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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22014
Pioneer Diversified High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: April 30
Date of reporting period: May 1, 2010 through October 30, 2010
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
Pioneer Diversified
High Income Trust
--------------------------------------------------------------------------------
Semiannual Report | October 31, 2010
--------------------------------------------------------------------------------
Ticker Symbol: HNW
[LOGO] PIONEER
Investments(R)
visit us: pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 9
Prices and Distributions 10
Performance Update 11
Schedule of Investments 12
Financial Statements 40
Notes to Financial Statements 46
Trustees, Officers and Service Providers 58
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 1
President's Letter
Dear Shareowner,
Through the first nine months of 2010, the U.S. economy moved forward on a slow
path to recovery. But with the memory of a deep recession still lingering,
businesses and consumers remained cautious about both investing and spending.
While business fundamentals showed signs of improvement, there was still a
reluctance to hire, and high unemployment remains a problem. Wary investors,
concerned about risk, gravitated towards cash and bonds. We remain generally
optimistic about the prospects for economic recovery, although it may occur
more slowly than many would like.
At Pioneer, we have long advocated the benefits of staying diversified and
investing for the long term. This strategy has generally performed well for
many investors. Bond markets certainly rewarded investors in the first nine
months of 2010. While the equity markets barely budged, equities at the end of
September 2010 were inexpensive relative to bonds, compared with historic
levels, and represented potentially good value for long-term investors.
Pioneer has not changed the basic approach to investing that we have used for
more than 80 years. We remain focused on company fundamentals and risk
management. Our investment process is based on careful research into individual
companies, quantitative analysis, and active portfolio management. This
three-pillared process, which we apply to each of our portfolios, is supported
by an integrated team approach and is designed to carefully balance risk and
reward. Our experienced professionals devote themselves to the careful research
needed to identify investment opportunities in markets around the world.
Our advice, as always, is to work closely with a trusted financial advisor to
discuss your goals and work together to develop an investment strategy that
meets your individual needs. There is no single best strategy that works for
every investor.
2 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
www.pioneerinvestments.com. We greatly appreciate your trust in us and we thank
you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 3
Portfolio Management Discussion | 10/31/10
Helped by a solid rebound in the closing weeks, high-yield bonds delivered
solid results for the six months ended October 31, 2010. In the following
interview, Andrew Feltus discusses the factors that influenced the performance
of Pioneer Diversified High Income Trust during the six months ended October
31, 2010. Mr. Feltus, senior vice president, and Jonathan Sharkey, vice
president, are members of Pioneer's fixed-income team and leaders of the
investment team responsible for the day-to-day management of the Trust.
Q How did the Trust perform during the six months ended October 31, 2010?
A Pioneer Diversified High Income Trust returned 7.27% at net asset value and
6.63% at market price over the six months ended October 31, 2010. Over the
same period, the Trust's custom benchmark returned 5.28%. The custom
benchmark is based on a 50% weighting of the Bank of America Merrill Lynch
Global High Yield and Emerging Markets Plus Index (the BofA ML Index),
which rose 8.36%, and a 50% weighting of the Credit Suisse (CSFB) Leveraged
Loan Index, which gained 2.20%. Unlike the Trust, the BofA ML Index is not
leveraged. On October 31, 2010, the Trust's 30-day SEC yield was 9.67%.
Q How would you describe the investment environment during the six months ended
October 31, 2010?
A The recovery by corporate bonds, emerging market debt and other credit-
sensitive investments, which began in 2009, persisted, despite a
significant pullback early in the six-month period. In the spring of 2010,
investors became increasingly concerned that the global economic rebound
might be fading and that economic growth, as measured by gross domestic
product (GDP), was beginning to slow. Corporations, after aggressively
building up their inventories, became somewhat more cautious at the same
time that many consumers focused on paying down debts rather than
purchasing goods and services. Meanwhile, some of the effects of the U.S.
government's stimulus spending began tapering off. In addition, government
debt problems in some European nations added to investors' anxieties about
the health of the global economy.
Market trends reversed, however, after Federal Reserve System (the Fed)
Chairman Ben Bernanke, in August 2010, outlined new plans to inject more
liquidity into the market. Investors again became attracted to corporate
securities, including high-yield bonds and stocks. Supporting the
resurgence
4 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
were new reports of improving corporate profits as well as growing
sentiments that the November mid-term elections would lead to more
business-friendly U.S. economic policies.
While high-yield bonds and emerging market debt produced generally healthy
returns over the six months ended October 31, 2010, floating-rate bank
loans lagged. Bank loans had performed well for more than a year-and-a-half,
in part based on the premise that interest rates eventually would rise,
resulting in higher yields to investors in the loans. As evidence of a
slowing in GDP growth grew, however, the expectation of higher interest
rates receded and the bank loans underperformed.
The Trust also invests in catastrophe-linked bonds as part of our
diversification management strategy. Those bonds, whose performance is
highly influenced by seasonal factors, outperformed floating-rate bank
loans, but lagged high-yield bonds over the six-month period. The
performance of catastrophe-linked bonds depends greatly on losses suffered
by the insurance industry because of catastrophes such as hurricanes and
floods. Typically, the bonds sell off, or underperform, in the months
approaching each hurricane season and then react to actual property losses
caused by storms. The damage caused by hurricanes in 2010 tended to be
relatively muted, and so the catastrophe-linked bonds recovered in value
late in the period. Catastrophe-linked bonds also have floating-rate
features, which make them more attractive when it appears that interest
rates may rise.
Q What were your principal investment strategies for the Trust and how did they
affect performance over the six months ended October 31, 2010?
A We have a yield-oriented strategy for the Trust, and performance generally
comes from our security selection. We aim to take advantage of Pioneer's
strength in fundamental analysis of companies and their securities to find
investments that not only provide generous yield, but that also are backed
by companies with the financial strength and business models that may
enable them to continue to meet their debt obligations. Especially since
the dramatic market declines of 2008, we have paid special attention to
analyzing high-yield corporate bonds to help identify what securities may
have been unfairly penalized by the market. The analysis reaped rewards
during the rebound of high-yield debt, when the market recognized the value
in many of the bonds in which we had invested the Trust's assets. In a
period when high-yield bonds generally performed well, the Trust's
performance received an added boost by our use of borrowed funds, or
leverage. When the Trust uses leverage, money is borrowed at low interest
rates, and then we use the borrowed monies to invest in higher-yielding
assets. At the end of the period, 28.1% of the Trust's total investment
portfolio was financed by borrowings.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 5
Throughout the six-month period ended October 31, 2010, the Trust had a
heavy emphasis on U.S. high-yield securities, which accounted for 39.2% of
the Trust's total investment portfolio at period end. Emerging market and
international high-yield investments accounted for another 17.2% of the
Trust's total investment portfolio at period end, while bank loans
represented 25.0% and catastrophe-linked bonds accounted for 17.6% of the
Trust's total investment portfolio, respectively, at period end.
While the Trust's performance over the six-month period was good, the
Trust's return was held back because many of the bonds and loans in which
it was invested were called back by their issuing companies. The companies
then issued new credits that were typically paying lower yields. That meant
that while we could reinvest the Trust's money, it typically was reinvested
at lower yields than those being paid by the Trust's original investments.
Q What were some of the individual investments that influenced the Trust's
returns over the six months ended October 31, 2010?
A Domestic high-yield bonds that performed well for the Trust included
securities of Commercial Vehicle Group, a truck parts manufacturer that
fared well as the automotive industry started to recover, and Cellu Tissue,
a paper products corporation that was acquired by another company and
subsequently retired its debt at a profit to the Trust. Additionally, bonds
issued by FMG, an Australian iron ore corporation, were called back at a
handsome profit to the Trust. Among emerging markets investments, the
Trust's position in the securities of True Move, a Thai wireless
communication company, was a standout performer. In addition, the Trust was
invested in Univision, the Mexico-based Spanish language broadcasting
corporation, which was the subject of a leveraged buyout. The company
successfully strengthened its capital base by selling a portion of itself
to Televisa, another Spanish language network from which Univision buys
much of its content. The transaction allowed Univision to retire some of
its debt and settle questions about future revenues.
Several investments detracted, however, from the Trust's performance
results over the six months ended October 31, 2010. The detractors included
bonds of Independencia, a Brazilian beef company that defaulted on its debt
even after a restructuring in 2009, and securities issued by the
Mashantucket Native American tribe. As the Mashantucket Foxwoods Casino
complex in Connecticut struggled with weakening revenues, the casino
defaulted on the bonds. In addition, while Sitel, an operator of call
centers, did not default on its bonds, the securities did lose value after
the company reported disappointing earnings for the second quarter of 2010.
Since then, the company has reported improved profits for the third quarter
and the bonds have recovered some of their value.
6 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
Q What is your investment outlook?
A Even after rallying strongly for more than a year, high-yield bonds still
appear reasonably priced -- in line with long-term historical averages and
inexpensive compared to their very low default rates. We believe
performance over the next several months will be highly influenced by what
Treasuries do. If Treasury rates do not spike up and thereby tighten the
yield spreads (the difference in yield between various types of debt
instruments), we believe high-yield bonds should continue to perform well
against a backdrop of improving corporate profits and generally healthy
corporate balance sheets. We do not anticipate that the Fed will move to
raise short-term interest rates in the next six months, as the nation's
central bankers are waiting either for the employment picture to improve or
for signs of increasing inflationary pressures to begin to appear.
Given all those factors, we are positive about the prospects for the
high-yield market. We also expect to be increasingly interested in
investments in convertible securities for the Trust. Convertibles give the
Trust an opportunity to take advantage of gains in the equity market. We
also are attracted to bank loans and catastrophe-linked bonds, both of
which offer the added advantage of having floating-rate interest rates,
which would rise if overall interest rates eventually start to move higher.
Please refer to the Schedule of Investments on pages 12-39 for a full listing
of Trust securities.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of debt securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities in the Trust generally will rise. Investments in the Trust are
subject to possible loss due to the financial failure of the issuers of the
underlying securities and their inability to meet their debt obligations.
The Trust may invest significantly in illiquid securities. Illiquid securities
may be difficult to dispose of at a fair price at the times when the Trust
believes it is desirable to do so and their market price is generally more
volatile than that of more liquid securities. Illiquid securities also are more
difficult to value, and investment of the Trust's assets in illiquid securities
may restrict the Trust's ability to take advantage of market opportunities.
The Trust is authorized to borrow from banks and issue debt securities, which
are forms of leverage. Leverage creates significant risks, including the risk
that the
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 7
Trust's income or capital appreciation will not be sufficient to cover the cost
of leverage, which may adversely affect the return for shareholders.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering prospectus and in shareowner reports issued from time to
time.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes.
8 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
Portfolio Summary | 10/31/10
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material]
Corporate Bonds & Notes 67.9%
Floating Rate Loan Interests 23.7%
Temporary Cash Investments 3.0%
Convertible Bonds & Notes 2.1%
Asset Backed Securities 1.4%
Collateralized Mortgage Obligations 0.7%
Common Stock 0.5%
Sovereign Debt Obligation 0.5%
Convertible Preferred Stock 0.2%
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on S&P ratings)
[The following data was represented as a pie chart in the printed material]
A & Higher 3.2%
BBB 1.6%
BB 26.2%
B 38.6%
CCC & Lower 13.6%
Not Rated 13.8%
Cash Equivalents 3.0%
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)*
1. Muteki, Ltd., 4.65%, 5/24/11 (144A) 1.10%
2. Alliance One International, Inc., 10.0%, 7/15/16 0.97
3. Residential Reinsurance 2008, Ltd., 11.752%, 6/6/11 (144A) 0.92
4. Atlas Reinsurance Plc, 10.885%, 1/10/11 (144A) 0.91
5. Green Valley, Ltd., 4.24%, 1/10/11 (144A) 0.91
6. Lodestone Re, Ltd., 8.369%, 5/17/13 (144A) 0.90
7. Blue Fin, Ltd., 4.695%, 4/10/12 (144A) 0.84
8. SunGard Data Systems, Inc., Tranche A U.S.Term Loan, 2.006%, 2/28/14 0.82
9. U.S.I. Holdings Corp., Tranche B Term Loan, 2.76%, 5/5/14 0.80
10. Carillon, Ltd., 15.507%, 1/10/11 (144A) 0.79
* This list excludes temporary cash investments and derivative investments.
The portfolio is actively managed, and current holdings may be different.
The holdings listed should not be considered recommendations to buy or sell
any security listed.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 9
Prices and Distributions | 10/31/10
Market Value per Common Share
--------------------------------------------------------------------------------
-----------------------------------------
10/31/10 4/30/10
-----------------------------------------
$ 20.78 $ 20.46
-----------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
-----------------------------------------
10/31/10 4/30/10
-----------------------------------------
$ 20.61 $ 20.17
-----------------------------------------
Distributions per Common Share: 5/1/10-10/31/10
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net
Investment Tax Return Short-Term Long-Term
Income of Capital Capital Gains Capital Gains
--------------------------------------------------------------------------------
$ 0.96 $ -- $ -- $ --
--------------------------------------------------------------------------------
10 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
Performance Update | 10/31/10
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in common
shares of Pioneer Diversified High Income Trust, compared to that of the
combined (50%/50%) Bank of America/Merrill Lynch Global High Yield and Emerging
Markets Plus Index and CSFB Leveraged Loan Index.
Cumulative Total Returns
(As of October 31, 2010)
----------------------------------------------------
Net Asset Market
Period Value (NAV) Price
----------------------------------------------------
Life-of-Trust
(5/30/07) 31.76% 26.87%
1 Year 22.87 35.51
----------------------------------------------------
[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
50% BofA/ML
Global HY and
Pioneer EM Plus Index
Diversified 50% CSFB
High Income Leveraged Loan
Trust Index
5/07 10,000 10,000
10/07 8,661 10,034
10/08 6,149 7,683
10/09 9,362 10,570
10/10 12,687 12,116
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below net asset value (NAV) due to such factors as
interest rate changes and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered. There is
a one-time public offering and, once issued, shares of closed-end funds are
sold in the open market through a stock exchange and frequently trade at prices
lower than their NAV. NAV per common share is total assets less total
liabilities, which includes bank borrowing, divided by the number of common
shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends
are assumed to be reinvested at prices obtained under the Trust's dividend
reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions.
The Bank of America/Merrill Lynch Global High Yield and Emerging Markets Plus
Index 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 CSFB Leveraged Loan Index is designed to mirror the investible
universe of the U.S. dollar-denominated leveraged loan market. The CSFB
Leveraged Loan Index consists of tradable term loans with at least one year to
maturity and rated BBB or lower.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Trust returns, do not reflect any fees, expenses or sales charges. The
indices are not leveraged. You cannot invest directly in an index.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 11
Schedule of Investments | 10/31/10 (unaudited)
--------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 1.9% of Net Assets
CONSUMER SERVICES -- 0.4%
Restaurants -- 0.4%
100,000 BB+/BAA3 DB Master Finance LLC, 5.779%, 6/20/31 (144A) $ 101,409
500,000 BB-/BA3 DB Master Finance LLC, 8.285%, 6/20/31 (144A) 495,265
------------
Total Consumer Services $ 596,674
--------------------------------------------------------------------------------------------
BANKS -- 0.8%
Thrifts & Mortgage Finance -- 0.8%
246,741(a) AA+/AA1 Ace Securities Corp., 1.162%, 12/25/34 $ 191,091
699,000(a) BBB+/CAA2 Carrington Mortgage Loan Trust, 0.463%, 2/25/37 431,868
504,783(a) CCC/NR Countrywide Asset-Backed Certificates,
0.713%, 3/25/47 (144A) 301,139
217,958(a) B-/B3 GSAMP Trust, 0.393%, 1/25/37 195,599
111,882(a) A/A2 GSAMP Trust, 0.693%, 3/25/35 107,579
588,376(a) CC/CA Lehman XS Trust, 0.613%, 12/25/35 189,839
------------
Total Banks $ 1,417,115
--------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.5%
Diversified Financial Services -- 0.4%
1,157,564(a) B-/CAA1 Aircraft Finance Trust, 0.734%, 5/15/24 (144A) $ 607,721
86,453(a) B-/BA3 Aircraft Finance Trust, 0.754%, 5/15/24 (144A) 73,485
------------
$ 681,206
--------------------------------------------------------------------------------------------
Specialized Finance -- 0.1%
150,000 BBB-/BAA3 Dominos Pizza Master Issuer LLC,
5.261%, 4/25/37 (144A) $ 152,625
------------
Total Diversified Financials $ 833,831
--------------------------------------------------------------------------------------------
REAL ESTATE -- 0.2%
Mortgage Real Estate Investment Trust -- 0.2%
350,000 NR/NR Real Estate Asset Trust, 10.0%, 9/25/40 (144A) $ 350,000
------------
Total Real Estate $ 350,000
--------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $3,215,065) $ 3,197,620
--------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
1.0% of Net Assets
BANKS -- 1.0%
Thrifts & Mortgage Finance -- 1.0%
256,042(a) CCC/B3 Countrywide Home Loans, 0.613%, 3/25/35 $ 68,034
509,719(a) CC/CA Downey Savings and Loan Association Mortgage Loan
Trust, 0.626%, 10/19/45 204,408
251,213(a) D/CA Downey Savings and Loan Association Mortgage Loan
Trust, 0.676%, 10/19/45 19,316
1,133,699(a) AAA/A3 Impac CMB Trust, 1.023%, 1/25/35 930,194
The accompanying notes are an integral part of these financial statements.
12 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
---------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance -- (continued)
102,455(a) D/B3 Impac Secured Assets CMN Owner Trust,
0.353%, 11/25/36 $ 94,238
445,422(a) D/CA Luminent Mortgage Trust, 0.523%, 7/25/36 30,283
381,532(a) AAA/AA1 WaMu Mortgage Pass-Through Certificates,
0.493%, 4/25/45 310,194
-----------
Total Banks $ 1,656,667
---------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $2,160,526) $ 1,656,667
---------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 94.1% of Net Assets
ENERGY -- 8.3%
Coal & Consumable Fuels -- 1.0%
850,000(b) BB/BA3 Bumi Capital Pte, Ltd., 12.0%, 11/10/16 (144A) $ 931,812
738,000 BB-/B1 Drummond Co., Inc., 9.0%, 10/15/14 (144A) 789,660
-----------
$ 1,721,472
---------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.7%
670,000 A/A3 Offshore Group Investments Ltd.,
11.5%, 8/1/15 (144A) $ 710,200
500,000 B/NR Pioneer Drilling Co, 9.875%, 3/15/18 525,000
-----------
$ 1,235,200
---------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 2.4%
1,500,000 B+/B1 American Petroleum Tankers LLC,
10.25%, 5/1/15 (144A) $ 1,560,000
730,000 B/B2 Expro Finance Luxembourg SCA,
8.5%, 12/15/16 (144A) 719,050
65,067(c) NR/NR Nexus 1 Pte., Ltd., 10.5%, 3/7/12 (144A) 65
1,120,000 NR/NR Oceanografia SA de CV, 11.25%, 7/15/15 (144A) 693,000
600,000(a) NR/NR Sevan Marine ASA, 3.619%, 5/14/13 (144A) 513,000
NOK 2,560,000(a) NR/NR Sevan Marine ASA, 7.92%, 10/24/12 (144A) 443,395
154,800 NR/NR Skeie Drilling & Production ASA,
11.25%, 3/8/13 (144A) 162,927
-----------
$ 4,091,437
---------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 2.9%
505,000 BB-/B2 Berry Petroleum Co., 10.25%, 6/1/14 $ 582,644
125,000 BB/BA3 Chesapeake Energy Corp., 9.5%, 2/15/15 145,000
970,000 BB-/B2 Hilcorp Energy I LP, 9.0%, 6/1/16 (144A) 1,023,350
685,000 B/B3 Linn Energy LLC/Linn Energy Finance Corp,
11.75%, 5/15/17 794,600
472,000 NR/NR Rosetta Resources, Inc., 9.5%, 4/15/18 492,060
NOK 2,500,000 NR/NR Norwegian Energy Co. AS, 12.9%, 11/20/14 446,800
NOK 3,000,000(a) NR/NR PA Resources AB, 9.82%, 3/9/11 504,322
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 13
Schedule of Investments | 10/31/10 (unaudited) (continued)
---------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- (continued)
240,000 B-/B3 Quicksilver Resources, Inc., 7.125%, 4/1/16 $ 229,800
670,000(d) B+/B3 SandRidge Energy, Inc., 8.625%, 4/1/15 683,400
-----------
$ 4,901,976
---------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.8%
1,310,000(b) B/B2 Petroplus Finance, Ltd., 9.375%, 9/15/19 (144A) $ 1,257,600
---------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 0.5%
500,000 B+/B1 Holly Energy Partners LP, 6.25%, 3/1/15 $ 500,000
450,000(a) BB/BA1 Southern Union Co., 7.2%, 11/1/66 415,125
-----------
$ 915,125
-----------
Total Energy $14,122,810
---------------------------------------------------------------------------------------------------
MATERIALS -- 11.4%
Aluminum -- 0.8%
300,000 B-/B3 CII Carbon LLC, 11.125%, 11/15/15 (144A) $ 318,750
1,316,221(a)(d) CCC+/B3 Noranda Aluminum Acquisition Corp.,
5.274%, 5/15/15 1,122,078
-----------
$ 1,440,828
---------------------------------------------------------------------------------------------------
Commodity Chemicals -- 0.2%
300,000 C/WR Montell Finance Co. BV, 8.1%, 3/15/27 (144A) $ 300,000
---------------------------------------------------------------------------------------------------
Construction Materials -- 0.6%
865,000 CCC+/B3 AGY Holding Corp., 11.0%, 11/15/14 $ 793,637
300,000(a)(e) B-/NR C8 Capital SPV, Ltd., 6.64%, 12/31/49 (144A) 206,781
-----------
$ 1,000,418
---------------------------------------------------------------------------------------------------
Diversified Chemicals -- 1.1%
EURO 1,275,000 CCC-/Caa3 Ineos Group Holdings Plc, 7.875%, 2/15/16 (144A) $ 1,559,460
275,000 CCC/CAA1 Momentive Performance Materials, Inc.,
9.0%, 1/15/21 (144A) 285,313
-----------
$ 1,844,773
---------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.6%
371,096 NR/NR Blaze Recycling & Metals LLC, 13.0%, 7/16/12 $ 308,010
195,000 B/B1 FMG Finance Pty., Ltd., 10.625%, 9/1/16 (144A) 287,625
750,000 NR/BA3 Prime Dig Pte, Ltd., 11.75%, 11/3/14 (144A) 778,125
428,000 BBB/BAA2 Teck Resources, Ltd., 10.25%, 5/15/16 528,580
750,000 BB/BA2 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 811,875
-----------
$ 2,714,215
---------------------------------------------------------------------------------------------------
Forest Products -- 0.1%
EURO 186,000 BB-/BA3 Grupo Papelero Scribe SA, 8.875%, 4/7/20 (144A) $ 186,930
---------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 1.6%
1,145,000 CCC+/B2 AEP Industries, Inc., 7.875%, 3/15/13 $ 1,136,412
EURO 255,000 NR/NR Ardagh Glass Finance Plc, 9.25%, 7/1/16 (144A) 386,321
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
---------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------
Metal & Glass Containers -- (continued)
EURO 175,000 B-/B3 BWAY Holdings Co., 10.0%, 6/15/18 (144A) $ 190,750
EURO 1,000,000 CCC+/CAA2 BWAY Parent Co., Inc., 10.125%, 11/1/15 (144A) 1,000,000
-----------
$ 2,713,483
---------------------------------------------------------------------------------------------------
Paper Packaging -- 1.2%
750,103(c)(f) NR/NR Corporacion Durango SAB de CV, 6.0%, 8/27/16 $ 678,843
700,000 CCC+/CAA1 Graham Packaging Co., Inc., 9.875%, 10/15/14 726,250
750,000 AAA/B3 U.S. Corrugated, Inc., 10.0%, 6/1/13 697,500
-----------
$ 2,102,593
---------------------------------------------------------------------------------------------------
Paper Products -- 1.7%
667,000 NR/B1 ABI Escrow Corp., 10.25%, 10/15/18 (144A) $ 712,023
500,000 B+/B1 Appleton Papers, Inc., 10.5%, 6/15/15 (144A) 482,500
425,000 B+/B1 Cellu Tissue Holdings, Inc., 11.5%, 6/1/14 495,125
260,000 BB/BA3 Clearwater Paper Corp., 10.625%, 6/15/16 299,650
339,000 B/B3 Exopack Holding Corp., 11.25%, 2/1/14 352,560
475,000 A/A3 Exopack Holdings Corp., 11.25%, 2/1/14 (144A) 494,000
-----------
$ 2,835,858
---------------------------------------------------------------------------------------------------
Precious Metals & Minerals -- 0.3%
500,000 BB-/BA3 ALROSA Finance SA, 8.875%, 11/17/14 (144A) $ 550,000
---------------------------------------------------------------------------------------------------
Steel -- 2.2%
1,245,000 CCC+/CAA2 Algoma Acquisition Corp., 9.875%, 6/15/15 (144A) $ 1,145,400
450,000 B+/B3 Essar Steel Algoma, Inc., 9.375%, 3/15/15 (144A) 464,625
250,000 B/B2 Evraz Group SA, 8.875%, 4/24/13 (144A) 267,100
250,000(b) B/B2 Evraz Group SA, 9.5%, 4/24/18 (144A) 281,875
500,000 NR/B3 Metinvest BV, 10.25%, 5/20/15 (144A) 531,633
920,000 CCC+/CAA1 Ryerson, Inc., 12.0%, 11/1/15 956,800
EURO 50,000 CC/Ca Zlomrex International Finance SA,
8.5%, 2/1/14 (144A) 44,477
-----------
$ 3,691,910
-----------
Total Materials $19,381,008
---------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 7.2%
Aerospace & Defense -- 0.8%
750,000 B-/B3 Aeroflex. Inc., 11.75%, 2/15/15 $ 813,750
405,000 BB/BA3 DigitalGlobe, Inc., 10.5%, 5/1/14 457,650
90,000 NR/NR GeoEye, Inc., 9.625%, 10/1/15 100,237
-----------
$ 1,371,637
---------------------------------------------------------------------------------------------------
Building Products -- 0.3%
EURO 200,000(a)(e) B-/NR C 10 - EUR Capital SPV, Ltd., 6.277%, 5/29/49 $ 170,957
365,000 BB/B2 USG Corp., 9.75%, 8/1/14 (144A) 381,425
-----------
$ 552,382
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 15
Schedule of Investments | 10/31/10 (unaudited) (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Construction & Engineering -- 1.0%
350,000 BB-/BA3 Dycom Industries, Inc., 8.125%, 10/15/15 $ 358,750
500,000 B/B2 Esco Corp., 8.625%, 12/15/13 (144A) 515,000
850,000 B+/CAA1 New Enterprise Stone & Lime Co.,
11.0%, 9/1/18 (144A) 811,750
-----------
$ 1,685,500
---------------------------------------------------------------------------------------------------------
Construction & Farm Machinery & Heavy Trucks -- 1.4%
720,000 B+/CAA1 American Railcar Industries, Inc., 7.5%, 3/1/14 $ 729,000
770,000 CCC/CAA2 Commercial Vehicle Group, Inc., 8.0%, 7/1/13 700,700
950,000 CCC/CAA2 Greenbrier Companies, Inc., 8.375%, 5/15/15 945,250
-----------
$ 2,374,950
---------------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.5%
750,000 B/B3 Wireco Worldgroup, 9.5%, 5/15/17 (144A) $ 791,250
-----------
$ 791,250
---------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.7%
500,000 B-/NR Cia Latinoamericana de Infraestructura & Servicios SA,
9.75%, 5/10/12 $ 485,000
500,000(c) D/WR Indalex Holding Corp., 11.5%, 2/1/14 3,900
740,000 CCC+/CAA1 Park-Ohio Industries, Inc., 8.375%, 11/15/14 740,000
-----------
$ 1,228,900
---------------------------------------------------------------------------------------------------------
Industrial Machinery -- 1.1%
335,000 B/B3 Liberty Tire Recycling, 11.0%, 10/1/16 (144A) $ 348,819
875,000 CCC+/B3 Mueller Water Products, Inc., 7.375%, 6/1/17 791,875
665,000 B+/NR WPE International Cooperatief,
10.375%, 9/30/20 (144A) 661,675
-----------
$ 1,802,369
---------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 1.4%
150,000 B/B3 Avis Budget Car Rental LLC / Avis Budget Finance,
Inc., 9.625%, 3/15/18 $ 161,250
1,090,000 B-/B3 Intcomex, Inc., 13.25%, 12/15/14 (144A) 1,155,400
1,000,000 B/B1 Wesco Distribution, Inc., 7.5%, 10/15/17 1,020,000
-----------
$ 2,336,650
-----------
Total Capital Goods $12,143,638
---------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.4%
Diversified Support Services -- 0.2%
400,000(g) NR/B3 MSX International, Ltd., UK, 12.5%, 4/1/12 (144A) $ 352,000
---------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.2%
700,000(c) NR/WR Aleris International, Inc., 10.0%, 12/15/16 $ 3,500
210,000 B+/B2 Casella Waste Systems, Inc., 11.0%, 7/15/14 232,312
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
-------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- (continued)
EURO 107,128 CCC+/Caa1 New Reclamation Group Pty., Ltd.,
8.125%, 2/1/13 (144A) $ 127,306
-----------
$ 363,118
-----------
Total Commercial & Professional Services $ 715,118
-------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.1%
Air Freight & Logistics -- 0.6%
929,000(b) CCC+/CAA1 CEVA Group Plc, 11.5%, 4/1/18 (144A) $ 982,484
-------------------------------------------------------------------------------------------------------
Airlines -- 0.2%
305,000 BB-/BA2 Delta Air Lines, Inc., 9.5%, 9/15/14 (144A) $ 335,500
-------------------------------------------------------------------------------------------------------
Railroads -- 0.1%
240,000 BB-/B1 Kansas City Southern de Mexico, 7.625%, 12/1/13 $ 249,000
-------------------------------------------------------------------------------------------------------
Trucking -- 0.2%
300,000 B/B3 Syncreon Global Ireland, Ltd., 9.5%, 5/1/18 (144A) $ 310,500
-----------
Total Transportation $ 1,877,484
-------------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 2.3%
Auto Parts & Equipment -- 2.1%
980,000(b) CCC+/CAA2 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) $ 1,063,300
160,000 CCC/CAA1 Stanadyne Corp., 10.0%, 8/15/14 158,400
500,000(f) CCC-/CAA3 Stanadyne Corp., 12.0%, 2/15/15 452,500
700,000(b) B/CAA1 Tenneco, Inc., 8.625%, 11/15/14 724,500
1,125,000(b) B/B1 Tower Automotive Holdings USA LLC,
10.625%, 9/1/17 (144A) 1,178,438
-----------
$ 3,577,138
-------------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.2%
235,000(b) B+/B1 Goodyear Tire & Rubber Co., 10.5%, 5/15/16 $ 269,075
-----------
Total Automobiles & Components $ 3,846,213
-------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.3%
Homebuilding -- 0.7%
430,000 BB-/BA3 Desarrolladora Homex SA de CV,
9.5%, 12/11/19 (144A) $ 494,837
695,000 B+/B1 Meritage Homes Corp., 6.25%, 3/15/15 698,475
-----------
$ 1,193,312
-------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 0.6%
1,000,000 CCC+/CAA1 Yankee Acquisition Corp., 9.75%, 2/15/17 $ 1,042,500
-----------
Total Consumer Durables & Apparel $ 2,235,812
-------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 2.5%
Casinos & Gaming -- 2.3%
500,000(c) NR/WR Buffalo Thunder Development Authority,
9.375%, 12/15/14 (144A) $ 130,000
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 17
Schedule of Investments | 10/31/10 (unaudited) (continued)
-------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------
Casinos & Gaming -- (continued)
EURO 1,155,000 B/B2 Codere Finance Luxembourg SA,
8.25%, 6/15/15 (144A) $ 1,625,393
395,000 B+/B2 FireKeepers Development Authority,
13.875%, 5/1/15 (144A) 463,137
275,000(c) NR/CA Little Traverse Bay Bands of Odawa Indians,
10.25%, 2/15/14 (144A) 93,844
1,615,000(c) NR/WR Mashantucket Western Pequot Tribe,
8.5%, 11/15/15 (144A) 226,100
EURO 500,000 B/B3 Peermont Global, Ltd., 7.75%, 4/30/14 (144A) 641,088
603,000 BB-/B1 Scientific Games International, Inc., 9.25%, 6/15/19 658,024
585,000(c) NR/WR Station Casinos, Inc., 6.625%, 3/15/18 70
-----------
$ 3,837,656
-------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.2%
350,000 B-/B3 StoneMor Operating LLC/Cornerstone Family Services/
Osiris Holdings, 10.25%, 12/1/17 (144A) $ 378,438
-----------
Total Consumer Services $ 4,216,094
-------------------------------------------------------------------------------------------------------
MEDIA -- 4.1%
Advertising -- 0.8%
716,000 BB-/B2 MDC Partners, Inc., 11.0%, 11/1/16 (144A) $ 794,760
800,000 B-/CAA2 Sitel LLC/Sitel Finance Corp., 11.5%, 4/1/18 (144A) 646,000
-----------
$ 1,440,760
-------------------------------------------------------------------------------------------------------
Broadcasting -- 2.8%
182,676 B/B2 CCH II LLC, 13.5%, 11/30/16 $ 218,754
840,000 B/B1 Hughes Network Systems LLC, 9.5%, 4/15/14 875,700
959,570 CCC+/CAA3 Intelsat Bermuda, Ltd., 11.5%, 2/4/17 1,037,535
500,000 B+/B3 Intelsat Subsidiary Holding Co., Ltd., 8.5%, 1/15/13 504,375
430,000 B-/CAA1 Telesat Canada, 12.5%, 11/1/17 507,400
1,451,560(d) CCC+/CAA2 Univision Communications, Inc.,
9.75%, 3/15/15 (144A) 1,536,839
-----------
$ 4,680,603
-------------------------------------------------------------------------------------------------------
Publishing -- 0.5%
600,000 CCC+/CAA2 Cengage Learning Acquisitions, Inc.,
10.5%, 1/15/15 (144A) $ 621,000
245,000 B-/CAA1 Interactive Data Corp., 10.25%, 8/1/18 (144A) 267,969
-----------
$ 888,969
-----------
Total Media $ 7,010,332
-------------------------------------------------------------------------------------------------------
RETAILING -- 1.6%
Distributors -- 0.7%
1,163,000 B-/B3 Minerva Overseas II, Ltd.,
10.875%, 11/15/19 (144A) $ 1,242,956
-------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Internet Retail -- 0.4%
640,000 B/B1 Ticketmaster Entertainment, Inc., 10.75%, 7/28/16 $ 708,800
---------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.5%
800,000(b) B/CAA1 Sally Holdings LLC, 10.5%, 11/15/16 $ 878,000
-----------
Total Retailing $ 2,829,756
---------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 4.2%
Agricultural Products -- 0.7%
1,127,000 B+/B3 Southern States Cooperative, Inc.,
11.25%, 5/15/15 (144A) $ 1,194,620
---------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 2.2%
650,000 NR/B1 Bertin Ltda, 10.25%, 10/5/16 (144A) $ 725,205
491,000 NR/B2 Corporacion Pesquera Inca SAC,
9.0%, 2/10/17 (144A) 517,391
750,000 B-/B3 FAGE Dairy Industry SA/FAGE USA Dairy Industry, Inc.,
9.875%, 2/1/20 (144A) 686,853
224,421(d) NR/NR Independencia International, Ltd.,
12.0%, 12/30/16 (144A) 6,733
475,000 B+/B1 Marfrig Overseas, Ltd., 9.5%, 5/4/20 (144A) 508,700
700,000 B+/B1 Marfrig Overseas, Ltd., 9.625%, 11/16/16 (144A) 756,875
275,000 B/B3 Minerva Overseas II, Ltd.,
10.875%, 11/15/19 (144A) 293,906
275,000(f) NR/B2 SA Fabrica de Produtos Alimenticios Vigor,
9.25%, 2/23/17 (144A) 277,957
-----------
$ 3,773,620
---------------------------------------------------------------------------------------------------------
Tobacco -- 1.3%
2,015,000 B+/B2 Alliance One International, Inc., 10.0%, 7/15/16 $ 2,216,500
-----------
Total Food, Beverage & Tobacco $ 7,184,740
---------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.5%
Personal Products -- 0.5%
300,000 B-/NR Revlon Consumer Products Corp., 9.75%, 11/15/15 $ 312,750
500,000 B/CAA1 Reynolds Group Issuer, Inc., 9.0%, 4/15/19 519,375
-----------
Total Household & Personal Products $ 832,125
---------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 4.6%
Health Care Services -- 2.6%
378,000 B-/B3 BioScrip, Inc., 10.25%, 10/1/15 $ 399,735
1,185,000 BB/NR DASA Finance Corp., 8.75%, 5/29/18 (144A) 1,333,125
476,000 B-/B2 Gentiva Health Services, Inc., 11.5%, 9/1/18 (144A) 520,030
1,170,000(b) CCC+/CAA1 Surgical Care Affiliates, Inc., 10.0%, 7/15/17 (144A) 1,205,100
796,459(d) B-/B3 Surgical Care Affiliates, Inc.,
8.875%, 7/15/15 (144A) 818,362
-----------
$ 4,276,352
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 19
Schedule of Investments | 10/31/10 (unaudited) (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Health Care Equipment -- 1.0%
750,000 CCC+/CAA2 Accellent, Inc., 10.0%, 11/1/17 (144A) $ 744,375
1,000,000 B/B2 Icon Health & Fitness, 11.875%, 10/15/16 (144A) 990,000
-----------
$ 1,734,375
---------------------------------------------------------------------------------------------------------
Health Care Supplies -- 1.0%
750,000 B/CAA1 Bausch & Lomb, Inc., 9.875%, 11/1/15 $ 815,625
815,000(d) B-/B3 Biomet, Inc., 10.375%, 10/15/17 910,762
-----------
$ 1,726,387
-----------
Total Health Care Equipment & Services $ 7,737,114
---------------------------------------------------------------------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY & LIFE SCIENCES -- 0.7%
Biotechnology -- 0.3%
543,000 B+/B2 Lantheus Medical Imaging, Inc.,
9.75%, 5/15/17 (144A) $ 567,435
---------------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.4%
131,406(d) B/CAA1 Catalent Pharma Solutions, Inc., 9.5%, 4/15/15 $ 133,377
420,000 B+/B3 PharmaNet Development Group, Inc.,
10.875%, 4/15/17 (144A) 436,800
-----------
$ 570,177
-----------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 1,137,612
---------------------------------------------------------------------------------------------------------
BANKS -- 1.6%
Diversified Banks -- 0.9%
400,000(a)(e) BB/BA3 ABN Amro North American Holding Preferred Capital
Repackage Trust I, 6.523%, 12/29/49 (144A) $ 348,000
700,000 NR/BA2 Banco Macro SA, 10.75%, 6/7/12 509,250
500,000(a)(b) NR/B2 Banco Macro SA, 9.75%, 12/18/36 490,000
BRL 350,000 AAA/NR International Finance Corp., 9.25%, 3/15/13 210,776
15,747 A/A3 JSC Temirbank, 14.0%, 6/30/22 (144A) 18,104
-----------
$ 1,576,130
---------------------------------------------------------------------------------------------------------
Regional Banks -- 0.7%
600,000(a)(e) BBB/BAA3 PNC Financial Services Group, Inc., 8.25% $ 629,267
500,000(a)(e) A-/BA1 Wells Fargo Capital XV, 9.75%, 12/29/49 561,550
-----------
$ 1,190,817
-----------
Total Banks $ 2,766,947
---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 7.6%
Asset Management & Custody Banks -- 0.6%
375,000(f) BB+/BAA3 Janus Capital Group, Inc., 6.5%, 6/15/12 $ 393,025
665,000 BB+/BAA3 Janus Capital Group, Inc., 6.95%, 6/15/17 696,444
-----------
$ 1,089,469
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
-----------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------------
Consumer Finance -- 0.2%
EURO 200,000 B+/B1 TVN Finance Corp II AB, 10.75%, 11/15/17 (144A) $ 315,506
-----------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
450,000(a)(e) BBB/BAA2 Goldman Sachs Capital II, 5.793%, 12/29/49 $ 386,438
-----------------------------------------------------------------------------------------------------------
Other Diversified Financial Services -- 4.6%
EURO 500,000(a) BB-/NR ATLAS VI Capital, Ltd., 10.135%, 4/6/13 (144A) $ 711,695
400,000(b) B-/CAA1 Blue Acquisition Sub, Inc., 9.875%, 10/15/18 (144A) 431,000
311,937 NR/NR BTA Bank JSC, 0.0%, 7/1/ 20 21,836
34,213 A/A3 BTA Bank JSC, Sub Note, 7.2%, 7/1/25 26,943
150,993(f) A/A3 BTA Bank JSC, 10.75%, 7/1/18 169,489
1,500,000(a) A/A3 Caelus Re II, Ltd., 6.5%, 5/24/13 1,522,800
400,000(a) BB/NR Ibis Re, Ltd., 10.507%, 5/10/12 (144A) 434,480
1,000,000(a) B+/NR Ibis Re, Ltd., 9.407%, 5/3/13 (144A) 1,003,200
2,000,000(a) BB/NR Lodestone Re, Ltd., 8.369%, 5/17/13 (144A) 2,052,600
100,000 NR/B2 Nara Cable Funding, 8.875%, 12/1/18 (144A) 138,989
1,000,000(a) NR/NR Redwood Capital XI, Ltd., 6.407%, 1/7/11 (144A) 1,004,000
250,000(a) A/A3 Residential Reinsurance, 0.0%, 6/6/13 (144A) 260,250
-----------
$ 7,777,282
-----------------------------------------------------------------------------------------------------------
Specialized Finance -- 2.0%
500,000 BB/BAA3 Capital One Capital V, 10.25%, 8/15/39 $ 542,500
1,000,000(a) B-/NR Montana Re, Ltd., 13.502%, 12/7/12 (144A) 1,018,100
425,000 B+/NR National Money Mart Co., 10.375%, 12/15/16 463,250
825,000 CCC/CAA2 NCO Group, Inc., 11.875%, 11/15/14 701,250
755,000(a) CCC/CAA1 NCO Group, Inc., 5.125%, 11/15/13 607,775
-----------
$ 3,332,875
-----------
Total Diversified Financials $12,901,570
-----------------------------------------------------------------------------------------------------------
INSURANCE -- 21.9%
Insurance Brokers -- 1.7%
250,000 CCC/CAA1 Alliant Holdings I, Inc., 11.0%, 5/1/15 (144A) $ 262,812
1,050,000 CCC+/CAA1 HUB International Holdings, Inc.,
10.25%, 6/15/15 (144A) 1,052,625
827,000(a) CCC/B3 U.S.I. Holdings Corp., 4.125%, 11/15/14 (144A) 715,355
804,000 CCC/CAA1 U.S.I. Holdings Corp., 9.75%, 5/15/15 (144A) 806,010
-----------
$ 2,836,802
-----------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 1.3%
1,000,000(a) BB/BAA3 Liberty Mutual Group, Inc., 7.0%, 3/15/37 (144A) $ 936,561
1,000,000(a) BB/BAA3 Liberty Mutual Group, Inc., 10.75%, 6/15/58 (144A) 1,240,000
65,000 BB-/NR Sul America Participacoes SA,
8.625%, 2/15/12 (144A) 68,088
-----------
$ 2,244,649
-----------------------------------------------------------------------------------------------------------
Reinsurance -- 18.9%
1,500,000(a) BB+/NR Akibare, Ltd., 3.201%, 5/22/12 (144A) $ 1,512,750
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 21
Schedule of Investments | 10/31/10 (unaudited) (continued)
----------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
----------------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
1,000,000(a) BB+/NR Akibare, Ltd., 3.401%, 5/22/12 (144A) $ 1,008,400
EURO 1,500,000(a) B-/NR Atlas Reinsurance Plc, 10.885%, 1/10/11 (144A) 2,074,415
2,000,000(a) BB+/NR Blue Fin, Ltd., 4.695%, 4/10/12 (144A) 1,923,200
1,000,000(a) BB-/NR Blue Fin, Ltd., 13.804%, 4/16/12 (144A) 1,070,200
1,000,000(a) BB/NR Caelus Re, Ltd., 6.502%, 6/7/11 (144A) 1,014,500
1,750,000(a) B/NR Carillon, Ltd., 15.507%, 1/10/11 (144A) 1,792,175
1,500,000(a) BB+/NR East Lane Re, Ltd., 7.249%, 5/6/11 (144A) 1,544,250
1,750,000(a) BB+/NR Fhu-Jin, Ltd., 4.149%, 8/10/11 (144A) 1,776,425
1,000,000(a) BB+/A2 Foundation Re III, Ltd., 5.806%, 2/3/14 (144A) 1,005,300
1,000,000(a) NR/B1 GlobeCat, Ltd., 6.292%, 1/2/13 (144A) 1,013,500
350,000(a) NR/B3 GlobeCat, Ltd., 9.542%, 1/2/13 (144A) 338,310
EURO 1,500,000(a) BB+/NR Green Valley, Ltd., 4.24%, 1/10/11 (144A) 2,073,164
600,000(a) BB+/NR Merna Reinsurance II, Ltd., 3.807%, 4/8/13 (144A) 606,660
250,000(a) B/NR MultiCat Mexico, Ltd., Series 2009-I Class A,
11.657%, 10/19/12 (144A) 267,225
250,000(a) B/NR MultiCat Mexico, Ltd., Series 2009-I Class B,
10.407%, 10/19/12 (144A) 266,775
250,000(a) B/NR MultiCat Mexico, Ltd., Series 2009-I Class C,
10.407%, 10/19/12 (144A) 266,775
250,000(a) BB-/NR MultiCat Mexico, Ltd., Series 2009-I Class D,
10.407%, 10/19/12 (144A) 264,200
2,500,000(a) NR/NR Muteki, Ltd., 4.65%, 5/24/11 (144A) 2,505,250
500,000(a) BB/NR Mystic Re II, Ltd., 12.252%, 3/20/12 (144A) 537,900
1,000,000(a) NR/B2 Nelson Re, Ltd., 4.75%, 6/6/11 (144A) 987,700
1,000,000(a) NR/NR Newton Re, Ltd., 4.932%, 12/24/10 (144A) 1,001,400
1,000,000(a) NR/NR Newton Re, Ltd., 7.232%, 12/24/10 (144A) 1,007,200
425,000(a) BB-/NR Residential Reinsurance 2008, Ltd.,
7.002%, 6/6/11 (144A) 437,070
2,000,000(a) B/NR Residential Reinsurance 2008, Ltd.,
11.752%, 6/6/11 (144A) 2,101,000
1,000,000(a) B-/NR Successor X, Ltd., 0.0%, 12/9/10 (144A) 974,900
600,000(a) B-/NR Successor X, Ltd., 0.0%, 12/9/10 (144A) 592,140
500,000(a) B-/NR Successor X, Ltd., 9.907%, 4/4/13 (144A) 462,250
1,250,000(a) NR/NR Successor X, Ltd., 11.907%, 4/4/13 (144A) 1,133,500
500,000(a) NR/NR Successor X, Ltd., 16.907%, 4/4/13 (144A) 446,950
-----------
$32,005,484
-----------
Total Insurance $37,086,935
----------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.3%
Real Estate Operating Companies -- 0.3%
65,489 B-/NR Alto Palermo SA, 11.0%, 6/11/12 (144A) $ 28,356
410,000 B-/NR IRSA Inversiones y Representaciones SA,
8.5%, 2/2/17 (144A) 407,950
-----------
Total Real Estate $ 436,306
----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
-----------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.4%
Application Software -- 0.8%
1,390,000 CCC+/CAA2 Vangent, Inc., 9.625%, 2/15/15 $ 1,266,638
-----------------------------------------------------------------------------------------------------
Data Processing & Outsourced Services -- 0.5%
900,000 B-/CAA1 First Data Corp., 9.875%, 9/24/15 $ 760,500
-----------------------------------------------------------------------------------------------------
Internet Software & Services -- 0.6%
905,000 B-/B1 Terremark Worldwide, Inc., 12.0%, 6/15/17 $ 1,038,488
-----------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 0.2%
405,000 CCC/CAA1 Activant Solutions, Inc., 9.5%, 5/1/16 $ 389,306
-----------------------------------------------------------------------------------------------------
Systems Software -- 0.3%
729,523(d)(h) NR/NR Pegasus Solutions, Inc., 13.0%, 4/15/14 (144A) $ 547,142
-----------
Total Software & Services $ 4,002,074
-----------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.6%
Computer Storage & Peripherals -- 0.3%
430,000 BBB/BAA3 Seagate Technology International, Inc.,
10.0%, 5/1/14 (144A) $ 524,600
-----------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.3%
486,000 B/B1 Da-Lite Screen Co., Inc., 12.5%, 4/1/15 $ 498,757
-----------
Total Technology Hardware & Equipment $ 1,023,357
-----------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 6.1%
Alternative Carriers -- 0.7%
945,000 B/B2 Global Crossing, Ltd., 12.0%, 9/15/15 $ 1,079,663
-----------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- 2.9%
910,000 B-/B3 Broadview Networks Holdings, Inc., 11.375%, 9/1/12 $ 891,800
388,000 B-/B3 Cincinnati Bell, Inc., 8.75%, 3/15/18 375,390
1,250,000 BB-/B2 GCI, Inc., 7.25%, 2/15/14 1,275,000
750,000 B/BA3 PAETEC Holding Corp., 8.875%, 6/30/17 808,125
1,010,000 CCC+/CAA1 PAETEC Holding Corp., 9.5%, 7/15/15 1,068,075
500,000 B+/BA3 Windstream Corp., 8.625%, 8/1/16 531,250
-----------
$ 4,949,640
-----------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.5%
550,000 NR/NR Bakrie Telecom Tbk PT, 11.5%, 5/7/15 (144A) $ 600,875
300,000 CCC+/CAA1 Digicel Group, Ltd., 10.5%, 4/15/18 (144A) 330,375
750,000 NR/NR NII Capital Corp, 10.0%, 8/15/16 850,313
790,000(b) BB+/BA2 OJSC Vimpel Communications,
9.125%, 4/30/18 (144A) 894,675
1,330,000 B-/B2 True Move Co., Ltd., 10.375%, 8/1/14 (144A) 1,433,075
100,000 B-/B2 True Move Co., Ltd., 10.75%, 12/16/13 (144A) 108,000
-----------
$ 4,217,313
-----------
Total Telecommunication Services $10,246,616
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 23
Schedule of Investments | 10/31/10 (unaudited) (continued)
-------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------
UTILITIES -- 3.4%
Electric Utilities -- 0.9%
750,000 B-/NR Cia de Transporte de Energia Electrica de Alta Tension
SA, 8.875%, 12/15/16 (144A) $ 706,875
239,000 B-/B2 Empresa Distribuidora Y Comercializadora Norte,
9.75%, 10/25/22 248,614
510,000(b) CCC/CAA2 Texas Competitive Electric Holdings LLC,
15.0%, 4/1/21 (144A) 502,350
------------
$ 1,457,839
-------------------------------------------------------------------------------------------------------
Gas Utilities -- 1.0%
490,000 B+/BA3 Inergy, L.P., 8.25%, 3/1/16 $ 514,500
1,135,000 B-/B2 Transportadora de Gas del Sur SA,
7.875%, 5/14/17 (144A) 1,119,394
------------
$ 1,633,894
-------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 1.4%
1,200,000 A/A3 Foresight Energy Corp., 9.625%, 8/15/17 (144A) $ 1,284,000
500,000 BB-/BA3 Intergen NV, 9.0%, 6/30/17 (144A) 540,000
500,000 NR/B2 Star Energy Geothermal (Wayang Windu), Ltd.,
11.5%, 2/12/15 (144A) 570,470
------------
$ 2,394,470
-------------------------------------------------------------------------------------------------------
Multi-Utilities -- 0.1%
225,000 BB-/BA2 PNM Resources, Inc., 9.25%, 5/15/15 $ 243,563
------------
Total Utilities $ 5,729,766
-------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $155,306,853) $159,463,427
-------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 3.0% of Net Assets
MATERIALS -- 0.9%
Diversified Chemicals -- 0.9%
1,900,000(g) BB-/NR Hercules, Inc., 6.5%, 6/30/29 $ 1,520,000
------------
Total Materials $ 1,520,000
-------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 0.2%
Electrical Components & Equipment -- 0.2%
150,000 NR/NR JA Solar Holdings Co., Ltd., 4.5%, 5/15/13 $ 144,375
271,000 NR/NR Suntech Power Holdings Co., Ltd., 3.0%, 3/15/13 242,545
------------
Total Capital Goods $ 386,920
-------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.5%
Marine -- 0.5%
990,000 CCC+/CAA3 Horizon Lines, Inc., 4.25%, 8/15/12 $ 905,850
------------
Total Transportation $ 905,850
-------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
---------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------
MEDIA -- 0.3%
Movies & Entertainment -- 0.3%
659,000 B-/NR Live Nation, Inc., 2.875%, 7/15/27 $ 568,388
-----------
Total Media $ 568,388
---------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 0.9%
Health Care Equipment & Services -- 0.6%
1,040,000(f) BB+/NR Hologic, Inc., 2.0%, 12/15/37 $ 980,200
---------------------------------------------------------------------------------------------
Health Care Facilities -- 0.3%
405,000 B/NR LifePoint Hospitals, Inc., 3.5%, 5/15/14 $ 402,469
---------------------------------------------------------------------------------------------
Health Care Services -- 0.0%
50,000 B+/B1 Omnicare, Inc., 3.25%, 12/15/35 $ 44,563
-----------
Total Health Care Equipment & Services $ 1,427,232
---------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.2%
Wireless Telecommunication Services -- 0.2%
250,000 B-/NR NII Holdings, Inc., 3.125%, 6/15/12 $ 243,750
-----------
Total Telecommunication Services $ 243,750
---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $3,984,843) $ 5,052,140
---------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATION -- 0.7% of Net Assets
Brazil -- 0.7%
BRL 1,750,000 BBB-/Baa3 Brazilian Government International Bond,
10.25%, 1/10/28 $ 1,116,538
---------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATION
(Cost $947,421) $ 1,116,538
---------------------------------------------------------------------------------------------
SENIOR FLOATING RATE LOAN INTERESTS -- 32.9% of Net
Assets (i)
ENERGY -- 1.1%
Coal & Consumable Fuels -- 0.3%
450,000 BB/NR Bumi Resources Term Loan, 11.2534%, 8/5/32 $ 450,000
---------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.6%
818,056 NR/B2 Big West Oil LLC, Term Loan, 12.0%, 7/23/15 $ 832,883
288,536 BB-/BA3 Hudson Products Holdings, Inc., Term Loan,
8.5%, 8/24/15 278,618
-----------
$ 1,111,501
---------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.2%
299,848 BB-/B3 Venoco, Inc., Second Lien Term Loan,
4.313%, 5/7/14 $ 284,169
-----------
Total Energy $ 1,845,670
---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 25
Schedule of Investments | 10/31/10 (unaudited) (continued)
----------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
----------------------------------------------------------------------------------------------
MATERIALS -- 3.7%
Diversified Chemicals -- 0.9%
480,095 BB+/BA1 Huntsman International LLC, New Dollar Term Loan B,
1.7835%, 4/19/14 $ 469,404
333,688 B/B2 Ineos US Finance LLC, Facility Term Loan B-2,
7.5%, 12/16/13 341,752
365,000 B/B2 Ineos US Finance LLC, Facility Term Loan C-2,
8.0%, 12/16/14 373,821
240,625 BB/BA2 Solutia, Inc., Term Loan, 4.75%, 3/17/17 242,730
-----------
$ 1,427,707
----------------------------------------------------------------------------------------------
Forest Products -- 0.8%
1,500,000 NR/BA3 Ainsworth Lumber Co., Ltd., Term Loan,
5.313%, 6/26/14 $ 1,426,875
----------------------------------------------------------------------------------------------
Paper Packaging -- 0.6%
459,023 B+/B1 Graham Packaging Co., LP, Term Loan C,
6.75%, 4/5/14 $ 463,695
90,000 B+/B1 Graham Packaging Co., LP, Term Loan, 6.0%,
9/23/16 91,041
430,852 B-/B3 Graphic Packaging International, Inc., Incremental
Term Loan, 3.0373%, 5/16/14 428,025
-----------
$ 982,761
----------------------------------------------------------------------------------------------
Paper Products -- 0.6%
962,401 BB+/NR Georgia-Pacific LLC, Term Loan B, 2.21%, 12/23/12 $ 962,564
----------------------------------------------------------------------------------------------
Precious Metals & Minerals -- 0.1%
225,000 NR/NR Fairmount Minerals, Tranche B Term Loan,
6.25%, 8/5/16 $ 227,906
----------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.2%
100,000 B/B2 Chemtura Corp., Facility Term Loan, 6.0%, 2/11/11 $ 100,250
250,000 NR/BA1 Chemtura Corp., Facility Term Loan, 5.5%, 8/29/16 252,395
-----------
$ 352,645
----------------------------------------------------------------------------------------------
Steel -- 0.5%
903,140(d)(h) B/B3 Niagara Corp., New Term Loan, 10.5%, 6/29/14 $ 894,108
-----------
Total Materials $ 6,274,566
----------------------------------------------------------------------------------------------
CAPITAL GOODS -- 3.1%
Aerospace & Defense -- 1.7%
698,721 B-/NR Aeroflex, Inc., Tranche B-2 Term Loan,
4.125%, 8/15/14 $ 692,608
605,843 BB-/B1 DAE Aviation Holdings, Inc., Tranche B-1 Term Loan,
4.04%, 7/31/14 583,124
247,984 BB/B1 Hunter Defense Technologies, Inc., Term Loan,
3.54%, 8/22/14 235,895
487,310 BB+/BA3 Spirit Aerosystems, Inc., Term Loan B-1,
3.5391%, 9/30/16 481,371
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
-----------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------
Aerospace & Defense -- (continued)
586,653 BB-/B1 Standard Aero, Ltd., Tranche B-2 Term Loan,
4.04%, 7/31/14 $ 564,654
383,232 BB/BA2 TASC, Inc., Tranche A Term Loan, 5.5%, 12/18/14 384,988
-----------
$ 2,942,640
-----------------------------------------------------------------------------------------------------
Construction & Farm Machinery & Heavy Trucks -- 0.4%
497,542 BB/BA2 Bucyrus International, Inc., Tranche C Dollar Term
Loan, 4.5%, 2/19/16 $ 503,513
210,687 BB+/BA2 Manitowoc Co., Inc., Term Loan B, 8.0%, 11/6/14 211,506
-----------
$ 715,019
-----------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.7%
EURO 1,125,000 B+/B1 Goodman Global, Inc., Term Loan, 5.75%, 10/6/16 $ 1,126,688
-----------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.2%
EURO 250,000 BB/BA2 Tomkins Plc, Term Loan, 6.75%, 9/7/16 $ 253,262
-----------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.1%
EURO 122,656 NR/NR SIG Euro Holding AG & Co. KGaA, European Term
Loan, 6.25%, 11/5/15 $ 171,118
-----------
Total Capital Goods $ 5,208,727
-----------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 2.3%
Commercial Printing -- 0.1%
3,742 BB-/BA2 Cenveo Corp., Delayed Draw Term Loan,
4.7916%, 6/21/13 $ 3,714
131,084 BB-/BA3 Cenveo Corp., Facility Term Loan C,
4.7916%, 6/21/13 130,080
-----------
$ 133,794
-----------------------------------------------------------------------------------------------------
Diversified Commercial & Professional Services -- 0.4%
668,675 BB+/B1 Asset Acceptance Capital Corp., Tranche B Term Loan,
3.7981%, 6/12/13 $ 647,500
-----------------------------------------------------------------------------------------------------
Diversified Support Services -- 0.3%
300,004 B-/CAA1 Rental Service Corp., Second Lien Initial Term Loan,
3.76%, 11/30/13 $ 294,529
250,000 B+/BA2 SHG Services LLC, Term Loan B, 7.5%, 9/23/16 247,969
-----------
$ 542,498
-----------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 1.3%
249,372 NR/NR Advanced Disposal Services, Inc., Term Loan B,
6.0%, 1/14/15 $ 250,930
815,000 B+/B1 Brickman Group Holdings, Inc., Tranche B Term Loan,
7.25%, 10/14/16 824,679
123,438 B+/BA2 Casella Waste Systems, Inc., Term Loan B,
7.0%, 4/9/14 124,595
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 27
Schedule of Investments | 10/31/10 (unaudited) (continued)
------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- (continued)
1,209,375 BB-/BA3 Synagro Technologies, Inc., First Lien Term Loan,
2.26%, 4/2/14 $ 1,052,156
-----------
$ 2,252,360
------------------------------------------------------------------------------------------------
Security & Alarm Services -- 0.2%
249,375 BB/B1 Protection One, Inc., Term Loan, 6.0%, 6/4/16 $ 249,998
-----------
Total Commercial & Professional Services $ 3,826,150
------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.1%
Air Freight & Logistics -- 0.9%
439,482 NR/BA2 Ceva Group Plc, Pre-Funded LC Loan,
0.19%, 11/4/13 $ 394,801
1,295,243 NR/BA2 Ceva Group Plc, U.S. Term Loan, 3.2553%, 11/4/13 1,163,560
-----------
$ 1,558,361
------------------------------------------------------------------------------------------------
Airlines -- 0.2%
248,077 B+/BA2 Delta Air Lines, Inc., Second Lien Term Loan,
3.5391%, 4/30/14 $ 240,738
-----------
Total Transportation $ 1,799,099
------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 1.7%
Auto Parts & Equipment -- 0.8%
141,275 B+/BA3 Federal-Mogul Corp., Tranche B Term Loan,
2.1975%, 12/29/14 $ 125,757
72,079 B+/BA3 Federal-Mogul Corp., Tranche C Term Loan,
2.1975%, 12/28/15 64,162
259,335 B+/B3 HHI Group Holdings LLC, Term Loan, 10.5%, 3/30/15 263,225
600,000 NR/B1 Metaldyne LLC, First Lien Term Loan B,
7.75%, 10/22/16 605,250
225,000 B/NR United Components, Inc., First Lien Term Loan,
6.25%, 3/23/17 227,363
-----------
$ 1,285,757
------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 0.3%
551,449 B-/BA3 Ford Motor Co., Tranche B-1 Term Loan,
3.0375%, 12/15/13 $ 546,813
------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.6%
1,000,000 BB/BA1 Goodyear Tire & Rubber Co., Second Lien Term Loan,
2.21%, 4/30/14 $ 964,583
-----------
Total Automobiles & Components $ 2,797,153
------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.3%
Leisure Products -- 0.3%
505,603 BB-/BA3 SRAM LLC, Term Loan, 5.01%, 4/30/15 $ 506,867
-----------
Total Consumer Durables & Apparel $ 506,867
------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
----------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
----------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 0.1%
Casinos & Gaming -- 0.1%
945,000(b) D/C Gateway Casinos & Entertainment, Inc., Advance
Second Lien Term Loan, 5.787%, 3/31/15 $ 165,671
-----------
Total Consumer Services $ 165,671
----------------------------------------------------------------------------------------------------
MEDIA -- 3.2%
Advertising -- 0.6%
995,000 BB/BA2 Affinion Group, Inc., Tranche B Term Loan,
5.0%, 10/9/16 $ 983,806
----------------------------------------------------------------------------------------------------
Broadcasting -- 1.4%
494,776 NR/NR Fox Co. Acquisition Sub LLC, Term Loan,
7.5%, 7/14/15 $ 491,065
919,342 B+/BA3 Insight Midwest Holdings LLC, Term Loan B,
2.0207%, 4/7/14 889,628
412,740 BB/BA2 TWCC Holding Corp., Replacement Term Loan,
5.0%, 9/14/15 415,173
595,722 NR/NR Univision Communications, Inc., First Lien Term Loan,
4.506%, 3/29/17 564,235
-----------
$ 2,360,101
----------------------------------------------------------------------------------------------------
Cable & Satellite -- 0.3%
553,026 B-/B1 WideOpenWest Finance LLC, Series A Term Loan,
6.7563%, 6/30/14 $ 542,888
-----------
$ 542,888
----------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.5%
235,416 NR/BA1 Cinedigm Digital Funding I, LLC, Term Loan,
5.25%, 4/29/16 $ 234,239
661,242 B+/B1 Lodgenet Entertainment Corp., Closing Date Term
Loan, 2.29%, 4/4/14 629,282
-----------
$ 863,521
----------------------------------------------------------------------------------------------------
Publishing -- 0.4%
872,462 B+/B1 RH Donnelley, Inc., Term Loan, 9.0%, 10/24/14 $ 744,865
-----------
Total Media $ 5,495,181
----------------------------------------------------------------------------------------------------
RETAILING -- 0.5%
Automotive Retail -- 0.2%
250,000 BB+/NR Autotrader.com, Inc., Tranche B Term Loan,
6.0%, 6/14/16 $ 251,094
----------------------------------------------------------------------------------------------------
Specialty Stores -- 0.3%
547,250 B+/BA3 Savers, Inc., Term Loan, 5.75%, 3/11/16 $ 549,302
-----------
Total Retailing $ 800,396
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 29
Schedule of Investments | 10/31/10 (unaudited) (continued)
------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.3%
Packaged Foods & Meats -- 0.3%
500,000 NR/NR Pierre Foods, Inc., First Lien Term Loan,
11.25%, 9/29/17 $ 496,407
-----------
Total Food, Beverage & Tobacco $ 496,407
------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.3%
Food Retail -- 0.3%
487,500 NR/B2 Bi-Lo LLC, Term Loan, 9.5%, 5/12/15 $ 496,031
-----------
Total Food & Staples Retailing $ 496,031
------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.4%
Household Products -- 0.1%
248,438 BB-/BA3 Reynolds Group Holdings, Inc., Term Loan,
6.25%, 5/5/16 $ 250,844
------------------------------------------------------------------------------------------------
Personal Products -- 0.3%
250,000 NR/BA3 NBTY, Inc., Term Loan B, 6.25%, 10/1/17 $ 253,593
248,750 B+/BA3 Revlon Consumer Products Corp., Term Loan,
6.0%, 3/11/15 249,505
-----------
$ 503,098
-----------
Total Household & Personal Products $ 753,942
------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 3.1%
Health Care Facilities -- 1.3%
248,750 B/B1 Ardent Medical Services, Inc., Term Loan,
6.5%, 9/15/15 $ 247,195
49,830 BB/BA3 Community Health Systems, Inc., Delayed Draw Term
Loan, 2.549%, 7/25/14 48,957
969,382 BB/BA3 Community Health Systems, Inc., Term Loan,
2.549%, 7/25/14 952,418
704,908 B+/B3 Hanger Orthopedic Group, Inc., Tranche B Term Loan,
2.26%, 5/26/13 702,485
82,579 B+/BA2 HCA, Inc., Tranche B-1 Term Loan, 2.54%, 11/18/13 80,910
198,040 BB/BA3 HCA, Inc., Tranche B-2 Term Loan, 3.54%, 3/31/17 194,631
-----------
$ 2,226,596
------------------------------------------------------------------------------------------------
Health Care Services -- 0.5%
468,825 BB-/BA3 Inventiv Health, Inc., Term Loan B, 6.5%, 8/4/16 $ 472,121
373,125 NR/B1 Prime Healthcare Services, Inc., Term Loan B,
7.25%, 4/28/15 358,200
-----------
$ 830,321
------------------------------------------------------------------------------------------------
Health Care Supplies -- 1.0%
112,147 BB-/B1 Bausch & Lomb, Inc., Delayed Draw Term Loan,
3.5053%, 4/24/15 $ 109,572
462,455 BB-/B1 Bausch & Lomb, Inc., Parent Term Loan,
3.5268%, 4/24/15 451,840
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
------------------------------------------------------------------------------------------------
Health Care Supplies -- (continued)
483,750 B+/B2 IM US Holdings LLC, First Lien Term Loan, 2.2699%,
6/26/14 $ 467,726
600,000 B+/B2 IM US Holdings LLC, Second Lien Term Loan,
4.502%, 6/26/15 582,563
-----------
$ 1,611,701
------------------------------------------------------------------------------------------------
Health Care Technology -- 0.3%
247,560 BB/BA3 IMS Health, Inc., Tranche B Dollar Term Loan,
5.25%, 2/26/16 $ 250,319
400,000 B/B2 Medical Card System, Inc., First Lien Term Loan,
12.0%, 9/17/15 400,000
-----------
$ 650,319
-----------
Total Health Care Equipment & Services $ 5,318,937
------------------------------------------------------------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY & LIFE SCIENCES -- 1.5%
Biotechnology -- 0.6%
366,864 BB+/B1 Warner Chilcott Co. LLC, Term Loan A,
6.0%, 10/30/14 $ 366,992
177,089 BB+/B1 Warner Chilcott Co. LLC, Term Loan B- 1,
6.25%, 4/30/15 178,113
294,885 BB+/B1 Warner Chilcott Co. LLC, Term Loan B- 2,
6.25%, 4/30/15 296,590
119,100 B+/BA3 Warner Chilcott Co. LLC, Term Loan B- 3,
6.25%, 4/30/15 119,736
-----------
$ 961,431
------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.7%
1,337,923 BB-/BA3 Catalent Pharma Solutions, Inc., Dollar Term Loan,
2.505%, 4/10/14 $ 1,257,369
------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.2%
384,393 BB/BA3 Mylan, Inc., U.S. Tranche B Term Loan,
3.563%, 10/2/14 $ 385,534
-----------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 2,604,334
------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 1.1%
Specialized Finance -- 1.1%
828,360 BB-/B3 Ace Cash Express, Inc., Term Loan, 3.289%, 10/5/13 $ 722,744
249,375 BB+/BA2 MSCI, Inc., Term Loan, 4.75%, 6/1/16 251,206
842,403 B+/BA3 Collect Acquisition Corp., Advance Term Loan B,
7.434%, 5/15/13 818,535
-----------
$ 1,792,485
-----------
Total Diversified Financials $ 1,792,485
------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 31
Schedule of Investments | 10/31/10 (unaudited) (continued)
---------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------
INSURANCE -- 3.3%
Insurance Brokers -- 2.4%
1,434,600 B-/B3 Alliant Holdings I, Inc., Term Loan, 3.289%, 8/21/14 $ 1,395,149
127,875 B/B3 HUB International, Ltd., Delay Draw Term Loan,
2.79%, 6/13/14 122,679
568,886 B/B3 HUB International, Ltd., Initial Term Loan,
2.79%, 6/13/14 545,768
99,000 B-/B3 U.S.I. Holdings Corp., Series C Term Loan,
7.0%, 5/5/14 96,978
1,935,000 B-/B2 U.S.I. Holdings Corp., Tranche B Term Loan,
2.76%, 5/5/14 1,815,674
-----------
$ 3,976,248
---------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.9%
790,101 B-/B2 AmWins Group, Inc., Initial Term Loan,
2.7958%, 6/8/13 $ 737,263
1,000,000 CCC/B3 AmWins Group, Inc., Second Lien Initial Term Loan,
5.8%, 6/9/14 855,000
-----------
$ 1,592,263
-----------
Total Insurance $ 5,568,511
---------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.1%
Real Estate Development -- 0.1%
248,750 BB-/BA3 Ozburn-Hessey Holding Co., LLC, First Lien Term Loan,
7.5%, 4/8/16 $ 251,704
-----------
Total Real Estate $ 251,704
---------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 3.9%
Application Software -- 0.8%
972,010 B+/B1 Nuance Communications, Inc., Term Loan,
2.01%, 3/29/13 $ 955,912
500,000 NR/CAA1 Vertafore, Inc., Second Lien Term Loan,
0.0%, 10/18/17 506,250
-----------
$ 1,462,162
---------------------------------------------------------------------------------------------------
Internet Software & Services -- 0.6%
565,000 B/B1 Savvis, Inc., Term Loan, 6.75%, 8/4/16 $ 572,698
444,332 B+/B1 Web Service Co., LLC, Term Loan, 7.0%, 8/28/14 443,222
-----------
$ 1,015,920
---------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 1.7%
390,988 B+/B1 Activant Solutions, Inc., Term Loan, 2.313%, 5/2/13 $ 377,955
546,710 B+/B2 Keane International, Inc., Closing Date Term Loan,
2.55%, 6/4/13 543,293
42,654 B+/B2 Keane International, Inc., Synthetic LC Loan,
2.415%, 6/4/13 42,387
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
---------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- (continued)
1,929,825 BB/BA3 SunGard Data Systems, Inc., Tranche A U.S.Term Loan,
2.006%, 2/28/14 $ 1,880,711
-----------
$ 2,844,346
---------------------------------------------------------------------------------------------------
Systems Software -- 0.8%
1,354,712 BB-/BA3 Vangent, Inc., Term Loan, 2.32%, 2/14/13 $ 1,300,524
-----------
Total Software & Services $ 6,622,952
---------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.4%
Communications Equipment -- 0.1%
248,125 BB/BA3 TowerCo Finance LLC, Term Loan, 6.0%, 11/24/14 $ 251,020
---------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.3%
488,773 BB-/BA3 Scitor Corp., Term Loan, 4.51%, 9/26/14 $ 481,442
-----------
Total Technology Hardware & Equipment $ 732,462
---------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.4%
Semiconductor Equipment -- 0.4%
775,257 B-/NR Freescale Semiconductor, Inc., Extended Maturity Term
Loan, 4.506%, 12/1/16 $ 731,326
-----------
Total Semiconductors & Semiconductor Equipment $ 731,326
---------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.3%
Integrated Telecommunication Services -- 0.3%
87,566 BB/BA3 Cincinnati Bell, Inc., Tranche B Term Loan,
6.5%, 6/11/17 $ 88,229
430,483 B+/B2 Telesat Canada, U.S. Term I Loan, 3.26%, 10/31/14 423,565
36,977 B+/B2 Telesat Canada, U.S. Term II Loan, 3.26%, 10/31/14 36,383
-----------
$ 548,177
-----------
Total Telecommunication Services $ 548,177
---------------------------------------------------------------------------------------------------
UTILITIES -- 0.7%
Electric Utilities -- 0.3%
656,703 B+/B1 Texas Competitive Electric Holdings Co. LLC, Initial
Tranche B-2 Term Loan, 3.923%, 10/10/14 $ 516,661
---------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 0.4%
496,024 BB-/B1 Calpine Corp., First Priority Term Loan,
3.165%, 3/29/14 $ 494,350
184,378 B+/B2 Mach Gen LLC, First Lien Synthetic LC Loan,
0.04%, 2/22/13 172,240
-----------
$ 666,590
-----------
Total Utilities $ 1,183,251
---------------------------------------------------------------------------------------------------
TOTAL SENIOR FLOATING RATE LOAN INTERESTS
(Cost $57,090,658) $55,819,999
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 33
Schedule of Investments | 10/31/10 (unaudited) (continued)
--------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------
COMMON STOCKS -- 0.7% of Net Assets
MATERIALS -- 0.4%
Commodity Chemicals -- 0.3%
12,897(j) Georgia Gulf Corp. $ 260,906
6,542(j) Lyondell Basell Industries NV 175,718
5,905(j) Lyondell Basell Industries NV (Class B) 158,785
-----------
$ 595,409
--------------------------------------------------------------------------
Forest Products -- 0.0%
13,963(j) Ainsworth Lumber Co., Ltd. $ 31,834
--------------------------------------------------------------------------
Steel -- 0.1%
15,083(h)(j) Niagara Corp. $ 105,430
-----------
Total Materials $ 732,673
--------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 0.3%
Auto Parts & Equipment -- 0.3%
5,014(j) Lear Corp. $ 443,238
-----------
Total Automobiles & Components $ 443,238
--------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.0%
Diversified Financial Services -- 0.0%
731 BTA Bank JSC (144A) $ 16,996
-----------
Total Diversified Financials $ 16,996
--------------------------------------------------------------------------
ENERGY -- 0.0%
Oil & Gas Drilling -- 0.0%
1,109 Rowan Companies, Inc. $ 36,486
-----------
Total Energy $ 36,486
--------------------------------------------------------------------------
MEDIA -- 0.0%
Cable & Satellite -- 0.0%
213(j) Charter Communications, Inc. $ 6,903
-----------
Total Media $ 6,903
--------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.0%
Systems Software -- 0.0%
2,114(h)(j) Perseus Holding Corp. (144A) $ --
-----------
Total Software & Services $ --
--------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $938,427) $ 1,236,296
--------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.3% of Net Assets
DIVERSIFIED FINANCIALS -- 0.3%
Other Diversified Financial Services -- 0.3%
470 Bank of America Corp. $ 445,090
-----------
Total Diversified Financials $ 445,090
--------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $382,900) $ 445,090
--------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
-----------------------------------------------------------------------------
Shares Value
-----------------------------------------------------------------------------
PREFERRED STOCK -- 0.0% of Net Assets
SOFTWARE & SERVICES -- 0.0%
Systems Software -- 0.0%
1,110(h)(j) Perseus Holding Corp. (144A) $ --
-----------
Total Software & Services $ --
-----------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost $0) $ --
-----------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.0% of Net Assets
REAL ESTATE -- 0.0%
Real Estate Development -- 0.0%
750,000(k)(j) Neo-China Group Holdings, Ltd., Expires
7/22/12 (144A) $ 967
-----------------------------------------------------------------------------
TOTAL RIGHTS/WARRANTS
(Cost $17,012) $ 967
-----------------------------------------------------------------------------
ESCROW HOLDINGS -- 0.0% of Net Assets
AUTOMOBILES & COMPONENTS -- 0.0%
Auto Parts & Equipment -- 0.0%
1,140,000(h)(j) Lear Corp. $ 11
-----------
Total Automobiles & Components $ 11
-----------------------------------------------------------------------------
TOTAL ESCROW HOLDINGS
(Cost $0) $ 11
-----------------------------------------------------------------------------
------------------------------------------------------------------------------
Principal
Amount
USD ($)
------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS -- 4.1% of Net Assets
SECURITIES LENDING COLLATERAL -- 4.1%(l)
Certificates of Deposit:
195,087 Bank of Nova Scotia, 0.37%, 9/29/11 $ 195,087
136,561 BBVA Group NY, 0.61%, 7/26/11 136,561
195,087 BNP Paribas Bank NY, 0.38%, 11/8/10 195,087
97,544 BNP Paribas Bank NY, 0.3%, 1/20/11 97,544
195,087 Canadian Imperial Bank of Commerce NY,
0.29%, 4/27/11 195,087
97,544 DNB Nor Bank ASA NY, 0.27%, 11/10/10 97,544
195,087 Nordea New York, 0.5%, 12/10/10 195,087
195,087 RoboBank Netherland NV NY, 0.44%, 8/8/11 195,087
195,087 Royal Bank of Canada NY, 0.26%, 1/21/11 195,087
195,087 SocGen NY, 0.34%, 11/10/10 195,087
97,544 Svenska NY, 0.275%, 11/12/10 97,544
-----------
$ 1,794,802
------------------------------------------------------------------------------
Commercial Paper:
117,052 American Honda Finance, 0.28%, 5/4/11 $ 117,052
78,427 American Honda Finance, 1.04%, 6/20/11 78,427
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 35
Schedule of Investments | 10/31/10 (unaudited) (continued)
------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
------------------------------------------------------------------------------------------
Commercial Paper: -- (continued)
71,740 Australia & New Zealand Banking Group,
1.04%, 8/4/11 $ 71,740
199,005 Caterpillar Financial Services Corp., 1.04%, 6/24/11 199,005
214,596 CBA, 0.31%, 1/3/11 214,596
136,508 CHARFD, 0.31%, 12/14/10 136,508
117,023 CLIPPR, 0.28%, 12/1/10 117,023
172,144 FAIRPP, 0.3%, 11/9/10 172,144
78,016 FASCO, 0.27%, 12/1/10 78,016
195,111 Federal Home Loan Bank, 0.37%, 6/1/11 195,111
97,539 GE Corp., 0.34%, 1/26/11 97,539
19,498 General Electric Capital Corp., 0.37%, 6/6/11 19,498
78,016 OLDLLC, 0.27%, 12/1/10 78,016
106,893 OLDLLC, 0.27%, 12/2/10 106,893
194,876 SEB, 0.0%, 2/7/11 194,876
97,484 SOCNAM, 0.0%, 1/14/11 97,484
97,517 SRCPP, 0.27%, 12/6/10 97,517
146,358 STRAIT, 0.25%, 12/8/10 146,358
97,491 TBLLC, 0.0%, 1/10/11 97,491
97,519 TBLLC, 0.27%, 12/2/10 97,519
195,087 Toyota Motor Credit Corp., 0.44%, 9/8/11 195,087
118,848 VARFUN, 0.35%, 1/20/11 118,848
117,056 Wachovia, 0.39%, 3/22/11 117,056
78,097 Wachovia, 0.42%, 10/15/11 78,097
195,087 Westpac, 0.31%, 07/29/11 195,087
-----------
$ 3,116,988
------------------------------------------------------------------------------------------
Tri-party Repurchase Agreements:
521,160 Barclays Capital Markets, 0.22%, 11/1/10 $ 521,160
390,176 Deutsche Bank Securities, Inc., 0.21%, 11/1/10 390,176
390,176 HSBC Bank USA NA, 0.22% 11/1/10 390,176
195,087 RBS Securities, Inc., 0.22%, 11/1/10 195,087
-----------
$ 1,496,599
------------------------------------------------------------------------------------------
Shares
Money Market Mutual Funds:
195,087 BlackRock Liquidity Temporary Cash Fund $ 195,087
195,087 Dreyfus Preferred Money Market Fund 195,087
195,087 Fidelity Prime Money Market Fund 195,087
-----------
$ 585,261
-----------
Total Securities Lending Collateral $ 6,993,650
----------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $6,993,650) $ 6,993,650
----------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
----------------------------------------------------------------------
Value
----------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 138.7%
(Cost $231,037,355)(m) $234,982,405
----------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (38.7)% $(65,596,459)
----------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $169,385,946
======================================================================
NR Security not rated by S&P or Moody's.
WR Withdrawn rating.
(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
October 31, 2010, the value of these securities amounted to $102,927,505
or 60.8% of total net assets applicable to common shareowners.
(a) Floating rate note. The rate shown is the coupon rate at October 31,
2010.
(b) At October 31, 2010, the following securities were out on loan:
---------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Description Value
---------------------------------------------------------------------------------------------
970,000 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) $1,052,450
18,000 Banco Macro SA, 9.75%, 12/18/36 17,640
396,000 Blue Acquisition Sub Inc, 9.875%, 10/15/18 (144A) 426,690
100,000 Bumi Capital Pte, Ltd., 12.0%, 11/10/16 (144A) 109,625
348,000 CEVA Group PLC, 11.5%, 4/1/18 (144A) 368,034
200,000 Evraz Group SA, 9.5%, 4/24/18 (144A) 225,500
232,000 Goodyear Tire & Rubber Co., 10.5%, 5/15/16 265,640
750,000 OJSC Vimpel Communications, 9.125%, 4/30/18 (144A) 849,375
100,000 Petroplus Finance, Ltd., 9.375%, 9/15/19 (144A) 96,000
700,000 Sally Holdings LLC, 10.5%, 11/15/16 768,250
210,000 Surgical Care Affiliates, Inc., 10.0%, 7/15/17 (144A) 216,300
570,000 Tenneco, Inc., 8.625%, 11/15/14 589,950
504,000 Texas Competitive Electric Holdings LLC, 15.0%, 4/1/21 (144A) 496,440
1,113,000 Tower Automotive Holdings USA LLC, 10.625%, 9/1/17 (144A) 1,165,868
---------------------------------------------------------------------------------------------
$6,647,762
=============================================================================================
(c) Security is in default and is non-income producing.
(d) Payment-in-Kind (PIK) security which may pay interest in additional
principal amount.
(e) Security is a perpetual bond and has no definite maturity date.
(f) Debt obligation initially issued at one coupon rate which converts to
another coupon rate at a specific date. The coupon rate shown is the
coupon rate at October 31, 2010.
(g) Security is priced as a unit.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 37
Schedule of Investments | 10/31/10 (unaudited) (continued)
(h) Security is valued using fair value methods (other than prices supplied
by independent pricing services).
(i) Floating rate loan interests in which the Trust invests generally pay
interest at rates that are periodically redetermined by reference to a
base lending rate plus a premium. These base lending rates are generally
(i) the lending rate offered by one or more major European banks, such as
LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one
or more major United States banks, (iii) the certificate of deposit (iv)
other base lending rates used by commercial lenders. The interest rate
shown is the coupon rate accruing at October 31, 2010.
(j) Non-income producing.
(k) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $17,012. The aggregate value $967 represents 0.0%
of total net assets applicable to common shareowners.
(l) Securities lending collateral is managed by Credit Suisse AG, New York
branch.
(m) At October 31, 2010, the net unrealized gain on investments based on cost
for federal income tax purposes of $231,762,106 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $13,831,273
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (9,886,223)
-----------
Net unrealized gain $ 3,945,050
===========
For financial reporting purposes net unrealized gain was $3,945,050 and cost of
investments aggregated $231,762,106.
Glossary of Terms:
LC Letter of Credit
Note: Principal amounts are denominated in U.S. dollars unless otherwise
denoted.
BRL Brazilian Real
EURO Euro
NOK Norwegian Krone
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended October 31, 2010, aggregated $33,274,345 and $20,464,728,
respectively.
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels listed below.
Highest priority is given to Level 1 inputs and lowest priority is given to
Level 3.
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 risk,
etc.)
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments)
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
The following is a summary of the inputs used as of October 31, 2010, in valuing
the Trust's investments:
------------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------------------------------
Asset backed securities $ -- $ 3,197,620 $ -- $ 3,197,620
Collateralized mortgage
obligations 1,656,667 -- 1,656,667
Corporate bonds & notes
(systems software) -- -- 547,142 547,142
Corporate bonds & notes (other
industries) -- 158,916,285 -- 158,916,285
Convertible bonds & notes -- 5,052,140 -- 5,052,140
Sovereign debt obligation -- 1,116,538 -- 1,116,538
Floating rate loan interests (steel) -- -- 894,108 894,108
Floating rate loan interests (other
industries) -- 54,925,891 -- 54,925,891
Common stock (steel) -- -- 105,430 105,430
Common stock (other industries) 1,130,866 -- -- 1,130,866
Convertible preferred stock 445,090 -- -- 445,090
Rights/Warrants -- 967 -- 967
Escrow holdings -- -- 11 11
Temporary cash investments -- 6,993,650 -- 6,993,650
------------------------------------------------------------------------------------------------------------
Total $ 1,575,956 $ 231,859,758 $ 1,546,691 $ 234,982,405
============================================================================================================
The following is a reconciliation of assets valued using significant inputs
(level 3):
----------------------------------------------------------------------------------------------------------------
Change in Transfer
Balance Realized unrealized Net in and Balance
as of gain appreciation purchases out of as of
4/30/10 (loss) (depreciation)(1) (sales) Level 3* 10/31/10
----------------------------------------------------------------------------------------------------------------
Corporate bonds & notes
(systems software) $ 513,749 $-- $ -- $33,393 $-- $ 547,142
Floating rate loan interests
(steel) 891,034 -- -- 3,074 -- 894,108
Common stock (steel) 117,044 -- (11,614) -- -- 105,430
Escrow holdings -- -- 11 -- -- 11
----------------------------------------------------------------------------------------------------------------
Ending balance $1,521,827 $-- $ 24,864 $ -- $-- $1,546,691
================================================================================================================
1 Unrealized appreciation (depreciation) on these securities is included in the
change in unrealized gain (loss) form investments in the Statement of
Operations.
* Transfers are calculated beginning of period.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 39
Statement of Assets and Liabilities | 10/31/10 (unaudited)
ASSETS:
Investments in securities, at value (including securities loaned of
$6,647,762) (cost $231,037,355) $234,982,405
Cash 724,684
Foreign currencies, at value (cost $951,387) 1,001,527
Appreciation on unfunded corporate loans -- net 5,627
Receivables --
Investment securities sold 5,171,263
Interest and dividends receivable 3,903,943
Commitment fees 653
Prepaid expenses and other assets 25,719
---------------------------------------------------------------------------------------
Total assets $245,815,821
---------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Notes payable $ 66,000,000
Investment securities purchased 3,088,446
Upon return of securities loaned 6,993,650
Dividends to shareowners (81,763)
Unamortized facility fees 2,959
Due to affiliates 187,950
Accrued interest expense 64,482
Accrued expenses and other liabilities 174,151
---------------------------------------------------------------------------------------
Total liabilities $ 76,429,875
---------------------------------------------------------------------------------------
NET ASSETS:
Paid-in capital $192,399,639
Distribution in excess of investment income (1,900,083)
Accumulated net realized loss on investments and foreign currency
transactions (25,125,311)
Net unrealized gain on investments 3,950,677
Net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies 61,024
---------------------------------------------------------------------------------------
Net assets applicable to common shareowners $169,385,946
=======================================================================================
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $169,385,946/8,219,910 shares $ 20.61
=======================================================================================
The accompanying notes are an integral part of these financial statements.
40 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
Statement of Operations (unaudited)
For the Six Months Ended 10/31/10
INVESTMENT INCOME:
Interest $9,918,069
Dividends 21,569
Facility and other fees 103,070
Income from securities loaned, net 11,116
-----------------------------------------------------------------------------------------------
Total investment income $10,053,824
-----------------------------------------------------------------------------------------------
EXPENSES:
Management fees $1,002,129
Administrative reimbursements 90,600
Transfer agent fees and expenses 6,000
Shareowner communications expense 34,974
Bank loan fees and expenses 60,875
Custodian fees 15,557
Registration fees 8,464
Professional fees 51,303
Printing expenses 16,143
Trustees' fees 3,664
Pricing fees 19,712
Miscellaneous 23,326
-----------------------------------------------------------------------------------------------
Net operating expenses $ 1,332,747
-----------------------------------------------------------------------------------------------
Interest expense $ 485,093
-----------------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 1,817,840
Less fees waived and expenses reimbursed by Pioneer
Investment Management, Inc. ("PIM") (27,859)
-----------------------------------------------------------------------------------------------
Net expenses $ 1,789,981
-----------------------------------------------------------------------------------------------
Net investment income $ 8,263,843
-----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
UNFUNDED CORPORATE LOANS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized loss from:
Investments $ (703,706)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies (23,255) $ (726,961)
-----------------------------------------------------------------------------------------------
Change in net unrealized gain from:
Investments $3,915,090
Unfunded corporate loans 5,627
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 35,640 $ 3,956,357
-----------------------------------------------------------------------------------------------
Net gain on investments and foreign currency transactions $ 3,229,396
-----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $11,493,239
===============================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 41
Statement of Changes in Net Assets
For the Six Months Ended 10/31/10 and the Year Ended 4/30/10, respectively
-----------------------------------------------------------------------------------------------------
Six Months Ended
10/31/10 Year Ended
(unaudited) 4/30/10
-----------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 8,263,843 $ 14,411,873
Net realized loss on investments and foreign currency
transactions (726,961) (9,588,054)
Change in net unrealized gain on investments, unfunded
corporate loans, and foreign currency transactions 3,956,357 62,597,723
-----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 11,493,239 $ 67,421,542
-----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS FROM:
Net investment income ($0.96 and $1.686 per share,
respectively) $ (7,878,113) $(13,800,249)
Tax return of capital ($0.00 and $0.324 per share respectively) -- (2,651,977)
-----------------------------------------------------------------------------------------------------
Total distributions to shareowners $ (7,878,113) $(16,452,226)
-----------------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 489,707 $ 499,351
-----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Trust share
transactions $ 489,707 $ 499,351
-----------------------------------------------------------------------------------------------------
Net increase in net assets $ 4,104,833 $ 51,468,667
NET ASSETS:
Beginning of period 165,281,113 113,812,446
-----------------------------------------------------------------------------------------------------
End of period $169,385,946 $165,281,113
-----------------------------------------------------------------------------------------------------
Distribution in excess of net investment income $ (1,900,083) $ (1,765,037)
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
42 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
Statement of Cash Flows (unaudited)
For the Six Months Ended 10/31/10
Cash Flows Used in Operating Activities
Net investment income $ 8,263,843
-------------------------------------------------------------------------------
Adjustment to Reconcile Net Investment Income to Net Cash
and Foreign Currency Used in Operating Activities
Purchase of investment securities $(386,112,585)
Proceeds from disposition of investment securities 390,324,780
Increase in receivable for investments sold (4,102,829)
Increase in interest and foreign tax reclaim receivable (300,335)
Decrease in commitment fees receivable (653)
Increase in other assets (12,187)
Increase in interest payable (593)
Increase in payable for investments purchased 1,560,095
Increase in accrued expenses and other liabilities 84,487
Decrease in unrealized appreciation on foreign currency
transactions 35,640
Net realized gain from foreign currency transactions (23,255)
Net amortization/(accretion) of premium/(discount) (724,597)
-------------------------------------------------------------------------------
Net adjustment to reconcile net investment income 727,968
-------------------------------------------------------------------------------
Net cash and foreign currency used in operating activities $ 8,991,811
-------------------------------------------------------------------------------
Cash Flows From Financing Activities
Increase in notes payable $ (1,000,000)
Cash dividends paid to common shareowners (8,781,404)
-------------------------------------------------------------------------------
Net cash flow from financing activities $ (9,781,404)
-------------------------------------------------------------------------------
Net decrease in cash and foreign currency $ (789,593)
-------------------------------------------------------------------------------
Cash and Foreign Currency
Beginning of the period $ 2,515,804
===============================================================================
End of the period $ 1,726,211
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 43
Financial Highlights
---------------------------------------------------------------------------------------------------------------
Six Months Ended
10/31/10
(unaudited)
---------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 20.17
---------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.01
Net realized and unrealized gain (loss) on investments and foreign currency transactions 0.39
---------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 1.40
Distributions from
Net investment income (0.96)
Tax return of capital (0.00)
Capital charge with respect to issuance of shares --
---------------------------------------------------------------------------------------------------------------
Preferred shares --
---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 0.44
---------------------------------------------------------------------------------------------------------------
Net asset value, end of period (d) $ 20.61
---------------------------------------------------------------------------------------------------------------
Market value, end of period (d) $ 20.78
===============================================================================================================
Total return at market value (e) 6.63%
Ratios to average net assets
Net operating expenses 1.61%(f)
Interest expense 0.60%(f)
Net expenses 2.21%(f)
Net investment income 10.18%(f)
Portfolio turnover 9%
Net assets, end of period (in thousands) $ 169,386
---------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
4/30/10 4/30/09
---------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 13.94 $ 22.02
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.76 $ 2.10
Net realized and unrealized gain (loss) on investments and foreign currency transactions 6.48 (7.67)
---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 8.24 $ (5.57)
Distributions from
Net investment income (1.69) (2.47)
Tax return of capital (0.32) (0.04)
Capital charge with respect to issuance of shares -- --
---------------------------------------------------------------------------------------------------------------------
Preferred shares -- --
---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 6.23 $ (8.08)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (d) $ 20.17 $ 13.94
---------------------------------------------------------------------------------------------------------------------
Market value, end of period (d) $ 20.46 $ 13.23
=====================================================================================================================
Total return at market value (e) 73.25% (23.11)%
Ratios to average net assets
Net operating expenses 1.39% 1.38%
Interest expense 0.83% 1.14%
Net expenses 2.22% 2.52%
Net investment income 9.84% 12.27%
Portfolio turnover 24% 25%
Net assets, end of period (in thousands) $165,281 $113,812
-----------------------------------------------------------------------------------------------------------
5/30/07 (b)
to 4/30/08
-----------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 23.88(c)
-----------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.77
Net realized and unrealized gain (loss) on investments and foreign currency transactions (1.80)
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ (0.03)
Distributions from
Net investment income (1.78)
Tax return of capital --
Capital charge with respect to issuance of shares (0.05)
-----------------------------------------------------------------------------------------------------------
Preferred shares --
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (1.86)
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period (d) $ 22.02
-----------------------------------------------------------------------------------------------------------
Market value, end of period (d) $ 20.47
===========================================================================================================
Total return at market value (e) (10.67)%
Ratios to average net assets
Net operating expenses 0.99%(f)
Interest expense 0.33%(f)
Net expenses 1.32%(f)
Net investment income 8.48%(f)
Portfolio turnover 21%
Net assets, end of period (in thousands) $179,515
The accompanying notes are an integral part of these financial statements.
44 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
---------------------------------------------------------------------------------------------------
Six Months Ended
10/31/10
(unaudited)
---------------------------------------------------------------------------------------------------
Ratios to average net assets before waivers and reimbursements of expenses
Net operating expenses 1.64%(f)
Interest expense 0.60%(f)
Net expenses 2.24%(f)
Net investment income 10.15%(f)
===================================================================================================
-------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended 5/30/07 (b)
4/30/10 4/30/09 to 4/30/08
-------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets before waivers and reimbursements of expenses
Net operating expenses 1.61% 1.68% 1.29%(f)
Interest expense 0.83% 1.14% 0.33%(f)
Net expenses 2.44% 2.82% 1.62%(f)
Net investment income 9.62% 11.97% 8.18%(f)
=========================================================================================================================
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Trust shares were first publicly offered on May 24, 2007 and commenced
operations on May 30, 2007.
(c) Net asset value immediately after the closing of the first public offering
was $23.83.
(d) 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.
(e) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns less than a full period are not annualized. Past
performance is not a guarantee of future results.
(f) Annualized.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in
the financial statements and market value data for the Trust's common shares.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 45
Notes to Financial Statements | 10/31/10 (unaudited)
1. Organization and Significant Accounting Policies
Pioneer Diversified High Income Trust (the Trust) was organized as a Delaware
statutory trust on January 30, 2007. Prior to commencing operations on May 30,
2007, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended. The
investment objective of the Trust is to provide a high level of current income
and, as a secondary objective, the Trust may seek capital appreciation to the
extent that it is consistent with its investment objective.
Information regarding the Trust's principal risks is contained in the Trust's
original offering prospectus, with additional information included in the
Trust's shareowner reports from time to time. Please refer to those documents
when considering the Trust's principal risks. At times, the Trust's investments
may represent industries or industry sectors that are interrelated or have
common risks, making the Trust more susceptible to any economic, political, or
regulatory developments or other risks affecting those industries and sectors.
The Trust invests in below investment grade (high yield) debt securities,
floating rate loans and event-linked bonds sometimes referred to as
"catastrophe" bonds or "insurance-linked" bonds. The Trust may invest in
securities and other obligations of any credit quality, including those that
are rated below investment grade, or are unrated but are determined by the
investment adviser to be of equivalent credit quality. Below investment grade
securities are commonly referred to as "junk bonds" and are considered
speculative with respect to the issuer's capacity to pay interest and repay
principal. These securities involve greater risk of loss, are subject to
greater price volatility, and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities. The Trust
may invest in securities of issuers that are in default or that are in
bankruptcy.
The Trust's investments in certain foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than 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's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts
46 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
of income, expenses and gains and losses 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 preparation of its financial statements, which are consistent with
those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. 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. Investments
in loan interests are valued in accordance with guidelines established by the
Board of Trustees at the mean between the last available bid and asked prices
from one or more brokers or dealers as obtained from Loan Pricing
Corporation. Senior loans for which no reliable price quotes are available
will be valued by Loan Pricing Corporation through the use of pricing
matrices to determine valuations. Fixed income securities with remaining
maturity of more than sixty days are valued at prices supplied by independent
pricing services, which consider such factors as market prices, market
events, quotations from one or more brokers, Treasury spreads, yields,
maturities and ratings. Valuations may be supplemented by dealers and other
sources, as required. Equity securities that have traded or an exchange are
valued at the last sale price on the principal exchange where they are
traded. Securities or loans for which independent pricing services are unable
to supply prices or for which market prices and/or quotations are not readily
available or are considered to be unreliable are valued using fair value
methods pursuant to procedures adopted by the Board of Trustees.
Trading in foreign securities is substantially completed each day at various
times prior to the close of the NYSE. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times.
The Trust may use the 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. Thus, the valuation of the Trust's securities may differ from
exchange prices. At October 31, 2010, six securities were valued using fair
value methods (in addition to securities valued using prices supplied by
independent pricing services) representing 0.9 of net assets. Inputs used
when applying fair value methods to value a security may include credit
ratings, the financial condition of the company, current market conditions
and comparable securities. Short-term income securities with remaining
maturities of sixty days or less generally are valued at amortized cost.
Money market mutual funds are valued at net asset value.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 47
Discounts and premiums on debt securities are accreted or amortized,
respectively, daily, into interest income on an effective yield to maturity
basis with a corresponding increase or decrease in the cost basis of the
security. Premiums and discounts related to certain mortgage-backed
securities are amortized or accreted in proportion to the monthly paydowns.
Interest income, including income on interest bearing cash accounts, is
recorded on an accrual basis, net of unrecoverable foreign taxes withheld at
the applicable country rates.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Trust becomes aware of the ex-dividend data in
the exercise of reasonable diligence.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on foreign
currency contracts, disposition of foreign currencies and the difference
between the amount of income accrued and the U.S. dollars actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the Statement of Operations from the
effects of changes in market prices of those securities but are included with
the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Trust may enter into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date. All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized gains or losses are recorded in
the Trust's financial statements. The Trust records realized gains and losses
at the time a portfolio hedge is offset by entry into a closing transaction
or extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to meet
the terms of the contracts and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar (see Note 5).
48 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. Tax
years for the prior two fiscal years remain subject to examination by tax
authorities.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal income
tax rules. Therefore, the sources of the Trust's distributions may be shown
in the accompanying financial statements as either from or in excess of net
investment income or net realized gain (loss) on investment and foreign
currency transactions, or from paid-in capital, depending on the type of
book/tax differences that may exist.
The tax character of current year distributions payable will be determined at
the end of the current taxable year. The tax character of distributions paid
to shareowners during the year ended April 30, 2010 was as follows:
--------------------------------------------------------------------------------
2010
--------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $13,800,249
Tax return of capital 2,651,977
--------------------------------------------------------------------------------
Total $16,452,226
================================================================================
The following shows the components of distributable earnings (loss) on a
federal income tax basis at April 30, 2010.
--------------------------------------------------------------------------------
2010
--------------------------------------------------------------------------------
Distributable earnings:
Capital loss carryforward $(22,593,756)
Post-October loss deferred (2,026,829)
Dividends payable (1,311,235)
Unrealized depreciation (696,999)
--------------------------------------------------------------------------------
Total $(26,628,819)
================================================================================
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the tax deferral of losses on wash sales, the
realization for tax purposes of unrealized gains on investments in passive
foreign investment companies, the book/tax differences in the accrual of
income on securities in default, the difference between book and tax
amortization methods for premiums and discounts on fixed income securities
and other book/tax temporary differences.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 49
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value of
the underlying securities (collateral), including accrued interest is
required to be equal to or in excess of the repurchase price. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Trust's custodian or sub custodians of the Trust. The Trust's
investment adviser, Pioneer Investment Management, Inc. (PIM), is responsible
for determining that the value of the collateral remains at least equal to
the repurchase price.
F. Securities Lending
The Trust lends securities in its portfolio to certain broker-dealers or
other institutional investors. When entering into a securities loan
transaction, the Trust typically receives cash collateral from the borrower
equal to at least the value of the securities loaned, which is invested in
temporary investments. Credit Suisse AG, New York Branch, as the Trust's
securities lending agent, manages the Trust's securities lending collateral.
The income earned on the investment of collateral is shared with the borrower
and the lending agent in payment of any rebate due to the borrower with
respect to the securities loan, and in compensation for the lending agent's
services to the Trust. The Trust also continues to receive payments in lieu
of dividends or interest on the securities loaned. Gain or loss on the value
of the loaned securities that may occur during the term of the loan will be
for the account of the Trust. The amount of the collateral is required to be
adjusted daily to reflect any price fluctuation in the value of the loaned
securities. If the required market value of the collateral is less than the
value of the loaned securities, the borrower is required to deliver
additional collateral for the account of the Trust prior to the close of
business on that day. The Trust has the right, under the lending agreement,
to terminate the loan and recover the securities from the borrower with prior
notice. The Trust is required to return the cash collateral to the borrower
and could suffer a loss if the value of the collateral, as invested, has
declined.
G. Automatic Dividend Reinvestment Plan
All common shareowners whose shares are registered in their own names
automatically participate in the Automatic Dividend Reinvestment Plan (the
Plan), under which participants receive all dividends and capital gain
distributions (collectively, dividends) in full and fractional common shares
of the Trust in lieu of cash. Shareowners may elect not to participate in the
Plan. Shareowners not participating in the Plan receive all dividends and
capital gain distributions in cash. Participation in the Plan is completely
voluntary and may be terminated or resumed at any time without penalty by
notifying American Stock Transfer & Trust Company, the agent for shareowners
in administering the Plan (the Plan Agent), in writing prior to any dividend
50 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
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 dividend in common shares of the
Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional unissued
but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the NYSE Amex or elsewhere. If, on the payment
date for any dividend, the net asset value per common share is equal to or
less than the market price per share plus estimated brokerage trading fees
(market premium), the Plan Agent will invest the dividend amount in newly
issued common shares. The number of newly issued common shares to be credited
to each account will be determined by dividing the dollar amount of the
dividend by the net asset value per common share on the date the shares are
issued, provided that the maximum discount from the then current market price
per share on the date of issuance does not exceed 5%. If, on the payment date
for any dividend, the net asset value per common share is greater than the
market value (market discount), the Plan Agent will invest the dividend
amount in common shares acquired in open-market purchases. There are no
brokerage charges with respect to newly issued common shares. However, each
participant will pay a pro rata share of brokerage trading fees incurred with
respect to the Plan Agent's open-market purchases. Participating in the Plan
does not relieve shareowners from any federal, state or local taxes which may
be due on dividends paid in any taxable year. Shareowners holding Plan shares
in a brokerage account may not be able to transfer the shares to another
broker and continue to participate in the Plan.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit),
manages the Trust's portfolio. Management fees payable under the Trust's
Advisory Agreement with PIM are calculated daily at the annual rate of 0.85% of
the Trust's average daily managed assets. "Managed assets" means (a) the total
assets of the Trust, including any form of investment leverage, minus (b) all
accrued liabilities incurred in the normal course of operations, which shall
not include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without limitation,
borrowing through a credit facility or the issuance of debt securities), (ii)
the
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 51
issuance of preferred stock or other similar preference securities, and/or
(iii) any other means. For the six months ended October 31, 2010, the net
management fee (excluding waivers and reimbursements) was equivalent to 0.86%
of the Trust's average daily managed assets, which was equivalent to 1.21% of
the Trust's average daily net assets.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. At
October 31, 2010, $187,950 was payable to PIM related to management costs,
administrative costs and certain other services and it is included in "Due to
affiliates" on the Statement of Assets and Liabilities.
Effective September 1, 2010, PIM has retained State Street Bank and Trust
Company (State Street) to provide certain administrative and accounting
services to the Trust on its behalf. For such services, PIM pays State Street a
monthly fee at an annual rate of 0.07% of the Trust's managed assets up to $500
million and 0.03% for managed assets in excess of $500 million, subject to a
minimum monthly fee of $10,000. Previously, PIM had retained Princeton
Administrators, LLC (Princeton) to provide such services. PIM paid Princeton a
monthly fee at an annual rate of 0.07% of the average daily value of the
Trust's managed assets up to $500 million and 0.03% for average daily managed
assets in excess of $500 million, subject to a minimum monthly fee of $10,000.
Neither State Street nor Princeton received compensation directly from the
Trust for providing such services.
PIM has entered into a Research Services Agreement with Montpelier Capital
Advisors, Ltd. (Montpelier). Under the research services agreement, Montpelier
will provide research services to PIM with regard to event-linked bonds. PIM
pays Montpelier a flat fee of $325,000 annually. Montpelier received no
compensation directly from the Trust.
Also, PIM had agreed for the first three years of the Trust's investment
operations to limit the Trust's total annual expenses, excluding offering costs
for common shares, interest expense, the cost of defending or prosecuting any
claim or litigation to which the Trust is a party (together with any amount in
judgment or settlement), indemnification expense or taxes incurred due to the
failure of the Trust to qualify as a regulated investment company under the
Code or any other non-recurring or non-operating expenses, to 0.90% of the
Trust's average daily managed assets in year one, 0.95% of the Trust's average
daily managed assets in year two and 1.00% of the Trust's average daily managed
assets in year three. This was a contractual limit which terminated on May 30,
2010. For the six months ended October 31, 2010 the expense reduction under
such arrangement was $27,859.
52 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly
owned indirect subsidiary of UniCredit, through a sub-transfer agency agreement
with American Stock Transfer & Trust Company, provides substantially all
transfer agent and shareowner services related to the Trust at negotiated
rates.
In addition, the Trust reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareowner communications activities such as proxy and
statement mailings and outgoing phone calls.
4. Expense Offset Arrangements
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion
of the Trust's custodian expenses. For the six months ended October 31, 2010,
the Trust expenses were not reduced under such arrangement.
5. Forward Foreign Currency Contracts
During the six months ended October 31, 2010, the Trust had entered into
various forward foreign currency contracts that obligate the Trust to deliver
or take delivery of currencies at specified future maturity dates.
Alternatively, prior to the settlement date of a forward foreign currency
contract, the Trust may close out such contract by entering into an offsetting
hedge contract. The average number of contracts open during the six months
ended October 31, 2010 was 416,667.
As of October 31, 2010, the Trust had no outstanding portfolio hedges and no
forward currency settlement contracts.
6. Loan Agreement
Effective February 5, 2010, the Trust extended the maturity of its existing
Revolving Credit Facility (the Credit Agreement) with the Bank of Nova Scotia
and, among other things, increased the size of the Credit Agreement to
$80,000,000.
At October 31, 2010, the Trust had a borrowing outstanding under the Credit
Agreement totaling $66,000,000. The interest rate charged at October 31, 2010
was 1.41%. During the six months ended October 31, 2010, the average daily
balance was $65,532,609 at a weighted average interest rate of 1.45%. With
respect to the loan, interest expense of $479,934 is included in the Statement
of Operations.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the Credit Agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities, not including any bank loans and
senior
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 53
securities, from the Trust's total assets and dividing such amount by the
principal amount of the borrowings outstanding. As of the date indicated below,
the Trust's debt outstanding and asset coverage were as follows:
--------------------------------------------------------------------------------
Total Asset coverage
Amount of Debt per $1,000 of
Date Outstanding Indebtedness
--------------------------------------------------------------------------------
10/31/10 $66,000,000 $3,566
7. Unfunded Loan Commitments
As of October 31, 2010, the Fund had unfunded loan commitments of approximately
$300,000, (excluding unrealized depreciation on those commitments of $5,627 as
of October 30, 2010) which could be extended at the option of the borrower
pursuant to the following loan agreements:
-----------------------------------------------------------------------------------------------
Net Unrealized
Borrower Shares Cost Value Gain
-----------------------------------------------------------------------------------------------
Reynolds Group Holdings, Term Loan 300,000 $300,000 $305,627 $5,627
In addition, the Trust had the following bridge loan commitments outstanding as
of October 31, 2010:
----------------------------------------------------------------------------------------
Net
Unrealized
Loan Shares Cost Value Gain
----------------------------------------------------------------------------------------
Med Assets, Inc., Bridge
Loan, 0.0%, 9/2/11 1,500,000 $1,500,000 $1,500,000 $--
----------------------------------------------------------------------------------------
Paetec Holdings Corp., Senior
Secured Bridge
Facility, 0.0%, 9/12/17 800,000 $ 800,000 $ 800,000 $--
----------------------------------------------------------------------------------------
Total $--
========================================================================================
8. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the six months ended
October 31, 2010 and the year ended April 30, 2010 were as follows:
--------------------------------------------------------------------------------
10/2010 4/2010
--------------------------------------------------------------------------------
Shares outstanding at beginning of period 8,195,218 8,165,927
Reinvestment of distributions 24,692 29,291
--------------------------------------------------------------------------------
Shares outstanding at end of period 8,219,910 8,195,218
================================================================================
54 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
9. Additional Disclosures about Derivative Instruments and Hedging Activities:
The effect of derivative instruments on the Statement of Operations for the six
months ended October 31, 2010 was as follows:
----------------------------------------------------------------------------------------------------------
Change in Net
Unrealized Gain
or (Loss) on
Location of Gain or Realized Gain or Derivatives
(Loss) On Derivatives (Loss) on Derivatives Recognized
Derivatives Recognized in Income Recognized in Income in Income
----------------------------------------------------------------------------------------------------------
Foreign Exchange Contracts Net realized gain (loss) from $(41,308)
forward foreign currency
contracts and other assets
and liabilities denominated
in foreign currencies
----------------------------------------------------------------------------------------------------------
10. Subsequent Events
Subsequent to October 31, 2010, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.16 per common share
payable November 30, 2010, to shareowners of record on November 16, 2010.
In preparing these financial statements, PIM has evaluated the impact of all
events and transactions for potential recognition or disclosure, and has
determined that other than disclosed above, there were no subsequent events
requiring recognition or disclosure in the financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 55
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. 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 common
shares in the open market.
56 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
Results of Shareholder Meeting (unaudited)
At the annual meeting of shareowners held on September 22, 2010 shareowners of
Pioneer Diversified High Income Trust were asked to consider the proposal
described below. A report of the total votes cast by the Trust's shareholders
follows:
Proposal 1 -- To elect Class III Trustees.
--------------------------------------------------------------------------------
Nominee For Withheld
--------------------------------------------------------------------------------
David R. Bock 6,919,470 285,922
Stephen K. West 6,923,909 281,483
John F. Cogan, Jr. 6,913,011 292,381
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 57
Trustees, Officers and Service Providers
Trustees
John F. Cogan, Jr., Chairman
David R. Bock
Mary K. Bush
Benjamin M. Friedman
Margaret B.W. Graham
Daniel K. Kingsbury
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
Officers
John F. Cogan, Jr., President
Daniel K. Kingsbury, Executive Vice President
Mark E. Bradley, Treasurer
Christopher J. Kelley, Secretary
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Bingham McCutchen LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Sub-Administrator
State Street Bank and 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 pioneerinvestments.com. This information is also available on
the Securities and Exchange Commission's web site at http://www.sec.gov.
The Statement of Additional Information of the Fund includes additional
information about the Trustees and is available, without charge, upon request,
by calling 1-800-225-6292.
58 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
This page for your notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10 59
This page for your notes.
60 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/10
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
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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.pioneerinvestments.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form also may be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
[LOGO]PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
pioneerinvestments.com
(C) 2010 Pioneer Investments 21398-03-1210
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or
after May 6, 2003, the effective date of the new SEC pre-
approval rules, the Trust's audit committee is required to pre-
approve services to affiliates defined by SEC rules to the
extent that the services are determined to have a direct impact
on the operations or financial reporting of the Trust. For the
years ended April 30, 2010 and 2009, there were no services
provided to an affiliate that required the Trust's audit
committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
N/A
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The 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 registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
The registrant has a separately-designated standing audit
committe eestablished in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
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o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managers. The table below indicates, for
each portfolio manager 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, 2010. 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
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Charles Melchreit Other Registered 3 $458,501,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 2 $448,065,000 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 3 1,482,841,000 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Andrew Feltus Other Registered 6 $6,180,262,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 4 $1,599,924,000 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 1 $335,242,000 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Jonathan Sharkey Other Registered 2 $522,857,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 $0 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 1 $56,524,000 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Potential Conflicts of Interest. When a portfolio manager is responsible for the
management of more than one account, the potential arises for the portfolio
manager to favor one account over another. The principal types of potential
conflicts of interest that may arise are discussed below. For the reasons
outlined below, Pioneer does not believe that any material conflicts are likely
to arise out of a portfolio manager's responsibility for the management of the
fund as well as one or more other accounts. Although Pioneer has adopted
procedures that it believes are reasonably designed to detect and prevent
violations of the federal securities laws and to mitigate the potential for
conflicts of interest to affect its portfolio management decisions, there can be
no assurance that all conflicts will be identified or that all procedures will
be effective in mitigating the potential for such risks. Generally, the risks of
such conflicts of interest are increased to the extent that a portfolio manager
has a financial incentive to favor one account over another. Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interest. The funds investment subadviser also
has adopted certain compliance procedures which are designed to address these
types of conflicts. However, there is no guarantee that such procedures will
detect each situation in which a conflict might arise. 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
Pioneer believes that its practices are reasonably designed to treat
each client in an equitable and fair manner, there may be instances
where a fund may not participate, or may participate to a lesser degree
than other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order
in which trades for the accounts are placed. If a portfolio manager
determines to purchase a security for more than one account in an
aggregate amount that may influence the market price of the security,
accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions. The
less liquid the market for the security or the greater the percentage
that the proposed aggregate purchases or sales represent of average
daily trading volume, the greater the potential for accounts that make
subsequent purchases or sales to receive a less favorable price. When a
portfolio manager intends to trade the same security on the same day
for more than one account, the trades typically are "bunched," which
means that the trades for the individual accounts are aggregated and
each account receives the same price. There are some types of accounts
as to which bunching may not be possible for contractual reasons (such
as directed brokerage arrangements). Circumstances may also arise where
the trader believes that bunching the orders may not result in the best
possible price. Where those accounts or circumstances are involved,
Pioneer will place the order in a manner intended to result in as
favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater
degree than other accounts managed by the portfolio manager. If, for
example, the portfolio manager receives a bonus based upon the
performance of certain accounts relative to a benchmark while other
accounts are disregarded for this purpose, the portfolio manager will
have a financial incentive to seek to have the accounts that determine
the portfolio manager's bonus achieve the best possible performance to
the possible detriment of other accounts. Similarly, if Pioneer receives
a performance-based advisory fee, the portfolio manager may favor that
account, whether or not the performance of that account directly
determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has
a beneficial interest in the account, in order to benefit a large client
or to compensate a client that had poor returns. For example, if the
portfolio manager held an interest in an investment partnership that was
one of the accounts managed by the portfolio manager, the portfolio
manager would have an economic incentive to favor the account in which
the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise.
For example, if a portfolio manager purchases a security for one account
and sells the same security for another account, such trading pattern
may disadvantage either the account that is long or short. In making
portfolio manager assignments, Pioneer seeks to avoid such potentially
conflicting situations. However, where a portfolio manager is
responsible for accounts with differing investment objectives and
policies, it is possible that the portfolio manager will conclude that
it is in the best interest of one account to sell a portfolio security
while another account continues to hold or increase the holding in such
security.
Compensation of Portfolio Managers. Pioneer has adopted a system of compensation
for portfolio managers that seeks to align the financial interests of the
portfolio managers with those of shareholders of the accounts (including Pioneer
funds) the portfolio managers manage, as well as with the financial performance
of Pioneer. The compensation program for all Pioneer portfolio managers includes
a base salary (determined by the rank and tenure of the employee) and an annual
bonus program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Pioneer seeks to set base compensation at market rates, taking
into account the experience and responsibilities of the portfolio manager. The
bonus plan is intended to provide a competitive level of annual bonus
compensation that is tied to the portfolio manager achieving superior investment
performance and align the interests of the investment professional with those of
shareholders, as well as with the financial performance of Pioneer. Any bonus
under the plan is completely discretionary, with a maximum annual bonus that may
be in excess of base salary. The annual bonus is based upon a combination of the
following factors:
o Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax investment performance of
all of the accounts managed by the portfolio manager (which includes
the fund and any other accounts managed by the portfolio manager) over
a one-year period (20% weighting) and four-year period (80% weighting),
measured for periods ending on December 31. The accounts, which include
the fund, are ranked against a group of mutual funds with similar
investment objectives and investment focus (60%) and a broad-based
securities market index measuring the performance of the same type of
securities in which the accounts invest (40%), which, in the case of
the fund, is the Merrill Lynch Global High Yield and Emerging Markets
Index and the CSFB Leveraged Loan Index. As a result of these two
benchmarks, the performance of the portfolio manager for compensation
purposes is measured against the criteria that are relevant to the
portfolio manager's competitive universe.
o Qualitative Performance. The qualitative performance component with
respect to all of the accounts managed by the portfolio manager
includes objectives, such as effectiveness in the areas of teamwork,
leadership, communications and marketing, that are mutually established
and evaluated by each portfolio manager and management.
o Pioneer Results and Business Line Results. Pioneer's financial
performance, as well as the investment performance of its investment
management group, affect a portfolio manager's actual bonus by a
leverage factor of plus or minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers may participate in other programs designed to reward
and retain key contributors. Senior executives or other key employees may be
granted performance units based on the stock price performance of UniCredit and
the financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
Share Ownership by Portfolio Managers. The following table indicates as of April
30, 2010 the value, within the indicated range, of shares beneficially owned by
the portfolio managers of the fund.
--------------------------------------- ----------------------------------------
Name of Portfolio Manager Beneficial Ownership of the Fund*
--------------------------------------- ----------------------------------------
--------------------------------------- ----------------------------------------
Charles Melchreit A
--------------------------------------- ----------------------------------------
--------------------------------------- ----------------------------------------
Andrew Feltus D
--------------------------------------- ----------------------------------------
--------------------------------------- ----------------------------------------
Jonathan Sharkey B
--------------------------------------- ----------------------------------------
*Key to Dollar Ranges
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
--------------------------------------------------------------------------------------------------------------------------
Interested Trustees:
--------------------------------------------------------------------------------------------------------------------------
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
John F. Cogan, Chairman of the Class III Deputy Chairman and a Director None
Jr. (81)* Board, Trustee Trustee since of Pioneer Global Asset
and President 2007. Term Management S.p.A. ("PGAM");
expires in 2010. Non-Executive Chairman and a
Director of Pioneer Investment
Management USA Inc. ("PIM-USA");
Chairman and a Director of
Pioneer; Chairman and Director
of Pioneer Institutional Asset
Management, Inc. (since 2006);
Director of Pioneer Alternative
Investment Management Limited
(Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda)
Limited and affiliated funds;
Director of PIOGLOBAL Real
Estate Investment Fund (Russia)
(until June 2006); Director of
Nano-C, Inc. (since 2003);
Director of Cole Management Inc.
(since 2004); Director of
Fiduciary Counseling, Inc.;
President and Director of
Pioneer Funds Distributor, Inc.
("PFD") (until May 2006);
President of all of the Pioneer
Funds; and Of Counsel, Wilmer
Cutler Pickering Hale and Dorr
LLP
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
Daniel K. Trustee and Class I Trustee Director, CEO and President of None
Kingsbury (49)* Executive Vice since 2007. Term Pioneer Investment Management
President expires in 2011. USA Inc., Pioneer Investment
Management, Inc. and Pioneer
Institutional Asset Management,
Inc. (since March 2007);
Executive Vice President of all
of the Pioneer Funds (since
March 2007); Director of Pioneer
Global Asset Management S.p.A.
(since March 2007); Head of New
Markets Division, Pioneer Global
Asset Management S.p.A.
(2000-2007)
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
--------------------------------------------------------------------------------------------------------------------------
Independent Trustees:
--------------------------------------------------------------------------------------------------------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
David R. Bock (63) Trustee Class III Executive Vice President and Director of The Enterprise
Trustee since Chief Financial Officer, I-trax, Social Investment Company
2007. Term Inc. (publicly traded health (privately-held affordable
expires in 2010. care services company) (2004 - housing finance company);
present); Partner, Federal City and Director of New York
Capital Advisors (boutique Mortgage Trust (publicly
merchant bank)(1997 to 2004); traded mortgage REIT)
and Executive Vice President and
Chief Financial Officer,
Pedestal Inc. (internet-based
mortgage trading company)
(2000-2002)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Mary K. Bush (59) Trustee Class II Trustee President, Bush International, Director of Brady
since 2007. Term LLC (international financial Corporation (industrial
expires in 2009. advisory firm) identification and
specialty coated material
products manufacturer);
Director of Briggs &
Stratton Co. (engine
manufacturer); Director of
UAL Corporation (airline
holding company); Director
of Mantech International
Corporation (national
security, defense, and
intelligence technology
firm): and Member, Board of
Governors, Investment
Company Institute
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Benjamin M. Friedman Trustee Class I Trustee Professor, Trustee, Mellon
(64) since 2008. Term Harvard Institutional Funds
expires in 2011. University Investment Trust and Mellon
Institutional Funds Master
Portfolio (oversees 17
portfolios in fund complex)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Margaret B.W. Graham Trustee Class I Trustee Founding Director, None
(60) since 2007. Term Vice-President and Corporate
expires in 2011. Secretary, The Winthrop Group,
Inc. (consulting
firm); and Desautels
Faculty of Management,
McGill
University
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Thomas J. Perna (57) Trustee Class II Trustee Private investor (2004 - Director of Quadriserv Inc.
since 2007. Term present); and Senior Executive (technology products for
expires in 2009. Vice President, The Bank of New securities lending
York (financial and securities industry)
services) (1986 - 2004)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Marguerite A. Piret Trustee Class II Trustee President and Chief Executive Director of New America
(59) since 2007. Term Officer, Newbury, Piret & High Income Fund, Inc.
expires in 2009. Company, Inc. (investment (closed-end investment
banking firm) company)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Stephen K. West (79) Trustee Class III Senior Counsel, Sullivan & Director, The Swiss
Trustee since Cromwell (law firm) Helvetia Fund, Inc.
2007. Term (closed-end investment
expires in 2010. company)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Diversified High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date December 30, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date December 30, 2010
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date December 30, 2010
* Print the name and title of each signing officer under his or her signature.