Evergreen Fixed Income Trust NCSRS Certified semi-annual shareholder report (management investment company)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08415

Evergreen Fixed Income Trust

_____________________________________________________________

(Exact name of registrant as specified in charter)

200 Berkeley Street

Boston, Massachusetts 02116

_____________________________________________________________

(Address of principal executive offices) (Zip code)

Michael H. Koonce, Esq.

200 Berkeley Street

Boston, Massachusetts 02116

_____________________________________________________________

(Name and address of agent for service)

Registrant’s telephone number, including area code: (617) 210-3200

Date of fiscal year end:

Registrant is making a semi-annual filing for four of its series, Evergreen Core Plus Bond Fund, Evergreen Diversified Income Builder Fund, Evergreen High Income Fund and Evergreen U.S. Government Fund Fund, for the six months ended October 31, 2009. These series have April 30 fiscal year end.

Date of reporting period: October 31, 2009

Item 1 - Reports to Stockholders.

Evergreen Core Plus Bond Fund

		table of contents

1		LETTER TO SHAREHOLDERS

4		FUND AT A GLANCE

7		ABOUT YOUR FUND’S EXPENSES

8		FINANCIAL HIGHLIGHTS

12		SCHEDULE OF INVESTMENTS

23		STATEMENT OF ASSETS AND LIABILITIES

24		STATEMENT OF OPERATIONS

25		STATEMENTS OF CHANGES IN NET ASSETS

27		NOTES TO FINANCIAL STATEMENTS

40		ADDITIONAL INFORMATION

48		TRUSTEES AND OFFICERS

This semiannual report must be preceded or accompanied by a prospectus of the Evergreen fund contained herein. The prospectus contains more complete information, including fees and expenses, and should be read carefully before investing or sending money.

The fund will file its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q will be available on the SEC’s Web site at http://www.sec.gov. In addition, the fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330.

A description of the fund’s proxy voting policies and procedures, as well as information regarding how the fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available by visiting our Web site at EvergreenInvestments.com or by visiting the SEC’s Web site at http://www.sec.gov. The fund’s proxy voting policies and procedures are also available without charge, upon request, by calling 800.343.2898.

Mutual Funds:

NOT FDIC INSURED

MAY LOSE VALUE

NOT BANK GUARANTEED

Evergreen Investment Management Company, LLC is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s other Broker Dealer subsidiaries.

Evergreen mutual funds are distributed by Evergreen Investment Services, Inc. 200 Berkeley Street, Boston, MA 02116

LETTER TO SHAREHOLDERS

December 2009

W. Douglas Munn
President and Chief Executive Officer

Dear Shareholder:

We are pleased to provide the Semiannual Report for Evergreen Core Plus Bond Fund for the six-month period ended October 31, 2009 (the “period”).

The period was characterized by a strong equity market rally that spanned the first half of the period. U.S. and international stocks rallied off their March 9th lows, with international and small cap stocks leading the gains. Signs of stability emerged in the corporate credit markets, as both issuance and performance improved. Stocks finished a banner third quarter 2009, as major market indexes, both domestic and international, climbed by approximately 15% and investor sentiment was buoyed by signs of improvement in the economy and corporate earnings. At the end of the period, however, stocks closed lower for the first time in seven months as investors questioned whether the huge rally had exceeded the economy’s ability to generate growth in output and profits. The weakness in U.S. markets failed to extend beyond our borders, as developed markets, which had also rallied off the lows of last year, experienced just a fractional loss in October 2009, and emerging markets managed to rise by 1%, adding to impressive year-to-date returns by the end of the period.

Fortunately, the fundamental picture has brightened. Better-than-expected economic data at period end suggests the possibility of improvements in corporate performance. Interest rates and inflation remain low, providing a healthy backdrop for corporations that have been very aggressive cutting costs from their expense structures.

Near the end of the period, the Federal Reserve Board (the “Fed”) reiterated its commitment to keeping the benchmark lending rate near zero for an “extended period.” Additionally, the Fed’s statement changed somewhat from the previous meeting of the Federal Open Market Committee, altering text regarding economic activity from “leveling out” to activity that has “picked up.” It should be emphasized, however, that this shift, which might be construed as a signal from the Fed that the recession is over, is followed by a statement that household spending was still being constrained by “job losses, sluggish income growth, lower housing wealth, and tight credit.” While this data reflects an economy that is managing to climb from the depths reached in March, we question whether the fundamentals are in place for sustainable growth, given that economic reports continue to display data that is simply “less bad” than the previous depths of the recession. Until we see stabilization in home prices and employment, it is unlikely that activity will exceed much beyond what is considered to be “below potential” for any period of time.

LETTER TO SHAREHOLDERS continued

In this challenging environment, the investment managers of Evergreen’s intermediate and long-term bond funds paid careful attention to risk management in a rapidly changing market environment. The teams supervising Evergreen U.S. Government Fund, Evergreen Core Bond Fund and Evergreen Core Plus Bond Fund focused on interest-rate movements, Fed policy and general economic trends in managing their portfolios. Meanwhile, the managers of Evergreen High Income Fund positioned the portfolio relatively conservatively during a period of growing risk aversion. Managers of Evergreen Diversified Income Builder Fund maintained an emphasis on better-quality, high yield corporate bonds while maintaining exposure to dividend-paying stocks.

We believe the changing conditions in the investment environment over the period have underscored the value of a well-diversified, long-term investment strategy to help soften the effects of volatility in any one market or asset class. As always, we encourage investors to maintain diversified investment portfolios in pursuit of their long-term investment goals.

Please visit us at EvergreenInvestments.com for more information about our funds and other investment products available to you. Thank you for your continued support of Evergreen Investments.

Sincerely,

W. Douglas Munn
President and Chief Executive Officer
Evergreen Funds

LETTER TO SHAREHOLDERS continued

Notice to Shareholders:

Effective after the close of business on June 30, 2009, Class B shares of the Fund were closed to new accounts and additional purchases by existing shareholders. Existing shareholders of Class B shares of the Fund may continue to exchange their Class B shares for Class B shares of other Evergreen Funds subject to the limitations described in each fund’s prospectus and may also continue to add to their accounts through dividend reinvestment. All other Class B share features and attributes, including, but not limited to, the 12b-1 fee, contingent deferred sales charge and conversion after a number of years to Class A shares, remain unchanged. Shareholders of the Fund may continue to redeem Fund shares in the manner described in the Fund’s prospectus.

FUND AT A GLANCE

as of October 31, 2009

MANAGEMENT TEAM

Investment Advisor:

Evergreen Investment Management Company, LLC

Sub-Advisor¹:

Wells Capital Management Inc.

Portfolio Managers¹:

Michael Bray, CFA; D. James Newton II, CFA; Thomas M. Price, CFA; Janet S. Rilling, CFA

1	Effective December 1, 2009, Wells Capital Management Inc. became sub-advisor for the fund. Mr. Bray, Mr. Newton, Mr. Price and Ms. Rilling became portfolio managers of the fund.

CURRENT INVESTMENT STYLE

Source: Morningstar, Inc.

Morningstar’s style box is based on a portfolio date as of 9/30/2009.

The Fixed Income style box placement is based on a fund’s average effective maturity or duration and the average credit rating of the bond portfolio.

PERFORMANCE AND RETURNS

Portfolio inception date: 11/30/1972

Class inception date	Class A 5/20/2005	Class B 5/20/2005	Class C 5/20/2005	Class I 11/30/1972

Nasdaq symbol	EKDLX	EKDMX	EKDCX	EKDYX

6-month return with sales charge	8.09%	8.10%	12.10%	N/A

6-month return w/o sales charge	13.52%	13.10%	13.10%	13.66%

Average annual return*

1-year with sales charge	5.51%	4.98%	8.98%	N/A

1-year w/o sales charge	10.80%	9.98%	9.98%	11.08%

5-year	-1.62%	-1.62%	-1.31%	-0.43%

10-year	3.07%	3.23%	3.23%	3.69%

Maximum sales charge	4.75% Front-end	5.00% CDSC	1.00% CDSC	N/A

*	Adjusted for maximum applicable sales charge, unless noted.

Past performance is no guarantee of future results. The performance quoted represents past performance and current performance may be lower or higher. The investment return and principal value of an investment will fluctuate so that investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance information current to the most recent month-end for Classes A, B, C or I, please go to EvergreenInvestments.com/fundperformance. The performance of each class may vary based on differences in loads, fees and expenses paid by the shareholders investing in each class. Performance includes the reinvestment of income dividends and capital gain distributions. Performance shown does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

FUND AT A GLANCE continued

Comparison of a $10,000 investment in the Evergreen Core Plus Bond Fund Class A shares versus a similar investment in the Barclays Capital Aggregate Bond Index (BCABI) and the Consumer Price Index (CPI).

The BCABI is an unmanaged market index and does not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses or any taxes. The CPI is a commonly used measure of inflation and does not represent an investment return. It is not possible to invest directly in an index.

Historical performance shown for Class I prior to 5/23/2005 is based on the performance of the fund’s predecessor closed-end fund, Vestaur Securities Fund. Historical performance shown for Classes A, B and C prior to their inception is based on the performance of Class I. The historical returns for Classes A, B and C have not been adjusted to reflect the effect of each class’ 12b-1 fee. These fees are 0.25% for Class A and 1.00% for Classes B and C. Class I does not, and Vestaur Securities Fund did not, pay a 12b-1 fee. If these fees had been reflected, returns for Classes A, B and C would have been lower.

The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares after eight years.

Class B shares are closed to new investments by new and existing shareholders.

The advisor is waiving a portion of its advisory fee. Had the fee not been waived, returns would have been lower. Returns reflect expense limits previously in effect for Class A, without which returns for Class A would have been lower.

Class I shares are only offered, subject to the minimum initial purchase requirements, in the following manner: (1) to investment advisory clients of EIMC (or its advisory affiliates), (2) to employer- or state-sponsored benefit plans, including but not limited to, retirement plans, defined benefit plans, deferred compensation plans, or savings plans, (3) to fee-based mutual fund wrap accounts, (4) through arrangements entered into on behalf of the Evergreen funds with certain financial services firms, (5) to certain institutional investors, and (6) to persons who owned Class Y shares in registered name in an Evergreen fund on or before December 31, 1994 or who owned shares of any SouthTrust fund in registered name as of March 18, 2005 or who owned shares of Vestaur Securities Fund as of May 20, 2005.

Class I shares are only available to institutional shareholders with a minimum of $1 million investment, which may be waived in certain situations.

The fund’s investment objective may be changed without a vote of the fund’s shareholders.

Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability and foreign currency fluctuations. Risks of international investing are magnified in emerging or developing markets.

FUND AT A GLANCE continued

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Asset-backed and mortgage-backed securities are generally subject to higher prepayment risks than other types of debt securities, which can limit the potential for gain in a declining interest rate environment and increase the potential for loss in a rising interest rate environment. Mortgage-backed securities may also be structured so that they are particularly sensitive to interest rates.

A high rate of defaults on the mortgages held by a mortgage pool may limit the pool’s ability to make payments to the fund if the fund holds securities that are subordinate to other interest in the same mortgage pool; the risk of such defaults is generally higher in mortgage pools that include subprime mortgages.

Derivatives involve additional risks including interest rate risk, credit risk, the risk of improper valuation and the risk of non-correlation to the relevant instruments they are designed to hedge or to closely track.

High yield, lower-rated bonds may contain more risk due to the increased possibility of default.

Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices, or currency rates are changing.

The return of principal is not guaranteed due to fluctuation in the fund’s NAV caused by changes in the price of individual bonds held by the fund and the buying and selling of bonds by the fund. Bond funds have the same inflation, interest rate and credit risks as individual bonds. Generally, the value of bond funds rises when prevailing interest rates fall, and falls when interest rates rise.

U.S. government guarantees apply only to certain securities held in the fund’s portfolio and not to the fund’s shares.

All data is as of October 31, 2009, and subject to change.

ABOUT YOUR FUND’S EXPENSES

The Example below is intended to describe the fees and expenses borne by shareholders and the impact of those costs on your investment.

Example

As a shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads), redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution (12b-1) fees and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2009 to October 31, 2009.

The example illustrates your fund’s costs in two ways:

• Actual expenses

The section in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class, in the column entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

• Hypothetical example for comparison purposes

The section in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the section in the table under the heading “Hypothetical (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 5/1/2009	Ending Account Value 10/31/2009	Expenses Paid During Period*

Actual
Class A	$1,000.00	$1,135.19	$5.60
Class B	$1,000.00	$1,130.98	$9.61
Class C	$1,000.00	$1,130.98	$9.61
Class I	$1,000.00	$1,136.59	$4.25
Hypothetical (5% return before expenses)
Class A	$1,000.00	$1,019.96	$5.30
Class B	$1,000.00	$1,016.18	$9.10
Class C	$1,000.00	$1,016.18	$9.10
Class I	$1,000.00	$1,021.22	$4.02

*	For each class of the fund, expenses are equal to the annualized expense ratio of each class (1.04% for Class A, 1.79% for Class B, 1.79% for Class C and 0.79% for Class I), multiplied by the average account value over the period, multiplied by 184 / 365 days.

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

CLASS A	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,												Year Ended November 30, 2005^{2, 3}

				2009			2008			2007			2006¹

Net asset value, beginning of period	$	9.95		$	13.40		$	14.45		$	14.25		$	14.53		$	14.83

Income from investment operations
Net investment income		0.22			0.71			0.74			0.81			0.33			0.41	⁴
Net realized and unrealized gains or losses on investments		1.12			(3.46	)		(1.07	)		0.23			(0.27	)		(0.28	)

Total from investment operations		1.34			(2.75	)		(0.33	)		1.04			0.06			0.13

Distributions to shareholders from
Net investment income		(0.29	)		(0.17	)		(0.51	)		(0.83	)		(0.34	)		(0.43	)
Tax basis return of capital		0			(0.53	)⁴		(0.21	)		(0.01	)		0			0

Total distributions to shareholders		(0.29	)		(0.70	)		(0.72	)		(0.84	)		(0.34	)		(0.43	)

Net asset value, end of period	$	11.00		$	9.95		$	13.40		$	14.45		$	14.25		$	14.53

Total return⁵		13.52	%		(20.78	)%		(2.38	)%		7.49	%		0.43	%		0.89	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	117,262		$	110,982		$	167,732		$	199,442		$	213,268		$	226,450
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.04	%⁶		0.92	%		0.92	%		0.94	%		0.96	%⁶		0.97	%⁶
Expenses excluding waivers/reimbursements and expense reductions		1.19	%⁶		1.20	%		1.15	%		1.16	%		1.19	%⁶		1.15	%⁶
Net investment income		4.16	%⁶		6.21	%		5.23	%		5.65	%		5.43	%⁶		5.28	%⁶
Portfolio turnover rate		139	%⁷		171	%⁷		374	%⁷		70	%		30	%		55	%

1	For the five months ended April 30, 2006. The Fund changed its fiscal year end from November 30 to April 30, effective April 30, 2006.

2	For the period from May 20, 2005 (commencement of class operations), to November 30, 2005.

Effective at the close of business on May 20, 2005, the Fund acquired the net assets of Vestaur Securities Fund. Vestaur Securities Fund became the accounting and performance survivor in this transaction. Class A shares of Vestaur Securities Fund did not exist prior to the transaction. As a result, accounting and performance information for Class A shares commenced on May 20, 2005.

4	Per share amount is based on average shares outstanding during the period.

5	Excluding applicable sales charges

6	Annualized

7	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

CLASS B	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,												Year Ended November 30, 2005^{2, 3}

				2009			2008			2007			2006¹

Net asset value, beginning of period	$	9.96		$	13.40		$	14.45		$	14.25		$	14.53		$	14.83

Income from investment operations
Net investment income		0.19			0.63	⁴		0.64			0.70			0.28			0.36	⁴
Net realized and unrealized gains or losses on investments		1.10			(3.45	)		(1.07	)		0.23			(0.26	)		(0.28	)

Total from investment operations		1.29			(2.82	)		(0.43	)		0.93			0.02			0.08

Distributions to shareholders from
Net investment income		(0.25	)		(0.09	)		(0.41	)		(0.72	)		(0.30	)		(0.38	)
Tax basis return of capital		0			(0.53	)⁴		(0.21	)		(0.01	)		0			0

Total distributions to shareholders		(0.25	)		(0.62	)		(0.62	)		(0.73	)		(0.30	)		(0.38	)

Net asset value, end of period	$	11.00		$	9.96		$	13.40		$	14.45		$	14.25		$	14.53

Total return⁵		13.10	%		(21.33	)%		(3.18	)%		6.71	%		0.14	%		0.52	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	5,802		$	6,200		$	13,618		$	16,102		$	18,277		$	20,439
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.79	%⁶		1.67	%		1.67	%		1.67	%		1.67	%⁶		1.67	%⁶
Expenses excluding waivers/reimbursements and expense reductions		1.94	%⁶		1.95	%		1.85	%		1.85	%		1.89	%⁶		1.85	%⁶
Net investment income		3.49	%⁶		5.42	%		4.49	%		4.91	%		4.72	%⁶		4.58	%⁶
Portfolio turnover rate		139	%⁷		171	%⁷		374	%⁷		70	%		30	%		55	%

1	For the five months ended April 30, 2006. The Fund changed its fiscal year end from November 30 to April 30, effective April 30, 2006.

2	For the period from May 20, 2005 (commencement of class operations), to November 30, 2005.

Effective at the close of business on May 20, 2005, the Fund acquired the net assets of Vestaur Securities Fund. Vestaur Securities Fund became the accounting and performance survivor in this transaction. Class B shares of Vestaur Securities Fund did not exist prior to the transaction. As a result, accounting and performance information for Class B shares commenced on May 20, 2005.

4	Per share amount is based on average shares outstanding during the period.

5	Excluding applicable sales charges

6	Annualized

7	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

CLASS C	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,												Year Ended November 30, 2005^{2, 3}

				2009			2008			2007			2006¹

Net asset value, beginning of period	$	9.96		$	13.40		$	14.45		$	14.25		$	14.53		$	14.83

Income from investment operations
Net investment income		0.18			0.63			0.63			0.70			0.28			0.36	⁴
Net realized and unrealized gains or losses on investments		1.11			(3.45	)		(1.06	)		0.23			(0.26	)		(0.28	)

Total from investment operations		1.29			(2.82	)		(0.43	)		0.93			0.02			0.08

Distributions to shareholders from
Net investment income		(0.25	)		(0.09	)		(0.41	)		(0.72	)		(0.30	)		(0.38	)
Tax basis return of capital		0			(0.53	)⁴		(0.21	)		(0.01	)		0			0

Total distributions to shareholders		(0.25	)		(0.62	)		(0.62	)		(0.73	)		(0.30	)		(0.38	)

Net asset value, end of period	$	11.00		$	9.96		$	13.40		$	14.45		$	14.25		$	14.53

Total return⁵		13.10	%		(21.39	)%		(3.11	)%		6.71	%		0.14	%		0.52	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	14,436		$	13,628		$	21,699		$	24,157		$	25,972		$	27,764
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.79	%⁶		1.67	%		1.67	%		1.67	%		1.67	%⁶		1.67	%⁶
Expenses excluding waivers/reimbursements and expense reductions		1.94	%⁶		1.95	%		1.85	%		1.85	%		1.89	%⁶		1.85	%⁶
Net investment income		3.41	%⁶		5.45	%		4.48	%		4.91	%		4.72	%⁶		4.58	%⁶
Portfolio turnover rate		139	%⁷		171	%⁷		374	%⁷		70	%		30	%		55	%

1	For the five months ended April 30, 2006. The Fund changed its fiscal year end from November 30 to April 30, effective April 30, 2006.

2	For the period from May 20, 2005 (commencement of class operations), to November 30, 2005.

Effective at the close of business on May 20, 2005, the Fund acquired the net assets of Vestaur Securities Fund. Vestaur Securities Fund became the accounting and performance survivor in this transaction. Class C shares of Vestaur Securities Fund did not exist prior to the transaction. As a result, accounting and performance information for Class C shares commenced on May 20, 2005.

4	Per share amount is based on average shares outstanding during the period.

5	Excluding applicable sales charges

6	Annualized

7	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

CLASS I	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,												Year Ended November 30,

				2009			2008			2007			2006¹			2005²			2004²

Net asset value, beginning of period	$	9.96		$	13.40		$	14.45		$	14.25		$	14.53		$	15.14		$	15.14

Income from investment operations
Net investment income		0.24	³		0.74	³		0.76			0.83			0.34			0.79	³		0.93
Net realized and unrealized gains or losses on investments		1.11			(3.45	)		(1.05	)		0.25			(0.26	)		(0.41	)		0.02

Total from investment operations		1.35			(2.71	)		(0.29	)		1.08			0.08			0.38			0.95

Distributions to shareholders from
Net investment income		(0.31	)		(0.20	)		(0.55	)		(0.87	)		(0.36	)		(0.86	)		(0.95	)
Tax basis return of capital		0			(0.53	)³		(0.21	)		(0.01	)		0			(0.13	)⁴		0

Total distributions to shareholders		(0.31	)		(0.73	)		(0.76	)		(0.88	)		(0.36	)		(0.99	)		(0.95	)

Net asset value, end of period	$	11.00		$	9.96		$	13.40		$	14.45		$	14.25		$	14.53		$	15.14

Total return		13.66	%		(20.58	)%		(2.13	)%		7.78	%		0.55	%		2.82	%		6.47	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	32,578		$	31,116		$	47,668		$	56,478		$	61,711		$	65,893		$	97,235
Ratios to average net assets
Expenses including waivers/ reimbursements but excluding expense reductions		0.79	%⁵		0.67	%		0.67	%		0.67	%		0.67	%⁵		0.79	%		0.94	%
Expenses excluding waivers/ reimbursements and expense reductions		0.94	%⁵		0.95	%		0.85	%		0.85	%		0.89	%⁵		0.88	%		0.97	%
Net investment income		4.41	%⁵		6.46	%		5.48	%		5.91	%		5.72	%⁵		5.50	%		6.10	%
Portfolio turnover rate		139	%⁶		171	%⁶		374	%⁶		70	%		30	%		55	%		23	%

1	For the five months ended April 30, 2006. The Fund changed its fiscal year end from November 30 to April 30, effective April 30, 2006.

Effective at the close of business on May 20, 2005, the Fund acquired the net assets of Vestaur Securities Fund. Vestaur Securities Fund became the accounting and performance survivor in this transaction. The financial highlights for the periods prior to May 23, 2005 are those of Vestaur Securities Fund. The per share information has been restated to give effect to this transaction. Total return performance reflects the total return of Vestaur Securities Fund based on its net asset value.

3	Per share amount is based on average shares outstanding during the period.

4	Return of capital relates to former Vestaur Securities Fund shareholders and is based on average shares outstanding from December 1, 2004 through May 20, 2005.

5	Annualized

6	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS

October 31, 2009 (unaudited)

	Principal Amount		Value

AGENCY COMMERCIAL MORTGAGE-BACKED SECURITIES 1.4%
FIXED-RATE 1.4%
FHLMC, Ser. M009, Class A, 5.40%, 10/15/2021 (cost $2,262,763)	$	2,260,503	$	2,442,180

AGENCY MORTGAGE-BACKED COLLATERALIZED MORTGAGE OBLIGATIONS 0.1%
FIXED-RATE 0.1%
FNMA:
Ser. 2002-T12, Class A3, 7.50%, 05/25/2042		14,963		16,724
Ser. 2003-W4, Class 4A, 7.50%, 10/25/2042		153,018		171,006

Total Agency Mortgage-Backed Collateralized Mortgage Obligations (cost $181,093)				187,730

AGENCY MORTGAGE-BACKED PASS THROUGH SECURITIES 25.5%
FIXED-RATE 25.5%
FHLMC:
6.50%, 09/25/2043		89,187		96,846
7.50%, 09/01/2013-08/25/2042		119,778		130,196
9.00%, 12/01/2016		66,029		72,861
9.50%, 12/01/2022		12,979		14,454
FHLMC 30 year:
5.00%, TBA #		3,030,000		3,140,310
5.50%, TBA #		6,365,000		6,700,155
FNMA:
5.70%, 11/01/2011		4,507,915		4,938,016
6.06%, 06/01/2012		240,000		259,779
6.10%, 03/01/2012		1,506,306		1,623,338
6.27%, 02/01/2011		3,986,658		4,153,066
6.45%, 09/01/2016		1,687,189		1,792,510
7.04%, 12/01/2010		607,863		612,592
7.87%, 07/01/2026		2,900,762		3,223,269
9.00%, 02/01/2025-09/01/2030		131,008		149,613
10.00%, 09/01/2010-04/01/2021		58,375		65,417
FNMA 15 year:
4.00%, TBA #		8,050,000		8,198,426
4.50%, TBA #		5,155,000		5,356,365
5.00%, TBA #		2,500,000		2,633,985
GNMA:
8.00%, 03/15/2022-08/15/2024		44,744		51,098
8.25%, 05/15/2020		46,400		52,087
8.50%, 09/15/2024-01/15/2027		24,737		28,405
9.00%, 12/15/2019		53,165		60,348
9.50%, 09/15/2019		1,817		1,870
10.00%, 01/15/2019-03/15/2020		26,916		31,027

Total Agency Mortgage-Backed Pass Through Securities (cost $42,701,418)				43,386,033

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

ASSET-BACKED SECURITIES 0.1%
Acacia CDO, Ltd.:
Ser. 05A, Class E, FRN, 3.26%, 11/08/2039 144A o + <	$	3,029,561	$	30,296
Ser. 10A, Class C, FRN, 3.98%, 09/07/2046 144A ••		1,053,095		11
C-Bass, Ltd., Ser. 13A, Class D, FRN, 2.64%, 03/17/2040 144A •		1,732,013		17
Nautilus RMBS CDO, Ltd., Ser. 2005-1A, Class A3, FRN, 4.29%, 07/07/2040 144A •		2,522,664		65,236

Total Asset-Backed Securities (cost $3,819,313)				95,560

COMMERCIAL MORTGAGE-BACKED SECURITIES 2.2%
FIXED-RATE 2.0%
American Home Mtge. Investment Trust, Ser. 2005-2, Class LV-A, 5.66%, 08/25/2035		623,018		425,137
Banc of America Comml. Mtge., Inc.:
Ser. 2000-2, Class F, 7.92%, 09/15/2032		3,000,000		2,913,863
Ser. 2003-7, Class B6, 4.75%, 09/25/2018 ••		193,372		8,112
Prima Capital Securitization, Ltd., Ser. 2006, Class D, 5.88%, 12/28/2048 ••		1,085,000		54,120

				3,401,232

FLOATING-RATE 0.2%
Capmark, Ltd., Ser. 2006-7A, Class B, 0.62%, 08/20/2036 144A		500,000		5,885
GE Capital Comml. Mtge. Corp., Ser. 2007-C1, Class C, 5.70%, 12/10/2049 ••		1,320,000		296,272
MASTR Reperforming Loan Trust, Ser. 2006-2, Class B3, 5.78%, 05/25/2036 144A ••		412,793		32,354
Trapeza CDO, LLC, Ser. 2004-7A, Class B1, 1.83%, 01/25/2035 144A o + <		1,013,573		0

				334,511

Total Commercial Mortgage-Backed Securities (cost $8,244,563)				3,735,743

CORPORATE BONDS 16.1%
CONSUMER DISCRETIONARY 1.5%
Media 0.6%
Time Warner, Inc., 7.625%, 04/15/2031		900,000		1,009,350

Multiline Retail 0.4%
Kohl’s Corp., 6.875%, 12/15/2037		575,000		658,845

Specialty Retail 0.5%
Home Depot, Inc., 5.875%, 12/16/2036		1,000,000		978,697

CONSUMER STAPLES 0.6%
Beverages 0.2%
Anheuser-Busch InBev, 6.875%, 11/15/2019 144A		240,000		267,825

Tobacco 0.4%
Altria Group, Inc., 9.95%, 11/10/2038		525,000		686,657

ENERGY 1.0%
Oil, Gas & Consumable Fuels 1.0%
EnCana Corp., 6.625%, 08/15/2037		1,000,000		1,092,374
Sunoco, Inc., 9.00%, 11/01/2024		500,000		551,520

				1,643,894

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

CORPORATE BONDS continued
FINANCIALS 9.5%
Capital Markets 4.7%
American Capital Strategies, Ltd., Ser. A, 5.92%, 09/01/2009 o + •	$	3,500,000	$	3,090,010
Goldman Sachs Group, Inc.:
5.30%, 02/14/2012		750,000		798,750
6.75%, 10/01/2037		900,000		950,990
Merrill Lynch & Co., Inc.:
6.05%, 08/15/2012		800,000		857,804
7.75%, 05/14/2038		575,000		649,281
Morgan Stanley:
5.625%, 01/09/2012		700,000		745,754
5.95%, 12/28/2017		900,000		926,959

				8,019,548

Commercial Banks 2.1%
BankAmerica Capital II, 8.00%, 12/15/2026		1,000,000		980,000
FBOP Corp., 10.00%, 05/28/2009 o + •		4,000,000		500,000
National City Corp., 5.80%, 06/07/2017		1,000,000		998,580
SunTrust Banks, Inc., 6.00%, 09/11/2017		1,000,000		1,003,196

				3,481,776

Consumer Finance 0.5%
American Water Capital Corp., 6.09%, 10/15/2017		850,000		892,824

Diversified Financial Services 0.4%
Citigroup, Inc., 5.50%, 08/27/2012		650,000		682,451

Insurance 0.7%
Prudential Financial, Inc., 6.10%, 06/15/2017		1,200,000		1,233,983

Real Estate Investment Trusts (REITs) 1.1%
BRE Properties, Inc., 5.50%, 03/15/2017		935,000		873,587
ERP Operating, LP, 5.75%, 06/15/2017		1,000,000		1,008,214

				1,881,801

HEALTH CARE 1.7%
Biotechnology 0.6%
Amgen, Inc., 6.375%, 06/01/2037		900,000		1,025,769

Health Care Providers & Services 0.6%
UnitedHealth Group, Inc., 5.375%, 03/15/2016		1,000,000		1,023,739

Pharmaceuticals 0.5%
Pfizer, Inc.:
4.45%, 03/15/2012		650,000		689,650
5.35%, 03/15/2015		100,000		110,541

				800,191

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

CORPORATE BONDS continued
INDUSTRIALS 0.0%
Commercial Services & Supplies 0.0%
ARAMARK Corp., 8.50%, 02/01/2015	$	50,000	$	50,750

MATERIALS 0.4%
Chemicals 0.4%
Dow Chemical Co., 7.60%, 05/15/2014		650,000		722,886

TELECOMMUNICATION SERVICES 1.4%
Diversified Telecommunication Services 0.5%
New Jersey Bell Telephone Co., 7.85%, 11/15/2029		750,000		830,091

Wireless Telecommunication Services 0.9%
AT&T Wireless, 8.125%, 05/01/2012		1,300,000		1,486,269

Total Corporate Bonds (cost $29,946,249)				27,377,346

FOREIGN BONDS – CORPORATE (PRINCIPAL AMOUNT DENOMINATED IN CURRENCY INDICATED) 4.0%
CONSUMER DISCRETIONARY 0.1%
Media 0.1%
Central European Media Enterprises, Ltd., 11.625%, 09/15/2016 EUR		155,000		222,403

CONSUMER STAPLES 0.7%
Beverages 0.1%
Central European Distribution Corp., 8.00%, 07/25/2012 EUR		116,000		173,272

Food & Staples Retailing 0.4%
Carrefour SA, 3.625%, 05/06/2013 EUR		250,000		375,647
Casino Guichard-Perrachon SA, 6.375%, 04/04/2013 EUR		50,000		79,687
Tesco plc, 5.875%, 09/12/2016 EUR		150,000		248,464

				703,798

Tobacco 0.2%
British American Tobacco plc, 5.875%, 03/12/2015 EUR		150,000		240,449

FINANCIALS 1.9%
Capital Markets 0.1%
Ahold Finance USA, Inc., 6.50%, 03/14/2017 GBP		65,000		117,100

Commercial Banks 0.9%
KfW Bankengruppe, 15.50%, 01/25/2010 TRY		240,000		163,061
Kreditanstalt fur Wiederaufbau:
5.25%, 01/12/2012 GBP		65,000		113,839
6.375%, 02/17/2015 NZD		585,000		427,727
Landwirtschaftliche Rentenbank:
4.375%, 11/27/2017 EUR		150,000		235,015
5.75%, 01/21/2015 AUD		610,000		535,834

				1,475,476

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

FOREIGN BONDS – CORPORATE (PRINCIPAL AMOUNT DENOMINATED IN CURRENCY INDICATED) continued
FINANCIALS continued
Consumer Finance 0.5%
ISS Financing plc, 11.00%, 06/15/2014 EUR		50,000	$	80,748
JTI UK Finance plc, 4.625%, 06/10/2011 EUR		150,000		229,743
Toyota Motor Credit Corp., 5.125%, 01/17/2012 GBP		205,000		354,157
Virgin Media Finance plc, 9.75%, 04/15/2014 GBP		50,000		85,755
Wind Acquisition Finance SpA, 9.75%, 12/01/2015 EUR		70,000		111,772

				862,175

Diversified Financial Services 0.2%
European Investment Bank, 3.625%, 10/15/2013 EUR		70,000		108,042
General Electric Capital Corp.:
3.375%, 02/08/2012 EUR		120,000		179,327
7.625%, 12/10/2014 NZD		200,000		148,997

				436,366

Thrifts & Mortgage Finance 0.2%
Realkredit Danmark, 2.00%, 01/01/2013 DKK ••		2,050,000		393,826

HEALTH CARE 0.3%
Pharmaceuticals 0.3%
GlaxoSmithKline plc, 5.625%, 12/13/2017 EUR		250,000		411,420
Pfizer, Inc., 4.75%, 06/03/2016 EUR		100,000		156,049

				567,469

INDUSTRIALS 0.2%
Aerospace & Defense 0.1%
Bombardier, Inc., 7.25%, 11/15/2016 EUR		70,000		105,076

Commercial Services & Supplies 0.1%
Iron Mountain, Inc., 6.75%, 10/15/2018 EUR		70,000		101,986

Machinery 0.0%
Savcio Holdings, Ltd., 8.00%, 02/15/2013 EUR		50,000		70,271

MATERIALS 0.3%
Chemicals 0.1%
Nalco Holdings Co., 7.75%, 11/15/2011 EUR		50,000		73,951
Rockwood Specialties Group, Inc., 7.625%, 11/15/2014 EUR		50,000		74,870

				148,821

Containers & Packaging 0.1%
Owens-Illinois European Group BV, 6.875%, 03/31/2017 EUR		70,000		100,955
Pregis Corp., FRN, 6.00%, 04/15/2013 EUR		50,000		66,684

				167,639

Metals & Mining 0.1%
New World Resources NV, 7.375%, 05/15/2015 EUR		145,000		198,986

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

FOREIGN BONDS – CORPORATE (PRINCIPAL AMOUNT DENOMINATED IN CURRENCY INDICATED) continued
TELECOMMUNICATION SERVICES 0.2%
Diversified Telecommunication Services 0.2%
France Telecom, 7.50%, 03/14/2011 GBP		120,000	$	210,776
Nordic Telephone Co., 8.25%, 05/01/2016 EUR		50,000		77,997

				288,773

UTILITIES 0.3%
Electric Utilities 0.1%
E.On International Finance BV, 5.75%, 05/07/2020 EUR		100,000		164,055

Multi-Utilities 0.2%
Veolia Environnement SA, 4.00%, 02/12/2016 EUR		200,000		294,305

Total Foreign Bonds – Corporate (Principal Amount Denominated in Currency Indicated) (cost $6,278,854)				6,732,246

FOREIGN BONDS – GOVERNMENT (PRINCIPAL AMOUNT DENOMINATED IN CURRENCY INDICATED) 7.6%
Australia, 6.00%, 10/14/2015 AUD		455,000		412,988
Brazil:
7.375%, 02/03/2015 EUR		210,000		356,176
10.25%, 01/10/2028 BRL		350,000		199,180
Canada:
4.25%, 02/27/2013 EUR		100,000		154,422
4.25%, 06/01/2018 CAD		830,000		822,790
Colombia, 11.50%, 05/31/2011 EUR		50,000		83,332
Denmark, 4.00%, 11/15/2017 DKK		4,170,000		855,895
France:
2.25%, 07/25/2020 EUR		454,135		713,455
4.00%, 10/25/2038 EUR		195,000		278,909
Germany, 4.25%, 07/04/2039 EUR		680,000		1,045,392
Hungary, 4.50%, 02/06/2013 EUR		120,000		179,176
Italy, 3.00%, 03/01/2012 EUR		355,000		536,616
Korea, 5.25%, 03/10/2027 KRW		627,000,000		512,858
Malaysia:
3.83%, 09/28/2011 MYR		1,450,000		435,061
3.87%, 04/13/2010 MYR		1,350,000		398,844
Mexico:
4.25%, 06/16/2015 EUR		100,000		147,165
5.50%, 02/17/2020 EUR		320,000		480,347
9.50%, 12/18/2014 MXN		8,695,000		716,475
Morocco, 5.375%, 06/27/2017 EUR		65,000		98,833
Netherlands:
4.00%, 07/15/2018 EUR		235,000		362,030
4.00%, 01/15/2037 EUR		190,000		274,412
New Zealand, 6.00%, 12/15/2017 NZD		260,000		189,965

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

FOREIGN BONDS – GOVERNMENT (PRINCIPAL AMOUNT DENOMINATED IN CURRENCY INDICATED) continued
Norway, 5.00%, 05/15/2015 NOK		4,720,000	$	875,848
Philippines, 6.25%, 03/15/2016 EUR		200,000		300,217
Poland:
5.25%, 04/25/2013 PLN		1,200,000		414,119
5.50%, 03/12/2012 EUR		210,000		333,372
Slovenia, 4.625%, 09/09/2024 EUR		120,000		178,311
South Africa, 5.25%, 05/16/2013 EUR		100,000		153,052
Spain, 4.80%, 01/31/2024 EUR		228,000		356,626
Sweden, 3.75%, 08/12/2017 SEK		5,900,000		867,798
Turkey, 5.50%, 02/16/2017 EUR		120,000		184,184
Ukraine, 4.95%, 10/13/2015 EUR		50,000		52,244

Total Foreign Bonds – Government (Principal Amount Denominated in Currency Indicated) (cost $12,292,455)				12,970,092

WHOLE LOAN MORTGAGE-BACKED COLLATERALIZED MORTGAGE OBLIGATIONS 1.6%
FIXED-RATE 1.6%
Banc of America Mtge. Securities, Inc., Ser. 2005-D, Class 2A6, 4.79%, 05/25/2035	$	3,255,000		2,633,397
Harborview NIM Corp., Ser. 2006-14, Class N2, 8.35%, 03/19/2038 144A • o +		469,183		4,692

Total Whole Loan Mortgage-Backed Collateralized Mortgage Obligations (cost $3,634,428)				2,638,089

WHOLE LOAN MORTGAGE-BACKED PASS THROUGH SECURITIES 5.3%
FIXED-RATE 0.9%
Wells Fargo Mtge. Backed Securities Trust, Ser. 2006-AR10, Class 5A1, 5.59%, 07/25/2036		1,988,778		1,531,547

FLOATING-RATE 4.4%
Merrill Lynch Countrywide Comml. Mtge. Trust, Ser. 2007-8, Class A3, 5.96%, 07/12/2017		3,530,000		3,045,682
Residential Funding Mtge. Securities, Ser. 2007-SA3, Class 2A1, 5.75%, 07/27/2037		2,906,809		1,976,927
Washington Mutual, Inc. Mtge. Pass-Through Cert.:
Ser. 2006-AR17, Class 1A1B, 1.57%, 12/25/2046		2,232,107		731,451
Ser. 2007-HY7, Class 3A2, 5.82%, 07/25/2037		2,510,244		1,801,702

				7,555,762

Total Whole Loan Mortgage-Backed Pass Through Securities (cost $13,083,334)				9,087,309

WHOLE LOAN SUBORDINATE COLLATERALIZED MORTGAGE OBLIGATIONS 0.1%
FIXED-RATE 0.1%
Financial Asset Securitization, Inc., Ser. 1997-NAM2, Class B-2, 7.88%, 07/25/2027		181,188		151,346

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

WHOLE LOAN SUBORDINATE COLLATERALIZED MORTGAGE OBLIGATIONS continued
FLOATING-RATE 0.0%
Harborview Mtge. Loan Trust:
Ser. 2004-7, Class B4, 3.55%, 11/19/2034	$	2,334,749	$	37,916
Ser. 2005-8, Class 2B3, 3.11%, 09/19/2035		969,651		10

				37,926

Total Whole Loan Subordinate Collateralized Mortgage Obligations (cost $2,965,404)				189,272

U.S. TREASURY OBLIGATIONS 29.3%
U.S. Treasury Bond, 3.50%, 02/15/2039		4,505,000		3,950,326
U.S. Treasury Notes:
2.25%, 05/31/2014		43,840,000		44,042,103
3.125%, 05/15/2019		1,860,000		1,820,767

Total U.S. Treasury Obligations (cost $48,946,845)				49,813,196

YANKEE OBLIGATIONS – CORPORATE 2.6%
CONSUMER STAPLES 0.1%
Beverages 0.1%
Companhia Brasileira de Bebidas, 8.75%, 09/15/2013		115,000		134,550

FINANCIALS 0.5%
Capital Markets 0.1%
BP Capital Markets plc, 3.875%, 03/10/2015		85,000		88,473

Commercial Banks 0.2%
Eurasian Development Bank, 7.375%, 09/29/2014 144A		100,000		104,010
KfW Bankengruppe, 4.875%, 06/17/2019		160,000		174,188

				278,198

Consumer Finance 0.1%
Petrobras International Finance Co., 5.75%, 01/20/2020		245,000		246,621

Diversified Financial Services 0.1%
Inter-American Development Bank, 7.25%, 05/24/2012		190,000		143,927
Preferred Term Securities XII, Ltd., FRN, 10.00%, 12/24/2033 + •		1,000,000		8,820

				152,747

MATERIALS 1.0%
Metals & Mining 1.0%
Alcan, Inc., 6.125%, 12/15/2033		650,000		658,987
ArcelorMittal SA, 5.375%, 06/01/2013		1,000,000		1,031,425

				1,690,412

TELECOMMUNICATION SERVICES 0.8%
Diversified Telecommunication Services 0.1%
Telecom Italia SpA, 6.20%, 07/18/2011		200,000		212,874

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

YANKEE OBLIGATIONS – CORPORATE continued
TELECOMMUNICATION SERVICES continued
Wireless Telecommunication Services 0.7%
Vodafone Group plc:
5.625%, 02/27/2017	$	700,000	$	747,802
6.25%, 01/15/2016		290,000		477,248

				1,225,050

UTILITIES 0.2%
Multi-Utilities 0.2%
National Power Corp., 6.875%, 11/02/2016		330,000		352,262

Total Yankee Obligations – Corporate (cost $4,558,756)				4,381,187

YANKEE OBLIGATIONS – GOVERNMENT 1.9%
Argentina, 12.25%, 06/19/2018 •		159,188		64,471
Brazil:
7.125%, 01/20/2037		370,000		428,275
8.25%, 01/20/2034		410,000		528,900
China, 4.75%, 10/29/2013		100,000		107,545
Colombia:
7.375%, 01/27/2017		100,000		113,250
7.375%, 03/18/2019		200,000		227,200
8.125%, 05/21/2024		175,000		208,250
Emirates of Abu Dhabi, 5.50%, 08/02/2012		200,000		214,247
Indonesia:
6.75%, 03/10/2014		90,000		96,517
6.875%, 01/17/2018		200,000		213,830
Mexico, 5.95%, 03/19/2019		196,000		205,800
Peru:
8.375%, 05/03/2016		155,000		187,163
8.75%, 11/21/2033		35,000		45,850
Russia, Sr. Disc. Note, Step Bond, 7.50%, 03/31/2030 †		131,600		147,734
Sri Lanka, 7.40%, 01/22/2015		100,000		100,500
Turkey, 7.00%, 09/26/2016		325,000		360,750

Total Yankee Obligations – Government (cost $3,100,096)				3,250,282



	Shares		Value

PREFERRED STOCKS 0.0%
FINANCIALS 0.0%
Diversified Financial Services 0.0%
First Republic Capital Corp., 10.50% 144A (cost $55,855)		50		45,250

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

OTHER 0.5%
FINANCIALS 0.5%
Diversified Financial Services 0.5%
JPMorgan Chase & Co., FRN, 7.90%, 12/31/2049 (cost $750,000)	$	750,000	$	756,554



	Shares		Value


SHORT-TERM INVESTMENTS 15.2%
MUTUAL FUND SHARES 15.2%
Evergreen Institutional Money Market Fund, Class I, 0.09% q ø ## (cost $25,915,303)		25,915,303		25,915,303

Total Investments (cost $208,736,729) 113.5%				193,003,372
Other Assets and Liabilities (13.5%)				(22,925,390	)

Net Assets 100.0%			$	170,077,982

#	When-issued or delayed delivery security
144A	Security that may be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees, unless otherwise noted.
o	Security is valued at fair value as determined by the investment advisor in good faith, according to procedures approved by the Board of Trustees.
+	Security is deemed illiquid.
••	Security which has defaulted on payment of interest and/or principal.
•	Security which has defaulted on payment of interest and/or principal. The Fund has stopped accruing interest on this security.
<	Security is currently paying interest in-kind.
†	Security initially issued in zero coupon form which converts to coupon form at a specified rate and date. An effective interest rate is applied to recognize interest income daily for the bond. This rate is based on total expected interest to be earned over the life of the bond which consists of the aggregate coupon-interest payments and discount at acquisition. The rate shown is the stated rate at the current period end.
*	Non-income producing security
q	Rate shown is the 7-day annualized yield at period end.
ø	Evergreen Investment Management Company, LLC is the investment advisor to both the Fund and the money market fund.
##	All or a portion of this security has been segregated for when-issued or delayed delivery securities.

Summary of Abbreviations
AUD	Australian Dollar
BRL	Brazil Real
CAD	Canadian Dollar
CDO	Collateralized Debt Obligation
DKK	Danish Krone
EUR	Euro
FHLMC	Federal Home Loan Mortgage Corp.
FNMA	Federal National Mortgage Association
FRN	Floating Rate Note
GBP	Great British Pound
GNMA	Government National Mortgage Association
KRW	Republic of Korea Won
MASTR	Mortgage Asset Securitization Transactions, Inc.
MXN	Mexican Peso
MYR	Malaysian Ringgit
NIM	Net Interest Margin
NOK	Norwegian Krone
NZD	New Zealand Dollar
PLN	Polish Zloty
SEK	Swedish Krona
TBA	To Be Announced
TRY	Turkish Lira

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

The following table shows the percent of total investments by credit quality based on Moody’s and Standard & Poor’s ratings as of October 31, 2009:

AAA	59.0	%
AA	12.6	%
A	10.0	%
BBB	11.2	%
BB	1.6	%
B	2.3	%
CCC	2.2	%
Less than CCC	1.1	%

	100.0	%

The following table shows the percent of total investments based on effective maturity as of October 31, 2009:

Less than 1 year	15.3	%
1 to 3 year(s)	18.2	%
3 to 5 years	36.8	%
5 to 10 years	16.8	%
10 to 20 years	10.6	%
20 to 30 years	2.3	%

	100.0	%

See Notes to Financial Statements

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2009 (unaudited)

Assets
Investments in unaffiliated issuers, at value (cost $182,821,426)	$	167,088,069
Investments in affiliated issuers, at value (cost $25,915,303)		25,915,303

Total investments		193,003,372
Segregated cash		1,307,631
Foreign currency, at value (cost $266,823)		262,234
Receivable for securities sold		1,913,296
Principal paydown receivable		1,286
Interest receivable		1,807,483
Unrealized gains on forward foreign currency exchange contracts		225,622
Prepaid expenses and other assets		195,229

Total assets		198,716,153

Liabilities
Dividends payable		115,843
Payable for securities purchased		28,072,732
Payable for Fund shares redeemed		244,768
Unrealized losses on forward foreign currency exchange contracts		126,634
Advisory fee payable		3,636
Distribution Plan expenses payable		4,056
Due to other related parties		2,653
Accrued expenses and other liabilities		67,849

Total liabilities		28,638,171

Net assets	$	170,077,982

Net assets represented by
Paid-in capital	$	235,612,184
Overdistributed net investment income		(829,735	)
Accumulated net realized losses on investments		(49,084,271	)
Net unrealized losses on investments		(15,620,196	)

Total net assets	$	170,077,982

Net assets consists of
Class A	$	117,262,343
Class B		5,801,683
Class C		14,436,264
Class I		32,577,692

Total net assets	$	170,077,982

Shares outstanding (unlimited number of shares authorized)
Class A		10,661,623
Class B		527,375
Class C		1,312,454
Class I		2,962,155

Net asset value per share
Class A	$	11.00
Class A — Offering price (based on sales charge of 4.75%)	$	11.55
Class B	$	11.00
Class C	$	11.00
Class I	$	11.00

See Notes to Financial Statements

STATEMENT OF OPERATIONS

Six Months Ended October 31, 2009 (unaudited)

Investment income
Interest (net of foreign withholding taxes of $50)	$	4,412,831
Income from affiliated issuers		36,485
Dividends		2,625

Total investment income		4,451,941

Expenses
Advisory fee		351,101
Distribution Plan expenses
Class A		146,346
Class B		30,703
Class C		71,329
Administrative services fee		85,026
Transfer agent fees		227,978
Trustees’ fees and expenses		2,079
Printing and postage expenses		35,976
Custodian and accounting fees		43,687
Registration and filing fees		19,197
Professional fees		32,151
Other		4,102

Total expenses		1,049,675
Less: Expense reductions		(17	)
Fee waivers		(129,348	)

Net expenses		920,310

Net investment income		3,531,631

Net realized and unrealized gains or losses on investments
Net realized gains or losses on:
Securities in unaffiliated issuers		(14,156,977	)
Foreign currency related transactions		(690,735	)
Credit default swap transactions		(125,285	)

Net realized losses on investments		(14,972,997	)

Net change in unrealized gains or losses on:
Securities
Unaffiliated issuers		31,678,761
Affiliated issuers		287,619
Foreign currency related transactions		545,934
Credit default swap transactions		169,769

Net change in unrealized gains or losses on investments		32,682,083

Net realized and unrealized gains or losses on investments		17,709,086

Net increase in net assets resulting from operations	$	21,240,717

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended October 31, 2009 (unaudited)					Year Ended April 30, 2009

Operations
Net investment income			$	3,531,631				$	12,229,610
Net realized losses on investments				(14,972,997	)				(25,683,849	)
Net change in unrealized gains or losses on investments				32,682,083					(35,271,751	)

Net increase (decrease) in net assets resulting from operations				21,240,717					(48,725,990	)

Distributions to shareholders from
Net investment income
Class A				(3,212,018	)				(2,024,222	)
Class B				(147,319	)				(71,321	)
Class C				(338,072	)				(127,110	)
Class I				(934,708	)				(669,212	)
Tax basis return of capital
Class A				0					(6,236,987	)
Class B				0					(437,360	)
Class C				0					(780,963	)
Class I				0					(1,764,937	)

Total distributions to shareholders				(4,632,117	)				(12,112,112	)

	Shares					Shares

Capital share transactions
Proceeds from shares sold
Class A	52,193			552,822		190,005			2,158,823
Class B	25,361			265,915		69,908			768,868
Class C	71,698			763,469		156,253			1,637,575
Class I	12,370			130,327		32,810			390,276

				1,712,533					4,955,542

Net asset value of shares issued in reinvestment of distributions
Class A	207,676			2,204,309		508,131			5,637,630
Class B	8,705			92,221		28,958			325,720
Class C	20,999			222,682		51,865			574,540
Class I	49,811			528,844		121,278			1,345,563

				3,048,056					7,883,453

Automatic conversion of Class B shares to Class A shares
Class A	43,963			463,287		126,366			1,313,399
Class B	(43,963	)		(463,287	)	(126,366	)		(1,313,399	)

				0					0

Payment for shares redeemed
Class A	(790,779	)		(8,379,321	)	(2,189,480	)		(24,849,331	)
Class B	(85,509	)		(901,550	)	(366,341	)		(4,147,312	)
Class C	(149,027	)		(1,570,664	)	(458,282	)		(5,129,146	)
Class I	(223,802	)		(2,366,164	)	(586,652	)		(6,666,414	)

				(13,217,699	)				(40,792,203	)

Net decrease in net assets resulting from capital share transactions				(8,457,110	)				(27,953,208	)

Total increase (decrease) in net assets				8,151,490					(88,791,310	)

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS continued

	Six Months Ended October 31, 2009 (unaudited)				Year Ended April 30, 2009

Net assets
Beginning of period		$	161,926,492			$	250,717,802

End of period		$	170,077,982			$	161,926,492

Undistributed (overdistributed) net investment income		$	(829,735	)		$	284,728

See Notes to Financial Statements

NOTES TO FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION

Evergreen Core Plus Bond Fund (the “Fund”) is a diversified series of Evergreen Fixed Income Trust (the “Trust”), a Delaware statutory trust organized on September 18, 1997. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Fund offers Class A, Class B, Class C and Class I shares. Class A shares are sold with a front-end sales charge. However, Class A share investments of $1 million or more are not subject to a front-end sales charge, but are subject to a contingent deferred sales charge of 1.00% upon redemption within 18 months. Effective after the close of business on June 30, 2009, Class B shares were closed to new accounts and additional purchases by existing shareholders. Class B shares are available for purchase only through (i) an exchange transaction in which Class B shares of another Evergreen fund are exchanged or (ii) the Fund’s dividend reinvestment program. Class B shares are sold without a front-end sales charge, but are subject to a contingent deferred sales charge that is payable upon redemption and decreases depending on how long the shares had been held. Class C shares are sold without a front-end sales charge, but are subject to a contingent deferred sales charge that is payable upon redemption within one year. Class I shares are sold without a front-end sales charge or contingent deferred sales charge. Each class of shares, except Class I shares, pays an ongoing distribution fee.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles in the United States of America, which require management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. Management has considered the circumstances under which the Fund should recognize or make disclosures regarding events or transactions occurring subsequent to the balance sheet date through December 23, 2009 which represents the date the financial statements are issued. Adjustments or additional disclosures, if any, have been included in these financial statements.

a. Valuation of investments

Portfolio debt securities acquired with more than 60 days to maturity are fair valued using matrix pricing methods determined by an independent pricing service which takes into consideration such factors as similar security prices, yields, maturities, liquidity and ratings. Securities for which valuations are not readily available from an independent pricing service may be valued by brokers which use prices provided by market makers or estimates of fair market value obtained from yield data relating to investments or securities with similar characteristics.

Listed equity securities are usually valued at the last sales price or official closing price on the national securities exchange where the securities are principally traded. If there has

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

been no sale, the securities are valued at the mean between bid and asked prices. Non-listed preferred securities are valued using evaluated prices determined by an independent pricing service which takes into consideration such factors as similar security prices, spreads, liquidity, benchmark quotes and market conditions. Securities for which valuations are not readily available from an independent pricing service may be valued by brokers who use prices provided by market makers or estimates of fair market value obtained from yield data relating to investments or securities with similar characteristics.

Short-term securities of sufficient credit quality with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost, which approximates fair value.

Investments in open-end mutual funds are valued at net asset value. Securities for which market quotations are not readily available or not reflective of current fair value are valued at fair value as determined by the investment advisor in good faith, according to procedures approved by the Board of Trustees.

The valuation techniques used by the Fund to measure fair value are consistent with the market approach, income approach and/or cost approach, where applicable, for each security type.

b. Foreign currency translation

All assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for that portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses on investments.

c. Forward foreign currency contracts

The Fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. A forward foreign currency contract is an agreement between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund enters into forward foreign currency contracts to facilitate transactions in foreign-denominated securities and to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. Forward foreign currency contracts are recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on foreign currency related transactions. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Fund’s maximum risk of loss from counterparty credit risk is the unrealized gains or losses on the

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

contracts. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty.

d. When-issued and delayed delivery transactions

The Fund records when-issued or delayed delivery securities as of trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

e. Loans

The Fund may purchase loans through an agent, by assignment from another holder of the loan or as a participation interest in another holder’s portion of the loan. Loans are purchased on a when-issued or delayed delivery basis. Interest income is accrued based on the terms of the securities. Fees earned on loan purchasing activities are recorded as income when earned. Loans involve interest rate risk, liquidity risk and credit risk, including the potential default or insolvency of the borrower.

f. Securities lending

The Fund may lend its securities to certain qualified brokers in order to earn additional income. The Fund receives compensation in the form of fees or interest earned on the investment of any cash collateral received. The Fund also continues to receive interest and dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a market value at least equal to the market value of the securities on loan, including accrued interest. In the event of default or bankruptcy by the borrower, the Fund could experience delays and costs in recovering the loaned securities or in gaining access to the collateral. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

g. Dollar roll transactions

The Fund may enter into dollar roll transactions with respect to mortgage-backed securities. In a dollar roll transaction, the Fund sells mortgage-backed securities to financial institutions and simultaneously agrees to accept substantially similar (same type, coupon and maturity) securities at a later date at an agreed upon price. The Fund will use the proceeds generated from the transactions to invest in short-term investments, which may enhance the Fund’s current yield and total return. The Fund accounts for dollar roll transactions as purchases and sales. The Fund could be exposed to risks if the counterparty defaults on its obligation to perform under the terms of the agreement, if the Fund receives inferior securities in comparison to what was sold to the counterparty at redelivery or if there are variances in paydown speed between the mortgage-related pools.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

h. Credit default swaps

The Fund is subject to credit risk in the normal course of pursuing its investment objectives. The Fund may enter into credit default swap contracts for hedging or speculative purposes to provide or receive a measure of protection against default on a referenced entity, obligation or index or for investment gains. Credit default swaps involve an exchange of a stream of payments for protection against the loss in value of an underlying security or index. Under the terms of the swap, one party acts as a guarantor (referred to as the seller of protection) and receives a periodic stream of payments, provided that there is no credit event, from another party (referred to as the buyer of protection) that is a fixed percentage applied to a notional principal amount over the term of the swap. An index credit default swap references all the names in the index, and if a credit event is triggered, the credit event is settled based on that name’s weight in the index. A credit event includes bankruptcy, failure to pay, obligation default, obligation acceleration, repudiation/moratorium, and restructuring. The Fund may enter into credit default swaps as either the seller of protection or the buyer of protection. As the seller of protection, the Fund is subject to investment exposure on the notional amount of the swap and has assumed the risk of default of the underlying security or index. As the buyer of protection, the Fund could be exposed to risks if the seller of the protection defaults on its obligation to perform, or if there are unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index. The maximum potential amount of future payments (undiscounted) that the Fund as the seller of protection could be required to make under the credit default swap contract would be an amount equal to the notional amount of the swap contract. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.

If the Fund is the seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will pay to the buyer of protection the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index. If the Fund is the buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will receive from the seller of protection the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index.

Any premiums paid or received on the transactions are recorded as an asset or liability on the Statement of Assets and Liabilities and amortized. The value of the swap contract is marked-to-market daily based on quotations from an independent pricing service or market makers and any change in value is recorded as an unrealized gain or loss. Periodic payments made or received are recorded as realized gains or losses. In addition, payments

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

received or made as a result of a credit event or termination of the contract are recognized as realized gains or losses.

Certain credit default swap contracts entered into by the Fund provide for conditions that result in events of default or termination that enable the counterparty to the agreement to cause an early termination of the transactions under those agreements. Any election by the counterparty to terminate early may impact the amounts reported on the financial statements.

i. Total return swaps

The Fund is subject to interest rate risk and equity price risk in the normal course of pursuing its investment objectives. The Fund may enter into total return swap contracts for hedging or speculative purposes. Total return swaps involve commitments to pay interest in exchange for a market-linked return, both based on notional amounts. To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from, or make a payment to, the counterparty.

The value of the swap contract is marked-to-market daily based upon quotations from an independent pricing service or from brokers which use prices provided by market makers and any change in value is recorded as an unrealized gain or loss. Periodic payments made or received are recorded as realized gains or losses. The Fund could be exposed to risks if the counterparty defaults on its obligation to perform, or if there are unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index. The Fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.

Certain total return swap contracts entered into by the Fund provide for conditions that result in events of default or termination that enable the counterparty to the agreement to cause an early termination of the transactions under those agreements. Any election by the counterparty to terminate early may impact the amounts reported on the financial statements.

j. Security transactions and investment income

Security transactions are recorded on trade date. Realized gains and losses are computed using the specific cost of the security sold. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectibility of interest is reasonably assured, the debt obligation is removed from non-accrual status. Dividend income is recorded on the

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

ex-dividend date. Foreign income and capital gains realized on some securities may be subject to foreign taxes, which are accrued as applicable.

k. Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income, including any net capital gains (which have already been offset by available capital loss carryovers). Accordingly, no provision for federal taxes is required. The Fund’s income and excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal, Massachusetts and Delaware revenue authorities.

l. Distributions

Distributions to shareholders from net investment income are accrued daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

m. Class allocations

Income, common expenses and realized and unrealized gains and losses are allocated to the classes based on the relative net assets of each class. Distribution fees, if any, are calculated daily at the class level based on the appropriate net assets of each class and the specific expense rates applicable to each class.

3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Evergreen Investment Management Company, LLC (“EIMC”), a subsidiary of Wells Fargo & Company (“Wells Fargo”), is the investment advisor to the Fund and is paid a fee at an annual rate of 2% of the Fund’s gross investment income plus an amount determined by applying percentage rates to the average daily net assets of the Fund, starting at 0.31% and declining to 0.16% as average daily net assets increase. For the six months ended October 31, 2009, the advisory fee was equivalent to an annual rate of 0.41% of the Fund’s average daily net assets.

Tattersall Advisory Group, Inc., an affiliate of EIMC and an indirect, wholly-owned subsidiary of Wells Fargo, is an investment sub-advisor to the Fund and is paid by EIMC for its services to the Fund.

First International Advisers, LLC, an affiliate of EIMC and a majority-owned subsidiary of Wells Fargo, is also an investment sub-advisor to the Fund and is paid by EIMC for its services to the Fund.

From time to time, EIMC may voluntarily or contractually waive its fee and/or reimburse expenses in order to limit operating expenses. During the six months ended October 31, 2009, EIMC voluntarily waived its advisory fee in the amount of $129,348.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

The Fund may invest in money market funds which are advised by EIMC. Income earned on these investments is included in income from affiliated issuers on the Statement of Operations.

EIMC also serves as the administrator to the Fund providing the Fund with facilities, equipment and personnel. EIMC is paid an annual rate determined by applying percentage rates to the aggregate average daily net assets of the Evergreen funds (excluding money market funds) starting at 0.10% and declining to 0.05% as the aggregate average daily net assets of the Evergreen funds (excluding money market funds) increase. For the six months ended October 31, 2009, the administrative services fee was equivalent to an annual rate of 0.10% of the Fund’s average daily net assets.

Evergreen Service Company, LLC (“ESC”), an affiliate of EIMC and a subsidiary of Wells Fargo, is the transfer and dividend disbursing agent for the Fund. ESC receives account fees that vary based on the type of account held by the shareholders in the Fund. For the six months ended October 31, 2009, the transfer agent fees were equivalent to an annual rate of 0.27% of the Fund’s average daily net assets.

4. DISTRIBUTION PLANS

Evergreen Investment Services, Inc. (“EIS”), an affiliate of EIMC and a subsidiary of Wells Fargo, serves as distributor of the Fund’s shares. The Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940 Act, for each class of shares, except Class I. Under the Distribution Plans, the Fund is permitted to pay distribution fees at an annual rate of up to 0.75% of the average daily net assets for each of Class A shares and up to 1.00% of the average daily net assets for each of Class B and Class C shares. However, currently the distribution fees for Class A shares are limited to 0.25% of the average daily net assets of the class.

For the six months ended October 31, 2009, EIS received $624 from the sale of Class A shares and $4,689 and $12 in contingent deferred sales charges from redemptions of Class B and Class C shares, respectively.

5. INVESTMENT TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows for the six months ended October 31, 2009:

Cost of Purchases		Proceeds from Sales

U.S. Government	Non-U.S. Government	U.S. Government	Non-U.S. Government

$209,012,613	$13,400,483	$161,082,754	$57,478,915

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Fair value measurements are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. These inputs are summarized into three broad levels as follows:

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 Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of October 31, 2009, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Equity securities
Preferred stocks	$	0	$	45,249	$	0	$	45,249
Asset-backed securities		0		65,263		30,296		95,559
Mortgage-backed securities		0		61,661,665		4,692		61,666,357
Corporate debt securities		0		34,900,770		3,590,010		38,490,780
Debt securities issued by foreign governments		0		16,220,374		0		16,220,374
Debt securities issued by U.S. Treasury and U.S. government agencies		49,813,196		0		0		49,813,196
Other		0		756,554		0		756,554
Short-term investments		25,915,303		0		0		25,915,303

	$	75,728,499	$	113,649,875	$	3,624,998	$	193,003,372

Further details on the major security types listed above can be found in the Schedule of Investments.

As of October 31, 2009, the inputs used in valuing the Fund’s other financial instruments, which are carried at fair value, were as follows:

	Quoted Prices (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total

Other financial instruments*	$0	$98,988	$0	$98,988

*	Other financial instruments include forwards.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Asset-backed securities		Mortgage- backed securities			Corporate debt securities			Total

Balance as of April 30, 2009	$	30,000	$	37,442		$	3,750,000		$	3,817,442
Realized gains or losses		0		108			0			108
Change in unrealized gains or losses		0		(4,264	)		(159,990	)		(164,254	)
Net purchases (sales)		296		(2,070	)		0			(1,774	)
Transfers in and/or out of Level 3		0		(26,524	)		0			(26,524	)

Balance as of October 31, 2009	$	30,296	$	4,692		$	3,590,010		$	3,624,998

Change in unrealized gains or losses included in earnings relating to securities still held at October 31, 2009	$	0	$	0		$	(159,990	)	$	(159,990	)

On October 31, 2009, the aggregate cost of securities for federal income tax purposes was $209,019,691. The gross unrealized appreciation and depreciation on securities based on tax cost was $5,077,933 and $21,094,252, respectively, with a net unrealized depreciation of $16,016,319.

As of April 30, 2009, the Fund had $25,929,160 in capital loss carryovers for federal income tax purposes expiring as follows:

Expiration

2010	2013	2015	2016	2017

$4,586,980	$4,295,612	$3,669,132	$4,304,664	$9,072,772

For income tax purposes, capital losses incurred after October 31 within the Fund’s fiscal year are deemed to arise on the first business day of the following fiscal year. As of April 30, 2009, the Fund incurred and elected to defer post-October losses of $8,050,070.

6. DERIVATIVE TRANSACTIONS

During the six months ended October 31, 2009, the Fund entered into forward foreign currency exchange contracts for hedging purposes.

At October 31, 2009, the Fund had forward foreign currency exchange contracts outstanding as follows:

Forward Foreign Currency Exchange Contracts to Buy:

Exchange Date	Contracts to Receive	U.S. Value at October 31, 2009	In Exchange for U.S. $	Unrealized Gain (Loss)

11/09/2009	225,000,000 JPY	$2,499,648	$2,366,802	$132,846
11/27/2009	60,140,000 JPY	668,190	634,636	33,554

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Forward Foreign Currency Exchange Contracts to Buy (continued):

Exchange Date	Contracts to Receive		U.S. Value at October 31, 2009		In Exchange for		U.S. Value at October 31, 2009		Unrealized Gain (Loss)

11/09/2009	69,400,000	JPY	$	771,002	507,273	EUR	$	746,518	$	24,484
11/25/2009	85,239,000	JPY		947,045	1,080,000	AUD		970,165		(23,120	)
11/25/2009	137,950	EUR		203,003	300,000	TRY		198,752		4,251
11/27/2009	1,157,561	EUR		1,703,434	157,000,000	JPY		1,744,360		(40,926	)
11/27/2009	44,300,000	JPY		492,198	334,617	EUR		492,413		(215	)
11/30/2009	44,684,512	JPY		496,478	6,775,000	MXN		511,375		(14,897	)
12/02/2009	330,578	EUR		486,464	520,000	CAD		480,578		5,886
12/07/2009	71,500,000	JPY		794,451	503,362	GBP		825,964		(31,513	)
12/07/2009	38,514	GBP		63,198	5,460,000	JPY		60,667		2,531
01/13/2010	82,359,000	JPY		915,346	1,270,000	NZD		906,716		8,630

Forward Foreign Currency Exchange Contracts to Sell:

Exchange Date	Contracts to Deliver		U.S. Value at October 31, 2009		In Exchange for U.S. $		Unrealized Gain (Loss)

11/09/2009	33,675,000	JPY	$	374,114	$	381,258	$	7,144
11/23/2009	970,000	EUR		1,427,437		1,426,928		(509	)
11/23/2009	34,500	EUR		50,770		50,427		(343	)
12/01/2009	405,000	EUR		595,981		580,875		(15,106	)
12/01/2009	295,609	EUR		435,005		435,000		(5	)
12/01/2009	265,000	EUR		389,963		395,089		5,126
12/16/2009	95,000	GBP		155,878		157,048		1,170

The Fund had average market values of $4,413,552 and $1,974,425 forward foreign currency exchange contracts to buy and forward foreign currency exchange contracts to sell, respectively, during the six months ended October 31, 2009.

As of October 31, 2009, the Fund did not have any open credit default swaps but had an average notional balance of $2,636 during the six months ended October 31, 2009.

A summary of derivative instruments by primary risk exposure is outlined in the following tables, unless the only primary risk exposure category is already reflected in the appropriate financial statements.

The effect of derivative instruments on the Statement of Operations for the six months ended October 31, 2009 was as follows:

Derivatives not accounted for as hedging instruments	Amount of Realized Gain or Losses on Derivatives

	Forward Currency Contracts		Credit Default Swaps			Total

Forward foreign currency contracts	$(702,552	)	$	0		$	(702,552	)
Credit contracts	0			(125,285	)		(125,285	)

	$(702,552	)	$	(125,285	)	$	(827,837	)

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Derivatives not accounted for as hedging instruments	Change in Unrealized Gains or Losses on Derivatives

	Forward Currency Contracts	Credit Default Swaps		Total

Forward foreign currency contracts	$552,645	$	0	$	552,645
Credit contracts	0		169,769		169,769

	$552,645	$	169,769	$	722,414

7. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the SEC, the Fund may participate in an interfund lending program with certain funds in the Evergreen fund family. This program allows the Fund to borrow from, or lend money to, other participating funds. During the six months ended October 31, 2009, the Fund did not participate in the interfund lending program.

8. EXPENSE REDUCTIONS

Through expense offset arrangements with ESC and the Fund’s custodian, a portion of fund expenses has been reduced.

9. DEFERRED TRUSTEES’ FEES

Each Trustee of the Fund may defer any or all compensation related to performance of his or her duties as a Trustee. The Trustees’ deferred balances are allocated to deferral accounts, which are included in the accrued expenses for the Fund. The investment performance of the deferral accounts is based on the investment performance of certain Evergreen funds. Any gains earned or losses incurred in the deferral accounts are reported in the Fund’s Trustees’ fees and expenses. At the election of the Trustees, the deferral account will be paid either in one lump sum or in quarterly installments for up to ten years.

10. FINANCING AGREEMENT

The Fund and certain other Evergreen funds share in a $100 million unsecured revolving credit commitment for temporary and emergency purposes, including the funding of redemptions, as permitted by each participating fund’s borrowing restrictions. Borrowings under this facility bear interest at the higher of the Federal Funds rate plus 1.25% or LIBOR plus 1.25%. Prior to June 26, 2009, the interest rate was 0.50% per annum above the Federal Funds rate. All of the participating funds are charged an annual commitment fee of 0.145% on the unused balance, which is allocated pro rata. Prior to June 26, 2009, the annual commitment fee was 0.09%. During the six months ended October 31, 2009, the Fund had no borrowings under this agreement.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

11. REGULATORY MATTERS AND LEGAL PROCEEDINGS

The Evergreen funds, EIMC and certain of EIMC’s affiliates are involved in various legal actions, including private litigation and class action lawsuits, and are and may in the future be subject to regulatory inquiries and investigations.

EIMC and EIS have reached final settlements with the Securities and Exchange Commission (“SEC”) and the Securities Division of the Secretary of the Commonwealth of Massachusetts (“Commonwealth”) primarily relating to the liquidation of Evergreen Ultra Short Opportunities Fund (“Ultra Short Fund”). The claims settled include the following: first, that during the period February 2007 through Ultra Short Fund’s liquidation on June 18, 2008, Ultra Short Fund’s former portfolio management team failed to properly take into account readily-available information in valuing certain non-agency residential mortgage-backed securities held by the Ultra Short Fund, resulting in the Ultra Short Fund’s net asset value (“NAV”) being overstated during the period; second, that EIMC and EIS acted inappropriately when, in an effort to explain the decline in Ultra Short Fund’s NAV, certain information regarding the decline was communicated to some, but not all, shareholders and financial intermediaries; third, that the Ultra Short Fund portfolio management team did not adhere to regulatory requirements for affiliated cross trades in executing trades with other Evergreen funds; and finally, that from at least September 2007 to August 2008, EIS did not preserve certain text and instant messages transmitted via personal digital assistant devices. In settling these matters, EIMC and EIS have agreed to payments totaling $41,125,000, up to $40,125,000 of which will be distributed to eligible shareholders of Ultra Short Fund pursuant to a methodology and plan approved by the regulators. EIMC and EIS neither admitted nor denied the regulators’ conclusions.

Three purported class actions have also been filed in the U.S. District Court for the District of Massachusetts relating to the same events; defendants include various Evergreen entities, including EIMC and EIS, and Evergreen Fixed Income Trust and its Trustees. The cases generally allege that investors in the Ultra Short Fund suffered losses as a result of (i) misleading statements in Ultra Short Fund’s registration statement and prospectus, (ii) the failure to accurately price securities in the Ultra Short Fund at different points in time and (iii) the failure of the Ultra Short Fund’s risk disclosures and description of its investment strategy to inform investors adequately of the actual risks of the fund.

EIMC does not expect that any of the legal actions, inquiries or settlement of regulatory matters will have a material adverse impact on the financial position or operations of the Fund to which these financial statements relate. Any publicity surrounding or resulting from any legal actions or regulatory inquiries involving EIMC or its affiliates or any of the Evergreen Funds could result in reduced sales or increased redemptions of Evergreen fund shares, which could increase Evergreen fund transaction costs or operating expenses or have other adverse consequences on the Evergreen funds, including the Fund.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

12. SUBSEQUENT EVENT

Effective December 1, 2009, Wells Capital Management Inc. (“Wells Capital”), an indirect wholly owned subsidiary of Wells Fargo, replaced both Tattersall Advisory Group, Inc. and First International Advisers, LLC as the investment sub-advisors to the Fund pursuant to a new interim sub-advisory agreement between EIMC and Wells Capital which will be in effect until no later than April 29, 2010. The shareholders of the Fund will meet on or around April 15, 2010 to consider a definitive sub-advisory agreement with Wells Capital, which if approved would replace the Fund’s interim agreement.

ADDITIONAL INFORMATION (unaudited)

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT

Each year, as required by law, the Fund’s Board of Trustees determines whether to approve the continuation of the Fund’s investment advisory agreements. At an in person meeting on September 23-24, 2009, the Trustees, including a majority of the Trustees who are not “interested persons” (as that term is defined in the 1940 Act) of the Fund, Tattersall Advisory Group, Inc. (“TAG”), First International Advisers, LLC (together with TAG, the “Sub-Advisors”), or EIMC (the “independent Trustees”), approved the continuation of the Fund’s investment advisory agreements. (References below to the “Fund” are to Evergreen Core Plus Bond Fund; references to the “funds” are to the Evergreen funds generally.)

At the same time, the Trustees considered the continuation of the investment advisory agreements for all of the Evergreen funds. The description below refers in many cases to the Trustees’ process for considering, and conclusions regarding, all of the funds’ agreements. In all of their deliberations, the Board of Trustees and the independent Trustees were advised by independent counsel to the independent Trustees and counsel to the funds.

The review process. In connection with its review of the funds’ investment advisory agreements, the Board of Trustees requests and evaluates, and EIMC and any sub-advisors are required to furnish, such information as the Trustees consider to be reasonably necessary in the circumstances. Over the course of the year preceding their September 2009 meeting, the Trustees regularly reviewed information regarding the investment performance of all of the funds. As part of their ongoing review of investment performance, the Trustees monitored for changes in performance and for the results of any changes in a fund’s investment process or investment team. The Trustees paid particular attention to funds whose performance since September 2008 (when the Trustees completed their 2008 review of the funds’ investment advisory agreements) indicated short-term or longer-term performance issues and to funds that they had identified during their 2008 review process as having short- or longer-term performance issues.

In spring 2009, a committee of the Board of Trustees (the “Committee”), working with EIMC management, determined generally the types of information the Trustees would review as part of the 2009 review process and set a timeline detailing the information required and the dates for its delivery to the Trustees. The Board engaged the independent data provider Keil Fiduciary Strategies LLC (“Keil”) to provide fund-specific and industry-wide data containing information of a nature and in a format generally prescribed by the Committee, and the Committee worked with Keil and EIMC to develop appropriate groups of peer funds for each fund. The Committee also identified a number of expense, performance, and other areas of review and requested specific information as to those areas of review.

ADDITIONAL INFORMATION (unaudited) continued

The Trustees formed small groups to review individual funds in greater detail. They reviewed, with the assistance of an independent industry consultant that they retained, the information that EIMC, the Sub-Advisors, and Keil provided. In addition, the Trustees considered information regarding, among other things, the funds’ brokerage practices, the funds’ use of derivatives, analyst and research support available to the portfolio management teams, risk management practices, and certain fall-out benefits received directly and indirectly by EIMC and its affiliates from the funds. The Trustees requested and received additional information following that review.

In December 2008 Wells Fargo & Company (“Wells Fargo”) acquired Wachovia Corporation (“Wachovia”), EIMC’s parent company. Wells Fargo and EIMC have taken steps to combine the operations of Wells Fargo’s investment management affiliates and EIMC during the past year and have proposed to the Trustees the combination of the mutual fund families managed by them. During the course of the year, and during their review, the Trustees requested and received information about Wells Fargo and its advisory and broker-dealer operations, the status of efforts to combine the Wells Fargo and Evergreen investment management operations, and the effects on the funds and on the services provided by EIMC and its affiliates to the funds. In their deliberations, the Trustees were mindful that it was possible that the proposed combination of the two fund families might be effected during the coming 12-month period.

The Committee met several times by telephone during the 2009 review process to consider the information provided to it. The Committee then met with representatives of EIMC and its affiliates, including Wells Fargo. In addition, during the course of their review, the Trustees discussed the continuation of the funds’ advisory agreements with representatives of EIMC, and in meetings with independent legal counsel in multiple private sessions at which no personnel of EIMC were present. At a meeting of the full Board of Trustees held on September 23-24, 2009, the Committee reported the results of its discussions with EIMC. The full Board met with representatives of EIMC and its affiliates and engaged in further review of the materials provided to it, after which the independent Trustees and the full Board approved the continuation of each of the advisory and sub-advisory agreements.

The Trustees’ determination to approve the continuation of the advisory and sub-advisory agreements was based on a comprehensive evaluation of all of the information provided to them. In considering the continuation of the agreements, the Trustees did not identify any particular information or consideration that was all-important or controlling, and each Trustee attributed different weights to various factors. The Trustees evaluated information provided to them both in terms of the funds generally and with respect to each fund, including the Fund, specifically as they considered appropriate. Although the Trustees considered the continuation of the agreements for each of the funds as part of the

ADDITIONAL INFORMATION (unaudited) continued

larger process of considering the continuation of the advisory contracts for all of the funds, their determination to continue the advisory agreements for each of the funds was ultimately made on a fund-by-fund basis.

This summary describes a number of the most important, but not necessarily all, of the factors considered by the Board and the independent Trustees.

Information reviewed. The Board of Trustees and committees of the Board of Trustees met periodically during the course of the year. EIMC presented a wide variety of information at those meetings regarding the services it provides for the funds, the investment performance of the funds, and other aspects of the business and operations of the funds. At those meetings, and in the process of considering the continuation of the agreements, the Trustees considered information regarding, for example, the funds’ investment results; the portfolio management teams for the funds and the experience of the members of the teams, and any recent changes in the membership of the teams; portfolio trading practices; compliance by the funds, EIMC, and the Sub-Advisors with applicable laws and regulations and with the funds’ and EIMC’s compliance policies and procedures; risk evaluation and oversight procedures at EIMC; services provided by affiliates of EIMC to the funds and shareholders of the funds; and other information relating to the nature, extent, and quality of services provided by EIMC and the Sub-Advisors. The Trustees considered a number of changes in portfolio management personnel at EIMC and its advisory affiliates in the year since September 2008. The Trustees also considered changes in personnel at the funds and EIMC, including the appointment of a new President of the funds, who also serves as President and Chief Operating Officer of EIMC, and a new Chief Investment Officer of EIMC in August of 2008.

The Trustees considered the rates at which the funds pay investment advisory fees, and the efforts generally by EIMC and its affiliates as sponsors of the funds. The data provided by Keil showed the management fees paid by each fund in comparison to the management fees of other peer mutual funds, in addition to data regarding the investment performance of the funds in comparison to other peer mutual funds. The Trustees were assisted by an independent industry consultant in reviewing the information presented to them.

The Trustees noted that, in certain cases, EIMC and/or its affiliates provide advisory services to other clients that are comparable to the advisory services they provide to certain funds. The Trustees considered the information EIMC provided regarding the rates at which those other clients pay advisory fees to EIMC. Fees charged to those other clients were generally lower than those charged to the respective funds. In respect of these other accounts, EIMC noted that the compliance, reporting, and other legal burdens of providing investment advice to mutual funds generally exceed those required to provide advisory services to non-mutual fund clients such as retirement or pension plans.

ADDITIONAL INFORMATION (unaudited) continued

The Trustees considered the transfer agency fees paid by the funds to an affiliate of EIMC. They reviewed information presented to them showing that the transfer agency fees charged to the funds were generally consistent with industry norms.

The Trustees also considered that EIMC serves as administrator to the funds and receives a fee for its services as administrator. In their comparison of fees paid by the funds with those paid by other mutual funds, the Trustees considered administrative fees paid by the funds and those other mutual funds. They considered that EIS, an affiliate of EIMC, would serve as distributor to the funds until January 3, 2010, and that Wells Fargo Funds Distributor, LLC, also an affiliate of EIMC, would serve as distributor to the funds beginning on January 4, 2010, and noted that the distributor receives fees from the funds for those services. The Trustees also considered other so-called “fall-out” benefits to EIMC and its affiliates due to their other relationships with the funds, including, for example, soft-dollar services received by EIMC attributable to transactions entered into by EIMC on behalf of the funds and brokerage commissions received by Wells Fargo Advisors, LLC (“Wells Fargo Advisors”) (formerly Wachovia Securities, LLC), an affiliate of EIMC, from transactions effected by it for the funds. The Trustees noted that the funds pay sub-transfer agency fees to various financial institutions, including Wells Fargo Advisors and its affiliates, that hold fund shares in omnibus accounts, and that an affiliate of EIMC receives fees for administering the sub-transfer agency payment program. In reviewing the services provided by an affiliate of EIMC, the Trustees noted that the affiliate of EIMC that provides transfer agency services to the funds had won recognition from Dalbar customer service each year since 1998, and also won recognition from National Quality Review for customer service and for accuracy in processing transactions in 2008. They also considered that Wells Fargo Advisors and its affiliates receive distribution-related fees and shareholder servicing payments (including amounts derived from payments under the funds’ Rule 12b-1 plans) in respect of shares sold or held through them and that an affiliate of EIMC receives compensation for serving as a securities lending agent for a number of the funds.

The Trustees considered regulatory actions taken against EIMC or its affiliates in the past year, and on-going reviews of the operations of EIMC and its affiliates as they might affect the funds. They considered the findings of the regulators, the cooperation of EIMC and its affiliates with those regulators and with the Trustees in respect of those actions and reviews, and the remedial steps EIMC and its affiliates have taken in response. They also considered the scope and nature of on-going reviews being conducted by EIMC and its affiliates, and communications to the Trustees relating to those reviews.

ADDITIONAL INFORMATION (unaudited) continued

program for the Fund. They noted that EIMC makes its personnel available to serve as officers of the funds, and concluded that the reporting and management functions provided by EIMC with respect to the funds were generally satisfactory. The Trustees considered the investment philosophy of the Fund’s portfolio management team and the in-house research capabilities of EIMC and its affiliates, as well as other resources available to EIMC, including research services available to it from third parties.

The Trustees considered the managerial and financial resources available to EIMC and its affiliates and the commitment that the Evergreen/Wells Fargo organization has made to the funds generally. They considered assurances from representatives of Wells Fargo that the merger of Wells Fargo and Wachovia and the integration of those firms’ advisory and broker-dealer operations was not expected to result in any adverse effect on the funds, on the quality and level of services that EIMC provides to the funds, or on the resources available to the funds and to EIMC, and that Wells Fargo is committed to continue providing the funds with high-quality services.

The Trustees noted the resources EIMC and its affiliates have committed to the regulatory, compliance, accounting, tax and oversight of tax reporting, and shareholder servicing functions, and the number and quality of staff committed to those functions, which they concluded were appropriate and generally in line with EIMC’s responsibilities to the Fund and to the funds generally. The Board and the independent Trustees concluded, within the context of their overall conclusions regarding the funds’ advisory agreements, that they were generally satisfied with the nature, extent, and quality of the services provided by the Sub-Advisors and EIMC, including services provided by EIMC under its administrative services agreements with the funds. They determined that the nature and scope of the services provided by EIMC and the Sub-Advisors were consistent with EIMC’s and the Sub-Advisors’ respective duties under the investment advisory agreements and appropriate and consistent with the investment programs and best interests of the funds.

Investment performance. The Trustees considered the investment performance of each fund, both by comparison to other comparable mutual funds and to broad market indices. Although the Trustees considered the performance of all share classes, the Trustees noted that, for the one-, three-, five-, and ten-year periods ended December 31, 2008, the Fund’s Class A shares had underperformed the Fund’s benchmark index, the Barclays Capital Aggregate Bond Index. The Trustees also noted that the Fund’s Class A shares had performed in the fifth quintile of the mutual funds against which the Trustees compared the Fund’s performance for the same periods. The Trustees noted that the Fund’s performance had suffered in recent periods due to significant exposure to mortgage-backed securities. The Trustees also noted that EIMC has taken steps to improve the Fund’s performance and expects to propose to change the Fund’s sub-advisor. The Trustees concluded that the remedial measures being undertaken by EIMC in light of the

ADDITIONAL INFORMATION (unaudited) continued

Fund’s relative underperformance were sufficient under the circumstances to support continuation of the advisory agreements. In anticipation of EIMC’s proposal to change the Fund’s sub-advisor, the Trustees approved the continuation of the Fund’s current sub-advisory agreements until November 30, 2009, rather than for a full year.

The Trustees discussed each fund’s performance with representatives of EIMC. In each instance where a fund experienced a substantial period of underperformance relative to its benchmark index and/or the non-Evergreen fund peers against which the Trustees compared the fund’s performance, the Trustees considered EIMC’s explanation of the reasons for the relative underperformance and the steps being taken to address the relative underperformance. The Trustees emphasized that the continuation of the investment advisory agreement for a fund should not be taken as any indication that the Trustees did not believe investment performance for any specific fund might not be improved, and they noted that they would continue to monitor closely the investment performance of the funds going forward.

Advisory and administrative fees. The Trustees recognized that EIMC does not seek to provide the lowest cost investment advisory service, but to provide a high quality, full-service investment management product at a reasonable price. They also noted that EIMC has in many cases sought to set its investment advisory fees at levels consistent with industry norms. The Trustees noted that, in certain cases, a fund’s management fees were higher than many or most other mutual funds in the same Keil peer group. However, in each case, the Trustees determined on the basis of the information presented that the level of management fees was not excessive. The Trustees noted that the management fee paid by the Fund was lower than the management fees paid by a majority of the other mutual funds against which the Trustees compared the Fund’s management fee, and that the level of profitability realized by EIMC in respect of the fee did not appear excessive.

Economies of scale. The Trustees noted the possibility that economies of scale would be achieved by EIMC in managing the funds as the funds grow. They reviewed the breakpoints in the Fund’s advisory fee structure, which operate generally to reduce the effective management fee rate of the Fund (as a percentage of Fund assets) as the Fund grows in size. They considered that, as a fund shrinks in size, breakpoints result in increasing fee levels. The Trustees noted that they would continue to review the appropriate levels of breakpoints in the future, and concluded that the breakpoints as implemented appeared to be a reasonable step toward the realization of economies of scale by the Fund.

ADDITIONAL INFORMATION (unaudited) continued

on a fund-by-fund basis, did not necessarily provide a definitive tool for evaluating the appropriateness of each fund’s advisory fee. They noted that the levels of profitability of the funds to EIMC varied widely, depending on, among other things, the size and type of fund. They considered the profitability of the funds in light of such factors as, for example, the information they had received regarding the relation of the fees paid by the funds to those paid by other mutual funds, the investment performance of the funds, and the amount of revenues involved. In light of these factors, the Trustees concluded that the profitability to EIMC of the services provided to any of the funds, individually or in the aggregate, should not prevent the Trustees from approving the continuation of the agreements.

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TRUSTEES AND OFFICERS

TRUSTEES¹
Charles A. Austin III Trustee DOB: 10/23/1934 Term of office since: 1991 Other directorships: None		Investment Counselor, Anchor Capital Advisors, LLC. (investment advice); Director, The Andover Companies (insurance); Trustee, Arthritis Foundation of New England; Former Director, The Francis Ouimet Society (scholarship program); Former Director, Executive Vice President and Treasurer, State Street Research & Management Company (investment advice)

K. Dun Gifford Trustee DOB: 10/23/1938 Term of office since: 1974 Other directorships: None		Chairman and President, Oldways Preservation and Exchange Trust (education); Trustee, Member of the Executive Committee, Former Chairman of the Finance Committee, and Former Treasurer, Cambridge College

Dr. Leroy Keith, Jr. Trustee DOB: 2/14/1939 Term of office since: 1983 Other directorships: Trustee, Phoenix Fund Complex (consisting of 50 portfolios as of 12/31/2008)		Managing Director, Almanac Capital Management (commodities firm); Trustee, Phoenix Fund Complex; Director, Diversapack Co. (packaging company); Former Partner, Stonington Partners, Inc. (private equity fund); Former Director, Obagi Medical Products Co.; Former Director, Lincoln Educational Services

Carol A. Kosel Trustee DOB: 12/25/1963 Term of office since: 2008 Other directorships: None		Former Consultant to the Evergreen Boards of Trustees; Former Vice President and Senior Vice President, Evergreen Investments, Inc.; Former Treasurer, Evergreen Funds; Former Treasurer, Vestaur Securities Fund

Gerald M. McDonnell Trustee DOB: 7/14/1939 Term of office since: 1988 Other directorships: None		Former Manager of Commercial Operations, CMC Steel (steel producer)

Patricia B. Norris Trustee DOB: 4/9/1948 Term of office since: 2006 Other directorships: None		President and Director of Buckleys of Kezar Lake, Inc. (real estate company); Former President and Director of Phillips Pond Homes Association (home community); Former Partner, PricewaterhouseCoopers, LLP (independent registered public accounting firm)

William Walt Pettit² Trustee DOB: 8/26/1955 Term of office since: 1988 Other directorships: None		Partner and Vice President, Kellam & Pettit, P.A. (law firm); Director, Superior Packaging Corp. (packaging company); Member, Superior Land, LLC (real estate holding company), Member, K&P Development, LLC (real estate development); Former Director, National Kidney Foundation of North Carolina, Inc. (non-profit organization)

David M. Richardson Trustee DOB: 9/19/1941 Term of office since: 1982 Other directorships: None		President, Richardson, Runden LLC (executive recruitment advisory services); Director, J&M Cumming Paper Co. (paper merchandising); Former Trustee, NDI Technologies, LLP (communications); Former Consultant, AESC (The Association of Executive Search Consultants)

Russell A. Salton III, MD Trustee DOB: 6/2/1947 Term of office since: 1984 Other directorships: None		President/CEO, AccessOne MedCard, Inc.

TRUSTEES AND OFFICERS continued

Michael S. Scofield Trustee DOB: 2/20/1943 Term of office since: 1984 Other directorships: None		Retired Attorney, Law Offices of Michael S. Scofield; Former Director and Chairman, Branded Media Corporation (multi-media branding company)

Richard J. Shima Trustee DOB: 8/11/1939 Term of office since: 1993 Other directorships: None		Independent Consultant; Director, Hartford Hospital; Trustee, Greater Hartford YMCA; Former Director, Trust Company of CT; Former Trustee, Saint Joseph College (CT)

Richard K. Wagoner, CFA³ Trustee DOB: 12/12/1937 Term of office since: 1999 Other directorships: None		Member and Former President, North Carolina Securities Traders Association; Member, Financial Analysts Society

OFFICERS
W. Douglas Munn⁴ President DOB: 4/21/1963 Term of office since: 2009		Principal occupations: Chief Operating Officer, Wells Fargo Funds Management, LLC; President and Chief Operating Officer, Evergreen Investment Company, Inc.

Kasey Phillips⁴ Treasurer DOB: 12/12/1970 Term of office since: 2005		Principal occupations: Senior Vice President, Evergreen Investment Management Company, LLC; Former Vice President, Evergreen Investment Services, Inc.

Michael H. Koonce⁴ Secretary DOB: 4/20/1960 Term of office since: 2000		Principal occupations: Senior Vice President and General Counsel, Evergreen Investment Services, Inc.; Secretary, Senior Vice President and General Counsel, Evergreen Investment Management Company, LLC and Evergreen Service Company, LLC

Robert Guerin⁴ Chief Compliance Officer DOB: 9/20/1965 Term of office since: 2007		Principal occupations: Chief Compliance Officer, Evergreen Funds and Senior Vice President of Evergreen Investment Company, Inc.; Former Managing Director and Senior Compliance Officer, Babson Capital Management LLC; Former Principal and Director, Compliance and Risk Management, State Street Global Advisors; Former Vice President and Manager, Sales Practice Compliance, Deutsche Asset Management

Each Trustee serves until a successor is duly elected or qualified or until his or her death, resignation, retirement or removal from office. Each Trustee oversaw 77 Evergreen funds as of December 31, 2008. Correspondence for each Trustee may be sent to Evergreen Board of Trustees, P.O. Box 20083, Charlotte, NC 28202.

It is possible that Mr. Pettit may be viewed as an “interested person” of the Evergreen funds, as defined in the 1940 Act, because of his law firm’s previous representation of affiliates of Wells Fargo & Company (“Wells Fargo”), the parent to the Evergreen funds’ investment advisor, EIMC. The Trustees are treating Mr. Pettit as an interested trustee for the time being.

3	Mr. Wagoner is an “interested person” of the Evergreen funds because of his ownership of shares in Wells Fargo & Company, the parent to the Evergreen funds’ investment advisor.

4	The address of the Officer is 200 Berkeley Street, Boston, MA 02116.

Additional information about the Fund’s Board of Trustees and Officers can be found in the Statement of Additional Information (SAI) and is available upon request without charge by calling 800.343.2898.

564353 rv7 12/2009

Evergreen Diversified Income Builder Fund

		table of contents
1		LETTER TO SHAREHOLDERS
4		FUND AT A GLANCE
7		ABOUT YOUR FUND’S EXPENSES
8		FINANCIAL HIGHLIGHTS
12		SCHEDULE OF INVESTMENTS
18		STATEMENT OF ASSETS AND LIABILITIES
19		STATEMENT OF OPERATIONS
20		STATEMENTS OF CHANGES IN NET ASSETS
22		NOTES TO FINANCIAL STATEMENTS
29		ADDITIONAL INFORMATION
36		TRUSTEES AND OFFICERS

Mutual Funds:

NOT FDIC INSURED

MAY LOSE VALUE

NOT BANK GUARANTEED

Evergreen Investment Management Company, LLC is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s other Broker Dealer subsidiaries.

Evergreen mutual funds are distributed by Evergreen Investment Services, Inc. 200 Berkeley Street, Boston, MA 02116

LETTER TO SHAREHOLDERS

December 2009

W. Douglas Munn

President and Chief Executive Officer

Dear Shareholder:

We are pleased to provide the Semiannual Report for Evergreen Diversified Income Builder Fund for the six-month period ended October 31, 2009 (the “period”).

LETTER TO SHAREHOLDERS continued

Please visit us at EvergreenInvestments.com for more information about our funds and other investment products available to you. Thank you for your continued support of Evergreen Investments.

Sincerely,

W. Douglas Munn

President and Chief Executive Officer

Evergreen Funds

LETTER TO SHAREHOLDERS continued

Notice to Shareholders:

FUND AT A GLANCE

as of October 31, 2009

MANAGEMENT TEAM

Investment Advisor:

Evergreen Investment Management Company, LLC

Portfolio Manager:

Margaret D. Patel

CURRENT INVESTMENT STYLE

Source: Morningstar, Inc.

Morningstar’s style box is based on a portfolio date as of 9/30/2009.

The Equity style box placement is based on 10 growth and valuation measures for each fund holding and the median size of the companies in which the fund invests.

The Fixed Income style box placement is based on a fund’s average effective maturity or duration and the average credit rating of the bond portfolio.

PERFORMANCE AND RETURNS

Portfolio inception date: 4/14/1987

	Class A	Class B	Class C	Class I
Class inception date	4/14/1987	2/1/1993	2/1/1993	1/13/1997

Nasdaq symbol	EKSAX	EKSBX	EKSCX	EKSYX

6-month return with sales charge	9.98%	9.77%	13.80%	N/A

6-month return w/o sales charge	15.50%	14.77%	14.80%	15.94%

Average annual return*

1-year with sales charge	24.91%	25.09%	29.15%	N/A

1-year w/o sales charge	31.17%	30.09%	30.15%	32.13%

5-year	-0.82%	-0.88%	-0.57%	0.34%

10-year	3.76%	3.51%	3.51%	4.53%

Maximum sales charge	4.75%	5.00%	1.00%	N/A
	Front-end	CDSC	CDSC

*	Adjusted for maximum applicable sales charge, unless noted.

Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund’s performance, especially for very short time periods, should not be the sole factor in making your investment decision.

The fund incurs a 12b-1 fee of 0.25% for Class A and 1.00% for Classes B and C. Class I does not pay a 12b-1 fee.

The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares after eight years.

Class B shares are closed to new investments by new and existing shareholders.

Returns reflect expense limits previously in effect, without which returns would have been lower.

FUND AT A GLANCE continued

Comparison of a $10,000 investment in the Evergreen Diversified Income Builder Fund Class A shares versus a similar investment in the Evergreen Diversified Income Builder Blended Index (EDIBBI), the BofA Merrill Lynch High Yield Master Index^†(BofAMLHYMI), the Russell 1000 Index (Russell 1000) and the Consumer Price Index (CPI).

The EDIBBI, the BofAMLHYMI and the Russell 1000 are unmanaged market indexes and do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses or any taxes. The CPI is a commonly used measure of inflation and does not represent an investment return. It is not possible to invest directly in an index.

Class I shares are only available to institutional shareholders with a minimum of $1 million investment, which may be waived in certain situations.

The fund’s investment objective may be changed without a vote of the fund’s shareholders.

The market value of convertible securities tends to decline as interest rates increase and may be affected by changes in the price of the underlying security.

FUND AT A GLANCE continued

This section left intentionally blank

High yield, lower-rated bonds may contain more risk due to the increased possibility of default.

Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices, or currency rates are changing.

U.S. government guarantees apply only to certain securities held in the fund’s portfolio and not to the fund’s shares.

The Evergreen Diversified Income Builder Blended Index is composed of the following indexes: BofAMLHYMI (75%) and Russell 1000 (25%).

†	Copyright 2009. BofA Merrill Lynch, Pierce, Fenner & Smith Incorporated. All rights reserved.

All data is as of October 31, 2009, and subject to change.

ABOUT YOUR FUND’S EXPENSES

The Example below is intended to describe the fees and expenses borne by shareholders and the impact of those costs on your investment.

Example

The example illustrates your fund’s costs in two ways:

• Actual expenses

• Hypothetical example for comparison purposes

	Beginning Account Value 5/1/2009	Ending Account Value 10/31/2009	Expenses Paid During Period*

Actual
Class A	$1,000.00	$1,155.03	$5.76
Class B	$1,000.00	$1,147.68	$9.80
Class C	$1,000.00	$1,147.97	$9.80
Class I	$1,000.00	$1,159.39	$4.41
Hypothetical
(5% return before expenses)
Class A	$1,000.00	$1,019.86	$5.40
Class B	$1,000.00	$1,016.08	$9.20
Class C	$1,000.00	$1,016.08	$9.20
Class I	$1,000.00	$1,021.12	$4.13

*	For each class of the fund, expenses are equal to the annualized expense ratio of each class (1.06% for Class A, 1.81% for Class B, 1.81% for Class C and 0.81% for Class I), multiplied by the average account value over the period, multiplied by 184 / 365 days.

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS A				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	4.58		$	6.06		$	6.40		$	6.32		$	6.53		$	6.38

Income from investment operations
Net investment income		0.11			0.26			0.27	¹		0.33	¹		0.29	¹		0.33
Net realized and unrealized gains or losses on investments		0.59			(1.45	)		(0.35	)		0.08			(0.19	)		0.19

Total from investment operations		0.70			(1.19	)		(0.08	)		0.41			0.10			0.52

Distributions to shareholders from
Net investment income		(0.11	)		(0.26	)		(0.26	)		(0.31	)		(0.31	)		(0.35	)
Net realized gains		0			(0.03	)		0			0			0			(0.02	)
Tax basis return of capital		0			0			0			(0.02	)		0			0

Total distributions to shareholders		(0.11	)		(0.29	)		(0.26	)		(0.33	)		(0.31	)		(0.37	)

Net asset value, end of period	$	5.17		$	4.58		$	6.06		$	6.40		$	6.32		$	6.53

Total return²		15.50	%		(19.64	)%		(1.26	)%		6.71	%		1.59	%		8.22	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	128,403		$	108,773		$	145,924		$	170,804		$	199,501		$	214,776
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.06	%³		1.07	%		1.11	%		1.16	%		1.17	%		1.12	%
Expenses excluding waivers/reimbursements and expense reductions		1.06	%³		1.07	%		1.16	%		1.20	%		1.18	%		1.12	%
Net investment income		4.70	%³		5.15	%		4.41	%		5.17	%		4.57	%		5.03	%
Portfolio turnover rate		39	%		57	%		125	%		128	%		100	%		130	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS B				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	4.60		$	6.08		$	6.42		$	6.34		$	6.55		$	6.40

Income from investment operations
Net investment income		0.10	¹		0.22	¹		0.23	¹		0.28	¹		0.25	¹		0.29
Net realized and unrealized gains or losses on investments		0.59			(1.45	)		(0.36	)		0.09			(0.19	)		0.19

Total from investment operations		0.69			(1.23	)		(0.13	)		0.37			0.06			0.48

Distributions to shareholders from
Net investment income		(0.10	)		(0.22	)		(0.21	)		(0.27	)		(0.27	)		(0.31	)
Net realized gains		0			(0.03	)		0			0			0			(0.02	)
Tax basis return of capital		0			0			0			(0.02	)		0			0

Total distributions to shareholders		(0.10	)		(0.25	)		(0.21	)		(0.29	)		(0.27	)		(0.33	)

Net asset value, end of period	$	5.19		$	4.60		$	6.08		$	6.42		$	6.34		$	6.55

Total return²		14.77	%		(19.99	)%		(1.97	)%		5.94	%		0.89	%		7.46	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	18,643		$	19,309		$	37,459		$	54,955		$	71,860		$	98,852
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.81	%³		1.81	%		1.86	%		1.90	%		1.87	%		1.83	%
Expenses excluding waivers/reimbursements and expense reductions		1.81	%³		1.81	%		1.86	%		1.90	%		1.87	%		1.83	%
Net investment income		3.95	%³		4.33	%		3.68	%		4.43	%		3.85	%		4.34	%
Portfolio turnover rate		39	%		57	%		125	%		128	%		100	%		130	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS C				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	4.60		$	6.07		$	6.41		$	6.33		$	6.54		$	6.39

Income from investment operations
Net investment income		0.10			0.22	¹		0.22	¹		0.28	¹		0.25	¹		0.29
Net realized and unrealized gains or losses on investments		0.58			(1.44	)		(0.35	)		0.09			(0.19	)		0.19

Total from investment operations		0.68			(1.22	)		(0.13	)		0.37			0.06			0.48

Distributions to shareholders from
Net investment income		(0.10	)		(0.22	)		(0.21	)		(0.27	)		(0.27	)		(0.31	)
Net realized gains		0			(0.03	)		0			0			0			(0.02	)
Tax basis return of capital		0			0			0			(0.02	)		0			0

Total distributions to shareholders		(0.10	)		(0.25	)		(0.21	)		(0.29	)		(0.27	)		(0.33	)

Net asset value, end of period	$	5.18		$	4.60		$	6.07		$	6.41		$	6.33		$	6.54

Total return²		14.80	%		(20.03	)%		(1.98	)%		5.94	%		0.88	%		7.46	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	85,965		$	57,096		$	61,229		$	55,110		$	65,322		$	79,539
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.81	%³		1.82	%		1.85	%		1.90	%		1.88	%		1.83	%
Expenses excluding waivers/reimbursements and expense reductions		1.81	%³		1.82	%		1.85	%		1.90	%		1.88	%		1.83	%
Net investment income		3.94	%³		4.41	%		3.63	%		4.43	%		3.86	%		4.34	%
Portfolio turnover rate		39	%		57	%		125	%		128	%		100	%		130	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS I				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	4.48		$	5.96		$	6.30		$	6.22		$	6.43		$	6.28

Income from investment operations
Net investment income		0.12			0.26			0.28	¹		0.34	¹		0.31	¹		0.34
Net realized and unrealized gains or losses on investments		0.59			(1.45	)		(0.35	)		0.08			(0.19	)		0.19

Total from investment operations		0.71			(1.19	)		(0.07	)		0.42			0.12			0.53

Distributions to shareholders from
Net investment income		(0.12	)		(0.26	)		(0.27	)		(0.32	)		(0.33	)		(0.36	)
Net realized gains		0			(0.03	)		0			0			0			(0.02	)
Tax basis return of capital		0			0			0			(0.02	)		0			0

Total distributions to shareholders		(0.12	)		(0.29	)		(0.27	)		(0.34	)		(0.33	)		(0.38	)

Net asset value, end of period	$	5.07		$	4.48		$	5.96		$	6.30		$	6.22		$	6.43

Total return		15.94	%		(19.85	)%		(1.09	)%		7.02	%		1.84	%		8.58	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	60,793		$	58,710		$	24,944		$	17,861		$	20,424		$	19,216
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		0.81	%²		0.84	%		0.85	%		0.90	%		0.88	%		0.82	%
Expenses excluding waivers/reimbursements and expense reductions		0.81	%²		0.84	%		0.85	%		0.90	%		0.88	%		0.82	%
Net investment income		4.95	%²		5.65	%		4.66	%		5.43	%		4.88	%		5.33	%
Portfolio turnover rate		39	%		57	%		125	%		128	%		100	%		130	%

1	Per share amount is based on average shares outstanding during the period.

2	Annualized

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS

October 31, 2009 (unaudited)

	Principal Amount		Value

ASSET-BACKED SECURITIES 0.0%
NovaStar ABS CDO, Ltd., Ser. 2007-1A, Class A2, FRN, 0.92%, 02/08/2047 144A + • (cost $3,988,000)	$	4,000,000	$	40

CORPORATE BONDS 70.3%
ENERGY 5.4%
Energy Equipment & Services 1.4%
Bristow Group, Inc., 7.50%, 09/15/2017		4,300,000		4,160,250

Oil, Gas & Consumable Fuels 4.0%
Murray Energy Corp., 10.25%, 10/15/2015 144A		7,800,000		7,761,000
Peabody Energy Corp., 5.875%, 04/15/2016		4,025,000		3,944,500

				11,705,500

FINANCIALS 1.8%
Consumer Finance 0.3%
Qwest Capital Funding, Inc., 6.50%, 11/15/2018		1,100,000		924,000

Real Estate Management & Development 1.5%
Forest City Enterprises, Inc., 6.50%, 02/01/2017		5,310,000		4,274,550

HEALTH CARE 2.5%
Life Sciences Tools & Services 2.5%
Bio-Rad Laboratories, Inc., 8.00%, 09/15/2016 144A		7,000,000		7,227,500

INDUSTRIALS 18.2%
Aerospace & Defense 1.7%
L-3 Communications Holdings, Inc., 6.375%, 10/15/2015		5,160,000		5,121,300

Commercial Services & Supplies 0.7%
Clean Harbors, Inc., 7.625%, 08/15/2016 144A		1,900,000		1,957,000

Electrical Equipment 7.6%
Baldor Electric Co., 8.625%, 02/15/2017		11,400,000		11,799,000
Belden, Inc., 7.00%, 03/15/2017		3,300,000		3,201,000
General Cable Corp., 7.125%, 04/01/2017		7,650,000		7,420,500

				22,420,500

Machinery 8.2%
Actuant Corp., 6.875%, 06/15/2017		13,000,000		12,317,500
SPX Corp., 7.625%, 12/15/2014		11,400,000		11,799,000

				24,116,500

INFORMATION TECHNOLOGY 3.9%
Electronic Equipment, Instruments & Components 3.9%
Agilent Technologies, Inc., 6.50%, 11/01/2017		9,076,000		9,433,612
Anixter International, Inc., 5.95%, 03/01/2015		2,130,000		1,980,900

				11,414,512

MATERIALS 17.7%
Containers & Packaging 10.1%
Ball Corp., 6.625%, 03/15/2018		8,100,000		7,978,500

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

CORPORATE BONDS continued
MATERIALS continued
Containers & Packaging continued
Crown Americas, Inc.:
7.625%, 05/15/2017 144A	$	3,800,000	$	3,914,000
7.75%, 11/15/2015		8,369,000		8,578,225
Greif, Inc.:
6.75%, 02/01/2017		5,000,000		4,925,000
7.75%, 07/23/2019 144A		4,050,000		4,171,500

				29,567,225

Metals & Mining 7.6%
Freeport-McMoRan Copper & Gold, Inc.:
8.25%, 04/01/2015		240,000		257,681
8.375%, 04/01/2017		10,010,000		10,775,675
Steel Dynamics, Inc., 8.25%, 04/15/2016 144A		11,300,000		11,413,000

				22,446,356

TELECOMMUNICATION SERVICES 9.9%
Diversified Telecommunication Services 9.9%
Frontier Communications Corp., 8.125%, 10/01/2018		10,800,000		10,894,500
Global Crossing, Ltd., 12.00%, 09/15/2015 144A		15,100,000		16,270,250
SBA Telecommunications, Inc., 8.25%, 08/15/2019 144A		1,900,000		1,995,000

				29,159,750

UTILITIES 10.9%
Electric Utilities 8.6%
Allegheny Energy, Inc., 6.875%, 09/01/2023		4,140,000		4,218,085
Edison Mission Energy, 7.00%, 05/15/2017		8,020,000		6,516,250
NRG Energy, Inc.:
7.25%, 02/01/2014		250,000		248,750
7.375%, 02/01/2016		4,250,000		4,234,062
7.375%, 01/15/2017		10,000,000		9,925,000

				25,142,147

Gas Utilities 1.9%
National Fuel Gas Co., 8.75%, 05/01/2019		4,800,000		5,681,568

Independent Power Producers & Energy Traders 0.4%
AES Corp., 7.75%, 03/01/2014		1,125,000		1,136,250

Total Corporate Bonds (cost $200,229,879)				206,454,908

YANKEE OBLIGATIONS – CORPORATE 0.0%
FINANCIALS 0.0%
Diversified Financial Services 0.0%
Preferred Term Securities XII, Ltd., FRN, 0.99%, 12/24/2033 • + (cost $81,063)		105,000		926

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Shares		Value

COMMON STOCKS 23.7%
ENERGY 5.1%
Energy Equipment & Services 1.0%
Cameron International Corp. *		20,000	$	739,400
National Oilwell Varco, Inc. *		10,000		409,900
Noble Corp.		20,000		814,800
Pride International, Inc. *		20,000		591,200
Seahawk Drilling, Inc. *		1		27
Transocean, Ltd. *		4,000		335,640

				2,890,967

Oil, Gas & Consumable Fuels 4.1%
Alpha Natural Resources, Inc. *		13,008		441,882
Anadarko Petroleum Corp.		5,000		304,650
Consol Energy, Inc. *		12,000		513,720
EnCana Corp., ADR		153,000		8,474,670
Massey Energy Co.		25,000		727,250
Occidental Petroleum Corp.		6,000		455,280
Patriot Coal Corp. *		16,000		180,800
Peabody Energy Corp.		20,000		791,800
XTO Energy, Inc.		5,000		207,800

				12,097,852

FINANCIALS 5.0%
Capital Markets 1.8%
Bank of New York Mellon Corp.		100,000		2,666,000
Northern Trust Corp.		50,000		2,512,500

				5,178,500

Commercial Banks 3.1%
PNC Financial Services Group, Inc.		90,000		4,404,600
U.S. Bancorp		205,000		4,760,100

				9,164,700

Diversified Financial Services 0.1%
Bank of America Corp.		30,000		437,400

HEALTH CARE 5.7%
Biotechnology 0.4%
Gen-Probe, Inc. *		25,000		1,043,000

Health Care Equipment & Supplies 3.0%
Baxter International, Inc.		100,000		5,406,000
St. Jude Medical, Inc. *		100,000		3,408,000

				8,814,000

Health Care Providers & Services 0.3%
Owens & Minor, Inc.		25,000		1,022,250

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Shares		Value

COMMON STOCKS continued
HEALTH CARE continued
Life Sciences Tools & Services 2.0%
Bio-Rad Laboratories, Inc., Class A *		11,000	$	983,290
Covance, Inc. *		30,000		1,550,400
Illumina, Inc. *		30,000		963,000
Life Technologies Corp. *		6,000		283,020
Thermo Fisher Scientific, Inc. *		45,000		2,025,000

				5,804,710

INDUSTRIALS 1.3%
Electrical Equipment 0.5%
Ametek, Inc. *		25,000		872,250
General Cable Corp. *		12,000		373,680
Roper Industries, Inc.		4,000		202,200

				1,448,130

Machinery 0.8%
Donaldson Co., Inc.		19,000		677,730
Flowserve Corp.		10,000		982,100
IDEX Corp.		25,000		710,750
Joy Global, Inc.		2,000		100,820

				2,471,400

INFORMATION TECHNOLOGY 1.5%
Electronic Equipment, Instruments & Components 1.5%
Amphenol Corp., Class A		107,000		4,292,840

MATERIALS 3.9%
Chemicals 1.4%
FMC Corp.		50,000		2,555,000
Monsanto Co.		25,000		1,679,500

				4,234,500

Metals & Mining 2.5%
Cliffs Natural Resources, Inc.		25,000		889,250
Freeport-McMoRan Copper & Gold, Inc.		80,000		5,868,800
Nucor Corp.		5,000		199,250
Steel Dynamics, Inc.		28,000		374,920

				7,332,220

TELECOMMUNICATION SERVICES 0.2%
Diversified Telecommunication Services 0.1%
Global Crossing, Ltd. *		47,000		535,800

Wireless Telecommunication Services 0.1%
American Tower Corp., Class A *		5,000		184,100

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Shares		Value

COMMON STOCKS continued
UTILITIES 1.0%
Electric Utilities 0.6%
NRG Energy, Inc. *		70,000	$	1,609,300

Gas Utilities 0.4%
National Fuel Gas Co.		10,000		453,400
Questar Corp.		19,000		756,960

				1,210,360

Total Common Stocks (cost $74,722,150)				69,772,029


	Principal Amount		Value


CONVERTIBLE DEBENTURES 5.3%
ENERGY 2.8%
Oil, Gas & Consumable Fuels 2.8%
Patriot Coal Corp., 3.25%, 05/31/2013	$	10,505,000		8,141,375

INDUSTRIALS 2.5%
Electrical Equipment 2.5%
General Cable Corp., 1.00%, 10/15/2012		7,900,000		7,445,750

Total Convertible Debentures (cost $15,556,387)				15,587,125

Total Investments (cost $294,577,479) 99.3%				291,815,028
Other Assets and Liabilities 0.7%				1,990,058

Net Assets 100.0%			$	293,805,086

144A	Security that may be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees, unless otherwise noted.
•	Security which has defaulted on payment of interest and/or principal. The Fund has stopped accruing interest on this security.
+	Security is deemed illiquid.
*	Non-income producing security

Summary of Abbreviations
ADR	American Depository Receipt
CDO	Collateralized Debt Obligation
FRN	Floating Rate Note

The following table shows the percent of total bonds by credit quality based on Moody’s and Standard & Poor’s ratings as of October 31, 2009:

BBB	13.8	%
BB	53.1	%
B	29.4	%
NR	3.7	%

	100.0	%

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

The following table shows the percent of total bonds based on effective maturity as of October 31, 2009:

1 to 3 year(s)	3.3	%
3 to 5 years	4.3	%
5 to 10 years	90.5	%
10 to 20 years	1.9	%

	100.0	%

See Notes to Financial Statements

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2009 (unaudited)

Assets
Investments in unaffiliated issuers, at value (cost $294,577,479)	$	291,815,028
Foreign currency, at value (cost $11,805)		9,716
Receivable for Fund shares sold		674,245
Dividends and interest receivable		3,717,982
Prepaid expenses and other assets		72,736

Total assets		296,289,707

Liabilities
Dividends payable		301,853
Payable for Fund shares redeemed		692,317
Due to custodian bank		1,423,936
Advisory fee payable		9,436
Distribution Plan expenses payable		11,267
Due to other related parties		2,965
Accrued expenses and other liabilities		42,847

Total liabilities		2,484,621

Net assets	$	293,805,086

Net assets represented by
Paid-in capital	$	359,460,090
Undistributed net investment income		1,551,611
Accumulated net realized losses on investments		(64,442,075	)
Net unrealized losses on investments		(2,764,540	)

Total net assets	$	293,805,086

Net assets consists of
Class A	$	128,403,448
Class B		18,643,182
Class C		85,965,175
Class I		60,793,281

Total net assets	$	293,805,086

Shares outstanding (unlimited number of shares authorized)
Class A		24,830,368
Class B		3,591,191
Class C		16,590,728
Class I		11,987,813

Net asset value per share
Class A	$	5.17
Class A — Offering price (based on sales charge of 4.75%)	$	5.43
Class B	$	5.19
Class C	$	5.18
Class I	$	5.07

See Notes to Financial Statements

STATEMENT OF OPERATIONS

Six Months Ended October 31, 2009 (unaudited)

Investment income
Interest	$	7,666,156
Dividends (net of foreign withholding taxes of $14,700)		323,343
Income from affiliated issuers		1,903

Total investment income		7,991,402

Expenses
Advisory fee		591,228
Distribution Plan expenses
Class A		153,276
Class B		101,104
Class C		369,461
Administrative services fee		138,952
Transfer agent fees		256,614
Trustees’ fees and expenses		3,751
Printing and postage expenses		29,179
Custodian and accounting fees		37,196
Registration and filing fees		26,946
Professional fees		29,567
Other		6,548

Total expenses		1,743,822
Less: Expense reductions		(26	)

Net expenses		1,743,796

Net investment income		6,247,606

Net realized and unrealized gains or losses on investments
Net realized gains or losses on:
Securities in unaffiliated issuers		5,956,809
Foreign currency related transactions		(6,361	)

Net realized gains on investments		5,950,448

Net change in unrealized gains or losses on:
Securities in unaffiliated issuers		26,709,226
Foreign currency related transactions		5,304

Net change in unrealized gains or losses on investments		26,714,530

Net realized and unrealized gains or losses on investments		32,664,978

Net increase in net assets resulting from operations	$	38,912,584

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended October 31, 2009 (unaudited)					Year Ended April 30, 2009

Operations
Net investment income			$	6,247,606				$	11,018,503
Net realized gains or losses on investments				5,950,448					(35,973,380	)
Net change in unrealized gains or losses on investments				26,714,530					(21,678,560	)

Net increase (decrease) in net assets resulting from operations				38,912,584					(46,633,437	)

Distributions to shareholders from
Net investment income
Class A				(2,823,721	)				(5,843,936	)
Class B				(390,944	)				(1,107,391	)
Class C				(1,420,258	)				(2,309,635	)
Class I				(1,488,388	)				(1,782,615	)
Net realized gains
Class A				0					(679,006	)
Class B				0					(145,108	)
Class C				0					(312,379	)
Class I				0					(213,200	)

Total distributions to shareholders				(6,123,311	)				(12,393,270	)

	Shares					Shares

Capital share transactions
Proceeds from shares sold
Class A	3,431,716			16,684,242		5,437,123			25,304,007
Class B	436,251			2,077,236		746,496			3,687,692
Class C	4,988,113			24,302,588		6,104,891			28,528,387
Class I	3,508,050			16,853,438		14,303,132			61,437,370

				59,917,504					118,957,456

Net asset value of shares issued in reinvestment of distributions
Class A	396,509			1,965,714		854,025			4,094,495
Class B	45,903			227,890		135,310			654,590
Class C	173,809			863,754		281,364			1,337,902
Class I	296,041			1,435,076		375,114			1,681,296

				4,492,434					7,768,283

Automatic conversion of Class B shares to Class A shares
Class A	473,692			2,354,165		660,840			3,273,710
Class B	(471,507	)		(2,354,165	)	(658,306	)		(3,273,710	)

				0					0

Payment for shares redeemed
Class A	(3,210,073	)		(15,942,989	)	(7,295,744	)		(36,093,794	)
Class B	(613,375	)		(3,047,246	)	(2,191,610	)		(10,779,039	)
Class C	(992,018	)		(4,898,505	)	(4,053,021	)		(19,046,079	)
Class I	(4,908,633	)		(23,394,042	)	(5,770,388	)		(27,446,867	)

				(47,282,782	)				(93,365,779	)

Net increase in net assets resulting from capital share transactions				17,127,156					33,359,960

Total increase (decrease) in net assets				49,916,429					(25,666,747	)

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS continued

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30, 2009

Net assets
Beginning of period		$	243,888,657		$	269,555,404

End of period		$	293,805,086		$	243,888,657

Undistributed net investment income		$	1,551,611		$	1,433,525

See Notes to Financial Statements

NOTES TO FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION

Evergreen Diversified Income Builder Fund (the “Fund”) is a diversified series of Evergreen Fixed Income Trust (the “Trust”), a Delaware statutory trust organized on September 18, 1997. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Fund offers Class A, Class B, Class C and Class I shares. Class A shares are sold with a front-end sales charge. However, Class A share investments of $1 million or more are not subject to a front-end sales charge, but are subject to a contingent deferred sales charge of 1.00% upon redemption within 18 months. Effective after the close of business on June 30, 2009, Class B shares were closed to new accounts and additional purchases by existing shareholders. Class B shares are available for purchase only through (i) an exchange transaction in which Class B shares of another Evergreen fund are exchanged or (ii) the Fund’s dividend reinvestment program. Class B shares are sold without a front-end sales charge, but are subject to a contingent deferred sales charge that is payable upon redemption and decreases depending on how long the shares have been held. Class C shares are sold without a front-end sales charge, but are subject to a contingent deferred sales charge that is payable upon redemption within one year. Class I shares are sold without a front-end sales charge or contingent deferred sales charge. Each class of shares, except Class I shares, pays an ongoing distribution fee.

2. SIGNIFICANT ACCOUNTING POLICIES

a. Valuation of investments

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Listed equity securities are usually valued at the last sales price or official closing price on the national securities exchange where the securities are principally traded. If there has been no sale, the securities are valued at the mean between bid and asked prices.

Short-term securities of sufficient credit quality with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost, which approximates fair value.

The valuation techniques used by the Fund to measure fair value are consistent with the market approach, income approach and/or cost approach, where applicable, for each security type.

b. Foreign currency translation

c. Securities lending

d. Security transactions and investment income

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectibility of interest is reasonably assured, the debt obligation is removed from non-accrual status. Dividend income is recorded on the ex-dividend date. Foreign income and capital gains realized on some securities may be subject to foreign taxes, which are accrued as applicable.

e. Federal and other taxes

f. Distributions

g. Class allocations

3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Evergreen Investment Management Company, LLC (“EIMC”), a subsidiary of Wells Fargo & Company (“Wells Fargo”), is the investment advisor to the Fund and is paid a fee at an annual rate of 2% of the Fund’s gross investment income plus an amount determined by applying percentage rates to the aggregate average daily net assets of the Fund and its variable annuity counterpart, Evergreen VA Diversified Income Builder Fund, starting at 0.31% and declining to 0.16% as the aggregate average daily net assets increase. For the six months ended October 31, 2009, the advisory fee was equivalent to an annual rate of 0.43% of the Fund’s average daily net assets.

The Fund may invest in money market funds which are advised by EIMC. Income earned on these investments is included in income from affiliated issuers on the Statement of Operations.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

daily net assets of the Evergreen funds (excluding money market funds) increase. For the six months ended October 31, 2009, the administrative services fee was equivalent to an annual rate of 0.10% of the Fund’s average daily net assets.

The Fund has placed a portion of its portfolio transactions with brokerage firms that are affiliates of Wells Fargo. During the six months ended October 31, 2009, the Fund paid brokerage commissions of $8,177 to broker-dealers affiliated with Wells Fargo.

4. DISTRIBUTION PLANS

Evergreen Investment Services, Inc. (“EIS”), an affiliate of EIMC and a subsidiary of Wells Fargo, serves as distributor of the Fund’s shares. The Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940 Act, for each class of shares, except Class I. Under the Distribution Plans, the Fund is permitted to pay distribution fees at an annual rate of up to 0.75% of the average daily net assets for Class A shares and up to 1.00% of the average daily net assets for each of Class B and Class C shares. However, currently the distribution fees for Class A shares are limited to 0.25% of the average daily net assets of the class.

For the six months ended October 31, 2009, EIS received $14,844 from the sale of Class A shares and $22,273 and $4,148 in contingent deferred sales charges from redemptions of Class B and Class C shares, respectively.

5. INVESTMENT TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were $122,140,732 and $104,591,287, respectively, for the six months ended October 31, 2009.

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 Fund’s own assumptions in determining the fair value of investments)

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of October 31, 2009, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Equity securities
Common stocks	$	69,772,029	$	0	$	0	$	69,772,029
Asset-backed securities		0		40		0		40
Corporate debt securities		0		222,042,959		0		222,042,959

	$	69,772,029	$	222,042,999	$	0	$	291,815,028

Further details on the major security types listed above can be found in the Schedule of Investments.

On October 31, 2009, the aggregate cost of securities for federal income tax purposes was $294,603,047. The gross unrealized appreciation and depreciation on securities based on tax cost was $16,720,719 and $19,508,738, respectively, with a net unrealized depreciation of $2,788,019.

As of April 30, 2009, the Fund had $43,433,625 in capital loss carryovers for federal income tax purposes expiring as follows:

Expiration

2010	2015	2016	2017

$27,292,961	$3,090,558	$1,086,859	$11,963,247

These losses are subject to certain limitations prescribed by the Internal Revenue Code.

6. INTERFUND LENDING

7. EXPENSE REDUCTIONS

Through expense offset arrangements with ESC and the Fund’s custodian, a portion of fund expenses has been reduced.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

8. DEFERRED TRUSTEES’ FEES

9. FINANCING AGREEMENT

10. REGULATORY MATTERS AND LEGAL PROCEEDINGS

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

distributed to eligible shareholders of Ultra Short Fund pursuant to a methodology and plan approved by the regulators. EIMC and EIS neither admitted nor denied the regulators’ conclusions.

ADDITIONAL INFORMATION (unaudited)

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT

Each year, as required by law, the Fund’s Board of Trustees determines whether to approve the continuation of the Fund’s investment advisory agreements. At an in person meeting on September 23-24, 2009, the Trustees, including a majority of the Trustees who are not “interested persons” (as that term is defined in the 1940 Act) of the Fund or EIMC (the “independent Trustees”), approved the continuation of the Fund’s investment advisory agreements. (References below to the “Fund” are to Evergreen Diversified Income Builder Fund; references to the “funds” are to the Evergreen funds generally.)

The review process. In connection with its review of the funds’ investment advisory agreements, the Board of Trustees requests and evaluates, and EIMC and any sub-advisors are required to furnish, such information as the Trustees consider to be reasonably necessary in the circumstances. Over the course of the year preceding their September 2009 meeting, the Trustees regularly reviewed information regarding the investment performance of all of the funds. As part of their ongoing review of investment performance, the Trustees monitored for changes in performance and for the results of any changes in a fund’s investment process or investment team. The Trustees paid particular attention to funds whose performance since September 2008 (when the Trustees completed their 2008 review of the funds’ investment advisory agreements) indicated short-term or longer-term performance issues and to funds that they had identified during their 2008 review process as having short- or longer-term performance issues.

The Trustees formed small groups to review individual funds in greater detail. They reviewed, with the assistance of an independent industry consultant that they retained, the

ADDITIONAL INFORMATION (unaudited) continued

information that EIMC and Keil provided. In addition, the Trustees considered information regarding, among other things, the funds’ brokerage practices, the funds’ use of derivatives, analyst and research support available to the portfolio management teams, risk management practices, and certain fall-out benefits received directly and indirectly by EIMC and its affiliates from the funds. The Trustees requested and received additional information following that review.

ADDITIONAL INFORMATION (unaudited) continued

their determination to continue the advisory agreements for each of the funds was ultimately made on a fund-by-fund basis.

This summary describes a number of the most important, but not necessarily all, of the factors considered by the Board and the independent Trustees.

Information reviewed. The Board of Trustees and committees of the Board of Trustees met periodically during the course of the year. EIMC presented a wide variety of information at those meetings regarding the services it provides for the funds, the investment performance of the funds, and other aspects of the business and operations of the funds. At those meetings, and in the process of considering the continuation of the agreements, the Trustees considered information regarding, for example, the funds’ investment results; the portfolio management teams for the funds and the experience of the members of the teams, and any recent changes in the membership of the teams; portfolio trading practices; compliance by the funds and EIMC with applicable laws and regulations and with the funds’ and EIMC’s compliance policies and procedures; risk evaluation and oversight procedures at EIMC; services provided by affiliates of EIMC to the funds and shareholders of the funds; and other information relating to the nature, extent, and quality of services provided by EIMC. The Trustees considered a number of changes in portfolio management personnel at EIMC and its advisory affiliates in the year since September 2008. The Trustees also considered changes in personnel at the funds and EIMC, including the appointment of a new President of the funds, who also serves as President and Chief Operating Officer of EIMC, and a new Chief Investment Officer of EIMC in August of 2008.

ADDITIONAL INFORMATION (unaudited) continued

Nature and quality of the services provided. The Trustees considered that EIMC and its affiliates generally provide a comprehensive investment management service to the funds. They noted that EIMC formulates and implements an investment program for the

ADDITIONAL INFORMATION (unaudited) continued

Fund. They noted that EIMC makes its personnel available to serve as officers of the funds, and concluded that the reporting and management functions provided by EIMC with respect to the funds were generally satisfactory. The Trustees considered the investment philosophy of the Fund’s portfolio management team and the in-house research capabilities of EIMC and its affiliates, as well as other resources available to EIMC, including research services available to it from third parties.

The Trustees noted the resources EIMC and its affiliates have committed to the regulatory, compliance, accounting, tax and oversight of tax reporting, and shareholder servicing functions, and the number and quality of staff committed to those functions, which they concluded were appropriate and generally in line with EIMC’s responsibilities to the Fund and to the funds generally. The Board and the independent Trustees concluded, within the context of their overall conclusions regarding the funds’ advisory agreements, that they were generally satisfied with the nature, extent, and quality of the services provided by EIMC, including services provided by EIMC under its administrative services agreements with the funds. They determined that the nature and scope of the services provided by EIMC were consistent with EIMC’s duties under the investment advisory agreements and appropriate and consistent with the investment programs and best interests of the funds.

Investment performance. The Trustees considered the investment performance of each fund, both by comparison to other comparable mutual funds and to broad market indices. Although the Trustees considered the performance of all share classes, the Trustees noted that, for the one-, three-, and five-year periods ended December 31, 2008, the Fund’s Class A shares had underperformed the broad-based securities index against which the Trustees compared the Fund’s performance, and performed in the fifth quintile of the mutual funds against which the Trustees compared the Fund’s performance. The Trustees noted that, for the ten-year period ended December 31, 2008, the Fund’s Class A shares had outperformed the Fund’s benchmark index, and performed in the third quintile of the mutual funds against which the Trustees compared the Fund’s performance. The Trustees noted that changes to the Fund’s portfolio management team had been implemented in 2007 and concluded that the remedial measures being undertaken by EIMC in

ADDITIONAL INFORMATION (unaudited) continued

light of the Fund’s relative underperformance were at least sufficient to allow the Trustees to continue the Fund’s advisory agreement.

Advisory and administrative fees. The Trustees recognized that EIMC does not seek to provide the lowest cost investment advisory service, but to provide a high quality, full-service investment management product at a reasonable price. They also noted that EIMC has in many cases sought to set its investment advisory fees at levels consistent with industry norms. The Trustees noted that, in certain cases, a fund’s management fees were higher than many or most other mutual funds in the same Keil peer group. However, in each case, the Trustees determined on the basis of the information presented that the level of management fees was not excessive. The Trustees noted that the management fee paid by the Fund was near the average and the median of the management fees paid by the other mutual funds against which the Trustees compared the Fund’s management fee, and that the level of profitability realized by EIMC in respect of the fee did not appear excessive.

Economies of scale. The Trustees noted the possibility that economies of scale would be achieved by EIMC in managing the funds as the funds grow. They reviewed the breakpoints in the Fund’s advisory fee structure, which operate generally to reduce the effective management fee rate of the Fund (as a percentage of Fund assets) as the Fund grows in size. They considered that, as a fund shrinks in size, breakpoints result in increasing fee levels. The Trustees noted that they would continue to review the appropriate levels of breakpoints in the future, and concluded that the breakpoints as implemented appeared to be a reasonable step toward the realization of economies of scale by the Fund.

Profitability. The Trustees considered information provided to them regarding the profitability to the EIMC organization of the investment advisory, administration, and transfer agency (with respect to the open-end funds only) fees paid to EIMC and its affiliates by each of the funds. They considered that the information provided to them was necessarily estimated, and that the profitability information provided to them, especially on a fund-by-fund basis, did not necessarily provide a definitive tool for evaluating the

ADDITIONAL INFORMATION (unaudited) continued

appropriateness of each fund’s advisory fee. They noted that the levels of profitability of the funds to EIMC varied widely, depending on, among other things, the size and type of fund. They considered the profitability of the funds in light of such factors as, for example, the information they had received regarding the relation of the fees paid by the funds to those paid by other mutual funds, the investment performance of the funds, and the amount of revenues involved. In light of these factors, the Trustees concluded that the profitability to EIMC of the services provided to any of the funds, individually or in the aggregate, should not prevent the Trustees from approving the continuation of the agreements.

TRUSTEES AND OFFICERS

TRUSTEES¹
Charles A. Austin III Trustee DOB: 10/23/1934 Term of office since: 1991 Other directorships: None	Investment Counselor, Anchor Capital Advisors, LLC. (investment advice); Director, The Andover Companies (insurance); Trustee, Arthritis Foundation of New England; Former Director, The Francis Ouimet Society (scholarship program); Former Director, Executive Vice President and Treasurer, State Street Research & Management Company (investment advice)

K. Dun Gifford Trustee DOB: 10/23/1938 Term of office since: 1974 Other directorships: None	Chairman and President, Oldways Preservation and Exchange Trust (education); Trustee, Member of the Executive Committee, Former Chairman of the Finance Committee, and Former Treasurer, Cambridge College

Dr. Leroy Keith, Jr. Trustee DOB: 2/14/1939 Term of office since: 1983 Other directorships: Trustee, Phoenix Fund Complex (consisting of 50 portfolios as of 12/31/2008)	Managing Director, Almanac Capital Management (commodities firm); Trustee, Phoenix Fund Complex; Director, Diversapack Co. (packaging company); Former Partner, Stonington Partners, Inc. (private equity fund); Former Director, Obagi Medical Products Co.; Former Director, Lincoln Educational Services

Carol A. Kosel Trustee DOB: 12/25/1963 Term of office since: 2008 Other directorships: None	Former Consultant to the Evergreen Boards of Trustees; Former Vice President and Senior Vice President, Evergreen Investments, Inc.; Former Treasurer, Evergreen Funds; Former Treasurer, Vestaur Securities Fund

Gerald M. McDonnell Trustee DOB: 7/14/1939 Term of office since: 1988 Other directorships: None	Former Manager of Commercial Operations, CMC Steel (steel producer)

Patricia B. Norris Trustee DOB: 4/9/1948 Term of office since: 2006 Other directorships: None	President and Director of Buckleys of Kezar Lake, Inc. (real estate company); Former President and Director of Phillips Pond Homes Association (home community); Former Partner, PricewaterhouseCoopers, LLP (independent registered public accounting firm)

William Walt Pettit² Trustee DOB: 8/26/1955 Term of office since: 1988 Other directorships: None	Partner and Vice President, Kellam & Pettit, P.A. (law firm); Director, Superior Packaging Corp. (packaging company); Member, Superior Land, LLC (real estate holding company), Member, K&P Development, LLC (real estate development); Former Director, National Kidney Foundation of North Carolina, Inc. (non-profit organization)

David M. Richardson Trustee DOB: 9/19/1941 Term of office since: 1982 Other directorships: None	President, Richardson, Runden LLC (executive recruitment advisory services); Director, J&M Cumming Paper Co. (paper merchandising); Former Trustee, NDI Technologies, LLP (communications); Former Consultant, AESC (The Association of Executive Search Consultants)

Russell A. Salton III, MD Trustee DOB: 6/2/1947 Term of office since: 1984 Other directorships: None	President/CEO, AccessOne MedCard, Inc.

TRUSTEES AND OFFICERS continued

Michael S. Scofield Trustee DOB: 2/20/1943 Term of office since: 1984 Other directorships: None	Retired Attorney, Law Offices of Michael S. Scofield; Former Director and Chairman, Branded Media Corporation (multi-media branding company)

Richard J. Shima Trustee DOB: 8/11/1939 Term of office since: 1993 Other directorships: None	Independent Consultant; Director, Hartford Hospital; Trustee, Greater Hartford YMCA; Former Director, Trust Company of CT; Former Trustee, Saint Joseph College (CT)

Richard K. Wagoner, CFA³ Trustee DOB: 12/12/1937 Term of office since: 1999 Other directorships: None	Member and Former President, North Carolina Securities Traders Association; Member, Financial Analysts Society

OFFICERS
W. Douglas Munn⁴ President DOB: 4/21/1963 Term of office since: 2009	Principal occupations: Chief Operating Officer, Wells Fargo Funds Management, LLC; President and Chief Operating Officer, Evergreen Investment Company, Inc.

Kasey Phillips⁴ Treasurer DOB: 12/12/1970 Term of office since: 2005	Principal occupations: Senior Vice President, Evergreen Investment Management Company, LLC; Former Vice President, Evergreen Investment Services, Inc.

Michael H. Koonce⁴ Secretary DOB: 4/20/1960 Term of office since: 2000	Principal occupations: Senior Vice President and General Counsel, Evergreen Investment Services, Inc.; Secretary, Senior Vice President and General Counsel, Evergreen Investment Management Company, LLC and Evergreen Service Company, LLC

Robert Guerin⁴ Chief Compliance Officer DOB: 9/20/1965 Term of office since: 2007	Principal occupations: Chief Compliance Officer, Evergreen Funds and Senior Vice President of Evergreen Investment Company, Inc.; Former Managing Director and Senior Compliance Officer, Babson Capital Management LLC; Former Principal and Director, Compliance and Risk Management, State Street Global Advisors; Former Vice President and Manager, Sales Practice Compliance, Deutsche Asset Management

3	Mr. Wagoner is an “interested person” of the Evergreen funds because of his ownership of shares in Wells Fargo & Company, the parent to the Evergreen funds’ investment advisor.

4	The address of the Officer is 200 Berkeley Street, Boston, MA 02116.

564358 rv7 12/2009

Evergreen High Income Fund

		table of contents
1		LETTER TO SHAREHOLDERS
4		FUND AT A GLANCE
7		ABOUT YOUR FUND’S EXPENSES
8		FINANCIAL HIGHLIGHTS
12		SCHEDULE OF INVESTMENTS
30		STATEMENT OF ASSETS AND LIABILITIES
31		STATEMENT OF OPERATIONS
32		STATEMENTS OF CHANGES IN NET ASSETS
34		NOTES TO FINANCIAL STATEMENTS
47		ADDITIONAL INFORMATION
56		TRUSTEES AND OFFICERS

Mutual Funds:

NOT FDIC INSURED

MAY LOSE VALUE

NOT BANK GUARANTEED

Evergreen Investment Management Company, LLC is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s other Broker Dealer subsidiaries.

Evergreen mutual funds are distributed by Evergreen Investment Services, Inc. 200 Berkeley Street, Boston, MA 02116

LETTER TO SHAREHOLDERS

December 2009

W. Douglas Munn

President and Chief Executive Officer

Dear Shareholder:

We are pleased to provide the Semiannual Report for Evergreen High Income Fund for the six-month period ended October 31, 2009 (the “period”).

LETTER TO SHAREHOLDERS continued

Please visit us at EvergreenInvestments.com for more information about our funds and other investment products available to you. Thank you for your continued support of Evergreen Investments.

Sincerely,

W. Douglas Munn

President and Chief Executive Officer

Evergreen Funds

LETTER TO SHAREHOLDERS continued

Notice to Shareholders:

FUND AT A GLANCE

as of October 31, 2009

PERFORMANCE AND RETURNS

Portfolio inception date: 9/11/1935

	Class A	Class B	Class C	Class I
Class inception date	1/20/1998	9/11/1935	1/21/1998	4/14/1998

Nasdaq symbol	EKHAX	EKHBX	EKHCX	EKHYX

6-month return with sales charge	21.59%	22.23%	26.23%	N/A

6-month return w/o sales charge	27.70%	27.23%	27.23%	27.85%

Average annual return*

1-year with sales charge	34.10%	34.49%	38.49%	N/A

1-year w/o sales charge	40.52%	39.49%	39.49%	40.86%

5-year	3.60%	3.55%	3.84%	4.88%

10-year	5.20%	4.94%	4.94%	5.99%

Maximum sales charge	4.75%	5.00%	1.00%	N/A
	Front-end	CDSC	CDSC

*	Adjusted for maximum applicable sales charge, unless noted.

The fund incurs a 12b-1 fee of 0.25% for Class A and 1.00% for Classes B and C. Class I does not pay a 12b-1 fee.

The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares after eight years.

Class B shares are closed to new investments by new and existing shareholders.

Class I shares are only available to institutional shareholders with a minimum of $1 million investment, which may be waived in certain situations.

The fund’s investment objective may be changed without a vote of the fund’s shareholders.

Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability and foreign currency fluctuations.

FUND AT A GLANCE continued

Comparison of a $10,000 investment in the Evergreen High Income Fund Class A shares versus a similar investment in the BofA Merrill Lynch High Yield Master Index^† BofAMLHYMI) and the Consumer Price Index (CPI).

The BofAMLHYMI is an unmanaged market index and does not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses or any taxes. The CPI is a commonly used measure of inflation and does not represent an investment return. It is not possible to invest directly in an index.

High yield, lower-rated bonds may contain more risk due to the increased possibility of default.

Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices, or currency rates are changing.

Loans are subject to risks similar to those associated with other below investment grade bond investments, such as credit risk (e.g. risk of issuer default), below investment grade bond risk (e.g. risk of greater volatility in value) and risk that the loan may become illiquid or difficult to price.

^†	Copyright 2009. BofA Merrill Lynch, Pierce, Fenner & Smith Incorporated. All rights reserved.

All data is as of October 31, 2009, and subject to change.

FUND AT A GLANCE continued

MANAGEMENT TEAM

Investment Advisor:

Evergreen Investment Management Company, LLC

Sub-Advisor:

Tattersall Advisory Group, Inc.

Portfolio Manager:

Andrew Cestone

CURRENT INVESTMENT STYLE

Source: Morningstar, Inc.

Morningstar’s style box is based on a portfolio date as of 9/30/2009.

The Fixed Income style box placement is based on a fund’s average effective maturity or duration and the average credit rating of the bond portfolio.

ABOUT YOUR FUND’S EXPENSES

The Example below is intended to describe the fees and expenses borne by shareholders and the impact of those costs on your investment.

Example

The example illustrates your fund’s costs in two ways:

• Actual expenses

• Hypothetical example for comparison purposes

	Beginning Account Value 5/1/2009	Ending Account Value 10/31/2009	Expenses Paid During Period*

Actual
Class A	$1,000.00	$1,276.99	$	6.60
Class B	$1,000.00	$1,272.32	$	10.82
Class C	$1,000.00	$1,272.32	$	10.88
Class I	$1,000.00	$1,278.55	$	5.17
Hypothetical
(5% return before expenses)
Class A	$1,000.00	$1,019.41	$	5.85
Class B	$1,000.00	$1,015.68	$	9.60
Class C	$1,000.00	$1,015.63	$	9.65
Class I	$1,000.00	$1,020.67	$	4.58

*	For each class of the fund, expenses are equal to the annualized expense ratio of each class (1.15% for Class A, 1.89% for Class B, 1.90% for Class C and 0.90% for Class I), multiplied by the average account value over the period, multiplied by 184 / 365 days.

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS A				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	2.39		$	3.13		$	3.40		$	3.31		$	3.32		$	3.43

Income from investment operations
Net investment income		0.12			0.27			0.25			0.24	¹		0.23			0.24
Net realized and unrealized gains or losses on investments		0.53			(0.76	)		(0.28	)		0.09			0			(0.10	)

Total from investment operations		0.65			(0.49	)		(0.03	)		0.33			0.23			0.14

Distributions to shareholders from
Net investment income		(0.14	)		(0.25	)		(0.24	)		(0.24	)		(0.24	)		(0.25	)

Net asset value, end of period	$	2.90		$	2.39		$	3.13		$	3.40		$	3.31		$	3.32

Total return²		27.70	%		(15.50	)%		(0.92	)%		10.35	%		7.01	%		4.14	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	259,155		$	217,199		$	270,758		$	335,411		$	388,523		$	467,714
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.15	%³		1.08	%		1.07	%		1.06	%		1.04	%		1.04	%
Expenses excluding waivers/reimbursements and expense reductions		1.16	%³		1.22	%		1.12	%		1.10	%		1.05	%		1.04	%
Net investment income		9.11	%³		10.60	%		7.82	%		7.19	%		6.95	%		7.16	%
Portfolio turnover rate		69	%		119	%		110	%		48	%		67	%		65	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS B				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	2.39		$	3.13		$	3.40		$	3.31		$	3.32		$	3.43

Income from investment operations
Net investment income		0.10			0.25	¹		0.22			0.21	¹		0.21	¹		0.22
Net realized and unrealized gains or losses on investments		0.54			(0.76	)		(0.28	)		0.09			(0.01	)²		(0.10	)

Total from investment operations		0.64			(0.51	)		(0.06	)		0.30			0.20			0.12

Distributions to shareholders from
Net investment income		(0.13	)		(0.23	)		(0.21	)		(0.21	)		(0.21	)		(0.23	)

Net asset value, end of period	$	2.90		$	2.39		$	3.13		$	3.40		$	3.31		$	3.32

Total return³		27.23	%		(16.13	)%		(1.65	)%		9.55	%		6.27	%		3.42	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	57,024		$	58,429		$	108,327		$	150,609		$	176,663		$	211,950
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.89	%⁴		1.83	%		1.82	%		1.80	%		1.75	%		1.74	%
Expenses excluding waivers/reimbursements and expense reductions		1.90	%⁴		1.97	%		1.82	%		1.80	%		1.75	%		1.74	%
Net investment income		8.42	%⁴		9.70	%		7.06	%		6.46	%		6.25	%		6.46	%
Portfolio turnover rate		69	%		119	%		110	%		48	%		67	%		65	%

1	Per share amount is based on average shares outstanding during the period.

2	The per share net realized and unrealized gains or losses is not in accord with the net realized and unrealized gains or losses for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of the portfolio.

3	Excluding applicable sales charges

4	Annualized

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS C				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	2.39		$	3.13		$	3.40		$	3.31		$	3.32		$	3.43

Income from investment operations
Net investment income		0.12			0.25			0.22			0.21	¹		0.21			0.22
Net realized and unrealized gains or losses on investments		0.52			(0.76	)		(0.28	)		0.09			(0.01	)²		(0.10	)

Total from investment operations		0.64			(0.51	)		(0.06	)		0.30			0.20			0.12

Distributions to shareholders from
Net investment income		(0.13	)		(0.23	)		(0.21	)		(0.21	)		(0.21	)		(0.23	)

Net asset value, end of period	$	2.90		$	2.39		$	3.13		$	3.40		$	3.31		$	3.32

Total return³		27.23	%		(16.13	)%		(1.65	)%		9.55	%		6.27	%		3.42	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	99,496		$	78,995		$	118,638		$	161,941		$	201,975		$	281,810
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.90	%⁴		1.83	%		1.82	%		1.80	%		1.75	%		1.74	%
Expenses excluding waivers/reimbursements and expense reductions		1.91	%⁴		1.97	%		1.82	%		1.80	%		1.75	%		1.74	%
Net investment income		8.34	%⁴		9.79	%		7.06	%		6.46	%		6.25	%		6.47	%
Portfolio turnover rate		69	%		119	%		110	%		48	%		67	%		65	%

1	Per share amount is based on average shares outstanding during the period.

2	The per share net realized and unrealized gains or losses is not in accord with the net realized and unrealized gains or losses for the period due to the timing of sales and redemptions of Fund shares in relation to fluctuating market values for the portfolio.

3	Excluding applicable sales charges

4	Annualized

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS I				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	2.39		$	3.13		$	3.40		$	3.31		$	3.32		$	3.43

Income from investment operations
Net investment income		0.13			0.28	¹		0.26			0.25	¹		0.24			0.26
Net realized and unrealized gains or losses on investments		0.52			(0.76	)		(0.29	)		0.09			0			(0.11	)

Total from investment operations		0.65			(0.48	)		(0.03	)		0.34			0.24			0.15

Distributions to shareholders from
Net investment income		(0.14	)		(0.26	)		(0.24	)		(0.25	)		(0.25	)		(0.26	)

Net asset value, end of period	$	2.90		$	2.39		$	3.13		$	3.40		$	3.31		$	3.32

Total return		27.85	%		(15.28	)%		(0.66	)%		10.65	%		7.33	%		4.45	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	97,914		$	68,991		$	25,729		$	27,147		$	50,365		$	60,412
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		0.90	%²		0.80	%		0.82	%		0.80	%		0.75	%		0.74	%
Expenses excluding waivers/reimbursements and expense reductions		0.91	%²		0.94	%		0.82	%		0.80	%		0.75	%		0.74	%
Net investment income		9.28	%²		11.89	%		8.05	%		7.42	%		7.23	%		7.46	%
Portfolio turnover rate		69	%		119	%		110	%		48	%		67	%		65	%

1	Per share amount is based on average shares outstanding during the period.

2	Annualized

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS

October 31, 2009 (unaudited)

		Principal Amount		Value

COMMERCIAL MORTGAGE-BACKED SECURITIES 2.8%
FIXED-RATE 0.9%
Bear Stearns Comml. Mtge. Securities Trust:
Ser. 2006-PW11, Class AM, 5.46%, 03/11/2039	$	580,000	$	477,276
Ser. 2006-PW13, Class AM, 5.58%, 09/11/2041		520,000		435,369
Ser. 2007-PW15, Class A4, 5.33%, 02/11/2044		1,505,000		1,375,126
Greenwich Capital Comml. Funding Corp., Ser. 2007-GG9, Class AM, 5.48%, 03/10/2039		205,000		158,455
Morgan Stanley Capital I Trust, Ser. 2006-HQ10, Class AM, 5.36%, 11/21/2041		2,425,000		1,969,477

				4,415,703

FLOATING-RATE 1.9%
Citigroup Comml. Mtge. Trust, Ser. 2007-C6, Class A4, 5.70%, 12/10/2049		1,965,000		1,798,134
GE Comml. Mtge. Trust:
Ser. 2006-C7, Class AM, 5.79%, 06/10/2046		3,095,000		2,564,786
Ser. 2007-C9, Class A4, 5.82%, 12/10/2049		1,705,000		1,582,479
Morgan Stanley Capital I Trust:
Ser. 2006-IQ11, Class AM, 5.77%, 10/15/2042		245,000		203,287
Ser. 2007-2A, Class 2A, 5.81%, 08/12/2045 144A		4,935,000		3,599,062

				9,747,748

Total Commercial Mortgage-Backed Securities (cost $10,591,287)				14,163,451

CORPORATE BONDS 66.2%
CONSUMER DISCRETIONARY 10.4%
Auto Components 1.5%
Cooper Tire & Rubber Co., 7.625%, 03/15/2027		5,040,000		4,158,001
Goodyear Tire & Rubber Co.:
7.86%, 08/15/2011		1,145,000		1,170,762
8.625%, 12/01/2011		690,000		715,013
9.00%, 07/01/2015		229,000		237,015
10.50%, 05/15/2016		765,000		831,937
Metaldyne Corp., FRN, 10.28%, 04/09/2014		549,081		407,369

				7,520,097

Diversified Consumer Services 0.3%
Carriage Services, Inc., 7.875%, 01/15/2015		1,465,000		1,384,425
Service Corporation International:
6.75%, 04/01/2015		100,000		97,750
7.50%, 04/01/2027		220,000		196,900

				1,679,075

Hotels, Restaurants & Leisure 2.8%
Boyd Gaming Corp.:
7.125%, 02/01/2016		525,000		456,750
7.75%, 12/15/2012		455,000		453,863
Caesars Entertainment, Inc., 7.875%, 03/15/2010		1,265,000		1,261,837

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
CONSUMER DISCRETIONARY continued
Hotels, Restaurants & Leisure continued
Harrah’s Entertainment Corp.:
10.00%, 12/15/2018 144A	$	275,000	$	210,375
11.25%, 06/01/2017 144A		2,070,000		2,121,750
Hyatt Hotels Corp., 6.875%, 08/15/2019 144A		1,715,000		1,752,689
Inn of the Mountain Gods Resort & Casino, 12.00%, 11/15/2010 • +		1,553,000		625,082
MGM MIRAGE:
6.625%, 07/15/2015		785,000		598,563
8.50%, 09/15/2010		1,335,000		1,331,662
11.125%, 11/15/2017 144A		415,000		458,575
11.375%, 03/01/2018 144A		85,000		76,925
Pokagon Gaming Authority, 10.375%, 06/15/2014 144A		60,000		62,400
Scientific Games Corp., 9.25%, 06/15/2019 144A		485,000		497,125
Seneca Gaming Corp., 7.25%, 05/01/2012		225,000		218,250
Shingle Springs Tribal Gaming Authority, 9.375%, 06/15/2015 144A		1,185,000		847,275
Speedway Motorsports, Inc., 8.75%, 06/01/2016 144A		685,000		719,250
Trump Entertainment Resorts, Inc., 8.50%, 06/01/2015 •		2,170,000		189,875
Universal City Development Partners, Ltd.:
8.875%, 11/15/2015 144A		360,000		358,200
10.875%, 11/15/2016 144A		245,000		246,225
11.75%, 04/01/2010		1,675,000		1,687,562
Wynn Resorts, Ltd., 7.875%, 11/01/2017 144A		55,000		54,313

				14,228,546

Household Durables 1.2%
D.R. Horton, Inc., 9.75%, 09/15/2010		2,190,000		2,283,075
Lennar Corp.:
5.125%, 10/01/2010		710,000		713,550
12.25%, 06/01/2017		55,000		66,275
Libbey, Inc., FRN, 8.26%, 06/01/2011		1,115,000		1,084,338
Meritage Homes Corp., 7.00%, 05/01/2014		640,000		611,200
Newell Rubbermaid, Inc., 10.60%, 04/15/2019		980,000		1,209,792
Sealy Corp., 10.875%, 04/15/2016 144A		175,000		196,875

				6,165,105

Internet & Catalog Retail 0.3%
QVC, Inc., 7.50%, 10/01/2019 144A		1,070,000		1,064,650
Ticketmaster Entertainment, Inc., 10.75%, 08/01/2016		720,000		745,200

				1,809,850

Media 2.8%
Cablevision Systems Corp., 8.625%, 09/15/2017 144A		100,000		104,000
CBS Corp., 8.875%, 05/15/2019		35,000		39,598
CCO Holdings, LLC, 8.75%, 11/15/2013 •		3,500,000		3,841,250

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
CONSUMER DISCRETIONARY continued
Media continued
Charter Communications, Inc.:
13.50%, 10/30/2016	$	275,000	$	317,798
Step Bond:
10.00%, 04/30/2012 144A • ††		2,095,000		2,136,900
12.875%, 09/15/2014 144A • ††		4,640,000		5,150,400
Dish Network Corp., 7.875%, 09/01/2019 144A		800,000		823,000
Lamar Media Corp.:
6.625%, 08/15/2015		95,000		91,200
7.25%, 01/01/2013		215,000		212,313
9.75%, 04/01/2014		60,000		66,300
R.H. Donnelley Corp., 11.75%, 05/15/2015 144A •		176,000		101,200
Regal Cinemas, Inc., 8.625%, 07/15/2019 144A		20,000		20,800
Sirius XM Radio, Inc., 9.625%, 08/01/2013		255,000		233,962
WMG Acquisition Corp., 9.50%, 06/15/2016 144A		55,000		58,988
XM Satellite Radio Holdings, Inc.:
11.25%, 06/15/2013 144A		500,000		527,500
13.00%, 08/01/2013 144A		520,000		520,000
Young Broadcasting, Inc.:
8.75%, 01/15/2014 •		1,815,000		18,150
10.00%, 03/01/2011 •		1,540,000		15,400

				14,278,759

Multiline Retail 0.2%
Macy’s, Inc., 5.90%, 12/01/2016		55,000		51,012
Neiman Marcus Group, Inc., 9.75%, 10/15/2015 @		402,230		357,985
Saks, Inc., 9.875%, 10/01/2011		440,000		448,800

				857,797

Specialty Retail 0.6%
American Achievement Corp.:
8.25%, 04/01/2012 144A		2,610,000		2,596,950
Sr. Disc. Note, Step Bond, 10.25%, 10/01/2012 †		390,000		378,300

				2,975,250

Textiles, Apparel & Luxury Goods 0.7%
Oxford Industries, Inc., 11.375%, 07/15/2015		2,425,000		2,619,000
Visant Corp., 7.625%, 10/01/2012		1,010,000		1,021,363

				3,640,363

CONSUMER STAPLES 2.4%
Beverages 0.3%
Cott Beverages, Inc., 8.00%, 12/15/2011		1,505,000		1,514,406

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
CONSUMER STAPLES continued
Food Products 1.7%
Del Monte Foods Co.:
6.75%, 02/15/2015	$	25,000	$	25,063
7.50%, 10/15/2019 144A		1,845,000		1,881,900
Dole Food Company, Inc.:
8.00%, 10/01/2016 144A		725,000		737,687
13.875%, 03/15/2014 144A		1,680,000		1,974,000
Smithfield Foods, Inc.:
7.00%, 08/01/2011		1,385,000		1,343,450
10.00%, 07/15/2014 144A		2,110,000		2,226,050
Tyson Foods, Inc.:
7.85%, 04/01/2016		305,000		314,150
10.50%, 03/01/2014		55,000		62,975

				8,565,275

Tobacco 0.4%
Altria Group, Inc., 10.20%, 02/06/2039		1,765,000		2,359,426

ENERGY 9.8%
Energy Equipment & Services 2.8%
Basic Energy Services, Inc., 11.625%, 08/01/2014 144A		370,000		394,050
Bristow Group, Inc.:
6.125%, 06/15/2013		120,000		115,800
7.50%, 09/15/2017		1,600,000		1,548,000
Forbes Energy Services, Ltd., 11.00%, 02/15/2015		3,215,000		2,708,638
GulfMark Offshore, Inc., 7.75%, 07/15/2014		1,440,000		1,411,200
Hercules Offshore, Inc., 10.50%, 10/15/2017 144A		730,000		730,000
Hornbeck Offshore Services, Inc.:
8.00%, 09/01/2017 144A		1,555,000		1,547,225
Ser. B, 6.125%, 12/01/2014		1,935,000		1,799,550
Parker Drilling Co., 9.625%, 10/01/2013		812,000		824,180
PHI, Inc., 7.125%, 04/15/2013		1,970,000		1,901,050
Pride International, Inc., 8.50%, 06/15/2019		930,000		1,043,925
SEACOR Holdings, Inc., 7.375%, 10/01/2019		430,000		432,209

				14,455,827

Oil, Gas & Consumable Fuels 7.0%
Alon Refining Krotz Springs, Inc., 13.50%, 10/15/2014 144A		1,240,000		1,178,000
Arch Coal, Inc., 8.75%, 08/01/2016 144A		50,000		51,500
Atlas Energy Resources, LLC, 12.125%, 08/01/2017		550,000		602,250
Bill Barrett Corp., 9.875%, 07/15/2016		225,000		239,625
Chesapeake Energy Corp.:
6.875%, 01/15/2016		4,555,000		4,418,350
9.50%, 02/15/2015		1,540,000		1,674,750

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
ENERGY continued
Oil, Gas & Consumable Fuels continued
El Paso Corp.:
7.42%, 02/15/2037	$	1,600,000	$	1,404,843
12.00%, 12/12/2013		415,000		477,250
Encore Acquisition Co., 6.00%, 07/15/2015		560,000		526,400
Exco Resources, Inc., 7.25%, 01/15/2011		2,890,000		2,890,000
Ferrellgas Partners, LP:
8.75%, 06/15/2012		440,000		442,200
9.125%, 10/01/2017 144A		295,000		309,750
Forest Oil Corp.:
7.25%, 06/15/2019		1,010,000		946,875
8.50%, 02/15/2014 144A		635,000		647,700
Frontier Oil Corp., 6.625%, 10/01/2011		860,000		869,675
Holly Corp., 9.875%, 06/15/2017 144A		1,745,000		1,814,800
Murray Energy Corp., 10.25%, 10/15/2015 144A		550,000		547,250
Newfield Exploration Co., 7.125%, 05/15/2018		80,000		80,700
North American Energy Alliance, LLC, 10.875%, 06/01/2016 144A		55,000		57,475
Nustar Logistics, LP, 7.65%, 04/15/2018		1,120,000		1,237,499
Peabody Energy Corp.:
5.875%, 04/15/2016		1,280,000		1,254,400
7.875%, 11/01/2026		2,720,000		2,665,600
Petrohawk Energy Corp.:
7.875%, 06/01/2015		1,010,000		1,025,150
10.50%, 08/01/2014		480,000		525,600
Plains Exploration & Production Co., 8.625%, 10/15/2019		2,575,000		2,594,312
Range Resources Corp., 8.00%, 05/15/2019		50,000		52,125
Sabine Pass LNG, LP:
7.25%, 11/30/2013		2,525,000		2,272,500
7.50%, 11/30/2016		1,440,000		1,224,000
SandRidge Energy, Inc., 8.00%, 06/01/2018 144A		60,000		59,700
Southwestern Energy Co., 7.50%, 02/01/2018		1,075,000		1,109,938
Tesoro Corp.:
6.50%, 06/01/2017		455,000		409,500
7.50%, 07/17/2012		940,000		853,558
9.75%, 06/01/2019		715,000		738,238
Williams Cos.:
8.125%, 03/15/2012		440,000		479,507
8.75%, 03/15/2032		200,000		232,661

				35,913,681

FINANCIALS 12.3%
Capital Markets 0.6%
E*TRADE Financial Corp.:
7.375%, 09/15/2013		485,000		436,500
12.50%, 11/30/2017		2,582,000		2,878,930

				3,315,430

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
FINANCIALS continued
Commercial Banks 0.4%
CapitalSource, Inc., 12.75%, 07/15/2014 144A	$	1,735,000	$	1,769,700
Zions Bancorp, 7.75%, 09/23/2014		240,000		215,010

				1,984,710

Consumer Finance 8.7%
Calpine Construction Finance Corp., 8.00%, 06/01/2016 144A		55,000		56,100
CCH II Capital Corp., 10.25%, 09/15/2010 •		5,495,000		6,668,925
Discover Financial Services, 10.25%, 07/15/2019		760,000		892,812
Ford Motor Credit Co., LLC:
8.70%, 10/01/2014		905,000		904,882
9.75%, 09/15/2010		1,065,000		1,091,989
9.875%, 08/10/2011		3,320,000		3,397,306
GMAC, LLC:
6.75%, 12/01/2014 144A		1,362,000		1,249,635
6.875%, 09/15/2011 144A		533,000		517,010
6.875%, 08/28/2012 144A		3,311,000		3,162,005
7.50%, 12/31/2013 144A		2,965,000		2,772,275
7.75%, 01/19/2010 144A		3,310,000		3,318,275
8.00%, 12/31/2018 144A		3,011,000		2,499,130
8.00%, 11/01/2031		700,000		595,643
8.00%, 11/01/2031 144A		2,228,000		1,927,220
International Lease Finance Corp.:
4.375%, 11/01/2009		615,000		615,000
4.75%, 01/13/2012		630,000		516,529
4.875%, 09/01/2010		1,110,000		1,061,863
5.125%, 11/01/2010		55,000		51,656
JBS USA Finance, Inc., 11.625%, 05/01/2014 144A		3,215,000		3,576,687
Nielsen Financial LLC:
11.50%, 05/01/2016		5,000		5,337
Sr. Disc. Note, Step Bond, 0.00%, 08/01/2016 †		85,000		74,056
NII Capital Corp., 10.00%, 08/15/2016 144A		75,000		79,500
NiSource Finance Corp., 10.75%, 03/15/2016		3,170,000		3,780,235
Pinnacle Foods Finance, LLC, 10.625%, 04/01/2017		690,000		707,250
Sprint Capital Corp.:
6.875%, 11/15/2028		5,065,000		3,824,075
7.625%, 01/30/2011		1,255,000		1,275,394

				44,620,789

Diversified Financial Services 1.0%
Citigroup, Inc., 8.50%, 05/22/2019		210,000		245,885
Leucadia National Corp.:
7.00%, 08/15/2013		490,000		497,350
7.125%, 03/15/2017		2,885,000		2,740,750
8.125%, 09/15/2015		1,745,000		1,775,538

				5,259,523

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
FINANCIALS continued
Real Estate Investment Trusts (REITs) 1.2%
Host Marriott Corp.:
7.125%, 11/01/2013	$	740,000	$	740,000
9.00%, 05/15/2017 144A		230,000		247,250
Omega Healthcare Investors, Inc., 7.00%, 04/01/2014		1,820,000		1,788,150
Potlatch Corp., 7.50%, 11/01/2019 144A		675,000		668,250
Ventas, Inc.:
6.75%, 04/01/2017		1,116,000		1,076,940
7.125%, 06/01/2015		1,036,000		1,028,230
9.00%, 05/01/2012		575,000		605,188

				6,154,008

Thrifts & Mortgage Finance 0.4%
Residential Capital, LLC, 8.50%, 05/15/2010		2,100,000		1,858,500

HEALTH CARE 3.2%
Biotechnology 0.1%
Talecris Biotherapeutics Holdings Corp., 7.75%, 11/15/2016 144A		600,000		613,500

Health Care Equipment & Supplies 0.2%
Biomet, Inc.:
10.375%, 10/15/2017 @		315,000		340,594
11.625%, 10/15/2017		325,000		357,906

				698,500

Health Care Providers & Services 2.7%
Apria Healthcare Group:
11.25%, 11/01/2014 144A		1,010,000		1,098,375
12.375%, 11/01/2014 144A		160,000		174,800
HCA, Inc.:
6.30%, 10/01/2012		405,000		398,925
7.875%, 02/01/2011		1,550,000		1,588,750
7.875%, 02/15/2020 144A		855,000		882,787
8.50%, 04/15/2019 144A		2,545,000		2,710,425
8.75%, 09/01/2010		910,000		930,475
9.25%, 11/15/2016		2,640,000		2,765,400
9.625%, 11/15/2016 @		1,144,000		1,216,930
Omnicare, Inc., 6.125%, 06/01/2013		1,270,000		1,225,550
Prospect Medical Holdings, Inc., 12.75%, 07/15/2014 144A		615,000		611,925
Symbion, Inc., 11.75%, 08/23/2015 @		460,086		351,966

				13,956,308

Life Sciences Tools & Services 0.2%
Bio-Rad Laboratories, Inc.:
7.50%, 08/15/2013		465,000		474,300
8.00%, 09/15/2016 144A		515,000		531,738

				1,006,038

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
INDUSTRIALS 6.8%
Aerospace & Defense 3.6%
Alliant Techsystems, Inc., 6.75%, 04/01/2016	$	1,675,000	$	1,654,062
DAE Aviation Holdings, Inc., 11.25%, 08/01/2015 144A		400,000		330,000
Geo Group, Inc., 7.75%, 10/15/2017 144A		1,210,000		1,234,200
GeoEye, Inc., 9.625%, 10/01/2015 144A		245,000		254,188
Hexcel Corp., 6.75%, 02/01/2015		1,486,000		1,448,850
L-3 Communications Holdings, Inc.:
5.20%, 10/15/2019 144A		50,000		50,188
5.875%, 01/15/2015		8,245,000		8,059,487
6.375%, 10/15/2015		2,505,000		2,486,212
Spirit AeroSystems Holdings, Inc., 7.50%, 10/01/2017 144A		485,000		483,788
TransDigm Group, Inc., 7.75%, 07/15/2014 144A		485,000		492,275
Vought Aircraft Industries, Inc., 8.00%, 07/15/2011		1,990,000		1,994,975

				18,488,225

Airlines 0.5%
Delta Air Lines, Inc.:
9.50%, 09/15/2014 144A		710,000		727,750
12.25%, 03/15/2015 144A		1,335,000		1,284,938
United Airlines, Inc., 10.40%, 05/01/2018		665,000		690,353

				2,703,041

Building Products 0.1%
Associated Materials, LLC, 9.875%, 11/15/2016 144A		275,000		283,250

Commercial Services & Supplies 1.5%
Browning-Ferris Industries, Inc., 9.25%, 05/01/2021		1,695,000		2,073,380
Casella Waste Systems, Inc., 11.00%, 07/15/2014 144A		380,000		403,750
Cornell Companies, Inc., 10.75%, 07/01/2012		175,000		179,375
Corrections Corporation of America:
6.25%, 03/15/2013		1,115,000		1,115,000
6.75%, 01/31/2014		290,000		288,550
7.75%, 06/01/2017		1,285,000		1,329,975
DigitalGlobe, Inc., 10.50%, 05/01/2014 144A		260,000		282,100
Interface, Inc., 11.375%, 11/01/2013 144A		270,000		292,950
Iron Mountain, Inc.:
6.625%, 01/01/2016		235,000		230,887
7.75%, 01/15/2015		440,000		447,700
8.375%, 08/15/2021		1,275,000		1,326,000

				7,969,667

Machinery 0.9%
Commercial Vehicle Group, Inc., 13.00%, 02/15/2013 144A @ +		3,930,000		3,478,050
CPM Holdings, Inc., 10.625%, 09/01/2014 144A		1,075,000		1,128,750

				4,606,800

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
INDUSTRIALS continued
Road & Rail 0.1%
Kansas City Southern, 13.00%, 12/15/2013	$	275,000	$	316,938

Trading Companies & Distributors 0.1%
RSC Equipment Rental, Inc., 10.00%, 07/15/2017 144A		75,000		81,750
United Rentals North America, Inc.:
6.50%, 02/15/2012		500,000		496,250
10.875%, 06/15/2016 144A		55,000		59,950

				637,950

INFORMATION TECHNOLOGY 3.3%
Communications Equipment 0.1%
EchoStar Corp.:
6.625%, 10/01/2014		380,000		371,450
7.75%, 05/31/2015		305,000		313,387

				684,837

Electronic Equipment, Instruments & Components 1.9%
Anixter International, Inc., 10.00%, 03/15/2014		1,525,000		1,658,438
Da-Lite Screen Co., Inc., 9.50%, 05/15/2011		1,655,000		1,590,869
Jabil Circuit, Inc., 8.25%, 03/15/2018		5,475,000		5,844,562
Sanmina-SCI Corp., 8.125%, 03/01/2016		520,000		499,200

				9,593,069

Internet Software & Services 0.4%
Terremark Worldwide, Inc., 12.00%, 06/15/2017 144A		1,575,000		1,748,250

IT Services 0.8%
First Data Corp.:
9.875%, 09/24/2015		240,000		222,600
10.55%, 09/24/2015		3,053,748		2,748,373
iPayment, Inc., 9.75%, 05/15/2014		900,000		661,500
Viasystems, Inc., 10.50%, 01/15/2011		485,000		487,425

				4,119,898

Semiconductors & Semiconductor Equipment 0.1%
National Semiconductor Corp., 6.60%, 06/15/2017		60,000		60,772
Spansion, Inc., 11.25%, 01/15/2016 144A •		435,000		371,925

				432,697

Software 0.0%
Activant Solutions, Inc., 9.50%, 05/01/2016		40,000		36,600

MATERIALS 5.1%
Chemicals 1.9%
Dow Chemical Co., 8.55%, 05/15/2019		1,095,000		1,252,170
Huntsman International, LLC, 5.50%, 06/30/2016 144A		1,085,000		943,950
Koppers Holdings, Inc., Sr. Disc. Note, Step Bond, 0.00%, 11/15/2014 †		2,795,000		2,808,975

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
MATERIALS continued
Chemicals continued
MacDermid, Inc., 9.50%, 04/15/2017 144A	$	346,000	$	328,700
Mosaic Co.:
7.30%, 01/15/2028		2,080,000		2,147,600
7.625%, 12/01/2016 144A		1,645,000		1,771,760
Nalco Holding Co., 8.25%, 05/15/2017 144A		55,000		58,025
SOLUTIA, Inc., 8.75%, 11/01/2017		50,000		51,750
Tronox Worldwide, LLC, 9.50%, 12/01/2012 •		520,000		328,900

				9,691,830

Construction Materials 0.8%
CPG International, Inc.:
10.50%, 07/01/2013		1,830,000		1,564,650
FRN, 7.87%, 07/01/2012		795,000		671,775
CRH America, Inc., 8.125%, 07/15/2018		450,000		520,448
Headwaters, Inc., 11.375%, 11/01/2014 144A		645,000		649,838
Texas Industries, Inc., 7.25%, 07/15/2013		515,000		507,275

				3,913,986

Containers & Packaging 0.8%
Ball Corp., 7.125%, 09/01/2016		125,000		128,438
Exopack Holding Corp., 11.25%, 02/01/2014		2,240,000		2,284,800
Graham Packaging Co., 8.50%, 10/15/2012		1,435,000		1,452,937
Silgan Holdings, Inc., 7.25%, 08/15/2016 144A		430,000		438,600

				4,304,775

Metals & Mining 0.7%
AK Steel Corp., 7.75%, 06/15/2012		485,000		488,638
Freeport-McMoRan Copper & Gold, Inc.:
8.25%, 04/01/2015		1,910,000		2,050,712
8.375%, 04/01/2017		1,180,000		1,270,259
Indalex Holdings Corp., 11.50%, 02/01/2014 •		3,285,000		53,381

				3,862,990

Paper & Forest Products 0.9%
Clearwater Paper Corp., 10.625%, 06/15/2016 144A		560,000		613,200
Georgia Pacific Corp.:
8.125%, 05/15/2011		690,000		721,050
8.25%, 05/01/2016 144A		55,000		58,575
8.875%, 05/15/2031		225,000		231,750
International Paper Co., 9.375%, 05/15/2019		1,500,000		1,818,879
NewPage Corp., 11.375%, 12/31/2014 144A		365,000		365,912
Verso Paper Holdings, LLC, 11.375%, 08/01/2016		1,137,000		744,735

				4,554,101

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
TELECOMMUNICATION SERVICES 5.6%
Diversified Telecommunication Services 3.0%
Cincinnati Bell, Inc., 8.25%, 10/15/2017	$	545,000	$	540,912
Citizens Communications Co., 7.875%, 01/15/2027		1,720,000		1,586,700
FairPoint Communications, Inc., 13.125%, 04/01/2018 •		1,295,000		213,675
Frontier Communications Corp.:
8.125%, 10/01/2018		1,935,000		1,951,931
8.25%, 05/01/2014		1,775,000		1,828,250
Global Crossing, Ltd., 12.00%, 09/15/2015 144A		235,000		253,213
Qwest Corp.:
7.125%, 11/15/2043		675,000		516,375
7.25%, 09/15/2025		305,000		266,875
7.50%, 06/15/2023		1,410,000		1,300,725
7.875%, 09/01/2011		395,000		409,812
8.00%, 10/01/2015 144A		5,000		4,988
8.875%, 03/15/2012		4,890,000		5,171,175
SBA Telecommunications, Inc., 8.00%, 08/15/2016 144A		720,000		748,800
West Corp., 9.50%, 10/15/2014		65,000		65,325
Windstream Corp., 7.875%, 11/01/2017 144A		740,000		751,100

				15,609,856

Wireless Telecommunication Services 2.6%
CC Holdings GS V, LLC, 7.75%, 05/01/2017 144A		55,000		58,025
Centennial Communications Corp., 8.125%, 02/01/2014		3,475,000		3,609,656
Cricket Communications, Inc.:
7.75%, 05/15/2016 144A		1,080,000		1,082,700
9.375%, 11/01/2014		115,000		112,125
iPCS, Inc., FRN, 3.73%, 05/01/2014 @		350,000		283,500
MetroPCS Communications, Inc., 9.25%, 11/01/2014		1,965,000		1,989,563
Sprint Nextel Corp.:
6.90%, 05/01/2019		580,000		507,500
Ser. D, 7.375%, 08/01/2015		3,465,000		3,088,181
Ser. F, 5.95%, 03/15/2014		2,890,000		2,532,362

				13,263,612

UTILITIES 7.3%
Electric Utilities 4.4%
Aquila, Inc., Step Bond, 11.875%, 07/01/2012 ††		7,392,000		8,584,248
CMS Energy Corp.:
8.50%, 04/15/2011		355,000		373,186
8.75%, 06/15/2019		260,000		287,516
Energy Future Holdings Corp., 11.25%, 11/01/2017 @		3,409,400		2,233,157
Mirant Americas Generation, LLC, 8.50%, 10/01/2021		240,000		214,800
Mirant Mid-Atlantic, LLC, Ser. C, 10.06%, 12/30/2028		3,609,761		3,713,541
Mirant North America, LLC, 7.375%, 12/31/2013		1,440,000		1,425,600

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

CORPORATE BONDS continued
UTILITIES continued
Electric Utilities continued
NRG Energy, Inc.:
7.25%, 02/01/2014	$	760,000	$	756,200
8.50%, 06/15/2019		1,010,000		1,027,675
Orion Power Holdings, Inc., 12.00%, 05/01/2010		3,534,000		3,666,525
Public Service Company of New Mexico, 7.95%, 04/01/2015		120,000		122,845

				22,405,293

Gas Utilities 0.4%
National Fuel Gas Co., 8.75%, 05/01/2019		1,950,000		2,308,137

Independent Power Producers & Energy Traders 1.9%
AES Corp.:
8.00%, 06/01/2020		85,000		85,425
8.875%, 02/15/2011		1,130,000		1,169,550
Dynegy Holdings, Inc.:
6.875%, 04/01/2011		1,000,000		1,012,500
7.125%, 05/15/2018		840,000		642,600
7.625%, 10/15/2026		1,200,000		822,000
Reliant Energy, Inc.:
6.75%, 12/15/2014		3,817,000		3,902,883
7.625%, 06/15/2014		1,885,000		1,847,300
7.875%, 06/15/2017		100,000		98,500

				9,580,758

Multi-Utilities 0.6%
PNM Resources, Inc., 9.25%, 05/15/2015		715,000		741,812
Texas-New Mexico Power Co., 9.50%, 04/01/2019 144A		1,995,000		2,448,053

				3,189,865

Total Corporate Bonds (cost $326,459,638)				339,737,188


FOREIGN BONDS – CORPORATE (PRINCIPAL AMOUNT DENOMINATED IN CURRENCY INDICATED) 0.7%
FINANCIALS 0.6%
Diversified Financial Services 0.6%
FMG Finance Property, Ltd., 9.75%, 09/01/2013 EUR		2,050,000		3,084,764

MATERIALS 0.1%
Chemicals 0.1%
Huntsman, LLC, 6.875%, 11/15/2013 EUR		485,000		649,513

Total Foreign Bonds – Corporate (Principal Amount Denominated in Currency Indicated) (cost $2,420,889)				3,734,277

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

WHOLE LOAN MORTGAGE-BACKED PASS THROUGH SECURITIES 3.0%
FIXED-RATE 1.3%
Bear Stearns Securities Trust, Ser. 2007, Class AM, 5.92%, 06/11/2050	$	2,555,000	$	2,004,313
Countrywide Alternative Loan Trust, Inc., Ser. 2005-50CB, Class 1A1, 5.50%, 11/25/2035		883,306		710,705
Credit Suisse Comml. Mtge. Trust, Ser. 2007-C5, Class A4, 5.70%, 09/15/2040		1,460,000		1,210,859
Greenwich Capital Commercial Funding Corp., Ser. 2007-GG11, Class AM, 5.87%, 08/10/2017		3,245,000		2,530,730

				6,456,607

FLOATING-RATE 1.7%
American Home Mtge. Assets:
Ser. 2006-2, Class 1A1, 1.72%, 09/25/2046		3,656,164		1,964,889
Ser. 2007-1, Class A1, 1.46%, 02/25/2047		761,834		352,584
Banc of America Comml. Mtge., Inc., Ser. 2007-04, Class A4, 5.74%, 02/10/2051		3,220,000		3,000,479
GSR Mtge. Loan Trust, Ser. 2007-AR1, Class 2A1, 5.96%, 03/25/2037		1,864,940		1,286,358
Lehman XS Trust, Ser. 2006-18N, Class A5A, 0.41%, 12/25/2036		4,550,000		1,736,644
Washington Mutual, Inc. Mtge. Pass-Through Cert., Ser. 2006-AR09, Class 2A, 1.60%, 11/25/2046		1,377,388		599,907

				8,940,861

Total Whole Loan Mortgage-Backed Pass Through Securities (cost $15,217,361)				15,397,468

YANKEE OBLIGATIONS – CORPORATE 11.7%
CONSUMER DISCRETIONARY 0.1%
Hotels, Restaurants & Leisure 0.0%
Royal Caribbean Cruises, Ltd., 11.875%, 07/15/2015		135,000		152,213

Media 0.1%
MDC Partners, Inc., 11.00%, 11/01/2016 144A		170,000		170,850
UPC Holdings BV, 9.875%, 04/15/2018 144A		15,000		15,938
Videotron, Ltd.:
9.125%, 04/15/2018 144A		30,000		32,625
9.125%, 04/15/2018		95,000		103,312

				322,725

ENERGY 2.1%
Oil, Gas & Consumable Fuels 2.1%
Connacher Oil & Gas, Ltd.:
10.25%, 12/15/2015 144A		1,740,000		1,505,100
11.75%, 07/15/2014 144A		670,000		733,650
Griffin Coal Mining Co., Ltd., 9.50%, 12/01/2016 144A		5,635,000		4,592,525
Mexichem SAB de CV, 8.75%, 11/06/2019		1,550,000		1,550,000
OPTI Canada, Inc.:
7.875%, 12/15/2014		2,930,000		2,300,050
8.25%, 12/15/2014		320,000		252,800

				10,934,125

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

YANKEE OBLIGATIONS – CORPORATE continued
FINANCIALS 2.3%
Consumer Finance 0.8%
Petroplus Finance, Ltd., 6.75%, 05/01/2014 144A	$	85,000	$	79,900
Wind Acquisition Finance SA, 11.75%, 07/15/2017 144A		3,530,000		4,006,550

				4,086,450

Diversified Financial Services 1.5%
Dexus Finance Property Group, Ltd., 7.125%, 10/15/2014 144A		1,090,000		1,091,916
FMG Finance Property, Ltd.:
10.625%, 09/01/2016 144A		3,310,000		3,649,275
FRN, 4.36%, 09/01/2011 144A		525,000		525,656
Preferred Term Securities XII, Ltd., FRN, 0.99%, 12/24/2033 • +		720,000		6,351
Ship Finance International, Ltd., 8.50%, 12/15/2013		2,275,000		2,172,625

				7,445,823

HEALTH CARE 0.0%
Pharmaceuticals 0.0%
Elan Corporation plc, 8.75%, 10/15/2016 144A		80,000		74,300

INDUSTRIALS 1.5%
Road & Rail 1.5%
Kansas City Southern de Mexico:
7.375%, 06/01/2014		5,265,000		5,001,750
12.50%, 04/01/2016 144A		435,000		490,462
TFM de CV, 9.375%, 05/01/2012		1,821,000		1,866,525

				7,358,737

Transportation Infrastructure 0.0%
Navios Maritime Holdings, Inc., 8.875%, 11/01/2017 144A		150,000		153,000

MATERIALS 3.8%
Chemicals 0.2%
NOVA Chemicals Corp.:
8.375%, 11/01/2016 144A		520,000		528,450
8.625%, 11/01/2019 144A		565,000		574,181

				1,102,631

Metals & Mining 2.3%
ArcelorMittal SA, 9.85%, 06/01/2019		1,455,000		1,717,540
Evraz Group SA:
8.875%, 04/24/2013 144A		1,535,000		1,510,056
8.875%, 04/24/2013		370,000		359,825
Novelis, Inc., 7.25%, 02/15/2015		2,685,000		2,423,213
Teck Resources, Ltd.:
9.75%, 05/15/2014		880,000		992,200
10.75%, 05/15/2019		1,875,000		2,193,750
Vedanta Resources plc, 9.50%, 07/18/2018 144A		2,470,000		2,476,175

				11,672,759

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

YANKEE OBLIGATIONS – CORPORATE continued
MATERIALS continued
Paper & Forest Products 1.3%
Cascades, Inc., 7.25%, 02/15/2013	$	910,000	$	894,075
Fibria, 9.25%, 10/30/2019 144A		2,140,000		2,225,600
PE Paper Escrow GmbH, 12.00%, 08/01/2014 144A		710,000		778,864
Sappi, Ltd.:
6.75%, 06/15/2012 144A		1,160,000		1,082,956
7.50%, 06/15/2032 144A		3,090,000		1,876,823

				6,858,318

TELECOMMUNICATION SERVICES 1.9%
Wireless Telecommunication Services 1.9%
Digicel SA, 12.00%, 04/01/2014 144A		520,000		588,900
Inmarsat, plc, Sr. Disc. Note, Step Bond, 10.375%, 11/15/2012 †		1,700,000		1,763,750
Intelsat, Ltd.:
8.50%, 01/15/2013		2,160,000		2,178,900
8.50%, 11/01/2019 144A		1,100,000		1,105,500
8.875%, 01/15/2015 144A		110,000		110,963
8.875%, 01/15/2015		666,000		675,157
Millicom International Cellular SA, 10.00%, 12/01/2013		275,000		285,656
Telesat Canada, Inc., 11.00%, 11/01/2015		930,000		1,013,700
Vimpel Communications:
8.375%, 04/30/2013 144A		50,000		51,563
9.125%, 04/30/2018 144A		1,855,000		1,943,112

				9,717,201

Total Yankee Obligations – Corporate (cost $52,603,941)				59,878,282



		Shares		Value

COMMON STOCKS 0.6%
CONSUMER DISCRETIONARY 0.6%
Auto Components 0.6%
Metaldyne Corp., Class A + o **		4,393		636,985
Metaldyne Corp., Class B + o **		15,462		2,628,540

Total Common Stocks (cost $4,412,145)				3,265,525

WARRANTS 0.0%
CONSUMER DISCRETIONARY 0.0%
Media 0.0%
Metricom, Inc., Expiring 02/15/2010 * + o (cost $318,090)		1,500		0

CLOSED END MUTUAL FUND SHARES 4.5%
BlackRock Limited Duration Income Trust		90,759		1,263,365
Blackrock Senior High Income Fund, Inc.		68,512		225,404
Credit Suisse Asset Management Income Fund, Inc.		16,366		52,371
Dreyfus High Yield Strategies Fund, Inc.		981,623		3,406,232

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Shares		Value

CLOSED END MUTUAL FUND SHARES continued
DWS Multi-Market Income Trust		142,052	$	1,149,201
Eaton Vance Limited Duration Income Trust		198,986		2,761,926
ING Prime Rate Trust		755,401		3,792,113
LMP Corporate Loan Fund, Inc.		302,267		2,895,718
New America High Income Fund, Inc.		188,888		1,573,437
Nuveen Floating Rate Income Fund		626,034		5,690,649
Van Kampen Senior Income Trust		61,392		240,043

Total Closed End Mutual Fund Shares (cost $16,615,714)				23,050,459



		Principal Amount		Value

CONVERTIBLE DEBENTURES 0.1%
INFORMATION TECHNOLOGY 0.1%
Communications Equipment 0.1%
Lucent Technologies, Inc., 2.875%, 06/15/2025 (cost $280,102)	$	585,000		487,013

LOANS 8.9%
CONSUMER DISCRETIONARY 2.6%
Abitibi Consolidated, Inc., FRN, 11.00%, 03/30/2010 •		1,658,877		1,360,279
Cooper Standard Automotive, Ltd., N/A, 12/23/2011 • <		710,000		654,911
Fontainebleau Resorts, LLC, FRN, 0.28%, 06/06/2014 •		910,929		258,722
Ford Motor Co., FRN, 3.25%-3.29%, 12/15/2013		1,244,055		1,097,642
Metaldyne Corp., FRN, 12.25%, 04/09/2014		2,350,000		2,357,121
MGM Mirage, N/A, 10/03/2011 <		759,149		683,925
Newsday, LLC, 9.75%, 07/15/2013 <		2,825,000		2,973,736
Sugarhouse HSP Gaming Properties, LP, FRN, 11.25%, 09/11/2014		1,245,000		1,222,104
Tower Automotive Holdings, FRN, 4.50%-4.625%, 07/31/2013		339,403		120,488
Tropicana Entertainment, LLC, FRN, 2.78%, 01/03/2012 •		2,970,000		965,280
Universal City Development, Ltd., 8.75%, 10/29/2014		1,895,000		1,876,050

				13,570,258

CONSUMER STAPLES 0.7%
Merisant Co., FRN, 3.75%, 01/11/2010 • <		4,335,864		3,772,245

ENERGY 0.9%
Saint Acquisition Corp., FRN, 3.56%, 06/05/2014		1,016,828		870,496
Semgroup Energy Partners, FRN, 8.25%, 07/20/2012		4,040,000		3,952,898

				4,823,394

FINANCIALS 0.6%
CIT Group, Inc., FRN, 13.00%, 01/18/2012		1,395,000		1,447,131
Realogy Corp., FRN:
3.25%, 09/01/2014		342,052		287,580
3.29%, 09/01/2014		1,270,480		1,068,156

				2,802,867

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

LOANS continued
HEALTH CARE 0.1%
HCA, Inc., FRN, 1.78%, 11/18/2012	$	774,348	$	719,191

INDUSTRIALS 1.0%
Commercial Vehicle Group, Inc., 15.00%, 02/15/2013		2,496,452		2,338,926
Neff Corp., FRN:
3.78%, 11/30/2014		4,755,000		927,225
3.80%, 05/31/2013		1,983,250		1,584,934

				4,851,085

MATERIALS 2.4%
LyondellBasell, FRN:
3.74%, 12/20/2013		609,985		344,391
3.99%, 12/22/2014 •		370,284		208,841
5.80%-6.56%, 0.00%, 12/15/2009		6,436,992		6,083,022
7.00%, 12/20/2013		1,606,770		906,219
13.00%, 12/15/2009		3,989,189		4,106,910
Momentive Performance Materials, Inc., FRN, 2.50%, 12/04/2013		448,846		384,140

				12,033,523

TELECOMMUNICATION SERVICES 0.5%
FairPoint Communications, Inc., FRN, 5.75%, 03/08/2015 •		2,893,565		2,419,397

UTILITIES 0.1%
Scorpion Holding Co., Ltd., FRN, 7.78%, 05/08/2014		795,000		727,346

Total Loans (cost $47,947,298)				45,719,306



		Shares		Value

SHORT-TERM INVESTMENTS 2.5%
MUTUAL FUND SHARES 2.5%

Evergreen Institutional Money Market Fund, Class I, 0.09% q ø ## (cost $13,090,305)		13,090,305		13,090,305

Total Investments (cost $489,956,770) 101.0%				518,523,274
Other Assets and Liabilities (1.0%)				(4,934,808	)

Net Assets 100.0%			$	513,588,466

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

144A		Security that may be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees, unless otherwise noted.
•		Security which has defaulted on payment of interest and/or principal. The Fund has stopped accruing interset on this security.
+		Security is deemed illiquid.
††		The rate shown is the stated rate at the current period end.
@		Security is currently paying interest in-kind.
†		Security initially issued in zero coupon form which converts to coupon form at a specified rate and date. An effective interest rate is applied to recognize interest income daily for the bond. This rate is based on total expected interest to be earned over the life of the bond which consists of the aggregate coupon-interest payments and discount at acquisition. The rate shown is the stated rate at the current period end.
o		Security is valued at fair value as determined by the investment advisor in good faith, according to procedures approved by the Board of Trustees.
**		Restricted security
*		Non-income producing security
<		All or a portion of the position represents an unfunded loan commitment.
q		Rate shown is the 7-day annualized yield at period end.
ø		Evergreen Investment Management Company, LLC is the investment advisor to both the Fund and the money market fund.
##		All or a portion of this security has been segregated for when-issued, delayed delivery securities and/or unfunded loans.

Summary of Abbreviations
EUR	Euro
FRN	Floating Rate Note

The following table shows the percent of total bonds by credit quality based on Moody’s and Standard & Poor’s ratings as of October 31, 2009:

AAA	8.8	%
AA	0.4	%
A	0.3	%
BBB	11.4	%
BB	31.0	%
B	27.0	%
CCC	9.7	%
Less than CCC	6.0	%
NR	5.4	%

	100.0	%

The following table shows the percent of total bonds based on effective maturity as of October 31, 2009:

Less than 1 year	15.8	%
1 to 3 year(s)	12.9	%
3 to 5 years	20.9	%
5 to 10 years	42.6	%
10 to 20 years	6.0	%
20 to 30 years	1.7	%
Greater than 30 years	0.1	%

	100.0	%

See Notes to Financial Statements

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2009 (unaudited)

Assets
Investments in unaffiliated issuers, at value (cost $476,866,465)	$	505,432,969
Investments in affiliated issuers, at value (cost $13,090,305)		13,090,305

Total investments		518,523,274
Cash		84,635
Segregated cash		1,068,000
Foreign currency, at value (cost $1,108,444)		1,101,224
Receivable for securities sold		8,755,202
Receivable for Fund shares sold		616,876
Dividends and interest receivable		9,703,416
Premiums paid on credit default swap transactions		355,682
Unrealized gains on forward foreign currency exchange contracts		33,505
Unrealized gains on credit default swap transactions		386,170
Prepaid expenses and other assets		152,542

Total assets		540,780,526

Liabilities
Dividends payable		1,462,380
Payable for securities purchased		17,915,911
Payable for Fund shares redeemed		6,015,354
Unrealized losses on credit default swap transactions		423,064
Unrealized losses on forward foreign currency exchange contracts		76,272
Premiums received on credit default swap transactions		1,145,060
Advisory fee payable		11,175
Distribution Plan expenses payable		18,109
Due to other related parties		6,198
Accrued expenses and other liabilities		118,537

Total liabilities		27,192,060

Net assets	$	513,588,466

Net assets represented by
Paid-in capital	$	748,509,849
Overdistributed net investment income		(860,740	)
Accumulated net realized losses on investments		(262,545,359	)
Net unrealized gains on investments		28,484,716

Total net assets	$	513,588,466

Net assets consists of
Class A	$	259,154,748
Class B		57,023,679
Class C		99,496,001
Class I		97,914,038

Total net assets	$	513,588,466

Shares outstanding (unlimited number of shares authorized)
Class A		89,223,708
Class B		19,631,040
Class C		34,255,008
Class I		33,709,978

Net asset value per share
Class A	$	2.90
Class A — Offering price (based on sales charge of 4.75%)	$	3.04
Class B	$	2.90
Class C	$	2.90
Class I	$	2.90

See Notes to Financial Statements

STATEMENT OF OPERATIONS

Six Months Ended October 31, 2009 (unaudited)

Investment income
Interest (net of foreign withholding taxes of $165)	$	23,927,486
Dividends		1,096,930
Income from affiliated issuers		19,562

Total investment income		25,043,978

Expenses
Advisory fee		1,252,197
Distribution Plan expenses
Class A		310,849
Class B		302,517
Class C		458,193
Administrative services fee		244,405
Transfer agent fees		461,329
Trustees’ fees and expenses		10,971
Printing and postage expenses		44,986
Custodian and accounting fees		91,451
Registration and filing fees		49,331
Professional fees		46,091
Other		25,673

Total expenses		3,297,993
Less: Expense reductions		(46	)
Fee waivers		(36,506	)

Net expenses		3,261,441

Net investment income		21,782,537

Net realized and unrealized gains or losses on investments
Net realized gains or losses on:
Securities in unaffiliated issuers		(1,498,076	)
Foreign currency related transactions		(524,592	)
Credit default swap transactions		732,998

Net realized losses on investments		(1,289,670	)

Net change in unrealized gains or losses on:
Securities in unaffiliated issuers		97,650,532
Foreign currency related transactions		6,997
Credit default swap transactions		(587,258	)

Net change in unrealized gains or losses on investments		97,070,271

Net realized and unrealized gains or losses on investments		95,780,601

Net increase in net assets resulting from operations	$	117,563,138

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended October 31, 2009 (unaudited)						Year Ended April 30, 2009

Operations
Net investment income				$	21,782,537					$	44,922,131
Net realized losses on investments					(1,289,670	)					(100,742,796	)
Net change in unrealized gains or losses on investments					97,070,271						(35,379,111	)

Net increase (decrease) in net assets resulting from operations					117,563,138						(91,199,776	)

Distributions to shareholders from
Net investment income
Class A					(12,827,853	)					(20,890,330	)
Class B					(2,907,400	)					(6,726,059	)
Class C					(4,376,876	)					(8,016,556	)
Class I					(4,622,611	)					(5,940,379	)

Total distributions to shareholders					(24,734,740	)					(41,573,324	)

		Shares						Shares

Capital share transactions
Proceeds from shares sold
Class A		13,886,373			36,981,176			23,460,686			46,855,024
Class B		682,857			1,771,262			1,778,667			4,242,958
Class C		2,786,155			7,419,352			4,212,769			9,983,604
Class I		12,666,716			33,769,583			35,364,025			39,415,839

					79,941,373						100,497,425

Net asset value of shares issued in reinvestment of distributions
Class A		2,918,465			7,917,628			5,386,285			13,364,282
Class B		564,024			1,526,634			1,350,073			3,371,595
Class C		845,938			2,295,186			1,665,853			4,138,975
Class I		1,088,321			2,973,460			1,302,557			2,994,319

					14,712,908						23,869,171

Automatic conversion of Class B shares to Class A shares
Class A		2,439,600			6,606,451			2,258,245			5,619,125
Class B		(2,439,600	)		(6,606,451	)		(2,258,245	)		(5,619,125	)

					0						0

Payment for shares redeemed
Class A		(20,974,889	)		(56,654,381	)		(28,265,734	)		(71,826,831	)
Class B		(3,641,426	)		(9,794,358	)		(11,034,293	)		(27,844,242	)
Class C		(2,452,739	)		(6,608,633	)		(10,727,624	)		(26,777,709	)
Class I		(8,933,270	)		(24,450,582	)		(26,226,695	)		(59,000,022	)

					(97,507,954	)					(185,448,804	)

Net asset value of shares issued in acquisition
Class A		0			0			1,562,948			12,467,016
Class I		0			0			10,223,579			81,550,002

					0						94,017,018

Net increase (decrease) in net assets resulting from capital share transactions					(2,853,673	)					32,934,810

Total increase (decrease) in net assets					89,974,725						(99,838,290	)

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS continued

	Six Months Ended October 31, 2009 (unaudited)				Year Ended April 30, 2009

Net assets
Beginning of period		$	423,613,741			$	523,452,031

End of period		$	513,588,466			$	423,613,741

Undistributed (overdistributed) net investment income		$	(860,740	)		$	2,091,463

See Notes to Financial Statements

NOTES TO FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION

Evergreen High Income Fund (the “Fund”) is a diversified series of Evergreen Fixed Income Trust (the “Trust”), a Delaware statutory trust organized on September 18, 1997. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

2. SIGNIFICANT ACCOUNTING POLICIES

a. Valuation of investments

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Foreign securities traded on an established exchange are valued at the last sales price on the exchange where the security is primarily traded. If there has been no sale, the securities are valued at the mean between bid and asked prices. Foreign securities may be valued at fair value according to procedures approved by the Board of Trustees if the closing price is not reflective of current market values due to trading or events occurring in the foreign markets between the close of the established exchange and the valuation time of the Fund. In addition, substantial changes in values in the U.S. markets subsequent to the close of a foreign market may also affect the values of securities traded in the foreign market. The value of foreign securities may be adjusted if such movements in the U.S. market exceed a specified threshold.

Short-term securities of sufficient credit quality with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost, which approximates fair value.

The valuation techniques used by the Fund to measure fair value are consistent with the market approach, income approach and/or cost approach, where applicable, for each security type.

b. Foreign currency translation

c. Forward foreign currency contracts

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

contracts are recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on foreign currency related transactions. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Fund’s maximum risk of loss from counterparty credit risk is the unrealized gains or losses on contracts. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty.

d. When-issued and delayed delivery transactions

e. Loans

f. Securities lending

g. Credit default swaps

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

security or index. Under the terms of the swap, one party acts as a guarantor (referred to as the seller of protection) and receives a periodic stream of payments, provided that there is no credit event, from another party (referred to as the buyer of protection) that is a fixed percentage applied to a notional principal amount over the term of the swap. An index credit default swap references all the names in the index, and if a credit event is triggered, the credit event is settled based on that name’s weight in the index. A credit event includes bankruptcy, failure to pay, obligation default, obligation acceleration, repudiation/moratorium, and restructuring. The Fund may enter into credit default swaps as either the seller of protection or the buyer of protection. As the seller of protection, the Fund is subject to investment exposure on the notional amount of the swap and has assumed the risk of default of the underlying security or index. As the buyer of protection, the Fund could be exposed to risks if the seller of the protection defaults on its obligation to perform, or if there are unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index. The maximum potential amount of future payments (undiscounted) that the Fund as the seller of protection could be required to make under the credit default swap contract would be an amount equal to the notional amount of the swap contract. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

h. Security transactions and investment income

i. Federal and other taxes

j. Distributions

k. Class allocations

3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

The Fund may invest in money market funds which are advised by EIMC. Income earned on these investments is included in income from affiliated issuers on the Statement of Operations.

The Fund has placed a portion of its portfolio transactions with brokerage firms that are affiliates of Wells Fargo. During the six months ended October 31, 2009, the Fund paid brokerage commissions of $1,893 to broker-dealers affiliated with Wells Fargo.

4. DISTRIBUTION PLANS

Evergreen Investment Services, Inc. (“EIS”), an affiliate of EIMC and a subsidiary of Wells Fargo, serves as distributor of the Fund’s shares. The Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940 Act, for each class of shares, except Class I. Under the Distribution Plans, the Fund is permitted to pay distribution fees at an annual rate of up to 0.75% of the average daily net assets for Class A shares and up to 1.00% of the average daily net assets for each of Class B and Class C shares. However, currently the distribution fees for Class A shares are limited to 0.25% of the average daily net assets of the class.

For the six months ended October 31, 2009, EIS received $24,475 from the sale of Class A shares and $32,702 and $3,055 in contingent deferred sales charges from redemptions of Class B and Class C shares, respectively.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

5. ACQUISITION

Effective at the close of business on September 19, 2008, the Fund acquired the net assets of Evergreen Select High Yield Bond Fund in a tax-free exchange for Class A and Class I shares of the Fund. Shares were issued to Class A and Class I shareholders of Evergreen Select High Yield Bond Fund at an exchange ratio of 2.80 and 2.80 for Class A and Class I shares, respectively, of the Fund. The acquired net assets consisted primarily of portfolio securities with unrealized depreciation of $10,172,034. The aggregate net assets of the Fund and Evergreen Select High Yield Bond Fund immediately prior to the acquisition were $440,185,205 and $94,017,018, respectively. The aggregate net assets of the Fund immediately after the acquisition were $534,202,223.

6. INVESTMENT TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows for the six months ended October 31, 2009:

Cost of Purchases		Proceeds from Sales

U.S.	Non-U.S.	U.S.	Non-U.S.
Government	Government	Government	Government

$4,158,036	$328,704,050	$4,220,866	$317,390,045

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 Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

As of October 31, 2009, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Equity securities
Common stocks	$	0	$	0	$	3,265,525	$	3,265,525
Warrants		0		0		0		0
Mutual fund shares		23,050,459		0		0		23,050,459
Mortgage-backed securities		0		29,560,919		0		29,560,919
Corporate debt securities		0		403,429,391		407,369		403,836,760
Loans				37,877,530		7,841,776		45,719,306
Short-term investments		13,090,305		0		0		13,090,305

	$	36,140,764	$	470,867,840	$	11,514,670	$	518,523,274

Further details on the major security types listed above can be found in the Schedule of Investments.

As of October 31, 2009, the inputs used in valuing the Fund’s other financial instruments, which are carried at fair value, were as follows:

	Quoted Prices (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total

Other financial instruments*	$0	$(869,039)	$0	$(869,039)

*	Other financial instruments include forwards and swap contracts. The value of swap contracts consists of unrealized gains/losses and premiums paid/received on swap contracts as reflected in the Statement of Assets and Liabilities.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common stocks			Corporate Debt Securities		Loans		Total

Balance as of May 1, 2009	$	0		$	0	$	0	$	0
Realized gains or losses		0			0		0		0
Change in unrealized gains or losses		(1,146,620	)		0		0		(1,146,620	)
Net purchases (sales)		4,412,145			0		0		4,412,145
Transfers in and/or out of Level 3		0			407,369		13,952,948		14,360,317

Balance as of October 31, 2009	$	3,265,525			407,369	$	13,952,948	$	17,625,842

Change in unrealized gains or losses included in earnings relating to securities still held at October 31, 2009	$	(1,146,620	)	$	0	$	0	$	(1,146,620	)

As of October 31, 2009, the Fund had unfunded loan commitments of $8,589,953.

On October 31, 2009, the aggregate cost of securities for federal income tax purposes was $507,404,171. The gross unrealized appreciation and depreciation on securities based on

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

tax cost was $31,844,238 and $20,725,135, respectively, with a net unrealized appreciation of $11,119,103.

As of April 30, 2009, the Fund had $194,204,789 in capital loss carryovers for federal income tax purposes expiring as follows:

Expiration

2010	2011	2013	2014	2015	2016	2017

$116,376,746	$15,936,101	$904,358	$6,309,078	$6,135,718	$4,801,509	$43,741,279

Certain portions of the capital loss carryovers of the Fund were assumed as a result of acquisitions. These losses are subject to certain limitations prescribed by the Internal Revenue Code.

7. DERIVATIVE TRANSACTIONS

During the six months ended October 31, 2009, the Fund entered into forward foreign currency exchange contracts for speculative purposes.

At October 31, 2009, the Fund had forward foreign currency exchange contracts outstanding as follows:

Forward Foreign Currency Exchange Contracts to Sell:

Exchange Date	Contracts to Deliver	U.S. Value at October 31, 2009		In Exchange for U.S. $		Unrealized Gain (Loss)

11/16/2009	1,035,689 EUR		$1,524,128		$1,447,856	$(76,272	)
04/15/2010	1,922,833 EUR		2,827,555		2,861,060	33,505

The Fund had an average market value of $238,958 in forward foreign currency exchange contracts to sell during the six months ended October 31, 2009.

The Fund enters into credit default swap contracts as a substitute for taking a position in the underlying security or basket of securities or to potentially enhance the Fund’s total return. At October 31, 2009, the Fund had the following credit default swap contracts outstanding:

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Credit default swaps on an index – Buy protection

Fixed

Payments

Frequency

Upfront

Rating of

Made

Premiums

Unrealized

Reference

Notional

by the

Payments

Market

Paid/

Gain

Expiration

Counterparty

Index

Index*@

Amount

Fund

Made

Value

(Received)

(Loss)

12/13/2049

Goldman
Sachs

Markit CMBX North America AAA.3 Index #

AAA

1,620,000

0.08%

Monthly

(333,205

)

(629,862

)

296,657

12/13/2049

Credit
Suisse First Boston

Markit CMBX North America AAA.3 Index #

AAA

1,435,000

0.08%

Monthly

(295,154

)

(384,667

)

89,513

Reflects the ratings of a nationally recognized ratings agency at period end. A rating of D would most likely indicate a trigger event of default has occurred although circumstances including bankruptcy, failure to pay, obligation default, obligation acceleration, repudiation/moratorium and restructuring may also cause a credit event to take place.

@	Rating represents an average rating for the underlying securities within the index.

#	The Fund entered into the swap contract for speculative purposes.

Credit default swaps on debt obligations – Sell protection

Fixed

Rating of

Payments

Frequency

Upfront

Reference

Received

Premiums

Unrealized

Debt

Notional

by the

Payments

Market

Paid/

Gain

Expiration

Counterparty

Obligation

Obligation*

Amount

Fund

Received

Value

(Received)

(Loss)

6/20/2014

Goldman
Sachs

Expedia, 7.46%, 08/15/2018 #

1,240,000

5.00%

Quarterly

(221,942

)

(105,458

)

(116,484

)

6/20/2014

UBS

Expedia, 7.46%, 08/15/2018 #

885,000

5.00%

Quarterly

(158,402

)

(25,073

)

(133,329

)

6/20/2014

UBS

Motorola ,6.50%, 09/01/2025 #

BB+

1,235,000

1.00%

Quarterly

16,674

112,143

(95,469

)

6/20/2014

JPMorgan

Motorola, 6.50%, 09/01/2025 #

BB+

1,370,000

1.00%

Quarterly

18,480

84,873

(66,393

)

Credit default swaps on an index – Sell protection

Fixed

Payments

Frequency

Upfront

Rating of

Received

Premiums

Unrealized

Reference

Notional

by the

Payments

Market

Paid/

Gain

Expiration

Counterparty

Index

Index*@

Amount

Fund

Received

Value

(Received)

(Loss)

06/20/2014

UBS

Dow Jones CDX North American Investment Grade Index ##

2,000,000

5.00%

Quarterly

147,277

158,666

(11,389

)

@	Rating represents an average rating for the underlying securities within the index.

#	The Fund entered into the swap contract for speculative purposes.

##	The Fund entered into the swap contract for hedging purposes.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

The Fund had an average notional balance on credit default swaps of $15,976,167 during the six months ended October 31, 2009.

Certain of the Fund’s derivative transactions may contain provisions for early termination in the event the net assets of the Fund declines below specific levels identified by the counterparty. If these levels are triggered, the counterparty may terminate the transaction and seek payment or request full collateralization of the derivative transaction in net liability positions. On October 31, 2009, the aggregate fair value of all derivative instruments with net asset contingent features that were in a liability positions amounted to $1,008,703. As of October 31, 2009, the Fund had segregated $1,068,000 as cash collateral for outstanding swap transactions.

A summary of derivative instruments by primary risk exposure is outlined in the following tables.

The fair value of derivative instruments as of October 31, 2009 was as follows:

	Asset Derivatives		Liability Derivatives

Derivatives not accounted for as hedging instruments	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value

Forward foreign currency contracts	Unrealized gains on forward foreign currency exchange contracts, Net assets – Net unrealized gains on investments	$ 33,505	Unrealized losses on forward foreign currency exchange contracts, Net assets – Net unrealized losses on investments	$	76,272
Credit contracts	Unrealized gains oncredit default swap transactions, Net assets – Net unrealized gains on investments	386,170	Unrealized losses on credit default swap transactions, Net assets – Net unrealized losses on investments		423,064
	Premiums paid on credit default swap transactions	355,682	Premiums received on credit default swap transactions		1,145,060

		$775,357		$	1,644,396

The effect of derivative instruments on the Statement of Operations for the six months ended October 31, 2009 was as follows:

	Amount of Realized Gains or Losses on Derivatives

Derivatives not accounted for as hedging instruments	Forward Currency Contracts			Credit Default Swaps		Total

Forward foreign currency contracts	$	(264,295	)	$	0	$	(264,295	)
Credit contracts		0			732,998		732,998

	$	(264,295	)	$	732,998	$	468,703

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

	Change in Unrealized Gains or Losses on Derivatives

Derivatives not accounted for as hedging instruments	Forward Currency Contracts		Credit Default Swaps			Total

Forward foreign currency contracts	$	12,771	$	0		$	12,771
Credit contracts		0		(587,258	)		(587,258	)

	$	12,771	$	(587,258	)	$	(574,487	)

8. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the SEC, the Fund may participate in an inter-fund lending program with certain funds in the Evergreen fund family. This program allows the Fund to borrow from, or lend money to, other participating funds. During the six months ended October 31, 2009, the Fund did not participate in the interfund lending program.

9. EXPENSE REDUCTIONS

Through expense offset arrangements with ESC and the Fund’s custodian, a portion of fund expenses has been reduced.

10. DEFERRED TRUSTEES’ FEES

11. FINANCING AGREEMENT

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

12. REGULATORY MATTERS AND LEGAL PROCEEDINGS

ADDITIONAL INFORMATION (unaudited)

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT

Each year, as required by law, the Fund’s Board of Trustees determines whether to approve the continuation of the Fund’s investment advisory agreements. At an in person meeting on September 23-24, 2009, the Trustees, including a majority of the Trustees who are not “interested persons” (as that term is defined in the 1940 Act) of the Fund, Tattersall Advisory Group, Inc. (the “Sub-Advisor”), or EIMC (the “independent Trustees”), approved the continuation of the Fund’s investment advisory agreements. (References below to the “Fund” are to Evergreen High Income Fund; references to the “funds” are to the Evergreen funds generally.)

The Trustees formed small groups to review individual funds in greater detail. They reviewed, with the assistance of an independent industry consultant that they retained, the

ADDITIONAL INFORMATION (unaudited) continued

information that EIMC, the Sub-Advisor, and Keil provided. In addition, the Trustees considered information regarding, among other things, the funds’ brokerage practices, the funds’ use of derivatives, analyst and research support available to the portfolio management teams, risk management practices, and certain fall-out benefits received directly and indirectly by EIMC and its affiliates from the funds. The Trustees requested and received additional information following that review.

ADDITIONAL INFORMATION (unaudited) continued

This summary describes a number of the most important, but not necessarily all, of the factors considered by the Board and the independent Trustees.

Information reviewed. The Board of Trustees and committees of the Board of Trustees met periodically during the course of the year. EIMC presented a wide variety of information at those meetings regarding the services it provides for the funds, the investment performance of the funds, and other aspects of the business and operations of the funds. At those meetings, and in the process of considering the continuation of the agreements, the Trustees considered information regarding, for example, the funds’ investment results; the portfolio management teams for the funds and the experience of the members of the teams, and any recent changes in the membership of the teams; portfolio trading practices; compliance by the funds, EIMC, and the Sub-Advisor with applicable laws and regulations and with the funds’ and EIMC’s compliance policies and procedures; risk evaluation and oversight procedures at EIMC; services provided by affiliates of EIMC to the funds and shareholders of the funds; and other information relating to the nature, extent, and quality of services provided by EIMC and the Sub-Advisor. The Trustees considered a number of changes in portfolio management personnel at EIMC and its advisory affiliates in the year since September 2008. The Trustees also considered changes in personnel at the funds and EIMC, including the appointment of a new President of the funds, who also serves as President and Chief Operating Officer of EIMC, and a new Chief Investment Officer of EIMC in August of 2008.

The Trustees also considered that EIMC serves as administrator to the funds and receives a fee for its services as administrator. In their comparison of fees paid by the funds with

ADDITIONAL INFORMATION (unaudited) continued

those paid by other mutual funds, the Trustees considered administrative fees paid by the funds and those other mutual funds. They considered that EIS, an affiliate of EIMC, would serve as distributor to the funds until January 3, 2010, and that Wells Fargo Funds Distributor, LLC, also an affiliate of EIMC, would serve as distributor to the funds beginning on January 4, 2010, and noted that the distributor receives fees from the funds for those services. The Trustees also considered other so-called “fall-out” benefits to EIMC and its affiliates due to their other relationships with the funds, including, for example, soft-dollar services received by EIMC attributable to transactions entered into by EIMC on behalf of the funds and brokerage commissions received by Wells Fargo Advisors, LLC (“Wells Fargo Advisors”) (formerly Wachovia Securities, LLC), an affiliate of EIMC, from transactions effected by it for the funds. The Trustees noted that the funds pay sub-transfer agency fees to various financial institutions, including Wells Fargo Advisors and its affiliates, that hold fund shares in omnibus accounts, and that an affiliate of EIMC receives fees for administering the sub-transfer agency payment program. In reviewing the services provided by an affiliate of EIMC, the Trustees noted that the affiliate of EIMC that provides transfer agency services to the funds had won recognition from Dalbar customer service each year since 1998, and also won recognition from National Quality Review for customer service and for accuracy in processing transactions in 2008. They also considered that Wells Fargo Advisors and its affiliates receive distribution-related fees and shareholder servicing payments (including amounts derived from payments under the funds’ Rule 12b-1 plans) in respect of shares sold or held through them and that an affiliate of EIMC receives compensation for serving as a securities lending agent for a number of the funds.

Nature and quality of the services provided. The Trustees considered that EIMC and its affiliates generally provide a comprehensive investment management service to the funds. They noted that EIMC and the Sub-Advisor formulate and implement an investment program for the Fund. They noted that EIMC makes its personnel available to serve as officers of the funds, and concluded that the reporting and management functions provided by EIMC with respect to the funds were generally satisfactory. The Trustees considered the investment philosophy of the Fund’s portfolio management team and the in-house research capabilities of EIMC and its affiliates, as well as other resources available to EIMC, including research services available to it from third parties.

ADDITIONAL INFORMATION (unaudited) continued

The Trustees noted the resources EIMC and its affiliates have committed to the regulatory, compliance, accounting, tax and oversight of tax reporting, and shareholder servicing functions, and the number and quality of staff committed to those functions, which they concluded were appropriate and generally in line with EIMC’s responsibilities to the Fund and to the funds generally. The Board and the independent Trustees concluded, within the context of their overall conclusions regarding the funds’ advisory agreements, that they were generally satisfied with the nature, extent, and quality of the services provided by the Sub-Advisor and EIMC, including services provided by EIMC under its administrative services agreements with the funds. They determined that the nature and scope of the services provided by EIMC and the Sub-Advisor were consistent with EIMC’s and the Sub-Advisor’s respective duties under the investment advisory agreements and appropriate and consistent with the investment programs and best interests of the funds.

Investment performance. The Trustees considered the investment performance of each fund, both by comparison to other comparable mutual funds and to broad market indices. Although the Trustees considered the performance of all share classes, the Trustees noted that, for the one-year period ended December 31, 2008, the Fund’s Class A shares had outperformed the Fund’s benchmark index, the BofA Merrill Lynch High Yield Master Index, and had underperformed the benchmark index for the three-, five-, and ten-year periods ended December 31, 2008. The Trustees noted that, for the one- and ten-year periods ended December 31, 2008, the Fund’s Class A shares had performed in the third and second quintiles, respectively, of the mutual funds against which the Trustees compared the Fund’s performance. The Trustees also noted that, for the three- and five-year periods ended December 31, 2008, the Fund’s Class A shares’ performance was in the fourth quintile of the mutual funds against which the Trustees compared the Fund’s performance. The Trustees noted that changes to the Fund’s portfolio management team had been implemented in 2007 and that the new team’s performance record with the Fund may be too short to draw definitive conclusions; however, the Trustees noted that the Fund’s relative performance had improved since these changes.

ADDITIONAL INFORMATION (unaudited) continued

reasons for the relative underperformance and the steps being taken to address the relative underperformance. The Trustees emphasized that the continuation of the investment advisory agreement for a fund should not be taken as any indication that the Trustees did not believe investment performance for any specific fund might not be improved, and they noted that they would continue to monitor closely the investment performance of the funds going forward.

Advisory and administrative fees. The Trustees recognized that EIMC does not seek to provide the lowest cost investment advisory service, but to provide a high quality, full-service investment management product at a reasonable price. They also noted that EIMC has in many cases sought to set its investment advisory fees at levels consistent with industry norms. The Trustees noted that, in certain cases, a fund’s management fees were higher than many or most other mutual funds in the same Keil peer group. However, in each case, the Trustees determined on the basis of the information presented that the level of management fees was not excessive. The Trustees noted that the management fee paid by the Fund was near the median and the average of the management fees paid by the other mutual funds against which the Trustees compared the Fund’s management fee, and that the level of profitability realized by EIMC in respect of the fee did not appear excessive.

Profitability. The Trustees considered information provided to them regarding the profitability to the EIMC organization of the investment advisory, administration, and transfer agency (with respect to the open-end funds only) fees paid to EIMC and its affiliates by each of the funds. They considered that the information provided to them was necessarily estimated, and that the profitability information provided to them, especially on a fund-by-fund basis, did not necessarily provide a definitive tool for evaluating the appropriateness of each fund’s advisory fee. They noted that the levels of profitability of the funds to EIMC varied widely, depending on, among other things, the size and type of fund. They considered the profitability of the funds in light of such factors as, for example, the information they had received regarding the relation of the fees paid by the funds to those paid by other mutual funds, the investment performance of the funds, and the amount of revenues involved. In light of these factors, the Trustees concluded that the profitability to EIMC of the services provided to any of the funds, individually or in the aggregate, should not prevent the Trustees from approving the continuation of the agreements.

This page left intentionally blank

TRUSTEES AND OFFICERS

TRUSTEES¹
Charles A. Austin III Trustee DOB: 10/23/1934 Term of office since: 1991 Other directorships: None	Investment Counselor, Anchor Capital Advisors, LLC. (investment advice); Director, The Andover Companies (insurance); Trustee, Arthritis Foundation of New England; Former Director, The Francis Ouimet Society (scholarship program); Former Director, Executive Vice President and Treasurer, State Street Research & Management Company (investment advice)

K. Dun Gifford Trustee DOB: 10/23/1938 Term of office since: 1974 Other directorships: None	Chairman and President, Oldways Preservation and Exchange Trust (education); Trustee, Member of the Executive Committee, Former Chairman of the Finance Committee, and Former Treasurer, Cambridge College

Dr. Leroy Keith, Jr. Trustee DOB: 2/14/1939 Term of office since: 1983 Other directorships: Trustee, Phoenix Fund Complex (consisting of 50 portfolios as of 12/31/2008)	Managing Director, Almanac Capital Management (commodities firm); Trustee, Phoenix Fund Complex; Director, Diversapack Co. (packaging company); Former Partner, Stonington Partners, Inc. (private equity fund); Former Director, Obagi Medical Products Co.; Former Director, Lincoln Educational Services

Carol A. Kosel Trustee DOB: 12/25/1963 Term of office since: 2008 Other directorships: None	Former Consultant to the Evergreen Boards of Trustees; Former Vice President and Senior Vice President, Evergreen Investments, Inc.; Former Treasurer, Evergreen Funds; Former Treasurer, Vestaur Securities Fund

Gerald M. McDonnell Trustee DOB: 7/14/1939 Term of office since: 1988 Other directorships: None	Former Manager of Commercial Operations, CMC Steel (steel producer)

Patricia B. Norris Trustee DOB: 4/9/1948 Term of office since: 2006 Other directorships: None	President and Director of Buckleys of Kezar Lake, Inc. (real estate company); Former President and Director of Phillips Pond Homes Association (home community); Former Partner, PricewaterhouseCoopers, LLP (independent registered public accounting firm)

William Walt Pettit² Trustee DOB: 8/26/1955 Term of office since: 1988 Other directorships: None	Partner and Vice President, Kellam & Pettit, P.A. (law firm); Director, Superior Packaging Corp. (packaging company); Member, Superior Land, LLC (real estate holding company), Member, K&P Development, LLC (real estate development); Former Director, National Kidney Foundation of North Carolina, Inc. (non-profit organization)

David M. Richardson Trustee DOB: 9/19/1941 Term of office since: 1982 Other directorships: None	President, Richardson, Runden LLC (executive recruitment advisory services); Director, J&M Cumming Paper Co. (paper merchandising); Former Trustee, NDI Technologies, LLP (communications); Former Consultant, AESC (The Association of Executive Search Consultants)

Russell A. Salton III, MD Trustee DOB: 6/2/1947 Term of office since: 1984 Other directorships: None	President/CEO, AccessOne MedCard, Inc.

TRUSTEES AND OFFICERS continued

Michael S. Scofield Trustee DOB: 2/20/1943 Term of office since: 1984 Other directorships: None	Retired Attorney, Law Offices of Michael S. Scofield; Former Director and Chairman, Branded Media Corporation (multi-media branding company)

Richard J. Shima Trustee DOB: 8/11/1939 Term of office since: 1993 Other directorships: None	Independent Consultant; Director, Hartford Hospital; Trustee, Greater Hartford YMCA; Former Director, Trust Company of CT; Former Trustee, Saint Joseph College (CT)

Richard K. Wagoner, CFA³ Trustee DOB: 12/12/1937 Term of office since: 1999 Other directorships: None	Member and Former President, North Carolina Securities Traders Association; Member, Financial Analysts Society

OFFICERS
W. Douglas Munn⁴ President DOB: 4/21/1963 Term of office since: 2009	Principal occupations: Chief Operating Officer, Wells Fargo Funds Management, LLC; President and Chief Operating Officer, Evergreen Investment Company, Inc.

Kasey Phillips⁴ Treasurer DOB: 12/12/1970 Term of office since: 2005	Principal occupations: Senior Vice President, Evergreen Investment Management Company, LLC; Former Vice President, Evergreen Investment Services, Inc.

Michael H. Koonce⁴ Secretary DOB: 4/20/1960 Term of office since: 2000	Principal occupations: Senior Vice President and General Counsel, Evergreen Investment Services, Inc.; Secretary, Senior Vice President and General Counsel, Evergreen Investment Management Company, LLC and Evergreen Service Company, LLC

Robert Guerin⁴ Chief Compliance Officer DOB: 9/20/1965 Term of office since: 2007	Principal occupations: Chief Compliance Officer, Evergreen Funds and Senior Vice President of Evergreen Investment Company, Inc.; Former Managing Director and Senior Compliance Officer, Babson Capital Management LLC; Former Principal and Director, Compliance and Risk Management, State Street Global Advisors; Former Vice President and Manager, Sales Practice Compliance, Deutsche Asset Management

3	Mr. Wagoner is an “interested person” of the Evergreen funds because of his ownership of shares in Wells Fargo & Company, the parent to the Evergreen funds’ investment advisor.

4	The address of the Officer is 200 Berkeley Street, Boston, MA 02116.

564355 rv7 12/2009

Evergreen U.S. Government Fund

		table of contents
1		LETTER TO SHAREHOLDERS
4		FUND AT A GLANCE
6		ABOUT YOUR FUND’S EXPENSES
7		FINANCIAL HIGHLIGHTS
11		SCHEDULE OF INVESTMENTS
18		STATEMENT OF ASSETS AND LIABILITIES
19		STATEMENT OF OPERATIONS
20		STATEMENTS OF CHANGES IN NET ASSETS
21		STATEMENT OF CASH FLOWS
22		NOTES TO FINANCIAL STATEMENTS
31		ADDITIONAL INFORMATION
40		TRUSTEES AND OFFICERS

Mutual Funds:

NOT FDIC INSURED

MAY LOSE VALUE

NOT BANK GUARANTEED

Evergreen Investment Management Company, LLC is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s other Broker Dealer subsidiaries.

Evergreen mutual funds are distributed by Evergreen Investment Services, Inc. 200 Berkeley Street, Boston, MA 02116

LETTER TO SHAREHOLDERS

December 2009

W. Douglas Munn

President and Chief Executive Officer

Dear Shareholder:

We are pleased to provide the Semiannual Report for Evergreen U.S. Government Fund for the six-month period ended October 31, 2009 (the “period”).

LETTER TO SHAREHOLDERS continued

Please visit us at EvergreenInvestments.com for more information about our funds and other investment products available to you. Thank you for your continued support of Evergreen Investments.

Sincerely,

W. Douglas Munn

President and Chief Executive Officer

Evergreen Funds

LETTER TO SHAREHOLDERS continued

Notice to Shareholders:

FUND AT A GLANCE

as of October 31, 2009

MANAGEMENT TEAM

Investment Advisor:

Evergreen Investment Management Company, LLC

Sub-Advisor:

Tattersall Advisory Group, Inc.

Portfolio Managers:

Christopher Y. Kauffman, CFA; Richard Applebach, CFA

CURRENT INVESTMENT STYLE

Source: Morningstar, Inc.

Morningstar’s style box is based on a portfolio date as of 9/30/2009.

The Fixed Income style box placement is based on a fund’s average effective maturity or duration and the average credit rating of the bond portfolio.

PERFORMANCE AND RETURNS

Portfolio inception date: 1/11/1993

	Class A	Class B	Class C	Class I
Class inception date	1/11/1993	1/11/1993	9/2/1994	9/2/1993

Nasdaq symbol	EUSAX	EUSBX	EUSCX	EUSYX

6-month return with sales charge	-2.17%	-2.69%	1.31%	N/A

6-month return w/o sales charge	2.70%	2.31%	2.31%	2.83%

Average annual return*

1-year with sales charge	1.66%	0.93%	4.93%	N/A

1-year w/o sales charge	6.72%	5.93%	5.93%	6.99%

5-year	1.78%	1.69%	2.04%	3.06%

10-year	3.99%	3.73%	3.73%	4.77%

Maximum sales charge	4.75%	5.00%	1.00%	N/A
	Front-end	CDSC	CDSC

*	Adjusted for maximum applicable sales charge, unless noted.

The fund incurs a 12b-1 fee of 0.25% for Class A and 1.00% for Classes B and C. Class I does not pay a 12b-1 fee.

The returns shown for Class B shares do not reflect the conversion of Class B shares to Class A shares after eight years.

Class B shares are closed to new investments by new and existing shareholders.

Returns reflect expense limits previously in effect, without which returns would have been lower.

FUND AT A GLANCE continued

Comparison of a $10,000 investment in the Evergreen U.S. Government Fund Class A shares versus a similar investment in the Barclays Capital Intermediate Government Index (BCITGBI) and the Consumer Price Index (CPI).

The BCITGBI is an unmanaged market index and does not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses or any taxes. The CPI is a commonly used measure of inflation and does not represent an investment return. It is not possible to invest directly in an index.

Class I shares are only available to institutional shareholders with a minimum of $1 million investment, which may be waived in certain situations.

The fund’s investment objective may be changed without a vote of the fund’s shareholders.

Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices, or currency rates are changing.

U.S. government guarantees apply only to certain securities held in the fund’s portfolio and not to the fund’s shares.

All data is as of October 31, 2009, and subject to change.

ABOUT YOUR FUND’S EXPENSES

The Example below is intended to describe the fees and expenses borne by shareholders and the impact of those costs on your investment.

Example

The example illustrates your fund’s costs in two ways:

• Actual expenses

• Hypothetical example for comparison purposes

	Beginning Account Value 5/1/2009	Ending Account Value 10/31/2009	Expenses Paid During Period*

Actual
Class A	$1,000.00	$1,026.97	$4.65
Class B	$1,000.00	$1,023.12	$8.46
Class C	$1,000.00	$1,023.12	$8.46
Class I	$1,000.00	$1,028.26	$3.37
Hypothetical
(5% return before expenses)
Class A	$1,000.00	$1,020.62	$4.63
Class B	$1,000.00	$1,016.84	$8.44
Class C	$1,000.00	$1,016.84	$8.44
Class I	$1,000.00	$1,021.88	$3.36

*	For each class of the fund, expenses are equal to the annualized expense ratio of each class (0.91% for Class A, 1.66% for Class B, 1.66% for Class C and 0.66% for Class I), multiplied by the average account value over the period, multiplied by 184 / 365 days.

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS A				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	9.44		$	10.02		$	9.97		$	9.81		$	10.09		$	9.96

Income from investment operations
Net investment income		0.14			0.35			0.46			0.44			0.32	¹		0.24	¹
Net realized and unrealized gains or losses on investments		0.11			(0.58	)		0.06			0.17			(0.24	)		0.19

Total from investment operations		0.25			(0.23	)		0.52			0.61			0.08			0.43

Distributions to shareholders from
Net investment income		(0.15	)		(0.35	)		(0.47	)		(0.45	)		(0.36	)		(0.30	)

Net asset value, end of period	$	9.54		$	9.44		$	10.02		$	9.97		$	9.81		$	10.09

Total return²		2.70	%		(2.36	)%		5.47	%		6.37	%		0.82	%		4.37	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	161,466		$	172,070		$	207,060		$	73,875		$	77,581		$	93,826
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		0.91	%³		0.88	%		0.91	%		0.95	%		0.98	%		1.00	%
Expenses excluding waivers/reimbursements and expense reductions		0.91	%³		0.88	%		0.96	%		0.99	%		0.99	%		1.00	%
Net investment income		3.00	%³		3.63	%		4.59	%		4.60	%		3.18	%		2.38	%
Portfolio turnover rate		101	%⁴		318	%⁴		377	%⁴		97	%		53	%		110	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

4	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS B				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	9.44		$	10.02		$	9.97		$	9.81		$	10.09		$	9.96

Income from investment operations
Net investment income		0.10			0.27			0.38			0.38	¹		0.24	¹		0.17	¹
Net realized and unrealized gains or losses on investments		0.12			(0.57	)		0.07			0.16			(0.23	)		0.19

Total from investment operations		0.22			(0.30	)		0.45			0.54			0.01			0.36

Distributions to shareholders from
Net investment income		(0.12	)		(0.28	)		(0.40	)		(0.38	)		(0.29	)		(0.23	)

Net asset value, end of period	$	9.54		$	9.44		$	10.02		$	9.97		$	9.81		$	10.09

Total return²		2.31	%		(3.09	)%		4.69	%		5.60	%		0.12	%		3.64	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	11,230		$	13,311		$	12,201		$	12,653		$	16,747		$	25,452
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.66	%³		1.63	%		1.66	%		1.69	%		1.69	%		1.70	%
Expenses excluding waivers/reimbursements and expense reductions		1.66	%³		1.63	%		1.66	%		1.69	%		1.69	%		1.70	%
Net investment income		2.24	%³		2.82	%		3.84	%		3.83	%		2.45	%		1.67	%
Portfolio turnover rate		101	%⁴		318	%⁴		377	%⁴		97	%		53	%		110	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

4	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS C				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	9.44		$	10.02		$	9.97		$	9.81		$	10.09		$	9.96

Income from investment operations
Net investment income		0.10			0.28			0.38¹			0.38¹			0.25	¹		0.17	¹
Net realized and unrealized gains or losses on investments		0.12			(0.58	)		0.07			0.16			(0.24	)		0.19

Total from investment operations		0.22			(0.30	)		0.45			0.54			0.01			0.36

Distributions to shareholders from
Net investment income		(0.12	)		(0.28	)		(0.40	)		(0.38	)		(0.29	)		(0.23	)

Net asset value, end of period	$	9.54		$	9.44		$	10.02		$	9.97		$	9.81		$	10.09

Total return²		2.31	%		(3.09	)%		4.69	%		5.60	%		0.12	%		3.64	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	15,662		$	21,291		$	11,746		$	7,669		$	7,973		$	9,820
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		1.66	%³		1.64	%		1.66	%		1.69	%		1.69	%		1.70	%
Expenses excluding waivers/reimbursements and expense reductions		1.66	%³		1.64	%		1.66	%		1.69	%		1.69	%		1.70	%
Net investment income		2.24	%³		2.76	%		3.81	%		3.86	%		2.47	%		1.67	%
Portfolio turnover rate		101	%⁴		318	%⁴		377	%⁴		97	%		53	%		110	%

1	Per share amount is based on average shares outstanding during the period.

2	Excluding applicable sales charges

3	Annualized

4	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Six Months Ended October 31, 2009 (unaudited)			Year Ended April 30,

CLASS I				2009			2008			2007			2006			2005

Net asset value, beginning of period	$	9.44		$	10.02		$	9.97		$	9.81		$	10.09		$	9.96

Income from investment operations
Net investment income		0.15			0.38			0.49			0.47			0.35	¹		0.27	¹
Net realized and unrealized gains or losses on investments		0.11			(0.58	)		0.06			0.17			(0.24	)		0.19

Total from investment operations		0.26			(0.20	)		0.55			0.64			0.11			0.46

Distributions to shareholders from
Net investment income		(0.16	)		(0.38	)		(0.50	)		(0.48	)		(0.39	)		(0.33	)

Net asset value, end of period	$	9.54		$	9.44		$	10.02		$	9.97		$	9.81		$	10.09

Total return		2.83	%		(2.12	)%		5.74	%		6.66	%		1.12	%		4.68	%

Ratios and supplemental data
Net assets, end of period (thousands)	$	281,893		$	423,516		$	733,387		$	479,015		$	436,890		$	436,431
Ratios to average net assets
Expenses including waivers/reimbursements but excluding expense reductions		0.66	%²		0.63	%		0.66	%		0.69	%		0.69	%		0.70	%
Expenses excluding waivers/reimbursements and expense reductions		0.66	%²		0.63	%		0.66	%		0.69	%		0.69	%		0.70	%
Net investment income		3.22	%²		3.92	%		4.82	%		4.88	%		3.48	%		2.69	%
Portfolio turnover rate		101	%³		318	%³		377	%³		97	%		53	%		110	%

1	Per share amount is based on average shares outstanding during the period.

2	Annualized

3	Portfolio turnover rate includes mortgage dollar roll activity.

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS

October 31, 2009 (unaudited)

	Principal Amount		Value

AGENCY COMMERCIAL MORTGAGE-BACKED SECURITIES 18.8%
FIXED-RATE 18.8%
FNMA:
5.08%, 02/01/2016	$	3,641,015	$	3,907,759
5.15%, 11/01/2017		4,024,841		4,269,555
5.18%, 05/01/2019		3,409,285		3,644,750
5.37%, 12/01/2024		895,921		941,082
5.55%, 05/01/2016		3,284,713		3,598,421
5.63%, 02/01/2018		1,157,836		1,274,779
5.64%, 12/01/2013		3,000,000		3,246,462
5.66%, 12/01/2016		1,732,000		1,868,778
5.67%, 03/01/2016-11/01/2021		12,505,894		13,591,601
5.68%, 08/01/2016-04/01/2021		12,403,517		13,689,558
5.70%, 03/01/2016		1,010,598		1,114,305
5.75%, 05/01/2021		3,810,350		4,083,778
5.79%, 10/01/2017-12/01/2017		3,242,400		3,599,973
5.82%, 12/01/2036		830,377		887,003
5.95%, 06/01/2024		1,921,610		2,109,098
5.99%, 09/01/2018		1,733,000		1,891,499
6.07%, 09/01/2013		3,024,859		3,391,350
6.08%, 01/01/2019		4,611,385		4,860,548
6.18%, 06/01/2013		9,232,516		9,718,957
6.32%, 08/01/2012		2,873,274		3,119,367
6.65%, 05/01/2016		1,563,926		1,754,278
7.48%, 01/01/2025		1,096,698		1,247,411
Ser. 2002-M1, Class C, 6.17%, 02/25/2016		624,415		650,036

Total Agency Commercial Mortgage-Backed Securities (cost $84,112,481)				88,460,348

AGENCY MORTGAGE-BACKED COLLATERALIZED MORTGAGE OBLIGATIONS 17.8%
FIXED-RATE 8.2%
FHLMC:
Ser. 0243, Class 6, IO, 6.00%, 12/15/2032		232,523		36,570
Ser. 2043, Class ZP, 6.50%, 04/15/2028		439,493		470,021
Ser. 2046, Class G, 6.50%, 04/15/2028		216,435		233,178
Ser. 2058, Class TE, 6.50%, 05/15/2028		226,741		243,555
Ser. 2072, Class A, 6.50%, 07/15/2028		861,467		927,738
Ser. 2078, Class PE, 6.50%, 08/15/2028		423,023		452,933
Ser. 2173, Class Z, 6.50%, 07/15/2029		648,002		692,488
Ser. 2326, Class ZP, 6.50%, 06/15/2031		16,698		17,998
Ser. 2461 Class PZ, 6.50%, 06/15/2032		677,046		725,881
Ser. 2958, Class NB, 5.00%, 05/15/2025		3,311,413		3,339,019
Ser. 3098, Class KI, IO, 5.50%, 11/15/2024		315,183		6,605
Ser. T-57, Class 1A1, 6.50%, 07/25/2043		2,774,200		3,014,071

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

AGENCY MORTGAGE-BACKED COLLATERALIZED MORTGAGE OBLIGATIONS continued
FIXED-RATE continued
FNMA:
Ser. 0342, Class 2, IO, 6.00%, 09/01/2033	$	93,968	$	15,798
Ser. 1993-215, Class ZQ, 6.50%, 11/25/2023		448,467		481,837
Ser. 1999, Class LH, 6.50%, 11/25/2029		290,115		310,119
Ser. 2001-82, Class ZA, 6.50%, 01/25/2032		198,271		213,024
Ser. 2002-09, Class PC, 6.00%, 03/25/2017		435,920		466,408
Ser. 2002-56, Class KW, 6.00%, 04/25/2023		436,898		444,783
Ser. 2002-T1, Class A3, 7.50%, 11/25/2031		1,862,275		2,062,646
Ser. 2002-W4, Class A4, 6.25%, 05/25/2042		2,003,176		2,175,114
Ser. 2003-046, Class IH, IO, 5.50%, 06/25/2033		2,064,646		212,927
Ser. 2003-33, Class IA, IO, 6.50%, 05/25/2033		232,993		39,919
Ser. 2003-W19, Class 1A6, 5.29%, 11/25/2033		6,931,253		7,366,185
Ser. 2004-52, Class ND, 4.50%, 05/25/2029		5,588,000		5,868,906
Ser. 2004-W1, Class 2A2, 7.00%, 12/25/2033		3,997,037		4,383,961
Ser. 2005-071, Class DB, 4.50%, 08/25/2025		4,000,000		4,226,440

				38,428,124

FLOATING-RATE 9.6%
FHLMC:
Ser. 06, Class B, 0.85%, 03/25/2023		479,730		477,676
Ser. 1220, Class A, 0.60%, 02/15/2022		157,300		156,204
Ser. 1370, Class JA, 1.40%, 09/15/2022		178,742		178,104
Ser. 1498, Class I, 1.40%, 04/15/2023		121,018		121,095
Ser. 1533, Class FA, 1.35%, 06/15/2023		40,776		40,780
Ser. 1671, Class TA, 0.75%, 02/15/2024		276,881		276,351
Ser. 1939, Class FB, 1.25%, 04/15/2027		319,572		325,082
Ser. 2030, Class F, 0.75%, 02/15/2028		612,178		607,338
Ser. 2181, Class PF, 0.65%, 05/15/2029		275,435		273,727
Ser. 2315, Class FD, 0.75%, 04/15/2027		207,799		205,805
Ser. 2380, Class FL, 0.85%, 11/15/2031		9,389,894		9,361,325
Ser. 2691, Class FC, 0.95%, 10/15/2033		356,701		356,677
Ser. 2852, Class NY, 5.00%, 09/15/2033		5,400,000		5,710,289
Ser. 3136, Class SA, IIFRN, 87.58%, 04/15/2036		1,183,556		1,885,606
Ser. T-67, Class 1A1C, 3.78%, 03/25/2036		5,161,731		5,155,280
Ser. T-67, Class 2A1C, 3.75%, 03/25/2036		4,841,744		4,867,527
Ser. T-75, Class A1, 0.64%, 11/25/2036		8,381,734		8,222,481
FNMA:
Ser. 1991, Class F, 1.13%, 05/25/2021		471,194		471,544
Ser. 1991-156, Class F, 1.58%, 11/25/2021		99,823		102,212
Ser. 1994-84, Class F, 0.88%, 02/25/2024		377,216		375,689
Ser. 1997-49, Class F, 0.78%, 06/17/2027		295,338		293,039
Ser. 1999-49, Class F, 0.64%, 05/25/2018		564,148		564,147
Ser. 2000-32, Class FM, 0.70%, 10/18/2030		349,760		349,358
Ser. 2002-07, Class FB, 0.64%, 02/25/2028		196,359		195,108

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

	Principal Amount		Value

AGENCY MORTGAGE-BACKED COLLATERALIZED MORTGAGE OBLIGATIONS continued
FLOATING-RATE continued
FNMA:
Ser. 2002-W5, Class A27, 0.74%, 11/25/2030	$	987,953	$	986,470
Ser. 2003-011, Class DF, 0.69%, 02/25/2033		1,735,232		1,714,948
Ser. 2003-011, Class FE, 0.74%, 12/25/2033		431,571		429,113
Ser. 2006-72, Class GS, IIFRN, 46.98%, 08/25/2036		488,320		585,295
Ser. G91, Class FA, 1.18%, 04/25/2021		14,894		14,897
Ser. G93, Class FH, 1.43%, 04/25/2023		99,556		100,699
GNMA:
Ser. 1999-40, Class FL, 0.85%, 02/17/2029		149,150		148,748
Ser. 2000-36, Class FG, 0.75%, 11/20/2030		260,540		258,511
Ser. 2002-15, Class F, 0.80%, 02/16/2032		431,273		429,719
Ser. 2002-26, Class C, 5.99%, 02/16/2024		118,508		119,520
Ser. 2006-47, Class SA, IO, 6.56%, 08/16/2036		1,053,899		103,208

				45,463,572

Total Agency Mortgage-Backed Collateralized Mortgage Obligations (cost $82,641,669)				83,891,696

AGENCY MORTGAGE-BACKED PASS THROUGH SECURITIES 32.1%
FIXED-RATE 23.1%
FHLMC:
5.50%, 05/01/2038 ##		11,037,527		11,635,526
6.00%, 10/01/2032-11/01/2038		25,307,986		26,932,629
6.50%, 04/01/2018-07/01/2031		1,588,901		1,717,155
7.00%, 12/01/2023-05/01/2029		155,199		170,455
8.00%, 08/01/2023-11/01/2028		336,550		380,502
8.50%, 07/01/2022-08/01/2026		67,365		76,934
9.00%, 01/01/2017-10/01/2024		143,913		160,912
9.50%, 09/01/2016-05/01/2021		43,001		48,119
10.00%, 08/01/2017-08/01/2020		1,267		1,445
10.50%, 02/01/2019-05/01/2020		108,147		126,478
FNMA:
4.44%, 05/01/2030		296,917		302,033
4.79%, 05/01/2019		2,327,009		2,426,199
4.98%, 01/01/2020		846,868		910,510
5.24%, 12/01/2012		514,655		539,851
5.39%, 01/01/2024		3,500,584		3,750,248
5.55%, 09/01/2019		4,711,809		4,861,861
6.00%, 03/01/2024		429,625		463,075
6.50%, 06/01/2017-11/01/2031		3,319,221		3,599,413
7.00%, 11/01/2026-07/01/2047		2,916,902		3,188,616
8.00%, 08/01/2020-02/01/2030		1,605,936		1,813,143

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

AGENCY MORTGAGE-BACKED PASS THROUGH SECURITIES continued
FIXED-RATE continued
FNMA:
8.50%, 08/01/2014-08/01/2029	$	347,572	$	396,916
9.00%, 06/01/2021-04/01/2025		213,420		244,150
9.50%, 10/01/2020-02/01/2023		24,440		26,958
11.00%, 01/01/2016		989		1,017
11.25%, 02/01/2016		9,537		10,455
FNMA 30 year, 6.00%, TBA #		20,700,000		21,990,521
GNMA:
6.00%, 05/15/2011-08/20/2034		2,112,834		2,259,876
6.50%, 12/15/2025-09/20/2033		446,829		479,419
7.00%, 12/15/2022-05/15/2032		374,211		413,070
7.34%, 10/20/2021-09/20/2022		448,698		501,141
8.00%, 04/15/2023-06/15/2025		53,645		61,338
8.50%, 07/15/2016		1,905		2,073
9.00%, 11/15/2016-04/15/2021		94,491		107,303
10.00%, 12/15/2018		22,936		26,311
14.00%, 02/15/2012-06/15/2012		117,899		128,467
GNMA 30 year, 4.50%, TBA #		14,000,000		14,161,910
SBA:
0.625%, 03/25/2035		402,266		390,798
0.66%, 11/25/2029		4,471,079		4,305,023

				108,611,850

FLOATING-RATE 9.0%
FHLB, 3.50%, 07/01/2032		4,308,893		4,333,903
FHLMC, 5.87%, 02/01/2037		9,081,997		9,627,917
FNMA:
1.96%, 02/01/2032-10/01/2041		2,761,144		2,725,016
2.10%, 04/01/2029		863,700		844,249
2.16%, 01/01/2041		1,660,893		1,638,953
2.97%, 02/01/2035		7,683,968		7,693,640
3.42%, 07/01/2025		260,375		269,166
3.51%, 11/01/2018		192,616		198,373
3.62%, 01/01/2038		4,132,472		4,229,216
4.33%, 03/01/2036		5,446,034		5,651,069
4.37%, 05/01/2035		4,815,072		4,954,250

				42,165,752

Total Agency Mortgage-Backed Pass Through Securities (cost $147,477,074)				150,777,602

AGENCY REPERFORMING MORTGAGE-BACKED PASS THROUGH SECURITIES 2.1%
FIXED-RATE 2.1%
FHLMC, Ser. T-60, Class 1A-1, 6.50%, 03/25/2044		881,296		957,630

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

AGENCY REPERFORMING MORTGAGE-BACKED PASS THROUGH SECURITIES continued
FIXED-RATE continued
FNMA:
Ser. 2001-T4, Class A1, 7.50%, 07/25/2041	$	1,220,040	$	1,289,578
Ser. 2002-T16, Class A1, 6.50%, 07/25/2042		3,078,031		3,342,289
Ser. 2002-W3, Class A5, 7.50%, 01/25/2028		290,341		324,473
Ser. 2002-W8, Class A4, 7.00%, 06/25/2017		864,862		936,447
Ser. 2003-W1, Class 1A-1, 6.50%, 12/25/2042		1,535,326		1,666,871
Ser. 2004-T1, Class 1A-2, 6.50%, 01/25/2044		1,395,527		1,515,328

Total Agency Reperforming Mortgage-Backed Pass Through Securities (cost $9,640,996)				10,032,616

ASSET-BACKED SECURITIES 0.4%
Argent Securities, Inc., Ser. 2004-W8, Class A2, FRN, 0.72%, 05/25/2034 +		778,579		484,376
Countrywide Asset-Backed Certificates:
Ser. 2005-16, Class 2AF2, 5.38%, 02/25/2030 +		342,726		227,065
Ser. 2005-17, Class 1AF2, 5.36%, 05/25/2036 +		197,331		149,283
HSBC Home Equity Loan Trust, Ser. 2005-3, Class A1, FRN, 0.51%, 01/20/2035 +		286,415		241,704
Lehman XS Trust:
Ser. 2005-04, Class 2A1B, 5.17%, 10/25/2035 +		66,304		65,666
Ser. 2005-10, Class 2A3B, 5.55%, 01/25/2036 +		277,716		203,802
NovaStar ABS CDO, Ltd., Ser. 2007-1A, Class A2, FRN, 5.82%, 02/08/2047 144A • +		4,000,000		40
Popular Mtge. Trust, Ser. 2005-A, Class B3, 5.68%, 01/25/2036 +		278,507		256,521

Total Asset-Backed Securities (cost $6,220,686)				1,628,457

COMMERCIAL MORTGAGE-BACKED SECURITIES 1.1%
FIXED-RATE 0.3%
GE Capital Comml. Mtge. Corp., Ser. 2005-C3, Class A2, 4.85%, 07/10/2045		660,000		664,212
LB-UBS Comml. Mtge. Trust, Ser. 2005-C5, Class A2, 4.89%, 09/15/2030		790,000		793,250

				1,457,462

FLOATING-RATE 0.8%
Credit Suisse First Boston Mtge. Securities:
Ser. 2004-TF2A, Class H, 0.95%, 11/15/2019 144A		1,900,000		1,470,332
Ser. 2004-TF2A, Class J, 1.20%, 11/15/2019 144A		1,828,000		1,324,529
Ser. 2005-TFLA, Class J, 1.20%, 02/15/2020 144A		961,000		914,065
Trapeza CDO, LLC, Ser. 2004-7A, Class B1, 1.83%, 01/25/2035 144A • o +		2,229,860		0

				3,708,926

Total Commercial Mortgage-Backed Securities (cost $8,376,097)				5,166,388

U.S. TREASURY OBLIGATIONS 28.9%
U.S. Treasury Notes:
1.50%, 12/31/2013		62,200,000		61,038,664
2.625%, 02/29/2016		10,000,000		9,903,130

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

		Principal Amount		Value

U.S. TREASURY OBLIGATIONS continued
U.S. Treasury Notes:
2.75%, 02/15/2019	$	15,340,000	$	14,582,603
4.25%, 11/15/2017		46,675,000		50,179,312

Total U.S. Treasury Obligations (cost $134,921,940)				135,703,709

WHOLE LOAN MORTGAGE-BACKED COLLATERALIZED MORTGAGE OBLIGATIONS 0.4%
FIXED-RATE 0.4%
Countrywide Home Loans, Inc., Ser. 2006-18, Class 2A5, 6.00%, 12/25/2036 +		4,050,000		1,657,443
Deutsche Securities, Inc.:
Ser. 2006-AB2, Class A7, 5.96%, 06/25/2036 +		5,200		5,149
Ser. 2006-AB3, Class A7, 6.36%, 07/25/2036 +		17,879		16,533
Residential Asset Securitization Trust, Ser. 2006-A9CB, Class A5, 6.00%, 07/25/2036 +		605,749		380,988

Total Whole Loan Mortgage-Backed Collateralized Mortgage Obligations (cost $4,657,183)				2,060,113

WHOLE LOAN SUBORDINATE COLLATERALIZED MORTGAGE OBLIGATIONS 0.9%
FIXED-RATE 0.9%
Countrywide Alternative Loan Trust, Ser. 2004-2CB, Class M, 5.68%, 03/25/2034 + (cost $10,198,585)		10,228,952		4,335,377

YANKEE OBLIGATIONS – CORPORATE 0.3%
FINANCIALS 0.3%
Diversified Financial Services 0.3%
MMCAPS Funding XIX, Ltd., FRN, 6.14%, 01/12/2038 144A +		5,000,000		79,800
Preferred Term Securities XIV, Ltd., FRN, 6.93%, 06/24/2034 144A + •		7,500,000		1,208,850

Total Yankee Obligations – Corporate (cost $12,050,642)				1,288,650



		Shares		Value

SHORT-TERM INVESTMENTS 5.4%
MUTUAL FUND SHARES 5.4%
Evergreen Institutional U.S. Government Money Market Fund, Class I, 0.01% q ø ## (cost $25,606,930)		25,606,930		25,606,930

Total Investments (cost $525,904,283) 108.2%				508,951,886
Other Assets and Liabilities (8.2%)				(38,699,871	)

Net Assets 100.0%			$	470,252,015

See Notes to Financial Statements

SCHEDULE OF INVESTMENTS continued

October 31, 2009 (unaudited)

#		When-issued or delayed delivery security
##		All or a portion of this security has been segregated for when-issued or delayed delivery securities.
144A		Security that may be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees, unless otherwise noted.
o		Security is valued at fair value as determined by the investment advisor in good faith, according to procedures approved by the Board of Trustees.
•		Security which has defaulted on payment of interest and/or principal. The Fund has stopped accruing interest on this security.
+		Security is deemed illiquid.
q		Rate shown is the 7-day annualized yield at period end.
ø		Evergreen Investment Management Company, LLC is the investment advisor to both the Fund and the money market fund.

Summary of Abbreviations
CDO		Collateralized Debt Obligation
FHLB		Federal Home Loan Bank
FHLMC		Federal Home Loan Mortgage Corp.
FNMA		Federal National Mortgage Association
FRN		Floating Rate Note
GNMA		Government National Mortgage Association
IIFRN		Indexed Inverse Floating Rate Note
IO		Interest Only
SBA		Small Business Administration
TBA		To Be Announced

The following table shows the percent of total bonds based on effective maturity as of October 31, 2009:

Less than 1 year	9.0	%
1 to 3 year(s)	17.9	%
3 to 5 years	35.1	%
5 to 10 years	35.0	%
10 to 20 years	3.0	%

	100.0	%

The following table shows the percent of total bonds by credit quality based on Moody’s and Standard & Poor’s ratings as of October 31, 2009:

AAA	98.3	%
AA	0.9	%
B	0.4	%
CCC	0.1	%
Less than CCC	0.3	%

	100.0	%

See Notes to Financial Statements

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2009 (unaudited)

Assets
Investments in unaffiliated issuers, at value (cost $500,297,353)	$	483,344,956
Investments in affiliated issuers, at value (cost $25,606,930)		25,606,930

Total investments		508,951,886
Receivable for securities sold		22,702,890
Principal paydown receivable		1,853
Receivable for Fund shares sold		271,091
Interest receivable		2,841,360
Prepaid expenses and other assets		57,244

Total assets		534,826,324

Liabilities
Dividends payable		604,107
Payable for securities purchased		58,783,016
Payable for Fund shares redeemed		5,103,100
Advisory fee payable		16,018
Distribution Plan expenses payable		5,516
Due to other related parties		3,257
Accrued expenses and other liabilities		59,295

Total liabilities		64,574,309

Net assets	$	470,252,015

Net assets represented by
Paid-in capital	$	532,443,040
Overdistributed net investment income		(669,984	)
Accumulated net realized losses on investments		(44,568,644	)
Net unrealized losses on investments		(16,952,397	)

Total net assets	$	470,252,015

Net assets consists of
Class A	$	161,466,018
Class B		11,230,363
Class C		15,662,147
Class I		281,893,487

Total net assets	$	470,252,015

Shares outstanding (unlimited number of shares authorized)
Class A		16,921,091
Class B		1,176,916
Class C		1,641,446
Class I		29,543,832

Net asset value per share
Class A	$	9.54
Class A — Offering price (based on sales charge of 4.75%)	$	10.02
Class B	$	9.54
Class C	$	9.54
Class I	$	9.54

See Notes to Financial Statements

STATEMENT OF OPERATIONS

Six Months Ended October 31, 2009 (unaudited)

Investment income
Interest	$	10,459,741
Income from affiliated issuers		18,657

Total investment income		10,478,398

Expenses
Advisory fee		1,096,426
Distribution Plan expenses
Class A		209,534
Class B		61,965
Class C		91,121
Administrative services fee		269,302
Transfer agent fees		239,543
Trustees’ fees and expenses		5,653
Printing and postage expenses		26,545
Custodian and accounting fees		71,924
Registration and filing fees		26,269
Professional fees		30,299
Other		8,812

Total expenses		2,137,393
Less: Expense reductions		(54	)

Net expenses		2,137,339

Net investment income		8,341,059

Net realized and unrealized gains or losses on investments
Net realized losses on securities in unaffiliated issuers		(2,467,559	)
Net change in unrealized gains or losses on securities in unaffiliated issuers		7,376,433

Net realized and unrealized gains or losses on investments		4,908,874

Net increase in net assets resulting from operations	$	13,249,933

See Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS

	Six Months Ended October 31, 2009 (unaudited)						Year Ended April 30, 2009

Operations
Net investment income				$	8,341,059					$	29,922,305
Net realized losses on investments					(2,467,559	)					(34,275,777	)
Net change in unrealized gains or losses on investments					7,376,433						(24,888,170	)

Net increase (decrease) in net assets resulting from operations					13,249,933						(29,241,642	)

Distributions to shareholders from
Net investment income
Class A					(2,681,608	)					(6,819,713	)
Class B					(151,484	)					(366,392	)
Class C					(222,260	)					(518,623	)
Class I					(5,818,668	)					(22,550,187	)

Total distributions to shareholders					(8,874,020	)					(30,254,915	)

		Shares						Shares

Capital share transactions
Proceeds from shares sold
Class A		500,352			4,774,533			2,713,607			25,884,276
Class B		100,624			953,416			1,023,651			9,719,270
Class C		130,988			1,243,651			2,612,050			24,792,580
Class I		936,825			8,983,943			17,968,062			172,741,248

					15,955,543						233,137,374

Net asset value of shares issued in reinvestment of distributions
Class A		213,106			2,015,848			540,965			5,170,310
Class B		10,751			101,704			24,348			232,189
Class C		15,008			141,933			30,723			292,221
Class I		266,381			2,519,297			1,308,472			12,564,379

					4,778,782						18,259,099

Automatic conversion of Class B shares to Class A shares
Class A		112,776			1,062,769			200,480			1,921,196
Class B		(112,776	)		(1,062,769	)		(200,480	)		(1,921,196	)

					0						0

Payment for shares redeemed
Class A		(2,137,822	)		(20,153,450	)		(5,877,165	)		(56,184,976	)
Class B		(232,230	)		(2,187,798	)		(654,012	)		(6,228,684	)
Class C		(760,798	)		(7,163,251	)		(1,558,204	)		(14,776,537	)
Class I		(16,535,730	)		(155,541,797	)		(47,557,926	)		(448,915,695	)

					(185,046,296	)					(526,105,892	)

Net decrease in net assets resulting from capital share transactions					(164,311,971	)					(274,709,419	)

Total decrease in net assets					(159,936,058	)					(334,205,976	)
Net assets
Beginning of period					630,188,073						964,394,049

End of period				$	470,252,015					$	630,188,073

Overdistributed net investment income				$	(669,984	)				$	(137,023	)

See Notes to Financial Statements

STATEMENT OF CASH FLOWS

October 31, 2009

Decrease in cash:
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	13,249,933
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchase of investment securities (including mortgage dollar rolls)		(513,586,209	)
Proceeds from disposition of investment securities (including mortgage dollar rolls)		644,569,165
Paydowns		28,296,305
Amortization		524,935
Sale of short-term investment securities, net		31,717,445
Decrease in interest receivable		736,127
Decrease in receivable for securities sold		32,463,438
Decrease in principal paydown receivable		22,702,890
Decrease in receivable for Fund shares sold		117,865
Increase in prepaid expenses and other assets		(27,149	)
Decrease in payable for securities purchased		(86,532,925	)
Increase in payable for Fund shares redeemed		4,147,597
Increase in advisory fees payable		9,078
Increase in due to other related parties		370
Decrease in accrued expenses and other liabilities		(6,402	)
Decrease in distribution fees payable		(5,516	)
Unrealized appreciation on investments		(7,376,433	)
Net realized loss on securities in unaffiliated issuers		2,467,559

Net cash provided by operating activities		173,468,073

Cash flows from financing activities:
Decrease in additional paid-in capital		(169,090,753	)
Cash distributions paid		(4,377,320	)

Net cash used in financing activities		(173,468,073	)

Net decrease in cash		0

Cash:
Beginning of period	$	0

End of period	$	0

See Notes to Financial Statements

NOTES TO FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION

Evergreen U.S. Government Fund (the “Fund”) is a diversified series of Evergreen Fixed Income Trust (the “Trust”), a Delaware statutory trust organized on September 18, 1997. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Fund offers Class A, Class B, Class C and Class I shares. Class A shares are sold with a front-end sales charge. However, Class A share investments of $1 million or more are not subject to a front-end sales charge, but are subject to a contingent deferred sales charge of 1.00% upon redemption within 18 months. Effective after the close of business on June 30, 2009, Class B shares were closed to new accounts and additional purchases by existing shareholders. Class B shares are available for purchase only through (i) an exchange transaction in which Class B shares of another Evergreen fund are exchanged or (ii) the Fund’s dividend reinvestment program. Class B shares are sold without a front-end sales charge, but are subject to a contingent deferred sales charge that is payable upon redemption and decreases depending on how long the shares have been held. Class C shares are sold without a front-end sales charge, but are subject to a contingent deferred sales charge that is payable upon redemption within one year. Class I shares are sold without a front-end sales charge or contingent deferred sales charge. Each class of shares, except Class I shares, pays an ongoing distribution fee.

2. SIGNIFICANT ACCOUNTING POLICIES

a. Valuation of investments

Listed equity securities are usually valued at the last sales price or official closing price on the national securities exchange where the securities are principally traded. If there has

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

Short-term securities of sufficient credit quality with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost, which approximates fair value.

The valuation techniques used by the Fund to measure fair value are consistent with the market approach, income approach and/or cost approach, where applicable, for each security type.

b. When-issued and delayed delivery transactions

c. Securities lending

d. Dollar roll transactions

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

and maturity) securities at a later date at an agreed upon price. The Fund will use the proceeds generated from the transactions to invest in short-term investments, which may enhance the Fund’s current yield and total return. The Fund accounts for dollar roll transactions as purchases and sales. The Fund could be exposed to risks if the counterparty defaults on its obligation to perform under the terms of the agreement, if the Fund receives inferior securities in comparison to what was sold to the counterparty at redelivery or if there are variances in paydown speed between the mortgage-related pools.

e. Credit default swaps

The Fund is subject to credit risk in the normal course of pursuing its investment objectives. The Fund may enter into credit default swap contracts for hedging or speculative purposes to provide or receive a measure of protection against default on a referenced entity, obligation or index. Credit default swaps involve an exchange of a stream of payments for protection against the loss in value of an underlying security or index. Under the terms of the swap, one party acts as a guarantor (referred to as the seller of protection) and receives a periodic stream of payments, provided that there is no credit event, from another party (referred to as the buyer of protection) that is a fixed percentage applied to a notional principal amount over the term of the swap. An index credit default swap references all the names in the index, and if a credit event is triggered, the credit event is settled based on that name’s weight in the index. A credit event includes bankruptcy, failure to pay, obligation default, obligation acceleration, repudiation/moratorium, and restructuring. The Fund may enter into credit default swaps as either the seller of protection or the buyer of protection. As the seller of protection, the Fund is subject to investment exposure on the notional amount of the swap and has assumed the risk of default of the underlying security or index. As the buyer of protection, the Fund could be exposed to risks if the seller of the protection defaults on its obligation to perform, or if there are unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index. The maximum potential amount of future payments (undiscounted) that the Fund as the seller of protection could be required to make under the credit default swap contract would be an amount equal to the notional amount of the swap contract. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

f. Security transactions and investment income

g. Federal and other taxes

h. Distributions

i. Class allocations

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Evergreen Investment Management Company, LLC (“EIMC”), a subsidiary of Wells Fargo & Company (“Wells Fargo”), is the investment advisor to the Fund and is paid an annual fee starting at 0.42% and declining to 0.35% as average daily net assets increase. For the six months ended October 31, 2009, the advisory fee was equivalent to an annual rate of 0.41% of the Fund’s average daily net assets.

The Fund may invest in money market funds which are advised by EIMC. Income earned on these investments is included in income from affiliated issuers on the Statement of Operations.

4. DISTRIBUTION PLANS

Evergreen Investment Services, Inc. (“EIS”), an affiliate of EIMC and a subsidiary of Wells Fargo, serves as distributor of the Fund’s shares. The Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940 Act, for each class of shares, except Class I. Under the Distribution Plans, the Fund is permitted to pay distribution fees at an annual rate of up to 0.75% of the average daily net assets for Class A shares and up to 1.00% of the average daily net assets for each of Class B and Class C shares. However, currently the distribution fees for Class A shares are limited to 0.25% of the average daily net assets of the class.

For the six months ended October 31, 2009, EIS received $4,077 from the sale of Class A shares and $13,919 and $916 in contingent deferred sales charges from redemptions of Class B and Class C shares, respectively.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

5. INVESTMENT TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows for the six months ended October 31, 2009:

Cost of Purchases		Proceeds from Sales

U.S.	Non-U.S.	U.S.	Non-U.S.
Government	Government	Government	Government

$541,866,209	$0	$641,418,645	$3,146,952

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 Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of October 31, 2009, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Asset-backed securities	$	0	$	1,628,457	$	0	$	1,628,457
Mortgage-backed securities		0		344,724,140		0		344,724,140
Corporate debt securities		0		1,288,650		0		1,288,650
Debt securities issued by U.S. Treasury and U.S. government agencies		135,703,709		0		0		135,703,709
Short-term investments		25,606,930		0		0		25,606,930

	$	161,310,639	$	347,641,247	$	0	$	508,951,886

Further details on the major security types listed above can be found in the Schedule of Investments.

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Mortgage- backed securities

Balance as of April 30, 2009	$	5,791,233
Realized gains or losses		0
Change in unrealized gains or losses		141,673
Net purchases (sales)		0
Transfers in and/or out of Level 3		(5,932,906	)

Balance as of October 31, 2009	$	0

Change in unrealized gains or losses included in earnings relating to securities still held at October 31, 2009	$	0

On October 31, 2009, the aggregate cost of securities for federal income tax purposes was $530,110,680. The gross unrealized appreciation and depreciation on securities based on tax cost was $7,572,281 and $28,731,075, respectively, with a net unrealized depreciation of $21,158,794.

As of April 30, 2009, the Fund had $36,841,676 in capital loss carryovers for federal income tax purposes with $1,572,729 expiring in 2014, $6,995,014 expiring in 2015 and $28,273,933 expiring in 2017.

6. INTERFUND LENDING

7. EXPENSE REDUCTIONS

Through expense offset arrangements with ESC and the Fund’s custodian, a portion of fund expenses has been reduced.

8. DEFERRED TRUSTEES’ FEES

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

performance of the deferral accounts is based on the investment performance of certain Evergreen funds. Any gains earned or losses incurred in the deferral accounts are reported in the Fund’s Trustees’ fees and expenses. At the election of the Trustees, the deferral account will be paid either in one lump sum or in quarterly installments for up to ten years.

9. FINANCING AGREEMENT

10. REGULATORY MATTERS AND LEGAL PROCEEDINGS

NOTES TO FINANCIAL STATEMENTS (unaudited) continued

ADDITIONAL INFORMATION (unaudited)

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT

Each year, as required by law, the Fund’s Board of Trustees determines whether to approve the continuation of the Fund’s investment advisory agreements. At an in person meeting on September 23-24, 2009, the Trustees, including a majority of the Trustees who are not “interested persons” (as that term is defined in the 1940 Act) of the Fund, Tattersall Advisory Group, Inc. (the “Sub-Advisor”), or EIMC (the “independent Trustees”), approved the continuation of the Fund’s investment advisory agreements. (References below to the “Fund” are to Evergreen U.S. Government Fund; references to the “funds” are to the Evergreen funds generally.)

The Trustees formed small groups to review individual funds in greater detail. They reviewed, with the assistance of an independent industry consultant that they retained, the

ADDITIONAL INFORMATION (unaudited) continued

This summary describes a number of the most important, but not necessarily all, of the factors considered by the Board and the independent Trustees.

Information reviewed. The Board of Trustees and committees of the Board of Trustees met periodically during the course of the year. EIMC presented a wide variety of information at those meetings regarding the services it provides for the funds, the investment performance of the funds, and other aspects of the business and operations of the funds. At those meetings, and in the process of considering the continuation of the agreements, the Trustees considered information regarding, for example, the funds’ investment results; the portfolio management teams for the funds and the experience of the members of the teams, and any recent changes in the membership of the teams; portfolio trading practices; compliance by the funds, EIMC, and the Sub-Advisor with applicable laws and regulations and with the funds’ and EIMC’s compliance policies and procedures; risk evaluation and oversight procedures at EIMC; services provided by affiliates of EIMC to the funds and shareholders of the funds; and other information relating to the nature, extent, and quality of services provided by EIMC and the Sub-Advisor. The Trustees considered a number of changes in portfolio management personnel at EIMC and its advisory affiliates in the year since September 2008. The Trustees also considered changes in personnel at the funds and EIMC, including the appointment of a new President of the funds, who also serves as President and Chief Operating Officer of EIMC, and a new Chief Investment Officer of EIMC in August of 2008.

The Trustees also considered that EIMC serves as administrator to the funds and receives a fee for its services as administrator. In their comparison of fees paid by the funds with

ADDITIONAL INFORMATION (unaudited) continued

The Trustees noted the resources EIMC and its affiliates have committed to the regulatory, compliance, accounting, tax and oversight of tax reporting, and shareholder servicing functions, and the number and quality of staff committed to those functions, which they concluded were appropriate and generally in line with EIMC’s responsibilities to the Fund and to the funds generally. The Board and the independent Trustees concluded, within the context of their overall conclusions regarding the funds’ advisory agreements, that they were generally satisfied with the nature, extent, and quality of the services provided by the Sub-Advisor and EIMC, including services provided by EIMC under its administrative services agreements with the funds. They determined that the nature and scope of the services provided by EIMC and the Sub-Advisor were consistent with EIMC’s and the Sub-Advisor’s respective duties under the investment advisory agreements and appropriate and consistent with the investment programs and best interests of the funds.

Investment performance. The Trustees considered the investment performance of each fund, both by comparison to other comparable mutual funds and to broad market indices. Although the Trustees considered the performance of all share classes, the Trustees noted that, for the one-, three-, five-, and ten-year periods ended December 31, 2008, the Fund’s Class A shares had underperformed the Fund’s benchmark index, the Barclays Capital Intermediate Government Index, and performed in the fifth quintile of the mutual funds against which the Trustees compared the Fund’s performance for the same periods. The Trustees noted that the Fund’s performance had suffered in recent periods due to significant exposure to mortgage-backed securities. The Trustees also noted that EIMC had taken steps to improve the Fund’s performance, including the appointment of a new portfolio management team in September 2008. They observed that the limited period of time that had elapsed since EIMC’s actions was insufficient for the Trustees to evaluate the success of those changes. The Trustees concluded that the remedial measures undertaken by EIMC were at least sufficient to allow the Trustees to continue the Fund’s advisory agreements.

ADDITIONAL INFORMATION (unaudited) continued

underperformance. The Trustees emphasized that the continuation of the investment advisory agreement for a fund should not be taken as any indication that the Trustees did not believe investment performance for any specific fund might not be improved, and they noted that they would continue to monitor closely the investment performance of the funds going forward.

Advisory and administrative fees. The Trustees recognized that EIMC does not seek to provide the lowest cost investment advisory service, but to provide a high quality, full-service investment management product at a reasonable price. They also noted that EIMC has in many cases sought to set its investment advisory fees at levels consistent with industry norms. The Trustees noted that, in certain cases, a fund’s management fees were higher than many or most other mutual funds in the same Keil peer group. However, in each case, the Trustees determined on the basis of the information presented that the level of management fees was not excessive. The Trustees noted that the management fee paid by the Fund was higher than the average management fee paid by the other mutual funds against which the Trustees compared the Fund’s management fee, and that the level of profitability realized by EIMC in respect of the fee did not appear excessive.

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TRUSTEES AND OFFICERS

TRUSTEES¹
Charles A. Austin III Trustee DOB: 10/23/1934 Term of office since: 1991 Other directorships: None	Investment Counselor, Anchor Capital Advisors, LLC. (investment advice); Director, The Andover Companies (insurance); Trustee, Arthritis Foundation of New England; Former Director, The Francis Ouimet Society (scholarship program); Former Director, Executive Vice President and Treasurer, State Street Research & Management Company (investment advice)

K. Dun Gifford Trustee DOB: 10/23/1938 Term of office since: 1974 Other directorships: None	Chairman and President, Oldways Preservation and Exchange Trust (education); Trustee, Member of the Executive Committee, Former Chairman of the Finance Committee, and Former Treasurer, Cambridge College

Dr. Leroy Keith, Jr. Trustee DOB: 2/14/1939 Term of office since: 1983 Other directorships: Trustee, Phoenix Fund Complex (consisting of 50 portfolios as of 12/31/2008)	Managing Director, Almanac Capital Management (commodities firm); Trustee, Phoenix Fund Complex; Director, Diversapack Co. (packaging company); Former Partner, Stonington Partners, Inc. (private equity fund); Former Director, Obagi Medical Products Co.; Former Director, Lincoln Educational Services

Carol A. Kosel Trustee DOB: 12/25/1963 Term of office since: 2008 Other directorships: None	Former Consultant to the Evergreen Boards of Trustees; Former Vice President and Senior Vice President, Evergreen Investments, Inc.; Former Treasurer, Evergreen Funds; Former Treasurer, Vestaur Securities Fund

Gerald M. McDonnell Trustee DOB: 7/14/1939 Term of office since: 1988 Other directorships: None	Former Manager of Commercial Operations, CMC Steel (steel producer)

Patricia B. Norris Trustee DOB: 4/9/1948 Term of office since: 2006 Other directorships: None	President and Director of Buckleys of Kezar Lake, Inc. (real estate company); Former President and Director of Phillips Pond Homes Association (home community); Former Partner, PricewaterhouseCoopers, LLP (independent registered public accounting firm)

William Walt Pettit² Trustee DOB: 8/26/1955 Term of office since: 1988 Other directorships: None	Partner and Vice President, Kellam & Pettit, P.A. (law firm); Director, Superior Packaging Corp. (packaging company); Member, Superior Land, LLC (real estate holding company), Member, K&P Development, LLC (real estate development); Former Director, National Kidney Foundation of North Carolina, Inc. (non-profit organization)

David M. Richardson Trustee DOB: 9/19/1941 Term of office since: 1982 Other directorships: None	President, Richardson, Runden LLC (executive recruitment advisory services); Director, J&M Cumming Paper Co. (paper merchandising); Former Trustee, NDI Technologies, LLP (communications); Former Consultant, AESC (The Association of Executive Search Consultants)

Russell A. Salton III, MD Trustee DOB: 6/2/1947 Term of office since: 1984 Other directorships: None	President/CEO, AccessOne MedCard, Inc.

TRUSTEES AND OFFICERS continued

Michael S. Scofield Trustee DOB: 2/20/1943 Term of office since: 1984 Other directorships: None	Retired Attorney, Law Offices of Michael S. Scofield; Former Director and Chairman, Branded Media Corporation (multi-media branding company)

Richard J. Shima Trustee DOB: 8/11/1939 Term of office since: 1993 Other directorships: None	Independent Consultant; Director, Hartford Hospital; Trustee, Greater Hartford YMCA; Former Director, Trust Company of CT; Former Trustee, Saint Joseph College (CT)

Richard K. Wagoner, CFA³ Trustee DOB: 12/12/1937 Term of office since: 1999 Other directorships: None	Member and Former President, North Carolina Securities Traders Association; Member, Financial Analysts Society

OFFICERS
W. Douglas Munn⁴ President DOB: 4/21/1963 Term of office since: 2009	Principal occupations: Chief Operating Officer, Wells Fargo Funds Management, LLC; President and Chief Operating Officer, Evergreen Investment Company, Inc.

Kasey Phillips⁴ Treasurer DOB: 12/12/1970 Term of office since: 2005	Principal occupations: Senior Vice President, Evergreen Investment Management Company, LLC; Former Vice President, Evergreen Investment Services, Inc.

Michael H. Koonce⁴ Secretary DOB: 4/20/1960 Term of office since: 2000	Principal occupations: Senior Vice President and General Counsel, Evergreen Investment Services, Inc.; Secretary, Senior Vice President and General Counsel, Evergreen Investment Management Company, LLC and Evergreen Service Company, LLC

Robert Guerin⁴ Chief Compliance Officer DOB: 9/20/1965 Term of office since: 2007	Principal occupations: Chief Compliance Officer, Evergreen Funds and Senior Vice President of Evergreen Investment Company, Inc.; Former Managing Director and Senior Compliance Officer, Babson Capital Management LLC; Former Principal and Director, Compliance and Risk Management, State Street Global Advisors; Former Vice President and Manager, Sales Practice Compliance, Deutsche Asset Management

3	Mr. Wagoner is an “interested person” of the Evergreen funds because of his ownership of shares in Wells Fargo & Company, the parent to the Evergreen funds’ investment advisor.

4	The address of the Officer is 200 Berkeley Street, Boston, MA 02116.

564359 rv7 12/2009

Item 2 - Code of Ethics

Not required for this semi-annual filing.

Item 3 - Audit Committee Financial Expert

Not required for this semi-annual filing.

Items 4 – Principal Accountant Fees and Services

Not required for this semi-annual filing.

Items 5 – Audit Committee of Listed Registrants

Not applicable.

Item 6 – Schedule of Investments

Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10 – Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees that have been implemented since the Registrant last provided disclosure in response to the requirements of this Item.

Item 11 - Controls and Procedures

(a)

The Registrant’s principal executive officer and principal financial officer have evaluated the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.

(b)

There has been no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to affect, the Registrant’s internal control over financial reporting .

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)(1)

Separate certifications for the Registrant’s principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX99.CERT.

(b)(2)

Separate certifications for the Registrant’s principal executive officer and principal financial officer, as required by Section 1350 of Title 18 of United States Code, as adopted pursuant to Section 906 of

the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached as EX99.906CERT. The certifications furnished pursuant to this paragraph are not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.

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.

Evergreen Fixed Income Trust

By:	/s/ W. Douglas Munn

	W. Douglas Munn
	Principal Executive Officer

Date: December 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ W. Douglas Munn

	W. Douglas Munn
	Principal Executive Officer

Date: December 29, 2009

By:	/s/ Kasey Phillips

	Kasey Phillips
	Principal Financial Officer

Date: December 29, 2009

Evergreen Fixed Income Trust Inactive N-CSRSCertified semi-annual shareholder report (management investment company)