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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22014
Pioneer Diversified High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: April 30
Date of reporting period: May 1, 2008 through October 31, 2008
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, 2008
Ticker Symbol: HNW
[LOGO]PIONEER
Investments(R)
visit us: pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 9
Prices and Distributions 10
Performance Update 11
Schedule of Investments 12
Financial Statements 35
Financial Highlights 39
Notes to Financial Statements 40
Trustees, Officers and Service Providers 50
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 1
President's Letter
Dear Shareowner,
Stock and bond markets around the globe this year have experienced one of their
most tumultuous periods in history. Investors have witnessed volatility of a
magnitude that many have never before seen. Distance often provides the best
vantage point for perspective. Still, we believe that the benefits of basic
investment principles that have stood the test of time -- even in the midst of
market turmoil -- cannot be underestimated.
First, invest for the long term. The founder of Pioneer Investments, Philip L.
Carret, began his investment career during the 1920s. One lesson he learned is
that while great prosperity affords an advantageous time for selling stocks,
extreme economic slumps can create opportunities for purchase. Indeed, many of
our portfolio managers, who follow the value-conscious investing approach of
our founder, are looking at recent market conditions as an opportunity to buy
companies whose shares we believe have been unjustifiably beaten down by
indiscriminate selling, but that we have identified as having strong prospects
over time. While investors may be facing a sustained market downturn, we
continue to believe that patience, along with staying invested in the market,
are important considerations for long-term investors.
A second principle is to stay diversified across different types of
investments. The global scope of the current market weakness poses challenges
for this basic investment axiom. But the turbulence makes now a good time to
reassess your portfolio and make sure that your investments continue to meet
your needs. We believe you should work closely with your financial advisor to
find the mix of stocks, bonds and money market assets that is best aligned to
your particular risk tolerance and investment objective.
As the investment markets sort through the continuing crisis in the financial
industry, we are staying focused on the fundamentals and risk management. With
more than 80 years of experience behind us, we have learned how to navigate
turbulent markets. At Pioneer Investments, risk management has always been a
critical part of our culture -- not just during periods of extraordinary
volatility. Our investment process is based on fundamental research,
quantitative analysis and active portfolio management. This three-pillared
process, which we apply to each of our portfolios, is supported by an
integrated team approach and is designed to carefully balance risk and reward.
While we
2 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
see potential chances for making money in many corners of the market, it takes
research and experience to separate solid investment opportunities from
speculation.
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at .
Thank you for investing with Pioneer.
Respectfully,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 3
Portfolio Management Discussion |10/31/08
A credit crisis that originally appeared in the U.S. subprime mortgage market
spread to financial markets throughout the globe during the six months ended
October 31, 2008. As markets grew increasingly worried about credit risk,
corporate bonds and bank loans were among the asset classes that suffered steep
price losses in a global flight-to-quality that primarily benefited only the
highest-quality assets, such as U.S. Treasuries. The following is an interview
with Portfolio Managers Andrew Feltus, CFA, and Jonathan Sharkey, who discuss
the factors that affected performance of Pioneer Diversified High Income Trust
during the six-month period ended October 31. Mr. Feltus and Mr. Sharkey are
members of the Pioneer 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, 2008?
A Pioneer Diversified High Income Trust had a total return of -25.51% at net
asset value and -31.16% at market price during the six months ended October
31, 2008. During the same period, the Trust's custom benchmark returned
-22.11%. The custom benchmark is based on a 50% weight of the Merrill Lynch
Global High Yield and Emerging Markets Plus Index, which returned -26.77%,
and a 50% weight of the CSFB Leveraged Loan Index, which returned -17.44%.
The Trust's distribution yield to investors on October 31, 2008, was 20.14%
at market price.
Q What was the investment environment like during the six months ended October
31, 2008?
A An emerging crisis in financial markets hit credit markets particularly hard
during the six-month period, resulting in dramatic price declines for
investments carrying credit risk, including high-yield corporate bonds,
investment-grade corporate bonds, and bank loans. October, the final month
of the period, was the worst month on record in both the high-yield bond
market and the bank loan market. The Merrill Lynch Global High Yield and
Emerging Markets Plus Index returned -17.62%, and the CSFB Leveraged Loan
Index returned -13.03% during that month alone. The problem started with
the deterioration in housing prices, which eventually resulted in the
failure or near-collapse of several major financial institutions. As the
financial markets became more volatile and available money for traditional
lending grew scarce, Congress passed a $700 billion financial rescue plan
and the Federal Reserve Board (the "Fed") continued to find ways to inject
more money into the financial system. The Fed, for example,
4 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
cut the key fed funds rate to just 1.00% in October 2008. Meanwhile,
evidence increased of deteriorating economic conditions both in the United
States and abroad, with fears growing that the global economy might already
have entered a recession.
In this environment, in which investors tried to avoid risk, U.S.
Treasuries and the sovereign debt of foreign industrialized nations tended
to hold up better than other parts of the fixed-income markets. Mortgages
backed by U.S. federal agencies trailed Treasuries, but outperformed most
other types of fixed-income investments. Bank loans, while turning in their
worst performance on record, nevertheless outperformed corporate bonds,
both high yield and investment grade. In the emerging markets,
higher-quality sovereign debt performed relatively well, outperforming U.S.
investment-grade corporate bonds. Other emerging market securities,
including corporates, did well until late summer, when they faltered as the
aversion to credit risk spread to markets throughout the world.
Q What were your principal investment strategies for the Trust during the six
months ended October 31, 2008?
A We kept the Trust well diversified, with larger allocations to U.S. and
foreign high-yield securities, floating-rate bank loans and event-linked
bonds. We managed the Trust to maintain a balanced, fixed-income strategy
that gives its portfolio exposure to different yield-oriented asset
classes. At October 31, 2008, for example, approximately 29% of the Trust's
assets were invested in domestic bank loans and more than 28% of assets
were invested in U.S. high-yield corporate bonds. Emerging market and
European high-yield investments accounted for nearly 10% of Trust
investments at October 31, while mortgage-backed securities represented
nearly 6% of assets. Also, about 23% of the Trust's assets were invested in
event-linked bonds, which are issued as reinsurance securities against the
possibility of significant losses from natural catastrophes, such as
hurricanes or earthquakes. The rest of the Trust's assets were allocated to
cash and cash equivalents. The average credit quality of Trust's
investments was B+ at October 31, 2008.
The Trust has the ability to borrow funds, or use leverage, in its
investment strategy. At the end of the period, about 30.2% of the Trust's
portfolio was leveraged through bank loans.
Q How did the Trust's positioning affect performance results for the period?
A The Trust's investment in event-linked bonds supported relative performance,
as these securities outperformed other high-yielding categories. While
several strong hurricanes did cause significant property losses over the
six-month period, the damage was not sufficient to adversely affect
investors in the bonds. The Trust's exposure to high-yield bonds hurt
performance during a period when lower-rated securities performed poorly.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 5
Also, the Trust's relatively low exposure to emerging market and European
high-yield bonds helped relative performance, as those securities performed
particularly poorly over the period. We underweighted the Trust both in
European high-yield corporate bonds and the euro currency, because we
believed the European market offered less yield than the United States,
while many European corporations had greater debt loads, or leverage, than
American companies.
Although bank loan investments tended to lose value during the six months,
the Trust's portfolio held up better than the overall bank loan market,
primarily because of the higher-quality orientation of the portfolio. We
focused on loans with credit ratings of BB- and above. We also had fewer
covenant-light loans, which are bank loans that offer relatively thin
protection for investors. The Trust's investments tended to be in loans
that offered greater covenant protection, and these outperformed the
overall loan market. During the period ended October 31, 2008, we added
investments in senior tranches of private label, lower-quality U.S.
mortgage-backed securities. The investments did not help the Trust's
performance immediately, but we found their valuations to be particularly
attractive, as they were priced for extremely severe scenarios that we
thought unlikely to occur.
While the Trust's use of leverage allowed investors to gain higher yields,
the use of leverage tends to exaggerate the price moves in the market.
During a period in which higher-yielding investments tended to endure
losses in their valuations, the use of leverage hurt the Trust's
performance on a total return basis.
Q What were some of the individual investments that influenced the Trust's
performance?
A The Trust's position in bank loans to Talecris helped support results when
the value of the investment increased in value. A health care-related
company involved in processing blood supplies, Talecris successfully
entered into an agreement with another corporation that improved the
company's growth prospects.
On the negative side, two defaults held back performance. One was of a bank
loan to LandSource, which is a land development joint venture between
homebuilder Lennar and the California Public Employees' Retirement System
(CALPERS). The joint venture was hit hard by the real estate slump in
California and filed for bankruptcy protection. We have retained the
position because we think there is an opportunity to recover some of the
value of the investment. The second default was of a bond issued by
Bulgaria Steel. The company had been acquired by a group of Indian
investors who subsequently found that the company had some unanticipated
problems. We sold most of the Trust's Bulgaria Steel holding. Also hurting
performance were investments in the bonds of Kazak and Russian banks, which
6 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
underperformed other emerging market corporate bonds when they came under
pressure in the global credit crisis.
Q What is your investment outlook?
A As we enter a six month period, we think both high-yield bonds and bank loans
appear inexpensive.
We have a cautious view of the near-term environment for bank loans because
of the many uncertainties in the market. On a fundamental basis, we believe
bank loans have been trading at extraordinarily cheap levels and offer the
opportunity for some price appreciation when the market begins to stabilize
and eventually recover. We believe that even if market default rates were
to increase from their present levels, bank loans at present prices offer
considerable potential value. However, the market still may face some
short-term volatility. With loan prices at unprecedented lows, the overall
loan market is trading at intrinsic value (this means that the entire loan
market is being priced by investors at levels that reflect historical
recovery rates in bankruptcy). With loan prices at historically deep
discounts, any payments by borrowers should allow investors to reap capital
appreciation, and the payment proceeds would then need to be reinvested by
fund managers. That should boost both demand and prices, given the limited
supply of new loan issues in today's market.
In the high-yield bond market, we think prices -- as reflected by the yield
spreads between high-yield bonds and less-risky investments -- are trading
at levels that reflect Depression-era default rates, which we believe is a
highly unlikely scenario. While we cannot forecast when the economy will
begin to improve, we do think there is great value in the high-yield
market. We intend to rely on intensive credit analysis and remain focused
on finding the best opportunities among the highest-quality companies in
the high-yield market.
We also expect to continue to look at values for investments in
event-linked bonds, as those opportunities present themselves.
Please refer to the Schedule of Investments on pages 12-34 for a full listing
of Trust securities.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 7
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 will generally 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 are also 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 may use leverage through the issuance of preferred shares with an
aggregate liquidation preference of up to 331/3% of the Trust's total assets
after such issuance. 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
registration statement on Form N-2 relating to its common shares, which may be
viewed by visiting the Securities and Exchange Commission's web site at
http://www.sec.gov.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes.
8 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Portfolio Summary | 10/31/08
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA IS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 60.4%
Floating Rate Loan Interests 28.9%
Asset Backed Securities 3.9%
Temporary Cash Investments 3.3%
Collateralized Mortgage Obligations 1.9%
Convertible Bonds & Notes 1.4%
Convertible Preferred Stock 0.2%
Common Stock* 0.0%
Warrants* 0.0%
* Amount is less than 0.1%.
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on S&P ratings)
[THE FOLLOWING DATA IS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
A & Higher 6.1%
BBB 0.2%
BB 28.6%
B 36.7%
CCC & Lower 9.0%
Cash Equivalents 3.3%
Not Rated 16.1%
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)*
1. Atlantic & Western Re, Ltd., 10.133%, 1/9/09 (144A) 1.45%
--------------------------------------------------------------------------------
2. Australis, Ltd., 6.441%, 3/24/09 (144A) 1.45
--------------------------------------------------------------------------------
3. Calabash Re, Ltd., 11.311%, 6/1/09 (144A) 1.17
--------------------------------------------------------------------------------
4. Fhu-Jin, Ltd., 6.691%, 8/10/11 (144A) 1.15
--------------------------------------------------------------------------------
5. Residential Reinsurance 2008, Ltd., 14.311%, 6/6/11 (144A) 1.15
--------------------------------------------------------------------------------
6. Successor II, Ltd., 27.815%, 4/6/10 (144A) 1.14
--------------------------------------------------------------------------------
7. Muteki, Ltd., 7.204%, 5/24/11 (144A) 1.13
--------------------------------------------------------------------------------
8. Green Valley, Ltd., 8.993%, 1/10/11 (144A) 1.08
--------------------------------------------------------------------------------
9. Atlas Reinsurance Plc, 15.487%, 1/10/11 (144A) 1.08
--------------------------------------------------------------------------------
10. Blue Fin, Ltd., 8.689%, 4/10/12 (144A) 1.05
--------------------------------------------------------------------------------
* 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.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 9
Prices and Distributions | 10/31/08
Market Value per Common Share
--------------------------------------------------------------------------------
10/31/08 4/30/08
$ 13.11 $ 20.47
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
10/31/08 4/30/08
$ 15.26 $ 22.02
--------------------------------------------------------------------------------
Distributions per Common Share: 5/1/08-10/31/08
--------------------------------------------------------------------------------
Net
Investment Short-Term Long-Term
Income Capital Gains Capital Gains
$ 1.2540 $ -- $ --
--------------------------------------------------------------------------------
10 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Performance Update |10/31/08
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, 2008)
--------------------------------------------------------------------------------
Net Asset Market
Period Value ("NAV") Price
--------------------------------------------------------------------------------
Life-of-Trust
(5/30/07) -25.05% -38.51%
1 Year -25.84 -29.00
--------------------------------------------------------------------------------
[THE FOLLOWING DATA IS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
50% ML
Global HY
Pioneer and EM Plus
Diversified Index
High 50% CSFB
Income Leveraged
Trust Loan Index
5/07 10,000 10,000
10/07 8,661 10,100
4/08 8,933 10,246
10/08 6,149 8,069
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. You
cannot invest directly in an index.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 11
Schedule of Investments | 10/31/08 (unaudited)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
ASSET BACKED SECURITIES -- 5.6% of Net Assets
CONSUMER SERVICES -- 0.3%
Restaurants -- 0.3%
500,000 BB/Ba3 DB Master Finance LLC, 8.285%, 6/20/31 (144A) $ 362,375
------------
Total Consumer Services $ 362,375
--------------------------------------------------------------------------------------------------------
BANKS -- 4.1%
Thrifts & Mortgage Finance -- 4.1%
246,741(a) AA+/Aa1 Ace Securities Corp., 3.859%, 12/25/34 $ 171,522
1,160,531(a) AAA/Aaa Bayview Financial Acquisition Trust, 3.63%, 8/28/44 1,033,430
1,826,738(a) AAA/Aaa Bayview Financial Acquisition Trust, 3.87%, 5/28/44 1,605,764
200,000(a) AAA/Aaa Carrington Mortgage Loan Trust, 3.359%, 10/25/36 186,415
699,000(a) AAA/A1 Carrington Mortgage Loan Trust, 3.459%, 2/25/37 597,571
211,452(a) AAA/Aaa Countrywide Asset-Backed Certificates, 3.439%,
7/25/36 188,134
600,000(a) AA+/Aa1 Countrywide Asset-Backed Certificates, 3.719%,
10/25/35 546,557
367,256(a) AAA/Aaa Lehman XS Trust, 3.378%, 8/25/36 234,093
820,525(a) AAA/Aaa Lehman XS Trust, 3.609%, 12/25/35 380,599
202,938(a) AAA/Aaa Residential Asset Mortgage Products, Inc., 3.459%,
3/25/36 182,167
------------
Total Banks $ 5,126,252
--------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 1.2%
Other Diversified Financial Services -- 0.3%
410,000(a) A/Baa1 Bear Stearns Asset Backed Securities Trust, 3.939%,
3/25/35 $ 306,464
108,149(a) AAA/Aaa First Franklin Mortgage Loan Asset-Backed Certificates,
3.449%, 3/25/36 95,352
------------
$ 401,816
--------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.9%
250,000(a) AAA/Aaa GSAMP Trust, 3.389%, 1/25/37 $ 210,623
218,790(a) A/Aa2 GSAMP Trust, 3.689%, 3/25/35 202,785
391,401(a) AAA/Aaa Option One Mortgage Loan Trust, 3.349%, 5/25/37 377,087
265,915(a) AAA/Aaa Option One Mortgage Loan Trust, 3.359%, 7/25/36 248,209
------------
$ 1,038,704
------------
Total Diversified Financials $ 1,440,520
--------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $7,157,136) $ 6,929,147
--------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.6%
of Net Assets
BANKS -- 2.1%
Thrifts & Mortgage Finance -- 2.1%
500,000(a) AAA/Aaa Adjustable Rate Mortgage Trust, 3.649%, 6/25/35 $ 303,905
68,793(a) AAA/Aaa Banc of America Funding Corp., 4.498%, 4/20/35 66,042
The accompanying notes are an integral part of these financial statements.
12 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Thrifts & Mortgage Finance -- (continued)
297,821(a) AAA/Aaa Countrywide Home Loans, 3.609%, 3/25/35 $ 158,142
1,453,376(a) AAA/Aaa Impac CMB Trust, 4.019%, 1/25/35 1,030,556
816,830(a) B/B1 Luminent Mortgage Trust, 3.519%, 7/25/36 231,822
481,004(a) AAA/Aaa WaMu Mortgage Pass-Through Certificates, 3.489%,
4/25/45 287,804
1,606,393(a) AAA/Aaa WaMu Mortgage Pass-Through Certificates, 3.739%,
7/25/45 601,719
------------
Total Banks $ 2,679,990
--------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.5%
Other Diversified Financial Services -- 0.5%
751,554(a) AAA/Aaa Downey Savings & Loan Association Mortgage Loan
Trust, 4.648%, 10/19/45 $ 338,334
516,694(a) AAA/Aaa Downey Savings & Loan Association Mortgage Loan
Trust, 4.698%, 10/19/45 248,013
------------
Total Diversified Financials $ 586,347
--------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $4,213,397) $ 3,266,337
--------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 85.2% of Net Assets
ENERGY -- 4.8%
Oil & Gas Drilling -- 0.3%
NOK 1,500,000 NR/NR Petrolia Drilling ASA, 12.0%, 6/20/12 (144A) $ 66,843
NOK 3,000,000 NR/NR Petromena AS, 9.75%, 5/24/12 (144A) 245,091
------------
$ 311,934
--------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 1.1%
300,000 NR/NR Nexus 1 Pte, Ltd., 10.5%, 3/7/12 (144A) $ 255,000
700,000(a) NR/NR Sevan Marine ASA, 5.78%, 5/14/13 (144A) 539,000
NOK 3,000,000(a) NR/NR Sevan Marine ASA, 12.29%, 10/24/12 (144A) 356,496
300,000 NR/NR Skeie Drilling & Production ASA, 11.25%, 3/8/13
(144A) 165,000
------------
$ 1,315,496
--------------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.2%
600,000 NR/B2 Tristan Oil, Ltd., 10.5%, 1/1/12 (144A) $ 240,000
--------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 2.7%
500,000 CCC+/Caa1 Harvest Operations Corp., 7.875%, 10/15/11 $ 358,750
970,000 BB-/B3 Hilcorp Energy I L.P./Hilcorp Finance Co., 9.0%,
6/1/16 (144A) 708,100
NOK 5,000,000 NR/NR Norwegian Energy Co. AS, 11.0%, 7/13/10 (144A) 557,024
NOK 2,000,000 NR/NR PA Resources AB, 8.75%, 3/10/10 237,664
675,000 B/Caa1 Parallel Petroleum Corp., 10.25%, 8/1/14 447,187
225,000 B/Caa1 PetroQuest Energy, Inc., 10.375%, 5/15/12 169,875
150,000 B/B2 Quicksilver Resources, Inc., 7.125%, 4/1/16 96,000
250,000(a) B-/B3 SandRidge Energy, Inc., 7.508%, 4/1/14 199,735
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 13
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Oil & Gas Exploration & Production -- (continued)
335,000 B-/B3 SandRidge Energy, Inc., 8.0%, 6/1/18 (144A) $ 222,775
600,000(b) B-/NR SandRidge Energy, Inc., 8.625%, 4/1/15 405,000
------------
$ 3,402,110
------------------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 0.2%
755,000(m) B/Caa1 Aventine Renewable Energy Holdings, Inc., 10.0%,
4/1/17 $ 188,750
460,000(c)(m) D/Ca VeraSun Energy Corp., 9.375%, 6/1/17 39,100
50,000(c)(m) D/Caa1 VeraSun Energy Corp., 9.875%, 12/15/12 20,500
------------
$ 248,350
------------------------------------------------------------------------------------------------------------------
Coal & Consumable Fuels -- 0.3%
505,000 BB-/B2 Massey Energy Co., 6.875%, 12/15/13 $ 409,050
------------
Total Energy $ 5,926,940
------------------------------------------------------------------------------------------------------------------
MATERIALS -- 6.6%
Commodity Chemicals -- 0.5%
1,750,000(m) CCC-/Caa2 Georgia Gulf Corp., 10.75%, 10/15/16 $ 455,000
650,000 CCC+/B3 Montell Finance Co. BV, 8.1%, 3/15/27 (144A) 185,250
------------
$ 640,250
------------------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 0.5%
EURO 1,275,000 B-/B3 Ineos Group Holdings Plc, 7.875%, 2/15/16 (144A) $ 557,785
------------------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.2%
400,000 B-/B3 ARCO Chemical Co., 9.8%, 2/1/20 $ 188,000
EURO 200,000 B/B2 Kronos International, Inc., 6.5%, 4/15/13 88,764
------------
$ 276,764
------------------------------------------------------------------------------------------------------------------
Construction Materials -- 0.6%
500,000 B/B2 AGY Holding Corp., 11.0%, 11/15/14 $ 350,000
300,000(a)(d)(m) BB+/NR C8 Capital SPV, Ltd., 6.64% (144A) 140,937
500,000 B/B3 U.S. Concrete, Inc., 8.375%, 4/1/14 312,500
------------
$ 803,437
------------------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 1.0%
1,145,000(m) B-/B2 AEP Industries, Inc., 7.875%, 3/15/13 $ 687,000
EURO 625,000 B-/B3 Impress Holdings BV, 9.25%, 9/15/14 (144A) 451,744
330,000 B-/Caa1 Vitro, S.A.B. de CV, 9.125%, 2/1/17 103,125
------------
$ 1,241,869
------------------------------------------------------------------------------------------------------------------
Paper Packaging -- 0.9%
700,000(m) CCC+/Caa1 Graham Packaging Co., Inc., 9.875%, 10/15/14 $ 441,000
500,000 B-/B3 Graphic Packaging International, Inc., 9.5%, 8/15/13 342,500
750,000 B/NR U.S. Corrugated, Inc., 10.0%, 6/1/13 375,000
------------
$ 1,158,500
------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Aluminum -- 0.7%
300,000 CCC+/B3 CII Carbon LLC, 11.125%, 11/15/15 (144A) $ 276,000
1,200,000(a) B-/B3 Noranda Aluminum Acquisition Corp., 6.828%,
5/15/15 540,000
------------
$ 816,000
---------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.0%
1,245,000 B-/Caa1 Algoma Acquisition Corp., 9.875%, 6/15/15 (144A) $ 821,700
195,000 B+/B1 FMG Finance Pty., Ltd., 10.625%, 9/1/16 (144A) 133,575
750,000 BB/Ba1 Vedanta Resources Plc, 9.5%, 7/18/18 (144A) 330,000
------------
$ 1,285,275
---------------------------------------------------------------------------------------------------------
Steel -- 0.6%
250,000 BB-/Ba3 Evraz Group SA, 9.5%, 4/24/18 (144A) $ 105,000
920,000 B+/B2 Ryerson, Inc., 12.0%, 11/1/15 (144A) 625,600
------------
$ 730,600
---------------------------------------------------------------------------------------------------------
Forest Products -- 0.2%
45,535(m) CC/Caa3 Ainsworth Lumber Co., Ltd., 11.0%, 7/29/15 (144A) $ 31,875
250,000 BB/Ba2 Sino-Forest Corp., 9.125%, 8/17/11 (144A) 155,000
------------
$ 186,875
---------------------------------------------------------------------------------------------------------
Paper Products -- 0.4%
600,000 B-/B3 Exopack Holding Corp., 11.25%, 2/1/14 $ 462,000
------------
Total Materials $ 8,159,355
---------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 6.5%
Aerospace & Defense -- 0.5%
750,000 B-/NR Aeroflex, Inc., 11.75%, 2/15/15 (144A) $ 547,500
---------------------------------------------------------------------------------------------------------
Building Products -- 0.2%
600,000 B+/B2 Asia Aluminum Holdings, Ltd., 8.0%, 12/23/11
(144A) $ 180,000
---------------------------------------------------------------------------------------------------------
Construction & Engineering -- 1.0%
750,000 NR/B2 Desarrolladora Metropolitana SA de CV, 10.875%,
5/9/17 (144A) $ 652,500
350,000 BB-/Ba3 Dycom Industries, Inc., 8.125%, 10/15/15 236,250
500,000 B/B2 Esco Corp., 8.625%, 12/15/13 (144A) 400,000
------------
$ 1,288,750
---------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 1.0%
620,106(b) CCC+/NR American Achievement Group Holding Corp., 14.75%,
10/1/12 $ 532,225
500,000 B-/NR Cia Latinoamericana de Infraestructura & Servicios SA,
9.75%, 5/10/12 150,000
500,000 CCC/Caa3 Indalex Holding Corp., 11.5%, 2/1/14 160,000
740,000 B-/B3 Park-Ohio Industries, Inc., 8.375%, 11/15/14 432,900
------------
$ 1,275,125
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 15
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Construction, Farm Machinery & Heavy Trucks -- 2.1%
1,150,000(m) CCC/Caa1 Accuride Corp., 8.5%, 2/1/15 $ 460,000
720,000 BB-/B1 American Railcar Industries, Inc., 7.5%, 3/1/14 568,800
770,000 B/B2 Commercial Vehicle Group, Inc., 8.0%, 7/1/13 492,800
950,000 B/B2 Greenbrier Companies, Inc., 8.375%, 5/15/15 724,375
400,000 B-/Caa1 Titan International, Inc., 8.0%, 1/15/12 356,000
------------
$ 2,601,975
---------------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.9%
1,220,000 B/NR Industrias Metalurgicas Pescarmona SA, 11.25%,
10/22/14 (144A) $ 597,800
875,000 B/B3 Mueller Water Products, Inc., 7.375%, 6/1/17 573,125
------------
$ 1,170,925
---------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.8%
320,000 NR/NR Blaze Recycling & Metals LLC, 10.875%, 7/15/12
(144A) $ 272,000
500,000 B-/B3 Intcomex, Inc., 11.75%, 1/15/11 441,250
125,000 BB-/B1 United Rentals North America, Inc., 6.5%, 2/15/12 87,500
300,000 B/B1 Wesco Distribution, Inc., 7.5%, 10/15/17 216,000
------------
$ 1,016,750
------------
Total Capital Goods $ 8,081,025
---------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 0.5%
Commercial Printing -- 0.2%
250,000 B+/B2 Sheridan Group, Inc., 10.25%, 8/15/11 $ 207,500
---------------------------------------------------------------------------------------------------------
Diversified Commercial & Professional Services -- 0.1%
400(e) NR/B2 MSX International UK, 12.5%, 4/1/12 (144A) $ 180,000
---------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.2%
700,000 B-/Caa1 Aleris International, Inc., 10.0%, 12/15/16 $ 227,500
EURO 107,128 B+/B1 New Reclamation Group Pty., Ltd., 8.125%, 2/1/13
(144A) 62,488
------------
$ 289,988
------------
Total Commercial & Professional Services $ 677,488
---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.6%
Air Freight & Logistics -- 0.4%
775,000 B-/B3 CEVA Group Plc, 10.0%, 9/1/14 (144A) $ 558,000
---------------------------------------------------------------------------------------------------------
Railroads -- 0.2%
240,000 BB-/B1 Kansas City Southern de Mexico, 7.625%, 12/1/13 $ 187,800
------------
Total Transportation $ 745,800
---------------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 1.7%
Auto Parts & Equipment -- 1.4%
980,000(m) B-/Caa1 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) $ 612,500
1,140,000 B-/B3 Lear Corp., 8.75%, 12/1/16 421,800
The accompanying notes are an integral part of these financial statements.
16 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Auto Parts & Equipment -- (continued)
500,000(f) CCC+/Caa2 Stanadyne Corp., 0.0%, 2/15/15 $ 280,000
160,000 B-/B3 Stanadyne Corp., 10.0%, 8/15/14 123,200
700,000(m) B/B3 Tenneco, Inc., 8.625%, 11/15/14 330,750
------------
$ 1,768,250
----------------------------------------------------------------------------------------------------------
Tires & Rubber -- 0.3%
985,000 CCC+/Caa1 Cooper-Standard Automotive, Inc., 8.375%,
12/15/14 $ 413,700
------------
Total Automobiles & Components $ 2,181,950
----------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 1.5%
Homebuilding -- 0.3%
695,000 BB-/B1 Meritage Homes Corp., 6.25%, 3/15/15 $ 356,187
----------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 0.9%
1,120,000 B+/NR Oceanografia SA de CV, 11.25%, 7/15/15 (144A) $ 761,600
175,000(f) B-/B3 Visant Holding Corp., 0.0%, 12/1/13 120,750
500,000(m) CCC+/Caa1 Yankee Acquisition Corp., 9.75%, 2/15/17 248,125
------------
$ 1,130,475
----------------------------------------------------------------------------------------------------------
Textiles -- 0.3%
500,000 BB/Ba3 Invista, 9.25%, 5/1/12 (144A) $ 415,000
------------
Total Consumer Durables & Apparel $ 1,901,662
----------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.1%
Casinos & Gaming -- 2.3%
500,000 B/B3 Buffalo Thunder Development Authority, 9.375%,
12/15/14 (144A) $ 175,000
EURO 1,155,000 B+/B2 Codere Finance Luxembourg SA, 8.25%, 6/15/15
(144A) 644,425
550,000 CCC/Caa1 Fontainebleau Las Vegas Holdings LLC, 10.25%,
6/15/15 (144A) 74,250
95,000 B+/B1 Galaxy Entertainment Finance Co., Ltd., 9.875%,
12/15/12 (144A) 36,100
275,000 B-/Caa1 Little Traverse Bay Bands of Odawa Indians, 10.25%,
2/15/14 (144A) 179,438
1,615,000 BB-/Ba2 Mashantucket Western Pequot Tribe, 8.5%, 11/15/15
(144A) 888,250
EURO 50,000 B/B3 Peermont Global, Ltd., 7.75%, 4/30/14 (144A) 29,165
750,000 CCC/Caa3 Station Casinos, Inc., 6.625%, 3/15/18 67,500
750,000(m) CCC+/Caa2 Trump Entertainment Resorts, Inc., 8.5%, 6/1/15 193,125
EURO 405,000 NR/NR Unibet Group Plc, 9.7%, 12/21/10 513,562
------------
$ 2,800,815
----------------------------------------------------------------------------------------------------------
Hotels, Resorts & Casinos -- 0.6%
1,110,000 B-/Caa1 Pegasus Solutions, Inc., 10.5%, 4/15/15 (144A) $ 765,900
----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 17
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Leisure Facilities -- 0.2%
395,000 B/B3 FireKeepers Development Authority, 13.875%, 5/1/15
(144A) $ 280,450
------------
Total Consumer Services $ 3,847,165
-------------------------------------------------------------------------------------------------------------
MEDIA -- 1.5%
Broadcasting -- 1.2%
40,000(m) CCC/Caa3 CCH I LLC, 11.0%, 10/1/15 $ 18,000
250,000 CCC/Caa2 CCH II LLC, 10.25%, 9/15/10 168,750
500,000 BB-/B3 Intelsat Subsidiary Holding Co., Ltd., 8.5%, 1/15/13
(144A) 435,000
400,000 B-/B2 Kabel Deutschland GmbH, 10.625%, 7/1/14 336,000
430,000 B-/Caa1 Telesat Canada, 12.5%, 11/1/17 (144A) 266,600
1,245,000(b) CCC/Caa1 Univision Communications, Inc., 9.75%, 3/15/15
(144A) 298,800
------------
$ 1,523,150
-------------------------------------------------------------------------------------------------------------
Publishing -- 0.3%
600,000 CCC+/Caa1 TL Acquisitions, Inc., 10.5%, 1/15/15 (144A) $ 357,000
------------
Total Media $ 1,880,150
-------------------------------------------------------------------------------------------------------------
RETAILING -- 1.8%
Distributors -- 0.7%
700,000 B+/B1 Marfrig Overseas, Ltd., 9.625%, 11/16/16 (144A) $ 336,000
1,175,000 B/NR Minerva Overseas, Ltd., 9.5%, 2/1/17 (144A) 528,750
------------
$ 864,750
-------------------------------------------------------------------------------------------------------------
Internet Retail -- 0.3%
465,000 BB/Ba3 Ticketmaster, 10.75%, 8/1/16 (144A) $ 390,600
-------------------------------------------------------------------------------------------------------------
Apparel Retail -- 0.0%
EURO 74,000(a) B-/Caa1 Edcon Holdings Pty., Ltd., 10.458%, 6/15/15 (144A) $ 27,212
-------------------------------------------------------------------------------------------------------------
Home Improvement Retail -- 0.2%
500,000 CCC/Caa1 KAR Holdings, Inc., 10.0%, 5/1/15 $ 282,500
-------------------------------------------------------------------------------------------------------------
Specialty Stores -- 0.6%
950,000 CCC+/Caa1 Sally Holdings LLC, 10.5%, 11/15/16 $ 693,500
------------
Total Retailing $ 2,258,562
-------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING -- 0.8%
Drug Retail -- 0.1%
275,000(m) CCC-/Caa3 Duane Reade, Inc., 9.75%, 8/1/11 $ 165,000
-------------------------------------------------------------------------------------------------------------
Food Distributors -- 0.7%
1,000,000 NR/B2 Arantes International, Ltd., 10.25%, 6/19/13 (144A) $ 630,000
400,000 B/B2 Independencia International, Ltd., 9.875%, 5/15/15
(144A) 168,000
------------
$ 798,000
------------
Total Food & Staples Retailing $ 963,000
-------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
FOOD, BEVERAGE & TOBACCO -- 1.6%
Distillers & Vintners -- 0.1%
EURO 330,000(g)(h) D/Caa2 Belvedere SA, 8.106%, 5/15/13 (144A) $ 125,537
--------------------------------------------------------------------------------------------------------------------
Agricultural Products -- 0.3%
350,000 B-/B3 American Rock Salt Co. LLC, 9.5%, 3/15/14 $ 315,000
--------------------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 0.3%
400,000 B+/Ba3 Bertin Ltda, 10.25%, 10/5/16 (144A) $ 180,000
275,000(f) NR/B2 SA Fabrica de Produtos Alimenticios Vigor, 9.25%,
2/23/17 (144A) 252,312
------------
$ 432,312
--------------------------------------------------------------------------------------------------------------------
Tobacco -- 0.9%
1,360,000 B+/B2 Alliance One International, Inc., 8.5%, 5/15/12 $ 1,047,200
125,000 B+/B2 Alliance One International, Inc., 11.0%, 5/15/12 105,625
------------
$ 1,152,825
------------
Total Food, Beverage & Tobacco $ 2,025,674
--------------------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.1%
Household Products -- 0.1%
205,000(m) CCC+/Caa1 Central Garden & Pet Co., 9.125%, 2/1/13 $ 125,050
------------
Total Household & Personal Products $ 125,050
--------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 4.3%
Health Care Equipment & Services -- 0.4%
750,000 CCC+/Caa3 Accellent, Inc., 10.5%, 12/1/13 $ 555,000
--------------------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.9%
1,265,000(b) B-/B3 Biomet, Inc., 10.375%, 10/15/17 $ 1,056,275
--------------------------------------------------------------------------------------------------------------------
Health Care Services -- 2.2%
1,385,000 BB-/NR DASA Finance Corp., 8.75%, 5/29/18 (144A) $ 765,212
320,000 CCC+/Caa1 Hanger Orthopedic Group, Inc., 10.25%, 6/1/14 291,200
500,000 B-/B2 Rural/Metro Corp., 9.875%, 3/15/15 407,500
725,000(b) B-/B3 Surgical Care Affiliates, Inc., 8.875%, 7/15/15
(144A) 543,750
1,170,000 CCC+/Caa1 Surgical Care Affiliates, Inc., 10.0%, 7/15/17 (144A) 737,100
------------
$ 2,744,762
--------------------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.4%
575,000 B/B3 Community Health Systems, Inc., 8.875%, 7/15/15 $ 481,563
--------------------------------------------------------------------------------------------------------------------
Managed Health Care -- 0.4%
500,000 B-/Caa1 Multiplan, Inc., 10.375%, 4/15/16 (144A) $ 460,000
------------
Total Health Care Equipment & Services $ 5,297,600
--------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 19
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
PHARMACEUTICALS & BIOTECHNOLOGY & LIFE SCIENCES -- 0.4%
Pharmaceuticals -- 0.4%
400,000(m) C/C Angiotech Pharmaceuticals, Inc., 7.75%, 4/1/14 $ 168,000
250,000 B/B2 Phibro Animal Health Corp., 10.0%, 8/1/13 (144A) 212,500
200,000 CCC+/Caa1 Phibro Animal Health Corp., 13.0%, 8/1/14 (144A) 170,000
------------
Total Pharmaceuticals & Biotechnology & Life
Sciences $ 550,500
------------------------------------------------------------------------------------------------------------
BANKS -- 1.4%
Diversified Banks -- 1.2%
750,000(a)(d) NR/B2 ALB Finance BV, 9.375% $ 112,500
250,000 BB+/Baa2 ATF Capital BV, 9.25%, 2/21/14 (144A) 132,500
500,000(a) NR/B2 Banco Macro SA, 9.75%, 12/18/36 125,000
700,000(a) NR/Ba1 Banco Macro SA, 10.75%, 6/7/12 280,000
200,000 B+/Ba3 JSC TemirBank, 9.5%, 5/21/14 (144A) 42,000
300,000 B+/Ba3 Petrocommerce Finance SA, 8.75%, 12/17/09 240,000
550,000 BB-/Ba2 Russian Standard Finance SA, 7.5%, 10/7/10 (144A) 192,500
500,000(m) BB/Ba1 TuranAlem Finance BV, 8.5%, 2/10/15 (144A) 185,000
EURO 445,000 NR/Ba3 URSA Bank, 7.0%, 5/21/10 214,428
------------
$ 1,523,928
------------------------------------------------------------------------------------------------------------
Regional Banks -- 0.2%
250,000(a)(d) AA-/Aa2 Wells Fargo Capital XV, 9.75% $ 242,500
------------
Total Banks $ 1,766,428
------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 8.5%
Other Diversified Financial Services -- 5.6%
2,500,000(a) BB/NR Australis, Ltd., 6.441%, 3/24/09 (144A) $ 2,455,000
1,750,000(a) BB/NR Australis, Ltd., 6.791%, 2/3/09 (144A) 1,715,000
500,000(a)(d) A/A2 Citigroup, Inc., 8.4% 347,550
EURO 1,500,000(a) BB+/NR Green Valley, Ltd., 8.993%, 1/10/11 (144A) 1,836,649
500,000 B-/B3 Mandra Forestry Holdings, Ltd., 12.0%, 5/15/13
(144A) 350,000
250,000 NR/NR Mirant JPSCo. Finance, Ltd., 11.0%, 7/6/16 (144A) 215,000
------------
$ 6,919,199
------------------------------------------------------------------------------------------------------------
Multi-Sector Holdings -- 0.0%
EURO 50,000 CCC/Caa3 Zlomrex International Finance SA, 8.5%, 2/1/14
(144A) $ 14,583
------------------------------------------------------------------------------------------------------------
Specialized Finance -- 2.9%
750,000 B-/Caa1 ACE Cash Express, Inc., 10.25%, 10/1/14 (144A) $ 352,500
425,000(a) B-/B3 NCO Group, Inc., 7.679%, 11/15/13 289,000
900,000 B-/Caa1 NCO Group, Inc., 11.875%, 11/15/14 612,000
The accompanying notes are an integral part of these financial statements.
20 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Specialized Finance -- (continued)
440,000(a) NR/NR Successor II, Ltd., 19.565%, 4/6/10 (144A) $ 430,188
2,000,000(a) NR/NR Successor II, Ltd., 27.815%, 4/6/10 (144A) 1,929,000
------------
$ 3,612,688
------------
Total Diversified Financials $ 10,546,470
--------------------------------------------------------------------------------------------------------------
INSURANCE -- 27.9%
Insurance Brokers -- 1.2%
250,000 CCC/Caa1 Alliant Holdings I, Inc., 11.0%, 5/1/15 (144A) $ 202,500
1,050,000 CCC+/Caa1 HUB International Holdings, Inc., 10.25%, 6/15/15
(144A) 661,500
500,000(a) CCC/B3 USI Holdings Corp., 6.679%, 11/15/14 (144A) 315,625
500,000 CCC/Caa1 USI Holdings Corp., 9.75%, 5/15/15 (144A) 315,000
------------
$ 1,494,625
--------------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 0.9%
1,000,000(a) NR/Baa3 Liberty Mutual Group, Inc., 7.0%, 3/15/37 (144A) $ 538,940
1,000,000(a) BB/Baa3 Liberty Mutual Group, Inc., 10.75%, 6/15/58 (144A) 525,000
65,000 B+/NR Sul America Participacoes SA, 8.625%, 2/15/12
(144A) 55,250
------------
$ 1,119,190
--------------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 1.9%
625,000(a) BBB+/Baa1 AMBAC Financial Group, Inc., 6.15%, 2/15/37 $ 143,368
2,000,000(a) BB+/NR Blue Fin, Ltd., 8.689%, 4/10/12 (144A) 1,785,600
820,000(a)(m) A/Baa1 MBIA Insurance Corp., 14.0%, 1/15/33 (144A) 442,800
------------
$ 2,371,768
--------------------------------------------------------------------------------------------------------------
Reinsurance -- 23.9%
1,500,000(a) BB+/NR AKIBARE, 5.762%, 5/22/12 (144A) $ 1,467,450
1,000,000(a) BB+/NR AKIBARE, 5.962%, 5/22/12 (144A) 977,800
2,500,000(a) CCC/NR Atlantic & Western Re, Ltd., 10.133%, 1/9/09 (144A) 2,462,500
EURO 1,500,000(a) B-/NR Atlas Reinsurance Plc, 15.487%, 1/10/11 (144A) 1,835,508
1,000,000(a) BB+/NR Caelus Re, Ltd., 9.061%, 6/7/11 (144A) 956,700
1,000,000(a) BB/NR Calabash Re II, Ltd., 11.219%, 1/8/10 (144A) 986,400
1,500,000(a) BB-/NR Calabash Re II, Ltd., 12.419%, 1/8/10 (144A) 1,485,600
2,000,000(a) BB/NR Calabash Re, Ltd., 11.311%, 6/1/09 (144A) 1,987,400
1,000,000(a) B/NR Carillon, Ltd., 18.069%, 1/10/11 (144A) 960,800
1,500,000(a) BB+/NR East Lane Re, Ltd., 9.801%, 5/6/11 (144A) 1,465,650
2,000,000(a) BB+/NR Fhu-Jin, Ltd., 6.691%, 8/10/11 (144A) 1,958,800
750,000(a) BB/NR Foundation Re, Ltd., 6.907%, 11/24/08 (144A) 746,025
1,000,000(a) NR/B1 GlobeCat, Ltd., 10.053%, 1/2/13 (144A) 985,400
350,000(a) NR/B3 GlobeCat, Ltd., 13.303%, 1/2/13 (144A) 344,960
2,000,000(a) NR/Ba2 Muteki, Ltd., 7.204%, 5/24/11 (144A) 1,911,000
1,000,000(a) NR/B1 Nelson Re, Ltd., 7.304%, 6/6/11 (144A) 980,300
1,000,000(a) BB+/NR Newton Re, Ltd., 7.848%, 12/24/10 (144A) 992,000
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 21
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Reinsurance -- (continued)
1,000,000(a) BB/NR Newton Re, Ltd., 10.148%, 12/24/10 (144A) $ 960,300
1,250,000(a) NR/B2 Redwood Capital X, Ltd., 13.451%, 1/9/09 (144A) 1,244,000
1,250,000(a) NR/NR Redwood Capital X, Ltd., 17.451%, 1/9/09 (144A) 1,239,750
1,500,000(a) B+/NR Residential Reinsurance 2006, Ltd., 12.811%,
6/5/09 (144A) 1,486,500
2,000,000(a) B/NR Residential Reinsurance 2008, Ltd., 14.311%,
6/6/11 (144A) 1,951,800
500,000(a) CC/NR Willow Re, Ltd., 8.545%, 6/16/10 (144A) 295,000
------------
$ 29,681,643
------------
Total Insurance $ 34,667,226
-----------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.3%
Real Estate Operating Companies -- 0.2%
100,000(a) B+/NR Alto Palermo SA, 11.0%, 6/11/12 (144A) $ 55,000
410,000 B+/NR IRSA Inversiones y Representaciones SA, 8.5%,
2/2/17 (144A) 159,900
------------
$ 214,900
-----------------------------------------------------------------------------------------------------------
Real Estate Development -- 0.1%
105,000 B+/B1 China Properties Group, Ltd., 9.125%, 5/4/14 (144A) $ 36,750
955,000 CCC+/Caa1 Neo-China Group Holdings, Ltd., 9.75%, 7/23/14
(144A) 95,500
------------
$ 132,250
------------
Total Real Estate $ 347,150
-----------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 1.9%
IT Consulting & Other Services -- 0.2%
405,000 CCC+/Caa1 Activant Solutions, Inc., 9.5%, 5/1/16 $ 247,050
-----------------------------------------------------------------------------------------------------------
Data Processing & Outsourced Services -- 0.9%
1,690,000 B/B3 First Data Corp., 9.875%, 9/24/15 $ 1,081,600
-----------------------------------------------------------------------------------------------------------
Application Software -- 0.8%
500,000 CCC+/Caa1 Open Solutions, Inc., 9.75%, 2/1/15 (144A) $ 212,500
1,390,000 B-/Caa1 Vangent, Inc., 9.625%, 2/15/15 820,100
------------
$ 1,032,600
------------
Total Software & Services $ 2,361,250
-----------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.2%
Electronic Manufacturing Services -- 0.0%
70,000 B-/B3 Sanmina-SCI Corp., 6.75%, 3/1/13 $ 47,600
-----------------------------------------------------------------------------------------------------------
Technology Distributors -- 0.2%
250,000 B/B1 Da-Lite Screen Co., Inc., 9.5%, 5/15/11 $ 222,500
------------
Total Technology Hardware & Equipment $ 270,100
-----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.7%
Semiconductor Equipment -- 0.7%
650,000(b) B-/B2 Freescale Semiconductor, Inc., 9.125%, 12/15/14 $ 237,250
1,750,000(m) B-/B3 Freescale Semiconductor, Inc., 10.125%, 12/15/16 686,875
------------
Total Semiconductors & Semiconductor Equipment $ 924,125
---------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 5.1%
Integrated Telecommunication Services -- 3.1%
910,000 CCC+/B3 Broadview Networks Holdings, Inc., 11.375%, 9/1/12 $ 655,200
400,000 NR/B2 Digicel, Ltd., 9.25%, 9/1/12 (144A) 312,000
1,200,000 B-/B2 GC Impsat Holdings I Plc, 9.875%, 2/15/17 (144A) 804,000
1,250,000 B/B3 GCI, Inc., 7.25%, 2/15/14 1,000,000
1,010,000(m) CCC+/Caa1 PAETEC Holding Corp., 9.5%, 7/15/15 573,175
142,000 NR/Baa3 Tele Norte Leste Participacoes SA, 8.0%, 12/18/13 113,600
500,000 BB/Ba3 Windstream Corp., 8.625%, 8/1/16 377,500
------------
$ 3,835,475
---------------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.0%
380,000 CCC/Caa2 Cell C Property, Ltd., 11.0%, 7/1/15 (144A) $ 279,300
500,000 B-/B3 Cricket Communications, Inc., 9.375%, 11/1/14 406,250
EURO 500,000(a) CCC+/Caa1 Hellas Telecommunications Luxembourg II, 11.318%,
1/15/15 (144A) 177,528
840,000 B/B1 Hughes Network Systems LLC, 9.5%, 4/15/14 714,000
540,000 BB+/Ba2 OJSC Vimpel Communications, 9.125%, 4/30/18
(144A) 279,031
1,330,000 B/B1 True Move Co., Ltd., 10.375%, 8/1/14 (144A) 651,700
------------
$ 2,507,809
------------
Total Telecommunication Services $ 6,343,284
---------------------------------------------------------------------------------------------------------------
UTILITIES -- 3.4%
Electric Utilities -- 1.2%
750,000 B/NR Cia de Transporte de Energia Electrica de Alta Tension
SA, 8.875%, 12/15/16 (144A) $ 240,000
930,000(d) NR/B3 Rede Empresas de Energia Eletrica SA, 11.125%
(144A) 381,300
1,200,000 CCC/B3 Texas Competitive Electric Holdings Co. LLC, 10.25%,
11/1/15 (144A) 915,000
------------
$ 1,536,300
---------------------------------------------------------------------------------------------------------------
Gas Utilities -- 0.7%
490,000 B+/B1 Inergy L.P., 8.25%, 3/1/16 $ 376,075
1,185,000 B+/B1 Transportadora de Gas del Sur SA, 7.875%, 5/14/17
(144A) 485,850
------------
$ 861,925
---------------------------------------------------------------------------------------------------------------
Multi-Utilities -- 0.2%
225,000 BB-/Ba2 PNM Resources, Inc., 9.25%, 5/15/15 $ 184,500
---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 23
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Independent Power Producers & Energy Traders -- 1.3%
2,000,000 BB-/Ba3 Intergen NV, 9.0%, 6/30/17 (144A) $ 1,600,000
------------
Total Utilities $ 4,182,725
------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $151,601,748) $106,030,679
------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 1.9% of Net Assets
TRANSPORTATION -- 0.4%
Marine -- 0.4%
990,000 B/Caa1 Horizon Lines, Inc., 4.25%, 8/15/12 $ 527,175
------------
Total Transportation $ 527,175
------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 0.9%
Health Care Services -- 0.6%
1,550,000 B+/B3 Omnicare, Inc., 3.25%, 12/15/35 $ 747,875
------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.3%
120,000 B/B1 LifePoint Hospitals, Inc., 3.25%, 8/15/25 $ 66,900
405,000 B/NR LifePoint Hospitals, Inc., 3.5%, 5/15/14 240,469
------------
$ 307,369
------------
Total Health Care Equipment & Services $ 1,055,244
------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 0.2%
Communications Equipment -- 0.2%
850,000 B-/B3 Nortel Networks Corp., 2.125%, 4/15/14 $ 297,500
------------
Total Technology Hardware & Equipment $ 297,500
------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.4%
Wireless Telecommunication Services -- 0.4%
900,000 NR/NR NII Holdings, Inc., 3.125%, 6/15/12 $ 495,000
------------
Total Telecommunication Services $ 495,000
------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $3,610,456) $ 2,374,919
------------------------------------------------------------------------------------------------
FLOATING RATE LOAN INTERESTS -- 40.8% of Net Assets (i)
ENERGY -- 0.5%
Integrated Oil & Gas -- 0.2%
340,000 BBB-/Ba2 Hudson Products Holdings, Inc., Term Loan, 8.0%,
8/24/15 $ 294,100
------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.3%
400,000 B/B3 Venoco, Inc., Second Lien Term Loan, 6.813%,
9/20/11 $ 304,000
------------
Total Energy $ 598,100
------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
MATERIALS -- 4.8%
Diversified Chemicals -- 0.7%
1,000,000 BB+/Ba1 Huntsman International LLC, New Dollar Term Loan B,
4.969%, 4/21/14 $ 869,643
-----------------------------------------------------------------------------------------------------
Paper Packaging -- 0.7%
595,466 B+/B1 Graham Packaging Co., L.P., New Term Loan,
5.063% - 6.313%, 10/7/11 $ 487,687
492,726 B-/B3 Graphic Packaging International, Inc., Incremental
Term Loan, 5.884% - 7.5%, 5/16/14 419,741
------------
$ 907,428
-----------------------------------------------------------------------------------------------------
Steel -- 1.6%
1,307,620 BB-/B3 Algoma Steel, Inc., Term Loan, 5.35%, 6/20/13 $ 1,059,172
1,306,771 NR/B1 Niagara Corp., Term Loan, 8.5%, 6/29/14 901,672
------------
$ 1,960,844
-----------------------------------------------------------------------------------------------------
Forest Products -- 0.9%
1,500,000 NR/Ba3 Ainsworth Lumber Co., Ltd., Term Loan, 8.25%,
6/26/14 $ 1,080,000
-----------------------------------------------------------------------------------------------------
Paper Products -- 0.9%
1,424,074 BB+/NR Georgia-Pacific LLC, Term Loan B, 4.219% - 4.551%,
12/20/12 $ 1,186,334
------------
Total Materials $ 6,004,249
-----------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 3.1%
Aerospace & Defense -- 1.5%
738,482 B+/NR Aeroflex, Inc., Tranche B-2 Term Loan, 6.563%,
8/15/14 $ 590,786
500,231 BB-/NR DAE Aviation Holdings, Inc., Tranche B-1 Term Loan,
7.17% - 7.47%, 7/31/14 372,672
497,462 BB+/Ba3 Spirit Aerosystems, Inc., Term Loan B, 6.5%, 9/30/13 424,086
494,374 NR/NR Standard Aero, Ltd., Tranche B-2 Term Loan, 6.55%,
7/31/14 491,902
------------
$ 1,879,446
-----------------------------------------------------------------------------------------------------
Construction, Farm Machinery & Heavy Trucks -- 1.6%
1,000,000 BB-/Ba3 Accuride Corp., Term Loan, 6.0% - 6.688%, 1/31/12 $ 757,500
2,000,000 BB-/B2 Rental Service Corp., Second Lien Initial Term Loan,
7.61% - 7.71%, 11/30/13 1,235,000
------------
$ 1,992,500
------------
Total Capital Goods $ 3,871,946
-----------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL SERVICES -- 1.2%
Diversified Commercial & Professional Services -- 0.4%
740,625 BB+/B1 Asset Acceptance Capital Corp., Tranche B Term Loan,
4.99% - 6.25%, 6/12/13 $ 566,578
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 25
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Environmental & Facilities Services -- 0.8%
1,234,375 BB-/Ba3 Synagro Technologies, Inc., First Lien Term Loan,
4.81% - 5.77%, 4/2/14 $ 956,641
------------
Total Commercial & Professional Services $ 1,523,219
------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.1%
Air Freight & Logistics -- 1.1%
439,482 NR/Ba2 Ceva Group Plc, Pre-Funded LC Loan, 3.662%,
11/4/13 $ 352,684
1,323,597 NR/Ba2 Ceva Group Plc, U.S. Term Loan, 6.171%, 11/4/13 1,062,186
------------
Total Transportation $ 1,414,870
------------------------------------------------------------------------------------------------------
AUTOMOBILES & COMPONENTS -- 0.6%
Tires & Rubber -- 0.6%
1,000,000 BB/Ba1 Goodyear Tire & Rubber Co., Second Lien Term Loan,
4.78%, 4/30/14 $ 711,667
------------
Total Automobiles & Components $ 711,667
------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 0.9%
Homebuilding -- 0.1%
2,000,000(g) BB+/Ba2 LandSource Communities Development LLC, Second
Lien Facility Term Loan, 10.5%, 2/27/14 $ 100,000
------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 0.5%
925,583 BB-/Ba3 Yankee Candle Co., Inc., Term Loan, 5.26% - 5.77%,
2/6/14 $ 624,769
------------------------------------------------------------------------------------------------------
Apparel, Accessories & Luxury Goods -- 0.3%
505,978 BB-/Ba2 Hanesbrands, Inc., First Lien Term Loan B, 5.25% -
5.266%, 9/5/13 $ 432,400
------------
Total Consumer Durables & Apparel $ 1,157,169
------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 1.3%
Casinos & Gaming -- 1.3%
1,000,000 B/NR Fontainebleau Las Vegas LLC, Initial Term Loan,
6.065%, 6/6/14 $ 475,000
220,458 B-/B2 Gateway Casinos & Entertainment, First Lien Delayed
Draw Term Loan, 6.553%, 9/30/14 110,229
1,094,025 BB-/NR Gateway Casinos & Entertainment, First Lien Term
Loan, 6.553%, 9/30/14 547,012
1,000,000 BB-/Caa1 Gateway Casinos & Entertainment, Second Lien Term
Loan, 9.553%, 3/31/15 493,333
------------
Total Consumer Services $ 1,625,574
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
MEDIA -- 2.4%
Broadcasting -- 1.3%
1,000,000 B+/Ba3 Insight Midwest Holdings LLC, Term Loan B, 5.93%,
4/7/14 $ 791,667
593,434 B+/B1 Stratos Global Corp., Facility Term Loan B, 6.262%,
2/13/12 489,583
675,000 B/Ba3 Univision Communications, Inc., Initial Term Loan,
5.049% - 5.75%, 9/29/14 366,863
------------
$ 1,648,113
--------------------------------------------------------------------------------------------------------
Cable & Satellite -- 0.1%
161,289 B-/B3 Knology, Inc., Term Loan, 6.4%, 6/30/12 $ 116,935
--------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.5%
971,500 B+/B1 Lodgenet Entertainment Corp., Closing Date Term
Loan, 5.77%, 4/4/14 $ 568,328
--------------------------------------------------------------------------------------------------------
Publishing -- 0.5%
926,401 NR/B1 RH Donnelley, Inc., Tranche D-1 Term Loan,
6.75% - 7.46%, 6/30/11 $ 605,635
------------
Total Media $ 2,939,011
--------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.5%
Packaged Foods & Meats -- 0.5%
744,332 BB/B1 Dean Foods Co., Tranche B Term Loan,
4.62% - 5.27%, 4/2/14 $ 560,808
------------
Total Food, Beverage & Tobacco $ 560,808
--------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.5%
Personal Products -- 0.5%
793,955 NR/Ba3 Brickman Group Holdings, Inc., Tranche B Term Loan,
5.118%, 1/23/14 $ 623,254
------------
Total Household & Personal Products $ 623,254
--------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 5.1%
Health Care Equipment & Services -- 1.2%
1,728,015 NR/B2 Talecris Biotherapeutics Holdings Corp., First Lien Term
Loan, 6.31%, 12/6/13 $ 1,542,253
--------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.9%
54,000 NR/NR Bausch & Lomb, Inc., Delayed Draw Term Loan,
6.051% - 7.012%, 4/24/15 $ 43,830
357,299 NR/NR Bausch & Lomb, Inc., Parent Term Loan, 6.051% -
7.012%, 4/24/15 290,008
493,750 B+/B2 IM US Holdings LLC, First Lien Term Loan,
5.476% - 5.5%, 6/26/14 364,552
600,000 B+/B2 IM US Holdings LLC, Second Lien Term Loan, 7.75%,
6/26/15 420,000
------------
$ 1,118,390
--------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 27
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Health Care Services -- 1.8%
1,365,580 BB-/Ba3 Catalent Pharma Solutions, Inc., Dollar Term Loan,
6.012%, 4/10/14 $ 884,213
713,997 B+/B3 Hanger Orthopedic Group, Inc., Tranche B Term Loan,
5.18%, 5/26/13 560,487
993,241 B/B3 HealthSouth Corp., Term Loan, 4.99% - 6.0%,
3/11/13 825,355
------------
$ 2,270,055
----------------------------------------------------------------------------------------------------
Health Care Facilities -- 1.2%
907,327 B+/NR Community Health Systems, Inc., Term Loan,
4.719% - 5.06%, 7/25/14 $ 729,377
98,225 B+/B1 Sun Healthcare Group, Inc., Delayed Draw Term Loan,
5.042% - 5.762%, 4/19/14 71,213
162,256 B+/B1 Sun Healthcare Group, Inc., Synthetic LC Loan,
3.604%, 4/19/14 117,636
706,608 B+/B1 Sun Healthcare Group, Inc., Term Loan, 4.81% -
5.541%, 4/19/14 512,291
------------
$ 1,430,517
------------
Total Health Care Equipment & Services $ 6,361,215
----------------------------------------------------------------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY & LIFE SCIENCES -- 0.7%
Pharmaceuticals -- 0.5%
744,375 NR/NR Mylan, Inc., U.S. Tranche B Term Loan, 6.625% -
7.063%, 10/2/14 $ 642,688
----------------------------------------------------------------------------------------------------
Life Sciences Tools & Services -- 0.2%
250,000 NR/Baa3 Invitrogen Corp., Term Loan B, 3.0%, 6/11/16 $ 233,438
------------
Total Pharmaceuticals & Biotechnology & Life
Sciences $ 876,126
----------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 4.0%
Other Diversified Financial Services -- 1.2%
995,000 BB/Ba2 Metavante Corp., Term Loan, 4.551%, 11/1/14 $ 815,900
800,000 NR/Baa3 SRAM LLC., Term Loan, 8.75%, 9/30/14 740,000
------------
$ 1,555,900
----------------------------------------------------------------------------------------------------
Specialized Finance -- 1.2%
845,609 BB-/B3 Ace Cash Express, Inc., Term Loan, 6.77%, 10/5/13 $ 600,383
977,194 B-/B2 Collect Acquisition Corp., Term Loan B,
7.06% - 8.02%, 5/15/13 842,830
------------
$ 1,443,213
----------------------------------------------------------------------------------------------------
Consumer Finance -- 1.1%
995,773 BB-/NR Dollar Financial Corp., Canadian Borrower Term Loan,
6.52%, 10/30/12 $ 771,724
732,186 BB-/NR Dollar Financial Corp., Delayed Draw Term Loan,
6.52%, 10/30/12 567,444
------------
$ 1,339,168
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Investment Banking & Brokerage -- 0.5%
694,750 NR/NR MSCI, Inc., Term Loan B, 5.31%, 11/20/14 $ 587,064
------------
Total Diversified Financials $ 4,925,345
----------------------------------------------------------------------------------------------------
INSURANCE -- 3.3%
Insurance Brokers -- 2.3%
1,485,000 B-/B3 Alliant Holdings I, Inc., Term Loan, 6.762%, 8/21/14 $ 1,024,650
108,886 B/B2 HUB International, Ltd., Delay Draw Term Loan,
6.262%, 6/13/14 75,131
484,440 B/B3 HUB International, Ltd., Initial Term Loan, 6.262%,
6/13/14 334,264
1,975,000 B-/B2 USI Holdings Corp., Tranche B Term Loan, 6.52%,
5/5/14 1,436,813
------------
$ 2,870,858
----------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 1.0%
791,489 B-/B2 AmWins Group, Inc., Initial Term Loan, 4.99% - 5.31%,
6/8/13 $ 577,787
1,000,000 B-/B2 AmWins Group, Inc., Second Lien Initial Term Loan,
7.97%, 6/9/14 630,000
------------
$ 1,207,787
------------
Total Insurance $ 4,078,645
----------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 2.7%
IT Consulting & Other Services -- 1.2%
1,969,925 B+/Ba3 SunGard Data Systems, Inc., New U.S.Term Loan,
4.553%, 2/28/14 $ 1,518,249
----------------------------------------------------------------------------------------------------
Application Software -- 0.6%
992,366 B/B1 Nuance Communications, Inc., Term Loan, 5.96%,
3/31/13 $ 747,582
----------------------------------------------------------------------------------------------------
Systems Software -- 0.9%
1,439,788 BB-/B3 Vangent, Inc., Term Loan, 4.82%, 2/14/13 $ 1,051,045
------------
Total Software & Services $ 3,316,876
----------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT -- 1.3%
Electronic Equipment & Instruments -- 1.3%
1,410,294 BB/Ba2 H3C Holdings, Ltd., Tranche B Term Loan, 6.701%,
9/28/12 $ 1,212,853
509,850 B/B3 Scitor Corp., Term Loan, 7.96%, 9/26/14 451,217
------------
Total Technology Hardware & Equipment $ 1,664,070
----------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.5%
Semiconductor Equipment -- 0.5%
987,437 BB-/Ba3 Freescale Semiconductor, Inc., Term Loan, 4.236%,
11/29/13 $ 675,572
------------
Total Semiconductors & Semiconductor Equipment $ 675,572
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 29
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
TELECOMMUNICATION SERVICES -- 2.8%
Alternative Carriers -- 0.7%
1,209,714 B-/Ba3 PAETEC Holding Corp., Replacement Term Loan,
6.204%, 2/28/13 $ 804,460
---------------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- 0.3%
439,336 B+/B2 Telesat Canada, U.S. Term I Loan, 5.8% - 6.71%,
10/31/14 $ 336,458
37,734 B+/B2 Telesat Canada, U.S. Term II Loan, 5.89% - 6.77%,
10/31/14 28,898
------------
$ 365,356
---------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.8%
987,374 B-/B1 Cricket Communications, Inc., Term Loan B, 7.262%,
6/16/13 $ 841,384
1,727,960 B/B1 MetroPCS Wireless, Inc., New Tranche B Term Loan,
5.5% - 6.0%, 11/4/13 1,434,639
------------
$ 2,276,023
------------
Total Telecommunication Services $ 3,445,839
---------------------------------------------------------------------------------------------------------
UTILITIES -- 3.5%
Multi-Utilities -- 0.8%
1,158,000 BB/Ba3 Goodman Global, Inc., Term Loan, 7.708%, 2/13/14 $ 946,665
---------------------------------------------------------------------------------------------------------
Independent Power Producers & Energy Traders -- 2.7%
1,970,113 NR/NR Calpine Corp., First Priority Term Loan, 6.645%,
3/31/14 $ 1,585,237
187,926 B/B2 Mach Gen LLC, First Lien Synthetic LC Loan, 3.512%,
2/22/13 174,771
1,782,130 B/B2 Mach Gen LLC, First Lien Term Loan B, 4.81%,
2/22/14 1,657,381
------------
$ 3,417,389
------------
Total Utilities $ 4,364,054
---------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE LOAN INTERESTS
(Cost $67,313,064) $ 50,737,609
---------------------------------------------------------------------------------------------------------
Shares
COMMON STOCK -- 0.0% of Net Assets
MATERIALS -- 0.0%
Forest Products -- 0.0%
13,963(j)(m) Ainsworth Lumber Co., Ltd. $ 18,375
---------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $97,187) $ 18,375
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
30 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
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. $ 416,500
----------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $490,737) $ 416,500
----------------------------------------------------------------------------------------------
WARRANTS -- 0.0% of Net Assets
REAL ESTATE -- 0.0%
Real Estate Development -- 0.0%
750,000(j) Neo-China Group Holdings, Ltd., Expires 7/22/12
(144A) $ 24,192
----------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $17,012) $ 24,192
----------------------------------------------------------------------------------------------
Principal
Amount
USD ($)
TEMPORARY CASH INVESTMENTS -- 4.7% of Net Assets
SECURITIES LENDING COLLATERAL -- 4.7%(k)
Certificates of Deposit:
127,309 Abbey National Plc, 3.15%, 8/13/09 $ 127,309
127,309 Banco Santander NY, 3.09%, 12/22/08 127,309
46,085 Bank of Scotland NY, 2.89%, 11/4/08 46,085
76,616 Bank of Scotland NY, 2.96%, 11/3/08 76,616
203,925 Bank of Scotland NY, 3.01%, 6/5/09 203,925
127,309 Bank of Scotland NY, 3.06%, 3/5/09 127,309
229,848 Barclays Bank, 2.85%, 5/27/09 229,848
40,325 Calyon NY, 4.62%, 1/16/09 40,325
255,195 CBA, 4.87%, 7/16/09 255,195
229,848 DNB NOR Bank ASA NY, 3.04%, 6/5/09 229,848
233,880 Intesa SanPaolo S.p.A., 2.88%, 5/22/09 233,880
229,848 New York Life Global, 2.99%, 9/4/09 229,848
12,097 NORDEA NY, 3.68%, 12/1/08 12,097
14,978 NORDEA NY, 4.13%, 4/9/09 14,978
191,252 Royal Bank of Canada NY, 3.0%, 8/7/09 191,252
25,347 Skandinavian Enskilda Bank NY, 2.79%, 2/13/09 25,347
255,195 Societe Generale, 3.29%, 9/4/09 255,195
229,848 Svenska Bank NY, 4.61%, 7/8/09 229,848
255,195 U.S. Bank NA, 2.91%, 8/24/09 255,195
------------
$ 2,911,409
----------------------------------------------------------------------------------------------
Commercial Paper:
250,586 American Honda Finance Corp., 4.95%, 7/14/09 $ 250,586
127,309 Bank of Nova Scotia, 3.14%, 5/5/09 127,309
24,194 BBVA U.S., 2.83%, 3/12/09 24,194
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 31
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal
Amount
USD ($) Value
Commercial Paper -- (continued):
127,309 CME Group, Inc., 3.0%, 8/6/09 $ 127,309
127,309 General Electric Capital Corp., 2.86%, 3/16/09 127,309
114,636 General Electric Capital Corp., 4.25%, 1/5/09 114,636
254,619 HSBC Bank, Inc., 3.2%, 8/14/09 254,619
47,237 IBM, 2.85%, 2/13/09 47,237
127,309 IBM, 3.03%, 9/25/09 127,309
76,616 John Deere Capital Corp., 2.82%, 12/12/08 76,616
229,848 Met Life Global Funding, 3.19%, 6/12/09 229,848
25,347 Met Life, Inc., 2.7%, 11/3/08 25,347
255,195 Monumental Global Funding, Ltd., 3.2%, 8/17/09 255,195
216,599 Westpac Banking Corp., 2.34%, 6/1/09 216,599
------------
$ 2,004,113
-----------------------------------------------------------------------------------------
Tri-party Repurchase Agreements:
510,389 ABN Amro, 0.2%, 11/3/08 $ 510,389
62,215 Barclays Capital Markets, 0.2%, 11/3/08 62,215
------------
$ 572,604
-----------------------------------------------------------------------------------------
Money Market Mutual Fund:
255,195 JPMorgan, U.S. Government Money Market Fund $ 255,195
-----------------------------------------------------------------------------------------
Other:
17,282 ABS CFAT 2008-A A1, 3.005%, 4/27/09 $ 17,282
-----------------------------------------------------------------------------------------
TOTAL SECURITIES LENDING COLLATERAL
(Cost $5,760,603) $ 5,760,603
-----------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 141.1%
(Cost $240,261,340) (j) $175,558,361
-----------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (41.1)% $(51,146,289)
-----------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $124,412,072
-----------------------------------------------------------------------------------------
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, 2008, the value of these securities amounted to $73,812,238
or 59.3% of total net assets applicable to common shareowners.
(a) Floating rate note. The rate shown is the coupon rate at October 31,
2008.
(b) Payment-in-Kind (PIK) security which may pay interest in additional
principal amount.
(c) On October 31, 2008, the security was not in default but defaulted after
the period end.
(d) Security is a perpetual bond and has no definite maturity date.
(e) Security is priced as a unit.
The accompanying notes are an integral part of these financial statements.
32 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
(f) Debt obligation initially issued at one coupon which converts to a higher
coupon at a specific date. The rate shown is the coupon rate at October
31, 2008.
(g) Security is in default and is non-income producing.
(h) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $441,591. The aggregate value $125,537 represents
0.1% of total net assets applicable to common shareowners.
(i) Floating rate loan interests in which the Trust invests generally pay
interest at rates that are periodically redetermined by reference to a
base lending rate plus a premium. These base lending rates are generally
(i) the lending rate offered by one or more major European banks, such as
LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one
or more major United States banks, (iii) the certificate of deposit (iv)
other base lending rates used by commercial lenders. The interest rate
shown is the coupon rate accruing at October 31, 2008.
(j) Non-income producing.
(k) Security lending collateral is managed by Credit Suisse.
(l) At October 31, 2008, the net unrealized loss on investments based on cost
for federal income tax purposes of $241,102,055 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 223,533
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (65,767,227)
------------
Net unrealized loss $(65,543,694)
------------
For financial reporting purposes net unrealized loss was $64,702,979 and
cost of investments aggregated $240,261,340.
(m) At October 31, 2008, the following securities were out on loan:
Principal
Amount
USD ($) Description Value
1,138,000 Accuride Corp., 8.5%, 2/1/15 $ 479,382
1,000,000 AEP Industries, Inc., 7.875%, 3/15/13 649,844
45,000 Ainsworth Lumber Co., Ltd., 11.0%, 7/29/15 (144A) 32,751
864,000 Allison Transmission, Inc., 11.0%, 11/1/15 (144A) 574,296
390,000 Angiotech Pharmaceuticals, Inc., 7.75%, 4/1/14 158,519
645,000 Aventine Renewable Energy Holdings, Inc., 10.0%, 4/1/17 182,750
297,000 C8 Capital SPV, Ltd., 6.64% (144A) 145,940
202,000 Central Garden & Pet Co., 9.125%, 2/1/13 125,757
30,000 CCH I LLC, 11.0%, 10/1/15 13,841
272,000 Duane Reade, Inc., 9.75%, 8/1/11 184,036
1,732,000 Freescale Semiconductor, Inc., 10.125%, 12/15/16 750,389
1,670,000 Georgia Gulf Corp., 10.75%, 10/15/16 424,980
600,000 Graham Packaging Co., Inc., 9.875%, 10/15/14 376,649
200,000 MBIA Insurance Corp., 14.0%, 1/15/33 (144A) 116,167
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 33
Schedule of Investments | 10/31/08 (unaudited) (continued)
Principal
Amount
USD ($) Description Value
970,000 PAETEC Holding Corp., 9.5%, 7/15/15 $ 604,027
43,000 Tenneco, Inc., 8.625%, 11/15/14 22,135
283,000 Tronox Worldwide LLC, 9.5%, 12/1/12* 73,387
720,000 Trump Entertainment Resorts, Inc., 8.5%, 6/1/15 147,730
450,000 TuranAlem Finance BV, 8.5%, 2/10/15 (144A) 143,500
400,000 VeraSun Energy Corp., 9.375%, 6/1/17 45,521
49,000 VeraSun Energy Corp., 9.875%, 12/15/12 18,855
495,000 Yankee Acquisition Corp., 9.75%, 2/15/17 242,838
Shares
13,800 Ainsworth Lumber Co., Ltd. 17,623
--------------------------------------------------------------------------------
$5,530,917
================================================================================
* Awaiting pending sales, portion not part of portfolio at period end.
Glossary of Terms:
LC -- Letter of Credit
Note: Principal amounts are denominated in U.S. dollars unless otherwise
denoted.
EURO Euro
NOK Norwegian Krone
Purchases and sales of securities (excluding temporary cash investments) for
the period ended October 31, 2008, aggregated $42,405,559 and $45,041,753,
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, 2008, in valuing
the Trust's assets:
Investments Other Financial
Valuation Inputs in Securities Instruments*
Level 1 -- Quoted Prices $ 434,875 $ (56,769)
Level 2 -- Other Significant Observable Inputs 175,123,486 --
Level 3 -- Significant Unobservable Inputs -- --
--------------------------------------------------------------------------------
Total $ 175,558,361 $ (56,769)
================================================================================
* Other financial instruments include foreign currency contracts.
The accompanying notes are an integral part of these financial statements.
34 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Statement of Assets and Liabilities | 10/31/08 (unaudited)
ASSETS:
Investments in securities, at value
(including securities loaned of $5,530,917)
(cost $240,261,340) $175,558,361
Cash 1,633,244
Foreign currencies, at value (cost $507,057) 786,537
Receivables --
Investment securities sold 1,851,833
Paydowns 12,473
Interest 4,290,783
Commitment fees 1,135
Prepaid expenses 12,897
--------------------------------------------------------------------------------------
Total assets $184,147,263
--------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Notes payable $ 53,000,000
Investment securities purchased 245,000
Upon return of securities loaned 5,760,603
Forward foreign currency portfolio hedge contracts -- net 56,769
Depreciation on unfunded corporate loans -- net 296,898
Unamortized facility fee 2,029
Due to affiliates 123,649
Accrued interest expense 128,580
Accrued expenses 121,663
--------------------------------------------------------------------------------------
Total liabilities $ 59,735,191
--------------------------------------------------------------------------------------
NET ASSETS:
Paid-in capital $194,273,750
Distribution in excess of investment income (554,219)
Accumulated net realized loss on investments and foreign currency
transactions (4,481,006)
Net unrealized loss on investments (64,999,877)
Net unrealized gain on forward foreign currency contracts and other
assets and liabilities denominated in foreign currencies 173,424
--------------------------------------------------------------------------------------
Net assets applicable to common shareowners $124,412,072
======================================================================================
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $124,412,072/8,154,188 shares $ 15.26
======================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 35
Statement of Operations (unaudited)
For the Six Months Ended 10/31/08
INVESTMENT INCOME:
Interest (net of foreign taxes withheld $4,419) $ 11,528,075
Dividends 9,244
Facility and other fees 17,875
Income from securities loaned, net 98,190
---------------------------------------------------------------------------------------------------------
Total investment income $ 11,653,384
---------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 1,003,455
Administrative fees 103,297
Transfer agent fees and expenses 32,650
Custodian fees 66,988
Registration fees 8,568
Professional fees 38,507
Printing expenses 21,833
Trustees' fees 4,163
Pricing fees 21,663
Commitment fees 12,251
Miscellaneous 14,873
---------------------------------------------------------------------------------------------------------
Net operating expenses $ 1,328,248
---------------------------------------------------------------------------------------------------------
Interest expense $ 1,084,255
---------------------------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 2,412,503
Less management fees waived and expenses reimbursed by
Pioneer Investment Management, Inc. ("PIM") (160,405)
---------------------------------------------------------------------------------------------------------
Net expenses $ 2,252,098
---------------------------------------------------------------------------------------------------------
Net investment income $ 9,401,286
---------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ (3,086,652)
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies 951,406 $ (2,135,246)
---------------------------------------------------------------------------------------------------------
Change in net unrealized gain (loss) from:
Investments $(52,262,471)
Unfunded corporate loans (210,806)
Forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies 329,526 $(52,143,751)
---------------------------------------------------------------------------------------------------------
Net loss on investments and foreign currency transactions $(54,278,997)
---------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(44,877,711)
=========================================================================================================
The accompanying notes are an integral part of these financial statements.
36 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Statement of Changes in Net Assets
For the Six Months Ended 10/31/08 and for the Period from 5/30/07 (Commencement
of Operations) to 4/30/08
Six Months Ended
10/31/08 5/30/07
(unaudited) to 4/30/08
FROM OPERATIONS:
Net investment income $ 9,401,286 $ 14,317,592
Net realized loss on investments and foreign currency
transactions (2,135,246) (1,862,742)
Change in net unrealized loss on investments and foreign
currency transactions (52,143,751) (12,682,702)
-----------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (44,877,711) $ (227,852)
-----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income ($1.254 per share and $1.78 per share,
respectively) $ (10,225,352) $(14,530,763)
-----------------------------------------------------------------------------------------------------
Total distributions to common shareowners $ (10,225,352) $(14,530,763)
-----------------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from the issuance of shares $ -- $174,287,500
Net proceeds from the underwriters' over-allotment option
exercised -- 20,293,750
Offering expenses charged to paid-in-capital $ -- (407,500)
-----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Trust share
transactions $ -- $194,173,750
-----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (55,103,063) $179,415,135
NET ASSETS:
Beginning of period 179,515,135 100,000
-----------------------------------------------------------------------------------------------------
End of period $ 124,412,072 $179,515,135
-----------------------------------------------------------------------------------------------------
Undistributed (distribution in excess) of net investment income $ (554,219) $ 269,847
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 37
Statement of Cash Flows (unaudited)
For the Six Months Ended 10/31/08
Cash Flows From Operating Activities
Net investment income $ 9,401,286
----------------------------------------------------------------------------
Adjustment to Reconcile Net Investment Income to Net Cash
and Foreign Currency Provided from Operating Activities
Purchase of investment securities $(760,559,370)
Proceeds from disposition of investment securities 799,103,409
Increase in receivable for investments sold (1,396,588)
Increase in paydowns receivable (9,973)
Increase in interest and foreign tax reclaim receivable (50,492)
Increase in commitment fees receivable (166)
Decrease in interest payable (1,192)
Decrease in payable for investments purchased (7,147,110)
Increase in accrued expenses and other liabilities 73,185
Increase in unrealized appreciation on foreign currency
transactions 400,449
Net realized gain from foreign currency transactions 951,406
Net amortization/(accretion) of premium/(discount) (518,011)
----------------------------------------------------------------------------
Net cash and foreign currency from operating activities $ 40,246,833
----------------------------------------------------------------------------
Cash Flows Used in Financing Activities
Decrease in notes payable $ (15,000,000)
Cash dividends paid to common shareowners (11,839,881)
Decrease in bank overdrafts (10,987,171)
----------------------------------------------------------------------------
Net cash flow used in financing activities $ (37,827,052)
----------------------------------------------------------------------------
Net increase in cash and foreign currency $ 2,419,781
----------------------------------------------------------------------------
Cash and Foreign Currency
Beginning of the period $ --
----------------------------------------------------------------------------
End of the period $ 2,419,781
============================================================================
The accompanying notes are an integral part of these financial statements.
38 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
Financial Highlights
Six Months
Ended 5/30/07 (b)
10/31/08 to
(unaudited) 4/30/08
Per Share Operating Performance
Net asset value, beginning of period $ 22.02 $ 23.88(c)
---------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:(a)
Net investment income $ 1.15 $ 1.77
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (6.66) (1.80)
---------------------------------------------------------------------------------------------------
Net decrease from investment operations $ (5.51) $ (0.03)
Distributions from net investment (1.25) (1.78)
Capital charge with respect to issuance of shares -- (0.05)(c)
---------------------------------------------------------------------------------------------------
Net decrease in net asset value $ (6.76) $ (1.86)
---------------------------------------------------------------------------------------------------
Net asset value, end of period(d) $ 15.26 $ 22.02
---------------------------------------------------------------------------------------------------
Market value, end of period(d) $ 13.11 $ 20.47
---------------------------------------------------------------------------------------------------
Total return at market value (e) (31.16)% (10.67)%
Ratios to average net assets
Net operating expenses 1.38%(f) 0.99%(f)
Interest expense 1.28%(f) 0.33%(f)
Net expenses 2.66%(f) 1.32%(f)
Net investment income 11.09%(f) 8.48%(f)
Portfolio turnover 19% 21%
Net assets, end of period (in thousands) $ 124,412 $ 179,515
Ratios to average net assets before waivers and reimbursements
of expenses
Net operating expenses 1.57%(f) 1.29%(f)
Interest expense 1.28%(f) 0.33%(f)
Net expenses 2.85%(f) 1.62%(f)
Net investment income 10.90%(f) 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 is 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.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 39
Notes to Financial Statements | 10/31/08 (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, and
the sale and issuance to Pioneer Investment Management, Inc. ("PIM"), the
Trust's investment adviser, a wholly owned indirect subsidiary of UniCredit
S.p.A. ("UniCredit"), of 4,188 shares of beneficial interest at an aggregate
purchase price of $100,000. PIM had agreed to reimburse all the Trust's
organizational expenses and to pay the amount by which the aggregate offering
costs (other than the sales load) exceed $0.05 per share of the common share
offering. The investment objective of the Trust is to provide a high level of
current income and, as a secondary objective, the Trust may seek capital
appreciation to the extent that it is consistent with its investment objective.
The Trust's investments in certain foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than in a
developed market. These risks include disruptive political or economic
conditions and the possible imposition of adverse governmental laws or currency
exchange restrictions.
Information regarding the Trust's principal risks is contained in the Trust's
original offering prospectus, with additional information included in the
Trust's Shareowner reports from time to time. Please refer to those documents
when considering the Trust's risks. At times, the Trust's investments may
represent industries or industry sectors that are interrelated or have common
risks, making it more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors.
The Trust invests in below investment grade (high yield) debt securities,
floating rate loans and event-linked bonds sometimes referred to as
"catastrophic" 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
40 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
higher rated debt securities. The Trust may invest in securities of issuers
that are in default or that are in bankruptcy.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains and losses on investments during the
reporting 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 loan interests for which no reliable price quotes are
available, such investments are valued by Loan Pricing Corporation through
the use of pricing matrices to determine valuations.
Fixed-income securities are valued at prices supplied by independent
pricing services, which consider such factors as Treasury spreads, yields,
maturities and ratings. Valuations may be supplemented by values obtained
from dealers and other sources, as required. Equity securities are valued
at the last sale price on the principal exchange where they are traded.
Securities or Loan Interests for which quotations are not readily available
are valued using fair value methods pursuant to procedures adopted by the
Board of Trustees. Trading in foreign securities is substantially completed
each day at various times prior to the close of the NYSE. The values of
such securities used in computing the net asset value of the Trust's shares
are determined as of such times. The Trust may also use the fair value of 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 exchange. As of
October 31, 2008, the Trust held no fair valued securities. Temporary cash
investments are valued at amortized cost.
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
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 41
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.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
the appropriate current exchange rates.
Net realized gains and losses on foreign currency transactions 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 enters 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 3).
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. All
tax returns filed thus far are subject to examination by tax authorities.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
42 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
income tax rules. Therefore, the sources of the Trust's distributions may
be shown in the accompanying financial statements as either from or in
excess of net investment income or net realized gain (loss) on investment
and foreign currency transactions, or from paid-in capital, depending on
the type of book/tax differences that may exist.
The Trust has elected to defer $1,725,324 in capital losses realized
between November 1, 2007 and April 30, 2008 to its fiscal year ending April
30, 2009.
At April 30, 2008, the Trust had a capital loss carryforward of $231,744
which will expire in 2016, if not utilized.
The tax character of current year distributions paid to shareowners will be
determined at the end of the fiscal year. Distributions paid during the
period ended April 30, 2008 was as follows:
2008
Distributions paid from:
Ordinary income $14,530,763
--------------------------------------------------------------------------------
Total $14,530,763
================================================================================
The following shows the components of distributable earnings on a federal
income tax basis at April 30, 2008.
Undistributed ordinary income $ 2,237,614
Capital loss carryforward (231,744)
Post-October loss deferred (1,725,324)
Dividend payable (1,614,529)
Unrealized depreciation (13,424,632)
--------------------------------------------------------------------------------
Total $ (14,758,615)
================================================================================
The difference between book basis and tax basis unrealized depreciation is
primarily attributable to the tax deferral of losses on wash sales, the
realization for tax purposes of unrealized gains on investments in passive
foreign investment companies, the realization for tax purposes of
unrealized gains 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
received from counterparties, is required to be at least equal to or in
excess of the value of the repurchase agreement at the time of purchase.
The collateral for all repurchase agreements is held in safekeeping in the
customer-only
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 43
account of the Trust's custodian, or subcustodians. PIM is responsible for
determining that the value of the collateral remains at least equal to the
repurchase price.
F. Securities Lending
The Trust lends securities in its portfolio to certain broker-dealers or
other institutional investors, with the Trust's custodian acting as the
lending agent. When entering into a loan, the Trust receives collateral
which is maintained by the custodian and earns income in the form of
negotiated lenders' fees. The Trust also continues to receive interest or
payments in lieu of dividends on the securities loaned. Gain or loss on the
fair value of the loaned securities that may occur during the term of the
loan will be for the account of the Trust. The loans are secured by
collateral which is required to be at least 102%, at all times, of the fair
value of the securities loaned. The amount of 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 recover
the securities from the borrower on demand. The Trust invests cash
collateral in cash equivalent investments. Securities lending collateral is
managed by Credit Suisse.
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 American Stock Exchange or elsewhere. If,
on the payment date for any dividend, the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees ("market premium"), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
44 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per common share is greater than the market value ("market discount"), the
Plan Agent will invest the dividend amount in common shares acquired in
open-market purchases. There are no brokerage charges with respect to newly
issued common shares. However, each participant will pay a pro rata share
of brokerage trading fees incurred with respect to the Plan Agent's
open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may not be able to transfer the shares to another broker
and continue to participate in the Plan.
2. Management Agreement
PIM manages the Trust's portfolio. Management fees payable under the Trust's
Advisory Agreement with PIM are calculated daily at the annual rate of 0.85% of
the Trust's average daily managed assets. "Managed assets" is the average daily
value of the Trust's total assets minus the sum of the Trust's liabilities,
which liabilities exclude debt related to leverage, short-term debt and the
aggregate liquidation preference of any outstanding preferred shares. For the
six months ended October 31, 2008, the net management fee was equivalent to
0.71% of the Trust's average daily managed assets, which was equivalent to
0.99% 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, 2008, $123,649 was payable to PIM related to management costs,
administrative costs and certain other services and is in 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% for average daily
managed assets in excess of $500 million, subject to a minimum monthly fee of
$10,000. Princeton receives no compensation directly from the Trust.
Effective October 1, 2008, PIM has entered into a Research Services Agreement
with Montpelier Capital Advisors, Ltd. ("Montpelier"). Under the research
services agreement, Montpelier will provide research services to PIM with
regard to event-linked bonds. PIM pays the Sub-adviser a flat fee of $325,000
annually. Prior to October 1, 2008, PIM had engaged Montpelier to act as the
Trust's investment sub-adviser with respect to the Trust's investments in
event-linked bonds. PIM paid Montpelier a monthly fee at an annual rate of
0.80% of the average daily value of the Trust's Sub-advised assets; provided,
however,
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 45
that such fee shall in no event be less than 0.15% of the Trust's average daily
managed assets. The fee is paid quarterly in arrears. Montpelier receives no
compensation directly from the Trust.
Also, PIM has agreed for the first three years of the Trust's investment
operations to limit the Trust's total annual expenses excluding offering costs
for common shares, interest expense, the cost of defending or prosecuting any
claim or litigation to which the Trust is a party (together with any amount in
judgment or settlement), indemnification expense or taxes incurred due to the
failure of the Trust to qualify as a regulated investment company under the
Code or any other non-recurring or non-operating expenses to 0.90% of the
Trust's average daily managed assets in year 1, 0.95% of the Trust's average
daily managed assets in year 2 and 1.00% of the Trust's average daily managed
assets in year 3. This is a contractual limit and may not be terminated by the
adviser for three years. There can be no assurance that it will be continued
after that time. For the six months ended October 31, 2008, the expense
reduction under such arrangements was $160,405.
3. Forward Foreign Currency Contracts
The Trust may enter into contracts that obligate the Trust to deliver
currencies at specified future dates. At the maturity of a contract, the Trust
must make delivery of the specific currency. Alternatively, prior to the
settlement date for these hedges, the Trust may close out such contracts by
entering into offsetting hedge contracts.
Open portfolio hedge at October 31, 2008 was as follows:
Net Net
Contracts In Exchange Settlement Unrealized
Currency to (Deliver) For US$ Date US$ Value Loss
EURO (3,340,000) $(4,173,163) 11/28/08 $ (4,229,932) $ (56,769)
================================================================================================
At October 31, 2008, the Trust had no outstanding forward currency settlement
hedges.
4. Unfunded Loan Commitments
As of October 31, 2008, the Trust had unfunded loan commitments of $582,404
which could be extended at the option of the borrower, pursuant to the
following loan agreements:
Unfunded Loan
Borrower Commitment
Bausch & Lomb, Inc., Delayed Draw Term Loan $ 36,000
Community Health Systems, Inc., Delayed
Draw Term Loan $ 46,404
Fontainebleau Las Vegas Holding LLC, Delayed Draw Term Loan $500,000
46 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
5. Loan Agreement
Effective February 8, 2008, the Trust entered into a $90,000,000 Revolving
Credit Facility (the "Credit Agreement") with the Bank of Nova Scotia.
At October 31, 2008, the Trust had a borrowing outstanding under the Credit
Agreement totaling $53,000,000. The interest rate charged at October 31, 2008
was 5.1375%. The average daily balance was $66,027,174 at a weighted average
interest rate of 3.21%. With respect to the loan, interest expense of
$1,084,255 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 was as follows:
Total Asset coverage
Amount per $1,000 of
Date Outstanding Indebtedness
10/31/08 $53,000,000 $3,347
6. 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.
7. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for six months ended
10/31/08 and the period from May 30, 2007 (commencement of investment
operation) to April 30, 2008 were as follows:
10/31/08 4/30/08
Shares outstanding at beginning of period 8,154,18 4,188
Shares issued in connection with initial
public offering -- 7,300,000
Shares issued from underwriters' over-allotment
option exercised -- 850,000
--------------------------------------------------------------------------------
Shares outstanding at end of period 8,154,188 8,154,188
================================================================================
Offering costs of $407,500 incurred in connection with the Trust's offering of
common shares have been charged to paid-in capital.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 47
8. New Pronouncement
In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures
about Derivative Instruments and Hedging Activities ("SFAS 161"), was issued
and is effective for fiscal years beginning after November 15, 2008. SFAS 161
requires enhanced disclosures about an entity's derivative and hedging
activities. Management is currently evaluating the impact the adoption of SFAS
161 will have on the Trust's financial statement disclosures.
9. Subsequent Event
Subsequent to October 31, 2008, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.22 per common share
payable November 28, 2008, to shareowners of record on November 14, 2008.
48 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
ADDITIONAL INFORMATION (unaudited)
During the period, there were no material changes in the Trust's investment
objective or fundamental policies that were not approved by the shareowners.
There were no changes in the Trust's charter or By-Laws that would delay or
prevent a change in control of the Trust which has not been approved by the
shareowners. There were no changes in the principle 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.
Results of Shareowner Meeting (unaudited)
On September 22, 2008, Pioneer Diversified High Income Trust held its annual
meeting of shareowners to elect Class I Trustees. All Class I Trustees were
elected. Here are the detailed results of the votes.
Proposal 1 - To elect Class I Trustees.
Nominee Affirmative Withheld
Benjamin M. Friedman 7,070,011 158,826
--------------------------------------------------------------------------------
Margaret B.W. Graham 7,073,638 155,199
--------------------------------------------------------------------------------
Daniel K. Kingsbury, Jr. 7,074,860 153,977
--------------------------------------------------------------------------------
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 49
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
Investment Sub-Adviser
Montpelier Capital Advisors, Ltd.
Sub-Administrator
Princeton Administrators, LLC
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at pioneerinvestments.com. This information is also available on
the Securities and Exchange Commission's web site at http://www.sec.gov.
50 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
This page for your notes.
Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08 51
This page for your notes.
52 Pioneer Diversified High Income Trust | Semiannual Report | 10/31/08
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
This report must be accompanied by a prospectus.
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 may also 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
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
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, 2008
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, 2008
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date December 29, 2008
* Print the name and title of each signing officer under his or her signature.