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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, 2009 through October 31, 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
--------------------------------------------------------------------------------
Semiannual Report | October 31, 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 36
Financial Highlights 40
Notes to Financial Statements 41
Trustees, Officers and Service Providers 51
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 1
President's Letter
Dear Shareowner,
Stock and bond markets around the globe have begun to recover this year from
one of their most tumultuous periods in history. This is a welcome relief, and
we are generally optimistic about the prospects for the economy going forward.
Still, challenges remain. Unemployment is high. Consumer demand and loan growth
are weak. And housing has not yet returned to normal.
At Pioneer, we have long advocated the benefits of investing for the long term.
This strategy has generally performed well for many investors. Those who
remained invested in the market during the downturn have most likely seen their
portfolios start to recover this year as the Dow Jones Industrial Average
climbed back towards the 10,000 level. Many bond investors have similarly seen
a strong rebound, with a broad-based recovery across many different fixed-income
asset classes. The riskiest asset classes, such as high-yield bonds, have
outperformed other fixed-income asset classes for most of 2009.
At Pioneer, we are not changing the approach to investing that we have used for
more than 80 years. We remain focused on company fundamentals and risk
management. Our investment process is based on careful research into individual
companies, quantitative analysis, and active portfolio management. This
three-pillared process, which we apply to each of our portfolios, is supported
by an integrated team approach and is designed to carefully balance risk and
reward. While we see potential opportunities for making money in many corners
of the markets around the globe, it takes research and experience to separate
solid investment opportunities from speculation.
Following this difficult period, many investors are rethinking their approach
to investing and risk management. Some are questioning whether the basic
investment principles they were taught in the past are still useful in today's
markets. Complicating matters is that financial markets remain unpredictable.
Our advice, as always, is to work closely with a trusted financial advisor to
discuss your goals and work together to develop an investment strategy that
meets your individual needs. There is no single best strategy that works for
every investor.
2 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
www.pioneerinvestments.com. We greatly appreciate you putting your trust in us
and we thank you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 3
Portfolio Management Discussion |10/31/09
Higher-yielding investments posted sharp price gains over the six months ended
October 31, 2009, as fixed-income investors sought out the greater income and
attractive prices offered by credit-sensitive securities after their prices had
been knocked down in the credit crisis of late 2008 and early 2009. In the
following discussion, Andrew Feltus and Jonathan Sharkey discuss the factors
affecting the performance of Pioneer Diversified High Income Trust during the
six-month period ended October 31, 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 six months ended October 31, 2009?
A Pioneer Diversified High Income Trust generated a total return of 41.82% at
net asset value during the six months ended October 31, 2009, and 36.32% at
market price. Over the same period, the Trust's customized benchmark
returned 25.38%. The custom benchmark is based on a 50% weighting of the
Merrill Lynch Global High Yield and Emerging Markets Plus Index, which
gained 29.23%, and a 50% weighting of the CSFB Leveraged Loan Index, which
returned 21.53%.
Q What were the main factors affecting the Trust's performance during the six
months ended October 31, 2009?
A The period provided an excellent environment for investing in the higher-
yielding securities that the Trust emphasizes. The rally that began in March
2009 continued throughout the six-month period, as the markets gained new
confidence that the economy would recover from recession. In the face of
aggressive fiscal and monetary actions both in the United States and in major
foreign markets, investor demand increased for higher-yielding,
credit-sensitive securities. Lower-rated, high-yield corporate bonds turned
in the strongest relative performance among domestic income securities, but
floating-rate bank loans also delivered robust returns over the period. The
third sector in which the Trust invests -- catastrophe-linked bonds --
delivered less impressive results, but still performed positively over the
six months.
At the end of the period on October 31, 2009, the largest component in the
Trust's portfolio was the allocation to domestic high-yield corporate bonds,
which represented 33.3% of the Trust's total investment portfolio, an
increase from the 28.9% allocation at the start of the period on May 1, 2009.
4 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
Bank loans accounted for about 28.3% of the Trust's total investment
portfolio at October 31, 2009, slightly down from the Trust's exposure at the
start of the period. The Trust's commitments to catastrophe-linked bonds and
emerging market and international bonds were both decreased during the
six-month period, ending at 14.3% and 14.4% of the Trust's total investment
portfolio, respectively. In addition, we maintained a relatively small
commitment (3.2% of the Trust's total investment portfolio) in commercial
mortgage-backed securities at the end of the six months. Approximately 25% of
Trust assets were leveraged, or borrowed, at period end, and the average
credit quality of the Trust's investments was B.
Q What types of investments most influenced the Trust's performance, either
positively or negatively, during the six months ended October 31, 2009?
A The Trust's commitment to U.S. high-yield corporate bonds was the primary
factor driving performance over the six-month period. As new liquidity poured
into financial markets, corporations gained the ability to issue new equity
and debt securities and to refinance existing debt, and lower-rated,
high-yield bonds staged a robust recovery that benefited the Trust. The
Trust's investments in floating-rate loans performed almost as well, adding
to performance results as demand for all risky assets rose. The performance
benefits of the positions in higher-yielding corporate bonds and in
floating-rate bank loans were amplified by the Trust's use of borrowed funds,
or leverage, to fund some investments. Leverage tends to exaggerate market
movements, both in positive and negative environments, and the Trust's
leveraged position during the six months ended October 31, 2009 boosted
results.
Holding back the Trust's performance results, somewhat, was the allocation
to catastrophe-linked bonds. Catastrophe-linked bonds are reinsurance
securities issued against the possibility of significant losses incurred by
casualty insurers from natural catastrophes, such as hurricanes and
earthquakes. While they produced positive returns, consistent with their
role as a way to add diversification and reduce overall volatility in a
high-yield oriented portfolio, the catastrophe-linked bonds' performance
results trailed those of high-yield corporate bonds and bank loans.
Catastrophe-linked bonds had outperformed high-yield bonds and
floating-rate loans during the downturn prior to the start of the six-month
period on May 1, 2009, but they trailed in the subsequent market recovery.
We had reduced the Trust's exposure to catastrophe-linked securities during
the six months ended October 31, 2009, but nevertheless retained an
allocation for portfolio diversification reasons. The Trust's small
position in commercial mortgage-backed securities did not help performance
early in the six-month period, but those securities performed better over
the final months of the period.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 5
Among individual high-yield bond securities, the Trust's investment in
bonds of GC Impsat Holdings, a London-based corporation that provides
fiber-optic telecommunication services in Latin America, aided performance
results. Holding back results, however, was an investment in bonds issued
by the Little Traverse Bay Casino, which operates on a Native American
reservation in Michigan.
In the floating-rate portion of the portfolio, the Trust enjoyed good
results from investments in loans to Custom Building Products, which
produces building materials and tools; Central Garden, which distributes
garden and pet care supplies; and LodgeNet Interactive, which supplies
electronic movie rental services to hotels and motels. Two underperforming
investments were loans to Hudson Products, which produces high-powered
industrial fans for electric generating stations and refineries; and
Niagara Steel.
While the Trust produced a solid total return that reflects both price
change and current income to investors, its monthly dividend was lowered
during the six months ended October 31, 2009, as two-thirds of the Trust's
investments were in floating-rate securities and income fell as short-term
interest rates, including the London Inter-Bank Offered Rate (LIBOR),
declined.
Q What is your investment outlook?
A We think we should see a favorable environment for high-yield investing in
the near term, as the effects of fiscal stimulus programs of the major
economic powers begin to take hold. High-yielding corporate bonds still are
trading at reasonable prices, as the global economy appears headed toward a
period of renewed expansion. This is an environment that should support
high-yield prices, although performance is not likely to match the results of
the past six months (May 1, 2009 through October 31, 2009).
One question that will hang over the markets, however, will be whether
monetary authorities may tighten their policies and limit liquidity if they
see the potential for the emergence of inflationary pressures as growth
trends strengthen. Market uncertainty over the direction of monetary policy
could add volatility to the fixed-income markets.
In the weeks and months ahead, we may consider adding more floating-rate
loans to the Trust's portfolio. Because their yields fluctuate with changes
in interest rates, we believe floating-rate loans stand to present a good
opportunity for solid performance when the Federal Reserve Board eventually
starts raising short-term rates again. We also think catastrophe-linked
bonds, which are also floating rate securities, should continue to be less
volatile than the other sectors, while continuing to offer the benefits of
diversification.
Please refer to the Schedule of Investments on pages 11-35 for a full listing
of Trust securities.
6 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
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 | Semiannual Report | 10/31/09 7
Portfolio Summary | 10/31/09
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material]
Corporate Bonds & Notes 62.0%
Floating Rate Loan Interests 27.8%
Temporary Cash Investments 3.2%
Convertible Bonds & Notes 2.9%
Asset Backed Securities 2.0%
Collateralized Mortgage Obligations 1.2%
Fixed Rate Loan Interests 0.5%
Convertible Preferred Stock 0.2%
Common Stock 0.2%
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 was represented as a pie chart in the printed material]
A & Higher 2.5%
BBB 0.8%
BB 29.9%
B 37.2%
CCC & Lower 14.0%
Not Rated 12.4%
Cash Equivalents 3.2%
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)*
1. Muteki, Ltd., 4.84%, 5/24/11 (144A) 1.18%
2. Atlas Reinsurance Plc, 11.0%, 1/10/11 (144A) 1.05
3. Green Valley, Ltd., 4.343%, 1/10/11 (144A) 1.04
4. Successor II, Ltd., 25.314%, 4/6/10 (144A) 0.98
5. SunGard Data Systems, Inc., Tranche A U.S. Term Loan, 1.994%, 2/28/14 0.97
6. Alliance One International, Inc., 10.0%, 7/15/16 (144A) 0.90
7. Calpine Corp., First Priority Term Loan, 3.165%, 3/29/14 0.90
8. Blue Fin, Ltd., 4.684%, 4/10/12 (144A) 0.88
9. Fhu-Jin, Ltd., 4.383%, 8/10/11 (144A) 0.87
10. U.S.I. Holdings Corp., Tranche B Term Loan, 3.04%, 5/5/14 0.85
* 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 | Semiannual Report | 10/31/09
Prices and Distributions | 10/31/09
Market Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
10/31/09 4/30/09
--------------------------------------------------------------------------------
$ 16.94 $ 13.23
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Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
10/31/09 4/30/09
--------------------------------------------------------------------------------
$ 18.53 $ 13.94
--------------------------------------------------------------------------------
Distributions per Common Share: 5/1/09-10/31/09
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--------------------------------------------------------------------------------
Net
Investment Tax Return Short-Term Long-Term
Income of Capital Capital Gains Capital Gains
--------------------------------------------------------------------------------
$ 1.0500 $ -- $ -- $ --
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Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 9
Performance Update | 10/31/09
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 October 31, 2009)
--------------------------------------------------------------------------------
Net Asset Market
Period Value Price
--------------------------------------------------------------------------------
Life-of-Trust
(5/30/07) 7.23% -6.38%
1 Year 43.08 52.25
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[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
50% ML Global
HY and EM
Pioneer Plus Index
Diversified 50% CSFB
High Income Leveraged
Trust Loan Index
5/07 10,000 10,000
10/07 8,661 10,095
10/08 6,149 8,066
10/09 9,362 10,659
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 | Semiannual Report | 10/31/09
Schedule of Investments | 10/31/09 (unaudited)
-----------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 2.9% of Net Assets
CONSUMER SERVICES -- 0.3%
Restaurants -- 0.3%
500,000 BB/Ba3 DB Master Finance LLC, 8.285%, 6/20/31 (144A) $ 406,675
------------
Total Consumer Services $ 406,675
-----------------------------------------------------------------------------------------------------------
BANKS -- 2.2%
Thrifts & Mortgage Finance -- 2.2%
246,741(a) AA+/Aa1 Ace Securities Corp., 0.844%, 12/25/34 $ 169,359
911,942(a) AAA/Aaa Bayview Financial Acquisition Trust, 0.829%, 8/28/44 788,908
1,526,392(a) AAA/Aaa Bayview Financial Acquisition Trust, 0.874%, 5/28/44 1,191,661
200,000(a) AAA/Ba3 Carrington Mortgage Loan Trust, 0.344%, 10/25/36 152,094
699,000(a) AA+/B3 Carrington Mortgage Loan Trust, 0.444%, 2/25/37 286,435
165,810(a) AAA/Ba2 Countrywide Asset-Backed Certificates, 0.424%,
7/25/36 116,468
75,533(a) A/B1 First Franklin Mortgage Loan Asset-Backed Certificates,
0.434%, 3/25/36 49,525
250,000(a) B+/Ba2 GSAMP Trust, 0.374%, 1/25/37 193,307
149,816(a) A/A2 GSAMP Trust, 0.674%, 3/25/35 143,544
686,803(a) CCC/Caa2 Lehman XS Trust, 0.594%, 12/25/35 188,041
146,625(a) B-/B2 Residential Asset Mortgage Products, Inc., 0.444%,
3/25/36 101,117
------------
Total Banks $ 3,380,459
-----------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.4%
Other Diversified Financial Services -- 0.4%
946,748(a) B/Caa1 Aircraft Finance Trust, 0.725%, 5/15/24 (144A) $ 378,700
216,523(a) BB-/Ba3 Aircraft Finance Trust, 0.745%, 5/15/24 (144A) 140,740
------------
Total Diversified Financials $ 519,440
-----------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $5,114,781) $ 4,306,574
-----------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS --
1.6% of Net Assets
BANKS -- 1.6%
Thrifts & Mortgage Finance -- 1.6%
276,759(a) CCC/B3 Countrywide Home Loans, 0.594%, 3/25/35 $ 69,578
572,160(a) CCC/Ca Downey Savings and Loan Association Mortgage Loan
Trust, 0.615%, 10/19/45 202,075
393,360(a) CCC/Ca Downey Savings and Loan Association Mortgage Loan
Trust, 0.665%, 10/19/45 82,606
1,271,689(a) AAA/A3 Impac CMB Trust, 1.004%, 1/25/35 871,268
208,879(a) CCC/Caa2 Impac Secured Assets CMN Owner Trust, 0.334%,
11/25/36 90,346
735,827(a) CCC/Ca Luminent Mortgage Trust, 0.504%, 7/25/36 89,263
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 11
Schedule of Investments | 10/31/09 (unaudited) (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance -- (continued)
438,538(a) AAA/Aa1 WaMu Mortgage Pass-Through Certificates,
0.474%, 4/25/45 $ 318,930
1,453,254(a) AAA/Baa1 WaMu Mortgage Pass-Through Certificates,
0.724%, 7/25/45 711,462
------------
Total Banks $ 2,435,528
--------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $3,446,933) $ 2,435,528
--------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 86.2% of Net Assets
ENERGY -- 8.9%
Oil & Gas Drilling -- 0.1%
NOK 1,500,000 NR/NR Petrolia Drilling ASA, 12.0%, 6/20/12 (144A) $ 131,627
--------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 1.1%
300,000(b) NR/NR Nexus 1 Pte, Ltd., 10.5%, 3/7/12 (144A) $ 30,000
1,120,000 CCC/NR Oceanografia SA de CV, 11.25%, 7/15/15 (144A) 595,000
700,000(a) NR/NR Sevan Marine ASA, 4.43%, 5/14/13 (144A) 546,000
NOK 3,000,000(a) NR/NR Sevan Marine ASA, 7.61%, 10/24/12 (144A) 463,329
154,800 NR/NR Skeie Drilling & Production ASA, 11.25%,
3/8/13 (144A) 100,620
------------
$ 1,734,949
--------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 4.4%
505,000 B/B2 Berry Petroleum Co., 10.25%, 6/1/14 $ 540,350
125,000 BB/Ba3 Chesapeake Energy Corp., 9.5%, 2/15/15 135,313
500,000 CCC/Caa1 Harvest Operations Corp., 7.875%, 10/15/11 503,750
970,000 BB-/B3 Hilcorp Energy I LP, 9.0%, 6/1/16 (144A) 970,000
685,000 B-/B3 Linn Energy LLC, 11.75%, 5/15/17 (144A) 761,206
855,000 B+/B3 Mariner Energy, Inc., 11.75%, 6/30/16 940,500
NOK 3,500,000 NR/NR Norwegian Energy Co. AS, 11.0%, 7/13/10 (144A) 631,154
NOK 2,500,000 NR/NR Norwegian Energy Co. AS, 12.9%, 11/20/14 440,952
NOK 2,000,000 NR/NR PA Resources AB, 8.75%, 3/10/10 347,496
225,000 B/Caa1 PetroQuest Energy, Inc., 10.375%, 5/15/12 221,625
240,000 B-/B3 Quicksilver Resources, Inc., 7.125%, 4/1/16 215,400
335,000 B-/B3 SandRidge Energy, Inc., 8.0%, 6/1/18 (144A) 331,650
670,000(c) B-/B3 SandRidge Energy, Inc., 8.625%, 4/1/15 675,025
------------
$ 6,714,421
--------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.9%
1,310,000 BB-/B1 Petroplus Finance, Ltd., 9.375%, 9/15/19 (144A) $ 1,313,275
--------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 1.0%
500,000 B+/B1 Holly Energy Partners LP, 6.25%, 3/1/15 $ 466,875
1,245,000(a) BB/Ba1 Southern Union Co., 7.2%, 11/1/66 1,020,900
------------
$ 1,487,775
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
12 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
---------------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------------
Coal & Consumable Fuels -- 1.4%
738,000 BB-/B1 Drummond Co., Inc., 9.0%, 10/15/14 (144A) $ 745,380
420,000 NR/B2 Indo Integrated Energy II BV, 9.75%, 11/5/16 (144A) 420,000
505,000 BB-/B2 Massey Energy Co., 6.875%, 12/15/13 498,687
400,000 B+/Caa1 Murray Energy Corp., 10.25%, 10/15/15 (144A) 396,000
------------
$ 2,060,067
------------
Total Energy $ 13,442,114
---------------------------------------------------------------------------------------------------------------
MATERIALS -- 10.6%
Commodity Chemicals -- 0.3%
195,000(b) NR/NR ARCO Chemical Co., 9.8%, 2/1/20 $ 135,525
300,000(b) NR/NR Montell Finance Co. BV, 8.1%, 3/15/27 (144A) 231,000
------------
$ 366,525
---------------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 1.0%
380,000(l) BB-/Ba3 Ashland, Inc., 9.125%, 6/1/17 (144A) $ 410,400
EURO 1,275,000 CCC-/Caa3 Ineos Group Holdings Plc, 7.875%, 2/15/16 (144A) 1,029,955
------------
$ 1,440,355
---------------------------------------------------------------------------------------------------------------
Construction Materials -- 0.6%
865,000 B/B3 AGY Holding Corp., 11.0%, 11/15/14 $ 704,975
300,000(a)(d) B-/NR C8 Capital SPV, Ltd., 6.64% (144A) 211,536
------------
$ 916,511
---------------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 1.6%
1,145,000 CCC+/B2 AEP Industries, Inc., 7.875%, 3/15/13 $ 1,104,925
EURO 255,000 BB/Ba3 Ardagh Glass Finance Plc, 9.25%, 7/1/16 (144A) 402,576
EURO 625,000 B-/B3 Impress Holdings BV, 9.25%, 9/15/14 (144A) 945,209
------------
$ 2,452,710
---------------------------------------------------------------------------------------------------------------
Paper Packaging -- 1.2%
700,000 CCC+/Caa1 Graham Packaging Co., Inc., 9.875%, 10/15/14 $ 714,000
500,000(l) B-/B3 Graphic Packaging International, Inc., 9.5%, 8/15/13 513,125
750,000 B/NR U.S. Corrugated, Inc., 10.0%, 6/1/13 630,000
------------
$ 1,857,125
---------------------------------------------------------------------------------------------------------------
Aluminum -- 0.8%
600,000(b) NR/NR Asia Aluminum Holdings, Ltd., 8.0%,
12/23/11 (144A) $ 94,500
300,000 CCC+/B3 CII Carbon LLC, 11.125%, 11/15/15 (144A) 295,500
1,244,070(a)(c) D/Caa2 Noranda Aluminum Acquisition Corp., 5.413%,
5/15/15 839,052
------------
$ 1,229,052
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 13
Schedule of Investments | 10/31/09 (unaudited) (continued)
-------------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.9%
320,000(c) NR/NR Blaze Recycling & Metals LLC, 13.0%, 7/16/12 $ 222,400
195,000 B/B2 FMG Finance Pty., Ltd., 10.625%, 9/1/16 (144A) 214,013
750,000 NR/Ba3 Prime Dig Pte, Ltd., 11.75%, 11/3/14 (144A) 750,000
745,000 BB+/Ba2 Teck Resources, Ltd., 10.25%, 5/15/16 858,612
750,000 BB/Ba2 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 748,125
------------
$ 2,793,150
-------------------------------------------------------------------------------------------------------------
Precious Metals & Minerals -- 0.3%
500,000 NR/Ba3 ALROSA Finance SA, 8.875%, 11/17/14 (144A) $ 501,875
-------------------------------------------------------------------------------------------------------------
Steel -- 1.6%
1,245,000 CCC+/Caa2 Algoma Acquisition Corp., 9.875%, 6/15/15 (144A) $ 1,064,475
250,000 B+/B2 Evraz Group SA, 8.875%, 4/24/13 (144A) 244,688
250,000 B+/B2 Evraz Group SA, 9.5%, 4/24/18 (144A) 246,250
920,000 CCC+/Caa1 Ryerson, Inc., 12.0%, 11/1/15 901,600
EURO 50,000 CC/Ca Zlomrex International Finance SA, 8.5%,
2/1/14 (144A) 24,345
------------
$ 2,481,358
-------------------------------------------------------------------------------------------------------------
Forest Products -- 0.4%
47,651 B-/Caa3 Ainsworth Lumber Co., Ltd., 11.0%, 7/29/15 (144A) $ 27,291
500,000(b) D/Ca Mandra Forestry Holdings, Ltd., 12.0%, 5/15/13
(144A) 360,000
250,000 BB/Ba2 Sino-Forest Corp., 10.25%, 7/28/14 (144A) 265,000
------------
$ 652,291
-------------------------------------------------------------------------------------------------------------
Paper Products -- 0.9%
425,000 B/B2 Cellu Tissue Holdings, Inc., 11.5%, 6/1/14 $ 465,375
260,000 BB/Ba3 Clearwater Paper Corp., 10.625%, 6/15/16 (144A) 283,400
600,000 B-/B3 Exopack Holding Corp., 11.25%, 2/1/14 609,000
------------
$ 1,357,775
------------
Total Materials $ 16,048,727
-------------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 6.3%
Aerospace & Defense -- 0.8%
750,000 B-/NR Aeroflex. Inc., 11.75%, 2/15/15 $ 705,000
405,000 BB/Ba3 DigitalGlobe, Inc., 10.5%, 5/1/14 (144A) 437,400
90,000 B/B1 GeoEye, Inc., 9.625%, 10/1/15 (144A) 92,925
------------
$ 1,235,325
-------------------------------------------------------------------------------------------------------------
Building Products -- 0.4%
EURO 200,000(a)(d) B-/NR C10 - EUR Capital SPV, Ltd., 6.277% $ 209,514
365,000 BB/B1 USG Corp., 9.75%, 8/1/14 (144A) 383,250
------------
$ 592,764
-------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
---------------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.6%
350,000 BB-/Ba3 Dycom Industries, Inc., 8.125%, 10/15/15 $ 322,000
100,000(a) B/B2 Esco Corp., 4.174%, 12/15/13 (144A) 91,250
500,000 B/B2 Esco Corp., 8.625%, 12/15/13 (144A) 493,750
------------
$ 907,000
--------------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.7%
500,000 B-/NR Cia Latinoamericana de Infraestructura & Servicios SA,
9.75%, 5/10/12 $ 410,000
500,000(b) NR/NR Indalex Holding Corp., 11.5%, 2/1/14 5,625
740,000 CCC+/Caa2 Park-Ohio Industries, Inc., 8.375%, 11/15/14 580,900
------------
$ 996,525
--------------------------------------------------------------------------------------------------------------
Construction & Farm Machinery & Heavy Trucks -- 1.5%
720,000 BB-/Caa1 American Railcar Industries, Inc., 7.5%, 3/1/14 $ 655,200
770,000 CCC/Caa3 Commercial Vehicle Group, Inc., 8.0%, 7/1/13 438,900
950,000 CCC/Caa2 Greenbrier Companies, Inc., 8.375%, 5/15/15 732,687
400,000 B-/Caa1 Titan International, Inc., 8.0%, 1/15/12 380,000
------------
$ 2,206,787
--------------------------------------------------------------------------------------------------------------
Industrial Machinery -- 1.1%
1,220,000 B-/NR Industrias Metalurgicas Pescarmona SA, 11.25%,
10/22/14 (144A) $ 927,200
875,000 B-/Caa1 Mueller Water Products, Inc., 7.375%, 6/1/17 756,875
------------
$ 1,684,075
--------------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 1.2%
500,000(l) CCC/B3 Intcomex, Inc., 11.75%, 1/15/11 $ 398,750
500,000 CCC/Caa1 KAR Holdings, Inc., 10.0%, 5/1/15 512,500
1,000,000 B/B1 Wesco Distribution, Inc., 7.5%, 10/15/17 983,750
------------
$ 1,895,000
------------
Total Capital Goods $ 9,517,476
--------------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.7%
Commercial Printing -- 0.1%
250,000 B/B2 Sheridan Group, Inc., 10.25%, 8/15/11 $ 220,000
--------------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.2%
700,000(b)(l) D/NR Aleris International, Inc., 10.0%, 12/15/16 $ 6,125
210,000 B+/B2 Casella Waste Systems, Inc., 11.0%, 7/15/14 (144A) 224,175
EURO 107,128 B/Caa1 New Reclamation Group Pty., Ltd., 8.125%,
2/1/13 (144A) 137,513
------------
$ 367,813
--------------------------------------------------------------------------------------------------------------
Office Services & Supplies -- 0.2%
225,000 BB/Ba1 Fibria Overseas Finance, Ltd., 9.25%,
10/30/19 (144A) $ 235,800
--------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 15
Schedule of Investments | 10/31/09 (unaudited) (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Diversified Support Services -- 0.2%
4,000(e) NR/B3 MSX International, Ltd., UK, 12.5%, 4/1/12 (144A) $ 230,000
------------
Total Commercial & Professional Services $ 1,053,613
--------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.8%
Air Freight & Logistics -- 0.5%
775,000 CCC/Caa2 CEVA Group Plc, 10.0%, 9/1/14 (144A) $ 724,625
--------------------------------------------------------------------------------------------------------
Airlines -- 0.2%
305,000 BB-/Ba2 Delta Air Lines, Inc., 9.5%, 9/15/14 (144A) $ 311,100
--------------------------------------------------------------------------------------------------------
Railroads -- 0.1%
240,000 B+/B2 Kansas City Southern de Mexico, 7.625%, 12/1/13 $ 230,400
------------
Total Transportation $ 1,266,125
--------------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 2.0%
Auto Parts & Equipment -- 1.9%
980,000(l) CCC+/Caa2 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) $ 999,600
1,140,000(b) D/NR Lear Corp., 8.75%, 12/1/16 775,200
160,000 CCC/Caa1 Stanadyne Corp., 10.0%, 8/15/14 137,600
500,000(f) CCC-/Caa3 Stanadyne Corp., 12.0%, 2/15/15 275,000
700,000(l) CCC/Caa2 Tenneco, Inc., 8.625%, 11/15/14 659,750
------------
$ 2,847,150
--------------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.1%
235,000 B+/B1 Goodyear Tire & Rubber Co., 10.5%, 5/15/16 $ 254,388
------------
Total Automobiles & Components $ 3,101,538
--------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.4%
Homebuilding -- 0.4%
695,000 B+/B1 Meritage Homes Corp., 6.25%, 3/15/15 $ 641,137
--------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 0.6%
1,000,000 CCC+/Caa1 Yankee Acquisition Corp., 9.75%, 2/15/17 $ 942,500
--------------------------------------------------------------------------------------------------------
Textiles -- 0.4%
500,000 B/Ba3 Invista, 9.25%, 5/1/12 (144A) $ 505,000
------------
Total Consumer Durables & Apparel $ 2,088,637
--------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.0%
Casinos & Gaming -- 3.0%
500,000(b) NR/NR Buffalo Thunder Development Authority, 9.375%,
12/15/14 (144A) $ 92,500
EURO 1,155,000 B/B2 Codere Finance Luxembourg SA, 8.25%, 6/15/15
(144A) 1,533,729
395,000 B/B3 FireKeepers Development Authority, 13.875%, 5/1/15
(144A) 426,600
95,000 B/B3 Galaxy Entertainment Finance Co., Ltd., 9.875%,
12/15/12 (144A) 93,100
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
----------------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
----------------------------------------------------------------------------------------------------------------
Casinos & Gaming -- (continued)
275,000(b) D/Ca Little Traverse Bay Bands of Odawa Indians, 10.25%,
2/15/14 (144A) $ 86,625
1,615,000 CCC/Ca Mashantucket Western Pequot Tribe, 8.5%,
11/15/15 (144A) 516,800
EURO 500,000 B/B3 Peermont Global, Ltd., 7.75%, 4/30/14 (144A) 627,066
180,000 BB-/Ba3 Scientific Games International, Inc., 9.25%, 6/15/19 187,650
423,000 BB-/Ba3 Scientific Games International, Inc., 9.25%, 6/15/19
(144A) 439,920
585,000(b) D/NR Station Casinos, Inc., 6.625%, 3/15/18 23,400
EURO 405,000 NR/NR Unibet Group Plc, 9.7%, 12/21/10 597,557
------------
Total Consumer Services $ 4,624,947
----------------------------------------------------------------------------------------------------------------
MEDIA -- 3.6%
Advertising -- 0.3%
500,000 B+/B2 MDC Partners, Inc., 11.0%, 11/1/16 (144A) $ 500,625
----------------------------------------------------------------------------------------------------------------
Broadcasting -- 2.9%
40,000(b) D/NR CCH I LLC, 11.0%, 10/1/15 (144A) $ 8,000
250,000(b) D/NR CCH II LLC, 10.25%, 9/15/10 301,250
840,000 B/B1 Hughes Network Systems LLC, 9.5%, 4/15/14 854,700
850,000(a)(c) CCC+/Caa3 Intelsat Bermuda, Ltd., 11.5%, 2/4/17 (144A) 799,531
500,000 B+/B3 Intelsat Subsidiary Holding Co., Ltd., 8.5%, 1/15/13 501,875
400,000 B/B2 Kabel Deutschland GmbH, 10.625%, 7/1/14 421,500
430,000 B-/Caa1 Telesat Canada, 12.5%, 11/1/17 471,387
1,310,362(c) CCC/Caa2 Univision Communications, Inc., 9.75%, 3/15/15
(144A) 992,391
------------
$ 4,350,634
----------------------------------------------------------------------------------------------------------------
Publishing -- 0.4%
600,000 CCC+/Caa2 Cengage Learning Acquisitions, Inc., 10.5%,
1/15/15 (144A) $ 567,000
------------
Total Media $ 5,418,259
----------------------------------------------------------------------------------------------------------------
RETAILING -- 1.0%
Internet Retail -- 0.4%
640,000 BB-/Ba3 Ticketmaster Entertainment, Inc., 10.75%, 7/28/16 $ 659,200
----------------------------------------------------------------------------------------------------------------
Apparel Retail -- 0.0%
EURO 74,000(a) CCC+/Caa1 Edcon Holdings Pty., Ltd., 6.273%, 6/15/15 (144A) $ 66,602
----------------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.6%
800,000(l) B-/Caa1 Sally Holdings LLC, 10.5%, 11/15/16 $ 848,000
------------
Total Retailing $ 1,573,802
----------------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 3.2%
Distillers & Vintners -- 0.0%
EURO 330,000(b)(g) NR/NR Belvedere SA, 0.0%, 5/15/13 (144A) $ 48,690
----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 17
Schedule of Investments | 10/31/09 (unaudited) (continued)
-------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 1.8%
490,000(b) NR/NR Arantes International, Ltd., 10.25%, 6/19/13 (144A) $ 19,600
650,000 B-/B1 Bertin Ltda, 10.25%, 10/5/16 (144A) 645,937
400,000(b) NR/NR Independencia International, Ltd., 9.875%,
5/15/15 (144A) 80,000
700,000 B+/B1 Marfrig Overseas, Ltd., 9.625%, 11/16/16 (144A) 700,000
1,175,000 CCC+/NR Minerva Overseas, Ltd., 9.5%, 2/1/17 (144A) 1,038,406
275,000(f) NR/B2 SA Fabrica de Produtos Alimenticios Vigor, 9.25%,
2/23/17 (144A) 255,750
------------
$ 2,739,693
-------------------------------------------------------------------------------------------------------
Tobacco -- 1.4%
250,000 B+/NR Alliance One International, Inc., 10.0%,
7/15/16 (144A) $ 260,000
1,765,000 B+/B2 Alliance One International, Inc., 10.0%,
7/15/16 (144A) 1,835,600
------------
$ 2,095,600
------------
Total Food, Beverage & Tobacco $ 4,883,983
-------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.1%
Household Products -- 0.1%
205,000 CCC+/Caa1 Central Garden and Pet Co., 9.125%, 2/1/13 $ 207,563
------------
Total Household & Personal Products $ 207,563
-------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 4.8%
Health Care Equipment & Services -- 0.5%
750,000 CCC+/Caa2 Accellent, Inc., 10.5%, 12/1/13 $ 735,000
-------------------------------------------------------------------------------------------------------
Health Care Supplies -- 1.4%
750,000 B/Caa1 Bausch & Lomb, Inc., 9.875%, 11/1/15 $ 776,250
1,265,000(c) B-/B3 Biomet, Inc., 10.375%, 10/15/17 1,363,037
------------
$ 2,139,287
-------------------------------------------------------------------------------------------------------
Health Care Services -- 2.4%
1,385,000(l) BB-/NR DASA Finance Corp., 8.75%, 5/29/18 (144A) $ 1,457,712
600,000 B/B2 Rural/Metro Corp., 9.875%, 3/15/15 601,500
759,890(c) B-/B3 Surgical Care Affiliates, Inc., 8.875%, 7/15/15
(144A) 630,709
1,170,000 CCC+/Caa1 Surgical Care Affiliates, Inc., 10.0%,
7/15/17 (144A) 982,800
------------
$ 3,672,721
-------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.2%
225,000 BB/Ba3 HCA, Inc., 8.5%, 4/15/19 (144A) $ 238,500
-------------------------------------------------------------------------------------------------------
Managed Health Care -- 0.3%
500,000 B-/Caa1 Multiplan, Inc., 10.375%, 4/15/16 (144A) $ 480,000
------------
Total Health Care Equipment & Services $ 7,265,508
-------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
-------------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY & LIFE SCIENCES -- 0.3%
Pharmaceuticals -- 0.3%
250,000 B/B2 Phibro Animal Health Corp., 10.0%, 8/1/13 (144A) $ 250,000
200,000 CCC+/Caa1 Phibro Animal Health Corp., 13.0%, 8/1/14 (144A) 196,000
------------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 446,000
-------------------------------------------------------------------------------------------------------------
BANKS -- 2.1%
Diversified Banks -- 1.3%
250,000 NR/Ba1 ATF Capital BV, 9.25%, 2/21/14 (144A) $ 243,750
500,000(a) NR/B2 Banco Macro SA, 9.75%, 12/18/36 400,000
700,000 NR/Ba2 Banco Macro SA, 10.75%, 6/7/12 469,000
BRL 350,000 NR/NR International Finance Corp., 9.25%, 3/15/13 192,303
200,000 NR/NR JSC TemirBank, 9.5%, 5/21/14 (144A) 46,000
550,000 B+/Ba3 Russian Standard Finance SA, 7.5%, 10/7/10 (144A) 526,625
500,000(b) D/C TuranAlem Finance BV, 8.5%, 2/10/15 (144A) 120,000
------------
$ 1,997,678
-------------------------------------------------------------------------------------------------------------
Regional Banks -- 0.8%
600,000(a)(d) BBB/Baa2 PNC Financial Services Group, Inc., 8.25% $ 601,610
500,000(a)(d)(l) A-/Ba3 Wells Fargo Capital XV, 9.75% 537,500
------------
$ 1,139,110
------------
Total Banks $ 3,136,788
-------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 2.7%
Other Diversified Financial Services -- 0.3%
400,000(a) BB-/NR Ibis Re, Ltd., 10.549%, 5/10/12 (144A) $ 431,520
-------------------------------------------------------------------------------------------------------------
Specialized Finance -- 1.5%
750,000 B-/Caa1 ACE Cash Express, Inc., 10.25%, 10/1/14 (144A) $ 585,000
500,000 BB/Baa2 Capital One Capital V, 10.25%, 8/15/39 570,615
755,000(a) CCC+/B3 NCO Group, Inc., 5.315%, 11/15/13 583,237
900,000 CCC+/Caa1 NCO Group, Inc., 11.875%, 11/15/14 621,000
------------
$ 2,359,852
-------------------------------------------------------------------------------------------------------------
Asset Management & Custody Banks -- 0.7%
375,000 BB+/Baa3 Janus Capital Group, Inc., 6.5%, 6/15/12 $ 373,124
665,000 BB+/Baa3 Janus Capital Group, Inc., 6.95%, 6/15/17 632,150
------------
$ 1,005,274
-------------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.2%
450,000(a)(d) BBB/A3 Goldman Sachs Capital II, 5.793% $ 334,688
------------
Total Diversified Financials $ 4,131,334
-------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 19
Schedule of Investments | 10/31/09 (unaudited) (continued)
-----------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------------
INSURANCE -- 22.6%
Insurance Brokers -- 1.5%
250,000 CCC/Caa1 Alliant Holdings I, Inc., 11.0%, 5/1/15 (144A) $ 243,750
1,050,000 CCC+/Caa1 HUB International Holdings, Inc., 10.25%, 6/15/15
(144A) 968,625
500,000(a) CCC/B3 U.S.I. Holdings Corp., 4.315%, 11/15/14 (144A) 412,500
804,000 CCC/Caa1 U.S.I. Holdings Corp., 9.75%, 5/15/15 (144A) 715,560
------------
$ 2,340,435
-----------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 1.3%
1,000,000(a) NR/Baa3 Liberty Mutual Group, Inc., 7.0%, 3/15/37 (144A) $ 792,808
1,000,000(a) BB/Baa3 Liberty Mutual Group, Inc., 10.75%, 6/15/58 (144A) 1,050,000
65,000 BB-/NR Sul America Participacoes SA, 8.625%, 2/15/12
(144A) 68,331
------------
$ 1,911,139
-----------------------------------------------------------------------------------------------------------
Reinsurance -- 19.8%
1,000,000(a) BB+/NR AKIBARE, 3.557%, 5/22/12 (144A) $ 973,400
1,500,000(a) BB+/NR AKIBARE, 3.567%, 5/22/12 (144A) 1,461,600
EURO 1,500,000(a) B-/NR Atlas Reinsurance Plc, 11.0%, 1/10/11 (144A) 2,146,778
2,000,000(a) BB+/NR Blue Fin, Ltd., 4.684%, 4/10/12 (144A) 1,779,000
1,000,000(a) BB/NR Caelus Re, Ltd., 6.611%, 6/7/11 (144A) 964,100
1,000,000(a) BB/NR Calabash Re II, Ltd., 8.844%, 1/8/10 (144A) 1,010,300
1,500,000(a) BB-/NR Calabash Re II, Ltd., 10.044%, 1/8/10 (144A) 1,501,950
1,000,000(a) B-/NR Carillon, Ltd., 15.549%, 1/10/11 (144A) 1,009,100
1,500,000(a) BB/NR East Lane Re, Ltd., 7.483%, 5/6/11 (144A) 1,501,500
1,750,000(a) BB+/NR Fhu-Jin, Ltd., 4.383%, 8/10/11 (144A) 1,733,900
500,000(a) BB/NR Foundation Re, Ltd., 7.69%, 2/24/10 (144A) 503,650
1,000,000(a) NR/B1 GlobeCat, Ltd., 6.287%, 1/2/13 (144A) 933,400
350,000(a) NR/B3 GlobeCat, Ltd., 9.537%, 1/2/13 (144A) 302,540
EURO 1,500,000(a) BB+/NR Green Valley, Ltd., 4.343%, 1/10/11 (144A) 2,129,294
820,000(a) B+/Caa3 MBIA Insurance Corp., 14.0%, 1/15/33 (144A) 352,600
250,000(a) B/NR MultiCat Mexico, Ltd., Series 2009-I Class A,
11.556%, 10/19/12 (144A) 250,550
250,000(a) B/NR MultiCat Mexico, Ltd., Series 2009-I Class B,
10.306%, 10/19/12 (144A) 252,675
250,000(a) B/NR MultiCat Mexico, Ltd., Series 2009-I Class C,
10.306%, 10/19/12 (144A) 252,675
250,000(a) BB-/NR MultiCat Mexico, Ltd., Series 2009-I Class D,
10.306%, 10/19/12 (144A) 250,725
2,500,000(a) NR/Ba2 Muteki, Ltd., 4.84%, 5/24/11 (144A) 2,418,250
250,000(a) BB/NR Mystic Re II, Ltd., 12.361%, 3/20/12 (144A) 265,875
1,000,000(a) NR/B1 Nelson Re, Ltd., 4.94%, 6/6/11 (144A) 964,800
1,000,000(a) BB+/NR Newton Re, Ltd., 4.936%, 12/24/10 (144A) 988,400
1,000,000(a) BB/NR Newton Re, Ltd., 7.236%, 12/24/10 (144A) 973,500
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
425,000(a) BB-/NR Residential Reinsurance 2008, Ltd., 7.111%,
6/6/11 (144A) $ 411,145
2,000,000(a) B-/NR Residential Reinsurance 2008, Ltd., 11.861%,
6/6/11 (144A) 1,976,200
440,000(a) NR/NR Successor II, Ltd., 17.064%, 4/6/10 (144A) 439,472
2,000,000(a) NR/NR Successor II, Ltd., 25.314%, 4/6/10 (144A) 1,999,000
500,000(a)(b) D/NR Willow Re, Ltd., 0.0%, 6/16/10 (144A) 330,000
------------
$ 30,076,379
------------
Total Insurance $ 34,327,953
---------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.3%
Real Estate Operating Companies -- 0.3%
88,261 B-/NR Alto Palermo SA, 11.0%, 6/11/12 (144A) $ 56,487
410,000 B-/NR IRSA Inversiones y Representaciones SA, 8.5%,
2/2/17 (144A) 331,587
------------
Total Real Estate $ 388,074
---------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.9%
Internet Software & Services -- 0.7%
905,000 B-/B2 Terremark Worldwide, Inc., 12.0%, 6/15/17 (144A) $ 1,000,025
---------------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 0.2%
405,000 CCC/Caa1 Activant Solutions, Inc., 9.5%, 5/1/16 $ 368,550
---------------------------------------------------------------------------------------------------------
Data Processing & Outsourced Services -- 0.9%
1,465,000(l) B-/Caa1 First Data Corp., 9.875%, 9/24/15 $ 1,351,462
---------------------------------------------------------------------------------------------------------
Application Software -- 0.9%
1,390,000 B-/Caa1 Vangent, Inc., 9.625%, 2/15/15 $ 1,323,975
---------------------------------------------------------------------------------------------------------
Systems Software -- 0.2%
1,110,000(b) NR/NR Pegasus Solutions, Inc., 10.5%, 4/15/15 (144A) $ 366,300
------------
Total Software & Services $ 4,410,312
---------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.5%
Computer Storage & Peripherals -- 0.3%
430,000 BB+/Ba1 Seagate Technology International, 10.0%, 5/1/14
(144A) $ 477,300
---------------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.2%
250,000 B/B1 Da-Lite Screen Co., Inc., 9.5%, 5/15/11 $ 239,063
------------
Total Technology Hardware & Equipment $ 716,363
---------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 6.3%
Alternative Carriers -- 0.7%
945,000 B-/B2 Global Crossing, Ltd., 12.0%, 9/15/15 (144A) $ 1,013,512
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 21
Schedule of Investments | 10/31/09 (unaudited) (continued)
-----------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- 2.8%
910,000 CCC+/B3 Broadview Networks Holdings, Inc., 11.375%, 9/1/12 $ 846,300
1,250,000 BB-/B2 GCI, Inc., 7.25%, 2/15/14 1,209,375
750,000 B/B1 PAETEC Holding Corp., 8.875%, 6/30/17 (144A) 742,500
1,010,000 CCC+/Caa1 PAETEC Holding Corp., 9.5%, 7/15/15 924,150
500,000 BB/Ba3 Windstream Corp., 8.625%, 8/1/16 513,750
------------
$ 4,236,075
-----------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.8%
60,000 CCC/Caa2 Cell C Property, Ltd., 11.0%, 7/1/15 (144A) $ 59,700
365,000 B+/Ba2 Cricket Communications, Inc., 7.75%, 5/15/16
(144A) 364,088
500,000(l) B-/B3 Cricket Communications, Inc., 9.375%, 11/1/14 485,000
400,000 NR/B1 Digicel, Ltd., 9.25%, 9/1/12 (144A) 406,000
750,000(l) BB-/B1 NII Capital Corp., 10.0%, 8/15/16 (144A) 791,250
790,000 BB+/Ba2 OJSC Vimpel Communications, 9.125%, 4/30/18
(144A) 823,575
1,330,000 B-/B2 True Move Co., Ltd., 10.375%, 8/1/14 (144A) 1,243,550
100,000 B-/B2 True Move Co., Ltd., 10.75%, 12/16/13 (144A) 95,500
------------
$ 4,268,663
------------
Total Telecommunication Services $ 9,518,250
-----------------------------------------------------------------------------------------------------------
UTILITIES -- 2.1%
Electric Utilities -- 0.7%
750,000 B-/NR Cia de Transporte de Energia Electrica de Alta Tension
Transener SA, 8.875%, 12/15/16 (144A) $ 637,500
500,000(l) CC/Caa2 Texas Competitive Electric Holdings Co. LLC, 10.25%,
11/1/15 355,000
------------
$ 992,500
-----------------------------------------------------------------------------------------------------------
Gas Utilities -- 1.0%
490,000 B+/B1 Inergy, L.P., 8.25%, 3/1/16 $ 497,350
1,135,000 B-/B2 Transportadora de Gas del Sur SA, 7.875%, 5/14/17
(144A) 991,706
------------
$ 1,489,056
-----------------------------------------------------------------------------------------------------------
Multi-Utilities -- 0.1%
225,000 BB-/Ba2 PNM Resources, Inc., 9.25%, 5/15/15 $ 232,313
-----------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 0.3%
500,000 BB-/Ba3 Intergen NV, 9.0%, 6/30/17 (144A) $ 520,000
------------
Total Utilities $ 3,233,869
-----------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $139,480,359) $130,801,235
-----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 4.0% of Net Assets
MATERIALS -- 0.8%
Diversified Chemicals -- 0.8%
1,900(e) B/NR Hercules Inc, 6.5%, 6/30/29 $ 1,159,000
------------
Total Materials $ 1,159,000
---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.5%
Marine -- 0.5%
990,000 CCC+/Caa2 Horizon Lines, Inc., 4.25%, 8/15/12 $ 780,863
------------
Total Transportation $ 780,863
---------------------------------------------------------------------------------------------------------
MEDIA -- 0.2%
Movies & Entertainment -- 0.2%
559,000 CCC+/NR Live Nation, Inc., 2.875%, 7/15/27 $ 398,986
------------
Total Media $ 398,986
---------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 1.6%
Health Care Equipment & Services -- 0.6%
1,040,000(f) BB-/NR Hologic, Inc., 2.0%, 12/15/37 $ 843,700
---------------------------------------------------------------------------------------------------------
Health Care Services -- 0.8%
1,550,000 B+/B3 Omnicare, Inc., 3.25%, 12/15/35 $ 1,234,187
---------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.2%
405,000 B/NR LifePoint Hospitals, Inc., 3.5%, 5/15/14 $ 362,475
------------
Total Health Care Equipment & Services $ 2,440,362
---------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.2%
Communications Equipment -- 0.2%
450,000(b) NR/NR Nortel Networks Corp., 2.125%, 4/15/14 $ 249,188
------------
Total Technology Hardware & Equipment $ 249,188
---------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.7%
Wireless Telecommunication Services -- 0.7%
1,150,000 B+/NR NII Holdings, Inc., 3.125%, 6/15/12 $ 1,019,187
------------
Total Telecommunication Services $ 1,019,187
---------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $5,674,333) $ 6,047,586
---------------------------------------------------------------------------------------------------------
FLOATING RATE LOAN INTERESTS -- 38.6% of Net Assets (h)
ENERGY -- 1.0%
Oil & Gas Equipment & Services -- 0.6%
886,811 B+/B2 Coffeyville Resources LLC, Tranche D Term Loan, 8.5%,
12/30/13 $ 890,691
---------------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.2%
336,600 BBB-/Ba2 Hudson Products Holdings, Inc., Term Loan, 8.0%,
8/24/15 $ 277,695
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 23
Schedule of Investments | 10/31/09 (unaudited) (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.2%
320,588 B/B3 Venoco, Inc., Second Lien Term Loan, 4.25%, 5/7/14 $ 288,930
------------
Total Energy $ 1,457,316
--------------------------------------------------------------------------------------------------------
MATERIALS -- 4.2%
Diversified Chemicals -- 0.8%
989,899 BB+/Ba1 Huntsman International LLC, New Dollar Term Loan B,
1.994%, 4/21/14 $ 906,445
371,827 B/Ba1 Solutia, Inc., Term Loan, 7.25%, 2/28/14 378,268
------------
$ 1,284,713
--------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.7%
52,886 B+/B1 Graham Packaging Co. LP, Term Loan B, 2.5% -
2.563%, 10/7/11 $ 51,737
529,271 B+/B1 Graham Packaging Co. LP, Term Loan C, 6.75%,
4/5/14 530,594
492,500 B-/B3 Graphic Packaging International, Inc., Incremental
Term Loan, 2.995% - 3.04%, 5/16/14 474,031
------------
$ 1,056,362
--------------------------------------------------------------------------------------------------------
Steel -- 1.2%
1,294,378 BB-/B3 Essar Steel Algoma, Inc., Term Loan, 8.0%, 6/20/13 $ 1,222,109
1,293,538 NR/B1 Niagara Corp., Term Loan, 9.25%, 6/30/14 601,495
------------
$ 1,823,604
--------------------------------------------------------------------------------------------------------
Forest Products -- 0.8%
1,500,000(c) NR/Ba3 Ainsworth Lumber Co., Ltd., Term Loan, 5.25%,
6/26/14 $ 1,170,000
--------------------------------------------------------------------------------------------------------
Paper Products -- 0.7%
1,132,372 BB+/NR Georgia-Pacific LLC, Term Loan B, 2.283% - 2.464%,
12/21/12 $ 1,093,050
------------
Total Materials $ 6,427,729
--------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 3.3%
Aerospace & Defense -- 1.4%
731,144 B+/NR Aeroflex, Inc., Tranche B-2 Term Loan, 4.0% - 4.25%,
8/15/14 $ 680,878
500,231 BB-/B1 DAE Aviation Holdings, Inc., Tranche B-1 Term Loan,
4.04%, 7/31/14 470,218
492,386 BB+/Ba3 Spirit Aerosystems, Inc., Term Loan B-1, 2.034%,
9/30/13 476,999
489,381 BB-/B1 Standard Aero, Ltd., Tranche B-2 Term Loan,
4.0% - 4.03%, 7/31/14 460,018
------------
$ 2,088,113
--------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.7%
1,158,000 BB/Ba3 Goodman Global, Inc., Term Loan, 6.25%, 2/13/14 $ 1,161,763
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
--------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------
Construction & Farm Machinery & Heavy Trucks -- 1.2%
1,000,000 BB-/Ba3 Accuride Corp., Advance Term Loan, 8.0%, 1/31/12 $ 995,313
498,744 NR/NR Manitowoc Co., Inc., Term Loan B, 7.5%, 11/16/14 491,886
290,000 NR/B2 Oshkosh Truck Corp., Term Loan B, 6.29% - 6.33%,
12/6/13 290,201
------------
$ 1,777,400
------------
Total Capital Goods $ 5,027,276
--------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 1.6%
Commercial Printing -- 0.2%
6,922 BB-/Ba3 Cenveo Corp., Delayed Draw Term Loan, 4.792%,
6/21/13 $ 6,740
242,439 BB-/Ba2 Cenveo Corp., Facility Term Loan C, 4.792%, 6/21/13 236,075
------------
$ 242,815
--------------------------------------------------------------------------------------------------
Diversified Commercial & Professional Services -- 0.7%
720,988 BB+/B1 Asset Acceptance Capital Corp., Tranche B Term Loan,
3.5% - 5.5%, 6/12/13 $ 699,358
420,246 BB-/B2 Rental Service Corp., Second Lien Initial Term Loan,
3.79% - 3.91%, 11/30/13 381,373
------------
$ 1,080,731
--------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.7%
124,688 B+/Ba2 Casella Waste Systems, Inc., Term Loan B, 7.0%,
4/9/14 $ 125,779
1,221,875 BB-/Ba3 Synagro Technologies, Inc., First Lien Term Loan,
2.24%, 4/2/14 994,301
------------
$ 1,120,080
------------
Total Commercial & Professional Services $ 2,443,626
--------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.0%
Air Freight & Logistics -- 1.0%
439,482 NR/Ba2 Ceva Group Plc, Pre-Funded LC Loan, 0.183%,
11/4/13 $ 370,996
1,309,420 NR/Ba2 Ceva Group Plc, U.S. Term Loan, 3.243%, 11/4/13 1,105,369
------------
Total Transportation $ 1,476,365
--------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 0.9%
Tires & Rubber -- 0.6%
1,000,000 BB/Ba1 Goodyear Tire & Rubber Co., Second Lien Term Loan,
2.34%, 4/30/14 $ 916,786
--------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 0.3%
498,087 B/Ba3 Ford Motor Co., Term Loan, 3.25% - 3.29%,
12/15/13 $ 445,165
------------
Total Automobiles & Components $ 1,361,951
--------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 25
Schedule of Investments | 10/31/09 (unaudited) (continued)
------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.8%
Housewares & Specialties -- 0.5%
876,651 BB-/Ba3 Yankee Candle Co., Inc., Term Loan, 2.25%, 2/6/14 $ 820,765
------------------------------------------------------------------------------------------------------
Apparel, Accessories & Luxury Goods -- 0.3%
368,502 BB-/Ba2 Hanesbrands, Inc., Term Loan B, 5.032%, 9/5/13 $ 370,674
------------
Total Consumer Durables & Apparel $ 1,191,439
------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 0.6%
Casinos & Gaming -- 0.5%
500,000(b) B+/B1 Fontainebleau Las Vegas LLC, Delayed Draw Term
Loan, 6.0%, 6/6/14 $ 145,000
1,000,000(b) B/NR Fontainebleau Las Vegas LLC, Initial Term Loan,
6.0%, 6/6/14 290,000
1,000,000 BB-/Caa1 Gateway Casinos & Entertainment, Inc., Advance
Second Lien Term Loan, 5.787%, 3/31/15 295,625
------------
$ 730,625
------------------------------------------------------------------------------------------------------
Hotels, Resorts & Cruise Lines -- 0.1%
167,580 BB/Ba2 Travelport LLC, Incremental Term Loan C, 10.5%,
8/23/13 $ 170,373
------------
Total Consumer Services $ 900,998
------------------------------------------------------------------------------------------------------
MEDIA -- 2.1%
Broadcasting -- 1.0%
1,000,000 B+/Ba3 Insight Midwest Holdings LLC, Term Loan B, 2.29%,
4/7/14 $ 953,036
675,000 B/Ba3 Univision Communications, Inc., Initial Term Loan,
2.533%, 9/29/14 545,785
------------
$ 1,498,821
------------------------------------------------------------------------------------------------------
Cable & Satellite -- 0.1%
157,318 B-/B3 Knology, Inc., Term Loan, 2.493%, 6/30/12 $ 153,188
------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.5%
838,971 B+/B1 Lodgenet Entertainment Corp., Closing Date Term
Loan, 2.29% , 4/4/14 $ 770,455
------------------------------------------------------------------------------------------------------
Publishing -- 0.5%
869,685 BB-/Ba1 RH Donnelley, Inc., Tranche D-1 Term Loan, 6.75%,
6/30/11 $ 761,699
------------
Total Media $ 3,184,163
------------------------------------------------------------------------------------------------------
RETAILING -- 0.2%
Catalog Retail -- 0.2%
250,000 BBB-/Ba2 QVC, Inc., Tranche 2-W Term Loan, 3.745%, 10/4/11 $ 249,844
------------
Total Retailing $ 249,844
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
-------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.7%
Drug Retail -- 0.7%
1,000,000 NR/B3 Rite Aid Corp., Tranche 4 Term Loan, 9.5%, 6/10/15 $ 1,036,667
------------
Total Food & Staples Retailing $ 1,036,667
-------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.4%
Packaged Foods & Meats -- 0.4%
736,776 BB/B1 Dean Foods Co., Tranche B Term Loan, 1.625% -
1.665%, 4/2/14 $ 690,267
------------
Total Food, Beverage & Tobacco $ 690,267
-------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.5%
Personal Products -- 0.5%
815,228 B+/Ba3 Brickman Group Holdings, Inc., Tranche B Term Loan,
2.283%, 1/23/14 $ 769,712
------------
Total Household & Personal Products $ 769,712
-------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 4.3%
Health Care Supplies -- 1.1%
112,592 BB-/B1 Bausch & Lomb, Inc., Delayed Draw Term Loan,
3.504% - 3.533%, 4/24/15 $ 107,581
463,644 BB-/B1 Bausch & Lomb, Inc., Parent Term Loan, 3.533%,
4/24/15 443,006
488,750 B+/B2 IM US Holdings LLC, First Lien Term Loan, 2.244% -
2.283%, 6/26/14 463,091
600,000 B+/B2 IM US Holdings LLC, Second Lien Term Loan, 4.494%,
6/26/15 576,000
------------
$ 1,589,678
-------------------------------------------------------------------------------------------------
Health Care Services -- 1.4%
1,351,751 BB-/Ba3 Catalent Pharma Solutions, Inc., Dollar Term Loan,
2.493%, 4/10/14 $ 1,178,727
522,294 B/B3 HealthSouth Corp., Tranche 1 Term Loan,
2.54% - 2.55%, 3/10/13 498,791
429,871 BB-/B3 HealthSouth Corp., Tranche 2 Term Loan,
4.04 - 4.05%, 3/15/14 416,439
------------
$ 2,093,957
-------------------------------------------------------------------------------------------------
Health Care Facilities -- 1.8%
47,884 NR/NR Community Health Systems, Inc., Delayed Draw Term
Loan, 2.493% - 2.511%, 7/25/14 $ 44,715
938,626 BB/Ba3 Community Health Systems, Inc., Term Loan,
2.493% - 2.622%, 7/25/14 876,501
712,270 B+/B3 Hanger Orthopedic Group, Inc., Tranche B Term Loan,
2.25%, 5/26/13 677,547
330,914 B+/Ba2 HCA, Inc., Tranche B-1 Term Loan, 2.533%, 11/18/13 308,830
162,256 B+/B1 Sun Healthcare Group, Inc., Synthetic LC Loan,
0.183%, 4/19/14 153,535
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 27
Schedule of Investments | 10/31/09 (unaudited) (continued)
--------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------
Health Care Facilities -- (continued)
764,765 B+/B1 Sun Healthcare Group, Inc., Term Loan, 2.281% -
3.313%, 4/19/14 $ 723,659
------------
$ 2,784,787
------------
Total Health Care Equipment & Services $ 6,468,422
--------------------------------------------------------------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY & LIFE SCIENCES -- 1.3%
Biotechnology -- 0.7%
396,610 BB+/B1 Warner Chilcott Co. LLC, Term Loan A, 3.25%,
10/30/14 $ 397,881
198,305 BB+/B1 Warner Chilcott Co. LLC, Term Loan B-1, 3.5%,
4/30/15 198,940
436,271 BB+/B1 Warner Chilcott Co. LLC, Term Loan B-2, 3.5%,
4/30/15 431,908
------------
$ 1,028,729
--------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.5%
727,500 BB/Ba3 Mylan, Inc., U.S. Tranche B Term Loan, 3.5% -
3.563%, 10/2/14 $ 709,312
--------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.1%
198,125 BBB-/Baa3 Life Technologies Corp., Facility Term Loan B, 5.25%,
11/23/15 $ 199,528
------------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 1,937,569
--------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 3.4%
Other Diversified Financial Services -- 0.8%
435,326 BB/Ba2 Metavante Corp., Term Loan, 2.233%, 11/3/14 $ 434,964
792,000 BB-/Ba3 SRAM LLC., Term Loan, 7.0% - 8.0%, 9/30/14 788,040
------------
$ 1,223,004
--------------------------------------------------------------------------------------------------
Specialized Finance -- 1.0%
836,985 BB-/B3 Ace Cash Express, Inc., Term Loan, 3.283%, 10/5/13 $ 707,252
912,041 B-/B2 Collect Acquisition Corp., Advance Term Loan B, 7.5%,
5/15/13 884,110
------------
$ 1,591,362
--------------------------------------------------------------------------------------------------
Consumer Finance -- 1.1%
1,028,833 BB-/NR Dollar Financial Corp., Canadian Borrower Term Loan,
3.04%, 10/30/12 $ 978,677
756,495 BB-/NR Dollar Financial Corp., Delayed Draw Term Loan,
3.04%, 10/30/12 719,616
------------
$ 1,698,293
--------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.5%
687,750 NR/NR MSCI, Inc., Term Loan B, 2.872%, 11/20/14 $ 678,293
------------
Total Diversified Financials $ 5,190,952
--------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
-----------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-----------------------------------------------------------------------------------------------------
INSURANCE -- 3.3%
Insurance Brokers -- 2.4%
1,470,000 B-/B3 Alliant Holdings I, Inc., Term Loan, 3.283%, 8/21/14 $ 1,370,775
119,073 B/B2 HUB International, Ltd., Delay Draw Term Loan,
2.743%, 6/13/14 105,031
529,745 B/B3 HUB International, Ltd., Initial Term Loan, 2.743%,
6/13/14 467,275
100,000 B-/B3 U.S.I. Holdings Corp., Add-on Term Loan, 5.0%,
5/5/14 97,375
1,955,000 B-/B2 U.S.I. Holdings Corp., Tranche B Term Loan, 3.04%,
5/5/14 1,702,479
------------
$ 3,742,935
-----------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.9%
783,474 B-/B2 AmWins Group, Inc., Initial Term Loan,
2.79% - 2.88%, 6/8/13 $ 640,490
1,000,000 B-/B2 AmWins Group, Inc., Second Lien Initial Term Loan,
5.79%, 6/9/14 700,000
------------
$ 1,340,490
------------
Total Insurance $ 5,083,425
-----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 3.7%
Internet Software & Services -- 0.3%
448,866 B+/B1 Web Service Co. LLC, Term Loan, 7.0%, 8/28/14 $ 446,622
-----------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 1.8%
404,694 B+/B1 Activant Solutions, Inc., Term Loan, 2.313%, 5/2/13 $ 377,377
555,924 B+/B2 Keane International, Inc., Closing Date Term Loan,
2.63%, 6/4/13 501,722
42,654 B+/B2 Keane International, Inc., Synthetic LC Loan, 2.63%,
6/4/13 38,495
1,949,875 B+/Ba3 SunGard Data Systems, Inc., Tranche A U.S.Term Loan,
1.994%, 2/28/14 1,835,930
------------
$ 2,753,524
-----------------------------------------------------------------------------------------------------
Data Processing & Outsourced Services -- 0.1%
178,514 NR/Ba1 Fidelity National Information Services, Inc., Tranche C
Term Loan, 4.473%, 1/18/12 $ 178,291
-----------------------------------------------------------------------------------------------------
Application Software -- 0.6%
982,188 B/B1 Nuance Communications, Inc., Term Loan, 2.25%,
3/29/13 $ 941,980
-----------------------------------------------------------------------------------------------------
Systems Software -- 0.9%
1,439,787 BB-/B3 Vangent, Inc., Term Loan, 2.65%, 2/14/13 $ 1,367,798
------------
Total Software & Services $ 5,688,215
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 29
Schedule of Investments | 10/31/09 (unaudited) (continued)
---------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.8%
Electronic Equipment & Instruments -- 0.8%
769,251 BB/Ba2 H3C Holdings, Ltd., Tranche B Term Loan, 3.639%,
9/28/12 $ 734,635
488,773 B/B3 Scitor Corp., Term Loan, 4.49%, 9/26/14 432,564
------------
Total Technology Hardware & Equipment $ 1,167,199
---------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.5%
Semiconductor Equipment -- 0.5%
970,639 BB-/Ba3 Freescale Semiconductor, Inc., Term Loan, 1.996%,
11/29/13 $ 791,341
------------
Total Semiconductors & Semiconductor Equipment $ 791,341
---------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.4%
Alternative Carriers -- 0.3%
501,297 B-/Ba3 PAETEC Holding Corp., Replacement Term Loan,
2.743%, 2/28/13 $ 476,859
---------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- 0.6%
434,910 B+/B2 Telesat Canada, U.S. Term I Loan, 3.25%, 10/31/14 $ 418,397
37,356 B+/B2 Telesat Canada, U.S. Term II Loan, 3.25%, 10/31/14 35,937
250,000 BB-/Ba1 Wind Telecomunicazioni S.P.A., Facility Term Loan B-2,
3.926%, 5/27/13 240,104
250,000 BB-/Ba1 Wind Telecomunicazioni S.P.A., Facility Term Loan C-2,
4.926%, 5/26/14 240,104
------------
$ 934,542
---------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.5%
1,710,327 B/B1 MetroPCS Wireless, Inc., Tranche B Term Loan,
2.5% - 2.75%, 11/3/13 $ 1,611,181
587,121 B+/B1 Stratos Global Corp., Facility Term Loan B, 2.783%,
2/13/12 578,314
------------
$ 2,189,495
------------
Total Telecommunication Services $ 3,600,896
---------------------------------------------------------------------------------------------------
UTILITIES -- 1.6%
Electric Utilities -- 0.3%
598,919 B+/Ba3 Texas Competitive Electric Holdings Co. LLC, Initial
Tranche B-2 Term Loan, 3.744% - 3.783%,
10/10/14 $ 465,566
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
-------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
-------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 1.3%
1,950,263 NR/NR Calpine Corp., First Priority Term Loan, 3.165%,
3/29/14 $ 1,798,202
184,378 B/B2 Mach Gen LLC, First Lien Synthetic LC Loan, 0.033%,
2/22/13 172,086
------------
$ 1,970,288
------------
Total Utilities $ 2,435,854
-------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE LOAN INTERESTS
(Cost $63,882,675) $ 58,581,226
-------------------------------------------------------------------------------------------------------
FIXED RATE LOAN INTERESTS -- 0.6% of Net Assets
MATERIALS -- 0.1%
Diversified Metals & Mining -- 0.1%
100,000 B/B2 Blaze Recycling & Metals LLC, Term Loan, 15.0%,
5/14/12 $ 100,000
------------
Total Materials $ 100,000
-------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.5%
Semiconductor Equipment -- 0.5%
824,333(l) NR/NR Freescale Semiconductor, Inc., Incremental Term Loan,
12.5%, 12/15/14 $ 848,376
------------
Total Semiconductors & Semiconductor Equipment $ 848,376
-------------------------------------------------------------------------------------------------------
TOTAL FIXED RATE LOAN INTERESTS
(Cost $1,037,339) $ 948,376
-------------------------------------------------------------------------------------------------------
Shares
-------------------------------------------------------------------------------------------------------
COMMON STOCK -- 0.3% of Net Assets
ENERGY -- 0.0%
Oil & Gas Equipment & Services -- 0.0%
383,316(i) Skeie Drilling & Production ASA $ 38,346
------------
Total Energy $ 38,346
-------------------------------------------------------------------------------------------------------
MATERIALS -- 0.3%
Commodity Chemicals -- 0.3%
29,346(i) Georgia Gulf Corp. $ 421,702
-------------------------------------------------------------------------------------------------------
Forest Products -- 0.0%
13,963(i) Ainsworth Lumber Co., Ltd. $ 22,813
------------
Total Materials $ 444,515
-------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $540,661) $ 482,861
-------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 31
Schedule of Investments | 10/31/09 (unaudited) (continued)
----------------------------------------------------------------------------------------------
Shares Value
----------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.3% of Net Assets
DIVERSIFIED FINANCIALS -- 0.3%
Other Diversified Financial Services -- 0.3%
595 Bank of America Corp. $ 498,217
----------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $490,737) $ 498,217
----------------------------------------------------------------------------------------------
WARRANTS -- 0.0% of Net Assets
REAL ESTATE -- 0.0%
Real Estate Development -- 0.0%
750,000(g)(i) Neo-China Group Holdings, Ltd., Expires 7/22/12
(144A) $ 24,193
----------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $17,012) $ 24,193
----------------------------------------------------------------------------------------------
--------------------------------------------------------------------------
Principal
Amount
USD ($)
--------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS -- 4.4% of Net Assets
Securities Lending Collateral -- 4.4%(j)
Certificates of Deposit:
325,369 Bank of Nova Scotia, 0.25%, 11/17/09 $ 325,369
343,445 BNP Paribas NY, 0.3%, 11/17/09 343,445
159,072 Nordea NY, 0.21%, 12/22/09 159,072
216,913 Rabobank Nederland NY, 0.24%, 12/11/09 216,913
216,913 Societe Generale, 0.27%, 12/4/09 216,913
216,913 Toronto Dominion, 0.23%, 12/16/09 216,913
------------
$ 1,478,625
--------------------------------------------------------------------------
Commercial Paper:
180,713 ABB LLC, 0.59%, 12/28/09 $ 180,713
361,475 BBVA London, 0.29%, 11/6/09 361,475
180,701 BCS FUN, 0.60%, 12/29/09 180,701
216,866 Cafco, 0.40%, 12/9/09 216,866
216,817 CBA Financial, 0.27%, 12/29/09 216,817
126,531 Char FD, 0.30%, 11/2/09 126,531
108,428 Ciesco, 0.25%, 12/7/09 108,428
108,433 Ciesco, 0.33%, 11/23/09 108,433
180,711 GE, 0.23%, 12/28/09 180,711
216,831 HND AF, 0.30%, 12/15/09 216,831
180,722 HSBC, 0.24%, 12/2/09 180,722
36,144 HSBC, 0.24%, 12/3/09 36,144
180,757 Kithaw, 0.23%, 11/3/09 180,757
325,272 NABPP, 0.29%, 12/7/09 325,272
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
-----------------------------------------------------------------------------------
Principal
Amount
USD ($) Value
-----------------------------------------------------------------------------------
Commercial Paper -- (continued)
180,711 Ranger, 0.24%, 12/11/09 $ 180,711
126,175 Santander U.S. Debt, 0.37%, 11/20/09 126,175
106,220 TB LLC, 0.20%, 12/10/09 106,220
------------
$ 3,033,507
-----------------------------------------------------------------------------------
Tri-party Repurchase Agreements:
801,283 Barclays Capital Markets, 0.05%, 11/2/09 $ 801,283
1,048,411 Deutsche Bank, 0.06%, 11/2/09 1,048,411
------------
$ 1,849,694
-----------------------------------------------------------------------------------
Shares
-----------------------------------------------------------------------------------
Money Market Mutual Funds:
144,608 Dreyfus Preferred Money Market Fund $ 144,608
180,761 Fidelity Prime Money Market Fund 180,761
------------
$ 325,369
-----------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $6,687,195) $ 6,687,195
-----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 138.9%
(Cost $226,372,025)(k) $210,812,991
-----------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (38.9)% $(58,994,410)
-----------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $151,818,581
===================================================================================
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
October 31, 2009, the value of these securities amounted to $84,600,896
or 55.7% of total net assets applicable to common shareowners.
(a) Floating rate note. The rate shown is the coupon rate at October 31,
2009.
(b) Security is in default and is non-income producing.
(c) Payment-in-Kind (PIK) security which may pay interest in additional
principal amount.
(d) Security is a perpetual bond and has no definite maturity date.
(e) Security is priced as a unit.
(f) Debt obligation initially issued at one coupon which converts to another
coupon at a specific date. The rate shown is the coupon rate at October
31, 2009.
(g) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $469,131. The aggregate value of $72,883
represents 0.0% of total net assets applicable to common shareowners.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 33
Schedule of Investments | 10/31/09 (unaudited) (continued)
(h) 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 October 31, 2009.
(i) Non-income producing.
(j) Securities lending collateral is managed by Credit Suisse AG, New York
branch.
(k) At October 31, 2009, the net unrealized loss on investments based on cost
for federal income tax purposes of $227,237,904 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 6,370,442
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (22,795,355)
------------
Net unrealized loss $(16,424,913)
============
For financial reporting purposes net unrealized loss was $15,559,034 and cost
of investments aggregated $226,372,025.
(l) At October 31, 2009, the following securities were out on loan:
------------------------------------------------------------------------------------------
Principal
Amount
USD ($) Description Value
------------------------------------------------------------------------------------------
379,000 Aleris International, Inc., 10.0%, 12/15/16 $ 3,316
970,000 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) 989,400
224,000 Ashland, Inc., 9.125%, 6/1/17 (144A) 241,920
490,000 Cricket Communications, Inc., 9.375%, 11/1/14 475,300
356,000 DASA Finance Corp., 8.75%, 5/29/18 (144A) 374,690
1,450,000 First Data Corp., 9.875%, 9/24/15 1,337,625
608,000 Freescale Semiconductor, Inc., Incremental Term Loan, 12.5%,
12/15/14 625,734
137,000 Graphic Packaging International, Inc., 9.5%, 8/15/13 140,596
5,000 Intcomex, Inc., 11.75%, 1/15/11 3,988
385,000 NII Capital Corp., 10.0%, 8/15/16 (144A) 406,175
775,000 Sally Holdings LLC, 10.5%, 11/15/16 821,500
683,000 Tenneco, Inc., 8.625%, 11/15/14 643,728
495,000 Texas Competitive Electric Holdings Co. LLC, 10.25%, 11/1/15 351,450
495,000 Wells Fargo Capital XV, 9.75% 532,125
------------------------------------------------------------------------------------------
$ 6,947,547
==========================================================================================
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
Glossary of Terms:
LC -- Letter of Credit
Note: Principal amounts are denominated in U.S. dollars unless otherwise
denoted.
BRL Brazilian Real
EURO Euro
NOK Norwegian Krone
Purchases and sales of securities (excluding temporary cash investments) for
the period ended October 31, 2009, aggregated $38,896,069 and $16,235,889,
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 October 31, 2009, in
valuing the Trust's investments:
---------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------------------------------------------------------------------------------
Asset backed securities $ -- $ 4,306,574 $ -- $ 4,306,574
Collateralized mortgage obligations -- 2,435,528 -- 2,435,528
Corporate bonds & notes -- 130,801,235 -- 130,801,235
Convertible bonds & notes -- 6,047,586 -- 6,047,586
Floating rate loan interests -- 58,581,226 -- 58,581,226
Fixed rate loan interests -- 948,376 -- 948,376
Common stocks 482,861 -- -- 482,861
Convertible preferred stocks 498,217 -- -- 498,217
Warrants -- 24,193 -- 24,193
Temporary cash investments -- 6,687,195 -- 6,687,195
---------------------------------------------------------------------------------------------
Total $ 981,078 $209,831,913 $ -- $210,812,991
---------------------------------------------------------------------------------------------
Other Financial Instruments* $ (79,793) $ 2,032 $ -- $ (77,761)
=============================================================================================
* Other financial instruments include foreign exchange contracts and
appreciation on unfunded corporate loans.
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 35
Statement of Assets and Liabilities | 10/31/09 (unaudited)
ASSETS:
Investments in securities, at value (including securities loaned of
$6,947,547) (cost $226,372,025) $210,812,991
Cash 707,042
Foreign currencies, at value (cost $2,643,571) 2,725,102
Receivables --
Interest receivable 3,603,201
Unfunded loan commitment 2,032
Prepaid expenses 13,332
--------------------------------------------------------------------------------------
Total assets $217,863,700
--------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Notes payable $ 55,000,000
Investment securities purchased 3,913,665
Upon return of securities loaned 6,687,195
Forward foreign currency portfolio hedge contracts -- net 79,793
Unamortized facility fees 1,587
Due to affiliates 140,048
Accrued interest expense 63,067
Accrued expenses and other liabilities 159,764
--------------------------------------------------------------------------------------
Total liabilities $ 66,045,119
--------------------------------------------------------------------------------------
NET ASSETS:
Paid-in capital $194,476,554
Distribution in excess of investment income (4,348,459)
Accumulated net realized loss on investments and foreign currency
transactions (22,773,959)
Net unrealized loss on investments (15,557,002)
Net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies 21,447
--------------------------------------------------------------------------------------
Net assets applicable to common shareowners $151,818,581
======================================================================================
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $151,818,581/8,190,918 shares $ 18.53
======================================================================================
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
Statement of Operations (unaudited)
For the Six Months Ended 10/31/09
INVESTMENT INCOME:
Interest (net of foreign taxes withheld $5,531) $ 8,235,746
Dividends 21,569
Facility and other fees 86,439
Income from securities loaned, net 10,911
----------------------------------------------------------------------------------------------------
Total investment income $ 8,354,665
----------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 791,053
Administrative fees 97,370
Transfer agent fees and expenses 33,952
Bank loan fees and expenses 65,089
Custodian fees 12,184
Registration fees 8,785
Professional fees 46,650
Printing expenses 15,371
Trustees' fees 3,822
Pricing fees 16,402
Miscellaneous 27,235
----------------------------------------------------------------------------------------------------
Net operating expenses $ 1,117,913
----------------------------------------------------------------------------------------------------
Interest expense $ 639,841
----------------------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 1,757,754
Less management fees waived and expenses reimbursed by
Pioneer Investment Management, Inc. ("PIM") (178,145)
Less fees paid indirectly (3)
----------------------------------------------------------------------------------------------------
Net expenses $ 1,579,606
----------------------------------------------------------------------------------------------------
Net investment income $ 6,775,059
----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ (7,720,901)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 119,413 $(7,601,488)
----------------------------------------------------------------------------------------------------
Change in net unrealized gain (loss) from:
Investments $ 47,351,485
Unfunded corporate loans 3,223
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies (347,884) $47,006,824
----------------------------------------------------------------------------------------------------
Net gain on investments and foreign currency transactions $39,405,336
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $46,180,395
====================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 37
Statement of Changes in Net Assets
For the Six Months Ended 10/31/09 and the Year Ended 4/30/09, respectively
------------------------------------------------------------------------------------------------------
Six Months Ended
10/31/09 Year Ended
(unaudited) 4/30/09
------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 6,775,059 $ 17,099,169
Net realized loss on investments and foreign currency
transactions (7,601,488) (12,595,394)
Change in net unrealized gain (loss) on investments and foreign
currency transactions 47,006,824 (49,859,677)
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $ 46,180,395 $(45,355,902)
------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income ($1.050 and $2.469 per share,
respectively) $ (8,588,256) $(20,135,595)
Tax return of capital ($0.000 and $0.045 per share respectively) -- (371,077)
------------------------------------------------------------------------------------------------------
Total distributions to common shareowners $ (8,588,256) $(20,506,672)
------------------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 413,996 $ 159,885
------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Trust share
transactions $ 413,996 $ 159,885
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 38,006,135 $(65,702,689)
NET ASSETS:
Beginning of period 113,812,446 179,515,135
------------------------------------------------------------------------------------------------------
End of period $151,818,581 $113,812,446
------------------------------------------------------------------------------------------------------
Distribution in excess of net investment income $ (4,348,459) $ (2,535,262)
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
Statement of Cash Flows (unaudited)
For the Six Months Ended 10/31/09
Cash Flows Used in Operating Activities
Net investment income $ 6,775,059
-------------------------------------------------------------------------------
Adjustment to Reconcile Net Investment Income to Net Cash
and Foreign Currency Provided used in Operating Activities
Purchase of investment securities $(521,255,451)
Proceeds from disposition of investment securities 504,848,033
Decrease in receivable for investments sold 710,823
Increase in interest and foreign tax reclaim receivable (280,309)
Decrease in commitment fees receivable 29
Increase in interest payable 14,437
Increase in payable for investments purchased 2,853,785
Increase in accrued expenses and other liabilities 106,919
Decrease in unrealized appreciation on foreign currency
transactions (299,928)
Net realized gain from foreign currency transactions 119,413
Net amortization/(accretion) of premium/(discount) (624,697)
-------------------------------------------------------------------------------
Net adjustment to reconcile net investment income (13,806,946)
-------------------------------------------------------------------------------
Net cash and foreign currency used in operating activities $ (7,031,887)
-------------------------------------------------------------------------------
Cash Flows From Financing Activities
Increase in notes payable $ 17,000,000
Cash dividends paid to common shareowners (9,725,786)
-------------------------------------------------------------------------------
Net cash flow from financing activities $ 7,274,214
-------------------------------------------------------------------------------
Net increase in cash and foreign currency $ 242,327
-------------------------------------------------------------------------------
Cash and Foreign Currency
Beginning of the period $ 3,189,817
-------------------------------------------------------------------------------
End of the period $ 3,432,144
===============================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 39
Financial Highlights
------------------------------------------------------------------------------------------------------
Six Months
Ended 5/30/07 (b)
10/31/09 Year Ended to
(unaudited) 4/30/09 4/30/08
------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 13.94 $ 22.02 $ 23.88(c)
------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:(a)
Net investment income $ 0.83 $ 2.10 $ 1.77
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 4.81 (7.67) (1.80)
------------------------------------------------------------------------------------------------------
Net decrease from investment operations $ 5.64 $ (5.57) $ (0.03)
Distributions from
Net investment income (1.05) (2.47) (1.78)
Tax return of capital -- (0.04) --
Capital charge with respect to issuance of shares -- -- (0.05)
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 4.59 $ (8.08) $ (1.86)
------------------------------------------------------------------------------------------------------
Net asset value, end of period(d) $ 18.53 $ 13.94 $ 22.02
------------------------------------------------------------------------------------------------------
Market value, end of period(d) $ 16.94 $ 13.23 $ 20.47
======================================================================================================
Total return at market value(e) 36.32% (23.11)% (10.67)%
Ratios to average net assets
Net operating expenses 1.38%(f) 1.38% 0.99%(f)
Interest expense 0.94%(f) 1.14% 0.33%(f)
Net expenses 2.32%(f) 2.52% 1.32%(f)
Net investment income 9.92%(f) 12.27% 8.48%(f)
Portfolio turnover 9% 25% 21%
Net assets, end of period (in thousands) $151,819 $113,812 $179,515
Ratios to average net assets before waivers and
reimbursements of expenses
Net operating expenses 1.64%(f) 1.68% 1.29%(f)
Interest expense 0.94%(f) 1.14% 0.33%(f)
Net expenses 2.58%(f) 2.82% 1.62%(f)
Net investment income 9.66%(f) 11.97% 8.18%(f)
------------------------------------------------------------------------------------------------------
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Trust shares were first publicly offered on May 24, 2007 and commenced
operations on May 30, 2007.
(c) Net asset value immediately after the closing of the first public offering
was $23.83.
(d) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and Saturday.
(e) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns less than a full period are not annualized. Past
performance is not a guarantee of future results.
(f) Annualized.
The information above represents the 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.
40 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
Notes to Financial Statements | 10/31/09 (unaudited)
1. Organization and Significant Accounting Policies
Pioneer Diversified High Income Trust (the Trust) was organized as a Delaware
statutory trust on January 30, 2007. Prior to commencing operations on May 30,
2007, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended. The
investment objective of the Trust is to provide a high level of current income
and, as a secondary objective, the Trust may seek capital appreciation to the
extent that it is consistent with its investment objective.
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 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
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 41
of income, expenses and gains and losses on investments during the reporting
period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in preparation of its financial statements, which are consistent with
those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. 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 the limited number of Loan Interests for which no reliable price quotes
are available, such investments will be 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 October 31, 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 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.
42 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
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
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 5).
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. Tax
years for the prior two fiscal years remain subject to examination by tax
authorities.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the Trust's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain (loss) on investments and
foreign currency transactions, or from paid-in capital, depending on the
type of book/tax differences that may exist.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 43
The tax character of current year distributions paid to shareowners will be
determined at the end of the fiscal year. Distributions paid during the year
ended April 30, 2009 were as follows:
------------------------------------------------
2009
------------------------------------------------
Distributions paid from:
Ordinary income $20,135,595
Tax return of capital 371,077
------------------------------------------------
Total $20,506,672
================================================
The following shows the components of distributable earnings (loss) 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 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. The Trust's investment adviser, Pioneer Investment
Management, Inc. (PIM), is responsible for determining that the value of the
collateral remains at least equal to the repurchase price.
F. Securities Lending
The Trust lends securities in its portfolio to certain broker-dealers or
other institutional investors. When entering into a securities loan
transaction, the Trust typically receives cash collateral from the borrower
equal to at least the value of the securities loaned, which is invested in
temporary cash investments. Credit Suisse AG, New York Branch, as the
Trust's securities lending
44 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
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 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 NYSE Amex or elsewhere. If, on the payment
date for any dividend, the net asset value per common share is equal to or
less than the market price per share plus estimated brokerage trading fees
(market premium), the Plan Agent will invest the dividend amount in newly
issued common shares. The number of newly issued common shares to be
credited to each account will be determined by dividing the dollar amount of
the dividend by the net asset value per common share on the date the shares
are issued, provided that the maximum discount from the then current market
price per share on the date of issuance does not exceed 5%. If, on the
payment date for any dividend, the net asset value per common share is
greater than the market value (market discount), the Plan Agent will invest
the dividend amount in common shares acquired in open-market purchases.
There are no brokerage charges with respect to newly issued
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 45
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
Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary
of UniCredit S.p.A. (UniCredit) manages the Trust's portfolio. Management fees
payable under the Trust's Advisory Agreement with PIM are calculated daily at
the annual rate of 0.85% of the Trust's average daily managed assets. "Managed
assets" means (a) the total assets of the Trust, including any form of
investment leverage, minus (b) all accrued liabilities incurred in the normal
course of operations, which shall not include any liabilities or obligations
attributable to investment leverage obtained through (i) indebtedness of any
type (including, without limitation, borrowing through a credit facility or the
issuance of debt securities), (ii) the issuance of preferred stock or other
similar preference securities, and/or (iii) any other means. For the six months
ended October 31, 2009, the net management fee was equivalent to 0.66% of the
Trust's average daily managed assets and 0.90% of the Trust's average daily net
assets.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. At
October 31, 2009, $140,048 was payable to PIM related to management costs,
administrative costs and certain other services and it is included in "Due to
affiliates" on the Statement of Assets and Liabilities.
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.
PIM has entered into a Research Services Agreement with Montpelier Capital
Advisors, Ltd. (Montpelier). Under the research services agreement, Montpelier
will provide research services to PIM with regard to event-linked bonds. PIM
pays Montpelier a flat fee of $325,000 annually. Montpelier received no
compensation directly from the Trust.
Also, PIM 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
46 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
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 in 2010. There can be no
assurance that it will be continued after that time. For the period ended
October 31, 2009, the expense reduction under such arrangement was $178,145.
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.
4. Expense Offset Arrangements
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion
of the Trust's custodian expenses. For the six months ended October 31, 2009,
the Trust expenses were reduced by $3 under such arrangement.
5. Forward Foreign Currency Contracts
During the six months ended October 31, 2009, the Trust has entered into
various contracts that obligate the Trust to deliver currencies at specified
future dates. At the maturity of a contract, the Trust must make or take
delivery of the foreign currency. Alternatively, prior to the settlement date
of a portfolio hedge, the Trust may close out such contracts by entering into
offsetting hedge contract. The average number of contracts open during the six
months ended October 31, 2009 was 3,433,333.
Open portfolio hedges at October 31, 2009 were as follows:
----------------------------------------------------------------------------------------------------
Net
Contracts Net
to Receive In Exchange Settlement Unrealized
Currency (Deliver) For US$ Date US$ Value Loss
----------------------------------------------------------------------------------------------------
EURO (3,340,000) $(4,855,825) 11/5/09 $ (4,927,998) $ (72,173)
EURO 500,000 745,344 11/5/09 737,724 (7,620)
----------------------------------------------------------------------------------------------------
Total $ (79,793)
====================================================================================================
As of October 31, 2009, the Trust had no outstanding forward currency
settlement contracts.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 47
6. Unfunded Loan Commitments
As of October 31, 2009, the Trust had unfunded loan commitments of $138,814
which could be extended at the option of the borrower, pursuant to the
following loan agreements:
------------------------------------------------------------------
Unfunded Loan
Borrower Commitment
------------------------------------------------------------------
Warner Chilcott Co., Delayed Draw Term Loan $138,814
7. 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 October 31, 2009, the Trust had a borrowing outstanding under the Credit
Agreement totaling $55,000,000. The interest rates charged at October 31, 2009
were 2.49% to 2.50%. During the six months ended October 31, 2009, the average
daily balance was $49,173,913 at a weighted average interest rate of 2.55%.
With respect to the loan, interest expense of $639,841 is included in the
Statement of Operations.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the Credit Agreement. Asset coverage is calculated by
subtracting the Trust's total liabilities, not including any bank loans and
senior securities, from the Trust's total assets and dividing such amount by
the principal amount of the borrowings outstanding. As of the date indicated
below, the Trust's debt outstanding and asset coverage were as follows:
--------------------------------------------
Total Asset coverage
Amount per $1,000 of
Date Outstanding Indebtedness
--------------------------------------------
10/31/09 $55,000,000 $3,760
8. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the six months ended
October 31, 2009 and the year ended April 30, 2009 were as follows:
-------------------------------------------------------------------------
10/2009 4/2009
-------------------------------------------------------------------------
Shares outstanding at beginning of period 8,165,927 8,154,188
Reinvestment of distributions 24,991 11,739
-------------------------------------------- --------- ---------
Shares outstanding at end of period 8,190,918 8,165,927
-------------------------------------------- --------- ---------
48 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
9. Additional Disclosures about Derivative Instruments and Hedging Activities:
Fair values of derivative instruments as of October 31, 2009:
------------------------------------------------------------------------------------------
Derivatives Not
Accounted for as Hedging
Instruments Under Balance Sheet Fair Balance Sheet Fair
Statement 133 Location Value Location Value
------------------------------------------------------------------------------------------
Foreign Exchange Contracts Receivables $-- Payables* $79,793
------------------------------------------------------------------------------------------
Total $-- $79,793
------------------------------------------------------------------------------------------
------------------
* Foreign Exchange Contracts are shown as a net payable on the Statement of
Assets and Liabilities.
The effect of derivative instruments on the Statement of Operations for the six
months ended October 31, 2009 was as follows:
----------------------------------------------------------------------------------------------------------
Change in
Unrealized Gain
Derivatives Not or (Loss) on
Accounted for as Hedging Location of Gain or Realized Gain or Derivatives
Instruments Under (Loss) On Derivatives (Loss) on Derivatives Recognized in
Statement 133 Recognized in Income Recognized in Income Income
----------------------------------------------------------------------------------------------------------
Foreign Exchange Contracts Net realized gain on forward $96,145
foreign currency contracts
and other assets and
liabilities denominated in
foreign currencies
----------------------------------------------------------------------------------------------------------
Foreign Exchange Contracts Change in unrealized gain $ (47,856)
(loss) on forward foreign
currency contracts and other
assets and liabilities
denominated in foreign
currencies
----------------------------------------------------------------------------------------------------------
10. Subsequent Events
Subsequent to October 31, 2009, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.16 per common share
payable November 30, 2009, to shareowners of record on November 16, 2009.
In preparing these financial statements, PIM has evaluated the impact of all
events and transactions for potential recognition or disclosure through
December 21, 2009, and has determined that there were no subsequent events
requiring recognition or disclosure in the financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 49
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 Shareholder Meeting (unaudited)
At the annual meeting of shareowners held on September 22, 2009, and adjourned
to October 8, 2009 with respect to Proposal 2, shareowners of Pioneer
Diversified High Income Trust were asked to consider the proposals described
below. A report of the total votes cast by the Trust's shareholders follows:
Proposal 1 - To elect Class II Trustees.
-------------------------------------------------------
Nominee For Withheld
-------------------------------------------------------
Mary K. Bush 5,239,303 173,207
-------------------------------------------------------
Thomas J. Perna 5,270,819 141,691
-------------------------------------------------------
Marguerite A. Piret 5,251,980 160,530
-------------------------------------------------------
Proposal 2 - To approve an Amended and Restated Management Agreement with
Pioneer Investment Management, Inc.
----------------------------------------------------------
Broker
For Against Abstain Non-Votes
----------------------------------------------------------
3,645,869 95,651 114,518 1,486,898
50 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
Trustees, Officers and Service Providers
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Daniel K. Kingsbury, Executive
Mary K. Bush Vice President
Benjamin M. Friedman Mark E. Bradley, Treasurer
Margaret B.W. Graham Dorothy E. Bourassa, Secretary
Daniel K. Kingsbury
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Bingham McCutchen LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Sub-Administrator
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 pioneerinvestments.com. This information is also available on
the Securities and Exchange Commission's web site at http://www.sec.gov.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09 51
This page for your notes.
52 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/09
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.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
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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"
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SECTION III - POLICY DETAIL, CONTINUED
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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
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AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
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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.
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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.
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(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.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
N/A
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has
considered whether the provision of non-audit services that
were rendered to the Affiliates (as defined) that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence.
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule 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.
Information not required in semi annual reports on form NCSR.
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.
Information not required in semi annual reports on form NCSR.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Diversified High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date December 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 December 29, 2009
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date December 29, 2009
* Print the name and title of each signing officer under his or her signature.