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: 811-23165

 

 

CION ARES DIVERSIFIED CREDIT FUND

(Exact name of registrant as specified in charter)

 

100 PARK AVENUE

25^TH FLOOR

NEW YORK, NEW YORK 10017

(Address of principal executive offices)(Zip code)

 

Eric A. Pinero 100 Park Avenue, 25th Floor New York, New York 10017 (Name and Address of Agent for Service)
	Copy to:
Michael A. Reisner Mark Gatto CION Ares Diversified Credit Fund 100 Park Avenue, 25th Floor New York, New York 10017		P. Jay Spinola, Esq. Michael A. DeNiro, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019

 

Registrant’s telephone number, including area code: (646) 845-2577

 

Date of fiscal year end: December 31

 

Date of reporting period: January 1, 2025 - June 30, 2025

 

 

 

 

Item 1. Report to Stockholders.

 

(a)

 

 

CION Ares Diversified Credit Fund

Contents

Letter to Shareholders				2
Fund Profile & Financial Data				5
Consolidated Schedule of Investments				7
Consolidated Statement of Assets and Liabilities				132
Consolidated Statement of Operations				134
Consolidated Statements of Changes in Net Assets				135
Consolidated Statement of Cash Flows				137
Financial Highlights				138
Notes to Consolidated Financial Statements				160
Proxy & Portfolio Information				191
Dividend Reinvestment Plan				192
Corporate Information				194
Privacy Notice				195
Trustees and Executive Officers				196
Approval of Investment Advisory Agreement and Investment Sub-Advisory Agreement				201

CION Ares Diversified Credit Fund

Letter to Shareholders

June 30, 2025

Fellow Shareholders,

We are pleased to present the semi-annual report for the CION Ares Diversified Credit Fund (the "Fund" or "CADC"), for the period ending June 30, 2025. The Fund has continued to experience steady asset growth, with total managed assets reaching approximately $7.3 billion as of June 30, 2025. The Fund returned +4.05%¹​ over the year-to-date period, benefitting from firm credit fundamentals within the portfolio, stable base rates, and dynamic asset allocation. As of period-end, the Fund had exposure to over 850+ investments, diversified across 24 unique industries. Secured debt instruments accounted for 91%²​ of the Fund and 78%³​ of the portfolio was deployed in investments directly originated by investment groups within the Ares Management Corporation ("Ares") platform. The Fund's distribution rate was stable during the period, ending June 30 at 8.44%⁴​. CADC's relative value approach across liquid and illiquid credit sectors enabled the portfolio to capitalize on market opportunities across global credit markets, while maintaining steady distributions of income and preserving shareholder capital.

Investment Philosophy and Process

The Fund employs a dynamic asset allocation framework that seeks to offer enhanced yield and downside risk mitigation, while enabling the Fund's investment advisor, CION Ares Management, LLC ("CION Ares Management," "CAM" or the "Advisor") and the Fund's investment sub-advisor, Ares Capital Management II LLC (the "Sub-Advisor"), an affiliate of Ares, to respond to changing market conditions. We believe the Fund's differentiated, diversified portfolio of both directly originated and liquid investments can provide superior risk-adjusted returns for our shareholders. Active management across a broad spectrum of credit asset classes, including direct lending in the United States and Europe, high yield bonds, leveraged loans, structured credit, real estate debt, and other credit instruments provides the opportunity to generate attractive risk-adjusted returns by capturing the best relative value.

The Fund's investment process is rigorous and incorporates both top-down and bottom-up factors. The Advisor leverages the resources of the Sub-Advisor to conduct ongoing proprietary analysis at the asset-class level, comparing current market conditions with historical and industry-level precedents to examine the rate environment, correlation to public markets, and local/regional risks. This information is brought before the Advisor's allocation committee, where senior members overseeing each of the underlying asset classes share their observations with the Fund's portfolio managers. This top-down framework is combined with the Sub-Advisor's robust origination and underwriting processes to drive a high degree of asset selectivity.

Investment Environment

Markets were met with a turbulent start to the year due to elevated geopolitical tensions and uncertainty around trade policy, culminating with the Trump administration's "Liberation Day" announcement in early April. Despite a drawdown heading into and immediately following the announcement, markets recovered swiftly due to positive trade developments and resilient hard economic data, both of which led to improved sentiment. While tariff arrangements as of June 30, 2025 have been better than initially feared, the Federal Reserve (the "Fed") has employed a "wait and see" approach with regard to future interest rate activity given the true impact of tariffs remains uncertain. Amid expectations of continued patience from the Fed, market forecasts currently reflect two rate cuts through year-end, which is fewer than was expected heading into 2025.

While price volatility was elevated, companies had a solid corporate earnings season and credit metrics remained stable. Despite the uncertain backdrop, equity and credit markets have experienced positive returns year-to-date following the risk rally toward the end of the first half of 2025. The S&P 500 returned +6.20%⁵​ year-to-date through June 30, shrugging off a -4.28%⁵​ return in the first quarter. Credit markets have underperformed equities, but have exhibited less volatility. Syndicated Loans returned +2.96%⁶​ year-to-date, as a result of an attractive carry profile and stable technicals. High yield bonds returned +4.55%⁷​ through June, benefitting from the risk-on environment more recently and expectations of future rate cuts by the Fed. Traditional fixed income returned +4.02%⁸​, driven largely by the risk-off environment at the start of the year.

CION Ares Diversified Credit Fund

Letter to Shareholders (continued)

June 30, 2025

Several recurring trends have emerged within the leveraged credit markets year-to-date. Fundamentals have yet to deteriorate with defaults remaining manageable at 3.77% and 1.41%⁹​ for syndicated loans and high yield bonds, respectively, while issuer leverage and interest coverage have remained sound. With respect to technicals, both the syndicated loan and high yield bond markets saw an expansion in market size of a combined $68 billion¹⁰​ year-to-date. While capital markets activity took a pause in early April, bank lending has resumed with a continued focus on repricings and refinancings. Institution loan issuance reached $441 billion while $40 billion¹⁰​ of high yield bonds have come to market year-to-date. Within private credit, deployment remained steady with lenders leaning more into their existing sponsor and management networks for new deals as M&A activity remains lower than initially expected at the onset of the year. As a result of challenged M&A volumes, competition for new issuance between the public and private loan markets has been elevated. Due to this competitive landscape, pricing for deals has grinded tighter, but all in yields remain above historical averages. Corporate fundamentals remain stable, with earnings growth moderating but still positive across most sectors and companies maintaining healthy balance sheets and liquidity.

Specific to CADC, the Fund has maintained a stable income profile with an attractive 9.45% current yield¹¹​ and 8.44% distribution rate⁴​. We are excited about the opportunities that lie ahead in the global credit markets and continue to actively participate in corporate and asset-backed direct lending opportunities, while seeking to take advantage of pockets of volatility within the liquid credit markets. While the Fund continues to be anchored in a core allocation to directly originated assets, we continue to utilize the depth and breadth of the Ares credit platform to identify pockets of relative value and pricing mismatches across traded segments of the market, such as high yield bonds, syndicated loans and CLO securities. We continue to closely monitor macroeconomic developments, proactively manage exposures, and identify relative value opportunities created by shifts in sentiment on macro data releases, corporate fundamental trends and new policy implementations.

Summary

While market conditions remain firm, credit dispersion is increasing as management teams navigate the new trade landscape, and we expect periodic bouts of market volatility to surface as the market reacts to geopolitical headlines and central bank activity. We remain focused on downside protection and asset selectivity, with a bias towards direct lending in the U.S. and Europe while dynamically allocating across liquid and alternative credit markets as attractive relative value opportunities arise. We are pleased with the ongoing construction of the Fund's diversified portfolio, and we believe the Fund is well positioned to find compelling opportunities in an unpredictable market environment given our emphasis on senior secured, floating rate, directly originated assets in defensive, non-cyclical, service-based sectors. We believe Ares' scaled platform, tenured experience and cycle-tested investment process will allow the Fund to successfully navigate the evolving market environment.

We thank you for your investment in and continued support of the CION Ares Diversified Credit Fund.

Sincerely,

Mitch Goldstein Portfolio Manager CION Ares Diversified Credit Fund				Greg Margolies Portfolio Manager CION Ares Diversified Credit Fund				Michael Smith Portfolio Manager CION Ares Diversified Credit Fund

Views expressed are those of CION Ares Management as of the date of this communication, are subject to change at any time, and may differ from the views of other portfolio managers or of Ares as a whole. Although these views are not intended to be a forecast of future events, a guarantee of future results, or investment advice, any forward-looking statements are not reliable indicators of future events and no guarantee is given that such activities will occur as expected or at all. Information contained herein has been obtained from sources believed to be reliable, but the accuracy and completeness of the information cannot be guaranteed. CION Ares Management does not undertake any obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise, except as required by law. All investments involve risk, including possible loss of principal. Past performance is not indicative of future results.

CION Ares Diversified Credit Fund

Letter to Shareholders (continued)

June 30, 2025

CION Securities, LLC ("CSL") is the wholesale marketing agent for the Fund, advised by CION Ares Management and distributed by ALPS Distributors, Inc ("ADI"). CSL, member FINRA, and CAM are not affiliated with ADI, member FINRA. Certain Ares fund securities may be offered through its affiliate, Ares Management Capital Markets LLC, a broker-dealer registered with the SEC, and a member of FINRA.

¹​ Past performance is not indicative of future results. Performance shown here is the I-Share Class. The I-Share was incepted on July 12, 2017. Returns include reinvestment of distributions and reflect fund expenses inclusive of recoupment of previously provided expense support. The expense ratio is 3.74% as of June 30, 2025 excluding interest expense. Expense ratios are annualized and calculated as a percentage of estimated average net assets. Share values will fluctuate, therefore if repurchased, they may be worth more or less than their original cost.

²​ Secured Debt includes First and Second Lien assets, Structured Credit Debt, Structured Credit Equity. Excludes Cash.

³​ Includes U.S. Direct Lending, European Direct Lending, Alternative Credit, Real Estate Debt and Opportunistic investments. Excludes cash.

⁴​ The current distribution rate is expressed as a percentage equal to the projected annualized distribution amount (which is calculated by annualizing the current daily cash distribution per share without compounding), divided by the relevant net asset value per share. A portion of distributions may be a direct result of expense support payments provided by CION Ares Management, which are subject to repayment by CADC within three years. The purpose of this arrangement is to ensure that CADC bears an appropriate level of expenses. Any such distributions may not be entirely based on investment performance and can only be sustained if positive investment performance is achieved in future periods and/or CAM continues to make such expense support payments. Future repayments will reduce cash otherwise potentially available for distributions. There can be no assurance that such performance will be achieved in order to sustain these distributions. CAM has no obligation to provide expense support payments in future periods.

⁵​ Proxy: S&P 500 Index. Please refer to Index Definitions for index definitions.

⁶​ Proxy: S&P UBS Leveraged Loan Index. Please refer to Index Definitions for index definitions.

⁷​ Proxy: ICE BofA US High Yield Index. Please refer to Index Definitions for index definitions.

⁸​ Proxy: Bloomberg Aggregate Bond Index. Please refer to Index Definitions for index definitions.

⁹​ Source: JP Morgan Default Monitor. As of June 30, 2025.

¹⁰​ Source: JP Morgan Market Monitor. As of June 30, 2025.

¹¹​ CADC's current yield does not represent a return to investors.

Index Definitions

The Bloomberg Aggregate Bond Index measures the performance of the U.S. investment grade bond market. The index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States — including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year. To be included in the index, bonds must be rated investment grade (at least Baa3/BBB) by Moody's and S&P. Inception date: January 1, 1976.

The Standard & Poor's 500 Index, often abbreviated as the S&P 500, or just "the S&P", is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The index components and their weightings are determined by S&P Dow Jones Indices.

The S&P UBS Leveraged Loan Index is designed to mirror the investable universe of the US dollar-denominated leveraged loan market. The index inception is January 1992. The index frequency is daily, weekly and monthly. New loans are added to the index on their effective date if they qualify according to the following criteria: 1) Loan facilities must be rated "5B" or lower. That is, the highest Moody's/S&P ratings are Baa1/BB+ or Ba1/BBB+. For unrated loans, the initial spread must be 125 basis points or higher above the benchmark reference reset rate. 2) Only fully-funded term loan facilities are included. 3) The tenor must be at least one year. 4) Issuers must be domiciled in developed countries; issuers from developing countries are excluded.

The ICE BofA US High Yield Index tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch), at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100 million. Index constituents are capitalization-weighted based on their current amount outstanding times the market price plus accrued interest. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index. The index is rebalanced on the last calendar day of the month, based on information available up to and including the third business day before the last business day of the month. No changes are made to constituent holdings other than on month end rebalancing dates. Inception date: August 31, 1986.

CION Ares Diversified Credit Fund

Fund Fact Sheet — As of June 30, 2025

CLASS A CADEX | CLASS C CADCX | CLASS I CADUX | CLASS L CADWX
CLASS U CADZX | CLASS U2 CADSX | CLASS W CADFX

FUND OVERVIEW

CION Ares Diversified Credit Fund (CADC) is a diversified, unlisted closed-end management investment company registered under the 1940 Act as an interval fund. The Fund will seek to capitalize on market inefficiencies and relative value opportunities by dynamically allocating a portfolio of directly originated loans, secured floating and fixed rate syndicated loans, corporate bonds, asset-backed securities, commercial real estate loans and other types of credit instruments which, under normal circumstances, will represent at least 80% of the Fund's assets.

Fixed Rate vs. Floating

Excludes cash, other net assets and equity instruments.

KEY FACTS

TOTAL MANAGED ASSETS*				$7.3B
TOTAL ISSUES				898
DISTRIBUTIONS1​				Monthly

 

SHARE CLASS				INCEPTION				MONTH-END DISTRIBUTION RATE2​				STANDARD DEVIATION3​				SHARPE RATIO4 ​(ANNUALIZED)
CLASS A				1/26/2017					8.10	%			3.64	%			1.05
CLASS C				7/12/2017					7.28	%			3.61	%			0.98
CLASS I				7/12/2017					8.40	%			3.66	%			1.11
CLASS L				11/2/2017					7.95	%			3.69	%			1.00
CLASS U				7/25/2019					7.65	%			4.03	%			0.85
CLASS U-2				4/30/2020					7.65	%			2.91	%			2.26
CLASS W				12/4/2018					7.93	%			3.91	%			1.02

Portfolio Characteristics

  Allocation by Asset Type**

  Allocation by Geography**

Allocation by Industry % of Portfolio

Software & Services					21.8	%
Health Care Equipment & Services					10.0	%
Structured Products					9.9	%
Financial Services					8.6	%
Commercial & Professional Services					7.9	%
Insurance					7.1	%
Consumer Services					5.1	%
Capital Goods					4.2	%
Other					23.9	%
Cash					1.5	%

Top Holdings % of Portfolio

Global Medical Response					1.3	%
Citrix					1.0	%
Global Music Rights					0.9	%
Enviva Partners					0.9	%
FinEquity Holdings					0.8	%
Spruce Bidco					0.8	%
eCapital					0.8	%
Kaseya					0.8	%
Banyan Software					0.7	%
High Street Insurance Partners					0.7	%

** Holdings and allocations, unless otherwise indicated, are based on the total managed assets and subject to change without notice. Total managed assets is defined as the total assets (including any assets attributable to financial leverage) minus accrued liabilities (other than debt representing financial leverage). Data shown is for informational purposes only and not a recommendation to buy or sell any security.

CION Ares Diversified Credit Fund

Fund Fact Sheet — As of June 30, 2025 (continued)

CLASS A CADEX | CLASS C CADCX | CLASS I CADUX | CLASS L CADWX
CLASS U CADZX | CLASS U2 CADSX | CLASS W CADFX

MANAGEMENT TEAM

• Mitch Goldstein, Co-Head of Ares Credit Group | 28 Years of Experience

• Greg Margolies, Partner, Ares Management | 35 Years of Experience

• Michael Smith, Co-Head of Ares Credit Group | 28 Years of Experience

• CADC's allocation committee consists of an additional 13 members, averaging nearly 25 years of experience.

ABOUT CION INVESTMENTS

CION Investments is a leading manager of investment solutions designed to redefine the way individual investors can build their portfolios and help meet their long-term investment goals. With more than 30 years of experience in the alternative asset management industry, CION strives to level the playing field. CION currently manages CION Investment Corporation, a leading BDC, and sponsors, through CION Ares Management, CION Ares Diversified Credit Fund, a globally diversified interval fund.

ABOUT ARES MANAGEMENT

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager operating three integrated businesses across Credit, Private Equity and Real Estate. Ares Management's investment groups collaborate to deliver innovative investment solutions which seek to provide consistent and attractive investment returns throughout market cycles. Please visit www.aresmgmt.com for additional information.

Risks and limitations include, but are not limited to, the following: investment instruments may be susceptible to economic downturns; most of the underlying credit instruments are rated below investment grade and considered speculative; there is no guarantee all shares can be repurchased; the Fund's business and operations may be impacted by fluctuations in the capital markets; the Fund is a diversified, closed-end investment company with limited operating history; diversification does not eliminate the risk of investment losses.

¹​ Distribution Frequency — there is no assurance monthly distributions paid by the Fund will be maintained at the targeted level or paid at all.

²​ Month-End Distribution Rate — Month-end distribution rate is expressed as a percentage equal to the projected annualized distribution amount (which is calculated by annualizing the current cash distribution per share without compounding), divided by the current net asset value. The month-end distribution rate shown may be rounded.

³​ Standard Deviation — a widely used measure of an investment's performance volatility. Standard deviation shows how much variation from the mean exists with a larger number indicating the data points are more spread out over a larger range of values. Figures shown here are based on non-loaded daily NAV total returns utilizing data since inception.

⁴​ Sharpe Ratio — a risk-adjusted measure that measures reward per unit of risk. The higher the Sharpe Ratio, the better. The numerator is the difference between a portfolio's return and the return of a risk-free instrument. The denominator is the portfolio's standard deviation. Figures shown here are based on non-loaded daily NAV total returns utilizing data since inception.

A portion of distributions may be a direct result of expense support payments provided by CION Ares Management, LLC (CAM), which are subject to repayment by CADC within three years. The purpose of this arrangement is to ensure that CADC bears an appropriate level of expenses. Any such distributions may not be entirely based on investment performance and can only be sustained if positive investment performance is achieved in future periods and/or CAM continues to make such expense support payments. Future repayments will reduce cash otherwise potentially available for distributions. There can be no assurance that such performance will be achieved in order to sustain these distributions. CAM has no obligation to provide expense support payments in future periods.

CADC may fund distributions from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital, as well as net income from operations, capital and non-capital gains from the sale of assets, dividends or distributions from equity investments and expense support payments from CAM, which are subject to repayment. For the year ending December 31, 2024 distributions were paid from taxable income and did not include a return of capital for tax purposes. It is not anticipated that the current distribution rate will contain a return of capital. If expense support payments from CAM were not provided, some or all of the distributions may have been a return of capital which would reduce the available capital for investment. The sources of distributions may vary periodically. Please refer to the semi-annual or annual reports filed with the SEC for the sources of distributions.

This is neither an offer to sell nor a solicitation to purchase the securities described herein. An offering is made only by the prospectus which must precede or accompany this piece. Please read the prospectus prior to making any investment decision and consider the risks, charges, expenses and other important information described therein. Additional copies of the prospectus may be obtained by contacting CION Securities at 800.435.5697 or by visiting cioninvestments.com.

Please be aware that the Fund, the Advisers, the Distributor or the Wholesale Marketing Agent and their respective officers, directors, employees and affiliates do not undertake to provide impartial investment advice or to give advice in a Fiduciary capacity in connection with the Fund's public offering of shares.

CION Securities, LLC (CSL) is the wholesale marketing agent for CION Ares Diversified Credit Fund, advised by CION Ares Management, LLC (CAM) with marketing services provided by ALPS Distributors, Inc (ADI). CSL, member FINRA, and CAM are not affiliated with ADI, member FINRA.

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
Automobiles and Components
Automotive Keys Group, LLC								1st Lien Term Loan				10.95%				SOFR (Q)					6.50	%						08/2026								$	1,702			$	1,464	(e)(f)​
Clarios Global LP								1st Lien Term Loan				6.83%				SOFR (M)					2.50	%						05/2030									7,778				7,749	(f)​
Collision SP Subco, LLC								1st Lien Revolving Loan																				01/2030									—				—	(e)(g)​
Collision SP Subco, LLC								1st Lien Term Loan				9.03%				SOFR (Q)					4.75	%						01/2030									892				892	(e)(f)​
Collision SP Subco, LLC								1st Lien Term Loan				9.03%				SOFR (Q)					4.75	%						01/2030									28				29	(e)(f)​
Collision SP Subco, LLC								1st Lien Delay Draw Term Loan				9.03%				SOFR (S)					4.75	%						01/2030									458				458	(e)(g)​
Collision SP Subco, LLC								1st Lien Delay Draw Term Loan																				01/2030									—				—	(e)(g)​
Continental Acquisition Holdings, Inc.								1st Lien Revolving Loan				8.17%				SOFR (M)					3.75	%						01/2028									1				1	(e)(g)​
Continental Acquisition Holdings, Inc.								1st Lien Term Loan																				07/2028									6,479				3,758	(e)(i)​
Continental Acquisition Holdings, Inc.								1st Lien Delay Draw Term Loan																				07/2028									1,573				912	(e)(i)​
Highline Aftermarket Acquisition, LLC								1st Lien Revolving Loan																				11/2028									—				—	(e)(g)​
Highline Aftermarket Acquisition, LLC								1st Lien Term Loan				7.83%				SOFR (M)					3.50	%						02/2030									16,583				16,666	(e)​
New Churchill Holdco LLC								1st Lien Revolving Loan																				11/2029									—				—	(e)(g)​
New Churchill Holdco LLC								1st Lien Term Loan				9.80%				SOFR (Q)					5.50	%						11/2029									1,194				1,194	(e)(f)​
New Churchill Holdco LLC								1st Lien Delay Draw Term Loan				9.80%				SOFR (Q)					5.50	%						11/2029									1,612				1,612	(e)(g)​
Sun Acquirer Corp.								1st Lien Revolving Loan																				09/2027									—				—	(e)(g)​
Sun Acquirer Corp.								1st Lien Term Loan				9.33%				SOFR (M)					5.00	%						09/2028									14,656				14,656	(e)(f)​
Sun Acquirer Corp.								1st Lien Term Loan				9.33%				SOFR (M)					5.00	%						09/2028									196				195	(e)(f)​
Sun Acquirer Corp.								1st Lien Delay Draw Term Loan				9.33%				SOFR (M)					5.00	%						09/2028									9,067				9,068	(e)(f)​

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
Sun Acquirer Corp.								1st Lien Delay Draw Term Loan				9.33%				SOFR (M)					5.00	%						09/2028								$	402			$	402	(e)(g)​
Telle Tire & Auto Service, LLC								1st Lien Revolving Loan																				03/2031									—				—	(e)(g)​
Telle Tire & Auto Service, LLC								1st Lien Term Loan				9.00%				SOFR (S)					4.75	%						03/2031									134				132	(e)(f)​
Telle Tire & Auto Service, LLC								1st Lien Delay Draw Term Loan				9.00%				SOFR (S)					4.75	%						03/2031									147				146	(e)(g)​
Truck-Lite Co., LLC and Ecco Holdings Corp.								1st Lien Revolving Loan																				02/2031									—				—	(e)(g)​
Truck-Lite Co., LLC and Ecco Holdings Corp.								1st Lien Term Loan				10.06%				SOFR (M)					5.75	%						02/2032									13,520				13,521	(e)(f)​
Truck-Lite Co., LLC and Ecco Holdings Corp.								1st Lien Delay Draw Term Loan																				02/2032									—				—	(e)(g)​
Wand Newco 3, Inc.								1st Lien Term Loan				6.83%				SOFR (M)					2.50	%						01/2031									22,627				22,511	(f)​
																																									95,366				1.96	%
Capital Goods
AI Aqua Merger Sub, Inc.								1st Lien Term Loan				7.32%				SOFR (M)					3.00	%						07/2028									31,490				31,425	(f)​
Airx Climate Solutions, Inc.								1st Lien Revolving Loan																				11/2029									—				—	(e)(g)​
Airx Climate Solutions, Inc.								1st Lien Term Loan				10.08%				SOFR (Q)					5.75	%						11/2029									1,494				1,494	(e)(f)​
Airx Climate Solutions, Inc.								1st Lien Term Loan				9.33%				SOFR (Q)					5.00	%						11/2029									2,420				2,420	(e)(f)​
Airx Climate Solutions, Inc.								1st Lien Delay Draw Term Loan				9.33%				SOFR (Q)					5.00	%						11/2029									494				494	(e)(f)(g)​
Align Precision Group, LLC								1st Lien Term Loan																				06/2027									5,200				2,340	(e)(i)​
Align Precision Group, LLC								1st Lien Delay Draw Term Loan				10.69%				SOFR (M)					6.25	%						06/2025									87				87	(e)(g)​
Align Precision Group, LLC								1st Lien Delay Draw Term Loan																				06/2027									1,185				534	(e)(i)​
AllClear Military Inc.								1st Lien Revolving Loan																				05/2030									—				—	(e)(g)(h)​
AllClear Military Inc.								1st Lien Term Loan				9.92%				SOFR (M)					5.50	%						05/2030									807				807	(e)​
AllClear Military Inc.								1st Lien Term Loan				8.96% (2.00% PIK)				SOFR (M)					4.50	%						05/2030									130				30	(e)​

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
AllClear Military Inc.								1st Lien Term Loan				5.46% (6.00% PIK)				SOFR (M)					1.00	%						05/2030								$	458			$	106	(e)​
AllClear Military Inc.								1st Lien Delay Draw Term Loan																				05/2030									—				—	(e)(g)(h)​
Artera Services, LLC								1st Lien Term Loan				8.80%				SOFR (Q)					4.50	%						02/2031									6,476				5,400	(f)​
BCPE Empire Holdings, Inc.								1st Lien Term Loan				7.58%				SOFR (M)					3.25	%						12/2030									3,461				3,438
BGIF IV Fearless Utility Services, Inc.								1st Lien Revolving Loan																				06/2030									—				—	(e)(g)​
BGIF IV Fearless Utility Services, Inc.								1st Lien Term Loan				9.31%				SOFR (M)					5.00	%						06/2031									2,221				2,221	(e)(f)​
BGIF IV Fearless Utility Services, Inc.								1st Lien Delay Draw Term Loan																				06/2031									—				—	(e)(g)​
Box Bidco Limited				United Kingdom				1st Lien Term Loan				9.23%				EURIBOR (S)					7.17	%						11/2028								€	878				1,035	(e)(f)​
Box Bidco Limited				United Kingdom				1st Lien Term Loan				10.19%				SOFR (S)					5.50	%						11/2028									1,691				1,690	(e)(f)​
Box Bidco Limited				United Kingdom				1st Lien Term Loan				11.86%				SOFR (S)					7.17	%						11/2028									536				536	(e)​
Burgess Point Purchaser Corporation								1st Lien Term Loan				9.65%				SOFR (Q)					5.25	%						07/2029									4,083				3,467	(f)​
Chillaton Bidco Limited				United Kingdom				1st Lien Term Loan				10.73%				SONIA (S)					6.50	%						05/2031								£	1,491				2,046	(e)​
Chillaton Bidco Limited				United Kingdom				1st Lien Delay Draw Term Loan				10.73%				SONIA (S)					6.50	%						05/2031								£	544				746	(e)(g)​
CP Atlas Buyer Inc								1st Lien Term Loan				8.18%				SOFR (M)					3.75	%						11/2027									4,069				4,051	(f)​
CPIG Holdco Inc.								1st Lien Revolving Loan				9.14%				SOFR (Q)					4.75	%						04/2028									1				1	(e)(g)​
CPIG Holdco Inc.								1st Lien Term Loan				11.39%				SOFR (Q)					7.00	%						04/2028									3,805				3,805	(e)(f)​
Dynamic NC Aerospace Holdings, LLC								1st Lien Revolving Loan				10.94%				SOFR (Q)					6.50	%						12/2027									686				686	(e)(g)​
Dynamic NC Aerospace Holdings, LLC								1st Lien Term Loan				10.94%				SOFR (Q)					6.50	%						12/2027									3,248				3,249	(e)(f)​
EC Partners Spanish Bidco, S.L.U.				Spain				1st Lien Term Loan				8.34%				EURIBOR (S)					5.75	%						01/2032								€	444				524	(e)​
EC Partners Spanish Bidco, S.L.U.				Spain				1st Lien Delay Draw Term Loan																				01/2032								€	—				—	(e)(g)​

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
Generator Buyer, Inc.				Canada				1st Lien Revolving Loan				7.93%				CORRA (Q)					5.25	%						07/2030								CAD	47			$	35	(e)(g)​
Generator Buyer, Inc.				Canada				1st Lien Term Loan				7.93%				CORRA (Q)					5.25	%						07/2030								CAD	2,025				1,487	(e)(f)​
Generator Buyer, Inc.				Canada				1st Lien Delay Draw Term Loan				7.93%				CORRA (Q)					5.25	%						07/2030								CAD	366				269	(e)(g)​
GENERATOR US BUYER, INC.								1st Lien Term Loan				9.55%				SOFR (Q)					5.25	%						07/2030									408				408	(e)(f)​
GSV Purchaser, Inc.								1st Lien Revolving Loan																				08/2030									—				—	(e)(g)​
GSV Purchaser, Inc.								1st Lien Term Loan				8.82%				SOFR (M)					4.50	%						08/2031									3,680				3,680	(e)(f)​
GSV Purchaser, Inc.								1st Lien Delay Draw Term Loan				8.82%				SOFR (Q)					4.50	%						08/2031									300				300	(e)(g)​
Helix Acquisition Holdings, Inc.								1st Lien Term Loan				11.43%				SOFR (M)					7.00	%						03/2030									473				473	(e)​
Horizon Avionics Buyer, LLC (Horizon CTS Buyer, LLC)								1st Lien Revolving Loan				8.80%				SOFR (Q)					4.50	%						03/2032									111				110	(e)(g)​
Horizon Avionics Buyer, LLC (Horizon CTS Buyer, LLC)								1st Lien Term Loan				8.80%				SOFR (Q)					4.50	%						03/2032									5,460				5,432	(e)(f)​
Horizon Avionics Buyer, LLC (Horizon CTS Buyer, LLC)								1st Lien Delay Draw Term Loan																				03/2032									—				—	(e)(g)​
Kene Acquisition, Inc.								1st Lien Revolving Loan																				02/2031									—				—	(e)(g)​
Kene Acquisition, Inc.								1st Lien Term Loan				9.53%				SOFR (Q)					5.25	%						02/2031									1,779				1,779	(e)(f)​
Kene Acquisition, Inc.								1st Lien Delay Draw Term Loan				9.53%				SOFR (Q)					5.25	%						02/2031									82				82	(e)(g)​
LBM Acquisition LLC								1st Lien Term Loan				8.18%				SOFR (M)					3.75	%						12/2027									3,697				3,640
LBM Acquisition LLC								1st Lien Term Loan				8.16%				SOFR (M)					3.75	%						06/2031									6,508				6,060	(f)​
Osmose Utilities Services, Inc.								1st Lien Term Loan				7.69%				SOFR (M)					3.25	%						06/2028									1,141				1,068
Osmose Utilities Services, Inc.								2nd Lien Term Loan				11.19%				SOFR (M)					6.75	%						06/2029									8,237				7,743	(e)​
Paris US Holdco, Inc. & 1001028292 Ontario Inc.								1st Lien Revolving Loan				9.08%				SOFR (M)					4.75	%						12/2031									43				43	(e)(g)​

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
Paris US Holdco, Inc. & 1001028292 Ontario Inc.								1st Lien Term Loan				9.08%				SOFR (M)					4.75	%						12/2031								$	5,858			$	5,858	(e)(f)​
Paris US Holdco, Inc. & 1001028292 Ontario Inc.								1st Lien Delay Draw Term Loan																				12/2031									—				—	(e)(g)​
Patriot Container Corp.								1st Lien Term Loan				13.00% (7.00% PIK)																09/2030									26,173				26,173	(e)​
Patriot Container Corp.								1st Lien Delay Draw Term Loan				13.00% (7.00% PIK)																09/2030									370				370	(e)(g)​
PumpTech, LLC								1st Lien Revolving Loan				11.25%				PRIME (Q)					3.75	%						01/2031									61				60	(e)(g)​
PumpTech, LLC								1st Lien Term Loan				9.08%				SOFR (M)					4.75	%						01/2031									2,033				2,007	(e)(f)​
PumpTech, LLC								1st Lien Delay Draw Term Loan																				01/2031									—				—	(e)(g)​
Radius Aerospace Europe Limited				United Kingdom				1st Lien Revolving Loan				10.22% (0.25% PIK)				SONIA (M)					6.00	%						03/2027								£	373				501	(e)(g)​
Radius Aerospace Europe Limited				United Kingdom				1st Lien Term Loan				10.51% (0.25% PIK)				SOFR (Q)					6.00	%						03/2027									4,103				4,021	(e)(f)​
Radius Aerospace, Inc.								1st Lien Revolving Loan				10.48% (0.25% PIK)				SOFR (Q)					6.00	%						03/2027									159				154	(e)(g)​
Radius Aerospace, Inc.								1st Lien Term Loan				10.51% (0.25% PIK)				SOFR (Q)					6.00	%						03/2027									4,684				4,590	(e)(f)​
Radius Aerospace, Inc.								1st Lien Term Loan				10.45% (0.25% PIK)				SOFR (Q)					6.00	%						03/2027									6				6	(e)​
Sigma Electric Manufacturing Corporation								1st Lien Revolving Loan				10.17%				SOFR (M)					5.75	%						12/2027									28				28	(e)(g)​
Sigma Electric Manufacturing Corporation								1st Lien Term Loan				10.18%				SOFR (M)					5.75	%						12/2027									439				439	(e)(f)​
Sigma Electric Manufacturing Corporation								1st Lien Term Loan				10.18%				SOFR (S)					5.75	%						12/2027									2,298				2,298	(e)(f)​
Spirit AeroSystems, Inc.								1st Lien Term Loan				9.29%																06/2025									10,349				10,349	(e)​
Sunk Rock Foundry Partners LP								1st Lien Term Loan				10.18%				SOFR (S)					5.75	%						12/2027									217				217	(e)(f)​
Sunvair Aerospace Group, Inc.								1st Lien Revolving Loan																				05/2031									—				—	(e)(g)​

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
Sunvair Aerospace Group, Inc.								1st Lien Term Loan				9.30%				SOFR (Q)					5.00	%						05/2031								$	1,760			$	1,760	(e)(f)​
Sunvair Aerospace Group, Inc.								1st Lien Delay Draw Term Loan				9.30%				SOFR (Q)					5.00	%						05/2031									154				154	(e)(g)​
Two Six Labs, LLC								1st Lien Revolving Loan				9.57%				SOFR (Q)					5.25	%						08/2027									1,229				1,229	(e)(g)​
Two Six Labs, LLC								1st Lien Term Loan				9.55%				SOFR (Q)					5.25	%						08/2027									7,187				7,187	(e)(f)​
Two Six Labs, LLC								1st Lien Term Loan				10.30%				SOFR (Q)					6.00	%						08/2027									1,318				1,318	(e)(f)​
Two Six Labs, LLC								1st Lien Delay Draw Term Loan				9.55%				SOFR (Q)					5.25	%						08/2027									2,810				2,810	(e)(f)​
Two Six Labs, LLC								1st Lien Delay Draw Term Loan																				08/2027									—				—	(e)(g)​
Victory Buyer LLC								1st Lien Term Loan				8.19%				SOFR (M)					3.75	%						11/2028									8,486				8,365
WEC US Holdings Ltd.								1st Lien Term Loan				6.57%				SOFR (M)					2.25	%						01/2031									21,706				21,704	(f)​
Werner FinCo LP								1st Lien Term Loan				9.82%				SOFR (Q)					5.50	%						06/2031									39,008				38,422	(e)(f)​
																																									245,262				5.05	%
Commercial and Professional Services
Accommodations Plus Technologies LLC								1st Lien Revolving Loan																				05/2032									—				—	(e)(g)​
Accommodations Plus Technologies LLC								1st Lien Term Loan				8.83%				SOFR (Q)					4.50	%						05/2032									410				405	(e)(f)​
Aero Operating LLC								1st Lien Term Loan				13.45%				SOFR (Q)					9.00	%						02/2026									2,934				2,758	(e)(f)​
Aero Operating LLC								1st Lien Delay Draw Term Loan				13.45% (2.00% PIK)				SOFR (Q)					9.00	%						02/2026									816				767	(e)(f)​
Aldinger Company								1st Lien Revolving Loan				9.56%				SOFR (M)					5.25	%						07/2027									81				81	(e)(g)​
Aldinger Company								1st Lien Term Loan				9.55%				SOFR (Q)					5.25	%						07/2027									1,245				1,245	(e)(f)​
Aldinger Company								1st Lien Delay Draw Term Loan				9.55%				SOFR (Q)					5.25	%						07/2027									716				717	(e)​
Aldinger Company								1st Lien Delay Draw Term Loan				9.55%				SOFR (Q)					5.25	%						07/2027									245				245	(e)(g)​
AMCP Clean Acquisition Company, LLC								1st Lien Term Loan				9.05%				SOFR (Q)					4.75	%						06/2028									798				798	(e)(f)​

CION Ares Diversified Credit Fund

Consolidated Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

Company				Country(a)​				Investment				Coupon				Reference				Spread				Acquisition Date				Maturity Date				Shares				Principal Amount(a)​				Fair Value(a)​				% of Net Assets
AMCP Clean Acquisition Company, LLC								1st Lien Delay Draw Term Loan				9.05%				SOFR (Q)					4.75	%						06/2028								$	640			$	640	(e)(g)​
Andwis Group Limited				United Kingdom				1st Lien Term Loan				10.98%				SONIA (S)					6.75	%						11/2031								£	2,074				2,847	(e)​
Andwis Group Limited				United Kingdom				1st Lien Delay Draw Term Loan				10.96%				SONIA (S)					6.75	%						11/2031								£	1,274				1,749	(e)​
Andwis Group Limited				United Kingdom				1st Lien Delay Draw Term Loan				10.96%				SONIA (S)					6.75	%						11/2031								£	1,650				2,265	(e)(g)​
Antea Group Holding B.V.				Netherlands				1st Lien Delay Draw Term Loan				8.26%				EURIBOR (Q)					6.25	%						03/2030								€	1,250				1,472	(e)(g)​
Armorica Lux S.a.r.l.				Luxembourg				1st Lien Term Loan				7.11%				EURIBOR (Q)					4.93	%						07/2028								€	6,500				7,482
Auxadi Midco S.L.U.				Spain				1st Lien Term Loan				6.99%				EURIBOR (Q)					4.75	%						07/2028								€	473				557	(e)​
Bluejack Fire Acquisition, Inc.								1st Lien Revolving Loan																				01/2031									—				—	(e)(g)​
Bluejack Fire Acquisition, Inc.								1st Lien Term Loan				9.07%				SOFR (M)					4.75	%						01/2031									989				977	(e)(f)​
Bluejack Fire Acquisition, Inc.								1st Lien Delay Draw Term Loan																				01/2031									—				—	(e)(g)​
Capstone Acquisition Holdings, Inc.								1st Lien Revolving Loan																				05/2029									—				—	(e)(g)​
Capstone Acquisition Holdings, Inc.								1st Lien Term Loan				8.93%				SOFR (M)					4.50	%						11/2029									17,964				17,964	(e)(f)​
Capstone Acquisition Holdings, Inc.								1st Lien Delay Draw Term Loan																				11/2029									—				—	(e)(g)​
Capstone Acquisition Holdings, Inc.								2nd Lien Term Loan				12.83%				SOFR (M)					8.50	%						11/2030									9,247				9,247	(e)(f)​
Capstone Acquisition Holdings, Inc.								2nd Lien Delay Draw Term Loan																				11/2030									—				—	(e)(g)​
Celnor Group Limited				United Kingdom				1st Lien Term Loan				10.02%				SONIA (Q)					5.67	%						08/2031								£	879				1,207	(e)​
Celnor Group Limited				United Kingdom				1st Lien Delay Draw Term Loan				10.02%				SONIA (Q)					5.67	%						08/2031								£	1,371				1,881	(e)​
Celnor Group Limited				United Kingdom				1st Lien Delay Draw Term Loan				9.93%				SOFR (Q)					5.67	%						08/2031								£	1,142				1,568	(e)​
Celnor Group Limited				United Kingdom				1st Lien Delay Draw Term Loan				10.02%				SONIA (Q)					5.67	%						08/2031								£	701				963	(e)(g)​
Compass Bidco Limited.				United Kingdom				1st Lien Term Loan				11.04%				SONIA (S)					6.75	%						04/2031								£	12,356				16,961	(e)​