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 811-21108
Pioneer Series Trust X
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Christopher J. Kelley, Amundi Asset Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant’s telephone number, including area code: (617) 742-7825
Date of fiscal year end: August 31, 2023
Date of reporting period: September 1, 2022 through February 28, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
High Yield Fund
A: RCRAX | C: RCRCX | Y: RCRYX |
Head of the Americas, President and CEO of US
Amundi Asset Management US, Inc.
April 2023
Q | How did the Fund perform during the six-month period ended February 28, 2023? |
A | Pioneer Corporate High Yield Fund’s Class A shares returned 1.18% at net asset value during the six-month period ended February 28, 2023, while the Fund’s benchmark, the ICE Bank of America US High Yield Index (the ICE BofA Index), returned 2.36%. During the same period, the average return of the 700 mutual funds in Morningstar’s High Yield Bond Funds category was 2.29%. |
Q | Could you please describe the investment environment for high-yield corporate bonds during the six-month period ended February 28, 2023? |
A | With inflation showing signs of modest easing entering the period, investors began to anticipate a pivot by the US Federal Reserve (Fed) to a more dovish stance on monetary policy after months of interest-rate increases. The speculation led to strong returns in the bond market during October and November 2022, despite the Fed’s making another 75-basis point (bps) increase to the target range for the federal funds rate in early November. (A basis point is equal to 1/100th of percentage point.) However, the market soon turned its attention to the potential recessionary effects of the higher-interest-rate regime already put in place by the Fed earlier in 2022, which led riskier assets, such as corporate bonds, to retrace some of their fourth-quarter gains as December progressed. The Fed implemented a more modest increase of 50 bps to the federal funds rate target range at its December meeting, leaving the target range at 4.25% ‒ 4.50% at the end of 2022, its highest level since the fall of 2007. |
Entering 2023, riskier assets rallied once again, due to growing optimism among investors that the Fed and other major central |
banks were poised to stop raising interest rates altogether. January saw Treasury yields ease off their recent highs on the outlook for easier monetary policies, which boosted performance for bonds in general. In addition, the reopening of China’s economy as the government unwound its “Zero-COVID” policy eased concerns about slowing global economic growth. Against that backdrop, areas of the market that had lagged during the 2022 sell-off, such as growth stocks and corporate credit, outperformed. On February 1, 2023, the Fed increased the federal funds target range by another 25 bps, to 4.50% ‒ 4.75%. | |
However, as the six-month period came to a close, the market was anticipating further, significant increases in the federal funds rate target range, based on hawkish rhetoric from Fed Chair Jerome Powell. As of February 28, 2023, the yield on the 10-year Treasury stood at 3.92%, an increase of 77 bps over the 3.15% yield at the beginning of the period six months earlier. | |
Q | Can you review your principal strategies in managing the Fund during the six-month period ended February 28, 2023, and the degree to which the portfolio’s positioning affected benchmark-relative returns? |
A | We have based our investment process for the Fund on security and sector selection. We believe that diligent, detailed, fundamental research could uncover mispriced securities, and that actively managing the portfolio to capture those opportunities may produce competitive returns over the longer term. |
During the six-month period, our use of index-based credit-default swap contracts, as part of our efforts to reduce portfolio-level credit risk, was the largest detractor from the Fund’s benchmark-relative performance. Overall security selection results also detracted from the Fund’s relative returns, most notably among the portfolio’s holdings within the transportation, and technology and electronics sectors. | |
On the positive side, security selection results within the basic industry sector proved additive for the Fund’s relative returns, and overall sector allocation results likewise contributed positively to relative performance. With regard to sector allocation, the portfolio’s underweight to the media sector and |
overweight to the transportation sector made the biggest positive contributions to the Fund’s relative results. | |
With regard to individual holdings, the Fund’s relative performance for the period benefited from exposures to the debt of gold-miner Iamgold, aircraft-leasing firms Aviation Capital and Global Aircraft Leasing, and TimkenSteel, a steel provider. On the downside, detractors from the Fund’s relative returns for the period included positions in air-cargo company WGA, cable-services provider CSC Holdings, remote-work software company LogMeIn, and specialty-retailer Party City. | |
Q | Can you discuss the factors that affected the Fund’s income-generation (or distributions* to shareholders), either positively or negatively, during the six-month period ended February 28, 2023? |
A | The Fund’s monthly distribution rate slightly increased during the six-month period, the result of rising interest rates as well as below-investment-grade corporate bond yields over the period. |
Q | Did the Fund have any exposure to derivatives during the six-month period ended February 28, 2023? If so, did the derivatives have a material effect on the Fund’s performance? |
A | We utilize derivatives in the portfolio from time to time, in order to maintain the desired level of exposure to the high-yield market, while also seeking to maintain sufficient liquidity to make opportunistic purchases and help meet any unanticipated shareholder redemptions. As noted earlier, our use of index-based credit-default-swap contracts detracted from the Fund’s relative performance for the six-month period. |
Q | What is your assessment of the current climate for high-yield investing? |
A | The US macroeconomic situation remains highly unusual, in our view, due to the lingering effects of COVID-19-related changes in consumption, production, and supply chains. Even as consumption has continued to shift away from goods to services and as supply chains have continued to normalize, backlogs still remain for many products. At the same time, the domestic job market has remained overheated, with job openings far in excess |
* | Distributions are not guaranteed. |
of available workers. Inflation has remained well above the Fed’s longer-run goal of 2%, and wage growth has been above levels consistent with that inflation target. The Fed has continued to focus on cooling the labor market to bring wage inflation down, and likely hopes that it can do so without tipping the economy into recession. However, we believe the path to such a “soft landing” for the economy remains narrow. | |
We believe clarity on when the Fed will eventually pause its rate-hiking cycle could boost investor demand for riskier assets in general, and provide a tailwind for fixed-income market returns, based on both credit-spread tightening and declining interest rates. (Credit spreads are commonly defined as the differences in yield between Treasuries and other types of fixed-income securities with similar maturities.) That said, we see elevated risk for persistent, high inflation, especially with respect to core services, where the Fed’s policy tightening has, so far, had little impact. Together with a robust employment backdrop, we believe this suggests that the terminal (ending) target range for the federal funds rate could be higher than previously expected. | |
While we believe having a strong focus on credit selection remains critical, on balance, we feel that a steep recession featuring elevated levels of high-yield defaults is unlikely, and so we have been seeking to maintain the portfolio’s risk profile at close to neutral versus that of the benchmark, while being prepared to decrease or increase portfolio risk as credit spreads narrow or widen. We believe current high-yield spreads are priced in anticipation of a mild recession. While our analysts have been uncovering some signs of economic slowing, they also have reported that most issuers appear to be in relatively good condition. |
Russia, other nations or individuals or companies and possible countermeasures, market disruptions caused by tariffs, trade disputes or other government actions, or adverse investor sentiment. These conditions may continue, recur, worsen or spread.
(As a percentage of total investments)* | ||
1. | FAGE International SA/FAGE USA Dairy Industry, Inc., 5.625%, 8/15/26 (144A) | 1.66% |
2. | Uniti Group LP/Uniti Fiber Holdings, Inc./CSL Capital LLC, 7.875%, 2/15/25 (144A) | 1.57 |
3. | Garda World Security Corp., 4.625%, 2/15/27 (144A) | 1.55 |
4. | Mativ Holdings, Inc., 6.875%, 10/1/26 (144A) | 1.51 |
5. | Koppers, Inc., 6.00%, 2/15/25 (144A) | 1.49 |
6. | Altice France Holding SA, 6.00%, 2/15/28 (144A) | 1.49 |
7. | Western Global Airlines LLC, 10.375%, 8/15/25 (144A) | 1.30 |
8. | NCR Corp., 5.00%, 10/1/28 (144A) | 1.17 |
9. | iStar, Inc., 4.75%, 10/1/24 | 1.14 |
10. | Dealer Tire LLC/DT Issuer LLC, 8.00%, 2/1/28 (144A) | 1.09 |
* | Excludes short-term investments and all derivative contracts except for options purchased. The Fund is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any securities. |
Class | 2/28/23 | 8/31/22 |
A | $7.84 | $7.97 |
C | $7.78 | $7.92 |
Y | $7.88 | $8.01 |
Class | Net Investment Income | Short-Term Capital Gains | Long-Term Capital Gains |
A | $0.2200 | $— | $— |
C | $0.1893 | $— | $— |
Y | $0.2329 | $— | $— |
Performance Update | 2/28/23 | Class A Shares |
Average Annual Total Returns (As of February 28, 2023) | |||
Period | Net Asset Value (NAV) | Public Offering Price (POP) | ICE BofA US High Yield Index |
Life of Class (1/3/17) | 2.91% | 2.14% | 3.30% |
5 Years | 2.30 | 1.37 | 2.70 |
1 Year | -6.34 | -10.60 | -5.52 |
Expense Ratio (Per prospectus dated December 28, 2022) | |
Gross | Net |
1.30% | 0.90% |
Performance Update | 2/28/23 | Class C Shares |
Average Annual Total Returns (As of February 28, 2023) | |||
Period | If Held | If Redeemed | ICE BofA US High Yield Index |
Life of Class (1/3/17) | 2.23% | 2.23% | 3.30% |
5 Years | 1.65 | 1.65 | 2.70 |
1 Year | -7.23 | -8.12 | -5.52 |
Expense Ratio (Per prospectus dated December 28, 2022) | |
Gross | Net |
2.06% | 1.65% |
Performance Update | 2/28/23 | Class Y Shares |
Average Annual Total Returns (As of February 28, 2023) | ||
Period | Net Asset Value (NAV) | ICE BofA US High Yield Index |
Life of Class (1/3/17) | 3.18% | 3.30% |
5 Years | 2.58 | 2.70 |
1 Year | -6.11 | -5.52 |
Expense Ratio (Per prospectus dated December 28, 2022) | |
Gross | Net |
1.11% | 0.60% |
(1) | ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and |
(2) | transaction costs, including sales charges (loads) on purchase payments. |
(1) | Divide your account value by $1,000 Example: an $8,600 account value ÷ $1,000 = 8.6 |
(2) | Multiply the result in (1) above by the corresponding share class’s number in the third row under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. |
Share Class | A | C | Y |
Beginning Account Value on 9/1/22 | $1,000.00 | $1,000.00 | $1,000.00 |
Ending Account Value (after expenses) on 2/28/23 | $1,011.80 | $1,006.60 | $1,013.40 |
Expenses Paid During Period* | $4.49 | $8.21 | $3.00 |
* | Expenses are equal to the Fund’s annualized expense ratio of 0.90%, 1.65%, and 0.60% for Class A, Class C, and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the partial year period). |
Share Class | A | C | Y |
Beginning Account Value on 9/1/22 | $1,000.00 | $1,000.00 | $1,000.00 |
Ending Account Value (after expenses) on 2/28/23 | $1,020.33 | $1,016.61 | $1,021.82 |
Expenses Paid During Period* | $4.51 | $8.25 | $3.01 |
* | Expenses are equal to the Fund’s annualized expense ratio of 0.90%, 1.65%, and 0.60% for Class A, Class C, and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the partial year period). |
Principal Amount USD ($) | Value | |||||
UNAFFILIATED ISSUERS — 99.2% | ||||||
Corporate Bonds — 94.7% of Net Assets | ||||||
Advertising — 3.4% | ||||||
275,000 | Clear Channel Outdoor Holdings, Inc., 7.50%, 6/1/29 (144A) | $ 222,750 | ||||
170,000 | Clear Channel Outdoor Holdings, Inc., 7.75%, 4/15/28 (144A) | 141,078 | ||||
100,000 | Outfront Media Capital LLC/Outfront Media Capital Corp., 4.25%, 1/15/29 (144A) | 82,250 | ||||
380,000 | Outfront Media Capital LLC/Outfront Media Capital Corp., 6.25%, 6/15/25 (144A) | 376,822 | ||||
378,000 | Stagwell Global LLC, 5.625%, 8/15/29 (144A) | 325,084 | ||||
301,000 | Summer BC Bidco B LLC, 5.50%, 10/31/26 (144A) | 257,912 | ||||
Total Advertising | $1,405,896 | |||||
Aerospace & Defense — 1.1% | ||||||
253,000 | Bombardier, Inc., 7.875%, 4/15/27 (144A) | $ 251,434 | ||||
110,000 | Spirit AeroSystems, Inc., 9.375%, 11/30/29 (144A) | 116,187 | ||||
90,000 | Triumph Group, Inc., 9.00%, 3/15/28 (144A) | 90,000 | ||||
Total Aerospace & Defense | $457,621 | |||||
Airlines — 0.9% | ||||||
66,850 | American Airlines 2021-1 Class B Pass Through Trust, 3.95%, 7/11/30 | $ 58,468 | ||||
125,000 | American Airlines, Inc./AAdvantage Loyalty IP, Ltd., 5.50%, 4/20/26 (144A) | 121,656 | ||||
205,000 | Spirit Loyalty Cayman, Ltd./Spirit IP Cayman, Ltd., 8.00%, 9/20/25 (144A) | 205,769 | ||||
Total Airlines | $385,893 | |||||
Apparel — 0.3% | ||||||
115,000 | Hanesbrands, Inc., 9.00%, 2/15/31 (144A) | $ 116,282 | ||||
Total Apparel | $116,282 | |||||
Auto Manufacturers — 1.6% | ||||||
100,000 | Ford Motor Co., 6.10%, 8/19/32 | $ 93,077 | ||||
200,000 | Ford Motor Credit Co. LLC, 3.625%, 6/17/31 | 158,446 | ||||
230,000 | Ford Motor Credit Co. LLC, 4.125%, 8/17/27 | 204,921 | ||||
206,000 | JB Poindexter & Co., Inc., 7.125%, 4/15/26 (144A) | 198,530 | ||||
Total Auto Manufacturers | $654,974 | |||||
Auto Parts & Equipment — 1.5% | ||||||
70,000 | Adient Global Holdings, Ltd., 7.00%, 4/15/28 | $ 70,000 |
Principal Amount USD ($) | Value | |||||
Auto Parts & Equipment — (continued) | ||||||
135,000 | Adient Global Holdings, Ltd., 8.25%, 4/15/31 | $ 135,000 | ||||
475,000 | Dealer Tire LLC/DT Issuer LLC, 8.00%, 2/1/28 (144A) | 431,281 | ||||
Total Auto Parts & Equipment | $636,281 | |||||
Banks — 1.3% | ||||||
317,000 | Freedom Mortgage Corp., 8.25%, 4/15/25 (144A) | $ 300,298 | ||||
250,000(a)(b) | HSBC Holdings Plc, 8.00% (1 Year CMT Index + 386 bps) | 250,000 | ||||
Total Banks | $550,298 | |||||
Building Materials — 3.0% | ||||||
260,000 | Builders FirstSource, Inc., 4.25%, 2/1/32 (144A) | $ 218,276 | ||||
145,000 | Builders FirstSource, Inc., 6.375%, 6/15/32 (144A) | 139,255 | ||||
450,000 | Cornerstone Building Brands, Inc., 6.125%, 1/15/29 (144A) | 326,265 | ||||
613,000 | Koppers, Inc., 6.00%, 2/15/25 (144A) | 592,630 | ||||
Total Building Materials | $1,276,426 | |||||
Chemicals — 3.2% | ||||||
650,000 | Mativ Holdings, Inc., 6.875%, 10/1/26 (144A) | $ 598,994 | ||||
111,000 | Olin Corp., 5.00%, 2/1/30 | 101,005 | ||||
200,000 | SCIL IV LLC/SCIL USA Holdings LLC, 5.375%, 11/1/26 (144A) | 179,748 | ||||
370,000 | Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc., 5.125%, 4/1/29 (144A) | 246,395 | ||||
251,000 | Tronox, Inc., 4.625%, 3/15/29 (144A) | 204,565 | ||||
Total Chemicals | $1,330,707 | |||||
Commercial Services — 5.4% | ||||||
20,000 | Allied Universal Holdco LLC/Allied Universal Finance Corp., 6.625%, 7/15/26 (144A) | $ 18,995 | ||||
275,000 | Allied Universal Holdco LLC/Allied Universal Finance Corp., 9.75%, 7/15/27 (144A) | 252,323 | ||||
80,000 | Brink's Co., 5.50%, 7/15/25 (144A) | 77,881 | ||||
692,000 | Garda World Security Corp., 4.625%, 2/15/27 (144A) | 612,881 | ||||
215,000 | Neptune Bidco US, Inc., 9.29%, 4/15/29 (144A) | 203,261 | ||||
190,000 | NESCO Holdings II, Inc., 5.50%, 4/15/29 (144A) | 169,338 | ||||
295,000 | PECF USS Intermediate Holding III Corp., 8.00%, 11/15/29 (144A) | 207,366 | ||||
35,000 | Prime Security Services Borrower LLC/Prime Finance, Inc., 5.25%, 4/15/24 (144A) | 34,475 |
Principal Amount USD ($) | Value | |||||
Commercial Services — (continued) | ||||||
420,000 | Prime Security Services Borrower LLC/Prime Finance, Inc., 6.25%, 1/15/28 (144A) | $ 389,592 | ||||
300,000 | Sotheby's, 7.375%, 10/15/27 (144A) | 283,014 | ||||
Total Commercial Services | $2,249,126 | |||||
Computers — 2.6% | ||||||
287,000 | Diebold Nixdorf, Inc., 9.375%, 7/15/25 (144A) | $ 200,900 | ||||
329,000 | KBR, Inc., 4.75%, 9/30/28 (144A) | 296,100 | ||||
540,000 | NCR Corp., 5.00%, 10/1/28 (144A) | 464,969 | ||||
150,000 | NCR Corp., 5.25%, 10/1/30 (144A) | 124,015 | ||||
Total Computers | $1,085,984 | |||||
Diversified Financial Services — 5.4% | ||||||
442,347(c) | Avation Capital SA, 8.25% (9.00% PIK or 8.25% Cash), 10/31/26 (144A) | $ 379,043 | ||||
65,000 | Bread Financial Holdings, Inc., 4.75%, 12/15/24 (144A) | 60,254 | ||||
250,000 | Bread Financial Holdings, Inc., 7.00%, 1/15/26 (144A) | 234,044 | ||||
444,722(c) | Global Aircraft Leasing Co., Ltd., 6.50% (7.25% PIK or 6.50% Cash), 9/15/24 (144A) | 402,033 | ||||
240,000 | Nationstar Mortgage Holdings, Inc., 6.00%, 1/15/27 (144A) | 220,800 | ||||
242,000 | Provident Funding Associates LP/PFG Finance Corp., 6.375%, 6/15/25 (144A) | 217,800 | ||||
201,000 | United Wholesale Mortgage LLC, 5.50%, 4/15/29 (144A) | 166,368 | ||||
305,000 | United Wholesale Mortgage LLC, 5.75%, 6/15/27 (144A) | 268,473 | ||||
357,000 | VistaJet Malta Finance Plc/XO Management Holding, Inc., 6.375%, 2/1/30 (144A) | 312,470 | ||||
Total Diversified Financial Services | $2,261,285 | |||||
Electric — 2.5% | ||||||
215,000 | Clearway Energy Operating LLC, 3.75%, 2/15/31 (144A) | $ 174,956 | ||||
85,000 | Clearway Energy Operating LLC, 3.75%, 1/15/32 (144A) | 67,362 | ||||
153,000 | Leeward Renewable Energy Operations LLC, 4.25%, 7/1/29 (144A) | 130,185 | ||||
135,000 | NRG Energy, Inc., 3.375%, 2/15/29 (144A) | 109,615 | ||||
290,000 | NRG Energy, Inc., 3.875%, 2/15/32 (144A) | 224,907 | ||||
46,236 | NSG Holdings LLC/NSG Holdings, Inc., 7.75%, 12/15/25 (144A) | 45,311 | ||||
55,000 | Vistra Operations Co. LLC, 4.375%, 5/1/29 (144A) | 47,514 | ||||
257,000 | Vistra Operations Co. LLC, 5.625%, 2/15/27 (144A) | 243,538 | ||||
Total Electric | $1,043,388 | |||||
Electrical Components & Equipments — 1.3% | ||||||
253,000 | Energizer Holdings, Inc., 4.75%, 6/15/28 (144A) | $ 220,793 |
Principal Amount USD ($) | Value | |||||
Electrical Components & Equipments — (continued) | ||||||
30,000 | Energizer Holdings, Inc., 6.50%, 12/31/27 (144A) | $ 28,800 | ||||
310,000 | WESCO Distribution, Inc., 7.125%, 6/15/25 (144A) | 312,811 | ||||
Total Electrical Components & Equipments | $562,404 | |||||
Engineering & Construction — 1.6% | ||||||
396,995 | Artera Services LLC, 9.033%, 12/4/25 (144A) | $ 341,416 | ||||
225,000 | Promontoria Holding 264 BV, 7.875%, 3/1/27 (144A) | 216,289 | ||||
160,000 | TopBuild Corp., 4.125%, 2/15/32 (144A) | 131,379 | ||||
Total Engineering & Construction | $689,084 | |||||
Entertainment — 1.6% | ||||||
77,000 | Penn Entertainment, Inc., 4.125%, 7/1/29 (144A) | $ 62,490 | ||||
110,000 | Scientific Games Holdings LP/Scientific Games US FinCo, Inc., 6.625%, 3/1/30 (144A) | 96,738 | ||||
214,000 | Scientific Games International, Inc., 7.25%, 11/15/29 (144A) | 210,255 | ||||
350,000 | SeaWorld Parks & Entertainment, Inc., 5.25%, 8/15/29 (144A) | 313,250 | ||||
Total Entertainment | $682,733 | |||||
Environmental Control — 1.3% | ||||||
130,000 | GFL Environmental, Inc., 4.00%, 8/1/28 (144A) | $ 113,127 | ||||
270,000 | GFL Environmental, Inc., 4.375%, 8/15/29 (144A) | 233,734 | ||||
201,000 | Tervita Corp., 11.00%, 12/1/25 (144A) | 216,075 | ||||
Total Environmental Control | $562,936 | |||||
Food — 3.0% | ||||||
280,000 | Albertsons Cos. Inc/Safeway, Inc./New Albertsons LP/Albertsons LLC, 6.50%, 2/15/28 (144A) | $ 278,418 | ||||
701,000 | FAGE International SA/FAGE USA Dairy Industry, Inc., 5.625%, 8/15/26 (144A) | 659,885 | ||||
280,000 | Lamb Weston Holdings, Inc., 4.125%, 1/31/30 (144A) | 245,726 | ||||
95,000 | US Foods, Inc., 4.625%, 6/1/30 (144A) | 82,977 | ||||
Total Food | $1,267,006 | |||||
Forest Products & Paper — 0.7% | ||||||
334,000 | Mercer International, Inc., 5.125%, 2/1/29 | $ 273,864 | ||||
Total Forest Products & Paper | $273,864 | |||||
Healthcare-Products — 0.5% | ||||||
255,000 | Medline Borrower LP, 3.875%, 4/1/29 (144A) | $ 212,536 | ||||
Total Healthcare-Products | $212,536 | |||||
Healthcare-Services — 2.9% | ||||||
229,000 | LifePoint Health, Inc., 5.375%, 1/15/29 (144A) | $ 150,299 |
Principal Amount USD ($) | Value | |||||
Healthcare-Services — (continued) | ||||||
318,000 | Prime Healthcare Services, Inc., 7.25%, 11/1/25 (144A) | $ 287,790 | ||||
54,000 | RegionalCare Hospital Partners Holdings, Inc./LifePoint Health, Inc., 9.75%, 12/1/26 (144A) | 45,967 | ||||
36,000 | Surgery Center Holdings, Inc., 6.75%, 7/1/25 (144A) | 35,532 | ||||
247,000 | Surgery Center Holdings, Inc., 10.00%, 4/15/27 (144A) | 251,326 | ||||
110,000 | Tenet Healthcare Corp., 6.125%, 6/15/30 (144A) | 104,774 | ||||
260,000 | US Acute Care Solutions LLC, 6.375%, 3/1/26 (144A) | 230,542 | ||||
353,000 | US Renal Care, Inc., 10.625%, 7/15/27 (144A) | 112,262 | ||||
Total Healthcare-Services | $1,218,492 | |||||
Home Builders — 0.7% | ||||||
157,000 | KB Home, 4.00%, 6/15/31 | $ 128,226 | ||||
205,000 | M/I Homes, Inc., 3.95%, 2/15/30 | 166,240 | ||||
Total Home Builders | $294,466 | |||||
Internet — 0.7% | ||||||
285,000 | Cogent Communications Group, Inc., 7.00%, 6/15/27 (144A) | $ 275,738 | ||||
Total Internet | $275,738 | |||||
Iron & Steel — 1.5% | ||||||
290,000 | Carpenter Technology Corp., 7.625%, 3/15/30 | $ 289,147 | ||||
39,000 | Mineral Resources, Ltd., 8.00%, 11/1/27 (144A) | 38,805 | ||||
360,000 | TMS International Corp., 6.25%, 4/15/29 (144A) | 281,645 | ||||
Total Iron & Steel | $609,597 | |||||
Leisure Time — 2.4% | ||||||
55,000 | Carnival Holdings Bermuda, Ltd., 10.375%, 5/1/28 (144A) | $ 58,850 | ||||
290,000 | NCL Corp., Ltd., 5.875%, 3/15/26 (144A) | 250,850 | ||||
55,000 | NCL Corp., Ltd., 7.75%, 2/15/29 (144A) | 47,878 | ||||
75,000 | NCL Finance, Ltd., 6.125%, 3/15/28 (144A) | 62,437 | ||||
120,000 | Royal Caribbean Cruises, Ltd., 5.50%, 4/1/28 (144A) | 104,592 | ||||
20,000 | Royal Caribbean Cruises, Ltd., 7.25%, 1/15/30 (144A) | 20,050 | ||||
200,000 | Royal Caribbean Cruises, Ltd., 11.625%, 8/15/27 (144A) | 213,008 | ||||
290,000 | Viking Ocean Cruises Ship VII, Ltd., 5.625%, 2/15/29 (144A) | 248,953 | ||||
Total Leisure Time | $1,006,618 | |||||
Principal Amount USD ($) | Value | |||||
Lodging — 1.0% | ||||||
232,000 | Hilton Grand Vacations Borrower Escrow LLC/Hilton Grand Vacations Borrower Esc, 5.00%, 6/1/29 (144A) | $ 203,613 | ||||
202,000 | Travel + Leisure Co., 6.625%, 7/31/26 (144A) | 198,010 | ||||
Total Lodging | $401,623 | |||||
Media — 3.2% | ||||||
355,000 | CCO Holdings LLC/CCO Holdings Capital Corp., 4.50%, 6/1/33 (144A) | $ 276,191 | ||||
121,000 | CCO Holdings LLC/CCO Holdings Capital Corp., 4.75%, 3/1/30 (144A) | 101,757 | ||||
160,000 | CCO Holdings LLC/CCO Holdings Capital Corp., 4.75%, 2/1/32 (144A) | 129,600 | ||||
55,000 | CCO Holdings LLC/CCO Holdings Capital Corp., 7.375%, 3/1/31 (144A) | 53,356 | ||||
800,000 | CSC Holdings LLC, 4.625%, 12/1/30 (144A) | 430,700 | ||||
362,000 | McGraw-Hill Education, Inc., 8.00%, 8/1/29 (144A) | 309,402 | ||||
25,000 | VZ Secured Financing BV, 5.00%, 1/15/32 (144A) | 20,563 | ||||
Total Media | $1,321,569 | |||||
Metal Fabricate/Hardware — 0.2% | ||||||
130,000 | Park-Ohio Industries, Inc., 6.625%, 4/15/27 | $ 98,788 | ||||
Total Metal Fabricate/Hardware | $98,788 | |||||
Mining — 2.6% | ||||||
191,000 | Coeur Mining, Inc., 5.125%, 2/15/29 (144A) | $ 144,549 | ||||
250,000 | Constellium SE, 3.75%, 4/15/29 (144A) | 207,630 | ||||
235,000 | Eldorado Gold Corp., 6.25%, 9/1/29 (144A) | 207,853 | ||||
265,000 | First Quantum Minerals, Ltd., 7.50%, 4/1/25 (144A) | 257,051 | ||||
339,000 | IAMGOLD Corp., 5.75%, 10/15/28 (144A) | 252,528 | ||||
Total Mining | $1,069,611 | |||||
Oil & Gas — 10.3% | ||||||
302,000 | Aethon United BR LP/Aethon United Finance Corp., 8.25%, 2/15/26 (144A) | $ 290,473 | ||||
309,000 | Baytex Energy Corp., 8.75%, 4/1/27 (144A) | 314,407 | ||||
302,000 | Energean Plc, 6.50%, 4/30/27 (144A) | 277,742 | ||||
365,000 | Harbour Energy Plc, 5.50%, 10/15/26 (144A) | 337,625 | ||||
90,000 | Hilcorp Energy I LP/Hilcorp Finance Co., 6.00%, 4/15/30 (144A) | 81,647 | ||||
90,000 | Hilcorp Energy I LP/Hilcorp Finance Co., 6.25%, 4/15/32 (144A) | 81,611 | ||||
262,000 | International Petroleum Corp., 7.25%, 2/1/27 (144A) | 249,555 | ||||
200,000 | Kosmos Energy, Ltd., 7.75%, 5/1/27 (144A) | 175,448 | ||||
50,000 | Nabors Industries, Inc., 7.375%, 5/15/27 (144A) | 48,189 |
Principal Amount USD ($) | Value | |||||
Oil & Gas — (continued) | ||||||
182,000 | Nabors Industries, Ltd., 7.50%, 1/15/28 (144A) | $ 168,000 | ||||
300,000 | Neptune Energy Bondco Plc, 6.625%, 5/15/25 (144A) | 291,655 | ||||
420,000 | Parkland Corp., 4.625%, 5/1/30 (144A) | 349,650 | ||||
66,000 | Precision Drilling Corp., 6.875%, 1/15/29 (144A) | 59,506 | ||||
210,000 | Shelf Drilling Holdings, Ltd., 8.875%, 11/15/24 (144A) | 212,100 | ||||
324,000 | Southwestern Energy Co., 5.375%, 3/15/30 | 295,968 | ||||
304,000 | Strathcona Resources, Ltd., 6.875%, 8/1/26 (144A) | 249,205 | ||||
360,000 | Tap Rock Resources LLC, 7.00%, 10/1/26 (144A) | 329,400 | ||||
115,000 | Transocean, Inc., 8.75%, 2/15/30 (144A) | 117,013 | ||||
40,000 | Transocean Titan Financing, Ltd., 8.375%, 2/1/28 (144A) | 40,828 | ||||
260,000 | Tullow Oil Plc, 10.25%, 5/15/26 (144A) | 210,860 | ||||
126,000 | Vermilion Energy, Inc., 6.875%, 5/1/30 (144A) | 111,173 | ||||
Total Oil & Gas | $4,292,055 | |||||
Oil & Gas Services — 0.5% | ||||||
215,000 | Enerflex, Ltd., 9.00%, 10/15/27 (144A) | $ 212,192 | ||||
Total Oil & Gas Services | $212,192 | |||||
Packaging & Containers — 2.2% | ||||||
344,000 | Clearwater Paper Corp., 4.75%, 8/15/28 (144A) | $ 300,811 | ||||
125,000 | Crown Cork & Seal Co., Inc., 7.375%, 12/15/26 | 128,954 | ||||
189,000 | OI European Group BV, 4.75%, 2/15/30 (144A) | 168,417 | ||||
195,000 | Sealed Air Corp., 5.00%, 4/15/29 (144A) | 178,070 | ||||
164,000 | TriMas Corp., 4.125%, 4/15/29 (144A) | 142,680 | ||||
Total Packaging & Containers | $918,932 | |||||
Pharmaceuticals — 2.6% | ||||||
155,000 | AdaptHealth LLC, 5.125%, 3/1/30 (144A) | $ 134,075 | ||||
350,000 | Owens & Minor, Inc., 6.625%, 4/1/30 (144A) | 287,875 | ||||
395,000 | P&L Development LLC/PLD Finance Corp., 7.75%, 11/15/25 (144A) | 316,064 | ||||
185,000 | Par Pharmaceutical, Inc., 7.50%, 4/1/27 (144A) | 139,244 | ||||
260,000 | Teva Pharmaceutical Finance Netherlands III BV, 5.125%, 5/9/29 | 230,142 | ||||
Total Pharmaceuticals | $1,107,400 | |||||
Pipelines — 4.7% | ||||||
202,000 | CQP Holdco LP/BIP-V Chinook Holdco LLC, 5.50%, 6/15/31 (144A) | $ 177,255 | ||||
190,000 | Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp., 7.375%, 2/1/31 (144A) | 185,083 | ||||
330,000 | Delek Logistics Partners LP/Delek Logistics Finance Corp., 7.125%, 6/1/28 (144A) | 290,400 | ||||
405,000(a)(b) | Energy Transfer LP, 7.125% (5 Year CMT Index + 531 bps) | 360,045 |
Principal Amount USD ($) | Value | |||||
Pipelines — (continued) | ||||||
6,000 | EnLink Midstream LLC, 5.375%, 6/1/29 | $ 5,571 | ||||
135,000 | EnLink Midstream LLC, 6.50%, 9/1/30 (144A) | 132,965 | ||||
357,000 | EnLink Midstream Partners LP, 5.60%, 4/1/44 | 290,955 | ||||
185,000 | Genesis Energy LP/Genesis Energy Finance Corp., 8.00%, 1/15/27 | 180,932 | ||||
369,000 | Harvest Midstream I LP, 7.50%, 9/1/28 (144A) | 355,849 | ||||
Total Pipelines | $1,979,055 | |||||
Real Estate — 0.5% | ||||||
270,000 | Kennedy-Wilson, Inc., 4.75%, 2/1/30 | $ 207,504 | ||||
Total Real Estate | $207,504 | |||||
REITs — 4.3% | ||||||
310,000 | HAT Holdings I LLC/HAT Holdings II LLC , 3.375%, 6/15/26 (144A) | $ 268,925 | ||||
50,000 | iStar, Inc., 4.25%, 8/1/25 | 49,748 | ||||
452,000 | iStar, Inc., 4.75%, 10/1/24 | 451,155 | ||||
300,000 | MPT Operating Partnership LP/MPT Finance Corp., 3.50%, 3/15/31 | 205,638 | ||||
610,000 | Uniti Group LP/Uniti Fiber Holdings, Inc./CSL Capital LLC, 7.875%, 2/15/25 (144A) | 621,850 | ||||
215,000 | Uniti Group LP/Uniti Group Finance, Inc./CSL Capital LLC, 10.50%, 2/15/28 (144A) | 215,043 | ||||
Total REITs | $1,812,359 | |||||
Retail — 3.7% | ||||||
181,000 | Asbury Automotive Group, Inc., 4.625%, 11/15/29 (144A) | $ 157,392 | ||||
190,000 | Bath & Body Works, Inc., 6.625%, 10/1/30 (144A) | 179,974 | ||||
220,000 | Beacon Roofing Supply, Inc., 4.125%, 5/15/29 (144A) | 188,375 | ||||
90,000 | Gap, Inc., 3.625%, 10/1/29 (144A) | 66,000 | ||||
50,000 | Gap, Inc., 3.875%, 10/1/31 (144A) | 35,873 | ||||
213,000 | Ken Garff Automotive LLC, 4.875%, 9/15/28 (144A) | 183,475 | ||||
435,000 | LCM Investments Holdings II LLC, 4.875%, 5/1/29 (144A) | 353,565 | ||||
235,000 | Murphy Oil USA, Inc., 3.75%, 2/15/31 (144A) | 190,141 | ||||
206,000 | Staples, Inc., 7.50%, 4/15/26 (144A) | 183,340 | ||||
Total Retail | $1,538,135 | |||||
Software — 0.7% | ||||||
199,000 | AthenaHealth Group, Inc., 6.50%, 2/15/30 (144A) | $ 157,398 | ||||
340,000 | Rackspace Technology Global, Inc., 5.375%, 12/1/28 (144A) | 133,566 | ||||
Total Software | $290,964 | |||||
Principal Amount USD ($) | Value | |||||
Telecommunications — 4.0% | ||||||
850,000 | Altice France Holding SA, 6.00%, 2/15/28 (144A) | $ 591,345 | ||||
185,000 | CommScope, Inc., 4.75%, 9/1/29 (144A) | 150,775 | ||||
359,000 | CommScope, Inc., 8.25%, 3/1/27 (144A) | 305,150 | ||||
445,000 | Lumen Technologies, Inc., 4.50%, 1/15/29 (144A) | 235,183 | ||||
500,000 | Windstream Escrow LLC/Windstream Escrow Finance Corp., 7.75%, 8/15/28 (144A) | 408,600 | ||||
Total Telecommunications | $1,691,053 | |||||
Transportation — 3.8% | ||||||
450,000 | Carriage Purchaser, Inc., 7.875%, 10/15/29 (144A) | $ 336,559 | ||||
219,000 | Danaos Corp., 8.50%, 3/1/28 (144A) | 213,508 | ||||
160,000 | Rand Parent LLC, 8.50%, 2/15/30 (144A) | 153,617 | ||||
110,000 | Seaspan Corp., 5.50%, 8/1/29 (144A) | 82,800 | ||||
300,000 | Seaspan Corp., 6.50%, 4/29/26 (144A) | 298,320 | ||||
858,000 | Western Global Airlines LLC, 10.375%, 8/15/25 (144A) | 515,332 | ||||
Total Transportation | $1,600,136 | |||||
Total Corporate Bonds (Cost $45,465,574) | $39,651,011 | |||||
Shares | ||||||
Right/Warrant — 0.0%† of Net Assets | ||||||
Aerospace & Defense — 0.0%† | ||||||
GBP 7,525(d) | Avation Plc, 1/1/59 | $ 3,530 | ||||
Total Aerospace & Defense | $3,530 | |||||
Total Right/Warrant (Cost $—) | $3,530 | |||||
Face Amount USD ($) | ||||||
Insurance-Linked Securities — 0.0%† of Net Assets# | ||||||
Collateralized Reinsurance — 0.0%† | ||||||
Multiperil – Worldwide — 0.0%† | ||||||
250,000(d)(e) + | Cypress Re 2017, 1/31/24 | $ 25 | ||||
250,000(d)(e) + | Resilience Re, 5/1/23 | — | ||||
$ 25 | ||||||
Total Collateralized Reinsurance | $25 | |||||
Face Amount USD ($) | Value | |||||
Reinsurance Sidecars — 0.0%† | ||||||
Multiperil – U.S. — 0.0%† | ||||||
1,500,000(d)(f) + | Harambee Re 2018, 12/31/24 | $ — | ||||
Multiperil – Worldwide — 0.0%† | ||||||
41,791(d)(e) + | Berwick Re 2018-1, 12/31/24 | $ 3,230 | ||||
29,857(d)(e) + | Berwick Re 2019-1, 12/31/24 | 4,762 | ||||
1,500,000(d)(e) + | Versutus Re 2018, 12/31/24 | 2,400 | ||||
250,000(d)(f) + | Viribus Re 2018, 12/31/24 | — | ||||
106,153(d)(f) + | Viribus Re 2019, 12/31/24 | 754 | ||||
$ 11,146 | ||||||
Total Reinsurance Sidecars | $11,146 | |||||
Total Insurance-Linked Securities (Cost $47,759) | $11,171 | |||||
Shares | ||||||
SHORT TERM INVESTMENTS — 4.5% of Net Assets | ||||||
Open-End Fund — 4.5% | ||||||
1,880,005(g) | Dreyfus Government Cash Management, Institutional Shares, 4.47% | $ 1,880,005 | ||||
$ 1,880,005 | ||||||
TOTAL SHORT TERM INVESTMENTS (Cost $1,880,005) | $1,880,005 | |||||
TOTAL INVESTMENTS IN UNAFFILIATED ISSUERS — 99.2% (Cost $47,393,338) | $41,545,717 | |||||
OTHER ASSETS AND LIABILITIES — 0.8% | $ 335,229 | |||||
net assets — 100.0% | $ 41,880,946 | |||||
bps | Basis Points. |
CMT | Constant Maturity Treasury Index. |
REIT | Real Estate Investment Trust. |
(144A) | Security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers in a transaction exempt from registration. At February 28, 2023, the value of these securities amounted to $35,287,217, or 84.3% of net assets. |
(a) | Security is perpetual in nature and has no stated maturity date. |
(b) | The interest rate is subject to change periodically. The interest rate and/or reference index and spread shown at February 28, 2023. |
(c) | Payment-in-kind (PIK) security which may pay interest in the form of additional principal amount. |
(d) | Non-income producing security. |
(e) | Issued as participation notes. |
(f) | Issued as preference shares. |
(g) | Rate periodically changes. Rate disclosed is the 7-day yield at February 28, 2023. |
† | Amount rounds to less than 0.1%. |
+ | Security is valued using significant unobservable inputs (Level 3). |
# | Securities are restricted as to resale. |
Restricted Securities | Acquisition date | Cost | Value |
Berwick Re 2018-1 | 1/29/2018 | $ 6,104 | $ 3,230 |
Berwick Re 2019-1 | 12/31/2018 | 3,568 | 4,762 |
Cypress Re 2017 | 1/24/2017 | 840 | 25 |
Harambee Re 2018 | 12/19/2017 | 31,843 | — |
Resilience Re | 2/8/2017 | 124 | — |
Versutus Re 2018 | 12/20/2017 | — | 2,400 |
Viribus Re 2018 | 12/22/2017 | 5,280 | — |
Viribus Re 2019 | 3/25/2019 | — | 754 |
Total Restricted Securities | $11,171 | ||
% of Net assets | 0.0% |
Notional Amount ($)(1) | Reference Obligation/Index | Pay/ Receive(2) | Annual Fixed Rate | Expiration Date | Premiums Paid | Unrealized (Depreciation) | Market Value | |
6,850,000 | Markit CDX North America High Yield Index Series 39 | Pay | 5.00% | 12/20/27 | $198,356 | $(362,469) | $(164,113) | |
TOTAL CENTRALLY CLEARED CREDIT DEFAULT SWAP CONTRACTS – BUY PROTECTION | $ 198,356 | $ (362,469) | $ (164,113) | |||||
TOTAL SWAP CONTRACTS | $ 198,356 | $ (362,469) | $ (164,113) |
(1) | The notional amount is the maximum amount that a seller of credit protection would be obligated to pay upon occurrence of a credit event. |
(2) | Pays quarterly. |
GBP | — Great British Pound |
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $ 277,661 |
Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (6,285,064) |
Net unrealized depreciation | $(6,007,403) |
Level 1 | – | unadjusted 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 Adviser's own assumptions in determining fair value of investments). See Notes to Financial Statements — Note 1A. |
Level 1 | Level 2 | Level 3 | Total | |
Corporate Bonds | $ — | $39,651,011 | $ — | $39,651,011 |
Right/Warrant | 3,530 | — | — | 3,530 |
Insurance-Linked Securities | ||||
Collateralized Reinsurance | ||||
Multiperil – Worldwide | — | — | 25 | 25 |
Reinsurance Sidecars | ||||
Multiperil – U.S. | — | — | —* | —* |
Multiperil – Worldwide | — | — | 11,146 | 11,146 |
Open-End Fund | 1,880,005 | — | — | 1,880,005 |
Total Investments in Securities | $ 1,883,535 | $ 39,651,011 | $ 11,171 | $ 41,545,717 |
Other Financial Instruments | ||||
Swap contracts, at value | $ — | $ (164,113) | $ — | $ (164,113) |
Total Other Financial Instruments | $ — | $ (164,113) | $ — | $ (164,113) |
* | Securities valued at $0. |
ASSETS: | |
Investments in unaffiliated issuers, at value (cost $47,393,338) | $ 41,545,717 |
Swaps collateral | 561,723 |
Variation margin for centrally cleared swap contracts | 11,784 |
Receivables — | |
Fund shares sold | 42,513 |
Interest | 679,020 |
Due from the Adviser | 7,041 |
Other assets | 25,390 |
Total assets | $ 42,873,188 |
LIABILITIES: | |
Overdraft due to custodian | $ 11,784 |
Payables — | |
Investment securities purchased | 545,000 |
Fund shares repurchased | 170,357 |
Distributions | 7,927 |
Trustees' fees | 1,352 |
Professional fees | 63,439 |
Swap contracts, at value (net premiums paid $198,356) | 164,113 |
Management fees | 2,861 |
Administrative expenses | 4,032 |
Distribution fees | 863 |
Accrued expenses | 20,514 |
Total liabilities | $ 992,242 |
NET ASSETS: | |
Paid-in capital | $113,742,099 |
Distributable earnings (loss) | (71,861,153) |
Net assets | $ 41,880,946 |
NET ASSET VALUE PER SHARE: | |
No par value (unlimited number of shares authorized) | |
Class A (based on $16,624,275/2,120,729 shares) | $ 7.84 |
Class C (based on $2,164,903/278,220 shares) | $ 7.78 |
Class Y (based on $23,091,768/2,930,665 shares) | $ 7.88 |
MAXIMUM OFFERING PRICE PER SHARE: | |
Class A (based on $7.84 net asset value per share/100%-4.50% maximum sales charge) | $ 8.21 |
INVESTMENT INCOME: | ||
Interest from unaffiliated issuers | $ 1,603,301 | |
Dividends from unaffiliated issuers | 28,352 | |
Total Investment Income | $ 1,631,653 | |
EXPENSES: | ||
Management fees | $ 113,951 | |
Administrative expenses | 12,929 | |
Transfer agent fees | ||
Class A | 4,781 | |
Class C | 586 | |
Class Y | 10,450 | |
Distribution fees | ||
Class A | 21,882 | |
Class C | 12,106 | |
Shareowner communications expense | 4,155 | |
Consulting fees | 12,167 | |
Custodian fees | 93 | |
Registration fees | 17,457 | |
Professional fees | 70,700 | |
Printing expense | 16,893 | |
Officers' and Trustees' fees | 4,190 | |
Miscellaneous | 12,263 | |
Total expenses | $ 314,603 | |
Less fees waived and expenses reimbursed by the Adviser | (138,897) | |
Net expenses | $ 175,706 | |
Net investment income | $ 1,455,947 | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||
Net realized gain (loss) on: | ||
Investments in unaffiliated issuers | $(1,188,543) | |
Swap contracts | 6,697 | |
Other assets and liabilities denominated in foreign currencies | (6,637) | $(1,188,483) |
Change in net unrealized appreciation (depreciation) on: | ||
Investments in unaffiliated issuers | $ 603,682 | |
Swap contracts | (415,529) | |
Other assets and liabilities denominated in foreign currencies | 4,804 | $ 192,957 |
Net realized and unrealized gain (loss) on investments | $ (995,526) | |
Net increase in net assets resulting from operations | $ 460,421 |
Six Months Ended 2/28/23 (unaudited) | Year Ended 8/31/22 | |
FROM OPERATIONS: | ||
Net investment income (loss) | $ 1,455,947 | $ 3,170,042 |
Net realized gain (loss) on investments | (1,188,483) | (954,202) |
Change in net unrealized appreciation (depreciation) on investments | 192,957 | (7,935,454) |
Net increase (decrease) in net assets resulting from operations | $ 460,421 | $ (5,719,614) |
DISTRIBUTIONS TO SHAREOWNERS: | ||
Class A ($0.22 and $0.39 per share, respectively) | $ (496,257) | $ (943,019) |
Class C ($0.19 and $0.32 per share, respectively) | (59,422) | (181,668) |
Class Y ($0.23 and $0.42 per share, respectively) | (765,877) | (1,626,083) |
Total distributions to shareowners | $ (1,321,556) | $ (2,750,770) |
FROM FUND SHARE TRANSACTIONS: | ||
Net proceeds from sales of shares | $ 1,787,839 | $ 6,870,247 |
Reinvestment of distributions | 1,267,847 | 2,631,093 |
Cost of shares repurchased | (10,283,319) | (21,481,429) |
Net decrease in net assets resulting from Fund share transactions | $ (7,227,633) | $(11,980,089) |
Net decrease in net assets | $ (8,088,768) | $ (20,450,473) |
NET ASSETS: | ||
Beginning of period | $ 49,969,714 | $ 70,420,187 |
End of period | $ 41,880,946 | $ 49,969,714 |
Six Months Ended 2/28/23 Shares (unaudited) | Six Months Ended 2/28/23 Amount (unaudited) | Year Ended 8/31/22 Shares | Year Ended 8/31/22 Amount | |
Class A | ||||
Shares sold | 158,736 | $ 1,240,647 | 457,441 | $ 3,975,150 |
Reinvestment of distributions | 59,800 | 465,456 | 102,547 | 879,915 |
Less shares repurchased | (451,942) | (3,544,092) | (739,675) | (6,423,136) |
Net decrease | (233,406) | $(1,837,989) | (179,687) | $ (1,568,071) |
Class C | ||||
Shares sold | 4,054 | $ 31,871 | 15,041 | $ 134,079 |
Reinvestment of distributions | 6,496 | 50,141 | 18,863 | 162,521 |
Less shares repurchased | (119,035) | (923,897) | (404,270) | (3,491,003) |
Net decrease | (108,485) | $ (841,885) | (370,366) | $ (3,194,403) |
Class Y | ||||
Shares sold | 65,419 | $ 515,321 | 313,756 | $ 2,761,018 |
Reinvestment of distributions | 96,174 | 752,250 | 183,733 | 1,588,657 |
Less shares repurchased | (742,258) | (5,815,330) | (1,313,540) | (11,567,290) |
Net decrease | (580,665) | $(4,547,759) | (816,051) | $ (7,217,615) |
Six Months Ended 2/28/23 (unaudited) | Year Ended 8/31/22 | Year Ended 8/31/21* | Year Ended 8/31/20* | Year Ended 8/31/19* | Year Ended 8/31/18* | |
Class A | ||||||
Net asset value, beginning of period | $ 7.97 | $ 9.22 | $ 8.78 | $ 9.06 | $ 8.90 | $ 9.13 |
Increase (decrease) from investment operations: | ||||||
Net investment income (loss) (a) | $ 0.24 | $ 0.45 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.42 |
Net realized and unrealized gain (loss) on investments | (0.15) | (1.31) | 0.44 | (0.27) | 0.16 | (0.20) |
Net increase (decrease) from investment operations | $ 0.09 | $ (0.86) | $ 0.90 | $ 0.19 | $ 0.61 | $ 0.22 |
Distributions to shareowners: | ||||||
Net investment income | $ (0.22) | $ (0.39) | $ (0.30) | $ (0.47) | $ (0.45) | $ (0.41) |
Net realized gain | — | — | — | — | — | (0.04) |
Tax return of capital | — | — | (0.16) | — | — | — |
Total distributions | $ (0.22) | $ (0.39) | $ (0.46) | $ (0.47) | $ (0.45) | $ (0.45) |
Net increase (decrease) in net asset value | $ (0.13) | $ (1.25) | $ 0.44 | $ (0.28) | $ 0.16 | $ (0.23) |
Net asset value, end of period | $ 7.84 | $ 7.97 | $ 9.22 | $ 8.78 | $ 9.06 | $ 8.90 |
Total return (b) | 1.18%(c) | (9.54)% | 10.45% | 2.25% | 7.13% | 2.60% |
Ratio of net expenses to average net assets | 0.90%(d) | 0.90% | 0.90% | 0.93% | 1.00% | 1.01% |
Ratio of net investment income (loss) to average net assets | 6.26%(d) | 5.20% | 5.05% | 5.27% | 5.10% | 4.68% |
Portfolio turnover rate | 10%(c) | 33% | 83% | 92% | 60% | 114% |
Net assets, end of period (in thousands) | $16,624 | $18,769 | $23,369 | $9,052 | $8,374 | $8,009 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | ||||||
Total expenses to average net assets | 1.47%(d) | 1.30% | 1.40% | 2.03% | 2.12% | 1.91% |
Net investment income (loss) to average net assets | 5.69%(d) | 4.80% | 4.55% | 4.17% | 3.98% | 3.78% |
* | The Fund acquired the assets and liabilities of Pioneer Corporate High Yield Fund (the “Predecessor Fund”) on September 25, 2020 (the “Reorganization”). As a result of the Reorganization, the Predecessor Fund’s performance and financial history became the performance and financial history of the Fund. Historical per-share amounts prior to September 25, 2020 have been adjusted to reflect the exchange ratio used to align the net asset values of the Predecessor Fund with those of the Fund. See Notes to Financial Statements — Note 8. |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. |
(c) | Not annualized. |
(d) | Annualized. |
Six Months Ended 2/28/23 (unaudited) | Year Ended 8/31/22 | Year Ended 8/31/21* | Year Ended 8/31/20* | Year Ended 8/31/19* | Year Ended 8/31/18* | |
Class C | ||||||
Net asset value, beginning of period | $ 7.92 | $ 9.17 | $ 8.73 | $ 8.94 | $ 8.79 | $ 9.01 |
Increase (decrease) from investment operations: | ||||||
Net investment income (loss) (a) | $ 0.21 | $ 0.37 | $ 0.39 | $ 0.41 | $ 0.38 | $ 0.35 |
Net realized and unrealized gain (loss) on investments | (0.16) | (1.30) | 0.44 | (0.21) | 0.15 | (0.19) |
Net increase (decrease) from investment operations | $ 0.05 | $ (0.93) | $ 0.83 | $ 0.20 | $ 0.53 | $ 0.16 |
Distributions to shareowners: | ||||||
Net investment income | $ (0.19) | $ (0.32) | $ (0.24) | $ (0.41) | $ (0.38) | $ (0.34) |
Net realized gain | — | — | — | — | — | (0.04) |
Tax return of capital | — | — | (0.15) | — | — | — |
Total distributions | $ (0.19) | $ (0.32) | $ (0.39) | $(0.41) | $ (0.38) | $ (0.38) |
Net increase (decrease) in net asset value | $ (0.14) | $ (1.25) | $ 0.44 | $(0.21) | $ 0.15 | $ (0.22) |
Net asset value, end of period | $ 7.78 | $ 7.92 | $ 9.17 | $ 8.73 | $ 8.94 | $ 8.79 |
Total return (b) | 0.66%(c) | (10.30)% | 9.64% | 2.30% | 6.34% | 1.84% |
Ratio of net expenses to average net assets | 1.65%(d) | 1.65% | 1.65% | 1.50% | 1.75% | 1.75% |
Ratio of net investment income (loss) to average net assets | 5.50%(d) | 4.29% | 4.35% | 4.67% | 4.35% | 3.94% |
Portfolio turnover rate | 10%(c) | 33% | 83% | 92% | 60% | 114% |
Net assets, end of period (in thousands) | $2,165 | $ 3,061 | $6,940 | $ 853 | $4,089 | $3,983 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | ||||||
Total expenses to average net assets | 2.22%(d) | 2.06% | 2.14% | 2.58% | 2.87% | 2.65% |
Net investment income (loss) to average net assets | 4.93%(d) | 3.88% | 3.86% | 3.59% | 3.23% | 3.04% |
* | The Fund acquired the assets and liabilities of Pioneer Corporate High Yield Fund (the “Predecessor Fund”) on September 25, 2020 (the “Reorganization”). As a result of the Reorganization, the Predecessor Fund’s performance and financial history became the performance and financial history of the Fund. Historical per-share amounts prior to September 25, 2020 have been adjusted to reflect the exchange ratio used to align the net asset values of the Predecessor Fund with those of the Fund. See Notes to Financial Statements — Note 8. |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. |
(c) | Not annualized. |
(d) | Annualized. |
Six Months Ended 2/28/23 (unaudited) | Year Ended 8/31/22 | Year Ended 8/31/21* | Year Ended 8/31/20* | Year Ended 8/31/19* | Year Ended 8/31/18* | |
Class Y | ||||||
Net asset value, beginning of period | $ 8.01 | $ 9.27 | $ 8.82 | $ 9.11 | $ 8.95 | $ 9.17 |
Increase (decrease) from investment operations: | ||||||
Net investment income (loss) (a) | $ 0.26 | $ 0.48 | $ 0.49 | $ 0.48 | $ 0.48 | $ 0.45 |
Net realized and unrealized gain (loss) on investments | (0.16) | (1.32) | 0.45 | (0.27) | 0.16 | (0.20) |
Net increase (decrease) from investment operations | $ 0.10 | $ (0.84) | $ 0.94 | $ 0.21 | $ 0.64 | $ 0.25 |
Distributions to shareowners: | ||||||
Net investment income | $ (0.23) | $ (0.42) | $ (0.33) | $ (0.50) | $ (0.48) | $ (0.43) |
Net realized gain | — | — | — | — | — | (0.04) |
Tax return of capital | — | — | (0.16) | — | — | — |
Total distributions | $ (0.23) | $ (0.42) | $ (0.49) | $ (0.50) | $ (0.48) | $ (0.47) |
Net increase (decrease) in net asset value | $ (0.13) | $ (1.26) | $ 0.45 | $ (0.29) | $ 0.16 | $ (0.22) |
Net asset value, end of period | $ 7.88 | $ 8.01 | $ 9.27 | $ 8.82 | $ 9.11 | $ 8.95 |
Total return (b) | 1.34%(c) | (9.31)% | 10.80% | 2.53% | 7.41% | 2.86% |
Ratio of net expenses to average net assets | 0.60%(d) | 0.60% | 0.60% | 0.63% | 0.75% | 0.75% |
Ratio of net investment income (loss) to average net assets | 6.56%(d) | 5.47% | 5.40% | 5.58% | 5.35% | 4.94% |
Portfolio turnover rate | 10%(c) | 33% | 83% | 92% | 60% | 114% |
Net assets, end of period (in thousands) | $23,092 | $28,139 | $40,111 | $12,934 | $8,163 | $8,021 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | ||||||
Total expenses to average net assets | 1.24%(d) | 1.11% | 1.12% | 1.76% | 1.87% | 1.66% |
Net investment income (loss) to average net assets | 5.92%(d) | 4.96% | 4.88% | 4.45% | 4.23% | 4.03% |
* | The Fund acquired the assets and liabilities of Pioneer Corporate High Yield Fund (the “Predecessor Fund”) on September 25, 2020 (the “Reorganization”). As a result of the Reorganization, the Predecessor Fund’s performance and financial history became the performance and financial history of the Fund. Historical per-share amounts prior to September 25, 2020 have been adjusted to reflect the exchange ratio used to align the net asset values of the Predecessor Fund with those of the Fund. See Notes to Financial Statements — Note 8. |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. |
(c) | Not annualized. |
(d) | Annualized. |
A. | Security Valuation |
The net asset value of the Fund is computed once daily, on each day the New York Stock Exchange (“NYSE”) is open, as of the close of regular trading on the NYSE. | |
Fixed-income securities are valued by using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers, Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis of current market prices for other debt securities, historical trading patterns in the market for fixed-income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an independent third party pricing service. When independent third party pricing services are unable to supply prices, or when prices or market quotations are considered to be unreliable, the value of that security may be determined using quotations from one or more broker-dealers. | |
Loan interests are valued at the mean between the last available bid and asked prices from one or more brokers or dealers as obtained from Loan Pricing Corporation, an independent third party pricing service. If price information is not available from Loan Pricing Corporation, or if the price information is deemed to be unreliable, price information will be obtained from an alternative loan interest pricing service. If no reliable price quotes are available from either the primary or alternative pricing service, broker quotes will be solicited. | |
Event-linked bonds are valued at the bid price obtained from an independent third party pricing service. Other insurance-linked securities (including reinsurance sidecars, collateralized reinsurance and industry loss warranties) may be valued at the bid price obtained from an independent pricing service, or through a third party using a pricing matrix, insurance valuation models, or other fair value methods or techniques to provide an estimated value of the instrument. | |
Equity securities that have traded on an exchange are valued by using the last sale price on the principal exchange where they are traded. Equity securities that have not traded on the date of valuation, or securities for which sale prices are not available, generally are valued using the mean between the last bid and asked prices or, if both last bid and asked prices are not available, at the last quoted bid price. Last sale and bid and asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, |
prices are typically determined by independent third party pricing services using a variety of techniques and methods. | |
The value of foreign securities is translated into U.S. dollars based on foreign currency exchange rate quotations supplied by a third party pricing source. Trading in non-U.S. equity securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. The Adviser may use a fair value model developed by an independent pricing service to value non-U.S. equity securities. | |
Swap contracts, including interest rate swaps, caps and floors (other than centrally cleared swap contracts), are valued at the dealer quotations obtained from reputable International Swap Dealers Association members. Centrally cleared swaps are valued at the daily settlement price provided by the central clearing counterparty. | |
Shares of open-end registered investment companies (including money market mutual funds) are valued at such funds’ net asset value. | |
Securities or loan interests for which independent pricing services or broker-dealers are unable to supply prices or for which market prices and/or quotations are not readily available or are considered to be unreliable are valued by a fair valuation team comprised of certain personnel of the Adviser. Effective September 8, 2022, the Adviser is designated as the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act. The Adviser’s fair valuation team is responsible for monitoring developments that may impact fair valued securities. | |
Inputs used when applying fair value methods to value a security may include credit ratings, the financial condition of the company, current market conditions and comparable securities. The Adviser 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 Fund'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 Fund's securities may differ significantly from exchange prices, and such differences could be material. | |
B. | Investment Income and Transactions |
Dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities where the ex-dividend date may have |
passed are recorded as soon as the Fund becomes aware of the ex-dividend data in the exercise of reasonable diligence. | |
Interest income, including interest on income-bearing cash accounts, is recorded on the accrual basis. Dividend and interest income are reported net of unrecoverable foreign taxes withheld at the applicable country rates and net of income accrued on defaulted securities. | |
Interest and dividend income payable by delivery of additional shares is reclassified as PIK (payment-in-kind) income upon receipt and is included in interest and dividend income, respectively. | |
Security transactions are recorded as of trade date. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. | |
C. | Foreign Currency Translation |
The books and records of the Fund 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 exchange 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 on the Statement of Operations from the effects of changes in the market prices of those securities, but are included with the net realized and unrealized gain or loss on investments. | |
D. | Federal Income Taxes |
It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income and net realized capital gains, if any, to its shareowners. Therefore, no provision for federal income taxes is required. As of February 28, 2023, the Fund did not accrue any interest or penalties with respect to uncertain tax positions, which, if applicable, would be recorded as an income tax expense on the Statement of Operations. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities. | |
The amount and character of income and capital gain distributions to shareowners are determined in accordance with federal income tax rules, which may differ from U.S. GAAP. Distributions in excess of net |
investment income or net realized gains are temporary over distributions 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. | |
A portion of the dividend income recorded by the Fund is from distributions by publicly traded real estate investment trusts (“REITs”), and such distributions for tax purposes may also consist of capital gains and return of capital. The actual return of capital and capital gains portions of such distributions will be determined by formal notifications from the REITs subsequent to the calendar year-end. Distributions received from the REITs that are determined to be a return of capital are recorded by the Fund as a reduction of the cost basis of the securities held and those determined to be capital gain are reflected as such on the Statement of Operations. | |
The tax character of current year distributions payable will be determined at the end of the current taxable year. The tax character of distributions paid during the year ended August 31, 2022 was as follows: |
2022 | |
Distributions paid from: | |
Ordinary income | $2,750,770 |
Total | $ 2,750,770 |
2022 | |
Distributable earnings/(losses): | |
Undistributed ordinary income | $ 416,711 |
Capital loss carryforward | (64,806,063) |
Other book/tax temporary differences | (9,736) |
Net unrealized depreciation | (6,600,930) |
Total | $ (71,000,018) |
E. | Fund Shares |
The Fund records sales and repurchases of its shares as of trade date. The Distributor earned $373 in underwriting commissions on the sale of Class A shares during the six months ended February 28, 2023. |
F. | Class Allocations |
Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on its respective percentage of adjusted net assets at the beginning of the day. | |
Distribution fees are calculated based on the average daily net asset value attributable to Class A and Class C shares of the Fund, respectively (see Note 5). Class Y shares do not pay distribution fees. All expenses and fees paid to the Fund's transfer agent for its services are allocated among the classes of shares based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 4). | |
The Fund declares as daily dividends substantially all of its net investment income. All dividends are paid on a monthly basis. Short-term capital gain distributions, if any, may be declared with the daily dividends. Distributions to shareowners are recorded as of the ex-dividend date. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner and at the same time, except that net investment income dividends to Class A, Class C and Class Y shares can reflect different transfer agent and distribution expense rates. | |
G. | Risks |
The value of securities held by the Fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political or regulatory conditions, recessions, the spread of infectious illness or other public health issues, inflation, changes in interest rates, armed conflict including Russia's military invasion of Ukraine, sanctions against Russia, other nations or individuals or companies and possible countermeasures, lack of liquidity in the bond markets or adverse investor sentiment. In the past several years, financial markets have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. These conditions may continue, recur, worsen or spread. Recently, inflation and interest rates have increased and may rise further. These circumstances could adversely affect the value and liquidity of the Fund's investments, impair the Fund's ability to satisfy redemption requests, and negatively impact the Fund's performance. Raising the ceiling on U.S. government debt has become increasingly politicized. Any failure to increase the ceiling on U.S. government debt could lead to a default on U.S. government obligations, with unpredictable consequences for economies and markets. |
The global pandemic of the novel coronavirus respiratory disease designated COVID-19 has resulted in major disruption to economies and markets around the world, including the United States. Global financial markets have experienced extreme volatility and severe losses, and trading in many instruments has been disrupted. Liquidity for many instruments has been greatly reduced for periods of time. Some sectors of the economy and individual issuers have experienced particularly large losses. These circumstances may continue to affect adversely the value and liquidity of the Fund's investments. Following Russia’s invasion of Ukraine, Russian securities have lost all, or nearly all, their market value. Other securities or markets could be similarly affected by past or future political, geopolitical or other events or conditions. | |
Governments and central banks, including the U.S. Federal Reserve, have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. These actions have resulted in significant expansion of public debt, including in the U.S. The consequences of high public debt, including its future impact on the economy and securities markets, may not be known for some time. | |
The U.S. and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the U.S. has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the U.S. and its trading partners, as well as companies directly or indirectly affected and financial markets generally. If the political climate between the U.S. and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund's assets may go down. | |
At times, the Fund’s investments may represent industries or industry sectors that are interrelated or have common risks, making the Fund more susceptible to any economic, political, or regulatory developments or other risks affecting those industries and sectors. | |
The Fund’s investments in foreign markets and countries with limited developing markets may subject the Fund to a greater degree of risk than investments in a developed market. These risks include disruptive political or economic conditions, military conflicts and sanctions, terrorism, sustained economic downturns, financial instability, less |
liquid trading markets, extreme price volatility, currency risks, reduction of government or central bank support, inadequate accounting standards, tariffs, tax disputes or other tax burdens, nationalization or expropriation of assets, and the imposition of adverse governmental laws, arbitrary application of laws and regulations or lack of rule of law and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the Fund’s return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. Depositary receipts may involve higher expenses and may trade at a discount (or premium) to the underlying security. | |
Russia launched a large-scale invasion of Ukraine on February 24, 2022. In response to the military action by Russia, various countries, including the U.S., the United Kingdom, and European Union issued broad-ranging economic sanctions against Russia and Belarus and certain companies and individuals. Since then, Russian securities have lost all, or nearly all, their market value, and many other issuers, securities and markets have been adversely affected. The United States and other countries may impose sanctions on other countries, companies and individuals in light of Russia’s military invasion. The extent and duration of the impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted. These and any related events could have a significant impact on the value and liquidity of certain Fund investments, on Fund performance and the value of an investment in the Fund, particularly with respect to securities and commodities, such as oil, natural gas and food commodities, as well as other sectors with exposure to Russian issuers or issuers in other countries affected by the invasion, and are likely to have collateral impacts on market sectors globally. | |
The Fund invests in below-investment-grade (high-yield) debt securities and preferred stocks. Some of these high-yield securities may be convertible into equity securities of the issuer. Debt securities rated below investment-grade 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 may be less liquid and more difficult to value, especially during periods of economic uncertainty or change, than higher rated debt securities. | |
The market prices of the Fund's fixed income securities may fluctuate significantly when interest rates change. The value of your investment |
will generally go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. For example, if interest rates increase by 1%, the value of a Fund's portfolio with a portfolio duration of ten years would be expected to decrease by 10%, all other things being equal. In recent years interest rates and credit spreads in the U.S. have been at historic lows. The U.S. Federal Reserve has raised certain interest rates, and interest rates may continue to go up. A general rise in interest rates could adversely affect the price and liquidity of fixed income securities. The maturity of a security may be significantly longer than its effective duration. A security's maturity and other features may be more relevant than its effective duration in determining the security's sensitivity to other factors affecting the issuer or markets generally, such as changes in credit quality or in the yield premium that the market may establish for certain types of securities (sometimes called "credit spread"). In general, the longer its maturity the more a security may be susceptible to these factors. When the credit spread for a fixed income security goes up, or "widens," the value of the security will generally go down. | |
If an issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. | |
The Fund's investments, payment obligations and financing terms may be based on floating rates, such as LIBOR (London Interbank Offered Rate) or SOFR (Secured Overnight Financing Rate). ICE Benchmark Administration, the administrator of LIBOR, ceased publication of most LIBOR settings on a representative basis at the end of 2021 and is expected to cease publication of a majority of U.S. dollar LIBOR settings on a representative basis after June 30, 2023. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after 2021. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. Markets are developing in response to these new rates, but questions around liquidity in these rates and how to appropriately adjust these rates to eliminate any economic value transfer at the time of transition remain a significant concern. The effect of any changes to – or discontinuation of – LIBOR on the fund will vary depending on, among other things, existing fallback provisions in |
individual contracts and whether, how, and when industry participants develop and widely adopt new reference rates and fallbacks for both legacy and new products and instruments. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that rely on LIBOR. The transition may also result in a reduction in the value of certain LIBOR-based investments held by the Fund or reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could result in losses for the Fund. Because the usefulness of LIBOR as a benchmark may deteriorate during the transition period, these effects could occur at any time. | |
The Fund may invest in REIT securities, the value of which can fall for a variety of reasons, such as declines in rental income, fluctuating interest rates, poor property management, environmental liabilities, uninsured damage, increased competition, or changes in real estate tax laws. | |
With the increased use of technologies such as the Internet to conduct business, the Fund is susceptible to operational, information security and related risks. While the Fund’s Adviser has established business continuity plans in the event of, and risk management systems to prevent, limit or mitigate, such cyber-attacks, there are inherent limitations in such plans and systems, including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by service providers to the Fund such as the Fund’s custodian and accounting agent, and the Fund’s transfer agent. In addition, many beneficial owners of Fund shares hold them through accounts at broker-dealers, retirement platforms and other financial market participants over which neither the Fund nor the Adviser exercises control. Each of these may in turn rely on service providers to them, which are also subject to the risk of cyber-attacks. Cybersecurity failures or breaches at the Adviser or the Fund’s service providers or intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the Fund’s ability to calculate its net asset value, impediments to trading, the inability of Fund shareowners to effect share purchases, redemptions or exchanges or receive distributions, loss of or unauthorized access to private shareowner information and violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, or additional compliance costs. Such costs and losses may not be covered under any insurance. In addition, maintaining vigilance against cyber-attacks may involve substantial costs over time, and system enhancements may themselves be subject to cyber-attacks. |
The Fund’s prospectus contains unaudited information regarding the Fund’s principal risks. Please refer to that document when considering the Fund’s principal risks. | |
H. | Restricted Securities |
Restricted Securities are subject to legal or contractual restrictions on resale. Restricted securities generally are resold in transactions exempt from registration under the Securities Act of 1933. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. | |
Disposal of restricted investments may involve negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted investments held by the Fund at February 28, 2023 are listed in the Schedule of Investments. | |
I. | Insurance-Linked Securities (“ILS”) |
The Fund invests in ILS. The Fund could lose a portion or all of the principal it has invested in an ILS, and the right to additional interest or dividend payments with respect to the security, upon the occurrence of one or more trigger events, as defined within the terms of an insurance-linked security. Trigger events, generally, are hurricanes, earthquakes, or other natural events of a specific size or magnitude that occur in a designated geographic region during a specified time period, and/or that involve losses or other metrics that exceed a specific amount. There is no way to accurately predict whether a trigger event will occur, and accordingly, ILS carry significant risk. The Fund is entitled to receive principal, and interest and/or dividend payments so long as no trigger event occurs of the description and magnitude specified by the instrument. In addition to the specified trigger events, ILS may expose the Fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. | |
The Fund’s investments in ILS may include event-linked bonds. ILS also may include special purpose vehicles (“SPVs”) or similar instruments structured to comprise a portion of a reinsurer’s catastrophe-oriented business, known as quota share instruments (sometimes referred to as reinsurance sidecars), or to provide reinsurance relating to specific risks to insurance or reinsurance companies through a collateralized instrument, known as collateralized reinsurance. Structured reinsurance investments also may include industry loss warranties (“ILWs”). A traditional ILW takes the form of a bilateral reinsurance contract, but |
there are also products that take the form of derivatives, collateralized structures, or exchange-traded instruments. | |
Where the ILS are based on the performance of underlying reinsurance contracts, the Fund has limited transparency into the individual underlying contracts, and therefore must rely upon the risk assessment and sound underwriting practices of the issuer. Accordingly, it may be more difficult for the Adviser to fully evaluate the underlying risk profile of the Fund's structured reinsurance investments, and therefore the Fund's assets are placed at greater risk of loss than if the Adviser had more complete information. Structured reinsurance instruments generally will be considered illiquid securities by the Fund. These securities may be difficult to purchase, sell or unwind. Illiquid securities also may be difficult to value. If the Fund is forced to sell an illiquid asset, the Fund may be forced to sell at a loss. | |
J. | Credit Default Swap Contracts |
A credit default swap is a contract between a buyer of protection and a seller of protection against a pre-defined credit event or an underlying reference obligation, which may be a single security or a basket or index of securities. The Fund may buy or sell credit default swap contracts to seek to increase the Fund's income, or to attempt to hedge the risk of default on portfolio securities. A credit default swap index is used to hedge risk or take a position on a basket of credit entities or indices. | |
As a seller of protection, the Fund would be required to pay the notional (or other agreed-upon) value of the referenced debt obligation to the counterparty in the event of a default by a U.S. or foreign corporate issuer of a debt obligation, which would likely result in a loss to the Fund. In return, the Fund would receive from the counterparty a periodic stream of payments during the term of the contract, provided that no event of default occurred. The maximum exposure of loss to the seller would be the notional value of the credit default swaps outstanding. If no default occurs, the Fund would keep the stream of payments and would have no payment obligation. The Fund may also buy credit default swap contracts in order to hedge against the risk of default of debt securities, in which case the Fund would function as the counterparty referenced above. | |
As a buyer of protection, the Fund makes an upfront or periodic payment to the protection seller in exchange for the right to receive a contingent payment. An upfront payment made by the Fund, as the protection buyer, is recorded within the "Swap contracts, at value" line item on the Statement of Assets and Liabilities. Periodic payments |
received or paid by the Fund are recorded as realized gains or losses on the Statement of Operations. | |
Credit default swap contracts are marked-to-market daily using valuations supplied by independent sources, and the change in value, if any, is recorded within the "Swap contracts, at value" line item on the Statement of Assets and Liabilities. Payments received or made as a result of a credit event or upon termination of the contract are recognized, net of the appropriate amount of the upfront payment, as realized gains or losses on the Statement of Operations. | |
Credit default swap contracts involving the sale of protection may involve greater risks than if the Fund had invested in the referenced debt instrument directly. Credit default swap contracts are subject to general market risk, liquidity risk, counterparty risk and credit risk. If the Fund is a protection buyer and no credit event occurs, it will lose its investment. If the Fund is a protection seller and a credit event occurs, the value of the referenced debt instrument received by the Fund, together with the periodic payments received, may be less than the amount the Fund pays to the protection buyer, resulting in a loss to the Fund. In addition, obligations under sell protection credit default swaps may be partially offset by net amounts received from settlement of buy protection credit default swaps entered into by the Fund for the same reference obligation with the same counterparty. | |
The Fund may invest in credit default swap index products ("CDX"). A CDX is a swap on an index of credit default swaps. CDXs allow an investor to manage credit risk or take a position on a basket of credit entities (such as credit default swaps or commercial mortgage-backed securities) in a more efficient manner than transacting in a single-name credit default swap. If a credit event occurs in one of the underlying companies, the protection is paid out via the delivery of the defaulted bond by the buyer of protection in return for a payment of notional value of the defaulted bond by the seller of protection or it may be settled through a cash settlement between the two parties. The underlying company is then removed from the index. If the Fund holds a long position in a CDX, the Fund would indirectly bear its proportionate share of any expenses paid by a CDX. A fund holding a long position in CDXs typically receives income from principal or interest paid on the underlying securities. By investing in CDXs, the Fund could be exposed to liquidity risk, counterparty risk, credit risk of the issuers of the underlying loan obligations and of the CDX markets, and operational risks. If there is a default by the CDX counterparty, the Fund will have contractual remedies pursuant to the agreements related to the |
transaction. CDXs also bear the risk that the Fund will not be able to meet its obligation to the counterparty. | |
Certain swap contracts that are cleared through a central clearinghouse are referred to as centrally cleared swaps. All payments made or received by the Fund are pursuant to a centrally cleared swap contract with the central clearing party rather than the original counterparty. Upon entering into a centrally cleared swap contract, the Fund is required to make an initial margin deposit, either in cash or in securities. The daily change in value on open centrally cleared contracts is recorded as "Variation margin for centrally cleared swap contracts" on the Statement of Assets and Liabilities. Cash received from or paid to the broker related to previous margin movement is held in a segregated account at the broker and is recorded as either "Due from broker for swaps" or "Due to broker for swaps" on the Statement of Assets and Liabilities. The amount of cash deposited with a broker as collateral at February 28, 2023, is recorded as "Swaps collateral" on the Statement of Assets and Liabilities. | |
The average notional value of credit default swap contracts buy protection open during the six months ended February 28, 2023 was $7,237,333. Open credit default swap contracts at February 28, 2023 are listed in the Schedule of Investments. |
Shareowner Communications: | |
Class A | $1,769 |
Class C | 310 |
Class Y | 2,076 |
Total | $4,155 |
Statement of Assets and Liabilities | Interest Rate Risk | Credit Risk | Foreign Exchange Rate Risk | Equity Risk | Commodity Risk |
Liabilities | |||||
Swap contracts at value | $ — | $164,113 | $ — | $ — | $ — |
Total Value | $— | $164,113 | $— | $— | $— |
Statement of Operations | Interest Rate Risk | Credit Risk | Foreign Exchange Rate Risk | Equity Risk | Commodity Risk |
Net Realized Gain (Loss) on | |||||
Swap contracts | $ — | $ 6,697 | $ — | $ — | $ — |
Total Value | $— | $ 6,697 | $— | $— | $— |
Change in Net Unrealized Appreciation (Depreciation) on | |||||
Swap contracts | $ — | $ (415,529) | $ — | $ — | $ — |
Total Value | $— | $(415,529) | $— | $— | $— |
Chief Executive Officer
and Chief Financial and
Accounting Officer
Chief Legal Officer
Amundi Asset Management US, Inc.
The Bank of New York Mellon Corporation
Ernst & Young LLP
Amundi Distributor US, Inc.
Morgan, Lewis & Bockius LLP
BNY Mellon Investment Servicing (US) Inc.
new accounts, prospectuses, applications
and service forms
account information and transactions
Retirement plans information | 1-800-622-0176 |
P.O. Box 534427
Pittsburgh, PA 15253-4427
Our toll-free fax | 1-800-225-4240 |
Our internet e-mail address | us.askamundi@amundi.com (for general questions about Amundi only) |
60 State Street
Boston, MA 02109
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
© 2023 Amundi Asset Management US, Inc. 30144-06-0423
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so.
The registrant has adopted, as of the end of the period covered by this report, a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and regulations;
(4) The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period covered by this report.
(d) If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item by posting such information on its Internet website, disclose the registrant’s Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 12(a)(1), a copy of its code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as an exhibit to its annual report on this Form N-CSR (see attachment);
(2) Post the text of such code of ethics on its Internet website and disclose, in its most recent report on this Form N-CSR, its Internet address and the fact that it has posted such code of ethics on its Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to any person without charge, upon request, a copy of such code of ethics and explain the manner in which such request may be made. See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant’s Board of Trustees has determined that the registrant either:
(i) Has at least one audit committee financial expert serving on its audit committee; or
(ii) Does not have an audit committee financial expert serving on its audit committee.
The registrant’s Board of Trustees has determined that the registrant has at least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is “independent.” In order to be considered “independent” for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the Board of Trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or
(ii) Be an “interested person” of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Mr. Fred J. Ricciardi, an independent Trustee, is such an audit committee financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1) (ii) of this Item, it must explain why it does not have an audit committee financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
N/A
.
(e) (1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of their outside auditors. Maintaining independence is a shared responsibility involving Amundi Asset Management US, Inc., the audit committee and the independent auditors.
The Funds recognize that a Fund’s independent auditors: 1) possess knowledge of the Funds, 2) are able to incorporate certain services into the scope of the audit, thereby avoiding redundant work, cost and disruption of Fund personnel and processes, and 3) have expertise that has value to the Funds. As a result, there are situations where it is desirable to use the Fund’s independent auditors for services in addition to the annual audit and where the potential for conflicts of interests are minimal. Consequently, this policy, which is intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and procedures to be followed by the Funds when retaining the independent audit firm to perform audit, audit-related tax and other services under those circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also constitute approval for any other Fund whose pre-approval is required pursuant to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services that may be provided consistently with Rule 210.2-01 may be approved by the Audit Committee itself and any pre-approval that may be waived in accordance with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund’s independent auditors and their compensation shall be determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
| ||||
SERVICE CATEGORY | SERVICE CATEGORY DESCRIPTION | SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES | ||
I. AUDIT SERVICES | Services that are directly related to performing the independent audit of the Funds | �� Accounting research assistance
| ||
• SEC consultation, registration statements, and reporting
| ||||
• Tax accrual related matters
| ||||
• Implementation of new accounting standards
| ||||
• Compliance letters (e.g. rating agency letters)
| ||||
• Regulatory reviews and assistance regarding financial matters
| ||||
• Semi-annual reviews (if requested)
| ||||
• Comfort letters for closed end offerings
| ||||
II. AUDIT-RELATED SERVICES | Services which are not prohibited under Rule
210.2-01(C)(4) (the “Rule”) and are related extensions of the audit services support the 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.) | • AICPA attest and agreed-upon procedures
| ||
• Technology control assessments
| ||||
• Financial reporting control assessments
| ||||
• Enterprise security architecture assessment | ||||
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• “One-time” pre-approval for the audit period for all pre-approved specific service subcategories. Approval of the independent auditors as auditors for a Fund shall constitute pre approval for these services. | • A summary of all such services and related fees reported at each regularly scheduled Audit Committee meeting. | |
• “One-time” pre-approval for the fund fiscal year within a specified dollar limit for all pre-approved specific service subcategories | • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. |
• 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) | ||
• 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 DESCRIPTION | SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES | ||
III. TAX SERVICES | Services which are not prohibited by the Rule,
if an officer of the Fund determines that using the Fund’s auditor to provide these services creates significant synergy in the form of efficiency, minimized disruption, or the ability to maintain a desired level of confidentiality. | • Tax planning and support
• Tax controversy assistance
• Tax compliance, tax returns, excise tax returns and support
• Tax opinions |
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• “One-time” pre-approval for the fund fiscal year within a specified dollar limit | • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. | |
• 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) | ||
• 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 DESCRIPTION | SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES | ||
IV. OTHER SERVICES
A. SYNERGISTIC, UNIQUE QUALIFICATIONS | Services which are not prohibited by the Rule, if an officer of the Fund 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. | • Business Risk Management support
• Other control and regulatory compliance projects |
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• “One-time” pre-approval for the fund fiscal year within a specified dollar limit | • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. | |
• 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) | ||
• 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 DESCRIPTION | SPECIFIC PROHIBITED SERVICE SUBCATEGORIES | ||
PROHIBITED SERVICES | Services which result in the auditors losing independence status under the Rule. | 1. Bookkeeping or other services related to the accounting records or financial statements of the audit 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 | |
• These services are not to be performed with the exception of the(*) services that may be permitted if they would not be subject to audit procedures at the audit client (as defined in rule 2-01(f)(4)) level the firm providing the service. | • A summary of all services and related fees reported at each regularly scheduled Audit Committee meeting will serve as continual confirmation that has not provided any restricted services. |
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
• | 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. |
• | 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. |
• | 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
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountants engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrants accountant for services rendered to the registrant, and rendered to the registrants investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant.
N/A
(h) Disclose whether the registrants audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrants investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
The Fund’s audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the Affiliates (as defined) that were not pre- approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17 CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption from the listing standards for audit committees.
N/A
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in 210.1212 of Regulation S-X [17 CFR 210.12-12], unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company’s investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company’s investment adviser, or any other third party, that the company uses, or that are used on the company’s behalf, to determine how to vote proxies relating to portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-end management investment company that is filing an annual report on this Form N-CSR, provide the following information:
(1) State the name, title, and length of service of the person or persons employed by or associated with the registrant or an investment adviser of the registrant who are primarily responsible for the day-to-day management of the registrant’s portfolio (“Portfolio Manager”). Also state each Portfolio Manager’s business experience during the past 5 years.
Not applicable to open-end management investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) If the registrant is a closed-end management investment company, in the following tabular format, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any affiliated purchaser, as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15)) of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors since the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R of Schedule 14(A) in its definitive proxy statement, or this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant’s principal executive and principal financials officers, or persons performing similar functions, regarding the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are effective based on the evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) Disclose any change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a) If the registrant is a closed-end management investment company, provide the following dollar amounts of income and compensation related to the securities lending activities of the registrant during its most recent fiscal year:
N/A
(1) Gross income from securities lending activities;
N/A
(2) All fees and/or compensation for each of the following securities lending activities and related services: any share of revenue generated by the securities lending program paid to the securities lending agent(s) (revenue split); fees paid for cash collateral management services (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split; administrative fees that are not included in the revenue split; fees for indemnification that are not included in the revenue split; rebates paid to borrowers; and any other fees relating to the securities lending program that are not included in the revenue split, including a description of those other fees;
N/A
(3) The aggregate fees/compensation disclosed pursuant to paragraph (2); and
N/A
(4) Net income from securities lending activities (i.e., the dollar amount in paragraph (1) minus the dollar amount in paragraph (3)).
If a fee for a service is included in the revenue split, state that the fee is included in the revenue split.
N/A
(b) If the registrant is a closed-end management investment company, describe the services provided to the registrant by the securities lending agent in the registrants most recent fiscal year.
N/A
ITEM 13. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
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 Series Trust X
By (Signature and Title)* /s/ Lisa M. Jones
Lisa M. Jones, President and Chief Executive Officer
Date May 3, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Lisa M. Jones
Lisa M. Jones, President and Chief Executive Officer
Date May 3, 2023
By (Signature and Title)* /s/ Anthony J. Koenig, Jr.
Anthony J. Koenig, Jr., Managing Director, Chief Operations Officer & Treasurer of the Funds
Date May 3, 2023
* | Print the name and title of each signing officer under his or her signature. |