investment opportunities that have limited supply, such as initial public
offerings and private placements. If, for example, an initial
0
public offering that was expected to appreciate in value significantly shortly
after the offering was allocated to a single account, that account may be
expected to have better investment performance than other accounts that did
not receive an allocation of the initial public offering. Generally,
investments for which there is limited availability are allocated based upon a
range of factors including available cash and consistency with the accounts'
investment objectives and policies. This allocation methodology necessarily
involves some subjective elements but is intended over time to treat each
client in an equitable and fair manner. Generally, the investment opportunity
is allocated among participating accounts on a pro rata basis. Although
Pioneer believes that its practices are reasonably designed to treat each
client in an equitable and fair manner, there may be instances where a fund
may not participate, or may participate to a lesser degree than other clients,
in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager determines
to purchase a security for more than one account in an aggregate amount that
may influence the market price of the security, accounts that purchased or
sold the security first may receive a more favorable price than accounts
that made subsequent transactions. The less liquid the market for the
security or the greater the percentage that the proposed aggregate purchases
or sales represent of average daily trading volume, the greater the
potential for accounts that make subsequent purchases or sales to receive a
less favorable price. When a portfolio manager intends to trade the same
security on the same day for more than one account, the trades typically are
"bunched," which means that the trades for the individual accounts are
aggregated and each account receives the same price. There are some types of
accounts as to which bunching may not be possible for contractual reasons
(such as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in the
best possible price. Where those accounts or circumstances are involved,
Pioneer will place the order in a manner intended to result in as favorable
a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater degree
than other accounts managed by the portfolio manager. If, for example, the
portfolio manager receives a bonus based upon the performance of certain
accounts relative to a benchmark while other accounts are disregarded for
this purpose, the portfolio manager will have a financial incentive to seek
to have the accounts that determine the portfolio manager's bonus achieve
the best possible performance to the possible detriment of other accounts.
Similarly, if Pioneer receives a performance-based advisory fee, the
portfolio manager may favor that account, whether or not the performance of
that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a
beneficial interest in the account, in order to benefit a large client or to
compensate a client that had poor returns. For example, if the portfolio
manager held an interest in an investment partnership that was one of the
accounts managed by the portfolio manager, the portfolio manager would have
an economic incentive to favor the account in which the portfolio manager
held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise. For
example, if a portfolio manager purchases a security for one account and
sells the same security for another account, such trading pattern may
disadvantage either the account that is long or short. In making portfolio
manager assignments, Pioneer seeks to avoid such potentially conflicting
situations. However, where a portfolio manager is responsible for accounts
with differing investment objectives and policies, it is possible that the
portfolio manager will conclude that it is in the best interest of one
account to sell a portfolio security while another account continues to hold
or increase the holding in such security.
COMPENSATION OF PORTFOLIO MANAGERS
Pioneer has adopted a system of compensation for portfolio managers that seeks
to align the financial interests of the portfolio managers with those of
shareholders of the accounts (including Pioneer funds) the portfolio managers
manage, as well as with the financial performance of Pioneer. The compensation
1
program for all Pioneer portfolio managers includes a base salary (determined
by the rank and tenure of the employee) and an annual bonus program, as well as
customary benefits that are offered generally to all full-time employees. Base
compensation is fixed and normally reevaluated on an annual basis. Pioneer
seeks to set base compensation at market rates, taking into account the
experience and responsibilities of the portfolio manager. The bonus plan is
intended to provide a competitive level of annual bonus compensation that is
tied to the portfolio manager achieving superior investment performance and
align the interests of the investment professional with those of shareholders,
as well as with the financial performance of Pioneer. Any bonus under the plan
is completely discretionary, with a maximum annual bonus that may be in excess
of base salary. The annual bonus is based upon a combination of the following
factors:
o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance
calculation is based on pre-tax investment performance of all of the
accounts managed by the portfolio manager (which includes the fund and any
other accounts managed by the portfolio manager) over a one-year period (20%
weighting) and four-year period (80% weighting), measured for periods ending
on December 31. The accounts, which include the fund, are ranked against a
group of mutual funds with similar investment objectives and investment
focus (60%) and a broad-based securities market index measuring the
performance of the same type of securities in which the accounts invest
(40%), which, in the case of the fund, is the Merrill Lynch Global High
Yield and Emerging Markets Index and the CSFB Leveraged Loan Index. As a
result of these two benchmarks, the performance of the portfolio manager for
compensation purposes is measured against the criteria that are relevant to
the portfolio manager's competitive universe.
o QUALITATIVE PERFORMANCE. The qualitative performance component with respect
to all of the accounts managed by the portfolio manager includes objectives,
such as effectiveness in the areas of teamwork, leadership, communications
and marketing, that are mutually established and evaluated by each portfolio
manager and management.
o PIONEER RESULTS AND BUSINESS LINE RESULTS. Pioneer's financial performance,
as well as the investment performance of its investment management group,
affect a portfolio manager's actual bonus by a leverage factor of plus or
minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers participate in other programs designed to reward and
retain key contributors. Senior executives or other key employees are granted
performance units based on the stock price performance of UniCredit and the
financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
SHARE OWNERSHIP BY PORTFOLIO MANAGERS
The following table indicates as of April 30, 2013 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
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 registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
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 registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
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 registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) 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 officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
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.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) 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.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
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/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date June 28, 2013
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/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date June 28, 2013
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date June 28, 2013
* Print the name and title of each signing officer under his or her signature.