UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22014
Pioneer Diversified High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Amundi Pioneer 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: April 30
Date of reporting period: May 1, 2018 through April 30, 2019
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Pioneer Diversified
High Income Trust
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Annual Report | April 30, 2019
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Ticker Symbol: HNW
Beginning in April 2021, as permitted by regulations adopted by the Securities
and Exchange Commission, paper copies of the Trust's shareholder reports like
this one will no longer be sent by mail, unless you specifically request paper
copies of the reports from the Trust or from your financial intermediary, such
as a broker-dealer, bank or insurance company. Instead, the reports will be
made available on the Trust's website, and you will be notified by mail each
time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will
not be affected by this change and you need not take any action. You may elect
to receive shareholder reports and other communications electronically by
contacting your financial intermediary or, if you invest directly with the
Trust, by calling 1-800-710-0935.
You may elect to receive all future reports in paper free of charge. If you
invest directly with the Trust, you can inform the Trust that you wish to
continue receiving paper copies of your shareholder reports by calling
1-800-710-0935. If you invest through a financial intermediary, you can contact
your financial intermediary to request that you continue to receive paper
copies of your shareholder reports. Your election to receive reports in paper
will apply to all funds held in your account if you invest through your
financial intermediary or all funds held within the Pioneer Fund complex if you
invest directly.
[LOGO] Amundi Pioneer
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ASSET MANAGEMENT
visit us: www.amundipioneer.com/us
Table of Contents
President's Letter 2
Portfolio Management Discussion 4
Portfolio Summary 11
Prices and Distributions 12
Performance Update 13
Schedule of Investments 14
Financial Statements 47
Financial Highlights 51
Notes to Financial Statements 53
Report of Independent Registered Public Accounting Firm 71
Additional Information 73
Trustees, Officers and Service Providers 74
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 1
President's Letter
Since 1928, active portfolio management based on in-depth, fundamental
research, has been the foundation of Amundi Pioneer's investment approach. We
believe an active management investment strategy is a prudent approach to
investing, especially during periods of market volatility, which can result
from any number of risk factors, including slow U.S. economic growth, rising
interest rates, and geopolitical factors. Of course, in today's global economy,
risk factors extend well beyond U.S. borders. In fact, it's not unusual for
political and economic issues on the international front to cause or contribute
to volatility in U.S. markets.
At Amundi Pioneer, each security under consideration is researched by our team
of experienced investment professionals, who visit companies and meet with
their management teams. At the end of this research process, if we have
conviction in a company's business model and management team, and regard the
security as a potentially solid investment opportunity, an Amundi Pioneer
portfolio manager makes an active decision to invest in that security. The
portfolio resulting from these decisions represents an expression of his or her
convictions, and strives to balance overall risk and return opportunity.
As an example, the Standard & Poor's 500 Index -- the predominant benchmark for
many U.S. Large-Cap Core Equity funds -- has 500 stocks. An Amundi Pioneer
portfolio manager chooses to invest in only those companies that he or she
believes can offer the most attractive opportunities to pursue the fund's
investment objective, thus potentially benefiting the fund's shareowners. This
process results in a portfolio that does not own all 500 stocks, but a much
narrower universe.
The same active decision to invest in a company is also applied when we decide
to sell a security, either due to changing fundamentals, valuation concerns, or
market risks. We apply this active decision-making across all of our equity,
fixed-income, and global portfolios.
Today, as investors, we have many options. It is our view that active
management can serve shareholders well not only when markets are thriving, but
also during periods of market volatility and uncertainty, thus making it a
compelling investment choice. As you consider the many choices today, we
encourage you to work with your financial advisor to develop an overall
investment plan that addresses both your short- and long-term goals, and to
implement such a plan in a disciplined manner.
2 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
We greatly appreciate the trust you have placed in us and look forward to
continuing to serve you in the future.
Sincerely,
/s/ Lisa M. Jones
Lisa M. Jones
Head of the Americas, President and CEO of U.S.
Amundi Pioneer Asset Management USA, Inc.
April 30, 2019
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. Past performance is no
guarantee of future results.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 3
Portfolio Management Discussion | 4/30/19
In the following interview, Andrew Feltus, Jonathan Sharkey, Chin Liu, and
Lawrence Zeno discuss the factors that affected the performance of Pioneer
Diversified High Income Trust during the 12-month period ended April 30, 2019.
Mr. Feltus, Managing Director, Co-Director of High Yield, and a portfolio
manager at Amundi Pioneer Asset Management, Inc. (Amundi Pioneer), Mr. Sharkey,
a senior vice president and a portfolio manager at Amundi Pioneer, Mr. Liu,
Managing Director, Director of Insurance-Linked Securities (ILS) and
Quantitative Research, and a portfolio manager at Amundi Pioneer, and Mr. Zeno,
a vice president and a portfolio manager at Amundi Pioneer, are responsible for
the day-to-day management of the Trust.
Q How did the Trust perform during the 12 months ended April 30, 2019?
A Pioneer Diversified High Income Trust returned 2.58% at net asset value
(NAV) and 3.95% at market price during the 12-month period ended April 30,
2019. During the same 12-month period, the Trust's composite benchmark
returned 3.93% at NAV. The Trust's composite benchmark is based on equal
weights of the ICE Bank of America Merrill Lynch (ICE BofA ML) Global High
Yield and Crossover Country Corporate and Government (GHY/CCC & G) Index
and the Standard & Poor's/Loan Syndications & Trading Association
(S&P/LSTA) Leveraged Loan Index. Unlike the Trust, the composite benchmark
does not use leverage. While the use of leverage increases investment
opportunity, it also increases investment risk.
During the same period, the average return at NAV of the 42 closed end
funds in Morningstar's High Yield Closed End Bond Funds Category (which
may or may not be leveraged) was 5.48%, and the average return at market
price of the 42 closed end funds in the same Morningstar category was
8.24%. Meanwhile, the average return at NAV of the 43 closed end funds in
Morningstar's Bank Loan Closed End Funds Category (which may or may not be
leveraged) was 3.26%, and the average return at market price of the 43
closed end funds in the same Morningstar category was 0.63%.
The shares of the Trust were selling at a 11.1% discount to NAV at the end
of the period on April 30, 2019. Comparatively, the shares of the Trust
were selling at a 12.2% discount to NAV on April 30, 2018.
As of April 30, 2019, the 30-day SEC yield on the Trust's shares was
7.51%*
* The 30-day SEC yield is a standardized formula that is based on the
hypothetical annualized earning power (investment income only) of the
Trust's portfolio securities during the period indicated.
4 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Q How would you describe the investment environment in the global
fixed-income markets during the 12-month period ended April 30, 2019?
A For most of the period, investors focused strongly on the U.S. Federal
Reserve System's (the Fed's) monetary policy. Messaging from the Fed
entering the period in May 2018 appeared to indicate a consensus among
Federal Open Market Committee members that U.S. inflation was headed
toward the 2% target and that there was perhaps room to raise the
benchmark federal funds rate more rapidly than previously expected. The
ongoing climb in crude oil prices, which broke out of the $50 a barrel
trading range in late 2017, fueled additional anxiety among investors
about inflation and interest rates, while also promising to largely offset
the benefit to consumers from lower individual U.S. tax rates that went
into effect in January 2018.
The firming outlook for higher U.S. interest rates was a contributing
factor in a significant weakening in some of the less fundamentally sound
emerging markets bond market segments and currencies, with Turkey and
Argentina feeling the biggest negative effects. The euro also declined
meaningfully versus the U.S. dollar (USD), as weak regional growth left
the European Central Bank (ECB) to maintain a zero-interest-rate policy.
At its September 2018 meeting, the Fed implemented its third 0.25% rate
hike of the calendar year, while signaling the likelihood of another
increase in December. October 2018 saw U.S. high-yield bonds come under
pressure alongside the sharpest one-month decline in U.S. equity markets
since September 2011 (as measured by the Standard & Poor's 500 Index).
Investor sentiment for riskier assets also declined that month in
conjunction with an underwhelming start to the third-quarter corporate
earnings season, especially with respect to technology companies, a
further deterioration in U.S.-China trade relations, softening economic
growth overseas, Italy's budget crisis, and political uncertainty.
In mid-December, the Fed met expectations and raised its short-term rate
target to the 2.25% to 2.50% range, the fourth increase in calendar year
2018, while noting the potential for additional rate hikes in 2019. In
combination with signs of slowing global economic growth and yet another
setback in the "Brexit" negotiations in the United Kingdom, concerns that
the Fed would overshoot on interest rates led to a spike in volatility in
the market for riskier assets. December 2018 saw the 10-year U.S. Treasury
yield decline from 3.01% to 2.69%, as investors sought a safe haven from
the market turmoil. Energy-related issues also declined sharply as crude
oil prices plunged over the fourth quarter, mainly due to concerns about a
weaker demand outlook and higher-than-expected supply driven in part by a
loosening of U.S. sanctions on Iran.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 5
Bank loans also struggled in late 2018, as loan prices suffered due to
retail investors removing assets from loan mutual funds. Institutional
demand for loans was light as well, given a drop-off in collateralized
loan obligation (CLO) formation following a record calendar year in terms
of volume.
Risk-oriented assets rebounded sharply in January of 2019, however, as the
Fed pivoted on monetary policy and took on a less aggressive tone,
announcing an early end to its balance-sheet reduction program while also
indicating it would become more "data dependent" with regard to interest
rates, thus putting further increases on hold, at least temporarily. In
addition to the Fed's policy actions, weak economic data out of the euro
zone and China led to renewed policy accommodations from both the ECB and
the People's Bank of China. Modest progress on trade matters, a firming in
oil prices, and positive corporate earnings reports also helped boost
credit-market sentiment during the first quarter of 2019. While the
overall pace of gains moderated and there was some interim market
volatility over the final weeks of the period, credit-sensitive assets
continued to outperform interest-rate-sensitive issues through the end of
April.
Q What factors affected the Trust's benchmark-relative performance during
the 12-month period ended April 30, 2019?
A The Trust's out-of-benchmark exposure to insurance-linked securities (ILS)
detracted from benchmark-relative performance during the period. Returns
for ILS issues, which are sponsored by property-and-casualty insurers to
help mitigate the risk of having to pay claims in the wake of natural
disasters, suffered after numerous claims-generating events occurred over
the second half of 2018, including typhoons in Japan, hurricanes in the
Southeastern U.S. and the Carolinas, and the worst California wildfire
season on record. Investing in ILS has been part of our portfolio
diversification** strategy since the Trust's inception in May 2007, and we
continue to view exposure to the asset class, which features return
streams that are uncorrelated with the performance of traditional credit
markets, as helping to improve the Trust's long-term risk/reward profile.
Despite the weak performance of bank loans in late 2018, the portfolio's
relative underweight to loans also detracted from performance versus the
Trust's custom benchmark, as the asset class rebounded over the final few
months of the period and outperformed other asset classes such as ILS. The
allocation to bank loans did provide a positive overall return for the
period, as the asset class bounced back from its late-2018 slump,
benefiting from a strong fundamental backdrop and continued low default
rate. In addition, loans received a lot of interest early in the period
from investors attracted to their floating-rate feature in a
rising-interest-rate environment. As noted
** Diversification does not assure a profit nor protect against loss.
6 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
earlier, the loan market was negatively affected in late 2018 by massive
outflows from retail mutual fund investors, but recovered the bulk of
those losses over the first four months of 2019.
In terms of individual loans held in the portfolio, positive contributions
to the Trust's benchmark-relative performance were led by exposure to the
loans of Uniti. The company's spinoff as an infrastructure real estate
investment trust from wireline service provider Windstream resulted in
litigation that created uncertainty among market participants, but those
concerns eased over the 12-month period and Uniti's loan prices benefited
from the improved sentiment. Loans of beauty company Revlon and luxury
retailer Neiman Marcus also contributed positively to the Trust's
benchmark-relative performance during the period. Market sentiment towards
Revlon received a boost from an improved sales outlook, while the prices
of the Neiman Marcus loans benefited as the company rationalized its
capital structure.
Notable detractors from the Trust's benchmark-relative performance during
the period included loans of Serta Simmons, as the mattress retailer
experienced customer losses and deteriorating operational results. A pair
of energy-related loans in the portfolio, for Gulf Finance and Gavilan
Resources, also lagged and detracted from the Trust's relative returns due
to the softening in oil prices witnessed in the fourth quarter of 2018.
Another detractor from benchmark-relative performance during the period
was the Trust's allocation to emerging markets bonds, particularly in
Argentina. Within Argentina, the portfolio had some holdings which
struggled as the peso plunged and spread widening for the country's
sovereign debt negatively affected that market. (Credit spreads are
commonly defined as the differences in yield between Treasuries and other
types of securities with similar maturities.) In particular, the Trust's
positions in Argentina's state-controlled energy company YPF, and the
bonds of Argentine province Entre Rios detracted from relative results. On
the other hand, the Trust's exposure to Brazil benefited relative
performance, as investor sentiment with respect to that market
strengthened following the presidential election. Positive contributions
to performance in Brazil were led by the Trust's exposures to beef
producer Marfrig Holdings and utility Light Servicio. In addition,
benchmark-relative performance benefited from the Trust's overweighting of
corporate bonds versus the more interest-rate-sensitive sovereign issues
within the emerging markets.
Within U.S. high-yield corporates, the Trust's overweight to energy
detracted from benchmark-relative returns for the period. Among high-yield
bond positions in the portfolio, the largest detractors from the Trust's
relative performance included the debt of energy producers Sanchez Energy
and Chaparral Energy. Performance within energy benefited from
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 7
the portfolio's exposure to longer-duration pipeline issues, which are
typically less sensitive to oil prices. Those holdings included the debt
of Williams Companies and Enterprise Development. Outside of energy, the
Trust's holdings of the bonds of Diebold Nixdorf hurt performance, as the
multinational, point-of-sale technology company experienced weakening
operating results.
Finally, the portfolio's short-duration stance relative to the benchmark
detracted from benchmark-relative results as U.S. Treasury yields moved
lower over the 12 months. (Duration is a measure of the sensitivity of the
price, or the value of principal, of a fixed-income investment to a change
in interest rates, expressed as a number of years.)
Q How did the level of leverage in the Trust change over the 12-month period
ended April 30, 2019?
A The Trust employs leverage through a credit agreement.
At the end of the 12-month period on April 30, 2019, 31.1% of the Trust's
total managed assets were financed by leverage, compared with 31.0% of the
Trust's total managed assets financed by leverage at the start of the
period on May 1, 2018. During the 12-month period, the Trust reduced the
absolute amount of borrowed funds. The slight increase in the percentage
of the Trust's total managed assets financed by leverage was the result of
a reduction of the aggregate net asset value of the Trust's holdings.
Q Did the Trust's distributions*** to shareholders change during the
12-month period ended April 30, 2019?
A No, the Trust's distributions remained stable throughout the 12-month
period.
Q Did the Trust invest in any derivative securities during the 12-month
period ended April 30, 2019? If so, did the derivatives have a notable
effect on performance?
A We invested the portfolio in forward foreign currency contracts during the
period to help hedge the risk of the Trust's exposures to foreign
currencies. The contracts had a small positive impact on the Trust's
benchmark-relative results, given the decline in the euro relative to the
USD over the 12 months.
Q What is your investment outlook?
A In our view, credit fundamentals remain largely supportive for high-yield
securities and other risk-oriented asset classes. The outlook for U.S.
economic growth and corporate earnings remains positive. Unemployment is
low, wages have been trending modestly higher, and consumer balance sheets
are sound in aggregate. While economic growth in 2019 is expected to be in
the modest 2% to 2.5% range, we believe that rate should be sufficient to
maintain current fundamentals.
*** Distributions are not guaranteed.
8 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Risks to the outlook include slowing economic growth overseas, as the
economies of both China and Europe disappointed in 2018, leading to
central-bank easing that could help conditions going forward. In addition,
while the U.S.-China trade dispute does not appear to have weighed heavily
on the global economy to date, any adverse development on that front would
not be supportive of risk-market sentiment. The run-up to the 2020 U.S.
presidential election also has the potential to blur the outlook.
With regard to positioning, we had increased the Trust's exposure to bank
loans and other floating-rate assets over the last year, but now that the
Fed is leaning towards easing instead of further rate hikes, we are
comfortable with adding fixed-rate securities to the portfolio. We expect
loan default rates to remain low, but given the recent rally in credit
spreads, we are not aggressively adding risk to the Trust's portfolio. The
recent trends toward weaker loan covenants and the greater levels of
leverage associated with newer loan issues give us pause. In this
environment, we believe security selection will drive performance more
than a step-down in credit quality.
In broad terms, the Trust is overweight to the U.S. bond market versus
Europe. We view high-yield valuations in Europe as attractive compared to
U.S. valuations, but have maintained an essentially neutral portfolio
positioning in the region, given the low absolute yields available.
After two poor years, ILS pricing has been improving for investors. While
the asset class may provide diversification benefits versus most
fixed-income and equity asset classes, higher yields can potentially
improve expected returns, although the risk of elevated claims payouts
resulting from natural disasters remains unpredictable.
We view current emerging markets valuations as essentially in line with
historical averages, and the Trust remains underweight in the emerging
markets, with a focus on corporates that are less interest-rate sensitive
as compared with sovereign issues.
Please refer to the Schedule of Investments on pages 14-46 for a full listing
of Trust securities.
All investments are subject to risk, including the possible loss of principal.
In the past several years, financial markets have experienced increased
volatility, depressed valuations, decreased liquidity and heightened
uncertainty. These conditions may continue, recur, worsen or spread.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political
conditions.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 9
When interest rates rise, the prices of debt securities held by the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities held by the Trust generally will rise. Interest rates in the U.S.
recently have been historically low, but have begun to rise, and so the Trust
faces a heightened risk that interest rates may continue to increase.
Investments held by the Trust are subject to possible loss due to the financial
failure of the issuers of the underlying securities and the issuers' inability
to meet their debt obligations.
The Trust may invest a significant amount of its total assets in illiquid
securities. Illiquid securities may be difficult to dispose of at a price
reflective of their value at the times when the Trust believes it is desirable
to do so and the market price of illiquid securities is generally more volatile
than that of more liquid securities. Illiquid securities also are more
difficult to value, and investment of the Trust's assets in illiquid securities
may restrict the Trust's ability to take advantage of market opportunities.
The Trust is authorized to borrow from banks and issue debt securities, which
are forms of leverage. Leverage creates significant risks, including the risk
that the Trust's incremental income or capital appreciation for investments
purchased with the proceeds of leverage will not be sufficient to cover the
cost of the leverage, which may adversely affect the return for shareholders.
The Trust is required to maintain certain regulatory and other asset coverage
requirements in connection with its use of leverage. In order to maintain
required asset coverage levels, the Trust may be required to reduce the amount
of leverage employed by the Trust, alter the composition of its investment
portfolio or take other actions at what might be inopportune times in the
market. Such actions could reduce the net earnings or returns to shareowners
over time, which is likely to result in a decrease in the market value of the
Trust's shares.
Certain securities in which the Trust invests, including floating rate loans,
once sold, may not settle for an extended period (for example, several weeks or
even longer). The Trust will not receive its sale proceeds until that time,
which may constrain the Trust's ability to meet its obligations.
The Trust may invest in insurance-linked securities. The return of principal
and the right to additional payments from investments in insurance-linked
securities are contingent on the non-occurrence of a predefined "trigger" event
that leads to physical or economic loss, such as a hurricane or an aerospace
catastrophe.
These risks may increase share price volatility.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. Past performance is no
guarantee of future results.
10 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Portfolio Summary | 4/30/19
Portfolio Diversification
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(As a percentage of total investments)*
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds 52.0%
Senior Secured Floating Rate Loan Interests 23.5%
Insurance-Linked Securities 15.8%
Foreign Government Bonds 3.1%
Commercial Mortgage-Backed Securities 1.3%
Convertible Corporate Bonds 1.0%
Preferred Stocks 0.8%
Collateralized Mortgage Obligations 0.7%
U.S. Government and Agency Obligations 0.7%
Convertible Preferred Stocks 0.5%
Asset Backed Securities 0.4%
Common Stocks 0.1%
Over The Counter (OTC) Currency Put Options Purchased 0.1%
Rights/Warrants 0.0%+
Over The Counter (OTC) Call Options Purchased 0.0%+
+ Amount rounds to less than 0.1%.
10 Largest Holdings
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(As a percentage of total investments)*
1. Fixed Income Trust, Series 2013-A, 7.697%, 10/15/97 (144A) 3.99%
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2. Hercules LLC, 6.5%, 6/30/29 0.98
------------------------------------------------------------------------------------------------------
3. eDreams ODIGEO SA, 5.5%, 9/1/23 (144A) 0.92
------------------------------------------------------------------------------------------------------
4. Scientific Games International, Inc., 8.25%, 3/15/26 (144A) 0.83
------------------------------------------------------------------------------------------------------
5. Indigo Natural Resources LLC, 6.875%, 2/15/26 (144A) 0.83
------------------------------------------------------------------------------------------------------
6. Uniti Group LP/Uniti Group Finance, Inc./CSL Capital LLC, 6.0%, 4/15/23 (144A) 0.69
------------------------------------------------------------------------------------------------------
7. U.S. Treasury Bills, 5/14/19 0.66
------------------------------------------------------------------------------------------------------
8. Light Servicos de Eletricidade SA/Light Energia SA, 7.25%, 5/3/23 (144A) 0.66
------------------------------------------------------------------------------------------------------
9. Windstream Services LLC/Windstream Finance Corp., 8.625%, 10/31/25 (144A) 0.65
------------------------------------------------------------------------------------------------------
10. Williams Cos., Inc., 5.75%, 6/24/44 0.65
------------------------------------------------------------------------------------------------------
* Excludes temporary cash investments and all derivative contracts except
for options purchased. The Trust is actively managed, and current holdings
may be different. The holdings listed should not be considered
recommendations to buy or sell any securities.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 11
Prices and Distributions | 4/30/19
Market Value per Share^
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--------------------------------------------------------------------------------
4/30/19 4/30/18
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Market Value $14.39 $15.00
--------------------------------------------------------------------------------
Premium/(Discount) (11.1)% (12.2)%
--------------------------------------------------------------------------------
Net Asset Value per Share^
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/19 4/30/18
--------------------------------------------------------------------------------
Net Asset Value $16.18 $17.09
--------------------------------------------------------------------------------
Distributions per Share:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
--------------------------------------------------------------------------------
5/1/18 - 4/30/19 $1.1400 $ -- $ --
--------------------------------------------------------------------------------
Yields
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/19 4/30/18
--------------------------------------------------------------------------------
30-Day SEC Yield 7.51% 8.15%
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The data shown above represents past performance, which is no guarantee of
future results.
^ Net asset value and market value are published in Barron's on Saturday,
The Wall Street Journal on Monday and The New York Times on Monday and
Saturday. Net asset value and market value are published daily on the
Trust's website at www.amundipioneer.com/us.
12 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Performance Update | 4/30/19
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in shares
of Pioneer Diversified High Income Trust during the periods shown, compared to
that of the composite (50%/50%) ICE BofA ML Global High Yield & Crossover
Country Corporate & Government Index (GHY/CCC & G) Index and S&P/LSTA Leveraged
Loan Index benchmark.
Average Annual Total Returns
(As of April 30, 2019)
----------------------------------------------------
50% BofA ML
GHY/CCC &
Net G Index/50%
Asset S&P/LSTA
Value Market Leveraged
Period (NAV) Price Loan Index
----------------------------------------------------
10 years 11.81% 11.08% 8.25%
5 years 4.70 1.45 3.69
1 year 2.58 3.95 3.93
----------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Diversified 50% ICE BofA ML GHY/CCC & G
High Income Index/50% S&P/LSTA
Trust Leveraged Loan Index
4/09 $10,000 $10,000
4/10 $16,209 $13,758
4/11 $18,563 $15,159
4/12 $19,060 $15,762
4/13 $22,372 $17,548
4/14 $24,267 $18,428
4/15 $24,561 $18,578
4/16 $24,490 $18,703
4/17 $28,458 $20,282
4/18 $29,761 $21,254
4/19 $30,530 $22,090
Call 1-800-710-0935 or visit www.amundipioneer.com/us for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below NAV due to such factors as interest rate
changes and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Shares of closed-end funds, unlike open-end funds, are not continuously
offered. There is a one-time public offering and, once issued, shares of
closed-end funds are bought and sold in the open market through a stock
exchange and frequently trade at prices lower than their NAV. NAV per share is
total assets less total liabilities, which include preferred shares or
borrowings, as applicable, divided by the number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends
are assumed to be reinvested at prices obtained through open-market purchases
under the Trust's dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the sale of Trust shares.
Had these fees and taxes been reflected, performance would have been lower.
The ICE BofA ML GHY/CCC & G Index is an unmanaged index that tracks the
performance of the below- and border-line investment-grade global debt markets
denominated in the major developed market currencies. The Index includes
sovereign issuers rated BBB1 and lower along with corporate issues rated BB1
and lower. There are no restrictions on issuer country of domicile. The
S&P/LSTA Leveraged Loan Index provides broad and comprehensive total return
metrics of the U.S. universe of syndicated term loans.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Trust returns, do not reflect any fees, expenses or sales charges. The
indices do not use leverage. It is not possible to invest directly in an
index.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 13
Schedule of Investments | 4/30/19
---------------------------------------------------------------------------------------------------------------
Shares Value
---------------------------------------------------------------------------------------------------------------
UNAFFILIATED ISSUERS -- 145.4%
COMMON STOCKS -- 0.1% of Net Assets
Health Care Technology -- 0.0%+
69,875^(a) Medical Card System, Inc. $ 699
------------
Total Health Care Technology $ 699
---------------------------------------------------------------------------------------------------------------
Household Durables -- 0.0%+
89,094(a) Desarrolladora Homex SAB de CV $ 583
------------
Total Household Durables $ 583
---------------------------------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 0.0%+
17,883^(a) PetroQuest Energy, Inc. $ 57,169
------------
Total Oil, Gas & Consumable Fuels $ 57,169
---------------------------------------------------------------------------------------------------------------
Specialty Retail -- 0.1%
42,088^(a) Targus Cayman SubCo., Ltd. $ 87,543
------------
Total Specialty Retail $ 87,543
---------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $220,657) $ 145,994
---------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.8%
of Net Assets
Banks -- 0.8%
770(b) Bank of America Corp., 7.25% $ 1,016,793
------------
Total Banks $ 1,016,793
---------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $739,352) $ 1,016,793
---------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.2% of Net Assets
Banks -- 0.8%
40,675(c) GMAC Capital Trust I, 8.469% (3 Month USD LIBOR +
579 bps), 2/15/40 $ 1,069,752
------------
Total Banks $ 1,069,752
---------------------------------------------------------------------------------------------------------------
Chemicals -- 0.0%+
455,230^(a) Pinnacle Agriculture $ 45,523
------------
Total Chemicals $ 45,523
---------------------------------------------------------------------------------------------------------------
Diversified Financial Services -- 0.4%
500(b)(c) Compeer Financial ACA, 6.75% (3 Month USD
LIBOR + 458 bps) (144A) $ 526,875
------------
Total Diversified Financial Services $ 526,875
---------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $1,810,580) $ 1,642,150
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 0.5%
of Net Assets
290,000(c) GMAT Trust, Series 2013-1A, Class M, 5.0%,
11/25/43 (144A) $ 177,506
500,000 VB-S1 Issuer LLC, Series 2016-1A, Class F, 6.901%,
6/15/46 (144A) 516,921
---------------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $780,688) $ 694,427
---------------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
1.0% of Net Assets
330,000(d) Freddie Mac Stacr Trust, Series 2019-HQA1, Class B2,
14.727% (1 Month USD LIBOR +
1,225 bps), 2/25/49 (144A) $ 353,502
250,000(d) Freddie Mac Stacr Trust, Series 2019-HQA2, Class B2,
13.731% (1 Month USD LIBOR +
1,125 bps), 4/25/49 (144A) 250,000
32,971 Global Mortgage Securitization, Ltd., Series 2004-A,
Class B1, 5.25%, 11/25/32 (144A) 23,077
750,000(d) Morgan Stanley Capital I, Inc., Series 2019-BPR,
Class D, 6.5% (1 Month USD LIBOR +
400 bps), 5/15/36 (144A) 754,335
---------------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,361,567) $ 1,380,914
---------------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 1.9% of Net Assets
200,000(c) BAMLL Commercial Mortgage Securities Trust, Series
2016-FR14, Class C, 1.347%, 2/27/48 (144A) $ 179,000
100,626(c) Bear Stearns Commercial Mortgage Securities Trust,
Series 2005-PWR7, Class B, 5.214%, 2/11/41 100,138
63,581(c) COBALT CMBS Commercial Mortgage Trust, Series
2007-C3, Class C, 5.802%, 5/15/46 65,419
250,000(d) COMM Mortgage Trust, Series 2014-FL5, Class D, 3.87%
(1 Month USD LIBOR + 400 bps), 10/15/31 (144A) 247,158
400,000(c) COMM Mortgage Trust, Series 2014-UBS4, Class D,
4.845%, 8/10/47 (144A) 362,917
500,000(c) JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2013-LC11, Class D, 4.307%, 4/15/46 441,731
250,000(c) Morgan Stanley Bank of America Merrill Lynch Trust,
Series 2014-C17, Class D, 4.859%, 8/15/47 (144A) 238,142
265,581(c) Morgan Stanley Capital I Trust, Series 2007-T25,
Class AJ, 5.574%, 11/12/49 268,606
250,000 Wells Fargo Commercial Mortgage Trust, Series
2016-BNK1, Class D, 3.0%, 8/15/49 (144A) 207,327
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 15
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- (continued)
400,000(c) WFRBS Commercial Mortgage Trust, Series 2011-C4,
Class E, 5.397%, 6/15/44 (144A) $ 394,094
---------------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $2,439,931) $ 2,504,532
---------------------------------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BOND -- 1.4%
of Net Assets
Chemicals -- 1.4%
1,900,000(e) Hercules LLC, 6.5%, 6/30/29 $ 1,914,250
------------
Total Chemicals $ 1,914,250
---------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE CORPORATE BOND
(Cost $1,294,605) $ 1,914,250
---------------------------------------------------------------------------------------------------------------
CORPORATE BONDS -- 75.6% of Net Assets
Advertising -- 0.9%
1,448,000 MDC Partners, Inc., 6.5%, 5/1/24 (144A) $ 1,223,560
------------
Total Advertising $ 1,223,560
---------------------------------------------------------------------------------------------------------------
Aerospace/Defense -- 1.0%
392,000 Bombardier, Inc., 7.5%, 3/15/25 (144A) $ 393,470
902,000 Bombardier, Inc., 7.875%, 4/15/27 (144A) 907,638
------------
Total Aerospace/Defense $ 1,301,108
---------------------------------------------------------------------------------------------------------------
Agriculture -- 0.1%
444,769 Pinnacle Operating Corp., 9.0%, 5/15/23 (144A) $ 191,251
------------
Total Agriculture $ 191,251
---------------------------------------------------------------------------------------------------------------
Airlines -- 0.8%
300,000 Latam Finance, Ltd., 6.875%, 4/11/24 (144A) $ 308,847
785,000 Latam Finance, Ltd., 7.0%, 3/1/26 (144A) 803,644
------------
Total Airlines $ 1,112,491
---------------------------------------------------------------------------------------------------------------
Auto Parts & Equipment -- 0.8%
EUR 395,000(f) IHO Verwaltungs GmbH, 3.75% (4.5% PIK or 0.0%
cash), 9/15/26 (144A) $ 456,571
712,000 Titan International, Inc., 6.5%, 11/30/23 683,520
------------
Total Auto Parts & Equipment $ 1,140,091
---------------------------------------------------------------------------------------------------------------
Banks -- 6.3%
200,000 Access Bank Plc, 10.5%, 10/19/21 (144A) $ 217,612
300,000(c) Banco de Galicia y Buenos Aires SA, 8.25% (5 Year
CMT Index + 716 bps), 7/19/26 (144A) 280,500
200,000(b)(c) Banco Santander SA, 6.375% (5 Year USD Swap
Rate + 479 bps) 200,260
1,000,000(b)(c) Barclays Plc, 7.75% (5 Year USD Swap Rate + 484 bps) 1,033,750
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Banks -- (continued)
1,153,000(b)(c) BNP Paribas SA, 6.625% (5 Year USD Swap Rate +
415 bps) (144A) $ 1,176,060
300,000(b)(c) BNP Paribas SA, 7.625% (5 Year USD Swap Rate +
631 bps) (144A) 316,125
480,000 Freedom Mortgage Corp., 8.125%, 11/15/24 (144A) 426,000
1,310,000 Freedom Mortgage Corp., 8.25%, 4/15/25 (144A) 1,162,625
240,000(b)(c) Goldman Sachs Capital II, 4.0% (3 Month USD
LIBOR + 77 bps) 192,600
350,000(b)(c) ING Groep NV, 6.5% (5 Year USD Swap Rate + 445 bps) 354,270
225,000(b)(c) Intesa Sanpaolo S.p.A., 7.7% (5 Year USD Swap
Rate + 546 bps) (144A) 220,361
IDR 812,959,000^ PT Bakrie & Brothers Tbk, 0.0%, 12/22/22 5,705
250,000(b)(c) Royal Bank of Scotland Group Plc, 8.0% (5 Year USD
Swap Rate + 572 bps) 272,187
400,000(b)(c) Royal Bank of Scotland Group Plc, 8.625% (5 Year
USD Swap Rate + 760 bps) 430,000
200,000 Sberbank of Russia Via SB Capital SA, 5.25%,
5/23/23 (144A) 203,751
460,000(b)(c) Societe Generale SA, 7.375% (5 Year USD Swap
Rate + 624 bps) (144A) 478,400
344,000(c) Turkiye Vakiflar Bankasi TAO, 8.0% (5 Year USD Swap
Rate + 585 bps), 11/1/27 (144A) 279,137
750,000 UBS AG, 7.625%, 8/17/22 834,465
450,000 Vnesheconombank Via VEB Finance Plc, 6.902%,
7/9/20 (144A) 463,514
------------
Total Banks $ 8,547,322
---------------------------------------------------------------------------------------------------------------
Building Materials -- 0.3%
215,000 Cemex SAB de CV, 7.75%, 4/16/26 (144A) $ 234,887
186,000 Summit Material LLC/Summit Materials Finance
Corp., 6.5%, 3/15/27 (144A) 192,277
------------
Total Building Materials $ 427,164
---------------------------------------------------------------------------------------------------------------
Chemicals -- 1.0%
300,000 Basell Finance Co. BV, 8.1%, 3/15/27 (144A) $ 367,386
55,000 Blue Cube Spinco LLC, 9.75%, 10/15/23 61,463
55,000 Blue Cube Spinco LLC, 10.0%, 10/15/25 62,562
200,000 CVR Partners LP/CVR Nitrogen Finance Corp.,
9.25%, 6/15/23 (144A) 209,250
375,000 Kraton Polymers LLC/Kraton Polymers Capital Corp.,
7.0%, 4/15/25 (144A) 387,544
336,000 Rain CII Carbon LLC/CII Carbon Corp., 7.25%,
4/1/25 (144A) 317,520
------------
Total Chemicals $ 1,405,725
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 17
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Coal -- 0.4%
497,000 SunCoke Energy Partners LP/SunCoke Energy
Partners Finance Corp., 7.5%, 6/15/25 (144A) $ 501,349
------------
Total Coal $ 501,349
---------------------------------------------------------------------------------------------------------------
Commercial Services -- 1.1%
MXN 4,500,000 Red de Carreteras de Occidente SAPIB de CV, 9.0%,
6/10/28 (144A) $ 227,632
540,000 StoneMor Partners LP/Cornerstone Family Services of
West Virginia Subsidiary, 7.875%, 6/1/21 491,400
455,000 Team Health Holdings, Inc., 6.375%, 2/1/25 (144A) 386,750
411,000 Verscend Escrow Corp., 9.75%, 8/15/26 (144A) 434,633
------------
Total Commercial Services $ 1,540,415
---------------------------------------------------------------------------------------------------------------
Computers -- 0.1%
130,000 Dell International LLC/EMC Corp., 7.125%,
6/15/24 (144A) $ 137,532
------------
Total Computers $ 137,532
---------------------------------------------------------------------------------------------------------------
Distribution/Wholesale -- 0.4%
480,000 Global Partners LP/GLP Finance Corp., 7.0%, 6/15/23 $ 480,000
------------
Total Distribution/Wholesale $ 480,000
---------------------------------------------------------------------------------------------------------------
Diversified Financial Services -- 9.4%
588,000 Avation Capital SA, 6.5%, 5/15/21 (144A) $ 588,000
600,000 Credito Real SAB de CV SOFOM ER, 7.25%,
7/20/23 (144A) 621,000
880,000 Financiera Independencia SAB de CV SOFOM ENR,
8.0%, 7/19/24 (144A) 773,300
6,000,000^(g) Fixed Income Trust, Series 2013-A, 7.697%,
10/15/97 (144A) 7,825,000
445,000 Jefferies Finance LLC/JFIN Co-Issuer Corp.,
7.375%, 4/1/20 (144A) 445,890
500,000 Mongolian Mortgage Corp. Hfc LLC, 9.75%,
1/29/22 (144A) 507,500
499,000 Nationstar Mortgage Holdings, Inc., 8.125%,
7/15/23 (144A) 502,742
175,000 Nationstar Mortgage LLC/Nationstar Capital Corp.,
6.5%, 7/1/21 175,219
580,000 Nationstar Mortgage LLC/Nationstar Capital Corp.,
6.5%, 6/1/22 571,126
615,000 Oxford Finance LLC/Oxford Finance Co-Issuer II, Inc.,
6.375%, 12/15/22 (144A) 634,987
------------
Total Diversified Financial Services $ 12,644,764
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Electric -- 4.2%
305,000(c) AES Gener SA, 7.125% (5 Year USD Swap Rate +
464 bps), 3/26/79 (144A) $ 319,488
400,000 Cemig Geracao e Transmissao SA, 9.25%,
12/5/24 (144A) 440,000
575,000 Centrais Eletricas Brasileiras SA, 5.75%, 10/27/21 594,838
460,000(c) Enel S.p.A., 8.75% (5 Year USD Swap Rate +
588 bps), 9/24/73 (144A) 515,200
1,275,000 Light Servicos de Eletricidade SA/Light Energia SA,
7.25%, 5/3/23 (144A) 1,294,125
570,000 NRG Energy, Inc., 6.625%, 1/15/27 609,900
320,000 NRG Energy, Inc., 7.25%, 5/15/26 348,400
209,547 NSG Holdings LLC/NSG Holdings, Inc., 7.75%,
12/15/25 (144A) 225,263
347,064 Stoneway Capital Corp., 10.0%, 3/1/27 (144A) 296,740
13,000 Talen Energy Supply LLC, 4.6%, 12/15/21 12,545
633,000 Vistra Energy Corp., 8.0%, 1/15/25 (144A) 672,562
357,000 Vistra Operations Co. LLC, 5.625%, 2/15/27 (144A) 366,371
------------
Total Electric $ 5,695,432
---------------------------------------------------------------------------------------------------------------
Energy-Alternate Sources -- 0.5%
585,000(g) TerraForm Power Operating LLC, 6.625%,
6/15/25 (144A) $ 611,325
------------
Total Energy-Alternate Sources $ 611,325
---------------------------------------------------------------------------------------------------------------
Engineering & Construction -- 0.5%
200,000 Aeropuertos Dominicanos Siglo XXI SA, 6.75%,
3/30/29 (144A) $ 209,500
455,000 Tutor Perini Corp., 6.875%, 5/1/25 (144A) 455,569
------------
Total Engineering & Construction $ 665,069
---------------------------------------------------------------------------------------------------------------
Entertainment -- 3.1%
200,000 Cirsa Finance International S.a.r.l., 7.875%,
12/20/23 (144A) $ 207,029
755,000 Enterprise Development Authority, 12.0%,
7/15/24 (144A) 773,875
305,000 International Game Technology Plc, 6.25%,
1/15/27 (144A) 320,651
EUR 750,000 Intralot Capital Luxembourg SA, 6.75%, 9/15/21 (144A) 591,038
100,000 Scientific Games International, Inc., 6.25%, 9/1/20 100,250
1,574,000 Scientific Games International, Inc., 8.25%,
3/15/26 (144A) 1,631,058
572,000 Scientific Games International, Inc., 10.0%, 12/1/22 602,030
------------
Total Entertainment $ 4,225,931
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 19
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Environmental Control -- 1.4%
506,000 Covanta Holding Corp., 6.0%, 1/1/27 $ 514,855
550,000 GFL Environmental, Inc., 8.5%, 5/1/27 (144A) 572,968
731,000 Tervita Escrow Corp., 7.625%, 12/1/21 (144A) 740,137
------------
Total Environmental Control $ 1,827,960
---------------------------------------------------------------------------------------------------------------
Food -- 3.0%
150,000 Albertsons Cos., LLC/Safeway, Inc./New Albertsons
LP/Albertson's LLC, 7.5%, 3/15/26 (144A) $ 159,000
200,000 C&S Group Enterprises LLC, 5.375%, 7/15/22 (144A) 199,500
655,000 JBS Investments GmbH, 7.25%, 4/3/24 (144A) 678,645
975,000 Marfrig Holdings Europe BV, 8.0%, 6/8/23 (144A) 1,013,025
700,000 Marfrig Holdings Europe BV, 11.25%, 9/20/21 (144A) 707,000
580,000 Minerva Luxembourg SA, 6.5%, 9/20/26 (144A) 573,185
652,000 Pilgrim's Pride Corp., 5.875%, 9/30/27 (144A) 673,190
------------
Total Food $ 4,003,545
---------------------------------------------------------------------------------------------------------------
Forest Products & Paper -- 0.9%
390,000 Eldorado International Finance GmbH, 8.625%,
6/16/21 (144A) $ 408,626
754,000 Schweitzer-Mauduit International, Inc., 6.875%,
10/1/26 (144A) 774,735
------------
Total Forest Products & Paper $ 1,183,361
---------------------------------------------------------------------------------------------------------------
Healthcare-Services -- 1.0%
810,000 RegionalCare Hospital Partners Holdings, Inc.,
8.25%, 5/1/23 (144A) $ 861,384
450,000 Surgery Centre Holdings, Inc., 10.0%, 4/15/27 (144A) 462,375
------------
Total Healthcare-Services $ 1,323,759
---------------------------------------------------------------------------------------------------------------
Home Builders -- 1.0%
135,000 Beazer Homes USA, Inc., 8.75%, 3/15/22 $ 141,075
350,000 Brookfield Residential Properties, Inc., 6.375%,
5/15/25 (144A) 343,000
211,000 KB Home, 6.875%, 6/15/27 220,231
250,000 KB Home, 7.0%, 12/15/21 267,500
340,000 KB Home, 7.625%, 5/15/23 374,850
------------
Total Home Builders $ 1,346,656
---------------------------------------------------------------------------------------------------------------
Home Furnishings -- 0.8%
EUR 930,000 International Design Group S.p.A., 6.5%,
11/15/25 (144A) $ 1,042,092
------------
Total Home Furnishings $ 1,042,092
---------------------------------------------------------------------------------------------------------------
Internet -- 1.3%
EUR 1,580,000 eDreams ODIGEO SA, 5.5%, 9/1/23 (144A) $ 1,801,781
------------
Total Internet $ 1,801,781
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Iron/Steel -- 0.8%
1,093,000 Metinvest BV, 7.75%, 4/23/23 (144A) $ 1,070,097
------------
Total Iron/Steel $ 1,070,097
---------------------------------------------------------------------------------------------------------------
Leisure Time -- 0.4%
250,000 Silversea Cruise Finance, Ltd., 7.25%, 2/1/25 (144A) $ 269,062
245,000 Viking Cruises, Ltd., 6.25%, 5/15/25 (144A) 253,575
------------
Total Leisure Time $ 522,637
---------------------------------------------------------------------------------------------------------------
Media -- 1.6%
250,000 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 258,750
300,000 Altice Luxembourg SA, 7.75%, 5/15/22 (144A) 305,625
309,000 Clear Channel Worldwide Holdings, Inc., 9.25%,
2/15/24 (144A) 332,561
315,000 CSC Holdings LLC, 5.5%, 4/15/27 (144A) 324,491
855,000 TEGNA, Inc., 6.375%, 10/15/23 883,326
------------
Total Media $ 2,104,753
---------------------------------------------------------------------------------------------------------------
Metal Fabricate/Hardware -- 0.5%
615,000 Novelis Corp., 5.875%, 9/30/26 (144A) $ 624,994
------------
Total Metal Fabricate/Hardware $ 624,994
---------------------------------------------------------------------------------------------------------------
Mining -- 2.2%
210,000 Alcoa Nederland Holding BV, 6.125%, 5/15/28 (144A) $ 218,400
330,000 Aleris International, Inc., 10.75%, 7/15/23 (144A) 345,675
141,763(f) Boart Longyear Management Pty, Ltd., 10.0% (0.0%
PIK or 10.0% cash), 12/31/22 124,751
500,000 First Quantum Minerals, Ltd., 6.875%, 3/1/26 (144A) 468,125
425,000 First Quantum Minerals, Ltd., 7.25%, 4/1/23 (144A) 420,962
200,000 Hudbay Minerals, Inc., 7.25%, 1/15/23 (144A) 207,500
589,000 Hudbay Minerals, Inc., 7.625%, 1/15/25 (144A) 612,560
170,000 Joseph T Ryerson & Son, Inc., 11.0%, 5/15/22 (144A) 180,200
70,000 Teck Resources, Ltd., 8.5%, 6/1/24 (144A) 74,902
375,000 Vedanta Resources, Ltd., 6.375%, 7/30/22 (144A) 365,813
------------
Total Mining $ 3,018,888
---------------------------------------------------------------------------------------------------------------
Miscellaneous Manufacturers -- 0.1%
150,000 Koppers, Inc., 6.0%, 2/15/25 (144A) $ 145,170
------------
Total Miscellaneous Manufacturers $ 145,170
---------------------------------------------------------------------------------------------------------------
Multi-National -- 0.5%
200,000 Banque Ouest Africaine de Developpement, 5.0%,
7/27/27 (144A) $ 200,156
IDR 2,730,000,000 European Investment Bank, 7.2%, 7/9/19 (144A) 190,889
IDR 4,840,000,000 Inter-American Development Bank, 7.875%, 3/14/23 342,315
------------
Total Multi-National $ 733,360
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 21
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Oil & Gas -- 10.7%
95,000 Ascent Resources Utica Holdings LLC/ARU Finance
Corp., 10.0%, 4/1/22 (144A) $ 103,788
489,000 Calumet Specialty Products Partners LP/Calumet Finance
Corp., 6.5%, 4/15/21 473,107
409,000 Centennial Resource Production LLC, 6.875%,
4/1/27 (144A) 423,826
660,000 Ensign Drilling, Inc., 9.25%, 4/15/24 (144A) 661,096
410,000 Great Western Petroleum LLC/Great Western Finance Corp.,
9.0%, 9/30/21 (144A) 333,125
740,000 Gulfport Energy Corp., 6.0%, 10/15/24 648,891
450,000 Gulfport Energy Corp., 6.375%, 5/15/25 396,000
402,000 Halcon Resources Corp., 6.75%, 2/15/25 258,285
1,745,000 Indigo Natural Resources LLC, 6.875%, 2/15/26 (144A) 1,618,488
420,000 MEG Energy Corp., 6.5%, 1/15/25 (144A) 422,100
603,000 Neptune Energy Bondco Plc, 6.625%, 5/15/25 (144A) 607,523
703,504(f) Northern Oil & Gas, Inc., 9.5% (1.0% PIK or 8.5% cash),
5/15/23 738,679
1,045,000 Nostrum Oil & Gas Finance BV, 8.0%, 7/25/22 (144A) 745,660
450,000 Novatek OAO via Novatek Finance, DAC, 4.422%,
12/13/22 (144A) 457,448
369,000 Oasis Petroleum, Inc., 6.875%, 3/15/22 370,384
200,000 PBF Holding Co. LLC/PBF Finance Corp., 7.0%, 11/15/23 205,750
410,000 Petrobras Global Finance BV, 6.25%, 3/17/24 440,934
650,000 Petrobras Global Finance BV, 7.375%, 1/17/27 725,270
390,000 Petroleum Co. of Trinidad & Tobago, Ltd., 9.75%,
8/14/19 (144A) 382,297
160,754(f) PetroQuest Energy, Inc., 10.0% (10.0% PIK or 0.0%
cash), 2/15/24 136,641
707,000 SEPLAT Petroleum Development Co. Plc, 9.25%,
4/1/23 (144A) 735,280
815,000 Shelf Drilling Holdings, Ltd., 8.25%, 2/15/25 (144A) 798,700
860,000 Transocean, Inc., 7.25%, 11/1/25 (144A) 851,400
120,000 Transocean, Inc., 7.5%, 1/15/26 (144A) 118,200
480,000 Whiting Petroleum Corp., 5.75%, 3/15/21 491,856
100,000 Whiting Petroleum Corp., 6.625%, 1/15/26 99,845
150,000 WPX Energy, Inc., 8.25%, 8/1/23 171,188
995,000 YPF SA, 6.95%, 7/21/27 (144A) 845,949
ARS 7,750,000 YPF SA, 16.5%, 5/9/22 (144A) 112,753
------------
Total Oil & Gas $ 14,374,463
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Oil & Gas Services -- 2.1%
540,000 Archrock Partners LP/Archrock Partners Finance Corp.,
6.0%, 10/1/22 $ 544,050
521,000 Archrock Partners LP/Archrock Partners Finance Corp.,
6.875%, 4/1/27 (144A) 542,491
1,168,000 Calfrac Holdings LP, 8.5%, 6/15/26 (144A) 969,440
750,000 KCA Deutag UK Finance Plc, 9.625%, 4/1/23 (144A) 639,375
170,000 SESI LLC, 7.75%, 9/15/24 125,375
------------
Total Oil & Gas Services $ 2,820,731
---------------------------------------------------------------------------------------------------------------
Packaging & Containers -- 0.8%
100,000(f) ARD Finance SA, 7.125% (7.875% PIK or 0.0%
cash), 9/15/23 $ 100,125
320,000 Ardagh Packaging Finance Plc/Ardagh Holdings USA, Inc.,
7.25%, 5/15/24 (144A) 337,136
630,000 Intertape Polymer Group, Inc., 7.0%, 10/15/26 (144A) 644,175
------------
Total Packaging & Containers $ 1,081,436
---------------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 2.5%
EUR 345,000 Bausch Health Cos., Inc., 4.5%, 5/15/23 (144A) $ 390,432
EUR 450,000 Bausch Health Cos., Inc., 4.5%, 5/15/23 509,259
494,000 Bausch Health Cos., Inc., 5.875%, 5/15/23 (144A) 497,804
430,000 Bausch Health Cos., Inc., 7.0%, 3/15/24 (144A) 453,113
425,000 BioScrip, Inc., 8.875%, 2/15/21 423,938
532,000 Endo, Dac/Endo Finance LLC/Endo Finco, Inc.,
6.0%, 7/15/23 (144A) 433,580
240,000 Endo, Dac/Endo Finance LLC/Endo Finco, Inc.,
6.0%, 2/1/25 (144A) 183,300
109,000 Horizon Pharma USA, Inc., 6.625%, 5/1/23 112,270
70,000 Horizon Pharma USA, Inc., 8.75%, 11/1/24 (144A) 75,600
255,000 Par Pharmaceutical, Inc., 7.5%, 4/1/27 (144A) 264,512
------------
Total Pharmaceuticals $ 3,343,808
---------------------------------------------------------------------------------------------------------------
Pipelines -- 4.9%
500,000 American Midstream Partners LP/American Midstream
Finance Corp., 9.5%, 12/15/21 (144A) $ 481,250
220,000 Blue Racer Midstream LLC/Blue Racer Finance Corp.,
6.125%, 11/15/22 (144A) 222,200
310,000 Blue Racer Midstream LLC/Blue Racer Finance Corp.,
6.625%, 7/15/26 (144A) 316,588
200,000 Cheniere Corpus Christi Holdings LLC, 7.0%, 6/30/24 224,250
230,000 DCP Midstream Operating LP, 5.6%, 4/1/44 218,500
555,000 Delek Logistics Partners LP/Delek Logistics Finance Corp.,
6.75%, 5/15/25 555,000
450,000(d) Energy Transfer Operating LP, 5.597% (3 Month USD
LIBOR + 302 bps), 11/1/66 371,250
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 23
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Pipelines -- (continued)
118,000 EnLink Midstream Partners LP, 5.05%, 4/1/45 $ 101,480
344,000 EnLink Midstream Partners LP, 5.6%, 4/1/44 310,030
950,000 Genesis Energy LP/Genesis Energy Finance Corp.,
6.75%, 8/1/22 963,499
585,000 Hess Infrastructure Partners LP/Hess Infrastructure
Partners Finance Corp., 5.625%, 2/15/26 (144A) 598,162
935,000 PBF Logistics LP/PBF Logistics Finance Corp.,
6.875%, 5/15/23 955,944
1,175,000 Williams Cos., Inc., 5.75%, 6/24/44 1,279,303
------------
Total Pipelines $ 6,597,456
---------------------------------------------------------------------------------------------------------------
Real Estate -- 0.1%
98,000 Realogy Group LLC/Realogy Co-Issuer Corp., 9.375%,
4/1/27 (144A) $ 101,793
------------
Total Real Estate $ 101,793
---------------------------------------------------------------------------------------------------------------
REITS -- 1.0%
1,404,000 Uniti Group LP/Uniti Group Finance, Inc./CSL Capital LLC,
6.0%, 4/15/23 (144A) $ 1,347,840
------------
Total REITS $ 1,347,840
---------------------------------------------------------------------------------------------------------------
Retail -- 0.9%
495,000 Golden Nugget, Inc., 6.75%, 10/15/24 (144A) $ 506,138
470,000 Golden Nugget, Inc., 8.75%, 10/1/25 (144A) 492,325
350,000 Neiman Marcus Group, Ltd. LLC, 8.0%, 10/15/21 (144A) 192,500
------------
Total Retail $ 1,190,963
---------------------------------------------------------------------------------------------------------------
Semiconductors -- 0.2%
200,000 Micron Technology, Inc., 5.5%, 2/1/25 $ 205,946
------------
Total Semiconductors $ 205,946
---------------------------------------------------------------------------------------------------------------
Software -- 0.8%
601,000 Rackspace Hosting, Inc., 8.625%, 11/15/24 (144A) $ 560,432
543,000 SS&C Technologies, Inc., 5.5%, 9/30/27 (144A) 556,914
------------
Total Software $ 1,117,346
---------------------------------------------------------------------------------------------------------------
Telecommunications -- 5.0%
425,000 Altice France SA, 6.25%, 5/15/24 (144A) $ 435,625
200,000 Altice France SA, 8.125%, 2/1/27 (144A) 209,000
300,000 Cincinnati Bell, Inc., 7.0%, 7/15/24 (144A) 276,759
325,000 Cincinnati Bell, Inc., 8.0%, 10/15/25 (144A) 296,562
280,000 CommScope Technologies LLC, 6.0%, 6/15/25 (144A) 284,382
115,000 Digicel Group One, Ltd., 8.25%, 12/30/22 (144A) 75,727
110,000 Digicel Group Two, Ltd., 8.25%, 9/30/22 (144A) 42,900
750,000 Digicel, Ltd., 6.75%, 3/1/23 531,150
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Telecommunications -- (continued)
500,000 Frontier Communications Corp., 8.5%, 4/1/26 (144A) $ 471,250
1,165,000 Frontier Communications Corp., 8.75%, 4/15/22 806,762
290,000 Frontier Communications Corp., 11.0%, 9/15/25 187,775
200,000 Mobile Telesystems OJSC via MTS International Funding,
Ltd., 5.0%, 5/30/23 (144A) 202,964
340,000 Sprint Corp., 7.125%, 6/15/24 340,744
485,000 Sprint Corp., 7.25%, 9/15/21 508,037
850,000 Sprint Corp., 7.625%, 3/1/26 850,000
1,300,000(h) Windstream Services LLC/Windstream Finance Corp.,
8.625%, 10/31/25 (144A) 1,280,500
114,000(h) Windstream Services LLC/Windstream Finance Corp.,
8.75%, 12/15/24 (144A) 25,080
------------
Total Telecommunications $ 6,825,217
---------------------------------------------------------------------------------------------------------------
Transportation -- 0.2%
375,000 Navios South American Logistics, Inc./Navios Logistics
Finance US, Inc., 7.25%, 5/1/22 (144A) $ 344,062
------------
Total Transportation $ 344,062
---------------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost $98,411,418) $101,950,643
---------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT BONDS -- 4.6%
of Net Assets
Angola -- 0.3%
448,000 Angolan Government International Bond, 8.25%,
5/9/28 (144A) $ 468,399
------------
Total Angola $ 468,399
---------------------------------------------------------------------------------------------------------------
Argentina -- 1.2%
141,280 Province of Salta Argentina, 9.5%, 3/16/22 (144A) $ 136,688
360,000 Provincia de Buenos Aires, 9.125%, 3/16/24 (144A) 271,350
230,000 Provincia de Buenos Aires, 9.95%, 6/9/21 (144A) 195,500
670,000 Provincia de Entre Rios Argentina, 8.75%, 2/8/25 (144A) 431,413
785,000 Provincia del Chubut Argentina, 7.75%, 7/26/26 (144A) 606,413
------------
Total Argentina $ 1,641,364
---------------------------------------------------------------------------------------------------------------
Bahrain -- 0.2%
300,000 Bahrain Government International Bond, 7.0%,
10/12/28 (144A) $ 324,000
------------
Total Bahrain $ 324,000
---------------------------------------------------------------------------------------------------------------
Egypt -- 0.8%
EGP 16,050,000(i) Egypt Treasury Bills, 2/4/20 $ 826,936
EGP 4,350,000(i) Egypt Treasury Bills, 3/3/20 221,624
------------
Total Egypt $ 1,048,560
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 25
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Kenya -- 0.4%
500,000 Kenya Government International Bond, 6.875%,
6/24/24 (144A) $ 510,000
------------
Total Kenya $ 510,000
---------------------------------------------------------------------------------------------------------------
Mexico -- 0.8%
MXN 970,000 Mexican Bonos, 7.75%, 11/13/42 $ 47,374
MXN 18,385,500 Mexican Bonos, 8.0%, 12/7/23 972,208
------------
Total Mexico $ 1,019,582
---------------------------------------------------------------------------------------------------------------
Turkey -- 0.3%
475,000 Turkey Government International Bond, 3.25%, 3/23/23 $ 415,856
------------
Total Turkey $ 415,856
---------------------------------------------------------------------------------------------------------------
Ukraine -- 0.6%
750,000 Ukraine Government International Bond, 8.994%,
2/1/24 (144A) $ 747,465
------------
Total Ukraine $ 747,465
---------------------------------------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost $6,513,523) $ 6,175,226
---------------------------------------------------------------------------------------------------------------
INSURANCE-LINKED SECURITIES -- 23.0%
of Net Assets(j)
Catastrophe Linked Bonds -- 9.6%
Earthquakes -- California -- 0.5%
250,000(d) Ursa Re, 7.515% (3 Month U.S. Treasury Bill +
510 bps), 9/24/21 (144A) $ 245,775
400,000(d) Ursa Re, 7.785% (3 Month U.S. Treasury Bill +
537 bps), 12/10/20 (144A) 397,240
------------
$ 643,015
---------------------------------------------------------------------------------------------------------------
Earthquakes -- Japan -- 0.7%
500,000(d) Kizuna Re II, 4.915% (3 Month U.S. Treasury Bill +
250 bps), 4/11/23 (144A) $ 494,150
500,000(d) Nakama Re, 4.475% (6 Month USD LIBOR + 220
bps), 10/13/21 (144A) 496,550
------------
$ 990,700
---------------------------------------------------------------------------------------------------------------
Earthquakes -- U.S. -- 0.2%
300,000(d) Acorn Re, 5.151% (3 Month USD LIBOR + 275
bps), 11/10/21 (144A) $ 296,700
---------------------------------------------------------------------------------------------------------------
Earthquakes -- U.S. Regional -- 0.4%
500,000(d) Merna Re, 4.415% (3 Month U.S. Treasury Bill +
200 bps), 4/8/20 (144A) $ 497,350
---------------------------------------------------------------------------------------------------------------
Flood -- U.S. -- 0.2%
250,000(d) FloodSmart Re, 13.67% (3 Month U.S. Treasury Bill +
1,125 bps), 8/6/21 (144A) $ 247,100
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Health -- U.S. -- 0.7%
1,000,000(d) Vitality Re VII, 5.065% (3 Month U.S. Treasury Bill +
265 bps), 1/7/20 (144A) $ 1,007,100
---------------------------------------------------------------------------------------------------------------
Multiperil -- Europe -- 0.4%
EUR 500,000(d) Lion II Re, 3.29% (3 Month EURIBOR + 329 bps),
7/15/21 (144A) $ 560,208
---------------------------------------------------------------------------------------------------------------
Multiperil -- U.S. -- 2.0%
375,000(d) Caelus Re V, 2.92% (1 Month U.S. Treasury Bill +
50 bps), 6/5/20 (144A) $ 38
400,000(d) Caelus Re V, 2.92% (1 Month U.S. Treasury Bill +
50 bps), 6/5/20 (144A) 40
250,000(d) Caelus Re V, 9.92% (3 Month U.S. Treasury Bill +
750 bps), 6/7/21 (144A) 208,600
500,000(d) Kilimanjaro II Re, 9.481% (6 Month USD LIBOR +
714 bps), 4/20/21 (144A) 496,500
500,000(d) Kilimanjaro II Re, 12.941% (6 Month USD LIBOR +
949 bps), 4/20/21 (144A) 496,650
750,000(d) Northshore Re II, 9.625% (3 Month U.S. Treasury Bill +
721 bps), 7/6/20 (144A) 745,050
250,000(d) Residential Reinsurance 2018 Re, 13.915% (3 Month
U.S. Treasury Bill + 1,150 bps), 12/6/22 (144A) 243,750
500,000(d) Spectrum Capital Re, 8.335% (6 Month USD LIBOR +
575 bps), 6/8/21 (144A) 489,600
------------
$ 2,680,228
---------------------------------------------------------------------------------------------------------------
Multiperil -- Worldwide -- 0.9%
250,000(d) Galilei Re, 11.166% (6 Month USD LIBOR + 863
bps), 1/8/21 (144A) $ 245,625
250,000(d) Galilei Re, 16.376% (6 Month USD LIBOR +
1,386 bps), 1/8/20 (144A) 246,250
250,000(d) Galilei Re, 16.396% (6 Month USD LIBOR +
1,386 bps), 1/8/21 (144A) 244,600
500,000(d) Galileo Re, 10.054% (3 Month USD LIBOR +
750 bps), 11/6/20 (144A) 495,700
------------
$ 1,232,175
---------------------------------------------------------------------------------------------------------------
Pandemic -- Worldwide -- 0.4%
300,000(d) International Bank for Reconstruction &
Development, 9.487% (6 Month USD LIBOR +
690 bps), 7/15/20 (144A) $ 300,900
300,000(d) International Bank for Reconstruction &
Development, 13.965% (6 Month USD LIBOR +
1,150 bps), 7/15/20 (144A) 232,500
------------
$ 533,400
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 27
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Wildfires -- California -- 0.0%+
250,000(d) Cal Phoenix Re, 9.988% (3 Month USD LIBOR +
750 bps), 8/13/21 (144A) $ 12,500
---------------------------------------------------------------------------------------------------------------
Windstorms -- Florida -- 1.3%
750,000(d) Integrity Re, 5.472% (6 Month USD LIBOR +
324 bps), 6/10/20 (144A) $ 745,875
500,000(d) Integrity Re, 6.352% (6 Month USD LIBOR +
412 bps), 6/10/20 (144A) 494,800
500,000(d) Sanders Re, 5.412% (6 Month USD LIBOR + 311
bps), 6/5/20 (144A) 494,550
------------
$ 1,735,225
---------------------------------------------------------------------------------------------------------------
Windstorms -- Japan -- 0.4%
500,000(d) Aozora Re, 4.771% (6 Month USD LIBOR + 229 bps),
4/7/20 (144A) $ 495,700
---------------------------------------------------------------------------------------------------------------
Windstorms -- Massachusetts -- 0.5%
750,000(d) Cranberry Re, 4.231% (6 Month USD LIBOR +
200 bps), 7/13/20 (144A) $ 740,025
---------------------------------------------------------------------------------------------------------------
Windstorms -- Mexico -- 0.4%
250,000(d) International Bank for Reconstruction &
Development, 8.275% (6 Month USD LIBOR +
590 bps), 12/20/19 (144A) $ 247,875
250,000(d) International Bank for Reconstruction &
Development, 11.675% (6 Month USD LIBOR +
930 bps), 12/20/19 (144A) 243,875
------------
$ 491,750
---------------------------------------------------------------------------------------------------------------
Windstorms -- Texas -- 0.4%
500,000(d) Alamo Re, 7.27% (3 Month U.S. Treasury Bill +
485 bps), 6/8/20 (144A) $ 498,800
---------------------------------------------------------------------------------------------------------------
Windstorms -- U.S. Multistate -- 0.2%
750,000(d) Citrus Re, 7.85% (3 Month U.S. Treasury Bill +
785 bps), 4/25/19 (144A) $ 262,500
------------
Total Catastrophe Linked Bonds $ 12,924,476
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Face
Amount
USD ($)
---------------------------------------------------------------------------------------------------------------
Collateralized Reinsurance -- 3.4%
Multiperil -- Massachusetts -- 0.3%
416,087+(a)(x) Denning Re 2018, 7/15/19 $ 417,585
---------------------------------------------------------------------------------------------------------------
Multiperil -- U.S. Regional -- 0.2%
250,000+(a)(x) EC0012 Re, 6/15/19 $ 247,500
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Face
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Multiperil -- Worldwide -- 2.3%
575,641+(x) Clarendon Re 2018, 1/15/20 $ 512,505
650,000+(a)(x) Cypress Re 2017, 1/10/20 56,290
300,766+(x) Dartmouth Re 2018, 1/15/20 162,534
115,581+(a)(x) Dartmouth Re 2019, 1/31/20 93,676
250,000+(a)(x) Dingle Re 2019, 2/1/20 230,264
389,876+(x) Gloucester Re 2018, 1/15/20 302,520
368,836+(x) Kilarney Re 2018, 4/15/20 312,589
350,000+(a)(x) Merion Re 2018, 12/31/21 22,225
363,501+(x) Merion Re 2019-1, 12/31/22 309,040
250,000+(a)(x) Old Head Re 2019, 12/31/22 212,608
333,342+(x) Oyster Bay Re 2018, 1/15/20 302,541
700,000+(a)(x) Resilience Re, 12/31/19 490
567,400+(x) Seminole Re 2018, 1/15/20 234,052
142,857+(x) Seminole Re 2019, 1/31/20 112,043
297,355+(a)(x) Wentworth Re 2019-1, 12/31/22 268,216
------------
$ 3,131,593
---------------------------------------------------------------------------------------------------------------
Windstorms -- Florida -- 0.4%
750,000+(a)(x) Portrush Re 2017, 6/15/19 $ 497,175
---------------------------------------------------------------------------------------------------------------
Windstorms -- U.S. Regional -- 0.2%
250,000+(a)(y) Promissum Re 2018, 6/15/19 $ 18,300
250,000+(a)(x) Resilience Re, 6/15/19 261,425
------------
$ 279,725
------------
Total Collateralized Reinsurance $ 4,573,578
---------------------------------------------------------------------------------------------------------------
Industry Loss Warranties -- 0.0%+
Multiperil -- U.S. -- 0.0%+
532,200+(x) Cypress Re 2018, 7/15/19 $ 38,851
------------
Total Industry Loss Warranties $ 38,851
---------------------------------------------------------------------------------------------------------------
Reinsurance Sidecars -- 10.0%
All Natural Peril -- Worldwide -- 1.1%
712,500+(a)(x) Eden Re II, 3/22/23 (144A) $ 742,852
313,499+(a)(z) Thopas Re 2019, 12/31/22 320,553
441,274+(a)(x) Versutus Re 2019-A, 12/31/21 447,187
------------
$ 1,510,592
---------------------------------------------------------------------------------------------------------------
Multiperil -- U.S. -- 1.4%
800,000+(x) Carnoustie Re 2015, 7/1/19 $ 2,560
1,000,000+(x) Carnoustie Re 2016, 11/30/20 27,000
1,000,000+(a)(x) Carnoustie Re 2017, 11/30/21 254,200
250,000+(a)(x) Carnoustie Re 2018, 12/31/21 24,950
400,000+(a)(x) Castle Stuart Re 2018, 12/1/21 337,360
1,000,000+(a)(z) Harambee Re 2018, 12/31/21 185,837
1,000,000+(a)(z) Harambee Re 2019, 12/31/22 1,011,800
------------
$ 1,843,707
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 29
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Face
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Multiperil -- U.S. Regional -- 0.0%+
250,000+(a)(x) EC0009 Re, 12/31/20 $ 66,875
---------------------------------------------------------------------------------------------------------------
Multiperil -- Worldwide -- 7.5%
250,000+(a)(x) Alturas Re 2019-2, 3/10/22 $ 252,650
500,000+(a)(x) Bantry Re 2018, 12/31/21 30,700
492,000+(a)(x) Bantry Re 2019, 12/31/22 500,710
1,579,039+(x) Berwick Re 2018-1, 12/31/21 260,699
1,215,671+(a)(x) Berwick Re 2019-1, 12/31/22 1,243,388
400,000+(a)(z) Blue Lotus Re 2018, 12/31/21 426,640
37,500+(a)(x) Eden Re II, 3/22/22 (144A) 88,395
12,500+(a)(x) Eden Re II, 3/22/22 (144A) 30,378
2,400,000+(x) Gleneagles Re 2016, 11/30/20 148,800
1,500,000+(a)(x) Gleneagles Re 2017, 11/30/21 677,100
250,000+(a)(x) Gleneagles Re 2018, 12/31/21 29,575
221,708+(a)(x) Gleneagles Re 2019, 12/31/22 226,102
1,059,157+(x) Gullane Re 2018, 12/31/21 991,371
250,000+(a)(x) Limestone Re 2018, 3/1/22 262,750
1,000,000+(a)(z) Lorenz Re 2017, 3/31/20 59,600
750,000+(a)(z) Lorenz Re 2018, 7/1/21 554,175
500,000+(a)(x) Merion Re 2018-2, 12/31/21 497,450
250,000+(a)(z) NCM Re 2018, 12/31/21 75,375
103,281+(a)(z) NCM Re 2019, 12/31/22 105,904
3,000,000+(x) Pangaea Re 2015-1, 2/1/20 5,400
2,000,000+(x) Pangaea Re 2016-1, 11/30/20 2,600
2,000,000+(x) Pangaea Re 2017-1, 11/30/21 --
1,000,000+(a)(x) Pangaea Re 2018-1, 12/31/21 58,800
1,000,000+(a)(x) Pangaea Re 2018-3, 7/1/22 853,300
819,247+(a)(x) Pangaea Re 2019-1, 2/1/23 831,126
500,000+(a)(x) Sector Re V, 3/1/24 (144A) 500,000
1,000,000+(a)(x) Silverton Re 2017, 9/16/19 (144A) 20,800
1,000,000+(a)(x) St. Andrews Re 2017-1, 2/1/20 67,800
500,000+(a)(z) Thopas Re 2018, 12/31/21 84,350
500,000+(a)(x) Versutus Re 2018, 12/31/21 34,950
58,727+(a)(x) Versutus Re 2019-B, 12/31/21 59,514
500,000+(a)(z) Viribus Re 2018, 12/31/21 157,900
212,306+(a)(z) Viribus Re 2019, 12/31/22 223,197
507,289+(x) Woburn Re 2018, 12/31/21 215,598
499,829+(a)(x) Woburn Re 2019, 12/31/22 514,442
------------
$ 10,091,539
------------
Total Reinsurance Sidecars $ 13,512,713
---------------------------------------------------------------------------------------------------------------
TOTAL INSURANCE-LINKED SECURITIES
(Cost $34,199,231) $ 31,049,618
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE LOAN
INTERESTS -- 34.3% of Net Assets*(d)
Aerospace & Defense -- 0.7%
487,490 MACOM Technology Solutions Holdings, Inc. (fka
M/A-COM Technology Solutions Holdings, Inc.), Initial
Term Loan, 4.733% (LIBOR + 225 bps), 5/17/24 $ 462,202
491,250 Peraton Corp. (fka MHVC Acquisition Corp.), First Lien
Initial Term Loan, 7.74% (LIBOR +525 bps), 4/29/24 477,741
------------
Total Aerospace & Defense $ 939,943
---------------------------------------------------------------------------------------------------------------
Automobile -- 2.7%
228,538 American Axle & Manufacturing, Inc., Tranche B Term
Loan, 4.767% (LIBOR + 225 bps), 4/6/24 $ 226,179
357,338 Bombardier Recreational Products, Inc., Term B Loan,
4.48% (LIBOR + 200 bps), 5/23/25 355,403
461,187 Commercial Vehicle Group, Inc. (CVG), Initial Term Loan,
8.483% (LIBOR + 600 bps), 4/12/23 461,187
624,241 CWGS Group LLC (aka Camping World, Inc.), Term
Loan, 5.229% (LIBOR + 275 bps), 11/8/23 579,920
500,000 Drive Chassis Holdco LLC, Second Lien Term B Loan,
10.834% (LIBOR + 825 bps), 4/10/26 481,250
378,385 Navistar, Inc., Tranche B Term Loan, 5.99% (LIBOR +
350 bps), 11/6/24 379,093
471,296 Thor Industries, Inc., Initial USD Term Loan, 6.313%
(LIBOR + 375 bps), 2/1/26 463,932
134,158 TI Group Automotive Systems LLC, Initial US Term Loan,
4.983% (LIBOR + 250 bps), 6/30/22 133,318
547,644 Tower Automotive Holdings USA LLC, Initial Term Loan,
5.25% (LIBOR + 275 bps), 3/7/24 542,852
------------
Total Automobile $ 3,623,134
---------------------------------------------------------------------------------------------------------------
Banking -- 0.2%
250,000 Starfruit Finco BV (Starfruit US Holdco LLC) (aka
AkzoNobel), Initial Dollar Term Loan, 5.729%
(LIBOR + 325 bps), 10/1/25 $ 249,649
------------
Total Banking $ 249,649
---------------------------------------------------------------------------------------------------------------
Beverage, Food & Tobacco -- 0.6%
492,019(k) Chobani LLC (Chobani Idaho LLC), First Lien New Term
Loan, 10/10/23 $ 486,330
344,750 Give and Go Prepared Foods Corp. (fka GG Foods
Acquisition Corp.), First Lien 2017 Term Loan, 6.851%
(LIBOR + 425 bps), 7/29/23 314,871
------------
Total Beverage, Food & Tobacco $ 801,201
---------------------------------------------------------------------------------------------------------------
Broadcasting & Entertainment -- 0.5%
523,238 Creative Artists Agency LLC, Refinancing Term Loan,
5.487% (LIBOR + 300 bps), 2/15/24 $ 524,627
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 31
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Broadcasting & Entertainment -- (continued)
213,825 MediArena Acquisition BV (fka AP NMT Acquisition BV),
First Lien Dollar Term B Loan, 8.35% (LIBOR +
575 bps), 8/13/21 $ 213,936
------------
Total Broadcasting & Entertainment $ 738,563
---------------------------------------------------------------------------------------------------------------
Building Materials -- 0.5%
294,742 Summit Materials LLC, New Term Loan, 4.483% (LIBOR +
200 bps), 11/21/24 $ 294,834
393,000 WKI Holding Co., Inc. (aka World Kitchen), Initial Term
Loan, 6.592% (LIBOR + 400 bps), 5/1/24 394,719
------------
Total Building Materials $ 689,553
---------------------------------------------------------------------------------------------------------------
Buildings & Real Estate -- 1.7%
495,000 Beacon Roofing Supply, Inc., Initial Term Loan, 4.734%
(LIBOR + 225 bps), 1/2/25 $ 492,319
859,159 Builders FirstSource, Inc., Refinancing Term Loan, 5.601%
(LIBOR + 300 bps), 2/29/24 849,761
483,853 Uniti Group, Inc., Shortfall Term Loan, 7.483% (LIBOR +
500 bps), 10/24/22 477,503
408,120 WireCo WorldGroup, Inc., (WireCo WorldGroup Finance LP),
First Lien Initial Term Loan, 7.483% (LIBOR +
500 bps), 9/29/23 409,344
------------
Total Buildings & Real Estate $ 2,228,927
---------------------------------------------------------------------------------------------------------------
Chemicals, Plastics & Rubber -- 2.1%
287,844 Chemours Co., Tranche B-2 US Dollar Term Loan,
4.24% (LIBOR + 175 bps), 4/3/25 $ 287,087
240,677 Infiltrator Water Technologies LLC, First Lien Term B-2
Loan, 5.601% (LIBOR + 300 bps), 5/27/22 241,429
187,031 Natgasoline LLC, Initial Term Loan, 6.125% (LIBOR +
350 bps), 11/14/25 188,195
560,762 Omnova Solutions, Inc., Term B-2 Loan, 5.733% (LIBOR +
325 bps), 8/25/23 562,164
366,686 Tata Chemicals North America, Term Loan, 5.375% (LIBOR +
275 bps), 8/7/20 367,603
400,908 Tronox Finance LLC, First Lien Initial Dollar Term Loan,
5.483% (LIBOR + 300 bps), 9/23/24 402,484
591,030 Twist Beauty International Holdings SA, Facility B2, 5.887%
(LIBOR + 300 bps), 4/22/24 590,107
169,729 Univar USA, Inc., Term B-3 Loan, 4.733% (LIBOR +
225 bps), 7/1/24 170,154
------------
Total Chemicals, Plastics & Rubber $ 2,809,223
---------------------------------------------------------------------------------------------------------------
Computers & Electronics -- 1.1%
247,500 Chloe OX Parent LLC, Initial Term Loan, 7.101% (LIBOR +
450 bps), 12/23/24 $ 247,809
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Computers & Electronics -- (continued)
178,710 Energy Acquisition LP (aka Electrical Components
International), First Lien Initial Term Loan,
6.851% (LIBOR + 425 bps), 6/26/25 $ 174,242
300,000(k) Neo Technology, Inc., Term Loan B, 4/24/26 302,250
814,688 Ultra Clean Holdings, Inc., Term B Loan, 6.983%
(LIBOR + 450 bps), 8/27/25 802,467
------------
Total Computers & Electronics $ 1,526,768
---------------------------------------------------------------------------------------------------------------
Diversified & Conglomerate Manufacturing -- 0.9%
392,127 Commercial Barge Line Co., Initial Term Loan, 11.233%
(LIBOR + 875 bps), 11/12/20 $ 274,979
244,995 ExamWorks Group, Inc. (fka Gold Merger Co., Inc.),
Term B-1 Loan, 5.733% (LIBOR + 325 bps), 7/27/23 245,570
99,250 Pelican Products, Inc., First Lien Term Loan, 5.974%
(LIBOR + 350 bps), 5/1/25 99,002
161,060 Ranpak Corp., Second Lien Initial Term Loan, 9.73%
(LIBOR + 725 bps), 10/3/22 160,456
500,000 STG-Fairway Acquisitions, Inc. (aka First Advantage), First
Lien Term Loan, 7.733% (LIBOR +525 bps), 6/30/22 500,625
------------
Total Diversified & Conglomerate Manufacturing $ 1,280,632
---------------------------------------------------------------------------------------------------------------
Diversified & Conglomerate Service -- 3.1%
486,785(k) Albany Molecular Research, Inc., First Lien Initial Term
Loan, 8/30/24 $ 486,252
498,750 Allied Universal Holdco LLC (fka USAGM Holdco LLC),
First Lien Incremental Term Loan, 6.733% (LIBOR +
425 bps), 7/28/22 494,308
243,798 CB Poly Investments LLC, First Lien Closing Date Term
Loan, 6.233% (LIBOR + 375 bps), 8/16/23 244,712
240,000 Change Healthcare Holdings, Inc. (fka Emdeon, Inc.),
Closing Date Term Loan, 5.233% (LIBOR +
275 bps), 3/1/24 240,236
736,875 Constellis Holdings LLC, First Lien Term B Loan, 7.583%
(LIBOR + 500 bps), 4/21/24 709,242
240,000 DBRS, Inc., Initial Term Loan, 7.879% (LIBOR +
525 bps), 3/4/22 238,425
565,369 DTI Holdco, Inc., Replacement B-1 Term Loan, 7.333%
(LIBOR + 475 bps), 9/29/23 534,450
55,000 National Mentor Holdings, Inc. (aka Civitas Solutions,
Inc.), First Lien Initial Term Loan, 6.74% (LIBOR +
425 bps), 3/9/26 55,215
3,000 National Mentor Holdings, Inc. (aka Civitas Solutions,
Inc.), First Lien Initial Term C Loan, 6.74%
(LIBOR + 425 bps), 3/9/26 3,012
97,516 NVA Holdings, Inc., First Lien Term B3 Loan, 5.233%
(LIBOR + 275 bps), 2/2/25 96,135
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 33
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Diversified & Conglomerate Service -- (continued)
245,625 Tempo Acquisition LLC, Initial Term Loan, 5.483%
(LIBOR + 300 bps), 5/1/24 $ 246,239
225,000(k) Trico Group LLC, First Lien Tranche B-2 Term
Loan, 2/2/24 213,750
678,093(k) West Corp., Incremental Term B-1 Loan, 10/10/24 649,880
------------
Total Diversified & Conglomerate Service $ 4,211,856
---------------------------------------------------------------------------------------------------------------
Diversified Natural Resources & Precious Metals -- 0.1%
105,426 84 Lumber Co., Term B-1 Loan, 7.727% (LIBOR +
525 bps), 10/25/23 $ 105,711
------------
Total Diversified Natural Resources & Precious Metals $ 105,711
---------------------------------------------------------------------------------------------------------------
Educational Services -- 0.3%
338,504 Laureate Education, Inc., Series 2024 Term Loan, 5.983%
(LIBOR + 350 bps), 4/26/24 $ 339,913
------------
Total Educational Services $ 339,913
---------------------------------------------------------------------------------------------------------------
Electric & Electrical -- 0.0%+
91,994 Rackspace Hosting, Inc., First Lien Term B Loan, 5.738%
(LIBOR + 300 bps), 11/3/23 $ 87,460
------------
Total Electric & Electrical $ 87,460
---------------------------------------------------------------------------------------------------------------
Electronics -- 0.7%
230,733 First Data Corp., 2024A New Dollar Term Loan, 4.481%
(LIBOR + 200 bps), 4/26/24 $ 230,965
195,477 nThrive, Inc. (fka Precyse Acquisition Corp.), Additional
Term B-2 Loan, 6.983% (LIBOR +
450 bps), 10/20/22 191,446
550,834 Scientific Games International, Inc., Initial Term B-5 Loan,
5.233% (LIBOR + 275 bps), 8/14/24 550,604
------------
Total Electronics $ 973,015
---------------------------------------------------------------------------------------------------------------
Farming & Agriculture -- 0.3%
450,642 Dole Food Co., Inc., Tranche B Term Loan, 5.25%
(LIBOR + 275 bps/PRIME + 175 bps), 4/6/24 $ 444,071
------------
Total Farming & Agriculture $ 444,071
---------------------------------------------------------------------------------------------------------------
Financial Services -- 0.2%
237,500 Freedom Mortgage Corp., Initial Term Loan, 7.233%
(LIBOR + 475 bps), 2/23/22 $ 239,133
------------
Total Financial Services $ 239,133
---------------------------------------------------------------------------------------------------------------
Healthcare & Pharmaceuticals -- 2.3%
344,750 Alphabet Holding Co., Inc. (aka Nature's Bounty), First
Lien Initial Term Loan, 5.983% (LIBOR +
350 bps), 9/26/24 $ 323,275
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Healthcare & Pharmaceuticals -- (continued)
230,462 Gentiva Health Services, Inc., First Lien Closing Date
Initial Term Loan, 6.25% (LIBOR +
375 bps), 7/2/25 $ 231,471
605,000 Gentiva Health Services, Inc., Second Lien Initial Term
Loan, 9.5% (LIBOR + 700 bps), 7/2/26 622,772
337,750 HC Group Holdings III, Inc., First Lien Refinancing Term
Loan, 6.233% (LIBOR + 375 bps), 4/7/22 338,172
304,721 Horizon Pharma, Inc., Fourth Amendment Refinanced
Term Loan, 5.5% (LIBOR + 300 bps), 3/29/24 306,753
329,238 NMN Holdings III Corp., First Lien Closing Date Term Loan,
6.233% (LIBOR + 375 bps), 11/13/25 328,620
487,575 Prospect Medical Holdings, Inc., Term B-1 Loan, 8.0%
(LIBOR + 550 bps), 2/22/24 458,930
490,000 Sterigenics-Nordion Holdings LLC, Incremental Term Loan,
5.483% (LIBOR + 300 bps), 5/15/22 488,315
------------
Total Healthcare & Pharmaceuticals $ 3,098,308
---------------------------------------------------------------------------------------------------------------
Healthcare, Education & Childcare -- 1.7%
228,218 Bausch Health Co., Inc. (fka Valeant Pharmaceuticals
International, Inc.), Initial Term Loan, 5.474%
(LIBOR + 300 bps), 6/2/25 $ 229,163
227,048 Catalent Pharma Solutions, Inc. (fka Cardinal Health 409,
Inc.), Dollar Term Loan, 4.733% (LIBOR +
225 bps), 5/20/24 227,261
181,763 Kinetic Concepts, Inc., Dollar Term Loan, 5.851% (LIBOR +
325 bps), 2/2/24 182,535
724,035 KUEHG Corp. (fka KC MergerSub, Inc.) (aka KinderCare),
Term B-3 Loan, 6.351% (LIBOR + 375 bps), 2/21/25 725,664
918,097 Regionalcare Hospital Partners Holdings, Inc., First Lien
Term B Loan, 6.987% (LIBOR +450 bps), 11/16/25 925,269
------------
Total Healthcare, Education & Childcare $ 2,289,892
---------------------------------------------------------------------------------------------------------------
Home & Office Furnishings -- 0.2%
522,133 Serta Simmons Bedding LLC, Second Lien Initial Term
Loan, 10.473% (LIBOR + 800 bps), 11/8/24 $ 224,517
------------
Total Home & Office Furnishings $ 224,517
---------------------------------------------------------------------------------------------------------------
Hotel, Gaming & Leisure -- 0.7%
164,957 Eldorado Resorts, Inc., Term Loan, 4.75% (LIBOR +
225 bps), 4/17/24 $ 165,129
227,076 Golden Nugget, Inc. (aka Landry's, Inc.), Initial Term
Loan B, 5.228% (LIBOR + 275 bps), 10/4/23 227,669
505,000 LTI Holdings, Inc., First Lien Initial Term Loan, 5.983%
(LIBOR + 350 bps), 9/6/25 498,687
------------
Total Hotel, Gaming & Leisure $ 891,485
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 35
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Insurance -- 1.7%
162,322 Alliant Holdings Intermediate LLC, 2018 Initial Term
Loan, 5.237% (LIBOR + 275 bps), 5/9/25 $ 159,820
101,811 Asurion LLC (fka Asurion Corp.), New B-7 Term Loan,
5.483% (LIBOR + 300 bps), 11/3/24 102,277
325,000 Asurion LLC (fka Asurion Corp.), Second Lien
Replacement B-2 Term Loan, 8.983% (LIBOR + 650
bps), 8/4/25 332,279
490,116 Confie Seguros Holding II Co., Term B Loan, 7.379%
(LIBOR + 475 bps), 4/19/22 490,116
483,892 Integro Parent, Inc., First Lien Initial Term Loan, 8.368%
(LIBOR + 575 bps), 10/31/22 482,683
355,258^ Medical Card System, Inc., Term Loan, 5.5% (LIBOR +
450 bps), 9/2/19 230,918
492,500 USI, Inc. (fka Compass Investors, Inc.), 2017 New Term
Loan, 5.601% (LIBOR + 300 bps), 5/16/24 489,298
------------
Total Insurance $ 2,287,391
---------------------------------------------------------------------------------------------------------------
Leisure & Entertainment -- 0.3%
399,134 Fitness International LLC, Term B Loan, 5.769%
(LIBOR + 325 bps/PRIME + 225 bps), 4/18/25 $ 398,801
------------
Total Leisure & Entertainment $ 398,801
---------------------------------------------------------------------------------------------------------------
Machinery -- 0.8%
185,753 Blount International, Inc., New Refinancing Term Loan,
6.233% (LIBOR + 375 bps), 4/12/23 $ 186,450
182,857 CTC AcquiCo GmbH, Facility B2, 5.629% (LIBOR +
300 bps), 3/7/25 179,657
165,881 NN, Inc., Tranche B Term Loan, 6.233% (LIBOR +
375 bps), 10/19/22 163,669
493,957 Shape Technologies Group, Inc., Initial Term Loan,
5.487% (LIBOR + 300 bps), 4/21/25 489,018
------------
Total Machinery $ 1,018,794
---------------------------------------------------------------------------------------------------------------
Metals & Mining -- 0.9%
759,263 Aleris International, Inc., Initial Term Loan, 7.233%
(LIBOR + 475 bps), 2/27/23 $ 762,466
487,500 Global Brass and Copper, Inc., Initial Term Loan, 5.0%
(LIBOR + 250 bps), 5/29/25 488,402
------------
Total Metals & Mining $ 1,250,868
---------------------------------------------------------------------------------------------------------------
Oil & Gas -- 2.3%
800,000 BCP Raptor II LLC, Initial Term Loan, 7.365% (LIBOR +
475 bps), 11/3/25 $ 778,500
250,000 California Resources Corp., Term Loan, 12.854%
(LIBOR + 1,038 bps), 12/31/21 259,875
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Oil & Gas -- (continued)
625,000 Encino Acquisition Partners Holdings LLC, Second Lien
Initial Term Loan, 9.233% (LIBOR +
675 bps), 10/29/25 $ 593,750
45,362 Gavilan Resources LLC, Second Lien Initial Term Loan,
8.477% (LIBOR + 600 bps), 3/1/24 34,211
645,200 Gulf Finance LLC, Tranche B Term Loan, 7.797%
(LIBOR + 525 bps), 8/25/23 515,515
454,025 Summit Midstream Partners Holdings LLC, Term Loan
Credit Facility, 8.483% (LIBOR + 600 bps), 5/13/22 453,079
447,750 Traverse Midstream Partners LLC, Advance Term Loan,
6.59% (LIBOR + 400 bps), 9/27/24 447,190
------------
Total Oil & Gas $ 3,082,120
---------------------------------------------------------------------------------------------------------------
Personal, Food & Miscellaneous Services -- 0.6%
145,358 Parfums Holding Co., Inc., First Lien Initial Term Loan,
6.879% (LIBOR + 425 bps), 6/30/24 $ 144,752
108,237 Prime Security Services Borrower LLC (aka Protection 1
Security Solutions), First Lien December 2018
Incremental Term B-1 Loan, 5.233% (LIBOR +
275 bps), 5/2/22 108,541
758,444 Revlon Consumer Products Corp., Initial Term B
Loan, 6.129% (LIBOR + 350 bps), 9/7/23 596,137
------------
Total Personal, Food & Miscellaneous Services $ 849,430
---------------------------------------------------------------------------------------------------------------
Printing & Publishing -- 0.3%
406,706 Red Ventures LLC (New Imagitas, Inc.), First Lien Term B-1
Loan, 5.483% (LIBOR + 300 bps), 11/8/24 $ 408,813
------------
Total Printing & Publishing $ 408,813
---------------------------------------------------------------------------------------------------------------
Professional & Business Services -- 0.2%
248,750 Interior Logic Group Holdings IV LLC, Initial Term Loan,
6.601% (LIBOR + 400 bps), 5/30/25 $ 246,262
------------
Total Professional & Business Services $ 246,262
---------------------------------------------------------------------------------------------------------------
Retail -- 1.9%
344,750 Bass Pro Group LLC, Initial Term Loan, 7.483% (LIBOR +
500 bps), 9/25/24 $ 344,836
478,803 Global Appliance, Inc. (aka SharkNinja Operating LLC),
Tranche B Term Loan, 6.49% (LIBOR +
400 bps), 9/29/24 479,102
1,045,747 Neiman Marcus Group, Ltd. LLC, Other Term Loan, 5.724%
(LIBOR + 325 bps), 10/25/20 972,172
152,145 PetSmart, Inc., Amended Term Loan, 6.73% (LIBOR +
425 bps), 3/11/22 146,883
747,708 United Natural Foods, Inc., Initial Term Loan, 6.733%
(LIBOR + 425 bps), 10/22/25 654,245
------------
Total Retail $ 2,597,238
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 37
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Securities & Trusts -- 0.5%
173,250 Deerfield Dakota Holding LLC (fka Dakota Holding
Corp.) (aka Duff & Phelps), Initial Term Loan, 5.733%
(LIBOR + 325 bps), 2/13/25 $ 171,986
500,000 KSBR Holding Corp., Initial Term Loan, 6.973% (LIBOR +
450 bps), 4/15/26 500,938
------------
Total Securities & Trusts $ 672,924
---------------------------------------------------------------------------------------------------------------
Telecommunications -- 1.9%
740,625 CenturyLink, Inc., Initial Term B Loan, 5.233% (LIBOR +
275 bps), 1/31/25 $ 737,153
938,000 Commscope, Inc., Initial Term Loan, 5.733% (LIBOR +
325 bps), 4/6/26 947,497
486,811 Level 3 Financing, Inc., Tranche B 2024 Term Loan,
4.733% (LIBOR + 225 bps), 2/22/24 487,825
343,000 Sprint Communications, Inc., Initial Term Loan, 5.0%
(LIBOR + 250 bps), 2/2/24 333,567
------------
Total Telecommunications $ 2,506,042
---------------------------------------------------------------------------------------------------------------
Textile & Apparel -- 0.4%
500,000(k) Adient US LLC, Term Loan B, 4/25/24 $ 502,500
------------
Total Textile & Apparel $ 502,500
---------------------------------------------------------------------------------------------------------------
Transport -- 0.3%
396,586 Navios Maritime Partners LP (Navios Partners Finance
(US), Inc.), Initial Term Loan, 7.6% (LIBOR +
500 bps), 9/14/20 $ 395,470
------------
Total Transport $ 395,470
---------------------------------------------------------------------------------------------------------------
Transportation -- 1.1%
150,730 DynCorp International, Inc., Term Loan B2, 8.48%
(LIBOR + 600 bps), 7/7/20 $ 149,977
324,188 Envision Healthcare Corp., Initial Term Loan, 6.233%
(LIBOR + 375 bps), 10/10/25 313,764
400,000(k) Travelport Finance (Luxembourg) S.a.r.l., Initial Term
Loan, 3/18/26 391,800
636,578 YRC Worldwide, Inc., Tranche B-1 Term Loan, 10.983%
(LIBOR + 850 bps), 7/26/22 629,416
------------
Total Transportation $ 1,484,957
---------------------------------------------------------------------------------------------------------------
Utilities -- 0.5%
433,850 APLP Holdings, Ltd. Partnership, Term Loan, 5.233%
(LIBOR + 275 bps), 4/13/23 $ 437,173
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
---------------------------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
---------------------------------------------------------------------------------------------------------------
Utilities -- (continued)
276,454 Eastern Power LLC (Eastern Covert Midco LLC)
(aka TPF II LC LLC), Term Loan, 6.233% (LIBOR +
375 bps), 10/2/23 $ 277,233
------------
Total Utilities $ 714,406
---------------------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING RATE
LOAN INTERESTS
(Cost $47,184,392) $ 46,208,970
---------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATION --
0.9% of Net Assets
1,300,000(i) U.S. Treasury Bills, 5/14/19 $ 1,298,881
---------------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATION
(Cost $1,298,884) $ 1,298,881
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Shares
---------------------------------------------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.0% of Net Assets
Machinery -- 0.0%
49^(a)(l) LTR Intermediate Holdings, Inc. $ --
------------
Total Machinery $ --
---------------------------------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 0.0%
1,981^(a)(m) Midstates Petroleum Co., Inc. $ --
------------
Total Oil, Gas & Consumable Fuels $ --
---------------------------------------------------------------------------------------------------------------
TOTAL RIGHTS/WARRANTS
(Cost $1) $ --
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Number of Counter- Strike Expiration
Contracts Description party Notional Price Date
---------------------------------------------------------------------------------------------------------------
OVER THE COUNTER (OTC) CALL OPTIONS
PURCHASED -- 0.0%
18,332^(n) Desarrolladora Bank of New
Homex SAB York Mellon
de CV Corp. MXN 18,332 USD --(o) 10/23/22 $ --
18,332^(p) Desarrolladora Bank of New
Homex SAB York Mellon
de CV Corp. MXN 18,332 USD --(o) 10/23/22 --
------------
$ --
---------------------------------------------------------------------------------------------------------------
TOTAL OVER THE COUNTER (OTC) CALL
OPTIONS PURCHASED
(Premiums paid $--) $ --
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 39
Schedule of Investments | 4/30/19 (continued)
----------------------------------------------------------------------------------------------------------------
Number of Counter- Strike Expiration
Contracts Description party Notional Price Date Value
----------------------------------------------------------------------------------------------------------------
OVER THE COUNTER (OTC) CURRENCY PUT
OPTIONS PURCHASED -- 0.1%
3,522,000 Put EUR Bank of
Call USD America
NA EUR 50,168 EUR 1.15 5/27/19 $ 84,532
2,035,000 Put EUR Bank of
Call USD America
NA EUR 30,498 EUR 1.15 9/23/19 49,616
-------------
$ 134,148
----------------------------------------------------------------------------------------------------------------
TOTAL OVER THE COUNTER (OTC) CURRENCY PUT
OPTIONS PURCHASED
(Premiums paid $80,667) $ 134,148
----------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Premiums paid $80,667) $ 134,148
----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN UNAFFILIATED
ISSUERS -- 145.4%
(Cost $196,335,496)(q) $196,116,546
----------------------------------------------------------------------------------------------------------------
OVER THE COUNTER (OTC) CURRENCY CALL
OPTIONS WRITTEN -- (0.0)%+
(3,522,000) Call EUR Bank of
Put USD America
NA EUR (50,168) EUR 1.27 5/27/19 $ --
(2,035,000) Call EUR Bank of
Put USD America
NA EUR (30,498) EUR 1.27 9/23/19 (208)
-------------
$ (208)
----------------------------------------------------------------------------------------------------------------
TOTAL OVER THE COUNTER (OTC) CURRENCY CALL
OPTIONS WRITTEN
(Premiums received $(80,667)) $ (208)
----------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (45.4)% $(61,263,091)
----------------------------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $134,853,247
================================================================================================================
bps Basis Points.
CMT Constant Maturity Treasury Index.
EURIBOR Euro Interbank Offered Rate.
LIBOR London Interbank Offered Rate.
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
PRIME U.S. Federal Funds Rate.
REIT Real Estate Investment Trust.
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At
April 30, 2019, the value of these securities amounted to $97,812,716,
or 72.5% of net assets.
+ Amount rounds to less than 0.1%.
* Senior secured floating rate loan interests in which the Fund invests
generally pay interest at rates that are periodically redetermined by
reference to a base lending rate plus a premium. These base lending
rates are generally (i) the lending rate offered by one or more major
European banks, such as LIBOR, (ii) the prime rate offered by one or
more major United States banks, (iii) the rate of a certificate of
deposit or (iv) other base lending rates used by commercial lenders.
The interest rate shown is the rate accruing at April 30, 2019.
+ Security that used significant unobservable inputs to determine its
value.
^ Security is valued using fair value methods (other than supplied by
independent pricing services). See Notes to Financial Statements --
Note 1A.
(a) Non-income producing security.
(b) Security is perpetual in nature and has no stated maturity date.
(c) The interest rate is subject to change periodically. The interest rate
and/or reference index and spread shown at April 30, 2019.
(d) Floating rate note. Coupon rate, reference index and spread shown at
April 30, 2019.
(e) Security is priced as a unit.
(f) Payment-in-kind (PIK) security which may pay interest in the form of
additional principal amount.
(g) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specific date. The rate shown is the rate at
April 30, 2019.
(h) Security is in default.
(i) Security issued with a zero coupon. Income is recognized through
accretion of discount.
(j) Securities are restricted as to resale.
(k) This term loan will settle after April 30, 2019, at which time the
interest rate will be determined.
(l) LTR Intermediate Holdings, Inc. is exercisable into 49 shares.
(m) Midstates Petroleum Co., Inc. is exercisable into 1,981 shares.
(n) Option does not become effective until underlying company's
outstanding common shares reach a market capitalization of MXN 12.5
Billion.
(o) Strike price is 1 Mexican Peso (MXN).
(p) Option does not become effective until underlying company's
outstanding common shares reach a market capitalization of MXN 15.5
Billion.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 41
Schedule of Investments | 4/30/19 (continued)
(q) Distributions of investments by country of issue, as a percentage of
total Investments based on country of domicile, is as follows:
United States 59.1%
Bermuda 14.3
Canada 3.6
Netherlands 3.2
Luxembourg 2.0
Argentina 1.6
Cayman Islands 1.6
United Kingdom 1.5
Mexico 1.5
Ireland 1.4
France 1.3
Brazil 1.2
Spain 1.0
Other (individually less than 1%) 6.7
-----
100.0%
=====
(x) Issued as participation notes.
(y) Issued as participation shares.
(z) Issued as preference shares.
FORWARD FOREIGN CURRENCY CONTRACTS
----------------------------------------------------------------------------------------------------------------------
In Unrealized
Currency Exchange Currency Settlement Appreciation
Purchased for Sold Deliver Counterparty Date (Depreciation)
----------------------------------------------------------------------------------------------------------------------
EUR 208,258 USD (234,864) Bank of America NA 5/24/19 $ (720)
EUR 298,484 USD (334,329) Bank of New York Mellon Corp. 6/26/19 2,234
IDR 4,193,245,000 USD (295,326) Citibank NA 5/28/19 (1,984)
USD 243,498 MXN (4,671,279) Citibank NA 5/24/19 (2,211)
EUR 259,338 USD (292,556) Goldman Sachs International 5/24/19 (982)
EUR 347,572 USD (391,187) State Street Bank & Trust Co. 6/25/19 691
EUR 279,349 USD (314,692) State Street Bank & Trust Co. 6/26/19 294
USD 1,518,748 EUR (1,335,886) State Street Bank & Trust Co. 5/24/19 16,810
----------------------------------------------------------------------------------------------------------------------
TOTAL FORWARD FOREIGN CURRENCY CONTRACTS $14,132
======================================================================================================================
SWAP CONTRACTS
OVER THE COUNTER (OTC) CREDIT DEFAULT SWAP CONTRACTS -- SELL PROTECTION
-----------------------------------------------------------------------------------------------------------------------------
Obligation Annual
Notional Reference/ Pay/ Fixed Expiration Premiums Unrealized Market
Amount ($)(1) Counterparty Index Receive(2) Rate Date (Received) Appreciation Value
-----------------------------------------------------------------------------------------------------------------------------
80,000 Goldman Sachs Chesapeake Receive 5.00% 6/20/22 $ (9,000) $12,751 $3,751
International Energy Corp.
45,000 Goldman Sachs Chesapeake Receive 5.00% 6/20/22 (5,512) 7,623 2,111
International Energy Corp.
75,000 Goldman Sachs Chesapeake Receive 5.00% 6/20/22 (9,188) 12,705 3,517
International Energy Corp.
-----------------------------------------------------------------------------------------------------------------------------
TOTAL OVER THE COUNTER (OTC) CREDIT DEFAULT SWAP
CONTRACTS -- SELL PROTECTION $(23,700) $33,079 $9,379
-----------------------------------------------------------------------------------------------------------------------------
TOTAL SWAP CONTRACTS $(23,700) $33,079 $9,379
=============================================================================================================================
(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) Receives Quarterly.
The accompanying notes are an integral part of these financial statements.
42 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Principal amounts are denominated in U.S. dollars ("USD") unless otherwise
noted.
ARS -- Argentine Peso
EGP -- Egyptian Pound
EUR -- Euro
IDR -- Indonesian Rupiah
MXN -- Mexican Peso
Purchases and sales of securities (excluding temporary cash investments) for
the year ended April 30, 2019, aggregated $71,715,366 and $73,361,441,
respectively.
The Trust is permitted to engage in purchase and sale transactions ("cross
trades") with certain funds and accounts for which Amundi Pioneer Asset
Management, Inc. (the "Adviser") serves as the Trust's investment adviser, as
set forth in Rule 17a-7 under the Investment Company Act of 1940, pursuant to
procedures adopted by the Board of Trustees. Under these procedures, cross
trades are effected at current market prices. During the year ended April 30,
2019, the Trust engaged in purchases of $619,522, which resulted in a net
realized gain/(loss) of $0. During the year ended April 30, 2019, the Trust did
not engage in sales pursuant to these procedures.
At April 30, 2019, the net unrealized depreciation on investments based on cost
for federal tax purposes of $197,236,307 was as follows:
Aggregate gross unrealized appreciation for all investments in which
there is an excess of value over tax cost $ 10,360,871
Aggregate gross unrealized depreciation for all investments in which
there is an excess of tax cost over value (11,457,329)
------------
Net unrealized depreciation $ (1,096,458)
============
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels below.
Level 1 - quoted prices in active markets for identical securities.
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risks,
etc.). See Notes to Financial Statements -- Note 1A.
Level 3 - significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments). See Notes to
Financial Statements -- Note 1A.
The following is a summary of the inputs used as of April 30, 2019, in valuing
the Trust's investments:
---------------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------------------------------------------------------------------------------------------------
Common Stocks
Health Care Technology $ -- $ -- $ 699 $ 699
Oil, Gas & Consumable Fuel -- -- 57,169 57,169
Specialty Retail -- -- 87,543 87,543
All Other Common Stocks 583 -- -- 583
Convertible Preferred Stock 1,016,793 -- -- 1,016,793
Preferred Stocks
Chemicals -- -- 45,523 45,523
Diversified Financial Services -- 526,875 -- 526,875
All Other Preferred Stocks 1,069,752 -- -- 1,069,752
Asset Backed Securities -- 694,427 -- 694,427
Collateralized Mortgage Obligations -- 1,380,914 -- 1,380,914
Commercial Mortgage-Backed
Securities -- 2,504,532 -- 2,504,532
Convertible Corporate Bond -- 1,914,250 -- 1,914,250
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 43
Schedule of Investments | 4/30/19 (continued)
---------------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------------------------------------------------------------------------------------------------
Corporate Bonds
Diversified Financial Services $ -- $ 4,819,764 $ 7,825,000 $ 12,644,764
All Other Corporate Bonds -- 89,305,879 -- 89,305,879
Foreign Government Bonds -- 6,175,226 -- 6,175,226
Insurance-Linked Securities
Collateralized Reinsurance
Multiperil -- Massachusetts -- -- 417,585 417,585
Multiperil -- U.S. Regional -- -- 247,500 247,500
Multiperil -- Worldwide -- -- 3,131,593 3,131,593
Windstorms -- Florida -- -- 497,175 497,175
Windstorms -- U.S. Regional -- -- 279,725 279,725
Industry Loss Warranties
Multiperil -- U.S. -- -- 38,851 38,851
Reinsurance Sidecars
All Natural Peril -- Worldwide -- -- 1,510,592 1,510,592
Multiperil -- U.S. -- -- 1,843,707 1,843,707
Multiperil -- U.S. Regional -- -- 66,875 66,875
Multiperil -- Worldwide -- -- 10,091,539 10,091,539
All Other Insurance-Linked
Securities -- 12,924,476 -- 12,924,476
Senior Secured Floating Rate
Loan Interests
Insurance -- 2,056,473 230,918 2,287,391
All Other Senior Secured Floating
Rate Loan Interests -- 43,921,579 -- 43,921,579
U.S. Government and
Agency Obligation -- 1,298,881 -- 1,298,881
Rights/Warrants
Machinery -- -- --* --*
All other Rights/Warrants -- --* -- --*
Over The Counter (OTC) Call
Options Purchased -- --* -- --*
Over The Counter (OTC) Currency
Put Options Purchased -- 134,148 -- 134,148
---------------------------------------------------------------------------------------------------------------
Total Investments in Securities $2,087,128 $167,657,424 $26,371,994 $196,116,546
---------------------------------------------------------------------------------------------------------------
Other Financial Instruments
Over The Counter (OTC) Currency
Call Options Written $ -- $ (208) $ -- $ (208)
Net unrealized appreciation
on forward foreign currency
contracts -- 14,132 -- 14,132
Swap contracts, at value -- 9,379 -- 9,379
===============================================================================================================
Total Other
Financial Instruments $ -- $ 23,303 $ -- $ 23,303
===============================================================================================================
* Securities valued at $0.
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
------------------------------------------------------------------------------------------------------------------------------------
Change in Transfers
Balance Realized unrealized Accrued in and out Balance
as of gain appreciation discounts/ of Level 3 as of
4/30/18 (loss)(1) (depreciation)(2) Purchases Sales premiums categories* 4/30/19
------------------------------------------------------------------------------------------------------------------------------------
Common Stocks
Capital Goods $ 103 $ (103) $ -- $ -- $ -- $ -- $ -- $ --
Health Care
Technology 699 -- -- -- -- -- -- 699
Oil, Gas &
Consumable
Fuels -- -- 7 57,162 -- -- -- 57,169
Specialty Retail 82,913(a) -- 20,156 -- (15,526) -- -- 87,543
Preferred Stocks
Diversified
Chemicals 45,523(b) -- -- -- -- -- -- 45,523
Corporate Bonds
Diversified
Financials 6,816,404(c) -- 983,988 -- -- 24,608 --
7,825,000
Insurance-Linked
Securities
Collateralized
Reinsurance
Multiperil --
Australia 186,782(d) (9,867) (25,482) -- (151,433) -- -- --
Multiperil --
Massachusetts 399,880(d) -- 4,614 407,649 (394,558) -- -- 417,585
Multiperil --
U.S. Regional 1,245,850(d) (20,849) (35,387) 243,500 (1,185,614) -- -- 247,500
Multiperil --
Worldwide 4,109,313(d) (3,651) 54,629 2,215,682 (3,244,380) -- --
3,131,593
Windstorms --
Florida 698,550(d) -- (100,907) -- (100,468) -- -- 497,175
Windstorms --
North Carolina 25,125(d) -- (18,354) -- (6,771) -- -- --
Windstorms --
U.S. Regional 753,375(d) -- (13,912) 477,899 (937,637) -- -- 279,725
Industry Loss
Warranties
Multiperil -- U.S. 471,850(d) -- (3,907) 32,042 (461,134) -- -- 38,851
Reinsurance Sidecars
All Natural Peril --
Worldwide -- -- 43,319 1,467,273 -- -- --
1,510,592
Multiperil -- U.S. 2,087,500(d) -- (278,616) 1,000,000 (965,177) -- --
1,843,707
Multiperil -- U.S.
Regional 261,000(d) -- (53,017) -- (141,108) -- -- 66,875
Multiperil --
Worldwide 11,605,042(d) (209,287) (961,898) 6,963,397 (7,305,715) -- -- 10,091,539
Senior Secured
Floating Rate
Loan Interests
Aerospace &
Defense 1,007,250 26,518 (27,035) -- (1,007,201) 468 -- --
Health Care
Technology 243,918(e) 714 (7,622) -- (20,000) 13,908 -- 230,918
Rights/Warrants
Machinery -- -- -- --** -- -- -- --**
------------------------------------------------------------------------------------------------------------------------------------
Total $30,041,077 $(216,525) $(419,424) $12,864,604 $(15,936,722) $38,984 $ -- $26,371,994
====================================================================================================================================
(1) Realized gain (loss) on these securities is included in the realized gain
(loss) from investments on the Statement of Operations.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 45
Schedule of Investments | 4/30/19 (continued)
(2) Unrealized appreciation (depreciation) on these securities is included in
the change in unrealized appreciation (depreciation) from investments on
the Statement of Operations.
(a) Securities were classified as Computer & Electronics Retail on the April
30, 2018 financial statements.
(b) Securities were classified as Diversified Chemicals on the April 30, 2018
financial statements.
(c) Securities were classified as Other Diversified Financial Services on the
April 30, 2018 financial statements.
(d) Securities were classified as Corporate Bonds on the April 30, 2018
financial statements.
(e) Securities were classified as Health Care Technology on the April 30 2018
financial statements.
* Transfers are calculated on the beginning of period value. For the year
ended April 30, 2019, there were no transfers between Levels 1, 2 and 3.
** Securities valued at $0.
Net change in unrealized appreciation (depreciation) of Level 3 investments
still held and considered Level 3 at April 30, 2019: $(335,610)
---------
The following table presents additional information about valuation techniques
and inputs used for investments categorized as Level 3 at April 30, 2019. These
amounts exclude valuations provided by a broker.
---------------------------------------------------------------------------------------------
Fair Value Valuation Unobservable Value/
Asset Type 4/30/19 Technique Input Range
---------------------------------------------------------------------------------------------
Senior Secured
Floating Rate
Loan Interests $ 230,918 Market Comparables EBITDA Multiples(1) 4.6x
---------------------------------------------------------------------------------------------
Corporate Bonds $7,825,000 Market Comparables Yield Premiums(2) 0.06%
---------------------------------------------------------------------------------------------
Common Stocks $ 145,411 Market Comparables EBITDA Multiples(1) 4.5x-4.6x
---------------------------------------------------------------------------------------------
Preferred Stocks $ 45,523 Market Comparables EBITDA Multiples(1) 7x
---------------------------------------------------------------------------------------------
Right/Warrant $ --* Market Comparables EBITDA Multiples(1) 5.5x-6.5x
---------------------------------------------------------------------------------------------
* Includes securities that are valued $0.
(1) An increase in this unobservable input would result in a higher fair value
measurement, while a decrease would result in a lower fair value
measurement.
(2) An increase in this unobservable input would result in a lower fair value
measurement, while a decrease would result in a higher fair value
measurement.
The accompanying notes are an integral part of these financial statements.
46 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Statement of Assets and Liabilities | 4/30/19
ASSETS:
Investments in unaffiliated issuers, at value (cost $196,335,496) $196,116,546
Cash 817,060
Foreign currencies, at value (cost $26,717) 26,749
Net unrealized appreciation on forward foreign currency contracts 14,132
Swap contracts, at value (net premiums received $(23,700)) 9,379
Unrealized appreciation on unfunded loan commitments 32
Receivables --
Investment securities sold 1,558,286
Interest 2,087,139
Other assets 156
---------------------------------------------------------------------------------------------
Total assets $200,629,479
=============================================================================================
LIABILITIES:
Payables --
Credit agreement $ 61,000,000
Investment securities purchased 4,566,854
Trustees' fees 947
Interest expense 44,862
Written options outstanding (net premiums received $(80,667)) 208
Due to affiliates 21,996
Accrued expenses 141,365
---------------------------------------------------------------------------------------------
Total liabilities $ 65,776,232
=============================================================================================
NET ASSETS:
Paid-in capital $170,800,602
Distributable earnings (loss) (35,947,355)
---------------------------------------------------------------------------------------------
Net assets $134,853,247
=============================================================================================
NET ASSET VALUE PER SHARE:
No par value
Based on $134,853,247/8,332,790 shares $ 16.18
=============================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 47
Statement of Operations
For the Year Ended 4/30/19
INVESTMENT INCOME:
Interest from unaffiliated issuers $12,542,947
Dividends from unaffiliated issuers 1,558,420
-------------------------------------------------------------------------------------------------------
Total investment income $14,101,367
=======================================================================================================
EXPENSES:
Management fees $ 1,695,611
Administrative expense 71,561
Transfer agent fees 13,736
Shareowner communications expense 11,084
Custodian fees 33,782
Professional fees 60,890
Printing expense 22,666
Pricing fees 37,540
Trustees' fees 8,020
Insurance expense 2,567
Interest expense 2,017,593
Miscellaneous 52,633
-------------------------------------------------------------------------------------------------------
Total expenses $ 4,027,683
-------------------------------------------------------------------------------------------------------
Net investment income $10,073,684
=======================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments in unaffiliated issuers $(3,745,955)
Forward foreign currency contracts 228,472
Swap contracts 10,139
Other assets and liabilities denominated in
foreign currencies (171,907) $(3,679,251)
-------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers $(4,523,002)
Written options 80,459
Unfunded loan commitments 32
Forward foreign currency contracts 8,548
Swap contracts 13,037
Other assets and liabilities denominated in
foreign currencies 7,343 $(4,413,583)
-------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(8,092,834)
-------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,980,850
=======================================================================================================
The accompanying notes are an integral part of these financial statements.
48 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Statements of Changes in Net Assets
---------------------------------------------------------------------------------------------------------
Year Year
Ended Ended
4/30/19 4/30/18
---------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income (loss) $ 10,073,684 $ 10,278,098
Net realized gain (loss) on investments (3,679,251) (1,363,543)
Change in net unrealized appreciation (depreciation)
on investments (4,413,583) (3,352,830)
---------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations $ 1,980,850 $ 5,561,725
---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
$1.14 and $1.26 per share, respectively $ (9,499,381) $(10,499,315)*
---------------------------------------------------------------------------------------------------------
Total distributions to shareowners $ (9,499,381) $(10,499,315)
---------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (7,518,531) $ (4,937,590)
NET ASSETS**:
Beginning of year $142,371,778 $147,309,368
---------------------------------------------------------------------------------------------------------
End of year $134,853,247 $142,371,778
=========================================================================================================
* For the year ended April 30, 2018, distributions to shareowners were
presented as net investment income.
** For the year ended April 30, 2018, distributions in excess of net
investment income were presented as follows: $(1,327,299).
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 49
Statement of Cash Flows
For the Year Ended 4/30/19
Cash Flows From Operating Activities:
Net increase in net assets resulting from operations $ 1,980,850
---------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets resulting from operations
to net cash, restricted cash and foreign currencies from operating activities:
Purchases of investment securities $(123,984,308)
Proceeds from disposition and maturity of investment securities 120,654,129
Net sales of temporary cash investments 7,126,596
Net (accretion) and amortization of discount/premium on investment securities (452,902)
Change in unrealized depreciation on investments in unaffiliated issuers 4,523,002
Change in unrealized appreciation on unfunded loan commitments (32)
Change in unrealized appreciation on swap contracts (13,037)
Change in unrealized appreciation on forward foreign currency contracts (8,548)
Change in unrealized appreciation on other assets and liabilities
denominated in foreign currency (5,442)
Change in unrealized appreciation on written options (80,459)
Net realized loss on investments in unaffiliated issuers 3,745,955
Decrease in interest receivable 15,720
Decrease in other assets 666
Decrease in due to affiliates (1,416)
Increase in trustees' fees payable 249
Decrease in accrued expenses payable (17,145)
Proceeds from sale of written options 80,667
---------------------------------------------------------------------------------------------------------------
Net cash, restricted cash and foreign currencies from operating activities $ 13,564,545
---------------------------------------------------------------------------------------------------------------
Cash Flows Used in Financing Activities:
Payments on borrowings $ (3,000,000)
Increase in interest expense payable (102,816)
Distributions to shareowners (10,290,996)
---------------------------------------------------------------------------------------------------------------
Net cash, restricted cash and foreign currencies used in financing activities $ (13,393,812)
---------------------------------------------------------------------------------------------------------------
Effect of Foreign Exchange Fluctuations on Cash:
Effect of foreign exchange fluctuations on cash $ 5,442
---------------------------------------------------------------------------------------------------------------
Cash, restricted cash and foreign currencies:
Beginning of the year* $ 667,634
---------------------------------------------------------------------------------------------------------------
End of the year* $ 843,809
===============================================================================================================
Cash Flow Information:
Cash paid for interest $ 2,120,409
---------------------------------------------------------------------------------------------------------------
* The following table provides a reconciliation of cash, restricted cash and
foreign currencies reported within statement of financial position that
sum to the total of the same such amounts shown in the Statement of Cash
Flows:
---------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
4/30/19 4/30/18
---------------------------------------------------------------------------------------------------------------
Cash $817,060 $ 383,079
Foreign currencies, at value 26,749 284,555
---------------------------------------------------------------------------------------------------------------
Total cash, restricted cash and foreign currencies
shown in the Statement of Cash Flows $843,809 $ 667,634
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
50 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
4/30/19 4/30/18 4/30/17* 4/30/16* 4/30/15*
------------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 17.09 $ 17.68 $ 16.63 $ 18.39 $ 20.03
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.21 $ 1.23 $ 1.29 $ 1.55 $ 1.82
Net realized and unrealized gain (loss) on investments (0.98) (0.56) 1.20 (1.81) (1.63)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 0.23 $ 0.67 $ 2.49 $ (0.26) $ 0.19
------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareowners from:
Net investment income and previously undistributed net
investment income $ (1.14) $ (1.26)** $ (1.44)** $ (1.50) $ (1.83)**
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.91) $ (0.59) $ 1.05 $ (1.76) $ (1.64)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.18 $ 17.09 $ 17.68 $ 16.63 $ 18.39
------------------------------------------------------------------------------------------------------------------------------------
Market value, end of period $ 14.39 $ 15.00 $ 16.70 $ 15.60 $ 17.42
====================================================================================================================================
Total return at net asset value (b) 2.58% 4.58% 16.20% (1.01)% 1.21%
Total return at market value (b) 3.95% (2.82)% 17.01% (1.26)% (7.90)%
Ratios to average net assets of shareowners:
Total expenses plus interest expense (c) 2.95% 2.54% 2.12% 1.99% 1.85%
Net investment income available to shareowners 7.37% 7.07% 7.52% 9.11% 9.52%
Portfolio turnover rate 37% 37% 58% 36% 48%
Net assets, end of period (in thousands) $134,853 $142,372 $147,309 $138,570 $153,276
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 51
Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
4/30/19 4/30/18 4/30/17* 4/30/16* 4/30/15*
------------------------------------------------------------------------------------------------------------------------------------
Total amount of debt outstanding (in thousands) $61,000 $64,000 $57,000 $57,000 $64,000
Asset coverage per $1,000 of indebtedness $ 3,211 $ 3,225 $ 3,584 $ 3,431 $ 3,395
====================================================================================================================================
* The Trust was audited by an independent registered public accounting firm
other than Ernst & Young LLP.
** The amount of distributions made to shareowners during the year were in
excess of the net investment income earned by the Trust during the year.
The Trust has accumulated undistributed net investment income which is
part of the Trust's net asset value ("NAV'). A portion of the accumulated
net investment income was distributed to shareowners during the year.
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Total investment return is calculated assuming a purchase of common shares
at the current net asset value or market value on the first day and a sale
at the current net asset value or market value on the last day of the
periods reported. Dividends and distributions, if any, are assumed for
purposes of this calculation to be reinvested at prices obtained under the
Trust's dividend reinvestment plan. Total investment return does not
reflect brokerage commissions. Past performance is not a guarantee of
future results.
(c) Includes interest expense of 1.48%, 1.06%, 0.62%, 0.50% and 0.43%,
respectively.
The accompanying notes are an integral part of these financial statements.
52 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Notes to Financial Statements | 4/30/19
1. Organization and Significant Accounting Policies
Pioneer Diversified High Income Trust (the "Trust") was organized as a Delaware
statutory trust on January 30, 2007. Prior to commencing operations on May 30,
2007, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended. The
investment objective of the Trust is to seek a high level of current income and
the Trust may, as a secondary objective, also seek capital appreciation to the
extent that it is consistent with its investment objective.
Amundi Pioneer Asset Management, Inc., an indirect, wholly owned subsidiary of
Amundi and Amundi's wholly owned subsidiary, Amundi USA, Inc., serves as the
Trust's investment adviser (the "Adviser"). Amundi Pioneer Distributor, Inc.,
an affiliate of Amundi Pioneer Asset Management, Inc., serves as the Trust's
distributor (the "Distributor").
In August 2018, the Securities and Exchange Commission ("SEC") released a
Disclosure Update and Simplification Final Rule. The Final Rule amends
Regulation S-X disclosures requirements to conform them to U.S. Generally
Accepted Accounting Principles ("U.S. GAAP") for investment companies. The
Trust's financial statements were prepared in compliance with the new
amendments to Regulation S-X.
The Trust is an investment company and follows investment company accounting
and reporting guidance under U.S. GAAP. U.S. GAAP requires the management of
the Trust to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of income,
expenses and gain or loss on investments during the reporting period. Actual
results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements:
A. Security Valuation
The net asset value of the Trust is computed once daily, on each day the
New York Stock Exchange ("NYSE") is open, as of the close of regular
trading on the NYSE.
Fixed-income securities are valued by using prices supplied by independent
pricing services, which consider such factors as market prices, market
events, quotations from one or more brokers, Treasury spreads, yields,
maturities and
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 53
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 in accordance with guidelines established by the
Board of Trustees at the mean between the last available bid and asked
prices from one or more brokers or dealers as obtained from Loan Pricing
Corporation, an independent third party pricing service. If price
information is not available from Loan Pricing Corporation, or if the
price information is deemed to be unreliable, price information will be
obtained from an alternative loan interest pricing service. If no reliable
price quotes are available from either the primary or alternative pricing
service, broker quotes will be solicited.
Event-linked bonds or catastrophe bonds are valued at the bid price
obtained from an independent third party pricing service. Other
insurance-linked securities (including sidecars, collateralized
reinsurance and industry loss warranties) may be valued at the bid price
obtained from an independent pricing service, or through a third party
using a pricing matrix, insurance industry valuation models, or other fair
value methods or techniques to provide an estimated value of the
instrument.
Equity securities that have traded on an exchange are valued by using the
last sale price on the principal exchange where they are traded. Equity
securities that have not traded on the date of valuation, or securities
for which sale prices are not available, generally are valued using the
mean between the last bid and asked prices or, if both last bid and asked
prices are not available, at the last quoted bid price. Last sale and bid
and asked prices are provided by independent third party pricing services.
In the case of equity securities not traded on an exchange, prices are
typically determined by independent third party pricing services using a
variety of techniques and methods.
The value of foreign securities is translated 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
Trust's shares are determined as of such times. The Trust may use a fair
value model developed by an independent pricing service to value non-U.S.
equity securities.
54 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Options contracts are generally valued at the mean between the last bid
and ask prices on the principal exchange where they are traded.
Over-the-counter ("OTC") options and options on swaps ("swaptions") are
valued using prices supplied by independent pricing services, which
consider such factors as market prices, market events, quotations from one
or more brokers, Treasury spreads, yields, maturities and ratings, or may
use a pricing matrix or other fair value methods or techniques to provide
an estimated value of the security or instrument.
Forward foreign currency exchange contracts are valued daily using the
foreign exchange rate or, for longer term forward contract positions, the
spot currency rate and the forward points on a daily basis, in each case
provided by a third party pricing service. Contracts whose forward
settlement date falls between two quoted days are valued by interpolation.
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.
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 pursuant to procedures adopted by the Trust's
Board of Trustees. The Adviser's fair valuation team uses fair value
methods approved by the Valuation Committee of the Board of Trustees. The
Adviser's fair valuation team is responsible for monitoring developments
that may impact fair valued securities and for discussing and assessing
fair values on an ongoing basis, and at least quarterly, with the
Valuation Committee of the Board of Trustees.
Inputs used when applying fair value methods to value a security may
include credit ratings, the financial condition of the company, current
market conditions and comparable securities. The Trust may use fair value
methods if it is determined that a significant event has occurred after
the close of the exchange or market on which the security trades and prior
to the determination of the Trust's net asset value. Examples of a
significant event might include political or economic news, corporate
restructurings, natural disasters, terrorist activity or trading halts.
Thus, the valuation of the Trust's securities may differ significantly
from exchange prices, and such differences could be material.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 55
At April 30, 2019, eleven securities were valued using fair value methods
(in addition to securities valued using prices supplied by independent
pricing services, broker-dealers or using a third party insurance pricing
model) representing 6.12% of net assets. The value of these fair valued
securities was $8,252,557.
B. Investment Income and Transactions
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Trust becomes aware of the ex-dividend
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.
Principal amounts of mortgage-backed securities are adjusted for monthly
paydowns. Premiums and discounts related to certain mortgage-backed
securities are amortized or accreted in proportion to the monthly
paydowns. All discounts/premiums on purchase prices of debt securities are
accreted/amortized for financial reporting purposes over the life of the
respective securities, and such accretion/amortization is included in
interest income.
Security transactions are recorded as of trade date. Gains and losses on
sales of investments are calculated on the identified cost method for both
financial reporting and federal income tax purposes.
C. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on
foreign currency contracts, disposition of foreign currencies and the
difference between the amount of income accrued and the U.S. dollars
actually received. Further, the effects of changes in foreign currency
exchange rates on investments are not segregated 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.
56 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income and net realized capital gains,
if any, to its shareowners. Therefore, no provision for federal income
taxes is required. As of April 30, 2019, the Trust did not accrue any
interest or penalties with respect to uncertain tax positions, which, if
applicable, would be recorded as an income tax expense 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.
At April 30, 2019, the Trust reclassified $1,249,417 to decrease
distributable earnings (loss) and $1,249,417 to decrease paid-in capital
to reflect permanent book/tax differences. These adjustments have no
impact on net assets or the results of operations.
At April 30, 2019, the Trust was permitted to carry forward indefinitely
$3,095,755 of short-term losses and $32,091,344 of long-term losses under
the Regulated Investment Company Modernization Act of 2010 without
limitation. Capital loss not utilized and expired in 2019 amounts to
$1,249,417.
The tax character of distributions paid during the year ended April 30,
2019 and April 30, 2018, were as follows:
--------------------------------------------------------------------------
2019 2018
--------------------------------------------------------------------------
Distributions paid from:
Ordinary income $9,499,381 $10,499,315
--------------------------------------------------------------------------
Total $9,499,381 $10,499,315
==========================================================================
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 57
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2019:
--------------------------------------------------------------------------
2019
--------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 337,844
Capital loss carryforward (35,187,099)
Other book/tax temporary differences (1,005,178)
Unrealized depreciation (92,922)
--------------------------------------------------------------------------
Total $(35,947,355)
==========================================================================
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the realization for tax purposes of unrealized
gains on investments in passive foreign investment companies, the book/tax
differences in the accrual of income on securities in default, the
difference between book and tax amortization methods and discounts on
fixed income securities.
E. Risks
At times, the Trust's investments may represent industries or industry
sectors that are interrelated or have common risks, making the Trust more
susceptible to any economic, political, or regulatory developments or
other risks affecting those industries and sectors. The Trust's
investments in foreign markets and countries with limited developing
markets may subject the Trust to a greater degree of risk than investments
in a developed market. These risks include disruptive political or
economic conditions and the imposition of adverse governmental laws or
currency exchange restrictions.
The value of securities held by the Trust may go up or down, sometimes
rapidly or unpredictably, due to general market conditions, such as real
or perceived adverse economic, political or regulatory conditions,
inflation, changes in interest rates, lack of liquidity in the bond
markets or adverse investor sentiment. In the past several years,
financial markets have experienced increased volatility, depressed
valuations, decreased liquidity and heightened uncertainty. These
conditions may continue, recur, worsen or spread. A general rise in
interest rates could adversely affect the price and liquidity of fixed
income securities.
The Trust invests in below investment grade (high yield) debt securities,
floating rate loans and insurance-linked securities. The Trust may invest
in securities and other obligations of any credit quality, including those
that are rated below investment grade, or are unrated but are determined
by the Adviser to be of equivalent credit quality. Below investment grade
securities
58 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
are commonly referred to as "junk bonds" and are considered speculative
with respect to the issuer's capacity to pay interest and repay principal.
Below investment grade securities, including floating rate loans, involve
greater risk of loss, are subject to greater price volatility, and may be
less liquid and more difficult to value, especially during periods of
economic uncertainty or change, than higher rated debt securities.
Certain securities in which the Trust invests, including floating rate
loans, once sold, may not settle for an extended period (for example,
several weeks or even longer). The Trust will not receive its sale
proceeds until that time, which may constrain the Trust's ability to meet
its obligations. The Trust may invest in securities of issuers that are in
default or that are in bankruptcy. The value of collateral, if any,
securing a floating rate loan can decline or may be insufficient to meet
the issuer's obligations or may be difficult to liquidate. No active
trading market may exist for many floating rate loans, and many loans are
subject to restrictions on resale. Any secondary market may be subject to
irregular trading activity and extended settlement periods. The Trust's
investments in certain foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than
in a developed market. These risks include disruptive political or
economic conditions and the possible imposition of adverse governmental
laws or currency exchange restrictions.
The Trust may invest a significant amount of its total assets in illiquid
securities. Illiquid securities are securities that the Trust reasonably
expects cannot be sold or disposed of in the current market in seven
calendar days or less without the sale or disposition significantly
changing the market value of the securities.
With the increased use of technologies such as the Internet to conduct
business, the Trust is susceptible to operational, information security
and related risks. While the Trust'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 Trust cannot control the
cybersecurity plans and systems put in place by service providers to the
Trust such as Brown Brothers Harriman & Co., the Trust's custodian and
accounting agent, American Stock Transfer & Trust Company ("AST"), the
Trust's transfer agent. In addition, many beneficial owners of Trust
shares hold them through accounts at broker-dealers, retirement platforms
and other financial market participants over which neither the Trust nor
Amundi Pioneer exercises control. Each of
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 59
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 Amundi Pioneer or the Trust's service providers or intermediaries have
the ability to cause disruptions and impact business operations
potentially resulting in financial losses, interference with the Trust's
ability to calculate its net asset value, impediments to trading, the
inability of Trust shareowners to effect share purchases 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
cost. 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.
F. Insurance-Linked Securities ("ILS")
The Trust invests in ILS. The Trust 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 Trust 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 Trust to other risks, including but not limited to issuer (credit)
default, adverse regulatory or jurisdictional interpretations and adverse
tax consequences.
The Trust's investments in ILS may include 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 Trust has limited transparency into the individual
underlying contracts, and therefore must rely upon the risk assessment and
sound
60 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
underwriting practices of the issuer. Accordingly, it may be more
difficult for the Adviser to fully evaluate the underlying risk profile of
the Trust's structured reinsurance investments, and therefore the Trust's
assets are placed at greater risk of loss than if the Adviser had more
complete information. Structured reinsurance instruments generally will be
considered illiquid securities by the Trust. These securities may be
difficult to purchase, sell or unwind. Illiquid securities also may be
difficult to value. If the Trust is forced to sell an illiquid asset, the
Trust may be forced to sell at a loss.
G. Repurchase Agreements
Repurchase agreements are arrangements under which the Trust purchases
securities from a broker-dealer or a bank, called the counterparty, upon
the agreement of the counterparty to repurchase the securities from the
Trust at a later date, and at a specific price, which is typically higher
than the purchase price paid by the Trust. The securities purchased serve
as the Trust's collateral for the obligation of the counterparty to
repurchase the securities. The value of the collateral, including accrued
interest, is required to be equal to or in excess of the repurchase price.
The collateral for all repurchase agreements is held in safekeeping in the
customer-only account of the Trust's custodian or a sub-custodian of the
Trust. The Adviser is responsible for determining that the value of the
collateral remains at least equal to the repurchase price. In the event of
a default by the counterparty, the Trust is entitled to sell the
securities, but the Trust may not be able to sell them for the price at
which they were purchased, thus causing a loss to the Trust. Additionally,
if the counterparty becomes insolvent, there is some risk that the Trust
will not have a right to the securities, or the immediate right to sell
the securities.
For the year ended April 30, 2019, the Trust had no open repurchase
agreements.
H. Purchased Options
The Trust may purchase put and call options to seek to increase total
return. Purchased call and put options entitle the Trust to buy and sell a
specified number of shares or units of a particular security, currency or
index at a specified price at a specific date or within a specific period
of time. Upon the purchase of a call or put option, the premium paid by
the Trust is included on the Statement of Assets and Liabilities as an
investment. All premiums are marked-to-market daily, and any unrealized
appreciation or depreciation is recorded on the Trust's Statement of
Operations. As the purchaser of an index option, the Trust has the right
to receive a cash payment equal to any depreciation in the value of the
index below the strike price of the option (in the case of a put) or equal
to any appreciation in the value of the index over the strike price of the
option (in the case of a call) as of the valuation date of the option.
Premiums paid for purchased call and put options which have
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 61
expired are treated as realized losses on investments on the Statement of
Operations. Upon the exercise or closing of a purchased put option, the
premium is offset against the proceeds on the sale of the underlying
security or financial instrument in order to determine the realized gain
or loss on investments. Upon the exercise or closing of a purchased call
option, the premium is added to the cost of the security or financial
instrument. The risk associated with purchasing options is limited to the
premium originally paid.
The average market value of purchased options contracts open during the
year ended April 30, 2019 was $86,508. Open purchased options at April 30,
2019, are listed in the Trust's Schedule of Investments.
I. Option Writing
The Trust may write put and covered call options to seek to increase total
return. When an option is written, the Trust receives a premium and
becomes obligated to purchase or sell the underlying security at a fixed
price, upon the exercise of the option. When the Trust writes an option,
an amount equal to the premium received by the Trust is recorded as
"Written options outstanding" on the Statement of Assets and Liabilities
and is subsequently adjusted to the current value of the option written.
Premiums received from writing options that expire unexercised are treated
by the Trust on the expiration date as realized gains from investments on
the Statement of Operations. The difference between the premium and the
amount paid on effecting a closing purchase transaction, including
brokerage commissions, is also treated as a realized gain on the Statement
of Operations, or, if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss on the Statement of
Operations. If a call option is exercised, the premium is added to the
proceeds from the sale of the underlying security in determining whether
the Trust has realized a gain or loss. The Trust as writer of an option
bears the market risk of an unfavorable change in the price of the
security underlying the written option.
The average market value of written options for the year ended April 30,
2019 was $(17,423). Open written options contracts at April 30, 2019, are
listed in the Trust's Schedule of Investments.
J. Forward Foreign Currency Contracts
The Trust may enter into forward foreign currency contracts ("contracts")
for the purchase or sale of a specific foreign currency at a fixed price
on a future date. All contracts are marked to market daily at the
applicable exchange rates, and any resulting unrealized appreciation or
depreciation is recorded in the Trust's financial statements. The Trust
records realized gains and losses at the time a contract is offset by
entry into a closing transaction or extinguished by delivery of the
currency. Risks may arise upon entering into
62 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
these contracts from the potential inability of counterparties to meet the
terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar (see Note 5).
At April 30, 2019, the Trust had entered into various forward foreign
currency contracts that obligated the Trust to deliver or take delivery of
currencies at specified future maturity dates. Alternatively, prior to the
settlement date of a forward foreign currency contract, the Trust may
close out such contract by entering into an offsetting contract.
The average market value of forward foreign currency contracts open during
the year ended April 30, 2019 was $(2,588,019). Open forward foreign
currency contracts outstanding at April 30, 2019, are listed in the
Schedule of Investments.
K. 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 Trust may buy or sell credit default swap contracts to
seek to increase the Trust'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 Trust 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
Trust. In return, the Trust 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 Trust would keep the stream of payments and would have no
payment obligation. The Trust may also buy credit default swap contracts
in order to hedge against the risk of default of debt securities, in which
case the Trust would function as the counterparty referenced above.
As a buyer of protection, the Trust 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 Trust, 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 Trust
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
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 63
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 Trust 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
Trust is a protection buyer and no credit event occurs, it will lose its
investment. If the Trust is a protection seller and a credit event occurs,
the value of the referenced debt instrument received by the Trust,
together with the periodic payments received, may be less than the amount
the Trust pays to the protection buyer, resulting in a loss to the Trust.
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 Trust for the same reference
obligation with the same 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 Trust 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 Trust 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 swaps" 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 April 30, 2019, if any, is
recorded as "Swaps collateral" on the Statement of Assets and Liabilities.
The average market value of credit default swap contracts open during the
year ended April 30, 2019 was $5,260. Open credit default swap contracts
at April 30, 2019, are listed in the Schedule of Investments.
L. Automatic Dividend Reinvestment Plan
All shareowners whose shares are registered in their own names
automatically participate in the Automatic Dividend Reinvestment Plan (the
"Plan"), under which participants receive all dividends and capital gain
distributions (collectively, dividends) in full and fractional shares of
the Trust in lieu of cash. Shareowners may elect not to participate in the
Plan. Shareowners not participating in the Plan receive all dividends and
capital gain distributions in cash. Participation in the Plan is
completely voluntary
64 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
and may be terminated or resumed at any time without penalty by notifying
American Stock Transfer & Trust Company, the agent for shareowners in
administering the Plan (the "Plan Agent"), in writing prior to any
dividend record date; otherwise such termination or resumption will be
effective with respect to any subsequently declared dividend or other
distribution.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate
in the Plan on the shareowner's behalf. If the firm or nominee does not
offer the Plan, dividends will be paid in cash to the shareowner of
record. A firm or nominee may reinvest a shareowner's cash dividends in
shares of the Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on shares payable in cash,
participants in the Plan will receive the equivalent in shares acquired by
the Plan Agent either (i) through receipt of additional unissued but
authorized shares from the Trust or (ii) by purchase of outstanding shares
on the New York Stock Exchange or elsewhere. If, on the payment date for
any dividend, the net asset value per share is equal to or less than the
market price per share plus estimated brokerage trading fees (market
premium), the Plan Agent will invest the dividend amount in newly issued
shares. The number of newly issued shares to be credited to each account
will be determined by dividing the dollar amount of the dividend by the
net asset value per share on the date the shares are issued, provided that
the maximum discount from the then current market price per share on the
date of issuance does not exceed 5%. If, on the payment date for any
dividend, the net asset value per share is greater than the market value
(market discount), the Plan Agent will invest the dividend amount in
shares acquired in open-market purchases. There are no brokerage charges
with respect to newly issued shares. However, each participant will pay a
pro rata share of brokerage trading fees incurred with respect to the Plan
Agent's open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may be able to transfer the shares to another broker and
continue to participate in the Plan.
2. Management Agreement
The Adviser manages the Trust's portfolio. Management fees payable under the
Trust's Advisory Agreement with the Adviser are calculated daily at the annual
rate of 0.85% of the Trust's average daily managed assets. "Managed assets"
means (a) the total assets of the Trust, including any form of investment
leverage, minus (b) all accrued liabilities incurred in the normal course of
operations, which shall not include any liabilities or obligations attributable
to investment leverage obtained through (i) indebtedness of any type
(including, without limitation, borrowing through a credit facility or the
issuance of debt
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 65
securities), (ii) the issuance of preferred stock or other similar preference
securities, and/or (iii) any other means. For the year ended April 30, 2019,
net management fee was 0.85% of the Trust's average daily managed assets, which
was equivalent to 1.24% of the Trust's average daily net assets.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Trust as administrative reimbursements. Included in
"Due to affiliates" reflected on the Statement of Assets and Liabilities is
$21,996 in management fees, administrative costs and certain other
reimbursements payable to the Adviser at April 30, 2019.
3. Transfer Agent
AST serves as the transfer agent with respect to the Trust's shares. The Trust
pays AST an annual fee, as is agreed to from time to time by the Trust and AST,
for providing such services.
In addition, the Trust reimbursed the transfer agent for out-of-pocket expenses
incurred by the transfer agent related to shareowner communications activities
such as proxy and statement mailings, and outgoing phone calls.
4. Master Netting Agreement
The Trust has entered into an International Swaps and Derivatives Association,
Inc. Master Agreement ("ISDA Master Agreement") or similar agreement with
substantially all its derivative counterparties. An ISDA Master Agreement is a
bilateral agreement between the Trust and a counterparty that governs the
trading of certain Over the Counter ("OTC") derivatives and typically contains,
among other things, close-out and set-off provisions which apply upon the
occurrence of an event of default and/or a termination event as defined under
the relevant ISDA Master Agreement. The ISDA Master Agreement may also give a
party the right to terminate all transactions traded under such agreement if,
among other things, there is deterioration in the credit quality of the other
party.
Upon an event of default or a termination of the ISDA Master Agreement, the
non-defaulting party has the right to close out all transactions under such
agreement and to net amounts owed under each transaction to determine one net
amount payable by one party to the other. The right to close out and net
payments across all transactions under the ISDA Master Agreement could result
in a reduction of the Trust's credit risk to its counterparty equal to any
amounts payable by the Trust under the applicable transactions, if any.
However, the Trust's right to setoff may be restricted or prohibited by the
bankruptcy or insolvency laws of the particular jurisdiction to which each
specific ISDA of each counterparty is subject.
66 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
The collateral requirements for derivatives transactions under an ISDA Master
Agreement are governed by a credit support annex to the ISDA Master Agreement.
Collateral requirements are generally determined at the close of business each
day and are typically based on changes in market values for each transaction
under an ISDA Master Agreement and netted into one amount for such agreement.
Generally, the amount of collateral due from or to a counterparty is subject to
threshold (a "minimum transfer amount") before a transfer is required, which
may vary by counterparty. Collateral pledged for the benefit of the Trust
and/or counterparty is held in segregated accounts by the Trust's custodian and
cannot be sold, re-pledged, assigned or otherwise used while pledged. Cash that
has been segregated to cover the Trust's collateral obligations, if any, will
be reported separately on the Statement of Assets and Liabilities as "Swaps
collateral". Securities pledged by the Trust as collateral, if any, are
identified as such in the Schedule of Investments.
Financial instruments subject to an enforceable master netting agreement such
as an ISDA Master Agreement have been offset on the Statement of Assets and
Liabilities. The following charts show gross assets and liabilities of the
Trust as of April 30, 2019.
-------------------------------------------------------------------------------------------------------------------
Derivative
Assets
Subject to Derivatives Non-Cash Cash Net Amount
Master Netting Available Collateral Collateral of Derivative
Counterparty Agreement for Offset Received (a) Received (a) Assets (b)
-------------------------------------------------------------------------------------------------------------------
Bank of America NA $134,148 $ (928) $ -- $ -- $133,220
Goldman Sachs 33,079 (982) -- -- 32,097
International
Bank of New York 2,234 -- -- -- 2,234
Mellon Corp.
State Street Bank 17,795 -- -- -- 17,795
& Trust Co.
-------------------------------------------------------------------------------------------------------------------
Total $187,256 $(1,910) $ -- $ -- $185,346
===================================================================================================================
-------------------------------------------------------------------------------------------------------------------
Derivative
Liabilities
Subject to Derivatives Non-Cash Cash Net Amount
Master Netting Available Collateral Collateral of Derivative
Counterparty Agreement for Offset Pledged (a) Pledged (a) Liabilities (c)
-------------------------------------------------------------------------------------------------------------------
Bank of America NA $ 928 $ (928) $ -- $ -- $ --
Citibank NA 4,195 -- -- -- 4,195
Goldman Sachs 982 (982) -- -- --
International
-------------------------------------------------------------------------------------------------------------------
Total $6,105 $(1,910) $ -- $ -- $4,195
===================================================================================================================
(a) The amount presented here may be less than the total amount of collateral
received/pledged as the net amount of derivative assets and liabilities
cannot be less than $0.
(b) Represents the net amount due from the counterparty in the event of
default.
(c) Represents the net amount payable to the counterparty in the event of
default.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 67
5. Additional Disclosures about Derivative Instruments and Hedging Activities
The Trust's use of derivatives may enhance or mitigate the Trust's exposure to
the following risks:
Interest rate risk relates to the fluctuations in the value of interest-bearing
securities due to changes in the prevailing levels of market interest rates.
Credit risk relates to the ability of the issuer of a financial instrument to
make further principal or interest payments on an obligation or commitment that
it has to the Trust.
Foreign exchange rate risk relates to fluctuations in the value of an asset or
liability due to changes in currency exchange rates.
Equity risk relates to the fluctuations in the value of financial instruments
as a result of changes in market prices (other than those arising from interest
rate risk or foreign exchange rate risk), whether caused by factors specific to
an individual investment, its issuer, or all factors affecting all instruments
traded in a market or market segment.
Commodity risk relates to the risk that the value of a commodity or commodity
index will fluctuate based on increases or decreases in the commodities market
and factors specific to a particular industry or commodity.
The fair value of open derivative instruments (not considered to be hedging
instruments for accounting disclosure purposes) by risk exposure at April 30,
2019 was as follows:
---------------------------------------------------------------------------------------
Statement of Assets and Liabilities
Foreign
Interest Credit Exchange Equity Commodity
Rate Risk Risk Rate Risk Risk Risk
---------------------------------------------------------------------------------------
Assets:
Currency put options
purchased* $ -- $ -- $134,148 $ -- $ --
Net unrealized
appreciation on
forward foreign
currency contracts -- -- 14,132 -- --
Swap contracts,
at value -- 9,379 -- -- --
---------------------------------------------------------------------------------------
Total Value $ -- $9,379 $148,280 $ -- $ --
=======================================================================================
Liabilities:
Written options
outstanding $ -- $ -- $ 208 $ -- $ --
---------------------------------------------------------------------------------------
Total Value $ -- $ -- $ 208 $ -- $ --
=======================================================================================
* Reflects the market value of purchased option contracts (see Note 1H).
These amounts are included in investments in unaffiliated issuers, at
value, on the Statement of Assets and Liabilities.
68 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
The effect of derivative instruments (not considered to be hedging instruments
for accounting disclosure purposes) on the Statement of Operations by risk
exposure at April 30, 2019 was as follows:
---------------------------------------------------------------------------------------
Statement of Operations
Foreign
Interest Credit Exchange Equity Commodity
Rate Risk Risk Rate Risk Risk Risk
---------------------------------------------------------------------------------------
Net realized
gain (loss):
Forward foreign
currency contracts $ -- $ -- $228,472 $ -- $ --
Swap contracts -- 10,139 -- -- --
---------------------------------------------------------------------------------------
Total Value $ -- $10,139 $228,472 $ -- $ --
=======================================================================================
Change in net
unrealized
appreciation
(depreciation) on:
Currency put options
purchased** $ -- $ -- $ 53,481 $ -- $ --
Written options -- -- 80,459 -- --
Forward foreign
currency contracts -- -- 8,548 -- --
Swap contracts -- 13,037 -- -- --
---------------------------------------------------------------------------------------
Total Value $ -- $13,037 $142,488 $ -- $ --
=======================================================================================
** Reflects the change in net unrealized appreciation (depreciation) on
purchased option contracts (see Note 1H). These amounts are included in
change in net unrealized appreciation (depreciation) on investments in
unaffiliated issuers, on the Statements of Operations.
6. Unfunded Loan Commitments
The Trust may enter into unfunded loan commitments. Unfunded loan commitments
may be partially or wholly unfunded. During the contractual period, the Trust
is obliged to provide funding to the borrower upon demand. A fee is earned by
the Trust on the unfunded commitment and is recorded as interest income on the
Statement of Operations.
As of April 30, 2019, the Trust has the following unfunded loan commitments
outstanding:
-----------------------------------------------------------------------------------------
Unrealized
Loan Principal Cost Value Appreciation
-----------------------------------------------------------------------------------------
NMN Holdings III Corp. $70,000 $69,837 $69,869 $32
-----------------------------------------------------------------------------------------
Total Value $70,000 $69,837 $69,869 $32
=========================================================================================
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 69
7. Trust Shares
Transactions in shares of beneficial interest for the year ended April 30, 2019
and the year ended April 30, 2019 were as follows:
--------------------------------------------------------------------------------
4/30/19 4/30/18
--------------------------------------------------------------------------------
Shares outstanding at beginning of year 8,332,790 8,332,790
--------------------------------------------------------------------------------
Shares outstanding at end of year 8,332,790 8,332,790
================================================================================
8. Credit Agreement
Effective January 27, 2017, the Trust extended the maturity of its existing
Revolving Credit Facility (the "Credit Agreement") with the Bank of Nova Scotia
to January 27, 2020. There is a $70,000,000 borrowing limit.
At April 30, 2019, the Trust had a borrowing outstanding under the credit
agreement totaling $61,000,000. The interest rate charged at April 30, 2019 was
2.49%. During the year ended April 30, 2019, the average daily balance was
$62,805,405 at an average interest rate of 3.17%. Interest expense of
$2,017,593 in connection with the credit agreement is included on the Statement
of Operations.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the credit agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities not including any bank loans and
senior securities, from the Trust's total assets and dividing such amount by
the principal amount of the borrowing outstanding.
9. Subsequent Events
A monthly dividend was declared on May 3, 2019 from undistributed and
accumulated net investment income of $0.0950 per share payable May 31, 2019, to
shareowners of record on May 16, 2019.
70 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and the Shareholders of
Pioneer Diversified High Income Trust:
--------------------------------------------------------------------------------
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Pioneer
Diversified High Income Trust (the "Trust"), including the schedule of
investments, as of April 30, 2019, and the related statements of operations,
changes in net assets and the financial highlights for the year then ended and
the related notes, and the statement of changes in net assets and financial
highlights for the year ended April 30, 2018 (collectively referred to as the
"financial statements"). The financial highlights for the periods ended April
30, 2015, April 30, 2016 and April 30, 2017 were audited by another independent
registered public accounting firm whose report, dated June 19, 2017, expressed
an unqualified opinion on those financial highlights. In our opinion, the
financial statements present fairly, in all material respects, the financial
position of Pioneer Diversified High Income Trust at April 30, 2019, the
results of its operations, the changes in its net assets, and the financial
highlights for the year ended, and the statement of changes in net assets and
the financial highlights for the year ended April 30, 2018, in conformity with
U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Trust's management.
Our responsibility is to express an opinion on the Fund's financial statements
based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to the Trust in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Trust is not required to have,
nor were we engaged to perform, an audit of the Trust's internal control over
financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting, but not for the
purpose of expressing an opinion on the effectiveness of the Trust's internal
control over financial reporting. Accordingly, we express no such opinion.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 71
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of April 30, 2019, by correspondence with the custodian and brokers.
Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
/s/Ernst & Young LLP
We have served as the Trust's auditor since 2017.
Boston, Massachusetts
June 27, 2019
72 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's
investment objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which has not been
approved by the shareowners. During the period, there have been no changes in
the principal risk factors associated with investment in the Trust. There were
no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its shares
in the open market.
The percentages of the Trust's ordinary income distributions that are exempt
from nonresident alien (NRA) tax withholding resulting from qualified interest
income was 59.27%.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 73
Trustees, Officers and Service Providers
Investment Adviser
Amundi Pioneer Asset Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Amundi Pioneer Distributor, Inc.
Legal Counsel
Morgan, Lewis & Bockius LLP
Transfer Agent
American Stock Transfer & Trust Company
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at www.amundipioneer.com/us. This information is also available on
the Securities and Exchange Commission's web site at www.sec.gov.
Trustees and Officers
The Trust's Trustees and officers are listed below, together with their
principal occupations and other directorships they have held during at least
the past five years. Trustees who are interested persons of the Trust within
the meaning of the 1940 Act are referred to as Interested Trustees. Trustees
who are not interested persons of the Trust are referred to as Independent
Trustees. Each of the Trustees serves as a Trustee of each of the 43 U.S.
registered investment portfolios for which Amundi Pioneer serves as investment
adviser (the "Pioneer Funds"). The address for all Trustees and all officers of
the Trust is 60 State Street, Boston, Massachusetts 02109.
The Statement of Additional Information of the Trust includes additional
information about the Trustees and is available, without charge, upon request,
by calling 1-800-225-6292.
74 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Independent Trustees
Name, Age and Position Term of Office and Other Directorships
Held With the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (68) Class II Trustee since 2007. Private investor (2004 - 2008 and 2013 - Director, Broadridge Financial
Chairman of the Board Term expires in 2021. present); Chairman (2008 - 2013) and Solutions,Inc. (investor
and Trustee Chief Executive Officer (2008 - 2012), communications and securities
Quadriserv, Inc. (technology products for processing provider for
securities lending industry); and Senior financial services industry)
Executive Vice President, The Bank of (2009 - present); Director,
New York (financial and securities Quadriserv, Inc. (2005 -
services) (1986 - 2004) 2013); and Commissioner, New
Jersey State Civil Service
Commission (2011 - 2015)
------------------------------------------------------------------------------------------------------------------------------------
David R. Bock (75) Class III Trustee since 2007. Managing Partner, Federal City Capital Director of New York Mortgage
Trustee Term expires in 2019. Advisors (corporate advisory services Trust (publicly-traded
company) (1997 - 2004 and 2008 - present); mortgage REIT) (2004 - 2009,
Interim Chief Executive Officer, Oxford 2012 - present); Director
Analytica, Inc. (privately held research of The Swiss Helvetia Fund,
and consulting company) (2010); Executive Inc. (closed-end fund) (2010 -
Vice President and Chief Financial 2017); Director of Oxford
Officer, I-trax, Inc. (publicly traded Analytica, Inc. (2008 - 2015);
health care services company) (2004 - and Director of Enterprise
2007); and Executive Vice President and Community Investment, Inc.
Chief Financial Officer, Pedestal Inc. (privately-held affordable
(internet-based mortgage trading company) housing finance company)
(2000 - 2002); Private Consultant (1985 - 2010)
(1995 - 1997); Managing Director,
Lehman Brothers (1992 - 1995); and
Executive, The World Bank (1979 - 1992)
------------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (74) Class I Trustee since 2008. William Joseph Maier Professor of Trustee, Mellon Institutional
Trustee Term expires in 2020. Political Economy, Harvard University Funds Investment Trust and
(1972 - present) Mellon Institutional Funds
Master Portfolio (oversaw
17 portfolios in fund complex)
(1989 - 2008)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 75
Independent Trustees (continued)
Name, Age and Position Term of Office and Other Directorships
Held With the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (71) Class I Trustee since 2007. Founding Director, Vice-President and None
Trustee Term expires in 2020. Corporate Secretary, The Winthrop Group,
Inc. (consulting firm) (1982 - present);
Desautels Faculty of Management, McGill
University (1999 - 2017); and Manager of
Research Operations and Organizational
Learning, Xerox PARC, Xerox's advance
research center (1990-1994)
------------------------------------------------------------------------------------------------------------------------------------
Lorraine H. Monchak (62) Class III Trustee since 2015. Chief Investment Officer, 1199 SEIU None
Trustee Term expires in 2019. Funds (healthcare workers union pension
funds) (2001 - present); Vice President -
International Investments Group, American
International Group, Inc. (insurance
company) (1993 - 2001); Vice President -
Corporate Finance and Treasury Group,
Citibank, N.A. (1980 - 1986 and 1990 -
1993); Vice President - Asset/Liability
Management Group, Federal Farm Funding
Corporation (government-sponsored issuer
of debt securities) (1988 - 1990);
Mortgage Strategies Group, Shearson
Lehman Hutton, Inc. (investment bank)
(1987 - 1988); and Mortgage Strategies
Group, Drexel Burnham Lambert, Ltd.
(investment bank) (1986 - 1987)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (70) Class II Trustee since 2007. President and Chief Executive Officer, Director of New America High
Trustee Term expires in 2021. Metric Financial Inc. (formerly known as Income Fund, Inc. (closed-end
Newbury Piret Company) (investment investment company) (2004 -
banking firm) (1981 - present) present); and Member, Board of
Governors, Investment Company
Institute (2000 - 2006)
------------------------------------------------------------------------------------------------------------------------------------
Fred J. Ricciardi (72) Class II Trustee since 2014. Consultant (investment company services) None
Trustee Term expires in 2021. (2012 - present); Executive Vice President,
BNY Mellon (financial and investment
company services) (1969 - 2012); Director,
BNY International Financing Corp.
(financial services) (2002 - 2012);
Director, Mellon Overseas Investment
Corp. (financial services) (2009 - 2012);
Director, Financial Models (technology)
(2005-2007); Director, BNY Hamilton Funds,
Ireland (offshore investment companies)
(2004-2007); Chairman/Director, AIB/BNY
Securities Services, Ltd., Ireland
(financial services) (1999-2006); and
Chairman, BNY Alternative Investment
Services, Inc. (financial services)
(2005-2007)
------------------------------------------------------------------------------------------------------------------------------------
76 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Interested Trustees
Name, Age and Position Term of Office and Other Directorships
Held With the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Lisa M. Jones (57)* Class III Trustee since 2014. Director, CEO and President of Amundi None
Trustee, President and Term expires in 2019. Pioneer Asset Management USA, Inc.
Chief Executive Officer (since September 2014); Director, CEO
and President of Amundi Pioneer Asset
Management, Inc. (since September 2014);
Director, CEO and President of Amundi
Pioneer Distributor, Inc. (since
September 2014); Director, CEO and
President of Amundi Pioneer Institutional
Asset Management, Inc. (since September
2014); Chair, Amundi Pioneer Asset
Management USA, Inc., Amundi Pioneer
Distributor, Inc. and Amundi Pioneer
Institutional Asset Management, Inc.
(September 2014 - 2018); Managing
Director, Morgan Stanley Investment
Management (2010 - 2013); Director of
Institutional Business, CEO of
International, Eaton Vance Management
(2005 - 2010); and Director of Amundi
USA, Inc. (since 2017)
------------------------------------------------------------------------------------------------------------------------------------
Kenneth J. Taubes (61)* Class I Trustee since 2014. Director and Executive Vice President None
Trustee Term expires in 2020. (since 2008) and Chief Investment Officer,
U.S. (since 2010) of Amundi Pioneer Asset
Management USA, Inc.; Director and Executive
Vice President and Chief Investment Officer,
U.S. of Amundi Pioneer (since 2008); Executive
Vice President and Chief Investment Officer,
U.S. of Amundi Pioneer Institutional Asset
Management, Inc. (since 2009); Portfolio
Manager of Amundi Pioneer (since 1999); and
Director of Amundi USA, Inc. (since 2017)
------------------------------------------------------------------------------------------------------------------------------------
* Ms. Jones and Mr. Taubes are Interested Trustees because they are officers or directors of the fund's investment adviser and
certain of its affiliates.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 77
Trust Officers
Name, Age and Position Term of Office and Other Directorships
Held With the Trust Length of Service Principal Occupation Held by Officer
------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (54) Since 2007. Serves at the Vice President and Associate General None
Secretary and Chief discretion of the Board Counsel of Amundi Pioneer since
Legal Officer January 2008; Secretary and Chief Legal
Officer of all of the Pioneer Funds since
June 2010; Assistant Secretary of all of
the Pioneer Funds from September 2003 to
May 2010; and Vice President and Senior
Counsel of Amundi Pioneer from July 2002
to December 2007
------------------------------------------------------------------------------------------------------------------------------------
Carol B. Hannigan (58) Since 2010. Serves at the Fund Governance Director of Amundi None
Assistant Secretary discretion of the Board Pioneer since December 2006 and Assistant
Secretary of all the Pioneer Funds since
June 2010; Manager - Fund Governance of
Amundi Pioneer from December 2003 to
November 2006; and Senior Paralegal of
Amundi Pioneer from January 2000 to
November 2003
------------------------------------------------------------------------------------------------------------------------------------
Thomas Reyes (56) Since 2010. Serves at the Senior Counsel of Amundi Pioneer since None
Assistant Secretary discretion of the Board May 2013 and Assistant Secretary of all
the Pioneer Funds since June 2010; and
Counsel of Amundi Pioneer from June 2007
to May 2013
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (59) Since 2008. Serves at the Vice President - Fund Treasury of Amundi None
Treasurer and Chief discretion of the Board Pioneer; Treasurer of all of the Pioneer
Financial and Funds since March 2008; Deputy Treasurer
Accounting Officer of Amundi Pioneer from March 2004 to
February 2008; and Assistant Treasurer
of all of the Pioneer Funds from March
2004 to February 2008
------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (54) Since 2007. Serves at the Director - Fund Treasury of Amundi None
Assistant Treasurer discretion of the Board Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (61) Since 2007. Serves at the Senior Manager - Fund Treasury of Amundi None
Assistant Treasurer discretion of the Board Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
78 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
Name, Age and Position Term of Office and Other Directorships
Held With the Trust Length of Service Principal Occupation Held by Officer
------------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (39) Since 2009. Serves at the Senior Manager - Fund Treasury of Amundi None
Assistant Treasurer discretion of the Board Pioneer since November 2008; Assistant
Treasurer of all of the Pioneer Funds
since January 2009; and Client Service
Manager - Institutional Investor
Services at State Street Bank from March
2003 to March 2007
-----------------------------------------------------------------------------------------------------------------------------------
John Malone (48) Since 2018. Serves at the Managing Director, Chief Compliance None
Chief Compliance Officer discretion of the Board Officer of Amundi Pioneer Asset
Management; Amundi Pioneer Institutional
Asset Management, Inc.; and the Pioneer
Funds since September 2018; and Chief
Compliance Officer of Amundi Pioneer
Distributor, Inc. since January 2014.
-----------------------------------------------------------------------------------------------------------------------------------
Kelly O'Donnell (48) Since 2007. Serves at the Vice President - Amundi Pioneer Asset None
Anti-Money Laundering discretion of the Board Management; and Anti-Money Laundering
Officer Officer of all the Pioneer Funds
since 2006
-----------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 79
This page is for your notes.
80 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
This page is for your notes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 81
This page is for your notes.
82 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
This page is for your notes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/19 83
This page is for your notes.
84 Pioneer Diversified High Income Trust | Annual Report | 4/30/19
How to Contact Amundi Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
--------------------------------------------------------------------------------
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site www.amundipioneer.com/us.
The Trust files a complete schedule of portfolio holdings with the Securities
and Exchange Commission for the first and third quarters of each fiscal year as
an exhibit to its reports on Form N-PORT. Shareowners may view the filed Form
N-PORT by visiting the Commission's web site at https://www.sec.gov.
[LOGO] Amundi Pioneer
==============
ASSET MANAGEMENT
Amundi Pioneer Asset Management, Inc.
60 State Street
Boston, MA 02109
www.amundipioneer.com/us
Securities offered through Amundi Pioneer Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
[C] 2019 Amundi Pioneer Asset Management 21909-11-0619
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. David R. Bock, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
The audit fees for the Trust were $38,500
payable to Ernst & Young LLP for the year ended
April 30, 2019 and $38,500
for the year ended April 30, 2018.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
There were no audit-related services in 2019 or 2018.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
The tax fees for the Trust were $10,115
payable to Ernst & Young LLP for the year ended
April 30, 2019 and $10,115
for the year ended April 30, 2018.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
There were no other fees in 2019 or 2018.
(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 Amudi Pioneer Asset Management, 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 SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered
into on or after May 6, 2003, the effective date of the
new SEC pre-approval rules, the Trust's audit
committee is required to pre-approve services to
affiliates defined by SEC rules to the extent that the
services are determined to have a direct impact on the
operations or financial reporting of the Trust. For the
years ended April 30, 2019 and 2018, there were no
services provided to an affiliate that required the
Trust's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountants engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrants accountant
for services rendered to the registrant, and rendered to the registrants
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Trust were $10,115
payable to Ernst & Young LLP for the year ended
April 30, 2019 and $10,115 for the year
ended April 30, 2018.
(h) Disclose whether the registrants audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrants investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees
has considered whether the provision of non-audit
services that were rendered to the Affiliates (as
defined) that were not pre- approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is
compatible with maintaining the principal accountant's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrant's audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.1212
of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrant's portfolio ("Portfolio Manager"). Also state each Portfolio
Manager's business experience during the past 5 years.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS
The table below indicates, for the portfolio managers of the fund, information
about the accounts other than the fund over which the portfolio manager has
day-to-day investment responsibility. All information on the number of accounts
and total assets in the table is as of April 30, 2019. For purposes of the
table, "Other Pooled Investment Vehicles" may include investment partnerships,
undertakings for collective investments in transferable securities ("UCITS")
and other non-U.S. investment funds and group trusts, and "Other Accounts" may
include separate accounts for institutions or individuals, insurance company
general or separate accounts, pension funds and other similar institutional
accounts but generally do not include the portfolio manager's personal
investment accounts or those which the manager may be deemed to own
beneficially under the code of ethics. Certain funds and other accounts managed
by the portfolio manager may have substantially similar investment strategies.
NUMBER OF ASSETS
ACCOUNTS MANAGED
MANAGED FOR FOR WHICH
WHICH ADVISORY ADVISORY
NUMBER OF FEE IS FEE IS
NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE-
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S)
------------------- ---------------------------------- ----------- ----------------- ---------------- --------------
Andrew Feltus Other Registered Investment
Companies 9 $6,334,978 N/A N/A
Other Pooled Investment Vehicles 7 $6,965,699 N/A N/A
Other Accounts 5 $1,381,276 N/A N/A
------------------- ---------------------------------- ----------- ---------- ---------------- --------------
Jonathan Sharkey Other Registered
Investment Companies 3 $6,877,002 N/A N/A
Other Pooled Investment Vehicles 2 $ 376,588 N/A N/A
Other Accounts 2 $ 47,860 N/A N/A
------------------- ---------------------------------- ----------- ---------- ---------------- --------------
Chin Liu Other Registered Investment
Companies 2 $ 876,748 N/A N/A
Other Pooled Investment Vehicles 1 $ 74,330 N/A N/A
Other Accounts 0 $ 0 N/A N/A
------------------- ---------------------------------- ----------- ---------- ---------------- --------------
Lawrence Zeno Other Registered Investment
Companies 1 $ 286,431 N/A N/A
Other Pooled Investment Vehicles 1 $ 124,148 N/A N/A
Other Accounts 0 $ 0 N/A N/A
------------------- ---------------------------------- ----------- ---------- ---------------- --------------
POTENTIAL CONFLICTS OF INTEREST
When a portfolio manager is responsible for the management of more than one
account, the potential arises for the portfolio manager to favor one account
over another. The principal types of potential conflicts of interest that may
arise are discussed below. For the reasons outlined below, Amundi Pioneer does
not believe that any material conflicts are likely to arise out of a portfolio
manager's responsibility for the management of the fund as well as one or more
other accounts. Although Amundi Pioneer has adopted procedures that it believes
are reasonably designed to detect and prevent violations of the federal
securities laws and to mitigate the potential for conflicts of interest to
affect its portfolio management decisions, there can be no assurance that all
conflicts will be identified or that all procedures will be effective in
mitigating the potential for such risks. Generally, the risks of such conflicts
of interest are increased to the
0
extent that a portfolio manager has a financial incentive to favor one account
over another. Amundi Pioneer has structured its compensation arrangements in a
manner that is intended to limit such potential for conflicts of interest. See
"Compensation of Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating new
investment opportunities that have limited supply, such as initial public
offerings and private placements. If, for example, an initial public
offering that was expected to appreciate in value significantly shortly
after the offering was allocated to a single account, that account may be
expected to have better investment performance than other accounts that did
not receive an allocation of the initial public offering. Generally,
investments for which there is limited availability are allocated based upon
a range of factors including available cash and consistency with the
accounts' investment objectives and policies. This allocation methodology
necessarily involves some subjective elements but is intended over time to
treat each client in an equitable and fair manner. Generally, the investment
opportunity is allocated among participating accounts on a pro rata basis.
Although Amundi Pioneer believes that its practices are reasonably designed
to treat each client in an equitable and fair manner, there may be instances
where a fund may not participate, or may participate to a lesser degree than
other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager determines
to purchase a security for more than one account in an aggregate amount that
may influence the market price of the security, accounts that purchased or
sold the security first may receive a more favorable price than accounts
that made subsequent transactions. The less liquid the market for the
security or the greater the percentage that the proposed aggregate purchases
or sales represent of average daily trading volume, the greater the
potential for accounts that make subsequent purchases or sales to receive a
less favorable price. When a portfolio manager intends to trade the same
security on the same day for more than one account, the trades typically are
"bunched," which means that the trades for the individual accounts are
aggregated and each account receives the same price. There are some types of
accounts as to which bunching may not be possible for contractual reasons
(such as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in the
best possible price. Where those accounts or circumstances are involved,
Amundi Pioneer will place the order in a manner intended to result in as
favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater degree
than other accounts managed by the portfolio manager. If, for example, the
portfolio manager receives a bonus based upon the performance of certain
accounts relative to a benchmark while other accounts are disregarded for
this purpose, the portfolio manager will have a financial incentive to seek
to have the accounts that determine the portfolio manager's bonus achieve
the best possible performance to the possible detriment of other accounts.
Similarly, if Amundi Pioneer receives a performance-based advisory fee, the
portfolio manager may favor that account, whether or not the performance of
that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a
beneficial interest in the account, in order to benefit a large client or to
compensate a client that had poor returns. For example, if the portfolio
manager held an interest in an investment partnership that was one of the
accounts managed by the portfolio manager, the portfolio manager would have
an economic incentive to favor the account in which the portfolio manager
held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise. For
example, if a portfolio manager purchases a security for one account and
sells the same security for another account, such trading pattern may
disadvantage either the account that is long or short. In making portfolio
manager assignments, Amundi Pioneer seeks to avoid such potentially
conflicting situations. However, where a portfolio manager is responsible
for accounts with differing investment objectives and policies, it is
possible that the portfolio manager will conclude that it is in the best
interest of one account to sell a portfolio security while another account
continues to hold or increase the holding in such security.
1
COMPENSATION OF PORTFOLIO MANAGERS
Amundi Pioneer has adopted a system of compensation for portfolio managers that
seeks to align the financial interests of the portfolio managers with those of
shareholders of the accounts (including Pioneer funds) the portfolio managers
manage, as well as with the financial performance of Amundi Pioneer. The
compensation program for all Amundi Pioneer portfolio managers includes a base
salary (determined by the rank and tenure of the employee) and an annual bonus
program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Amundi Pioneer seeks to set base compensation at market rates,
taking into account the experience and responsibilities of the portfolio
manager. The bonus plan is intended to provide a competitive level of annual
bonus compensation that is tied to the portfolio manager achieving superior
investment performance and align the interests of the investment professional
with those of shareholders, as well as with the financial performance of Amundi
Pioneer. Any bonus under the plan is completely discretionary, with a maximum
annual bonus that may be in excess of base salary. The annual bonus is based
upon a combination of the following factors:
o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance
calculation is based on pre-tax investment performance of all of the
accounts managed by the portfolio manager (which includes the fund and any
other accounts managed by the portfolio manager) over a one-year period (20%
weighting) and four-year period (80% weighting), measured for periods ending
on December 31. The accounts, which include the fund, are ranked against a
group of mutual funds with similar investment objectives and investment
focus (60%) and a broad-based securities market index measuring the
performance of the same type of securities in which the accounts invest
(40%), which, in the case of the fund, is the Merrill Lynch Global High
Yield and Emerging Markets Index and the CSFB Leveraged Loan Index. As a
result of these two benchmarks, the performance of the portfolio manager for
compensation purposes is measured against the criteria that are relevant to
the portfolio manager's competitive universe.
o QUALITATIVE PERFORMANCE. The qualitative performance component with respect
to all of the accounts managed by the portfolio manager includes objectives,
such as effectiveness in the areas of teamwork, leadership, communications
and marketing, that are mutually established and evaluated by each portfolio
manager and management.
o AMUNDI PIONEER RESULTS AND BUSINESS LINE RESULTS. Amundi Pioneer's financial
performance, as well as the investment performance of its investment
management group, affect a portfolio manager's actual bonus by a leverage
factor of plus or minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers participate in other programs designed to reward and
retain key contributors. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
SHARE OWNERSHIP BY PORTFOLIO MANAGERS
The following table indicates as of April 30, 2019 the value, within the
indicated range, of shares beneficially owned by the portfolio managers of the
fund.
BENEFICIAL OWNERSHIP
NAME OF PORTFOLIO MANAGER OF THE FUND*
--------------------------- ---------------------
Andrew Feltus D
--------------------------- ---------------------
Jonathan Sharkey B
--------------------------- ---------------------
Chin Liu D
--------------------------- ---------------------
Lawrence Zeno A
--------------------------- ---------------------
* Key to Dollar Ranges
2
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
3
- The significant investment strategies for Pioneer Diversified High Income
Trust (a closed-end fund) and certain other similarly managed accounts
with investment objectives of a high level of current income, with a
potential for capital appreciation as a secondary objective. The fund
invests in a unique blend of higher yielding asset classes, including
global high yield bonds, leveraged bank loans and event-linked bonds (cat
bonds).
Under normal market conditions, the fund invests at least 80% of its managed
assets (net assets plus borrowings or other leverage for investment purposes)
in diversified portfolio of below investment grade (high yield) debt
securities, loans and preferred stocks. The fund allocates its investments
principally among three sectors of the fixed income securities markets: (i)
below investment grade debt securities and preferred stocks of U.S. and
non-U.S. issuers, including governmental and corporate issuers in emerging
markets ("global high yield debt securities"), (ii) floating rate loans and
(iii) "event-linked" bonds, which sometimes are referred to as
"insurance-linked" or "catastrophe" bonds.
PIM believes that this actively managed, diversified portfolio of asset classes
- global high yield debt securities, floating rate loans and event-linked bonds
- may provide investors with a range of potential benefits across various
market cycles and under various market conditions. These benefits include,
among others, the potential to provide investors with a relatively high level
of current income without undue risk as a result of the low correlation among
these asset classes, reduced volatility due to limited exposure to interest
rate and duration risk, as well as a favorable risk return profile.
Specifically, the floating rate feature of both floating rate loans and
event-linked bonds serves to reduce sensitivity to changes in prevailing
interest rates. In addition, the introduction of event-linked bonds to the
diversified portfolio enhances these benefits by reducing volatility, while
providing the potential for above average returns. Moreover, the fund's
investments in event-linked bonds offer investors access to a unique asset
class that otherwise may be unavailable to them.
The fund does not have a policy of maintaining a specific average credit
quality or a targeted maturity range for its portfolio. The fund may invest any
portion of its assets in securities and other instruments of non-U.S. issuers,
including emerging market issuers, and may engage in certain strategic
transactions.
PIM is responsible for managing the fund's overall investment program,
including allocating the fund's investments among the different asset classes
and managing the fund's investments in global high income debt securities and
floating rate loans. PIM considers both broad economic and issuer specific
factors in selecting a portfolio designed to achieve the fund's investment
objectives. PIM selects individual securities based upon the terms of the
securities (such as yields compared to U.S. Treasuries or comparable issues),
liquidity and rating, sector and issuer diversification. PIM also employs due
diligence and fundamental quantitative and qualitative research to assess an
issuer's credit quality, taking into account financial condition and
profitability, future capital needs, potential for change in rating, industry
outlook, the competitive environment and management ability. PIM may sell a
portfolio security when it believes the security no longer will contribute to
meeting the fund's investment objectives. PIM makes that determination based on
the same criteria it uses to select portfolio securities. In making these
portfolio decisions, PIM relies on the knowledge, experience and judgment of
its staff and the staff of its affiliates who have access to a wide variety of
research.
The fund may use financial leverage on an ongoing basis for investment purposes
by borrowing from banks through a revolving credit facility. Leverage creates
special risks not associated with unleveraged funds having a similar investment
objectives and policies. These include the possibility of higher volatility of
both the net asset value of the fund and the value of assets serving as asset
coverage for the preferred shares.
4
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrant's equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781).
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 407(c)(2)(iv) of
Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15))
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrant's board of
directors since the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-R of Schedule 14(A)
in its definitive proxy statement, or this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financials officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR
270.30a-3(c))) as of a date within 90 days of the filing date of the report
that includes the disclosure required by this paragraph,
based on the evaluation of these controls and procedures required by Rule
30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b)
under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on the evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that
occured during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
Item 12. 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.
(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(2) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2(a) under the Act
(17 CFR 270.30a-2(a)) , exactly as set forth below:
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Diversified High Income Trust
By (Signature and Title)* /s/ Lisa M. Jones
Lisa M. Jones, President & Chief Executive Officer
Date July 1, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Lisa M. Jones
Lisa M. Jones, President & Chief Executive Officer
Date July 1, 2019
By (Signature and Title)* /s/ Mark E. Bradley
Mark E. Bradley, Treasurer & Chief Accounting & Financial Officer
Date July 1, 2019
* Print the name and title of each signing officer under his or her signature.