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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)
Dorothy E. Bourassa, 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, 2008 through April 30, 2009
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
--------------------------------------------------------------------------------
Annual Report | April 30, 2009
--------------------------------------------------------------------------------
Ticker Symbol: HNW
[LOGO]PIONEER
Investments(R)
visit us: pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Schedule of Investments 11
Financial Statements 33
Financial Highlights 37
Notes to Financial Statements 38
Report of Independent Registered Public Accounting Firm 47
Approval of Investment Advisory Agreement 49
Trustees, Officers and Service Providers 52
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 1
President's Letter
Dear Shareowner,
Stock and bond markets around the globe have been experiencing one of their
most tumultuous periods in history. Investors have witnessed volatility of a
magnitude that many have never before seen. Distance often provides the best
vantage point for perspective. Still, we believe that the benefits of basic
investment principles that have stood the test of time -- even in the midst of
market turmoil -- cannot be underestimated.
First, invest for the long term. The founder of Pioneer Investments, Philip L.
Carret, began his investment career during the 1920s. One lesson he learned is
that while great prosperity affords an advantageous time for selling stocks,
extreme economic slumps can create opportunities for purchase. Indeed, many of
our portfolio managers, who follow the value-conscious investing approach of
our founder, are looking at recent market conditions as an opportunity to buy
companies whose shares we believe have been unjustifiably beaten down by
indiscriminate selling, but that we have identified as having strong prospects
over time. While investors may be facing a sustained market downturn, we
continue to believe that patience, along with staying invested in the market,
are important considerations for long-term investors.
A second principle is to stay diversified across different types of
investments. The global scope of the current market weakness poses challenges
for this basic investment axiom. But the turbulence makes now a good time to
reassess your portfolio and make sure that your investments continue to meet
your needs. We believe you should work closely with your financial advisor to
find the mix of stocks, bonds and money market assets that is best aligned to
your particular risk tolerance and investment objective.
As the investment markets sort through the continuing crisis in the financial
industry, we are staying focused on the fundamentals and risk management. With
more than 80 years of experience behind us, we have learned how to navigate
turbulent markets. At Pioneer Investments, risk management has always been a
critical part of our culture -- not just during periods of extraordinary
volatility. Our investment process is based on fundamental research,
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.
While we
2 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
see potential chances for making money in many corners of the market, it takes
research and experience to separate solid investment opportunities from
speculation.
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. Thank you for investing with Pioneer.
Respectfully,
/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 | Annual Report | 4/30/09 3
Portfolio Management Discussion |4/30/09
High-yield bond and bank loan investments struggled through the final eight
months of 2008 in the face of a severe credit crisis before credit-related
securities started to recover early in 2009. In the following discussion,
Andrew Feltus, CFA, and Jonathan Sharkey discuss the factors affecting the
performance of Pioneer Diversified High Income Trust during the 12 months ended
April 30, 2009. Mr. Feltus and Mr. Sharkey are members of Pioneer's Fixed
Income Department and leaders of the investment team responsible for the daily
management of the Trust.
Q How did the Trust perform during the 12 months ended April 30, 2009?
A Pioneer Diversified High Income Trust had a total return of -24.69% at net
asset value and a return of -23.11% at market price. As of April 30, 2009,
the Trust was selling at a discount of market price to net asset value of
-5.1%. Over the same period, the Trust's benchmark returned -14.78%. The
benchmark's return is based on a 50% weighting of the Merrill Lynch Global
High Yield and Emerging Market Plus Index (these indices are not leveraged)
and a 50% weighting of the CSFB Leveraged Loan Index, which produced total
returns of -14.23% and -15.32%, respectively. The Trust's 30-day SEC yield
was 10.68% and the distribution rate based on market close on April 30,
2009, was 17.23%, based on the most recent monthly dividend.
Q What were the principal factors affecting the Trust's performance during
the 12 months ended April 30, 2009?
A After a brief market rally in the early spring of 2008, the value of
high-yield bond and bank-loan investments declined sharply over the
remainder of the year in the face of mounting credit problems. The
volatility in fixed-income markets peaked in late 2008 following the
September bankruptcy of investment bank Lehman Brothers and the collapse or
near-collapse of several other institutions, several of which required U.S.
government assistance to survive. Market values for fixed-income securities
exposed to credit risk plummeted in the fourth quarter of 2008, finishing a
dismal year for such investments. However, early in 2009 investors started
perceiving attractive values relative to the risks in investments such as
high-yield bonds and floating-rate loans securities, leading to a rebound
in those markets in the final months of the Trust's fiscal year.
In this environment, the Trust's allocation to catastrophe-linked bonds
helped support performance results. Catastrophe-linked bonds are
reinsurance securities issued against the possibility of significant losses
incurred by
4 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
casualty insurers from natural catastrophes, such as earthquakes or storms.
Bank loans did not hold up as well, as mounting questions about credit
problems caused institutional investors such as hedge funds to sell-off
their bank loan investments. The Trust's overweight position in U.S.
high-yield corporate bonds also performed poorly, as they underperformed
some other high-yield sectors, notably emerging-market sovereign
securities. However, the decision to reduce the Trust's exposure to foreign
currencies tended to help results, as did the decision to avoid, for most
of the period, commercial mortgage-backed debt. As noted, the Trust's
bank-loan investments also struggled, as an emphasis on B-rated and a
de-emphasis on BB-rated securities tended to hold back results when
lower-rated investments underperformed. The Trust's performance at net
asset value ("NAV") lagged the overall market indices for the period,
partially due to the effects of the Trust's use of leverage (borrowed
funds) in the market. While leverage tends to amplify gains in bull
markets, it also tends to magnify losses in poor markets. At the end of the
fiscal year, the Trust's leverage ratio was 25%. The percentage of leverage
stayed relatively unchanged for the year.
At the end of the 12-month period, bank loans represented 31.6% of the
Trust's investment portfolio, while U.S. high-yield corporates accounted
for 28.9% of the Trust's investment portfolio, and emerging market and
international high-yield bonds represented 12% of the Trust's investment
portfolio. Catastrophe-linked bonds accounted for 19.5% of the Trust's
investment portfolio.
Q What were some of the investments that supported the Trust's performance
during the 12 months ended April 30, 2009?
A The Trust's position in high-yield bonds of Talecris did well. The health
care company, which specializes in processing blood supplies, announced it
was to be acquired by another company. Bonds of electric utility Jamaica
Mirant helped performance, as did several securities tied to the
telecommunication service sector. Also supporting the Trust's results were
a loan to Stratos Global, which provides voice and data communication
services to corporations and government agencies; GCI, another
telecommunication service provider; and bonds of Intelsat, a satellite
communications company. In addition, a loan to Metavante, which provides
transaction-processing services to the banking industry, helped the Trust's
performance.
Q What were some of the investments that produced disappointing results for
the Trust over the 12 months ended April 30, 2009?
A Loans to steel companies, such as Aloma Steel and Niagara Steel, which
fared poorly in a difficult year for the metals industry, was one area that
hurt the Trust's results over the 12-month period. Also holding back
results were loans to Ceva Group, a logistics company servicing the
automotive industry. High-yield bonds performed poorly as a group,
especially those of
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 5
commodity related corporations. Bonds of Aventine Renewable Energy
Resources, an ethanol producer, lost most of their value when the company
defaulted. The Trust's overweight position in chemical industry bonds also
proved to be a detractor, with poor performance by bonds of ARCO, Georgia
Gulf, Ineos and Kronos Worldwide.
Q What is your investment outlook?
A We think domestic high-yield corporate bonds have fallen to reflect a
depression-style scenario, which we think is a worse outlook than is
justified. As a consequence, we believe investors will continue to see
value in high-yield bonds, which we believe are priced below their
fundamental value. We think 2009 should show improvement in market
conditions and believe that the Trust is well positioned to participate in
a market rebound. However, we also can anticipate continued volatility in
day-to-day trading.
Although they suffered minor collateral damage from the credit crunch,
catastrophe-linked bonds have proven to be an island of calm within the
high-yield markets. Their recent history supports the theory that the
performance of this group is not highly correlated to other areas in the
high-yield market. At current yields, we believe catastrophe-linked bonds
are priced comparable to high-yield bonds and bank loans, and we see
opportunities in the coming months, as new supply is expected to be low. We
believe the best values are in U.S. hurricane bonds.
Bank loans, as an asset class, still face fundamental issues, especially in
light of our projections that the economy is likely to contract for the
second quarter of 2009 -- on the heels of the large contraction seen in the
first quarter of the year -- before starting to recover in the final two
quarters. We also expect that unemployment will remain high. On the plus
side, the market's advance in early 2009 does offer evidence that many
companies now can get financing, while the recovery value of loans in
bankruptcy may improve. The market also has shown signs of stabilization as
buyers have stepped in to make investments. Liquidity has improved in the
market and refinancing activity has increased, raising the potential for
price appreciation by bank loans. At the same time, the new-issue market
may begin to reopen.
Loans have continued to sell at very attractive discounts and we believe
the bank loan market may continue to perform well, although we cannot
predict when values will snap back significantly.
Please refer to the Schedule of Investments on pages 11-32 for a full listing
of Trust securities.
6 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
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 fixed-income securities in the Trust
will generally fall. Conversely, when interest rates fall the prices of
fixed-income securities in the Trust generally will rise. Investments in the
Trust are subject to possible loss due to the financial failure of 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 Trust's income or capital appreciation will not be sufficient to cover
the cost of leverage, which may adversely affect the return for the holders of
common shares.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering prospectus relating to its common shares.
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.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 7
Portfolio Summary | 4/30/09
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA IS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.]
Corporate Bonds & Notes 57.4%
Floating Rate Loan Interests 31.2%
Temporary Cash Investments 5.1%
Asset Backed Securities 2.4%
Convertible Bonds & Notes 1.9%
Collateralized Mortgage Obligations 1.4%
Fixed Rate Loan Interests 0.4%
Convertible Preferred Stock 0.2%
Common Stock* 0.0%
Warrants* 0.0%
* Amount is less than 0.1%.
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on S&P ratings)
[THE FOLLOWING DATA IS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.]
A & Higher 3.8%
BBB 0.9%
BB 30.4%
B 37.0%
CCC & Lower 10.0%
Cash Equivalents 5.1%
Not Rated 12.8%
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)**
1. Calabash Re, Ltd., 9.749%, 6/1/09 (144A) 1.39%
2. Green Valley, Ltd., 5.045%, 1/10/11 (144A) 1.31
3. Muteki, Ltd., 5.638%, 5/24/11 (144A) 1.30
4. Residential Reinsurance 2008, Ltd., 12.761%, 6/6/11 (144A) 1.30
5. Atlas Reinsurance Plc, 11.77%, 1/10/11 (144A) 1.29
6. Successor II, Ltd., 26.277%, 4/6/10 (144A) 1.27
7. SunGard Data Systems, Inc., New U.S. Term Loan, 2.219%--2.991%, 2/28/14 1.23
8. Blue Fin, Ltd., 5.557%, 4/10/12 (144A) 1.17
9. Calpine Corp., First Priority Term Loan, 4.095%, 3/29/14 1.16
10. Fhu-Jin, Ltd., 5.084%, 8/10/11 (144A) 1.15
** This list excludes temporary cash 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.
8 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Prices and Distributions | 4/30/09
Market Value per Common Share
--------------------------------------------------------------------------------
4/30/09 4/30/08
$ 13.23 $ 20.47
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
4/30/09 4/30/08
$ 13.94 $ 22.02
--------------------------------------------------------------------------------
Distributions per Common Share: 5/1/08-4/30/09
--------------------------------------------------------------------------------
Net
Investment Tax Return Short-Term Long-Term
Income of Capital Capital Gains Capital Gains
$ 2.469 $ 0.045 $ -- $ --
--------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 9
Performance Update | 4/30/09
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%) Merrill Lynch Global High Yield and Emerging Market Plus
Index and CSFB Leveraged Loan Index.
Cumulative Total Returns
(As of April 30, 2009)
---------------------------------------------------------
Net Asset Market
Period Value ("NAV") Price
---------------------------------------------------------
Life-of-Trust
(5/30/07) -24.22% -31.32%
1 Year -24.69 -23.11
---------------------------------------------------------
[THE FOLLOWING DATA IS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
Value of $10,000 Investment
50% ML Global HY
and EM Plus Index
Pioneer Diversified 50% CSFB Leveraged
High Income Trust Loan Index
5/07 $10,000 $10,000
4/08 8,933 10,246
4/09 6,868 9,281
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 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.
10 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Schedule of Investments | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
ASSET BACKED SECURITIES -- 3.3% of Net Assets
CONSUMER SERVICES -- 0.3%
Restaurants -- 0.3%
500,000 BB/Ba3 DB Master Finance LLC, 8.285%, 6/20/31 (144A) $ 316,745
------------
Total Consumer Services $ 316,745
---------------------------------------------------------------------------------------------------------
BANKS -- 3.0%
Thrifts & Mortgage Finance -- 3.0%
246,741(a) AA+/Aa1 Ace Securities Corp., 1.038%, 12/25/34 $ 125,531
1,058,010(a) AAA/Aaa Bayview Financial Acquisition Trust, 0.825%, 8/28/44 930,422
1,652,270(a) AAA/Aaa Bayview Financial Acquisition Trust, 1.065%, 5/28/44 1,012,067
200,000(a) AAA/Baa3 Carrington Mortgage Loan Trust, 0.538%, 10/25/36 126,369
699,000(a) AAA/B3 Carrington Mortgage Loan Trust, 0.638%, 2/25/37 421,191
185,225(a) AAA/Ba2 Countrywide Asset-Backed Certificates,
0.618%, 7/25/36 126,853
88,482(a) AAA/B1 First Franklin Mortgage Loan Asset-Backed Certificates,
0.628%, 3/25/36 47,567
250,000(a) AAA/Ba2 GSAMP Trust, 0.568%, 1/25/37 160,884
175,070(a) A/A2 GSAMP Trust, 0.868%, 3/25/35 158,989
760,881(a) AAA/Caa2 Lehman XS Trust, 0.788%, 12/25/35 149,033
172,549(a) AAA/B2 Residential Asset Mortgage Products, Inc.,
0.638%, 3/25/36 110,983
------------
Total Banks $ 3,369,889
---------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $5,041,877) $ 3,686,634
---------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 1.9%
of Net Assets
BANKS -- 1.9%
Thrifts & Mortgage Finance -- 1.9%
500,000(a) AAA/Aaa Adjustable Rate Mortgage Trust, 0.828%, 6/25/35 $ 194,013
285,722(a) AAA/B3 Countrywide Home Loans, 0.788%, 3/25/35 86,621
666,569(a) AAA/Ca Downey Savings and Loan Association Mortgage Loan
Trust, 0.817%, 10/19/45 273,972
458,266(a) AAA/Ca Downey Savings and Loan Association Mortgage Loan
Trust, 0.867%, 10/19/45 64,157
1,361,643(a) AAA/Aa2 Impac CMB Trust, 1.198%, 1/25/35 672,329
292,994(a) A/Caa2 Impac Secured Assets CMN Owner Trust,
0.528%, 11/25/36 170,683
777,924(a) B/Ca Luminent Mortgage Trust, 0.698%, 7/25/36 104,933
464,619(a) AAA/Aa1 WaMu Mortgage Pass-Through Certificates,
0.668%, 4/25/45 224,101
1,545,355(a) AAA/Baa1 WaMu Mortgage Pass-Through Certificates,
0.918%, 7/25/45 349,563
------------
Total Banks $ 2,140,372
---------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $4,130,686) $ 2,140,372
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 11
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
CORPORATE BONDS & NOTES -- 76.6% of Net Assets
ENERGY -- 4.9%
Oil & Gas Drilling -- 0.1%
NOK 1,500,000 NR/NR Petrolia Drilling ASA, 12.0%, 6/20/12 (144A) $ 63,864
----------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 1.1%
300,000 NR/NR Nexus 1 Pte, Ltd., 10.5%, 3/7/12 (144A) $ 60,000
1,120,000 B/NR Oceanografia SA de CV, 11.25%, 7/15/15 (144A) 504,000
700,000(a) NR/NR Sevan Marine ASA, 5.525%, 5/14/13 (144A) 385,000
NOK 3,000,000(a) NR/NR Sevan Marine ASA, 8.31%, 10/24/12 (144A) 237,210
300,000 NR/NR Skeie Drilling & Production ASA, 11.25%,
3/8/13 (144A) 60,000
----------
$1,246,210
----------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 3.2%
125,000 BB/Ba3 Chesapeake Energy Corp., 9.5%, 2/15/15 $ 126,250
500,000 CCC+/Caa1 Harvest Operations Corp., 7.875%, 10/15/11 370,000
970,000 BB-/B3 Hilcorp Energy I L.P./Hilcorp Finance Co., 9.0%,
6/1/16 (144A) 829,350
NOK 3,500,000 NR/NR Norwegian Energy Co. AS, 11.0%, 7/13/10 (144A) 425,762
NOK 2,000,000 NR/NR PA Resources AB, 8.75%, 3/10/10 258,498
530,000 B/Caa2 Parallel Petroleum Corp., 10.25%, 8/1/14 341,850
225,000 B-/Caa1 PetroQuest Energy, Inc., 10.375%, 5/15/12 162,000
240,000 CCC+/B3 Quicksilver Resources, Inc., 7.125%, 4/1/16 150,000
250,000(a) B-/B3 SandRidge Energy, Inc., 4.833%, 4/1/14 181,333
335,000 B-/B3 SandRidge Energy, Inc., 8.0%, 6/1/18 (144A) 293,125
670,000(b) B-/B3 SandRidge Energy, Inc., 8.625%, 4/1/15 539,350
----------
$3,677,518
----------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.1%
755,000(c) D/NR Aventine Renewable Energy Holdings, Inc.,
10.0%, 4/1/17 $ 151,000
460,000(c) NR/NR VeraSun Energy Corp., 9.375%, 6/1/17 25,300
----------
$ 176,300
----------------------------------------------------------------------------------------------------------
Coal & Consumable Fuels -- 0.4%
505,000 BB-/B2 Massey Energy Co., 6.875%, 12/15/13 $ 430,512
----------
Total Energy $5,594,404
----------------------------------------------------------------------------------------------------------
MATERIALS -- 7.1%
Commodity Chemicals -- 0.3%
195,000(c) D/C ARCO Chemical Co., 9.8%, 2/1/20 $ 44,850
1,530,000(c)(m) C/C Georgia Gulf Corp., 10.75%, 10/15/16 137,700
650,000(c) C/C Montell Finance Co. BV, 8.1%, 3/15/27 (144A) 234,000
----------
$ 416,550
----------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 0.2%
EURO 1,275,000 CC/Ca Ineos Group Holdings Plc, 7.875%, 2/15/16 (144A) $ 282,992
----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
12 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Specialty Chemicals -- 0.1%
EURO 200,000 CCC-/Caa2 Kronos International, Inc., 6.5%, 4/15/13 $ 87,457
-----------------------------------------------------------------------------------------------------------------
Construction Materials -- 0.6%
500,000 B/B2 AGY Holding Corp., 11.0%, 11/15/14 $ 315,000
300,000(a)(d) CCC/NR C8 Capital SPV, Ltd., 6.64% (144A) 134,613
500,000 CCC+/B3 U.S. Concrete, Inc., 8.375%, 4/1/14 237,500
------------
$ 687,113
-----------------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 1.3%
1,145,000 B-/B3 AEP Industries, Inc., 7.875%, 3/15/13 $ 790,050
EURO 625,000 B-/B3 Impress Holdings BV, 9.25%, 9/15/14 (144A) 695,678
------------
$ 1,485,728
-----------------------------------------------------------------------------------------------------------------
Paper Packaging -- 1.3%
700,000 CCC+/Caa1 Graham Packaging Co., Inc., 9.875%, 10/15/14 $ 566,125
500,000 B-/B3 Graphic Packaging International, Inc., 9.5%, 8/15/13 451,250
750,000 B/NR U.S. Corrugated, Inc., 10.0%, 6/1/13 450,000
------------
$ 1,467,375
-----------------------------------------------------------------------------------------------------------------
Aluminum -- 0.6%
600,000(c) D/C Asia Aluminum Holdings, Ltd., 8.0%,
12/23/11 (144A) $ 72,000
300,000 CCC+/B3 CII Carbon LLC, 11.125%, 11/15/15 (144A) 174,000
1,200,000(a)(b) D/Caa2 Noranda Aluminum Acquisition Corp.,
6.595%, 5/15/15 420,000
------------
$ 666,000
-----------------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 0.8%
320,000 NR/NR Blaze Recycling & Metals LLC, 10.875%,
7/15/12 (144A) $ 179,200
195,000 B+/B1 FMG Finance Pty., Ltd., 10.625%, 9/1/16 (144A) 170,625
750,000 BB/Ba2 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 547,500
------------
$ 897,325
-----------------------------------------------------------------------------------------------------------------
Steel -- 1.1%
1,245,000 B-/Caa2 Algoma Acquisition Corp., 9.875%, 6/15/15 (144A) $ 498,000
250,000 BB-/B1 Evraz Group SA, 9.5%, 4/24/18 (144A) 154,375
920,000(a) B/Caa1 Ryerson, Inc., 12.0%, 11/1/15 556,600
EURO 50,000 CCC/Caa3 Zlomrex International Finance SA, 8.5%,
2/1/14 (144A) 11,926
------------
$ 1,220,901
-----------------------------------------------------------------------------------------------------------------
Forest Products -- 0.4%
46,490(m) B-/Caa3 Ainsworth Lumber Co., Ltd., 11.0%, 7/29/15 (144A) $ 11,768
500,000(e) CC/Caa1 Mandra Forestry Holdings, Ltd., 12.0%,
5/15/13 (144A) 175,000
250,000 BB/Ba2 Sino-Forest Corp., 9.125%, 8/17/11 235,000
------------
$ 421,768
-----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 13
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Paper Products -- 0.4%
600,000 B-/B3 Exopack Holding Corp., 11.25%, 2/1/14 $ 420,000
------------
Total Materials $ 8,053,209
--------------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 4.7%
Aerospace & Defense -- 0.7%
750,000 B-/NR Aeroflex. Inc., 11.75%, 2/15/15 $ 450,000
405,000 BB/Ba3 DigitalGlobe, Inc., 10.5%, 5/1/14 (144A) 403,988
------------
$ 853,988
--------------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.6%
350,000 BB-/Ba3 Dycom Industries, Inc., 8.125%, 10/15/15 $ 297,500
500,000 B/B2 Esco Corp., 8.625%, 12/15/13 (144A) 405,000
------------
$ 702,500
--------------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.6%
671,898(b)(f) CCC-/NR American Achievement Group Holding Corp.,
16.75%, 10/1/12 $ 118,436
500,000 B-/NR Cia Latinoamericana de Infraestructura & Servicios SA,
9.75%, 5/10/12 160,000
500,000(c) D/NR Indalex Holding Corp., 11.5%, 2/1/14 30,000
740,000 CCC+/B3 Park-Ohio Industries, Inc., 8.375%, 11/15/14 327,450
------------
$ 635,886
--------------------------------------------------------------------------------------------------------------
Construction & Farm Machinery & Heavy Trucks -- 1.3%
720,000 BB-/B1 American Railcar Industries, Inc., 7.5%, 3/1/14 $ 561,600
770,000 CCC+/Caa3 Commercial Vehicle Group, Inc., 8.0%, 7/1/13 238,700
950,000 CCC/Caa1 Greenbrier Companies, Inc., 8.375%, 5/15/15 418,000
400,000 B-/Caa1 Titan International, Inc., 8.0%, 1/15/12 320,000
------------
$ 1,538,300
--------------------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.9%
1,220,000 B-/NR Industrias Metalurgicas Pescarmona SA, 11.25%,
10/22/14 (144A) $ 463,600
875,000 B/Caa1 Mueller Water Products, Inc., 7.375%, 6/1/17 516,250
------------
$ 979,850
--------------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.6%
500,000 B-/B3 Intcomex, Inc., 11.75%, 1/15/11 $ 175,000
500,000 CCC/Caa1 KAR Holdings, Inc., 10.0%, 5/1/15 290,000
300,000 B/B1 Wesco Distribution, Inc., 7.5%, 10/15/17 228,750
------------
$ 693,750
------------
Total Capital Goods $ 5,404,274
--------------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.4%
Commercial Printing -- 0.1%
250,000 B+/B2 Sheridan Group, Inc., 10.25%, 8/15/11 $ 155,000
--------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Environmental & Facilities Services -- 0.1%
700,000(c)(m) D/NR Aleris International, Inc., 10.0%, 12/15/16 $ 14,000
EURO 107,128 B/Caa1 New Reclamation Group Pty., Ltd., 8.125%,
2/1/13 (144A) 58,201
------------
$ 72,201
--------------------------------------------------------------------------------------------------------------
Diversified Support Services -- 0.2%
400(g) NR/B3 MSX International, Ltd., UK, 12.5%, 4/1/12 (144A) $ 80,000
125,000 BB-/B2 United Rentals North America, Inc., 6.5%, 2/15/12 111,875
------------
$ 191,875
------------
Total Commercial & Professional Services $ 419,076
--------------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.5%
Air Freight & Logistics -- 0.3%
775,000 CCC+/Caa2 CEVA Group Plc, 10.0%, 9/1/14 (144A) $ 383,625
--------------------------------------------------------------------------------------------------------------
Railroads -- 0.2%
240,000 B+/B2 Kansas City Southern de Mexico, 7.625%, 12/1/13 $ 196,800
------------
Total Transportation $ 580,425
--------------------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 1.2%
Auto Parts & Equipment -- 1.2%
980,000 CCC+/Caa2 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) $ 588,000
1,140,000 CCC/Caa2 Lear Corp., 8.75%, 12/1/16 176,700
500,000(f) CCC+/Caa2 Stanadyne Corp., 0.0%, 2/15/15 245,000
160,000 B-/B3 Stanadyne Corp., 10.0%, 8/15/14 128,000
700,000 CCC/Caa2 Tenneco, Inc., 8.625%, 11/15/14 210,000
------------
Total Automobiles & Components $ 1,347,700
--------------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.1%
Homebuilding -- 0.4%
695,000 B+/B1 Meritage Homes Corp., 6.25%, 3/15/15 $ 507,350
--------------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 0.3%
500,000 CCC+/Caa1 Yankee Acquisition Corp., 9.75%, 2/15/17 $ 322,500
--------------------------------------------------------------------------------------------------------------
Textiles -- 0.4%
500,000 B/Ba3 Invista, 9.25%, 5/1/12 (144A) $ 453,750
------------
Total Consumer Durables & Apparel $ 1,283,600
--------------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 1.9%
Casinos & Gaming -- 1.9%
500,000 NR/NR Buffalo Thunder Development Authority, 9.375%,
12/15/14 (144A) $ 52,500
EURO 1,155,000 B+/B2 Codere Finance Luxembourg SA, 8.25%,
6/15/15 (144A) 642,806
395,000 B/B3 FireKeepers Development Authority, 13.875%,
5/1/15 (144A) 284,400
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 15
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Casinos & Gaming -- (continued)
550,000 CC/Ca Fontainebleau Las Vegas Holdings LLC, 10.25%,
6/15/15 (144A) $ 19,250
95,000 B/B3 Galaxy Entertainment Finance Co., Ltd., 9.875%,
12/15/12 (144A) 74,100
275,000 CCC/Caa1 Little Traverse Bay Bands of Odawa Indians, 10.25%,
2/15/14 (144A) 110,000
1,615,000 B+/B2 Mashantucket Western Pequot Tribe, 8.5%,
11/15/15 (144A) 347,225
EURO 50,000 B/B3 Peermont Global, Ltd., 7.75%, 4/30/14 (144A) 42,072
750,000(c) D/C Station Casinos, Inc., 6.625%, 3/15/18 30,000
750,000(c) D/NR Trump Entertainment Resorts, Inc., 8.5%, 6/1/15 54,375
EURO 405,000 NR/NR Unibet Group Plc, 9.7%, 12/21/10 542,032
------------
Total Consumer Services $ 2,198,760
-------------------------------------------------------------------------------------------------------------
MEDIA -- 3.0%
Broadcasting -- 2.6%
40,000(c)(m) D/NR CCH I LLC, 11.0%, 10/1/15 (144A) $ 3,100
250,000(c) D/NR CCH II LLC, 10.25%, 9/15/10 226,250
840,000 B/B1 Hughes Network Systems LLC, 9.5%, 4/15/14 785,400
800,000(a)(b) CCC+/Caa2 Intelsat Bermuda, Ltd., 11.5%, 2/4/17 (144A) 516,939
500,000 BB-/B3 Intelsat Subsidiary Holding Co., Ltd., 8.5%,
1/15/13 (144A) 495,000
400,000 B/B2 Kabel Deutschland GmbH, 10.625%, 7/1/14 408,000
430,000 B-/Caa1 Telesat Canada, 12.5%, 11/1/17 (144A) 356,900
1,245,000(b)(m) CCC/Caa2 Univision Communications, Inc., 9.75%,
3/15/15 (144A) 202,312
------------
$ 2,993,901
-------------------------------------------------------------------------------------------------------------
Publishing -- 0.4%
600,000 CCC+/Caa2 TL Acquisitions, Inc., 10.5%, 1/15/15 (144A) $ 408,000
------------
Total Media $ 3,401,901
-------------------------------------------------------------------------------------------------------------
RETAILING -- 1.0%
Internet Retail -- 0.3%
465,000 BB-/Ba3 Ticketmaster Entertainment, Inc.,
10.75%, 8/1/16 (144A) $ 317,362
-------------------------------------------------------------------------------------------------------------
Apparel Retail -- 0.0%
EURO 74,000(a) CCC+/Caa1 Edcon Holdings Pty., Ltd., 7.15%, 6/15/15 (144A) $ 22,553
-------------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.7%
800,000(m) B-/Caa1 Sally Holdings LLC, 10.5%, 11/15/16 $ 772,000
------------
Total Retailing $ 1,111,915
-------------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 2.5%
Distillers & Vintners -- 0.0%
EURO 330,000(c)(h) NR/Caa2 Belvedere SA, 8.106%, 5/15/13 (144A) $ 52,474
-------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Packaged Foods & Meats -- 1.3%
490,000(c) NR/NR Arantes International, Ltd., 10.25%, 6/19/13 (144A) $ 19,600
400,000 B+/Ba3 Bertin Ltda, 10.25%, 10/5/16 (144A) 200,000
400,000(c) D/NR Independencia International, Ltd., 9.875%,
5/15/15 (144A) 52,000
700,000 B+/B1 Marfrig Overseas, Ltd., 9.625%, 11/16/16 (144A) 497,000
1,175,000 B/NR Minerva Overseas, Ltd., 9.5%, 2/1/17 (144A) 487,625
275,000(f) NR/B2 SA Fabrica de Produtos Alimenticios Vigor, 9.25%,
2/23/17 (144A) 168,094
----------
$1,424,319
----------------------------------------------------------------------------------------------------------
Tobacco -- 1.2%
1,360,000 B+/B2 Alliance One International, Inc., 8.5%, 5/15/12 $1,210,400
125,000 B+/B2 Alliance One International, Inc., 11.0%, 5/15/12 121,875
----------
$1,332,275
----------
Total Food, Beverage & Tobacco $2,809,068
----------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.2%
Household Products -- 0.2%
205,000(m) CCC+/Caa1 Central Garden and Pet Co., 9.125%, 2/1/13 $ 177,325
----------
Total Household & Personal Products $ 177,325
----------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 4.6%
Health Care Equipment & Services -- 0.5%
750,000 CCC+/Caa3 Accellent, Inc., 10.5%, 12/1/13 $ 566,250
----------------------------------------------------------------------------------------------------------
Health Care Supplies -- 1.0%
1,265,000(b) B-/B3 Biomet, Inc., 10.375%, 10/15/17 $1,208,075
----------------------------------------------------------------------------------------------------------
Health Care Services -- 2.5%
1,385,000 BB-/NR DASA Finance Corp., 8.75%, 5/29/18 (144A) $1,163,400
500,000 B-/B2 Rural/Metro Corp., 9.875%, 3/15/15 422,500
725,000(b) B-/B3 Surgical Care Affiliates, Inc., 8.875%,
7/15/15 (144A) 493,000
1,170,000 CCC+/Caa1 Surgical Care Affiliates, Inc., 10.0%, 7/15/17 (144A) 760,500
----------
$2,839,400
----------------------------------------------------------------------------------------------------------
Managed Health Care Facilities -- 0.2%
225,000 BB/Ba3 HCA, Inc., 8.5%, 4/15/19 (144A) $ 226,406
----------------------------------------------------------------------------------------------------------
Managed Health Care -- 0.4%
500,000 B-/Caa1 Multiplan, Inc., 10.375%, 4/15/16 (144A) $ 440,000
----------
Total Health Care Equipment & Services $5,280,131
----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 17
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
PHARMACEUTICALS & BIOTECHNOLOGY &
LIFE SCIENCES -- 0.4%
Pharmaceuticals -- 0.4%
260,000 C/C Angiotech Pharmaceuticals, Inc., 7.75%, 4/1/14 $ 100,750
250,000 B/B2 Phibro Animal Health Corp., 10.0%, 8/1/13 (144A) 210,000
200,000 CCC+/Caa1 Phibro Animal Health Corp., 13.0%, 8/1/14 (144A) 164,000
------------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 474,750
----------------------------------------------------------------------------------------------------------------
BANKS -- 1.6%
Diversified Banks -- 0.9%
250,000 NR/Ba1 ATF Capital BV, 9.25%, 2/21/14 (144A) $ 125,000
500,000(a) NR/B2 Banco Macro SA, 9.75%, 12/18/36 180,000
700,000(a) NR/Ba1 Banco Macro SA, 10.75%, 6/7/12 238,000
200,000 B+/Ca JSC TemirBank, 9.5%, 5/21/14 (144A) 40,000
550,000 B+/Ba3 Russian Standard Finance SA, 7.5%, 10/7/10 (144A) 363,000
500,000 D/Ca TuranAlem Finance BV, 8.5%, 2/10/15 (144A) 100,000
------------
$ 1,046,000
----------------------------------------------------------------------------------------------------------------
Regional Banks -- 0.7%
600,000(a)(d) BBB/A3 PNC Financial Services Group, Inc., 8.25% $ 359,484
500,000(a)(d)(m) A/B2 Wells Fargo Capital XV, 9.75% 425,000
------------
$ 784,484
------------
Total Banks $ 1,830,484
----------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 1.7%
Other Diversified Financial Services -- 0.4%
400,000(a) BB/NR Ibis Re, Ltd., 11.257%, 5/10/12 (144A) $ 400,000
----------------------------------------------------------------------------------------------------------------
Specialized Finance -- 0.8%
750,000 B-/Caa1 ACE Cash Express, Inc., 10.25%, 10/1/14 (144A) $ 262,500
425,000(a) CCC+/B3 NCO Group, Inc., 6.113%, 11/15/13 257,125
900,000 CCC+/Caa1 NCO Group, Inc., 11.875%, 11/15/14 423,000
------------
$ 942,625
----------------------------------------------------------------------------------------------------------------
Asset Management & Custody Banks -- 0.3%
500,000 BB+/Baa3 Janus Capital Group, Inc., 6.95%, 6/15/17 $ 324,249
----------------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
450,000(a)(d) BBB/A3 Goldman Sachs Capital II, 5.793% $ 222,566
------------
Total Diversified Financials $ 1,889,440
----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
INSURANCE -- 27.9%
Insurance Brokers -- 1.1%
250,000 CCC/Caa1 Alliant Holdings I, Inc., 11.0%, 5/1/15 (144A) $ 172,500
1,050,000 CCC+/Caa1 HUB International Holdings, Inc., 10.25%,
6/15/15 (144A) 588,000
500,000(a) CCC/B3 USI Holdings Corp., 5.113%, 11/15/14 (144A) 240,000
500,000 CCC/Caa1 USI Holdings Corp., 9.75%, 5/15/15 (144A) 240,000
------------
$ 1,240,500
--------------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.8%
1,000,000(a) NR/Baa3 Liberty Mutual Group, Inc., 7.0%, 3/15/37 (144A) $ 368,124
1,000,000(a) BB/Baa3 Liberty Mutual Group, Inc., 10.75%, 6/15/58 (144A) 550,000
65,000 B+/NR Sul America Participacoes SA, 8.625%,
2/15/12 (144A) 63,700
------------
$ 981,824
--------------------------------------------------------------------------------------------------------------
Reinsurance -- 26.0%
1,500,000(a) BB+/NR AKIBARE, 4.201%, 5/22/12 (144A) $ 1,418,700
1,000,000(a) BB+/NR AKIBARE, 4.401%, 5/22/12 (144A) 945,400
EURO 1,500,000(a) B-/NR Atlas Reinsurance Plc, 11.77%, 1/10/11 (144A) 1,868,391
2,000,000(a) BB+/NR Blue Fin, Ltd., 5.557%, 4/10/12 (144A) 1,688,000
1,000,000(a) BB+/NR Caelus Re, Ltd., 7.511%, 6/7/11 (144A) 932,500
2,000,000(a) BB/NR Calabash Re, Ltd., 9.749%, 6/1/09 (144A) 1,999,000
1,000,000(a) BB/NR Calabash Re II, Ltd., 9.72%, 1/8/10 (144A) 959,500
1,500,000(a) BB-/NR Calabash Re II, Ltd., 10.92%, 1/8/10 (144A) 1,485,900
1,000,000(a) B/NR Carillon, Ltd., 16.57%, 1/10/11 (144A) 919,000
1,500,000(a) BB+/NR East Lane Re, Ltd., 8.17%, 5/6/11 (144A) 1,402,350
1,750,000(a) BB+/NR Fhu-Jin, Ltd., 5.084%, 8/10/11 (144A) 1,665,125
1,000,000(a) NR/B1 GlobeCat, Ltd., 7.192%, 1/2/13 (144A) 925,100
350,000(a) NR/B3 GlobeCat, Ltd., 10.442%, 1/2/13 (144A) 321,195
EURO 1,500,000(a) BB+/NR Green Valley, Ltd., 5.045%, 1/10/11 (144A) 1,892,243
820,000(a)(m) BBB-/Caa2 MBIA Insurance Corp., 14.0%, 1/15/33 (144A) 311,600
2,000,000(a) NR/Ba2 Muteki, Ltd., 5.638%, 5/24/11 (144A) 1,879,600
250,000(a) BB/NR Mystic Re, Ltd., 13.326%, 3/20/12 (144A) 249,875
1,000,000(a) NR/B1 Nelson Re, Ltd., 5.738%, 6/6/11 (144A) 942,700
1,000,000(a) BB+/NR Newton Re, Ltd., 5.873%, 12/24/10 (144A) 989,000
1,000,000(a) BB/NR Newton Re, Ltd., 8.173%, 12/24/10 (144A) 941,000
1,500,000(a) B+/NR Residential Reinsurance 2006, Ltd., 11.261%,
6/5/09 (144A) 1,497,000
2,000,000(a) B/NR Residential Reinsurance 2008, Ltd., 12.761%,
6/6/11 (144A) 1,872,200
440,000(a) NR/NR Successor II, Ltd., 18.027%, 4/6/10 (144A) 413,248
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 19
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Reinsurance -- (continued)
2,000,000(a) NR/NR Successor II, Ltd., 26.277%, 4/6/10 (144A) $ 1,837,400
500,000(a)(c) D/NR Willow Re, Ltd., 6.295%, 6/16/10 (144A) 215,000
------------
$ 29,571,027
------------
Total Insurance $ 31,793,351
--------------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.2%
Real Estate Operating Companies -- 0.2%
100,000(a) B-/NR Alto Palermo SA, 11.0%, 6/11/12 (144A) $ 50,500
410,000(m) B-/NR IRSA Inversiones y Representaciones SA, 8.5%,
2/2/17 (144A) 209,100
------------
Total Real Estate $ 259,600
--------------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.3%
IT Consulting & Other Services -- 0.2%
405,000 CCC+/Caa1 Activant Solutions, Inc., 9.5%, 5/1/16 $ 264,263
--------------------------------------------------------------------------------------------------------------
Data Processing & Outsourced Services -- 0.9%
1,465,000(m) B-/B3 First Data Corp., 9.875%, 9/24/15 $ 1,012,681
--------------------------------------------------------------------------------------------------------------
Application Software -- 0.9%
1,390,000 B-/Caa1 Vangent, Inc., 9.625%, 2/15/15 $ 979,950
--------------------------------------------------------------------------------------------------------------
Systems Software -- 0.3%
1,110,000 NR/NR Pegasus Solutions, Inc., 10.5%, 4/15/15 (144A) $ 399,600
------------
Total Software & Services $ 2,656,494
--------------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.6%
Computer Storage & Peripherals -- 0.4%
430,000 BB+/Ba1 Seagate Technology International, 10.0%,
5/1/14 (144A) $ 423,550
--------------------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.2%
250,000 B/B1 Da-Lite Screen Co., Inc., 9.5%, 5/15/11 $ 225,000
--------------------------------------------------------------------------------------------------------------
Electronic Manufacturing Services -- 0.0%
70,000(m) CCC/B3 Sanmina-SCI Corp., 6.75%, 3/1/13 $ 39,550
------------
Total Technology Hardware & Equipment $ 688,100
--------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 5.8%
Integrated Telecommunication Services -- 3.6%
910,000 CCC+/B3 Broadview Networks Holdings, Inc., 11.375%, 9/1/12 $ 586,950
1,200,000 B-/B2 GC Impsat Holdings I Plc, 9.875%, 2/15/17 (144A) 918,000
1,250,000 B/B3 GCI, Inc., 7.25%, 2/15/14 1,150,000
1,010,000(m) CCC+/Caa1 PAETEC Holding Corp., 9.5%, 7/15/15 757,500
142,000 NR/Baa3 Tele Norte Leste Participacoes SA, 8.0%, 12/18/13 145,195
500,000 BB/Ba3 Windstream Corp., 8.625%, 8/1/16 497,500
------------
$ 4,055,145
--------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Wireless Telecommunication Services -- 2.2%
380,000 CCC/Caa2 Cell C Property, Ltd., 11.0%, 7/1/15 (144A) $ 325,850
500,000 B-/B3 Cricket Communications, Inc., 9.375%, 11/1/14 495,000
400,000 NR/B1 Digicel, Ltd., 9.25%, 9/1/12 (144A) 376,000
EURO 500,000(a) CCC/Caa3 Hellas Telecommunications Luxembourg II, 7.435%,
1/15/15 (144A) 142,448
540,000(m) BB+/Ba2 OJSC Vimpel Communications, 9.125%,
4/30/18 (144A) 384,750
1,330,000 B-/B2 True Move Co., Ltd., 10.375%, 8/1/14 (144A) 771,400
------------
$ 2,495,448
------------
Total Telecommunication Services $ 6,550,593
-----------------------------------------------------------------------------------------------------------------------
UTILITIES -- 3.0%
Electric Utilities -- 1.4%
750,000 B-/NR Cia de Transporte de Energia Electrica de Alta Tension
SA, 8.875%, 12/15/16 (144A) $ 330,000
250,000 NR/NR Mirant JPSCo. Finance, Ltd., 11.0%, 7/6/16 (144A) 247,500
930,000(d) NR/Caa3 Rede Empresas de Energia Eletrica SA,
11.125% (144A) 306,900
1,200,000 CCC/Caa1 Texas Competitive Electric Holdings Co. LLC,
10.25%, 11/1/15 681,000
------------
$ 1,565,400
-----------------------------------------------------------------------------------------------------------------------
Gas Utilities -- 1.0%
490,000 B+/B1 Inergy, L.P., 8.25%, 3/1/16 $ 486,325
1,135,000 B-/B2 Transportadora de Gas del Sur SA, 7.875%,
5/14/17 (144A) 658,300
------------
$ 1,144,625
-----------------------------------------------------------------------------------------------------------------------
Multi-Utilities -- 0.2%
225,000 BB-/Ba2 PNM Resources, Inc., 9.25%, 5/15/15 $ 203,063
-----------------------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 0.4%
500,000 BB-/Ba3 Intergen NV, 9.0%, 6/30/17 (144A) $ 475,000
------------
Total Utilities $ 3,388,088
-----------------------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $129,924,152) $ 87,192,688
-----------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 2.5% of Net Assets
TRANSPORTATION -- 0.4%
Marine -- 0.4%
990,000 B-/Caa1 Horizon Lines, Inc., 4.25%, 8/15/12 $ 511,087
------------
Total Transportation $ 511,087
-----------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 1.3%
Health Care Services -- 0.9%
1,550,000 B+/B3 Omnicare, Inc., 3.25%, 12/15/35 $ 1,061,750
-----------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 21
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Health Care Facilities -- 0.4%
120,000 B/B1 LifePoint Hospitals, Inc., 3.25%, 8/15/25 $ 98,700
405,000 B/NR LifePoint Hospitals, Inc., 3.5%, 5/15/14 324,506
------------
$ 423,206
------------
Total Health Care Equipment & Services $ 1,484,956
------------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.2%
Communications Equipment -- 0.2%
850,000(c)(m) D/NR Nortel Networks Corp., 2.125%, 4/15/14 $ 195,500
------------
Total Technology Hardware & Equipment $ 195,500
------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.6%
Wireless Telecommunication Services -- 0.6%
900,000 NR/NR NII Holdings, Inc., 3.125%, 6/15/12 $ 657,000
------------
Total Telecommunication Services $ 657,000
------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $3,679,240) $ 2,848,543
------------------------------------------------------------------------------------------------------------
FLOATING RATE LOAN INTERESTS -- 41.7% of Net Assets (i)
ENERGY -- 0.5%
Integrated Oil & Gas -- 0.3%
338,300 BBB-/Ba2 Hudson Products Holdings, Inc., Term Loan,
8.0%, 8/24/15 $ 290,938
------------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.2%
395,588 B/B3 Venoco, Inc., Second Lien Term Loan, 5.25%, 5/8/14 $ 261,088
------------
Total Energy $ 552,026
------------------------------------------------------------------------------------------------------------
MATERIALS -- 4.7%
Diversified Chemicals -- 0.7%
989,899 BB+/Ba1 Huntsman International LLC, New Dollar Term Loan B,
2.178%, 4/21/14 $ 821,616
------------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.9%
585,088 B+/B1 Graham Packaging Co., L.P., New Term Loan,
2.687% - 2.812%, 10/7/11 $ 529,830
492,613 B-/B3 Graphic Packaging International, Inc., Incremental
Term Loan, 3.21% - 3.958%, 5/16/14 454,846
------------
$ 984,676
------------------------------------------------------------------------------------------------------------
Steel -- 1.3%
1,300,999 BB-/B3 Essar Steel Algoma, Inc., Term Loan, 2.93%, 6/20/13 $ 754,580
1,300,155 NR/B1 Niagara Corp., Term Loan, 5.428% - 7.25%, 6/29/14 731,337
------------
$ 1,485,917
------------------------------------------------------------------------------------------------------------
Forest Products -- 0.7%
1,500,000 NR/Ba3 Ainsworth Lumber Co., Ltd., Term Loan,
5.438%, 6/26/14 $ 862,500
------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Paper Products -- 1.1%
1,318,355 BB+/NR Georgia-Pacific LLC, Term Loan B,
2.428% - 3.293%, 12/20/12 $ 1,233,075
------------
Total Materials $ 5,387,784
-----------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 2.8%
Aerospace & Defense -- 1.4%
738,482 B+/NR Aeroflex, Inc., Tranche B-2 Term Loan,
4.25% - 5.0%, 8/15/14 $ 494,783
500,231 BB-/B1 DAE Aviation Holdings, Inc., Tranche B-1 Term Loan,
4.18% - 4.79%, 7/31/14 295,137
494,924 BB+/Ba3 Spirit Aerosystems, Inc., Term Loan B-1,
2.89%, 9/30/13 455,330
491,878 BB-/B1 Standard Aero, Ltd., Tranche B-2 Term Loan,
4.6% - 4.79%, 7/31/14 290,208
------------
$ 1,535,458
-----------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.9%
1,158,000 BB/Ba3 Goodman Global, Inc., Term Loan, 6.5%, 2/13/14 $ 1,021,356
-----------------------------------------------------------------------------------------------------
Construction & Farm Machinery & Heavy Trucks -- 0.5%
1,000,000 BB-/Ba3 Accuride Corp., Term Loan, 8.0%, 1/31/12 $ 611,875
------------
Total Capital Goods $ 3,168,689
-----------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 1.8%
Diversified Commercial & Professional Services -- 1.1%
724,738 BB+/B1 Asset Acceptance Capital Corp., Tranche B Term Loan,
2.94% - 4.5%, 6/12/13 $ 605,156
1,000,000 BB-/B2 Rental Service Corp., Second Lien Initial Term Loan,
3.93% - 4.67%, 11/30/13 650,000
------------
$ 1,255,156
-----------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.7%
1,228,125 BB-/Ba3 Synagro Technologies, Inc., First Lien Term Loan,
2.43% - 2.57%, 4/2/14 $ 826,937
------------
Total Commercial & Professional Services $ 2,082,093
-----------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.8%
Air Freight & Logistics -- 0.8%
439,482 NR/Ba2 Ceva Group Plc, Pre-Funded LC Loan,
3.10%, 11/4/13 $ 223,037
1,316,508 NR/Ba2 Ceva Group Plc, U.S. Term Loan, 3.428%, 11/4/13 668,128
------------
Total Transportation $ 891,165
-----------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 0.8%
Tires & Rubber -- 0.8%
1,000,000 BB/Ba1 Goodyear Tire & Rubber Co., Second Lien Term Loan,
2.19%, 4/30/14 $ 840,179
------------
Total Automobiles & Components $ 840,179
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 23
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
CONSUMER DURABLES & APPAREL -- 1.1%
Homebuilding -- 0.0%
1,750,000(c)(h) BB/Ba3 LandSource Communities Development LLC, Second
Lien Facility Term Loan, 8.75%, 2/27/14 $ 28,801
--------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 0.7%
876,651 BB-/Ba3 Yankee Candle Company, Inc., Term Loan,
2.44% - 3.22%, 2/6/14 $ 734,743
--------------------------------------------------------------------------------------------------------
Apparel, Accessories & Luxury Goods -- 0.4%
441,192 BB-/Ba2 Hanesbrands, Inc., Term Loan B,
5.198% - 5.842%, 9/5/13 $ 432,276
------------
Total Consumer Durables & Apparel $ 1,195,820
--------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 0.4%
Casinos & Gaming -- 0.4%
500,000 B+/B1 Fontainebleau Las Vegas LLC, Delayed Draw Term
Loan, 3.685%, 6/6/14 $ 82,500
1,000,000 B/NR Fontainebleau Las Vegas LLC, Initial Term Loan,
4.527%, 6/6/14 165,000
1,000,000 BB-/Caa1 Gateway Casinos & Entertainment, Inc., Second Lien
Term Loan, 6.708%, 3/31/15 185,000
------------
Total Consumer Services $ 432,500
--------------------------------------------------------------------------------------------------------
MEDIA -- 2.4%
Broadcasting -- 1.2%
1,000,000 B+/Ba3 Insight Midwest Holdings LLC, Term Loan B,
2.5%, 4/7/14 $ 918,750
675,000 B/Ba3 Univision Communications, Inc., Initial Term Loan,
2.677%, 9/29/14 415,294
------------
$ 1,334,044
--------------------------------------------------------------------------------------------------------
Cable & Satellite -- 0.1%
158,115 B-/B3 Knology, Inc., Term Loan, 2.751%, 6/30/12 $ 136,967
--------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.6%
927,880 B+/B1 Lodgenet Entertainment Corp., Closing Date Term
Loan, 2.43% -- 3.22%, 4/4/14 $ 652,609
--------------------------------------------------------------------------------------------------------
Publishing -- 0.5%
921,589 BB-/Ba1 RH Donnelley, Inc., Tranche D-1 Term Loan,
6.75%, 6/30/11 $ 617,465
------------
Total Media $ 2,741,085
--------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.6%
Packaged Foods & Meats -- 0.6%
740,554 BB/B1 Dean Foods Co., Tranche B Term Loan,
1.93% - 2.72%, 4/2/14 $ 691,904
------------
Total Food, Beverage & Tobacco $ 691,904
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
HOUSEHOLD & PERSONAL PRODUCTS -- 0.6%
Personal Products -- 0.6%
780,228 B+/Ba3 Brickman Group Holdings, Inc., Tranche B Term Loan,
2.428%, 1/23/14 $ 681,724
------------
Total Household & Personal Products $ 681,724
--------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 6.2%
Health Care Equipment & Services -- 1.4%
1,719,221 NR/B2 Talecris Biotherapeutics Holdings Corp., First Lien Term
Loan, 4.74% - 5.5%, 12/6/13 $ 1,607,472
--------------------------------------------------------------------------------------------------------
Health Care Supplies -- 1.2%
67,500 BB-/B1 Bausch & Lomb, Inc., Delayed Draw Term Loan,
3.678% - 4.47%, 4/24/15 $ 58,674
355,499 BB-/B1 Bausch & Lomb, Inc., Parent Term Loan,
4.47%, 4/24/15 309,018
491,250 B+/B2 IM US Holdings LLC, First Lien Term Loan,
2.428% - 3.232%, 6/26/14 453,915
600,000 B+/B2 IM US Holdings LLC, Second Lien Term Loan,
4.739%, 6/26/15 522,000
------------
$ 1,343,607
--------------------------------------------------------------------------------------------------------
Health Care Services -- 1.6%
1,358,666 BB-/Ba3 Catalent Pharma Solutions, Inc., Dollar Term Loan,
2.678%, 4/10/14 $ 956,501
957,177 B/B3 HealthSouth Corp., Term Loan,
2.93% - 2.96%, 3/10/13 868,297
------------
$ 1,824,798
--------------------------------------------------------------------------------------------------------
Health Care Facilities -- 2.0%
45,458 NR/NR Community Health Systems, Inc., Delayed Draw Term
Loan, 2.678%, 7/25/14 $ 41,144
891,053 BB/Ba3 Community Health Systems, Inc., Term Loan,
2.678% - 3.506%, 7/25/14 806,504
713,997 B+/B3 Hanger Orthopedic Group, Inc., Tranche B Term Loan,
2.44%, 5/26/13 651,522
162,256 B+/B1 Sun Healthcare Group, Inc., Synthetic LC Loan,
2.10%, 4/19/14 141,298
768,657 B+/B1 Sun Healthcare Group, Inc., Term Loan,
3.099% - 3.631%, 4/19/14 669,372
------------
$ 2,309,840
------------
Total Health Care Equipment & Services $ 7,085,717
--------------------------------------------------------------------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY &
LIFE SCIENCES -- 0.8%
Pharmaceuticals -- 0.6%
727,500 BB/Ba3 Mylan, Inc., U.S. Tranche B Term Loan,
3.688% - 6.75%, 10/2/14 $ 693,348
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 25
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Life Sciences Tools & Services -- 0.2%
248,750 BBB-/Baa3 Life Technologies Corp., Facility Term Loan B,
5.25%, 11/20/15 $ 248,517
------------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 941,865
-----------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 4.2%
Diversified Financial Services -- 1.4%
990,000 BB/Ba2 Metavante Corp., Term Loan, 2.92%, 11/1/14 $ 952,875
796,000 BB-/Ba3 SRAM LLC., Term Loan, 7.0% - 8.0%%, 9/30/14 692,520
------------
$ 1,645,395
-----------------------------------------------------------------------------------------------------
Specialized Finance -- 1.0%
841,297 BB-/B3 Ace Cash Express, Inc., Term Loan, 4.22%, 10/5/13 $ 461,662
947,343 B-/B2 Collect Acquisition Corp., Term Loan B,
7.5%, 5/15/13 667,877
------------
$ 1,129,539
-----------------------------------------------------------------------------------------------------
Consumer Finance -- 1.2%
990,693 BB-/NR Dollar Financial Corp., Canadian Borrower Term Loan,
3.97%, 10/30/12 $ 777,694
728,451 BB-/NR Dollar Financial Corp., Delayed Draw Term Loan,
3.97%, 10/30/12 571,834
------------
$ 1,349,528
-----------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.6%
691,250 NR/NR MSCI, Inc., Term Loan B,
2.928% - 3.756%, 11/20/14 $ 646,319
------------
Total Diversified Financials $ 4,770,781
-----------------------------------------------------------------------------------------------------
INSURANCE -- 3.3%
Insurance Brokers -- 2.6%
1,477,500 B-/B3 Alliant Holdings I, Inc., Term Loan, 4.232%, 8/17/14 $ 1,159,837
108,336 B/B2 HUB International, Ltd., Delay Draw Term Loan,
3.72%, 6/13/14 84,502
481,987 B/B3 HUB International, Ltd., Initial Term Loan,
3.72%, 6/13/14 375,950
1,965,000 B-/B2 USI Holdings Corp., Tranche B Term Loan,
3.97%, 5/4/14 1,372,224
------------
$ 2,992,513
-----------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.7%
787,481 B-/B2 AmWins Group, Inc., Initial Term Loan,
3.76% - 3.79%, 6/8/13 $ 474,457
1,000,000 B-/B2 AmWins Group, Inc., Second Lien Initial Term Loan,
6.79%, 6/9/14 255,000
------------
$ 729,457
------------
Total Insurance $ 3,721,970
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
SOFTWARE & SERVICES -- 3.4%
IT Consulting & Other Services -- 1.5%
1,959,900 B+/Ba3 SunGard Data Systems, Inc., New U.S.Term Loan,
2.219% - 2.991%, 2/28/14 $ 1,769,082
----------------------------------------------------------------------------------------------------
Application Software -- 0.8%
987,277 B/B1 Nuance Communications, Inc., Term Loan,
2.43%, 3/31/13 $ 896,777
----------------------------------------------------------------------------------------------------
Systems Software -- 1.1%
1,439,788 BB-/B3 Vangent, Inc., Term Loan, 3.5%, 2/14/13 $ 1,216,620
------------
Total Software & Services $ 3,882,479
----------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 1.2%
Electronic Equipment & Instruments -- 1.2%
1,258,775 BB/Ba2 H3C Holdings, Ltd., Tranche B Term Loan,
4.794%, 9/28/12 $ 981,844
488,773 B/B3 Scitor Corp., Term Loan, 4.68%, 9/26/14 432,564
------------
Total Technology Hardware & Equipment $ 1,414,408
----------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.5%
Semiconductor Equipment -- 0.5%
975,664 BB-/Ba3 Freescale Semiconductor, Inc., Term Loan,
2.259%, 11/29/13 $ 574,728
------------
Total Semiconductors & Semiconductor Equipment $ 574,728
----------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 4.0%
Alternative Carriers -- 0.9%
1,191,772 B-/Ba3 PAETEC Holding Corp., Replacement Term Loan,
2.927%, 2/28/13 $ 1,026,911
----------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- 0.4%
437,123 B+/B2 Telesat Canada, U.S. Term I Loan,
3.43% -- 4.27%, 10/31/14 $ 404,430
37,545 B+/B2 Telesat Canada, U.S. Term II Loan, 4.28%, 10/31/14 34,737
------------
$ 439,167
----------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.7%
982,323 B-/B1 Cricket Communications, Inc., Term Loan B,
5.75%, 6/16/13 $ 940,697
1,719,144 B/B1 MetroPCS Wireless, Inc., New Tranche B Term Loan,
2.688% - 3.438%, 11/3/13 1,609,938
587,121 B+/B1 Stratos Global Corp., Facility Term Loan B,
3.72%, 2/13/12 560,701
------------
$ 3,111,336
------------
Total Telecommunication Services $ 4,577,414
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 27
Schedule of Investments | 4/30/09 (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
UTILITIES -- 1.6%
Independent Power Producers & Energy Traders -- 1.6%
1,960,188 NR/NR Calpine Corp., First Priority Term Loan,
4.095%, 3/29/14 $ 1,676,574
184,378 B/B2 Mach Gen LLC, First Lien Synthetic LC Loan,
0.982%, 2/22/13 156,414
------------
Total Utilities $ 1,832,988
---------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE LOAN INTERESTS
(Cost $62,889,218) $ 47,467,319
---------------------------------------------------------------------------------------------------------------
FIXED RATE LOAN INTERESTS -- 0.5% of Net Assets
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.5%
Semiconductor Equipment -- 0.5%
825,420(m) NR/NR Freescale Semiconductor, Inc., Incremental Term Loan,
12.5%, 12/15/14 $ 575,043
---------------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE LOAN INTERESTS
(Cost $928,507) $ 575,043
---------------------------------------------------------------------------------------------------------------
Shares
COMMON STOCK -- 0.0% of Net Assets
MATERIALS -- 0.0%
Forest Products -- 0.0%
13,963(j) Ainsworth Lumber Co., Ltd. $ 9,990
---------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $97,187) $ 9,990
---------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.3% of Net Assets
DIVERSIFIED FINANCIALS -- 0.3%
Other Diversified Financial Services -- 0.3%
595 Bank of America Corp. $ 343,315
---------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $490,737) $ 343,315
---------------------------------------------------------------------------------------------------------------
WARRANTS -- 0.0% of Net Assets
REAL ESTATE -- 0.0%
Real Estate Development -- 0.0%
750,000(h)(j) Neo-China Group Holdings, Ltd., Expires 7/22/12
(144A) $ 24,193
---------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $17,012) $ 24,193
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Principal
Amount
USD ($) Value
TEMPORARY CASH INVESTMENTS -- 6.8% of Net Assets
Repurchase Agreements -- 2.8%
3,175,000 Deutsche Bank AG, 0.16%, dated 4/30/09,
repurchase price of $3,175,000 plus accrued interest
on 5/1/09 collateralized by the following:
$975,100 Freddie Mac Giant, 5.0% - 7.0%,
5/1/22 - 2/1/39
$5,699 Federal Home Loan Mortgage Corp.,
5.339%, 9/1/32
$594,851 Federal National Mortgage Association
(ARM), 4.358% - 6.053%, 5/1/36 - 5/1/38
$799,768 Federal National Mortgage Association,
5.0% - 7.0%, 3/1/34 - 10/1/38
$863,082 Government National Mortgage
Association, 6.0% - 7.0%,
10/15/37 - 11/15/38 $ 3,175,000
------------------------------------------------------------------------------------------
Total Repurchase Agreements $ 3,175,000
------------------------------------------------------------------------------------------
Securities Lending Collateral -- 4.0%(k)
Certificates of Deposit:
104,944 Abbey National Plc, 1.58%, 8/13/09 $ 104,944
104,944 Bank of Nova Scotia, 1.58%, 5/5/09 104,944
167,865 Bank of Scotland NY, 1.45%, 6/5/09 167,865
188,900 Barclays Bank, 1.15%, 5/27/09 188,900
188,900 DnB NOR Bank ASA NY, 1.5%, 6/5/09 188,900
192,258 Intesa SanPaolo S.p.A., 1.05%, 5/22/09 192,258
157,417 Royal Bank of Canada NY, 1.44%, 8/7/09 157,417
188,900 Svenska Bank NY, 1.48%, 7/8/09 188,900
------------
$ 1,294,128
------------------------------------------------------------------------------------------
Commercial Paper:
206,111 American Honda Finance Corp., 1.27%, 7/14/09 $ 206,111
209,889 CBA, 1.35%, 7/16/09 209,889
104,944 CME Group, Inc., 1.44%, 8/6/09 104,944
209,889 HSBC Bank, Inc., 1.64%, 8/14/09 209,889
52,472 IBM, 1.47%, 9/25/09 52,472
188,900 MetLife Global Funding, 1.71%, 6/12/09 188,900
209,889 Monumental Global Funding, Ltd., 1.64%, 8/17/09 209,889
188,900 New York Life Global, 1.37%, 9/4/09 188,900
209,889 Societe Generale, 1.75%, 9/4/09 209,889
209,889 U.S. Bank NA, 1.35%, 8/24/09 209,889
178,406 Westpac Banking Corp., 0.96%, 6/1/09 178,406
------------
$ 1,969,178
------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 29
Schedule of Investments | 4/30/09 (continued)
Principal
Amount
USD ($) Value
Tri-party Repurchase Agreements:
221,534 Barclays Capital Markets, 0.15%, 5/1/09 $ 221,534
839,555 Deutsche Bank, 0.15%, 5/1/09 839,555
------------
$ 1,061,089
--------------------------------------------------------------------------------
Shares
Money Market Mutual Fund:
209,889 JPMorgan U.S. Government Money Market Fund $ 209,889
--------------------------------------------------------------------------------
Total Securities Lending Collateral $ 4,534,284
--------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $7,709,284) $ 7,709,284
--------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 133.6%
(Cost $214,907,900)(l) $151,997,381
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (33.6)% $(38,184,935)
--------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $113,812,446
================================================================================
NR Security not rated by S&P or Moody's.
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At April
30, 2009, the value of these securities amounted to $57,308,457 or 50.4%
of total net assets applicable to common shareowners.
(a) Floating rate note. The rate shown is the coupon rate at April 30, 2009.
(b) Represents a pay in kind security.
(c) Security is in default and is non-income producing.
(d) Security is a perpetual bond and has no definite maturity date.
(e) On April 30, 2009, the security was not in default but defaulted after
the year end.
(f) Debt obligation initially issued at one coupon which converts to a higher
coupon at a specific date. The rate shown is the coupon rate at April 30,
2009.
(g) Security is priced as a unit.
(h) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $2,208,409. The aggregate value of $105,468
represents 0.1% of total net assets applicable to common shareowners.
(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 or
(iv) other base lending rates used by commercial lenders. The interest
rate shown is the coupon rate accruing at April 30, 2009.
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
(j) Non-income producing.
(k) Securities lending collateral is managed by Credit Suisse, New York
Branch.
(l) At April 30, 2009, the net unrealized loss on investments based on cost
for federal income tax purposes of $216,120,745 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 597,914
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (64,721,278)
------------
Net unrealized loss $(64,123,364)
============
For financial reporting purposes net unrealized loss was $62,910,519 and
cost of investments aggregated $214,907,900.
(m) At April 30, 2009, the following securities were out on loan:
Principal
Amount
USD ($) Description Value
45,944 Ainsworth Lumber Co., Ltd., 11.0%, 7/29/15 (144A) $ 13,324
379,000 Aleris International, Inc., 10.0%, 12/15/16 7,580
39,000 CCH I LLC, 11.0%, 10/1/15 (144A) 3,022
202,000 Central Garden and Pet Co., 9.125%, 2/1/13 174,730
1,450,000 First Data Corp., 9.875%, 9/24/15 1,002,313
608,000 Freescale Semiconductor, Inc., Incremental Term Loan,
12.5%, 12/15/14 423,573
1,000,000 Georgia Gulf Corp., 10.75%, 10/15/16 90,000
210,000 IRSA Inversiones y Representaciones SA, 8.5%, 2/2/17 (144A) 107,100
610,000 MBIA Insurance Corp., 14.0%, 1/15/33 (144A) 231,800
841,000 Nortel Networks Corp., 2.125%, 4/15/14 193,430
534,000 OJSC Vimpel Communications, 9.125%, 4/30/18 (144A) 380,475
564,000 PAETEC Holding Corp., 9.5%, 7/15/15 423,000
785,000 Sally Holdings LLC, 10.5%, 11/15/16 757,525
67,000 Sanmina-SCI Corp., 6.75%, 3/1/13 37,855
1,000,000 Univision Communications, Inc., 9.75%, 3/15/15 (144A) 162,500
487,000 Wells Fargo Capital XV, 9.75% 413,950
----------------------------------------------------------------------------------------
$4,422,177
========================================================================================
Glossary of Terms:
LC -- Letter of Credit
Note: Principal amounts are denominated in U.S. dollars unless otherwise
denoted.
EURO Euro
NOK Norwegian Krone
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 31
Schedule of Investments | 4/30/09 (continued)
Purchases and sales of securities (excluding temporary cash investments) for
the year ended April 30, 2009, aggregated $46,984,570 and $64,249,155,
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 following is a summary of the inputs used as of April 30, 2009, in valuing
the Trust's investments:
Investments Other Financial
Valuation Inputs in Securities Instruments*
Level 1 -- Quoted Prices $ 353,305 $ (31,837)
Level 2 -- Other Significant Observable Inputs 151,644,076 (1,191)
Level 3 -- Significant Unobservable Inputs -- --
------------------------------------------------------------------------------------
Total $151,997,381 $ (33,028)
------------------------------------------------------------------------------------
* Other financial instruments include foreign exchange contracts and
depreciation on unfunded corporate loans..
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Statement of Assets and Liabilities | 4/30/09
ASSETS:
Investments in securities, at value (including securities loaned of
$4,422,177) (cost $214,907,900) $151,997,381
Cash 806,641
Foreign currencies, at value (cost $1,982,131) 2,383,176
Receivables --
Investment securities sold 710,823
Interest 3,322,892
Commitment fees 29
Prepaid expenses 13,332
---------------------------------------------------------------------------------------
Total assets $159,234,274
---------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Notes payable $ 38,000,000
Investment securities purchased 1,059,880
Upon return of securities loaned 4,534,284
Forward foreign currency portfolio hedge contracts -- net 31,837
Dividends to shareowners 1,551,526
Depreciation on unfunded corporate loans -- net 1,191
Unamortized facility fees 1,750
Due to affiliates 58,058
Accrued interest expense 48,630
Accrued expenses and other liabilities 134,672
---------------------------------------------------------------------------------------
Total liabilities $ 45,421,828
---------------------------------------------------------------------------------------
NET ASSETS:
Paid-in capital $194,062,558
Distributions in excess of net investment income (2,535,262)
Accumulated net realized loss on investments and foreign currency
transactions (15,172,471)
Net unrealized loss on investments (62,911,710)
Net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies 369,331
---------------------------------------------------------------------------------------
Net assets applicable to common shareowners $113,812,446
=======================================================================================
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $113,812,446/8,165,927 shares $ 13.94
=======================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 33
Statement of Operations
For the Year Ended 4/30/09
INVESTMENT INCOME:
Interest (net of foreign taxes withheld $8,245) $ 20,370,945
Dividends 30,813
Facility and other fees 66,176
Income from securities loaned, net 145,890
----------------------------------------------------------------------------------------------------------
Total investment income $ 20,613,824
----------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 1,645,472
Administrative fees 188,855
Transfer agent fees and expenses 61,243
Bank loan fees and expenses 143,103
Custodian fees 89,433
Registration fees 17,500
Professional fees 78,417
Printing expenses 47,442
Trustees' fees 7,876
Pricing fees 25,979
Miscellaneous 33,003
----------------------------------------------------------------------------------------------------------
Net operating expenses $ 2,338,323
----------------------------------------------------------------------------------------------------------
Interest expense $ 1,595,281
----------------------------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 3,933,604
Less management fees waived and expenses reimbursed by
Pioneer Investment Management, Inc. ("PIM") (418,949)
----------------------------------------------------------------------------------------------------------
Net expenses $ 3,514,655
----------------------------------------------------------------------------------------------------------
Net investment income $ 17,099,169
----------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ (13,199,934)
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies 604,540 $(12,595,394)
----------------------------------------------------------------------------------------------------------
Change in net unrealized gain (loss) from:
Investments $ (50,470,011)
Unfunded corporate loans 84,901
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies 525,433 $(49,859,677)
----------------------------------------------------------------------------------------------------------
Net loss on investments and foreign currency transactions $(62,455,071)
----------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(45,355,902)
==========================================================================================================
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Statement of Changes in Net Assets
For the Year Ended 4/30/09 and for the period from 5/30/07 (Commencement of
Operations) to 4/30/08
Year
Ended 5/30/07
4/30/09 to 4/30/08
FROM OPERATIONS:
Net investment income $ 17,099,169 $ 14,317,592
Net realized loss on investments and foreign currency
transactions (12,595,394) (1,862,742)
Change in net unrealized loss on investments and foreign
currency transactions (49,859,677) (12,682,702)
----------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(45,355,902) $ (227,852)
----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income ($2.469 and $1.780 per
share, respectively) $(20,135,595) $(14,530,763)
Tax return of capital ($0.045 and $0.000 per
share, respectively) (371,077) --
----------------------------------------------------------------------------------------------------
Total distributions to common shareowners $(20,506,672) $(14,530,763)
----------------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from the issuance of shares $ -- $174,287,500
Net proceeds from the underwriters' over-allotment
option exercised -- 20,293,750
Offering expenses charged to paid-in-capital -- (407,500)
Reinvestment of distributions 159,885 --
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Trust share
transactions $ 159,885 $194,173,750
----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $(65,702,689) $179,415,135
NET ASSETS:
Beginning of period 179,515,135 100,000
----------------------------------------------------------------------------------------------------
End of period $113,812,446 $179,515,135
----------------------------------------------------------------------------------------------------
Undistributed (distribution in excess of) net investment income $ (2,535,262) $ 269,847
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 35
Statement of Cash Flows
For the year ended April 30, 2009
Cash Flows From Operating Activities
Net investment income $ 17,099,169
-----------------------------------------------------------------------------
Adjustment to Reconcile Net Investment Income to Net Cash
and Foreign Currency Provided from Operating Activities
Purchase of investment securities $(1,172,082,404)
Proceeds from disposition of investment securities 1,225,128,350
Increase in receivable for investments sold (255,578)
Decrease in paydowns receivable 2,500
Decrease in interest and foreign tax reclaim receivable 917,399
Decrease in commitment fees receivable 940
Increase in prepaid expenses (435)
Decrease in interest payable (81,142)
Decrease in payable for investments purchased (6,332,230)
Increase in accrued expenses and other liabilities 20,324
Increase in unrealized appreciation on foreign currency
transactions 571,424
Net realized gain from foreign currency transactions 604,540
Net amortization/(accretion) of premium/(discount) (1,006,079)
-----------------------------------------------------------------------------
Net adjustment to reconcile net investment income 47,487,609
-----------------------------------------------------------------------------
Net cash and foreign currency provided from operating
activities $ 64,586,778
-----------------------------------------------------------------------------
Cash Flows Used in Financing Activities
Decrease in notes payable $ (30,000,000)
Cash dividends paid to common shareowners (20,409,790)
Decrease in bank overdrafts (10,987,171)
-----------------------------------------------------------------------------
Net cash flow used in financing activities $ (61,396,961)
-----------------------------------------------------------------------------
Net increase in cash and foreign currency $ 3,189,817
-----------------------------------------------------------------------------
Cash and Foreign Currency
Beginning of the period $ --
-----------------------------------------------------------------------------
End of the period $ 3,189,817
=============================================================================
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Financial Highlights
Year 5/30/07 (b)
Ended to
4/30/09 4/30/08
Per Share Operating Performance
Net asset value, beginning of period $ 22.02 $ 23.88(c)
--------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:(a)
Net investment income $ 2.10 $ 1.77
Net realized and unrealized loss on investments and foreign
currency transactions (7.67) (1.80)
--------------------------------------------------------------------------------------------------
Net decrease from investment operations $ (5.57) $ (0.03)
Distributions from:
Net investment income (2.47) (1.78)
Tax return of capital (0.04) --
Capital charge with respect to issuance of shares -- (0.05)
--------------------------------------------------------------------------------------------------
Net decrease in net asset value $ (8.08) $ (1.86)
--------------------------------------------------------------------------------------------------
Net asset value, end of period(d) $ 13.94 $ 22.02
--------------------------------------------------------------------------------------------------
Market value, end of period(d) $ 13.23 $ 20.47
==================================================================================================
Total return at market value (e) (23.11)% (10.67)%
Ratios to average net assets
Net operating expenses 1.38% 0.99%(f)
Interest expense 1.14% 0.33%(f)
Net expenses 2.52% 1.32%(f)
Net investment income 12.27% 8.48%(f)
Portfolio turnover 25% 21%
Net assets, end of period (in thousands) $113,812 $ 179,515
Ratios to average net assets before waivers and reimbursements
of expenses
Net operating expenses 1.68% 1.29%(f)
Interest expense 1.14% 0.33%(f)
Net expenses 2.82% 1.62%(f)
Net investment income 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 covering 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 | Annual Report | 4/30/09 37
Notes to Financial Statements | 4/30/09
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, and
the sale and issuance to Pioneer Investment Management, Inc. (PIM), the Trust's
investment adviser, a wholly owned indirect subsidiary of UniCredit S.p.A.
(UniCredit), of 4,188 shares of beneficial interest at an aggregate purchase
price of $100,000. PIM reimbursed all the Trust's organizational expenses and
paid the amount by which the aggregate offering costs (other than the sales
load) exceeded $0.05 per share of the common share offering. 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.
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.
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 risks. At times, the Trust's investments may
represent industries or industry sectors that are interrelated or have common
risks, making it 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
38 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
higher rated debt securities. The Trust may invest in securities of issuers
that are in default or that are in bankruptcy.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains and losses on investments during the
reporting year. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in 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. 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. For Loan Interests for which no reliable price quotes are
available, such investments are valued by Loan Pricing Corporation through
the use of pricing matrices to determine valuations.
Fixed-income securities are valued at prices supplied by independent
pricing services, which consider such factors as Treasury spreads, yields,
maturities and ratings. Valuations may be supplemented by values obtained
from dealers and other sources, as required. Equity securities are valued
at the last sale price on the principal exchange where they are traded.
Securities or Loan Interests for which market prices and/or quotations are
not readily available are valued using fair value methods pursuant to
procedures adopted by the Board of Trustees ("board determined"). 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 Trust's shares are determined as of
such times. The Trust may also use fair value methods to value a security,
including a non-U.S. security, when the closing market price on the primary
exchange where the security is traded no longer accurately reflects the
value of the security as of the close of the NYSE. As of April 30, 2009,
there were no securities valuations that were board determined. Temporary
cash investments are valued at amortized cost which approximates market
value.
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. Discounts and premiums on
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 39
debt securities are accreted or amortized, respectively, daily, on an
effective yield to maturity basis and are included in interest income.
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. Dividend and interest income are reported net of
unrecoverable foreign taxes withheld at the applicable country rates.
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
the appropriate 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 as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
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 4).
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.
40 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
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 as from net realized gain on investments
and foreign currency transactions, or as from paid-in capital, depending on
the type of book/tax differences that may exist.
At April 30, 2009, the Trust reclassified $231,317 to decrease
distributions in excess of net investment income and $231,317 to increase
accumulated net realized loss on investments. The reclassification has no
impact on the net asset value of the Trust and presents the Trust's capital
accounts on a tax basis.
The Trust has elected to defer approximately $14,228,771 in capital losses
realized and $585,166 in currency losses realized between November 1, 2008
and April 30, 2009 to its fiscal year ending April 30, 2010.
At April 30, 2009, the Trust had a net capital loss carryforward of
$644,894 which is comprised of $231,744 which will expire in 2016 and
$413,150 which will expire in 2017, if not utilized.
The tax character of current year distributions paid to shareowners during
the year ended April 30, 2009 and the period ended April 30, 2008 were as
follows:
2009 2008
Distributions paid from:
Ordinary income $20,135,595 $14,530,763
Tax return of capital 371,077 --
---------------------------------------------------------
Total $20,506,672 $14,530,763
=========================================================
The following shows the components of distributable earnings on a federal
income tax basis at April 30, 2009.
Distributable earnings:
Capital loss carryforward $ (644,894)
Post-October loss deferred (14,813,937)
Dividends payable (1,551,526)
Unrealized depreciation (63,239,755)
-----------------------------------------------
Total $ (80,250,112)
===============================================
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 losses on certain foreign
currency contracts, the book/tax differences in the accrual of income on
securities in
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 41
default, the difference between book and tax amortization methods for
premiums and discounts on fixed income securities and other book/tax
temporary differences.
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 at least equal to or in excess of the value of the
repurchase agreement. The collateral for all repurchase agreements is held
in safekeeping in the customer-only account of the Trust's custodian, or
subcustodians. 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 cash investments. Credit Suisse, 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
interest or payments in lieu of dividends 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. 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 will be 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 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
42 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Agent), in writing prior to any dividend record date; otherwise such
termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution.
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 American Stock Exchange or elsewhere. If,
on the payment date for any dividend, the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees (market premium), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per common share is greater than the market value (market discount), the
Plan Agent will invest the dividend amount in common shares acquired in
open-market purchases. There are no brokerage charges with respect to newly
issued common shares. However, each participant will pay a pro rata share
of brokerage trading fees incurred with respect to the Plan Agent's
open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may not be able to transfer the shares to another broker
and continue to participate in the Plan.
2. Management Agreement
PIM 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 the total
assets of the Trust, including any form of investment leverage, minus all
accrued expenses incurred in the normal course of operations, but not excluding
any liabilities or obligations attributable to investment leverage obtained
through (i) indebtedness of any type (including, without limitation, borrowing
through a credit facility or the issuance of debt securities), (ii) the issuance
of preferred stock or other similar preference securities, (iii) the
reinvestment of collateral received for securities loaned in accordance with the
Funds investment objectives and policies, and/or (iv) any other means. For the
year ended April 30, 2009, the net management fee was equivalent to 0.63% of the
Trust's average daily managed assets, which was equivalent to 0.88% of the
Trust's average daily net assets.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 43
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. Included
in "Due to affiliates" reflected on the Statement of Assets and Liabilities is
$58,058 in management fees, administrative fees and certain other fees payable
to PIM at April 30, 2009.
PIM has retained Princeton Administrators, LLC (Princeton) to provide certain
administrative and accounting services to the Trust on its behalf. PIM pays
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% of average daily
managed assets in excess of $500 million, subject to a minimum monthly fee of
$10,000. Princeton receives no compensation directly from the Trust.
Effective October 1, 2008, 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. Prior to October 1, 2008, PIM had engaged Montpelier to act as the
Trust's investment sub-adviser with respect to the Trust's investments in
event-linked bonds. PIM paid Montpelier a monthly fee at an annual rate of
0.80% of the average daily value of the Trust's sub-advised assets; however,
the fee in no event was less than 0.15% of the Trust's average daily managed
assets. The fee was paid quarterly in arrears. Montpelier received no
compensation directly from the Trust.
Also, PIM has 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 is a contractual limit and may not be terminated by
the adviser during the three year period ending on 2010. There can be no
assurance that it will be continued after that time. For the year ended April
30, 2009, the expense reduction under such arrangement was $418,949.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly
owned indirect subsidiary of UniCredit, through a sub-transfer agency agreement
with American Stock Transfer & Trust Company, provides substantially all
transfer agent and shareowner services related to the Trust's common shares at
negotiated rates.
44 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
4. Forward Foreign Currency Contracts
The Trust may enter into contracts that obligate the Trust to deliver
currencies at specified future dates. At the maturity of a contract, the Trust
must make or take delivery of the foreign currency. Alternatively, prior to the
settlement date of a portfolio hedge, the Trust may close out such contracts by
entering into offsetting hedge contract.
Open portfolio hedges at April 30, 2009 were as follows:
Net
Contracts Net
to Receive In Exchange Settlement Unrealized
Currency (Deliver) For US$ Date US$ Value Gain/(Loss)
EURO 3,340,000 $ 4,427,170 5/5/09 $ 4,425,750 $ (1,420)
EURO (3,340,000) $(4,393,904) 5/4/09 $ (4,425,767) $ (31,863)
EURO (3,340,000) $(4,426,635) 6/5/09 $ (4,425,189) $ 1,446
-------------------------------------------------------------------------------------------------
Total $ (31,837)
=================================================================================================
At April 30, 2009, the Trust had no outstanding forward currency settlement
contracts.
5. Unfunded Loan Commitments
As of April 30, 2009, the Trust had unfunded loan commitments of $22,500 which
could be extended at the option of the borrower, pursuant to the following loan
agreements:
Unfunded Loan
Borrower Commitment
Bausch & Lomb, Inc., Delayed Draw Term Loan $22,500
6. Loan Agreement
Effective February 6, 2009, the Trust entered into a $55,000,000 Revolving
Credit Facility (the Credit Agreement) with the Bank of Nova Scotia.
At April 30, 2009, the Trust had a borrowing outstanding under the Credit
Agreement totaling $38,000,000. The interest rate charged at April 30, 2009 was
2.71%. The average daily balance was $54,191,781 at a weighted average interest
rate of 2.90%. With respect to the loan, interest expense of $1,595,281 is
included in the Statement of Operations.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the Credit Agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities, not including any bank loans and
senior securities, from the Trust's total assets and dividing such amount by
the principal amount of the borrowings outstanding. As of the date indicated
below, the Trust's debt outstanding and asset coverage were as follows:
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 45
Total Asset coverage
Amount per $1,000 of
Date Outstanding Indebtedness
4/30/09 $38,000,000 $3,995
7. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the year ended April
30, 2009 and the period from May 30, 2007 (commencement of investment
operations) to April 30, 2008 were as follows:
2009 2008
Shares outstanding at beginning of period 8,154,188 4,188
Shares issued in connection with initial
public offering -- 7,300,000
Shares issued from underwriters' over-allotment
option exercised -- 850,000
Reinvestment of distributions 11,739 --
---------------------------------------------------------------------------
Shares outstanding at end of period 8,165,927 8,154,188
===========================================================================
For the period ended April 30, 2008, offering costs of $407,500 incurred in
connection with the Trust's offering of common shares have been charged to
paid-in capital.
8. New Pronouncement
In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures
about Derivative Instruments and Hedging Activities (SFAS 161), was issued and
is effective for fiscal years beginning after November 15, 2008. SFAS 161
requires enhanced disclosures about an entity's derivative and hedging
activities. Management currently is evaluating the impact the adoption of SFAS
161 will have on the Trust's financial statement disclosures.
9. Subsequent Event
Subsequent to April 30, 2009, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.19 per common share
payable May 29, 2009, to shareowners of record on May 15, 2009.
46 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and the Shareowners of
Pioneer Diversified High Income Trust:
--------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Pioneer
Diversified High Income Trust (the "Trust"), including the schedule of
investments, as of April 30, 2009, and the related statements of operations and
cash flows for the year then ended, and the statements of changes in net assets
and the financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Trust's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of April 30, 2009, by correspondence with
the custodian, agent banks, and brokers or by other appropriate auditing
procedures where replies from brokers were not received. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Diversified High Income Trust at April 30, 2009, the results of its
operations and its cash flows for the year then ended, and the changes in its
net assets and financial highlights for the periods indicated therein, in
conformity with U.S. generally accepted accounting principles.
/s/Ernst & Young LLP
Boston, Massachusetts
June 23, 2009
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 47
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 that have not been
approved by the shareowners. During the period, there have been no changes in
the principal risk factors associated with investment in the Trust. There were
no changes in the persons who are primarily responsible for the day-to- day
management of the Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
CEO CERTIFICATION DISCLOSURE (unaudited)
The Trust's Chief Executive Officer has submitted to the New York Stock
Exchange the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual. In addition, the Trust has filed with the
Securities and Exchange Commission the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the Sarbanes-
Oxley Act.
Results of Shareowner Meeting (unaudited)
On September 22, 2008, Pioneer Diversified High Income Trust held its annual
meeting of shareowners to elect Class I Trustees. All Class I Trustees were
elected. Below are the detailed results of the votes.
Proposal 1 -- To elect Class I Trustees.
Nominee Affirmative Withheld Abstained
Benjamin M. Friedman 7,070,011 0 158,826
--------------------------------------------------------------------------
Margaret B.W. Graham 7,073,638 0 155,199
--------------------------------------------------------------------------
Daniel K. Kingsbury, Jr. 7,074,860 0 153,977
--------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (unaudited)
The following information is provided with respect to the ordinary income
distributions paid by Pioneer Diversified High Income Trust for the fiscal year
ended April 30, 2009:
Interest Related Dividends for Non-U.S. Residents 66.60%*
------------------
* Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
48 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Approval of Investment Advisory Agreement (unaudited)
Pioneer Investment Management, Inc. (PIM) serves as the Trust's investment
adviser pursuant to an investment advisory agreement between PIM and the Trust.
The Trustees of the Trust, as required by law, determine annually whether to
continue the investment advisory agreement for the Trust.
The contract renewal process began in March 2008 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the
process. In July, the Trustees approved the format of the contract renewal
materials and submitted their formal request to PIM to furnish information
necessary to evaluate the terms of the investment advisory agreement. The
contract renewal materials were provided to the Trustees in August. After
reviewing and discussing the materials, the Trustees submitted a request for
additional information to PIM in September, and materials were provided in
response to this request later that month. Meetings of the Independent Trustees
of the Trust were held in September and October to review and discuss the
contract renewal materials.
At a meeting held on November 11, 2008, based on their evaluation of the
information provided by PIM, the Trustees of the Trust, including the
independent Trustees voting separately, unanimously approved the continuation
of the investment advisory agreement for another year. In considering the
continuation of the investment advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. The Trustees did not identify any single factor as the
controlling factor in determining to approve the continuation of the investment
advisory agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that
were provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust and the information related to the Trust provided to
the Trustees at each regularly scheduled meeting. The Trustees reviewed the
terms of the investment advisory agreement. The Trustees also reviewed PIM's
investment approach for the Trust and its research process. The Trustees
considered the resources of PIM and the personnel of PIM who provide investment
management services to the Trust. They also considered PIM's compliance and
legal resources and personnel.
The Trustees also considered that, as administrator, PIM is responsible for the
administration of the Trust's business and other affairs. It was noted that PIM
supervises and monitors the performance of the Trust's service providers and
provides the Trust with personnel (including officers) as are necessary for the
Trust's operations. The Trustees considered the fees paid to PIM for the
provision of such services.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 49
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that were provided by PIM to the Trust were
satisfactory and consistent with the terms of the investment advisory
agreement.
Performance of the Trust
The Trustees considered the performance results of the Trust over various time
periods. They reviewed information comparing the Trust's performance with the
average performance of its peer group of funds as classified by Morningstar,
Inc. (Morningstar), an independent provider of investment company data, and
with the performance of the Trust's benchmark index. The Trustees noted that
the Trust commenced operations on May 30, 2007. The Trustees considered that
the Trust's annualized total return was in the first quintile of its
Morningstar category for the one year period ended June 30, 2008. (In all
quintile rankings referred to throughout this disclosure, first quintile is
most favorable to the Trust's shareowners. Thus, highest relative performance
would be first quintile and lowest relative expenses also would be first
quintile.) The Trustees noted that the yield (gross of expenses) to the Trust's
common shareowners for the twelve months ended June 30, 2008 exceeded the yield
of the Trust's benchmark index for the same period. The Trustees concluded that
the investment performance of the Trust was satisfactory.
Management Fee and Expenses
The Trustees considered information on the fees and expenses of the Trust in
comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the independent Trustees
for this purpose using data provided by Strategic Insight Mutual Trust Research
and Consulting, LLC (Strategic Insight), an independent third party.
The Trustees considered that the Trust's management fee for the twelve months
ended June 30, 2008 was in the fourth quintile relative to the management fees
paid by other funds in its Strategic Insight peer group for the comparable
period. The Trustees considered that the Trust's management fee was 0.037%
higher than the median management fee of the peer group. The Trustees also
considered that the Trust's expense ratio for the twelve months ended June 30,
2008 was in the first quintile relative to its Strategic Insight peer group for
the comparable period. The Trustees noted the challenge of selecting a
comparable peer group for expense comparison purposes. It was noted that PIM
did not currently manage any separate accounts with an investment objective and
strategies that were similar to those of the Trust.
The Trustees concluded that the management fee payable by the Trust to PIM was
reasonable in relation to the nature and quality of the services provided by
PIM. The Trustees also concluded that the Trust's expense ratio was reasonable,
taking into account the quality of services provided by PIM, the investment
performance of the Trust and the contractual expense limitation agreed to by
PIM with respect to the Trust.
50 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
recognized that PIM should be entitled to earn a reasonable level of profit for
the services provided to the Trust. The Trustees concluded that PIM's
profitability with respect to the management of the Trust was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is
a closed-end fund and its size is relatively stable at an asset level that was
anticipated when the management fee initially was set, the Trustees concluded
that economies of scale were not a relevant consideration.
Other Benefits
The Trustees also considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services
provided by PIM and its affiliates. The Trustees further considered the
revenues and profitability of PIM's businesses other than the fund business.
The Trustees concluded that the receipt of these benefits was reasonable in the
context of the overall relationship between PIM and the Trust.
Conclusion
After consideration of the factors described above as well as other factors,
the Trustees, including all of the independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
continuation of the investment advisory agreement for the Trust.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 51
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Bingham McCutchen LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Investment Sub-Adviser
Montpelier Capital Advisors, Ltd.
Sub-Administrator
Princeton Administrators, LLC
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at www.pioneerinvestments.com. This information is also available
on the Securities and Exchange Commission's web site at http://www.sec.gov.
Trustees and Officers
The Board of Trustees provides broad supervision over the Trust's affairs. The
officers of the Trust are responsible for the Trust's operations. The Trustees
and officers are listed below, together with their principal occupations during
the past five years. Trustees who are interested persons of the Trust within
the meaning of the 1940 Act are referred to as Interested Trustees. Trustees
who are not interested persons of the Trust are referred to as Independent
Trustees. Each of the Trustees serves as a Trustee of each of the 67 U.S.
registered investment portfolios for which Pioneer serves as investment adviser
(the "Pioneer Funds"). The address for all Trustees and all officers of the
Trust is 60 State Street, Boston, Massachusetts 02109.
52 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Interested Trustees
Position Held Length of Service
Name and Age with the Trust and Term of Office
John F. Cogan, Jr. (82)* Chairman of the Board, Class III Trustee since
Trustee and President 2007. Term expires
in 2010.
--------------------------------------------------------------------------------
Daniel K. Kingsbury (50)* Trustee and Executive Class I Trustee since
Vice President 2007. Term expires
in 2011.
--------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Trustee
John F. Cogan, Jr. (82)* Deputy Chairman and a Director of Pioneer Global Asset Man- None
agement S.p.A. ("PGAM"); Non-Executive Chairman and a Direc-
tor 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 Invest-
ment 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 Dis-
tributor, Inc. ("PFD") (until May 2006); President of all of the
Pioneer Funds; and Of Counsel, Wilmer Cutler Pickering Hale
and Dorr LLP
--------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (50)* Director, CEO and President of Pioneer Investment Management None
USA Inc. (since February 2007); Director and President of
Pioneer Investment Management, Inc. and Pioneer Institutional
Asset Management, Inc. (since February 2007); Executive Vice
President of all of the Pioneer Funds (since March 2007);
Director of Pioneer Global Asset Management S.p.A. (since April
2007); Head of New Markets Division, Pioneer Global Asset
Management S.p.A. (2000 - 2007)
--------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are
officers or directors of the Trust's investment adviser and certain of its
affiliates.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 53
Independent Trustees
Position Held Length of Service
Name and Age with the Trust and Term of Office
David R. Bock (65) Trustee Class III Trustee since
2007. Term expires
in 2010.
-------------------------------------------------------------
Mary K. Bush (61) Trustee Class II Trustee since
2007. Term expires
in 2009.
-------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Trustee
David R. Bock (65) Managing Partner, Federal City Capital Advisors (boutique mer- Director of Enterprise Com-
chant bank) (1997 - 2004 and 2008 - present); and Executive munity Investment, Inc.
Vice President and Chief Financial Officer, I-trax, Inc. (publicly (privately-held affordable
traded health care services company) (2004 - 2007) housing finance company);
Director of New York
Mortgage Trust (publicly
traded mortgage REIT); and
Director of Oxford Analytica,
Inc. (privately-held research
and consulting company)
------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (61) President, Bush International, LLC (international financial Director of Marriott Interna-
advisory firm) tional, Inc.; Director of Dis-
cover Financial Services
(credit card issuer and elec-
tronic payment services);
Director of Briggs & Stratton
Co. (engine manufacturer);
Director of UAL Corporation
(airline holding company);
Director of Mantech Interna-
tional Corporation (national
security, defense, and intel-
ligence technology firm);
and Member, Board of
Governors, Investment
Company Institute
------------------------------------------------------------------------------------------------------------------------
54 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Position Held Length of Service
Name and Age with the Trust and Term of Office
Benjamin M. Friedman (64) Trustee Class I Trustee since
2008. Term expires
in 2011.
--------------------------------------------------------------------
Margaret B.W. Graham (61) Trustee Class I Trustee since
2007. Term expires
in 2011.
--------------------------------------------------------------------
Thomas J. Perna (58) Trustee Class II Trustee since
2007. Term expires
in 2009.
--------------------------------------------------------------------
Marguerite A. Piret (60) Trustee Class II Trustee since
2007. Term expires
in 2009.
--------------------------------------------------------------------
Stephen K. West (80) Trustee Class III Trustee since
2007. Term expires
in 2010.
--------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Trustee
Benjamin M. Friedman (64) Professor, Harvard University Trustee, Mellon Institutional
Funds Investment Trust and
Mellon Institutional Funds
Master Portfolio (oversees
17 portfolios in fund
complex)
------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (61) Founding Director, Vice-President and Corporate Secretary, The None
Winthrop Group, Inc. (consulting firm); and Desautels Faculty of
Management, McGill University
------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (58) Chief Executive Officer, Quadriserv, Inc. (technology products for None
securities lending industry) (2008 - present); Private investor
(2004 - 2008); and Senior Executive Vice President, The Bank
of New York (financial and securities services) (1986 - 2004)
------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (60) President and Chief Executive Officer, Newbury, Piret & Company, Director of New America
Inc. (investment banking firm) High Income Fund, Inc.
(closed-end investment
company)
------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (80) Senior Counsel, Sullivan & Cromwell LLP (law firm) Director, The Swiss Helvetia
Fund, Inc. (closed-end
investment company)
------------------------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 55
Trust Officers
Position Held Length of Service
Name and Age with the Trust and Term of Office
Dorothy E. Bourassa (61) Secretary Since 2007. Serves
at the discretion of the
Board
---------------------------------------------------------------------------
Christopher J. Kelley (44) Assistant Secretary Since 2007. Serves
at the discretion of the
Board
---------------------------------------------------------------------------
Mark E. Bradley (49) Treasurer Since 2008. Serves
at the discretion of the
Board
---------------------------------------------------------------------------
Luis I. Presutti (44) Assistant Treasurer Since 2007. Serves
at the discretion of the
Board
---------------------------------------------------------------------------
Gary Sullivan (51) Assistant Treasurer Since 2007. Serves
at the discretion of the
Board
---------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Officer
Dorothy E. Bourassa (61) Secretary of PIM-USA; Senior Vice President - Legal of Pioneer; None
Secretary/Clerk of most of PIM-USA's subsidiaries; and Secretary
of all of the Pioneer Funds since September 2003 (Assistant
Secretary from November 2000 to September 2003)
---------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (44) Associate General Counsel of Pioneer since January 2008 and None
Assistant Secretary of all of the Pioneer Funds since September
2003; Vice President and Senior Counsel of Pioneer from July
2002 to December 2007
---------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (49) Vice President - Fund Accounting, Administration and Controller- None
ship Services of Pioneer; and Treasurer of all of the Pioneer
Funds since March 2008; Deputy Treasurer of Pioneer from
March 2004 to February 2008; Assistant Treasurer of all of the
Pioneer Funds from March 2004 to February 2008; and Treasurer
and Senior Vice President, CDC IXIS Asset Management Services
from 2002 to 2003
---------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (44) Assistant Vice President - Fund Accounting, Administration and None
Controllership Services of Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
---------------------------------------------------------------------------------------------------------------------
Gary Sullivan (51) Fund Accounting Manager - Fund Accounting, Administration and None
Controllership Services of Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
---------------------------------------------------------------------------------------------------------------------
56 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
Position Held Length of Service
Name and Age with the Trust and Term of Office
David F. Johnson (29) Assistant Treasurer Since 2009. Serves
at the discretion of the
Board
----------------------------------------------------------------------------
Teri W. Anderholm (49) Chief Compliance Officer Since 2007. Serves
at the discretion of the
Board
----------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation During Past Five Years Held by this Officer
David F. Johnson (29) Fund Administration Manager - Fund Accounting, Administration None
and Controllership Services since November 2008 and Assistant
Treasurer of all of the Pioneer Funds since January 2009; Client
Service Manager - Institutional Investor Services at State Street
Bank from March 2003 to March 2007
----------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (49) Chief Compliance Officer of Pioneer since December 2006 and None
of all the Pioneer Funds since January 2007; Vice President and
Compliance Officer, MFS Investment Management (August 2005
to December 2006); Consultant, Fidelity Investments (February
2005 to July 2005); Independent Consultant (July 1997 to
February 2005)
----------------------------------------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 57
This page for your notes.
58 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
This page for your notes.
Pioneer Diversified High Income Trust | Annual Report | 4/30/09 59
This page for your notes.
60 Pioneer Diversified High Income Trust | Annual Report | 4/30/09
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
--------------------------------------------------------------------------------
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site 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.
The Trust has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
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.
Audit Fees
Fees for audit services provided to the Trust, including fees
associated with the filings to update its Form N-2 and issuance of
comfort letters, totaled approximately $41,300 in 2009 and $50,545
in 2008.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
There were no audit-related fees for 2009 and 2008.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns,
totaled approximately $8,290 and $7,820 for 2009 and 2008,
respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
All Other Fees
There were no other fees for 2009 and 2008.
(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.
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, 2009 and 2008,
there were no services provided to an affiliate that required the
Trust's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Trust and affiliates, as
previously defined, totaled approximately $8,290 in 2009 and
$7,820 in 2008.
(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.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
PORTFOLIO MANAGEMENT
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, 2008. 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 $344,371,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 2 $306,977,000 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 3 $1,195,829,000 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 $4,104,771,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 3 $393,924,000 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 4 $390,088,000 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 $444,457,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 N/A N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 1 $48,346,000 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, 2009 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 June 29, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date June 29, 2009
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date June 29, 2009
* Print the name and title of each signing officer under his or her signature.