This report is for shareholder information. This is not a Prospectus intended for use in the purchase or sale of Fund shares.

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Dear Shareholders,

We are pleased to provide the Annual Report for the Oaktree Diversified Income Fund (the “Fund”) for the year ended December 31, 2024.

Risk assets performed well in both the third and fourth quarter of 2024, amid positive risk sentiment and a supportive technical backdrop which drove spreads tighter. Several central banks around the world began easing their monetary policies, with the Federal Reserve (the “Fed”) cutting rates by 100bps during the second half of the year. Nevertheless, interest rates continued to fluctuate amid shifting rate expectations. While the recent election results helped equity indices reach new highs, they also drove renewed concerns on rising inflation, with the prospects of tariffs, tax cuts and a growing fiscal deficit putting pressure on rates. Additionally, the Fed signaled more moderate rate cuts in 2025 relative to what they had previously reported. Against this backdrop, global high yield bonds and senior loans had both a strong performance, returning 5.6% and 4.5%, respectively, while longer duration global investment grade bonds returned 3.4%. Overall, sub-investment grade rated credit continued to deliver compelling returns.

The Fund’s diversified asset mix of both public and private debt investments provided investors with a net return of 6.12% during the six-month period, with all strategies contributing positively to the fund’s performance. Structured credit was the top-contributing strategy in the period, led by BB- and BBB-rated collateralized loan obligations (CLOs) debt tranches, which outperformed amid high current income and spread tightening. Real estate debt also performed well, with returns driven by commercial real estate (CRE) CLOs, office-backed single asset single borrower (SASB) commercial mortgage-backed securities (CMBS), and non-agency residential mortgage-backed securities (RMBS). Private credit also had solid returns, benefitting from strong performance among floating rate loans in the healthcare and information technology sectors. Senior loans in the U.S. and Europe contributed positively to returns, outperforming their respective indices. High yield bonds delivered strong returns as well, in both the U.S. and Europe, with the latter outperforming amid lower volatility in interest rates. Emerging markets debt also gained, amid positive performance in our corporate exposure in Asia. Lastly, the portfolio’s allocation to global convertibles was accretive to performance, supported by positive risk sentiment and strong equity returns.

Overall, the backdrop for risk assets was favorable in the second half of the year and in 2024 as a whole, as economic growth surpassed expectations and central banks began to cut rates. Global credit markets delivered another year of strong returns, supported by elevated starting yields and spread compression. While continued uncertainty around the future path of interest rates was once again a source of market volatility, our portfolio was relatively insulated given the mix of fixed and floating-rate assets.

Heading into the new year, we continue to focus on assets that offer higher yields, given our desire for income to be the primary driver of portfolio performance rather than duration positioning. We continue to believe that credit investments remain an attractive alternative to equity on a risk-adjusted basis. While yields for sub-investment grade bonds have come off their recent highs, they remain well above their December 2021 levels (~300 bps higher), and above their average levels since the global financial crisis (~100 bps higher). Meanwhile, credit fundamentals are relatively sound for most borrowers, and active management will allow the portfolio to avoid the companies which are expected to experience challenges ahead and that may be adversely impacted by new government policies.

Our focus remains on credit fundamentals, conscious that an uptick in corporate activity in 2025 could alter the credit profile of borrowers and the relative value between markets. We continue to deploy capital into high yield bonds, senior loans and structured credit, while maintaining some dry powder for opportunistic deployment. Selectivity remains key, and in both high yield bonds and senior loans we are primarily focusing on the middle of the quality spectrum, while avoiding lower-quality names offering insufficient compensation for the attendant risk. Within private credit, we continued to look for opportunities across the sponsor and non-sponsor segments, with niche areas such as asset-backed finance offering further diversification potential across a range of contractual assets. Outside of bonds and loans, corporate structured credit still offers some of the best relative value opportunities in the market. We are currently targeting BB-rated CLOs. Recent refinancing of CLOs issued with expensive AAA-rated liabilities (the largest portion of their capital structure and therefore the largest driver of overall economics) has created opportunities in BB-rated tranches where managers are less sensitive to pricing. We believe balancing this allocation with dry powder will leave us well positioned if CLO market volatility picks up again. Finally, we are finding select opportunities within the real estate structured credit market, targeting primarily BBB- and BB-rated non-qualified mortgage residential MBS, which could benefit from high levels of prepayments as interest rates decline. Within real estate debt, we’ve also been purchasing commercial real estate CLOs, particularly those with multifamily collateral. We believe the portfolio remains well-positioned with a yield-to-worst of 11.36%, an average price in the mid-90s and a duration of 1.16 years.

In addition to performance information and additional discussion of factors impacting the Fund, this report provides the Fund’s audited financial statements and schedules of investments as of December 31, 2024.

We welcome your questions and comments and encourage you to contact our Investor Relations team at 1-855-777-8001 or visit us at https://www.brookfieldoaktree.com for more information.

Thank you for your support.

Sincerely,

These views represent the opinions of Oaktree Fund Advisors, LLC and are not intended to predict or depict the performance of any investment. These views are primarily as of the close of business on December 31, 2024 and subject to change based on subsequent developments.

Must be preceded or accompanied by a Prospectus.

Past performance is no guarantee of future results.

Investing involves risk. Principal loss is possible. Real assets include real estate securities, infrastructure securities and natural resources securities. Property values may fall due to increasing vacancies or declining rents resulting from unanticipated economic, legal, cultural or technological developments. Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability and energy conservation policies. Natural resources securities may be affected by numerous factors, including events occurring in nature, inflationary pressures and international politics.

Quasar Distributors, LLC is the distributor of Oaktree Diversified Income Fund Inc.

The Fund’s portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. There is no assurance that the Fund currently holds these securities. Please refer to the Schedule of Investments contained in this report for a full listing of Fund holdings.

Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance includes the reinvestment of income, dividends and capital gain distributions. To obtain performance information current to the most recent month-end, please call 1-855-862-5873. Performance reflects management fees and other fund expenses.

An investor should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing.

The Fund is subject to investment risks, including the possible loss of principal invested. Investing involves risk, and principal loss is possible. The Adviser employs an active approach to allocation across multiple credit sectors, but there is no guarantee that such allocation techniques will produce the desired results. General interest rate fluctuations may have a substantial negative impact on the Fund’s investments and investment opportunities, and, accordingly, may have a material adverse effect on the Fund’s rate of return. The Fund may invest in foreign securities, including, but not limited to, risk related to exchange rate changes, political and economic upheaval, and relatively low market liquidity, all of which are magnified in emerging markets. The Fund intends to invest in illiquid investments which can face significant difficulties and delays associated with such transactions, and the Fund may be unable to sell other illiquid investments when it desires to do so, resulting in the Fund obtaining a lower price or being required to retain the investment. Investments in derivatives involve special risks including correlation, counterparty, liquidity, operational, accounting and tax risks. These risks, in certain cases, may be greater than the risks presented by more traditional investments.

High-yield debt securities rated below investment grade are commonly referred to as “junk bonds” and are considered speculative. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Bank loans (including senior loans) are usually rated below investment grade, and the market for bank loans may be subject to irregular trading activity, wide bid/ask spreads, restrictions on resale, and extended trade settlement periods. The Fund’s investments in senior loans may be subject to greater levels of credit risk, call risk, settlement risk and liquidity risk than funds that do not invest in such securities. The Fund may invest in distressed securities of corporate issuers that are the subject of bankruptcy proceedings or otherwise in default as to the repayment of principal and/or interest or in significant risk of being in such default which is speculative and involves significant risk. Distressed Securities frequently do not produce income while they are outstanding and may require the Fund to bear certain extraordinary expenses in order to protect and recover its investment. The Fund may invest in loans that may be “covenant-lite,” generally loans that do not have financial maintenance covenants, which can cause the Fund to have fewer rights against a borrower and may have a greater risk of loss on such investments.

The Fund may invest in a variety of mortgage related and other asset-backed securities, which are subject to greater price volatility in relation to interest rate movements. Residential mortgage backed securities (RMBS) may be subject to prepayment risk, meaning that securities may be paid off more quickly than originally anticipated and the Fund will have to invest the proceeds in securities with lower yields. Commercial mortgage backed securities (CMBS) may be subject to extension risk, meaning that the value of CMBS may be adversely affected in rising interest rate environments when payments on underlying mortgages do not occur as anticipated, resulting in the extension of the security’s effective maturity and the related increase in interest rate sensitivity of a longer-term instrument. Investments in collateralized loan obligations (CLOs) carry additional risks including, but not limited to: 1) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; 2) the quality of the collateral may decline in value or default; 3) the possibility that the Fund may invest in CLOs that are subordinate to other classes; and 4) the complex structure of the security may produce disputes with the issuer or unexpected investment results.

Short term performance in particular is not a good indication of the Fund’s future performance and an investment should not be made based solely on returns.

These views represent the opinions of Oaktree Fund Advisors, LLC and are not intended to predict or depict the performance of any investment. These views are as of the close of business on December 31, 2024 and subject to change based on subsequent developments.