Bond Fund Of America N-14 Registration statement for investment companies business combination

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

o    PRE-EFFECTIVE AMENDMENT NO.

o    POST-EFFECTIVE AMENDMENT NO.

THE BOND FUND OF AMERICA, INC.

(Exact Name of Registrant as Specified in Charter)

333 SOUTH HOPE STREET

LOS ANGELES, CA 90071

(Address of Principal Executive Offices)

(213) 486-9200

(Registrant’s Telephone Number)

Kristine M. Nishiyama

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071

(Name and Address of Agent for Service)

with copies to:

Timothy W. McHale Capital Research and Management Company 333 South Hope Street Los Angeles, CA 90071 Phone No.: (213) 486-9200 Fax No.: (213) 615-0430 Michael Glazer Bingham McCutchen LLP 355 South Grand Avenue, Suite 4400 Los Angeles, CA 90071 Phone No.: (213) 680-6646 Fax No.: (213) 680-6499

Approximate Date of Proposed Public Offering: As soon as practicable after the Registration Statement becomes effective under the Securities Act of 1933.

It is proposed that this filing shall become effective on December 2, 2009, or as soon thereafter as practicable pursuant to a request for acceleration.

Title of Securities Being Registered: Class A, B, C, F-1, F-2, 529-A, 529-B, 529-C, 529-E, 529-F-1, R-1, R-2, R-3, R-4, R-5 and R-6 shares of common stock, par value $0.001, of The Bond Fund of America, Inc.  No filing fee is due because the Registrant has previously registered an indefinite number of shares under the Securities Act of 1933 pursuant to Section 24(f) under the Investment Company Act of 1940.

PART A

Important Proxy Materials

PLEASE CAST YOUR VOTE NOW

Endowments

One Market, Steuart Tower, Suite 1800

San Francisco, California 94105

December 2, 2009

Dear Shareholder:

I am writing to let you know that a special meeting of the shareholders of Endowments -- Bond Portfolio (the “Fund”) will be held on January 27, 2010. The purpose of the meeting is to vote on an important proposal to reorganize and merge the Fund into The Bond Fund of America, Inc. (“BFA”).  As a shareholder, you have the opportunity to voice your opinion on the matters that materially affect your Fund.  In this proposed transaction, you would become a shareholder of BFA and the value of your account in BFA on the date of the closing of the transaction would be the same as the value of your Fund account immediately before the transaction.  Capital Research and Management Company is the investment adviser to the Fund and BFA.

The Boards of each of the funds have carefully reviewed the proposed transaction and have determined that it is in the best interests of each fund and its shareholders to reorganize and merge the Fund into BFA.  Therefore, the Board of the Fund recommends that you vote “FOR” the proposal.  BFA will provide shareholders with a fund that has the same investment objective and a substantially similar investment strategy as the Fund. If the Fund’s shareholders do not approve the contemplated transaction, the Fund’s Board of Trustees and investment adviser will have to consider other strategic alternatives, including liquidating the Fund.

Enclosed you will find various materials, including a Combined Proxy Statement/Prospectus and proxy ballot(s), for this special meeting.  The materials provide you with detailed information about the transaction, including the reasons why the Board of the Fund believes that this reorganization is in the best interests of the Fund and its shareholders.  The Board of the Fund urges you to vote in favor of this proposed reorganization.

Every vote counts!  We urge you to vote as soon as possible.  Your vote is important, regardless of the number of shares you own.  You are entitled to one vote for each share that you own of the Fund on the record date (November 18, 2009).

To cast your vote, simply complete the proxy card(s) enclosed in this package.  Be sure to sign the card(s) before mailing it in the postage paid envelope included in this package.  If you have questions, please call Abbe Shapiro at 310-996-6153.  We will be glad to help you get your vote in quickly.  Thank you for your participation in this important initiative.

Sincerely,

/s/ Robert G. O’Donnell

Robert G. O’Donnell

Vice Chairman of the Board

Important information to help you understand and vote on the proposal

Please read the full text of the Combined Proxy Statement/Prospectus.  Below is a brief overview of the proposal to be voted upon.  Your vote is important.

What am I being asked to vote on?

You are being asked to vote on a reorganization and merger of Endowments -- Bond Portfolio (the “Fund”) into The Bond Fund of America, Inc. (“BFA”).  Specifically, you are being asked to approve an Agreement and Plan of Reorganization and Liquidation (the “Agreement”) that provides for the transfer to BFA of all the assets of the Fund in exchange solely for Class A shares of common stock of BFA and the assumption by BFA of all of the Fund’s liabilities.  The Fund will then distribute such shares to its shareholders in liquidation and dissolution of the Fund.

Have the funds’ Boards of Directors/Trustees approved the reorganization?

Yes.  The Boards of the Fund and BFA have unanimously approved the proposal and the Fund's Board recommends that its shareholders vote to approve it.

What are the reasons for and advantages of the proposed reorganization?

Due to a number of factors, including the relatively small size of the Fund and changes in the fixed-income market as a result of recent market turmoil, we believe it is in shareholders’ best interests to reorganize and merge the Fund with BFA.  BFA is also managed by Capital Research and Management Company, has similar investment objectives and guidelines as the Fund, shares similar investment personnel and is significantly larger in size and thus has a favorable expense structure.  Importantly, after the reorganization current Fund shareholders would continue to receive the same services they receive today.

Do the funds being merged have similar investment objectives and policies?

Like the Fund, BFA’s investment objective is to provide a high level of current income consistent with capital preservation. The Fund and BFA have substantially similar investment guidelines.  However, unlike the Fund, BFA has the ability to invest up to 15% of its assets in debt securities with credit ratings below investment grade (i.e., rated Ba1 or BB+ and below by Standard & Poor’s and Moody’s).  This flexibility is intended to provide BFA with unique investment opportunities consistent with its investment objective.

How do the expense structures of the Funds compare?

As more fully discussed below, the Class A shares of BFA have lower expenses than shares of the Fund.  The estimated effective investment advisory fee for BFA would be lower than the current advisory fee for the Fund.

Is the investment manager for BFA the same as for the Fund?

Yes.  Capital Research and Management Company is the investment adviser to BFA and the Fund.

Is the reorganization a taxable event for federal income tax purposes?

No. Typically a fund reorganization does not result in a gain or loss for federal or state income tax purposes.

What if there are not enough votes of the Fund’s shareholders to approve the reorganization?

If there are not enough votes to approve the Fund’s proposal by the time of your shareholder meeting (January 27, 2010), the meeting may be adjourned to permit further solicitation of proxy votes.  If the Fund’s shareholders do not ultimately approve the proposal, the Fund’s Board of Trustees and investment adviser will have to consider other strategic alternatives for the Fund, including possibly liquidating the Fund.

Who will pay the costs associated with obtaining shareholder approval for the proposed reorganization?

The Fund's Board of Trustees has determined that the expenses associated with obtaining shareholder approval of the proposed merger, including printing and mailing of this Combined Proxy Statement/Prospectus, are appropriate expenses for the Fund to incur. The Fund does not expect to incur any expenses related to the solicitation of proxies.

How many votes am I entitled to cast?

Each whole share of the Fund you held as of the close of business on the Record Date (November 18, 2009) is entitled to one vote, and each fractional share is entitled to a proportionate fractional vote, at the Fund’s Special Meeting.

How do I vote my shares?

You can vote your shares by mail or attending the Special Meeting in person. You can vote by completing, signing and dating the enclosed proxy card(s) and mailing it in the enclosed postage-paid envelope.  Proxy cards that are signed and dated, but not completed, will be voted “For” the reorganization.  If you need assistance, or have any questions regarding the proposals or how to vote your shares, please call Abbe Shapiro at 310-996-6153.

Your vote is important, regardless of the number of shares you own.  Please take a few minutes to read the enclosed material and vote your shares.

How do I sign the proxy card?

Please complete, sign and date the proxy card(s).  When signing the proxy card the person signing must indicate his or her capacity.  For example, a trustee for a trust or other entity should sign, “John Doe, Trustee.”

NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS

December 2, 2009

To the shareholders:

Notice is given that a meeting of shareholders (the “Special Meeting”) of Endowments -- Bond Portfolio (the “Fund”) will be held on January 27, 2010, at the offices of Capital Research and Management Company, One Market, Spear Tower, 39th floor, San Francisco, California, 94105 at 2 p.m., Pacific time, and at any adjournment or adjournments thereof, for the following purposes:

1. To approve a proposed Agreement and Plan of Reorganization and Liquidation (the “Agreement”) between Endowments -- Bond Portfolio (the “Fund”) and The Bond Fund of America, Inc. (“BFA”).  The Agreement contemplates the transfer to BFA of all the assets of the Fund in exchange solely for Class A shares of common stock of BFA and the assumption by BFA of all of the Fund’s liabilities.  The Agreement further contemplates the distribution of such shares to the shareholders of the Fund, and the liquidation and dissolution of the Fund.

2. To consider and act upon any other business as may properly come before the Special Meeting and any adjournment or adjournments thereof.

The proposed business cannot be conducted for the Fund at its shareholder meeting unless the required quorum of its shares on November 18, 2009 (the “Record Date”) is present in person or by proxy. Therefore, please mark, sign, date and return the enclosed proxy card(s) as soon as possible. You may revoke your proxy at any time before its use. Please be certain to vote each proxy card you receive. Only shareholders of record at the close of business on the Record Date are entitled to notice of and to vote at the Special Meeting and any adjournment or adjournments thereof.

By order of the Board of Trustees of the Fund,

/s/ Patrick F. Quan

Patrick F. Quan Vice President and Secretary of Endowments

Shareholders are invited to attend the meeting in person. However, you may vote prior to the meeting by returning the completed proxy card.  Your vote is important no matter how many shares you owned on the record date.

Important

You can help your Fund by promptly voting your shares by signing, dating and returning the proxy card(s) in the enclosed postage-paid envelope.

COMBINED PROXY STATEMENT/PROSPECTUS

RELATING TO THE ACQUISITION OF ASSETS OF

ENDOWMENTS -- BOND PORTFOLIO

BY AND IN EXCHANGE FOR CLASS A SHARES OF COMMON STOCK OF

THE BOND FUND OF AMERICA, INC.

333 South Hope Street

Los Angeles, CA 90071

800/421-0180

This Combined Proxy Statement/Prospectus is being furnished to shareholders of Endowments -- Bond Portfolio (the “Fund”) in connection with the solicitation of proxies by, and on behalf of, the Fund’s Board of Trustees for use at a Special Meeting of shareholders of the Fund and at any adjournments thereof (the “Special Meeting”).  The Special Meeting of the Fund will be held on January 27, 2010 at 2 p.m. Pacific time at the offices of Capital Research and Management Company, One Market, Spear Tower, 39th floor San Francisco, California, 94105.

As more fully described in this Combined Proxy Statement/Prospectus, the purpose of the Special Meeting is to vote on an Agreement and Plan of Reorganization and Liquidation (the “Agreement”) relating to the proposed acquisition of the Fund by The Bond Fund of America, Inc. (“BFA”).  As the context requires, the term “Reorganization” is used in this Combined Proxy Statement/Prospectus to describe the transactions contemplated by the Agreement with respect to the Fund.

 This Combined Proxy Statement/Prospectus relates to the proposed transfer to BFA of all of the assets of the Fund, in exchange for Class A shares of common stock of BFA and the assumption by BFA of the Fund’s liabilities.  The shares of BFA will then be distributed to the shareholders of the Fund in conjunction with the reorganization and merger of the Fund into BFA. As a result of the Reorganization, each shareholder of the Fund would receive an equivalent value of Class A shares of BFA common stock for shares of beneficial interest such shareholder holds in the Fund.

The Board of Trustees of the Fund believes that the Reorganization is in the best interest of the Fund and that the interests of the Fund’s shareholders will not be diluted as a result of the Reorganization.  If the Reorganization is approved, the investment advisory fee of BFA immediately after the closing of the transaction is expected to be lower than the current investment advisory fee of the Fund as described in more detail below.  The expense ratio for Class A shares of BFA is expected to be lower than that of the Fund.

For federal income tax purposes, the Reorganization is to be structured as a tax-free transaction for the Fund, BFA and their shareholders.  The investment objectives of the Fund and BFA are the same.  BFA, like the Fund, seeks to provide a high level of current income consistent with capital preservation.

This Combined Proxy Statement/Prospectus sets forth concisely information about BFA that shareholders of the Fund should know before investing and should be read and retained by investors for future reference.  Copies of the prospectus and retirement plan prospectus (together, the “prospectus”) for BFA, dated March 1, 2009 have been filed with the Securities and Exchange Commission (the “SEC”), are enclosed with this Combined Proxy Statement/Prospectus, and are incorporated by reference herein.

A Statement of Additional Information dated December 2, 2009, relating to this Combined Proxy Statement/Prospectus, has been filed with the SEC and is incorporated by reference herein.  A Statement of Additional Information for BFA dated March 1, 2009, as supplemented, containing additional and more detailed information about BFA, has been filed with the SEC and is incorporated by reference herein.

In addition, the prospectus for the Fund dated October 1, 2009, which has been previously delivered to shareholders, and the Statement of Additional Information for the Fund, also dated October 1, 2009, have been filed with the SEC and are incorporated by reference herein.  The annual report for the Fund for its fiscal year ended July 31, 2009, and the semi-annual report for the Fund for the six months ended January 31, 2009, have been previously mailed to shareholders and filed with the SEC.

Copies of these documents are available without charge and can be obtained by writing to the secretary of the Fund at One Market, Steuart Tower, Suite 1800, San Francisco, California, 94105 or BFA at 333 South Hope Street, Los Angeles, California 90071or by calling American Funds Service Company, toll free, at 1-800-421-0180.  In addition, these documents may be obtained from the EDGAR database on the SEC’s Internet site at www.sec.gov.  You may review and copy documents at the SEC Public Reference Room in Washington, DC (for information on the operation of the Public Reference Room, call 1-202-551-8090).  You may request documents by mail from the SEC, upon payment of a duplication fee, by writing to:  Securities and Exchange Commission, Public Reference Section, Washington, DC 20549-0102.  You may also obtain this information upon payment of a duplicating fee, by e-mailing the SEC at the following address:  publicinfo@sec.gov.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Combined Proxy Statement/Prospectus.  Any representation to the contrary is a criminal offense.

AN INVESTMENT IN THE FUND OR BFA IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY.  AN INVESTMENT IN THE FUND AND BFA INVOLVES INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

This Combined Proxy Statement/Prospectus is dated December 2, 2009.

TABLE OF CONTENTS

		Page
I.	Proposal – To Approve the Agreement and Plan of Reorganization and Liquidation	x
A.	Overview	x
B.	Comparison Fee Table and Examples	x
C.	Comparison of Investment Results	x
D.	Summary of Investment Objectives, Strategies and Risks	x
E.	Key Information about the Proposed Reorganization	x
1.	Summary of the Proposed Reorganization	x
2.	Description of BFA’s Shares	x
3.	Reasons for the Reorganization	x
4.	Federal Income Tax Consequences	x
5.	Comparison of Shareholder Rights	x
6.	Comparison of Valuation Procedures; Purchase, Redemption, Exchange and Dividend Policies	x
7.	Capitalization	x
8.	Investment Adviser	x
9.	Distribution	x
10.	Service Providers	x
11.	Financial Highlights	x
II.	Voting Information	x
A.	Method and Cost of Solicitation	x
B.	Right of Revocation	x
C.	Voting Securities and Principal Holders	x
D.	Interest of Certain Persons in the Reorganization	x
III.	Further Information about the Fund and BFA	x
IV.	Miscellaneous Matters	x
A.	Other Business	x
B.	Next Meeting of Shareholders	x
C.	Legal Matters	x
D.	Independent Registered Public Accounting Firm	x

APPENDICES

Appendix A – Form of Proxy Card

Appendix B – Form of Agreement and Plan of Reorganization and Liquidation

Appendix C – Comparison of Fundamental Investment Policies

Appendix D – Summary Comparison of Governing Documents and State Law

I.PROPOSAL – TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION

A.   OVERVIEW

At a meeting held on September 9, 2009, the Board of Trustees of the Fund, including all of the Trustees of the Fund’s Board who are not “interested persons” of the Fund (the “Independent Trustees”), as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (“1940 Act”), considered and approved an Agreement and Plan of Reorganization and Liquidation, a copy of which is attached to this proxy statement as Appendix B.  If the Reorganization is approved and implemented, shareholders of the Fund will become shareholders of BFA.  The Fund and BFA have the same investment adviser, Capital Research and Management Company (“CRMC” or the “Investment Adviser”).  BFA’s investment objectives are the same as the Fund’s objectives and BFA’s principal investment strategies are substantially similar to the investment strategies of the Fund, all as discussed in further detail below.

The Board of Trustees of the Fund recommends that the shareholders of the Fund vote “FOR” the Agreement and the resulting Reorganization.

B.   COMPARISON FEE TABLE AND EXAMPLES

The following tables show the shareholder fees (paid directly from your investment) for the Fund and BFA:

Endowments -- Bond Portfolio
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)	none
Maximum deferred sales charge (load) (as a percentage of the amount redeemed)	none
Maximum sales charge (load) imposed on reinvested dividends	none
Redemption or exchange fees	none

Class A shares of The Bond Fund of America
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)	3.75%*
Maximum deferred sales charge (load) (as a percentage of the amount redeemed)	none
Maximum sales charge (load) imposed on reinvested dividends	none
Redemption or exchange fees	none

*Purchases made by shareholders who obtained shares as a result of the acquisition of Endowments -- Bond Portfolio by The Bond Fund of America, Inc. are not subject to a sales charge.

The information in the following tables reflect annual fund operating expenses shares of Endowments - - Bond Portfolio as of July 31, 2009 and Class A shares of BFA as of June 30, 2009. The expenses are not expected to be affected materially by the reorganization.

Annual Fund Operating Expenses (Expenses that you pay each year as a percentage of the value of your investment)
Endowments – Bond Portfolio
Management fees	0.50%
Distribution and/or service (12b-1) fees	0.00%
Other expenses	0.31%
Total annual fund operating expenses	0.81%

Annual Fund Operating Expenses (Expenses that you pay each year as a percentage of the value of your investment)
BFA Class A Shares
Management Fees	0.25%
Distribution and/or service (12b-1 fees)	0.25%
Other Expenses	0.17%
Total annual fund operating expenses	0.67%

Comparison of Investment Advisory Fee and Breakpoint Schedules

Set forth below are the investment advisory fee and breakpoint schedules from the Investment Advisory and Service Agreements of the Fund and BFA.  The agreements for the Fund and BFA set forth a monthly advisory fee calculated at the annual rate according to the following schedules.

Endowments - -- Bond Portfolio

·   0.50% per annum of the first $150 million of the Fund's average daily net assets during the month, plus

·   0.40% on the portion of such net assets in excess of $150 million

The Bond Fund of America, Inc.

·   0.30% per annum of the first $60 million of BFA’s average daily net assets during the month, plus

·   0.21% per annum on the portion of such net assets between $60 million and $1 billion, plus

·   0.18% per annum on the portion of such net assets between $1 billion and $3 billion, plus

·   0.16% per annum on the portion of such net assets between $3 billion and $6 billion, plus

·   0.15% per annum on the portion of such net assets between $6 billion and $10 billion, plus

·   0.14% per annum on the portion of such net assets between $10 billion and $16 billion, plus

·   0.13% on the portion of such net assets between $16 billion and $20 billion; plus

·   0.12% on the portion of such net assets between $20 billion and $28 billion; plus

·   0.115% on the portion of such net assets between $28 billion and $36 billion; plus

·   0.11% on the portion of such net assets in excess of $36 billion, plus

·   2.25% of the Fund’s first $8,333,333 of monthly gross income, plus

·   2% of such income between $8,333,333 and $41,666,667, plus

·   1.75% of such income in excess of $41,666,667.

Examples

The examples are intended to help you compare the cost of investing in the Fund with the cost of investing in BFA.

The examples assume that you invest $10,000 in the Fund or BFA for the time periods indicated, and then redeem all of your shares at the end of those periods. The examples assume that no sales charge is paid. The examples also assume that your investment has a 5% return each year, that all dividends and capital gain distributions are reinvested, and that the operating expenses remain the same as shown above.  Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

Endowments - - Bond Portfolio

1 year	3 years	5 years	10 years
$83	$259	$450	$1,002

The Bond Fund of America, Inc.

	1 year	3 years	5 years	10 years
Class A	$68	$214	$373	$835

Portfolio turnover

The funds pay transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. During the Fund's most recent fiscal year, the Fund's portfolio turnover rate was 77% of the average value of its portfolio. During BFA's most recent fiscal year, the Fund's portfolio turnover rate was 57% of the average value of its portfolio.

C.   COMPARISON OF INVESTMENT RESULTS

Investment Results for Periods Ended December 31, 2008

The bar charts below show how the investment results of the Fund and BFA have varied from year to year, and the table following each bar chart shows the average annual total returns of each fund for various periods. This information provides some indication of the risks of investing in the funds. Past results (before and after taxes) are not predictive of future results. Updated information on both funds’ results can be obtained by calling American Funds Service Company at 1-800-421-0180.

Endowments - -- Bond Portfolio

[bar chart]

1999	-0.40%
2000	9.72
2001	7.77
2002	8.29
2003	9.66
2004	4.80
2005	1.94
2006	5.09
2007	2.12
2008	-11.60

[end bar chart]

Highest/Lowest quarterly results during this time period were:

Highest 4.49% (quarter ended June 30, 2003)

Lowest -7.79% (quarter ended September 30, 2008)

The fund’s total return for the six months ended June 30, 2009, was 5.86%.

Average annual total returns

For the periods ended December 31, 2008

	1 year	5 years	10 years
first sold 5/28/1974	-11.60%	0.27%	3.55%

	1 Year	5 Years	10 Years
Barclays Capital U.S. Aggregate Index1	5.24%	4.65%	5.63%

Annualized 30-day yield at July 31, 20092: 4.08%

1 Barclays Capital U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. This index is unmanaged and its results include reinvested dividends and/or distributions, but do not reflect the effect of sales charges, commissions, expenses or taxes. This index was not in existence as of the date the fund's Class A shares were first sold; therefore, lifetime rseults are not shown.

2 Reflects a fee waiver (3.92% without the waiver) as described in the fund’s statement of additional information

The Bond Fund of America, Inc.

[bar chart]

Calendar year total returns for Class A shares

(Results do not include a sales charge; if a sales charge were included, results would be lower.)

1999	2.29%
2000	6.19
2001	7.15
2002	6.11
2003	12.22
2004	5.85
2005	1.94
2006	5.88
2007	3.37
2008	-12.24

[end bar chart]

Highest/Lowest quarterly results during this time period were:

Highest  5.41% (quarter ended June 30, 2003)

Lowest -6.82% (quarter ended September 30, 2008)

Average annual total returns

For the periods ended December 31, 2008 (with maximum sales charges)

		1 year	5 years	10 years
Class A	first sold 5/28/1974
Before taxes		-15.54%	-0.05%	3.29%
After taxes on distributions		-17.32%	-1.85%	1.05%
After taxes on distributions and sale of fund shares		-9.96%	-1.00%	1.47%

	1 Year	5 Years	10 Years
Barclays Capital U.S. Aggregate Index1	5.24%	4.65%	5.63%
Consumer Price Index2	-5.88%	1.60%	3.77%
Lipper Corporate Debt A Rated Bond Funds Average3	0.09%	2.67%	2.52%

Annualized 30 day yield at July 31, 2009: 4.63%

1 Barclays Capital U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. This index is unmanaged and its results include reinvested dividends and/or distributions, but do not reflect the effect of sales charges, commissions, expenses or taxes. This index was not in existence as of the date the fund's Class A shares were first sold; therefore, lifetime rseults are not shown.

2 Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Widely used as a measure of inflation, the CPI is computed by the U.S. Department of Labor, Bureau of Labor Statistics.

3 Lipper Corporate Debt A-Rated Bond Funds Average is composed of funds that invest primarily in corporate debt issues rated A or better or government issues. The results of the underlying funds in the average include the reinvestment of dividends and capital gain distributions, as well as brokerage commissions paid by the funds for portfolio transactions, but do not reflect the effect of sales charges or taxes.

D.   SUMMARY OF INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

Comparison of Investment Objective, Principal Investment Strategies and Principal Risks

Investment Objective

BFA, like the Fund, has the objective of providing shareholders as high a level of current income as is consistent with the preservation of capital.

Principal Investment Strategies

BFA and the Fund seek to achieve their investment objectives by investing primarily in bonds. Normally, at least 80% of each fund’s assets will be invested in bonds and other debt securities.

The Fund invests in debt securities rated Baa3 or better by Moody’s Investors Service or BBB- or better by Standard & Poor’s Corporation or in unrated securities that are determined to be of equivalent quality. The Fund also invests in securities issued and guaranteed by the U.S. government.

BFA invests a majority of its assets in debt securities with quality ratings of A3/A- or better, including securities issued and guaranteed by the U.S. and other governments, and securities backed by mortgages and other assets. Unlike the Fund, BFA is permitted to invest a portion of its assets in high-risk, high-yield debt securities. BFA’s current practice is not to invest more than 15% of its assets in debt securities rated Ba1 and BB+ or below or in debt securities that are unrated but determined by BFA’s investment adviser to be of equivalent quality.

Principal Investment Risks

Because of their similar investment objectives and strategies, BFA and the Fund have substantially similar risks.  The following is a discussion of the principal risks of investing in BFA and the Fund.  This discussion is qualified in its entirety by the more extensive discussion of risk factors set forth in the prospectuses and statements of additional information of BFA and the Fund.  After the Reorganization, the investments of the Fund’s shareholders will be subject to BFA’s risks.

·   Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, entity or person.

·   The values of, and the income generated by, most debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of those securities. For example, the values of debt securities in the fund's portfolio generally will decline when interest rates rise and increase when interest rates fall.

·   Falling interest rates may cause an issuer to redeem, "call" or refinance a security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities.

·   Debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default.

·   Lower quality or longer maturity debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality or shorter maturity debt securities.

·   A security backed by the U.S. Treasury or the full faith and credit of the U.S. government is guaranteed only as to the timely payment of interest and principal when held to maturity. Accordingly, the current market prices for these securities will fluctuate with changes in interest rates.

·   The fund may also invest in debt securities and mortgage-backed securities issued by federal agencies and instrumentalities that are not backed by the full faith and credit of the U.S. government. These securities are neither issued nor guaranteed by the U.S. Treasury.

·   Although all securities in the fund's portfolio may be adversely affected by currency fluctuations or global economic, political or social instability, securities issued by entities based outside the United States may be affected to a greater extent.

Disclosure of Portfolio Holdings

The funds have identical policies regarding disclosure of their portfolio securities.  A description of the funds’ policies and procedures with respect to the disclosure of the portfolio securities is available in the Statement of Additional Information for the Fund and BFA.

Investment Restrictions and Limitations

A chart comparing all of the fundamental and non-fundamental investment policies of BFA with those of the Fund is attached as Appendix C.  The policies of BFA differ from those of the Fund mainly in form, but for practical purposes do not impact the way in which BFA is managed compared with the way the Fund is managed.  After the Reorganization, the assets of the Fund’s shareholders will be managed subject to the fundamental and non-fundamental investment restrictions and limitations of BFA.

Legal Proceedings

For information about material pending legal proceedings and regulatory matters, please see the section entitled “General information – Legal proceedings” in the Fund’s and BFA’s Statement of Additional Information, both of which are incorporated herein by reference.

E.   KEY INFORMATION ABOUT THE PROPOSED REORGANIZATION

The following is a summary of key information concerning the proposed Reorganization; however, this summary is qualified in its entirety by reference to the Agreement, a copy of which is attached to this Combined Proxy Statement/Prospectus in Appendix B.

1.   SUMMARY OF THE PROPOSED REORGANIZATION

On September 9, 2009, the Board of Trustees of the Fund approved the Agreement, which contemplates the transfer to BFA of all of the assets of the Fund in exchange for Class A shares of common stock of BFA and the assumption by BFA of all the Fund’s liabilities.  The Board of Directors of BFA approved the Agreement on September 17, 2009. Following the transfer, Class A shares of common stock of BFA will be distributed to shareholders of the Fund.  Endowments’ registration statement will then be updated and filed with the SEC to remove references to the Fund.

BFA and the Fund have the same investment objectives and are managed by CRMC.   The Boards of the funds believe that the Reorganization would not materially alter the nature of the investments of the funds’ shareholders.

As a result of the Reorganization, each shareholder of the Fund will receive Class A shares of common stock of BFA. The number of shares received will depend on the number of Fund shares held by the shareholder and the respective share prices of the Fund and BFA at the time of the transaction (the “Closing Date”).  The Closing Date is currently scheduled to take place in the winter of 2010 (the precise date and time to be determined by the parties) in conjunction with the transfer of the Fund’s assets to BFA.  The Boards of the funds have determined that the interests of existing shareholders will not be diluted as a result of the transactions contemplated by the Reorganization.  For the reasons set forth below under “Reasons for the Reorganization,” the Board of Trustees of the Fund, including its Independent Trustees, concluded that the Reorganization would be in the best interest of the shareholders of the Fund and recommends approval of the Agreement.

Completion of the Reorganization is subject to a number of conditions set forth in the Agreement, some of which may be waived by the Fund or BFA.  The Agreement may be amended in any mutually agreeable manner, except that no amendment that may have a materially adverse effect on the interests of the shareholders of the Fund may be made after the Special Meeting of the Fund’s shareholders. The Reorganization is not contingent upon the approval of BFA’s shareholders.

The Fund will pay its expenses associated with the Reorganization. No expenses are expected to be incurred for the solication of proxies.

2.   DESCRIPTION OF BFA’S SHARES

BFA is registered with the SEC as an open-end management investment company.  The Directors of BFA are authorized to issue 5,000,000,000 shares of common stock of BFA, par value $0.001.  Each share of BFA represents an equal proportionate interest in BFA with each other share, and each such share is entitled to equal voting, dividend, liquidation and redemption rights.  BFA’s Class A shares (“Shares”), to be issued to the Fund’s shareholders pursuant to the Reorganization, will be duly authorized, validly issued, fully paid and non-assessable when issued, will be transferable without restriction and will have no preemptive or conversion rights.  The Shares’ voting and dividend rights, right of redemption, and privilege of exchange are described in the BFA’s Prospectus and Statement of Additional Information.  BFA’s Shares will be sold and redeemed based upon the net asset value (“NAV”) per share of BFA’s Shares next determined after receipt of the purchase or redemption request.

3.   REASONS FOR THE REORGANIZATION

CRMC recommended the Reorganization to the Board of Trustees of the Fund, and the Board considered the recommendation at a meeting of the Board on September 9, 2009. The Board of Directors of BFA considered the recommendation at a meeting of the Board on September 17, 2009. The Boards of the Fund and BFA have each determined that the Reorganization is in the best interests of the shareholders of the Fund and BFA and that the Reorganization will not result in a dilution of the interests of shareholders of the Fund or BFA.  Each Board has unanimously approved the Agreement and the Reorganization and the Board of Trustees of the Fund recommends that its shareholders vote in favor of the Reorganization by approving the Agreement.

In considering the Reorganization, the Boards of the funds considered a number of factors, including among others the following:

(1) Due to a number of factors, including the relatively small size of the Fund and changes in the fixed-income market as a result of recent market turmoil, managing the Fund has become challenging.

(2) The Fund’s Board of Trustees considered that the total expense ratio of Class A shares of BFA, taking into account the Reorganization, would be less than the total expense ratio of the Fund.  This is due in part to the fact that BFA is significantly larger than the Fund, and BFA is able to take advantage of the various breakpoints built into its advisory fee schedule.

(3) BFA and the Fund have identical investment objectives and substantially similar investment policies, and the Fund’s Board of Trustees believes that the differences in BFA’s policies from those of the Fund, as described in Appendix C, provide appropriate additional management flexibility to BFA without sacrificing significant investor protection. In addition, CRMC is the investment manager of BFA as well as the Fund, and the other service providers of BFA are identical to those of the Fund.

 (4) The Reorganization is intended to permit Fund shareholders to exchange their investment for an investment in BFA without recognizing gain or loss for federal income tax purposes.

For the reasons described above, the Board of Trustees of the Fund unanimously recommends a vote IN FAVOR of the proposed Agreement and the resulting Reorganization.

If the Agreement is not approved by the shareholders of the Fund, the Board of Trustees may consider other alternatives, such as the liquidation of the Fund.  Such other actions may require shareholder approval.

4.   FEDERAL INCOME TAX CONSEQUENCES

Both the Fund and BFA intend to qualify, as of the Closing Date, as a “regulated investment company” under the Internal Revenue Code of 1986, as amended (the “Code”).  Accordingly, the Fund and BFA have been, and expect to continue to be, relieved of all or substantially all federal income taxes. The exchange of the assets of the Fund for shares of BFA and the assumption by BFA of the liabilities of the Fund, are intended to qualify for federal income tax purposes as a tax-free reorganization under Section 368(a)(1)(C) Code.  As a condition to the closing of the Reorganization, BFA and the Fund will receive an opinion of Bingham McCutchen LLP, counsel to the Fund and BFA, to the effect that, based on certain assumptions and on the existing provisions of the Code, Treasury regulations issued thereunder, current Revenue Rulings, Revenue Procedures and court decisions, for federal income tax purposes:

(1) The transfer of all of the assets and liabilities of the Fund to BFA in exchange for shares of BFA and the distribution to shareholders of the Fund of Class A shares of BFA, as described in the Agreement, will constitute a tax-free “reorganization” within the meaning of Section 368(a)(1)(C) of the Code, and the Fund and BFA each will be considered “a party to a reorganization” within the meaning of Section 368(b) of the Code;

(2) No gain or loss will be recognized by the Fund upon (a) the transfer of its assets and liabilities to BFA in exchange for the issuance of Class A shares of BFA to the Fund and the assumption by BFA of the Fund’s liabilities, if any, and (b) the distribution by the Fund to its shareholders of Class A shares of BFA received as a result of the Reorganization (Sections 361(a), 354(a) and 357(a) of the Code);

(3) No gain or loss will be recognized by BFA upon its receipt of the assets and liabilities of the Fund in exchange for the issuance of Class A shares of BFA to the Fund and the assumption by BFA of the Fund’s liabilities, if any (Section 1032(a) of the Code);

(4) The tax basis of Class A shares of BFA received by a shareholder of the Fund will be the same as the tax basis of the shareholder’s Fund shares,  immediately prior to the Reorganization (Section 358(a)(i) of the Code);

(5) The tax basis of BFA in the assets and liabilities of the Fund received pursuant to the Reorganization will be the same as the tax basis of the assets and liabilities in the hands the Fund, immediately before the Reorganization (Section 362(b) of the Code);

(6) The tax holding period for the Class A shares of BFA issued in connection with the Reorganization will be determined by including the period for which the shareholder held shares of the Fund, exchanged therefore, provided that the shareholder held such shares of the Fund as capital assets;

(7) The tax holding period for BFA with respect to the assets and liabilities of the Fund received in the Reorganization will include the period for which such assets and liabilities were held by the Fund (Section 1223(2) of the Code); and

(8) Fund shareholders will not recognize gain or loss upon the exchange of their shares of the Fund for Class A shares of BFA as part of the Reorganization.

Shareholders of the Fund should consult their tax advisers regarding the effect, if any, of the Reorganization in light of their individual circumstances, including state and local tax consequences, if any, of the Reorganization.

The opinion of Bingham McCutchen, LLP is based on the Code, Treasury regulations issued thereunder, administrative pronouncements and judicial interpretations thereof, in each case as in effect on the date thereof, all of which are subject to change.  An opinion of counsel merely represents counsel’s best judgment with respect to the probable outcome on the merits and is not binding on the Internal Revenue Service or the courts.  Accordingly, there can be no assurance that the Internal Revenue Service will not take a contrary position, that the applicable law will not change, or that any such change will not have retroactive effect.

Significant holders of the Fund.  Pursuant to the Treasury Regulation Section 1.368-3(b), each significant holder of a fund, as defined therein, must include a statement on or with its return for the taxable year of the Reorganization stating the names and employer identification numbers (if any) of all of the parties to the Reorganization, the date of the Reorganization, and the fair market value of the shares of the fund held by such holder and the holder’s basis in such shares immediately before the Reorganization.  This is not tax advice and should not be relied on as such.  Please consult your tax adviser for more information.

5.   COMPARISON OF SHAREHOLDER RIGHTS

Set forth below is a discussion of the material differences between BFA and the rights of its shareholders and the Fund and the rights of its shareholders. Further information about BFA and the Fund can be found in their respective Prospectuses and Statements of Additional Information. A summary of Maryland corporate law and Delaware business trust law, and a comparison of the relevant provisions of the governing documents of BFA and the Fund, are included in Appendix D to this Combined Proxy Statement/Prospectus.

Organization.  BFA is currently organized as a Maryland corporation.  The Fund is organized as a Delaware business trust.  BFA is authorized to issue 5,000,000,000 shares of common stock. The Fund is authorized to issue an unlimited number of shares of beneficial interest. Each of BFA’s and the Fund’s operations are governed by their respective articles of incorporation or trust instruments, as amended, by-laws and applicable state laws as well as the 1940 Act.

Shareholder Liability.  Under The Maryland General Corporation Law a shareholder of a corporation is generally not obligated to the Maryland corporation or its creditors with respect to the stock, except to the extent that the consideration for the stock has not been paid. Under Delaware law, shareholders of a business trust are generally afforded by statute the same limited liability as corporate shareholders and are permitted broad indemnification rights.

Comparison of Voting Rights.  Each shareholder of the Fund and BFA is entitled to one vote for each share of the fund such shareholder owns and a proportionate fractional vote for each fractional share held.  Shareholders of the Fund and BFA are not entitled to cumulative voting in the election of Trustees or Directors.  The quorum requirement for a shareholders’ meeting of the Fund is one third of the shares entitled to vote on the matter. The quorum requirement for a shareholder meeting regarding a reorganization of the Fund is a majority of shares entitled to vote on the reorganization. The quorum requirement for a shareholders’ meeting of BFA is a majority of the shares entitled to vote on the matter except when a larger quorum is required by applicable law.  The Declaration of Trust for the Fund and the By-Laws for BFA establish the maximum number of days prior to a shareholders’ meeting on which a record date may be set by the fund’s Board; the maximum is 120 days for the Fund and 90 days for BFA.

Under BFA’s Articles of Incorporation shareholders are entitled to vote for the election of directors in order to comply with the1940 Act, other matters that may be required by the 1940 Act or other laws, certain amendments to the Articles of Incorporation and those matters that the Directors may consider necessary or desirable.  Under the Fund’s Trust Instrument shareholders are entitled to vote on the election  or removal of trustees, matters related to the Fund’s investment advisory contract and such additional matters relating to the Fund as may be required by law, the Trust Instrument or By-laws or as the trustees may consider necessary or desirable.

Board of Directors.  The Board of Directors of BFA is different from the Board of Trustees of the Fund.  For more information regarding the Board of Directors of BFA, please refer to BFA’s Statement of Additional Information.

6.   COMPARISON OF VALUATION PROCEDURES; PURCHASE, REDEMPTION, EXCHANGE AND DIVIDEND POLICIES

The Fund and BFA have adopted the same pricing procedures.  The Fund and BFA calculate their net asset value each day the New York Stock Exchange is open for trading as of approximately 4 p.m. New York time, the normal close of regular trading.

Shares of the Fund are available only to entities exempt from taxation under Section 501(c)(3) of the Code (“501(c)(3) organizations”), trusts with beneficiaries exempt from taxation under Section 501(c)(3) of the Code and any other entity formed for the primary purpose of benefitting a 501(c)(3) organization. Shares of BFA are available to all types of investors, including 501(c)(3) organizations. Shares of the Fund and BFA are purchased or redeemed at the net asset value per share next determined after a shareholder’s request is received and accepted.  The Fund requires a minimum initial investment of $50,000. The Fund’s minimum may be met by investing a portion of the $50,000 in Endowments -- Growth and Income Portfolio.  There is no minimum for subsequent Fund investments. BFA requires a minimum initial investment of $250 and a minimum additional investment of $50.

The Fund typically distributes dividends to shareholders in March, June, September and December.  BFA declares daily dividends from net investment income and distributes the accrued dividends to shareholders each month.

Further information regarding these matters is available in the Prospectuses and Statements of Additional Information of the Fund and BFA.

7.   CAPITALIZATION

The following table sets forth as of June 30, 2009:  (1) the audited capitalization of the Fund, and (2) the unaudited pro forma combined capitalization of BFA assuming the Reorganization has been approved and completed.  If the Reorganization is completed, the capitalizations are likely to be different on the Closing Date as a result of variations in the value of portfolio investments and daily share purchase and redemption activity.

	Net Assets	Shares Outstanding	Net Asset Value Per Share
Fund	$           45,798,000	3,435,698	$13.33
BFA	$     37,890,606,000	3,380,732,000	$11.21
Adjustment for payment of expenses*			None
Pro Forma: BFA	$     37,936,404,000	3,384,817,459	$11.21

*The adjustment for payment of expenses is the estimated expenses of the Fund associated with obtaining shareholder approval of the proposal contained in this Combined Proxy Statement/Prospectus.

8.   INVESTMENT ADVISER

Capital Research and Management Company, an experienced investment management organization founded in 1931, serves as investment adviser to the Fund and BFA.  CRMC is a wholly owned subsidiary of The Capital Group Companies, Inc. and is located at 333 South Hope Street, Los Angeles, California 90071, and 6455 Irvine Center Drive, Irvine, California 92618. CRMC manages the investment portfolios and business affairs of the Fund and BFA. The total management fees paid by the Fund and BFA, as a percentage of average net assets, for the previous fiscal year appear in the Operating Expenses table above under the heading “Comparison Fee Table and Examples.”

The primary individual portfolio counselors for The Bond Fund of America are:

PORTFOLIO COUNSELOR/ FUND TITLE (IF APPLICABLE)	PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND	PRIMARY TITLE WITH INVESTMENT ADVISER (OR AFFILIATE) AND INVESTMENT EXPERIENCE	PORTFOLIO COUNSELOR ROLE IN MANAGEMENT OF THE FUND
ABNER D. GOLDSTINE President and Director	35 years (since the fund's inception)	Senior Vice President- Fixed Income, Capital Research and Management Company	Serves as a fixed-income portfolio counselor
		Investment professional for 57 years in total; 42 years with Capital Research and Management Company or affiliate
DAVID C. BARCLAY Senior Vice President	14 years	Senior Vice President- Fixed Income, Capital Research and Management Company	Serves as a fixed-income portfolio counselor
		Investment professional for 28 years in total, 21 years with Capital Research and Management Company or affiliate
MARK R. MACDONALD Senior Vice President	10 years	Senior Vice President- Fixed Income, Capital Research and Management Company	Serves as a fixed-income portfolio counselor
		Investment professional for 24 years in total; 15 years with Capital Research and Management Company or affiliate
JOHN H. SMET Senior Vice President	20 years	Senior Vice President- Fixed Income, Capital Research and Management Company	Serves as a fixed-income portfolio counselor
		Investment professional for 27 years in total; 26 years with Capital Research and Management Company or affiliate
MARK H. DALZELL	15 years	Senior Vice President- Fixed Income, Capital Research and Management Company	Serves as a fixed-income portfolio counselor
		Investment professional for 31 years in total; 21 years with Capital Research and Management Company or affiliate
SUSAN M. TOLSON	11 years (plus 7 years of prior experience as an investment analyst for the fund)	Senior Vice President- Fixed Income, Capital Research and Management Company	Serves as a fixed-income portfolio counselor
		Investment professional for 21 years in total; 19 years with Capital Research and Management Company or affiliate

Information regarding the portfolio counselors' compensation, their ownership of securities in the fund and other accounts they manage can be found in the statement of additional information of BFA.

9.   DISTRIBUTION

American Funds Distributors, Inc. is the principal underwriter of the shares of the Fund and BFA. Shares of the Fund are sold without an initial sales charge.  Class A shares of BFA are subject to an initial sales charge, as described in the prospectus.  The initial sales charge will be waived for shareholders who obtain shares of BFA pursuant to the Reorganization.

10.   SERVICE PROVIDERS

American Funds Service Company (“AFS”), a wholly owned subsidiary of CRMC, is the transfer agent for the Fund and BFA and maintains their records of shareholder accounts, processes purchases and redemptions of shares of the Fund and BFA, acts as dividend and capital gain distribution disbursing agent for the Fund and BFA, and performs other related shareholder service functions for the Fund and BFA. The principal office of AFS is located at 6455 Irvine Center Drive, Irvine, CA 92618.  For certain shareholder accounts, third parties which may be unaffiliated with CRMC provide transfer agency and shareholder services in place of AFS. These services are rendered under agreements with AFS or its affiliates and the third parties receive compensation according to such agreements, which will remain in place after the Reorganization.

JPMorgan Chase Bank, located at 270 Park Avenue, New York, NY 10017-2070, is the custodian for the cash and securities of the Fund and BFA.

11.   FINANCIAL HIGHLIGHTS

The financial highlights table for the Fund is intended to help you understand the financial performance of the Fund for the past five fiscal years.  This information has been audited by the Fund’s independent registered public accounting firm, Deloitte & Touche LLP, whose reports, along with the Fund’s financial statements and related notes, are included in the Fund’s annual report, which is available by request and is incorporated by reference herein.

Endowments - -- Bond Portfolio

Financial highlights
		(Loss) income from investment operations(1)			Dividends and distributions
	Net asset value, beginning of year	Net investment income	Net (losses) gains on securities (both realized and unrealized)	Total from investment operations	Dividends (from net investment income)	Distributions (from capital gains)	Total dividends and distributions	Net asset value, end of year	Total return(2)	Net assets, end of year (in millions)	Ratio of expenses to average net assets before waivers	Ratio of expenses to average net assets after waivers(2)	Ratio of net income to average net assets(2)
Class A:
Year ended 7/31/2009	$14.65	$.67	$(.97)	$(.30)	$(.76)	$                        -	$(.76)	$13.59	(1.75)%	$46	.81%	.75%	5.04%
Year ended 7/31/2008	15.82	.83	(1.09)	(.26)	(.91)	-	(.91)	14.65	(1.81)	56	.75	.70	5.33
Year ended 7/31/2007	15.99	.83	(.07)	.76	(.93)	-	(.93)	15.82	4.81	60	.76	.71	5.12
Year ended 7/31/2006	16.62	.81	(.50)	.31	(.94)	-	(.94)	15.99	1.94	60	.79	.74	5.00
Year ended 7/31/2005	16.72	.78	.05	.83	(.93)	-	(.93)	16.62	5.07	65	.74	.71	4.61
(1) Based on average shares outstanding.
(2) This column reflects the impact, if any, of certain waivers from Capital Research and Management Company.
During the years shown, Capital Research and Management Company reduced fees for investment advisory services.

The Bond Fund of America, Inc.

The financial highlights table for BFA is intended to help you understand the financial performance of Class A shares of BFA for the past five fiscal years.  This information (except for the six months ended June 30, 2009) has been audited by BFA’s independent registered public accounting firm, Deloitte & Touche LLP, whose reports, along with the BFA’s financial statements and related notes, are included in the BFA’s annual report, which is available by request and is incorporated by reference herein.

Financial highlights1

	(Loss) income from investment operations(2)
	Net asset value, beginning of period	Net Investment income	Net (losses) Gains on securities (both realized and unrealized)	Total from Investment operations	Dividends (from net Investment income)	Net asset value, end of period	Total return (3) (4)	Net assets, end of period (in millions)	Ratio of expenses to average net assets before reimbursements/ waivers	Ratio of expenses to average net assets after reimbursements/ waivers (4)	Ratio of net income to average net assets (4)
Class A:
Six months ended 6/30/2009(5)	$10.76	$.29	$.45	$.74	$(.29)	$11.21	7.06%	$25,722	.67%(6)	.67%(6)	5.41%(6)
Year ended 12/31/2008	13.06	.70	(2.25)	(1.55)	(.75)	$10.76	(.12)	21,987	.65	.63	5.76
Year ended 12/31/2007	13.32	.69	(.25)	.44	(.70)	$13.06	3.37	24,898	.63	.61	5.22
Year ended 12/31/2006	13.22	.67	.09	.76	(.66)	$13.32	5.88	20,670	.65	.62	5.07
Year ended 12/31/2005	13.65	.62	(.36)	.26	(.69)	$13.22	1.94	17,738	.65	.62	4.60
Year ended 12/31/2004	13.51	.61	.16	.77	(.63)	$13.65	5.85	15,822	.65	.65	4.54
(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.
(2) Based on average shares outstanding.
(3) Total returns exclude any applicable sales charges, including contingent deferred sales charges.
(4) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During the periods shown, CRMC reduced fees for investment advisory services.
(5) Unaudited.
(6) Annualized.

12.   AMERICAN FUNDS JOINT PROXY STATEMENT

Please note that shareholders of BFA are currently considering a number of proposals pursuant to a Joint Proxy Statement dated August 28, 2009.  The proposals ask shareholders to (1) elect board members; (2) approve the reorganization of BFA from a Maryland corporation to a Delaware statutory trust; (3) approve updates to certain fundamental investment policies; (4) approve a policy allowing CRMC, which will continue to be BFA’s investment adviser, to appoint subsidiary advisers; (5) approve amendments to BFA’s Investment Advisory and Service Agreement; (6) approve a form of Subsidiary Agreement and appoint subsidiary advisers for BFA; and (7) consider a proposal submitted by shareholders of BFA.  Please see BFA’s prospectus and the joint proxy statement for more details on the transaction. Both documents can be accessed by visiting americanfunds.com.

THE BOARD RECOMMENDS

A VOTE “FOR” THE PROPOSED REORGANIZATION.

II.VOTING INFORMATION

This Combined Proxy Statement/Prospectus is being provided in connection with the solicitation of proxies by the Board of Trustees of the Fund to solicit your vote for the proposed Reorganization at a Special Meeting of the shareholders of the Fund.  The Special Meeting will be held at the offices of Capital Research and Management Company, One Market, Spear Tower, 39th floor, San Francisco, California, 94105, on January 27, 2010, at 2 p.m. Pacific Standard Time.

You may vote by completing and signing the enclosed proxy ballot and mailing it to us in the prepaid return envelope (if mailed in the United States) or by attending the Special Meeting in person.

You may revoke a proxy once it is given.  If you want to revoke a proxy, you must submit a subsequent proxy or a written notice of revocation to the Fund.  You may also give written notice of revocation in person at the Special Meeting.  Each properly executed proxy received in time for the Special Meeting will be voted as specified in the proxy, or, if no specification is made, FOR each proposal.

Only shareholders of record on November 18, 2009 (the “Record Date”),are entitled to receive notice of and to vote at the Special Meeting or at any adjournment thereof.  Each whole share of the Fund held as of the close of business on the Record Dateis entitled to one vote and each fractional share is entitled to a proportionate fractional vote at the Fund’s Special Meeting.

A majority of the shareholders of the Fund entitled to vote must be present in person or by proxy to constitute a quorum for the Fund.  When a quorum is present, the affirmative vote of the lesser of (1) 50% or more of the Fund’s outstanding shares or (2) 67% or more of the voting securites present in person or by proxy is required to approve the Reorganization.

If a quorum of shareholders of the Fund is not present at the Special Meeting, or if a quorum is present but sufficient votes to approve the proposal described in this Combined Proxy Statement/Prospectus with respect to the Fund are not received, the persons named as proxies may, but are under no obligation to, propose one or more adjournments of the Special Meeting for the Fund to permit further solicitation of proxies.  Any business that might have been transacted at the Special Meeting with respect to the Fund may be transacted at any such adjourned session(s) at which a quorum is present.  The Fund’s Special Meeting may be adjourned from time to time by a majority of the votes of the Fund properly cast upon the question of adjourning the Special Meeting to another date and time, whether or not a quorum is present, and the Special Meeting may be held as adjourned without further notice.  The persons named in the proxy will vote in favor of such adjournment those shares that they are entitled to vote in favor of the reorganization if such adjournment is necessary to obtain a quorum or to obtain a favorable vote on the reorganization. The persons named in the proxy will vote against adjournment those shares that they are entitled to vote if the shareholder proxies instruct the persons named in the proxy to vote against the reorganization.  The votes may be counted and proposal approved at a Special Meeting for the Fund, including an adjourned meeting.

All proxies voted, including abstentions and broker non-votes (shares held by brokers or nominees where the underlying holder has not voted and the broker does not have discretionary authority to vote the shares), will be counted toward establishing a quorum.  In addition, under the rules of the New York Stock Exchange if a broker has not received instructions from beneficial owners or persons entitled to vote and the proposal to be voted upon may “affect substantially” a shareholder’s rights or privileges, the broker may not vote the shares as to that proposal even if it has discretionary voting power.  As a result, such shares also will be treated as broker non-votes for purposes of proposals that may “affect substantially” a shareholder’s rights or privileges (but will not be treated as broker non-votes for other proposals, including adjournment of the Special Meeting).

Abstentions and broker non-votes will be treated as shares voted against the reorganization.  Treating broker non-votes as votes against the reorganization can have the effect of causing shareholders who choose not to participate in the proxy vote to prevail over shareholders who cast votes or provide voting instructions to their brokers or nominees.  In order to prevent this result, the Fund may request that selected brokers or nominees refrain from returning proxies on behalf of shares for which voting instructions have not been received from beneficial owners or persons entitled to vote.  The Fund also may request that selected brokers or nominees return proxies on behalf of shares for which voting instructions have not been received if doing so is necessary to obtain a quorum.

The reorganization will be approved only if a sufficient number of votes are cast “FOR” the proposal.  If shareholders of the Fund do not vote to approve the Reorganization, the Board of Trustees of the Fund will consider other possible courses of action with respect to the Fund, including liquidating the Fund

A shareholder of the Fund who objects to the proposed Reorganization will not be entitled under either Delaware law or the Fund’s Trust Instrument to demand payment for, or an appraisal of, his or her shares.  Shareholders, however, should be aware that the Reorganization as proposed is not expected to result in recognition of gain or loss to shareholders for federal income tax purposes.  If the Reorganization is completed, shareholders will be free to redeem the shares of BFA that they receive in the transaction at their then current NAV.  Shares of the Fund may be redeemed at any time prior to the consummation of the Reorganization at their current NAV.  Shareholders of the Fund may wish to consult their tax advisors as to any different consequences of redeeming their shares prior to the Reorganization or exchanging such shares in the Reorganization.

A.   METHOD AND COST OF SOLICITATION

This Combined Proxy Statement/Prospectus is being sent to you in connection with the solicitation of proxies by the Board of Trustees of the Fund for use at the Special Meeting.  The Fund expects that the solicitation of proxies will be primarily by mail.  The solicitation may also include email or oral communications by certain employees of CRMC, who will not be paid for these services.  The Fund does not expect to incur any solicitation costs.

B.   RIGHT OF REVOCATION

Any shareholder of the Fund giving a proxy may revoke it before it is exercised at the Fund’s Special Meeting, either by providing written notice to the Fund, by submission of a later-dated and duly executed proxy or by voting in person at the Special Meeting.  A prior proxy can also be revoked by proxy by voting again through the toll-free number or the web address listed in the enclosed Voting Instructions.  If not so revoked, the votes will be cast at the Special Meeting and any postponements or adjournments thereof.  Attendance by a shareholder at the Special Meeting does not, by itself, revoke a proxy for that Special Meeting.

C.   VOTING SECURITIES AND PRINCIPAL HOLDERS

Shareholders of the Fund at the close of business on the Record Date will be entitled to be present and vote at the Special Meeting.  Each share of any class of shares is entitled to one vote per share.  As of the Record Date the Fund had xxx shares outstanding.

As of xxx, 2009, shareholders of record and/or beneficial owners (to the Fund’s knowledge) who owned five percent or more of the Fund’s shares are set forth below:

Name and Address	Ownership percentage
Information to come

As of xxx, 2009, the Officers and Trustees of the Fund, as a group, owned of record and beneficially less than 1% of the outstanding voting securities the Fund.

D.   INTEREST OF CERTAIN PERSONS IN THE REORGANIZATION

A beneficial owner of 25% or more of a voting security of the Fund is presumed to have “control” of the Fund for purposes of the 1940 Act, absent a determination to the contrary by the SEC.  A person who controls the Fund could have effective control over the outcome of matters submitted to a vote of shareholders of the Fund.  Based on the information provided above, as of xxx, 2009, no person owned a controlling interest in the Fund.

III.FURTHER INFORMATION ABOUT THE FUND AND BFA

Shareholder reports, proxy statements, registration statements and other information filed by the Fund and BFA may be inspected without charge and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549, and at the following regional offices of the SEC:  Northeast Regional Office, 3 World Financial Center, Suite 400, New York, New York 10281; Southeast Regional Office, 801 Brickell Avenue, Suite 1800, Miami, Florida 33131; Midwest Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604; Central Regional Office, 1801 California Street, Suite 1500, Denver, Colorado 80202; and Pacific Regional Office, 5670 Wilshire Boulevard, Suite 1100, Los Angeles, California 90036.  Copies of such materials may also be obtained from the Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, DC 20549 at prescribed rates.  Shareholder reports, prospectuses and statements of additional information for the Fund and BFA are also available free of charge by calling American Funds Service Company at 1-800-421-0180.

IV.MISCELLANEOUS MATTERS

A.   OTHER BUSINESS

The Board of Trustees of the Fund knows of no other business to be brought before the Special Meeting.  If any other matters come before the Fund’s Special Meeting, the Board of Trustees of the Fund intends that proxies that do not contain specific restrictions to the contrary will be voted on those matters in accordance with the judgment of the persons named in the enclosed form of proxy.

B.   NEXT MEETING OF SHAREHOLDERS

The Fund is not required and does not intend to hold annual or other periodic meetings of shareholders except as required by the 1940 Act.  By observing this policy, the Fund seeks to avoid the expenses customarily incurred in the preparation of proxy material and the holding of shareholder meetings, as well as the related expenditure of staff time.  If the Reorganization is not completed, the next meeting of the shareholders of the Fund will be held at such time as the Board of Trustees of the Fund may determine or at such time as may be legally required.  Any shareholder proposal intended to be presented at such meeting must be received by the Fund at its office at a reasonable time before the Fund begins to print and mail its proxy, as determined by the Board of Trustees of the Fund, to be included in the Fund’s proxy statement and form of proxy relating to that meeting, and must satisfy all other legal requirements.

C.   LEGAL MATTERS

Certain legal matters in connection with the tax consequences of the Reorganization will be passed upon by Bingham McCutchen LLP.

D.   INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The financial statements of the Fund for the year ended July 31, 2009, contained in the Fund’s 2009 Annual Report to Shareholders, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, which are incorporated herein by reference and have been so incorporated in reliance upon the report of such firm given on their authority as experts in accounting and auditing.

By Order of the Board of Trustees of Endowments -- Bond Portfolio

/s/ Patrick F. Quan

Patrick F. Quan

Vice President and Secretary

Dated:  October 2, 2009

APPENDIX A

FORM OF PROXY CARD

ENDOWMENTS – BOND PORTFOLIO

Proxy Solicited on Behalf of the Board of Trustees

for the Meeting of Shareholders to be held January 27, 2010

The undersigned hereby appoints Kristine M. Nishiyama, Robert G. O'Donnell and Patrick F. Quan, and each of them, his/her true and lawful agents and proxies with full power of substitution to represent the undersigned at the Meeting of Shareholders to be held at the offices of Capital Research and Management Company, One Market, Spear Tower, 39th floor, San Francisco, California, on January 27, 2010, at 2 p.m. Pacific Time, and any adjournments or postponements thereof on all matters coming before said meeting.

Please mark, sign, date and return this proxy.  When properly completed, it will be voted exactly as you instruct.  If you sign and return this proxy, without otherwise completing it, your shares will be voted FOR the proposals.

	(Signature of shareholder representative)
(Date)	(Please sign shareholder name as it appears below)

SHAREHOLDER:

Bond Portfolio

1.   To approve a proposed Agreement and Plan of Reorganization and Liquidation (the “Agreement”) between the Fund and The Bond Fund of America, Inc. (“BFA”).  The Agreement contemplates the transfer to BFA of all the assets of the Fund in exchange solely for Class A shares of common stock of BFA and the assumption by BFA of all of the Fund’s liabilities.  The Agreement further contemplates the distribution of such shares to the shareholders of the Fund, and the liquidation and dissolution of the Fund.

[  ] FOR [  ] AGAINST [  ] ABSTAIN

VOTE VIA MAIL OR IN PERSON

IMPORTANT

Shareholders can help avoid the necessity of sending follow-up letters by promptly signing and returning this Proxy.

PLEASE SIGN AND DATE BEFORE MAILING.

APPENDIX B

FORM OF

AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION

THIS AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION (the “Agreement”) is dated this _____ day of ________________, 2009, by and between Endowments on behalf of Endowments -- Bond Portfolio (the “Acquired Fund”), a Delaware business trust, and The Bond Fund of America, Inc. (the “Acquiring Fund”), a Maryland corporation.

W I T N E S S E T H:

WHEREAS, the parties hereto are each open-end registered investment companies; and

WHEREAS, the parties hereto desire to provide for the acquisition by the Acquiring Fund of all of the assets and known and disclosed liabilities of the Acquired Fund solely in exchange for the Class A shares of common stock (par value $.001) (“Class A Shares”) of the Acquiring Fund, and for the distribution of such shares thereafter by such Acquired Fund pro rata to its shareholders in complete liquidation of such Acquired Fund and complete cancellation of the shares of the Acquired Fund;

NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

1.The parties hereto hereby adopt this Agreement, pursuant to section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), with respect to the following plan of reorganization:  the reorganization will be comprised of the acquisition by the Acquiring Fund of all of the properties, assets and known and disclosed liabilities of the Acquired Fund, which will be retained by the Acquiring Fund for the benefit of its shareholders, solely in exchange for Class A Shares of the Acquiring Fund, followed by the distribution of such Acquiring Fund Class A Shares to the shareholders of the Acquired Fund in exchange for their shares of the Acquired Fund, and the liquidation and dissolution of the Acquired Fund all upon and subject to the terms of the Agreement hereinafter set forth.

The share transfer books of the Acquired Fund shall be permanently closed on or before the Closing Date (as hereinafter defined) and only redemption requests made by shareholders of the Acquired Fund pursuant to Section 22(e) of the Investment Company of 1940, as amended (the “1940 Act”) received in proper form on or prior to the close of business on such date shall be fulfilled by the Acquired Fund. Redemption requests received by the Acquired Fund on or after the Closing Date shall be treated as requests for the redemption of the Class A Shares of the Acquiring Fund to be distributed to the shareholder of such Class A Shares as provided in Section 5. Nothing contained herein shall be construed to prevent the Acquired Fund from closing the fund to new investments at an earlier date, as determined by the Acquired Fund.

2.On the Closing Date, all of the assets and known and disclosed liabilities of the Acquired Fund on that date shall be delivered to the Acquiring Fund; and the number of Class A Shares of the Acquiring Fund having an aggregate value equal to the aggregate value of the net assets of the Acquired Fund shall be transferred and delivered to the Acquired Fund.

3.The net asset value of Class A Shares of the Acquiring Fund and the value of the net assets of the Acquired Fund to be transferred shall in each case be determined as of the close of business of the New York Stock Exchange on the Closing Date.  The computation of the net asset value of the Class A Shares of the Acquiring Fund and the shares of the Acquired Fund shall be done in the manner used by the Acquiring Fund and the Acquired Fund, respectively, in the computation of such net asset value per share as set forth in their respective prospectuses.  The methods used by the Acquiring Fund in such computation shall be applied to the valuation of the assets of the Acquired Fund to be transferred to the Acquiring Fund.

The Acquired Fund shall declare on the Closing Date, a dividend or dividends which, together with all previous such dividends, shall have the effect of distributing to the Acquired Fund’s shareholders all of the Acquired Fund’s investment company taxable income as defined in Section 852(b) of the Code for taxable years ending on or prior to the Closing Date (computed without regard to any deduction for dividends paid) and all of its net capital gain, if any, realized in taxable years ending on or prior to the Closing Date (after reduction for any capital loss carryforward) (the “RIC dividend”).

4.The closing shall be at the office of Capital Research and Management Company, 333 South Hope Street, Los Angeles, CA 90071, at 9:00 a.m., Pacific time on ____________, 2010, or at such other time, date or place as the parties may designate or as provided below (the “Closing Date”).

If on or prior to the Closing Date either party has, pursuant to the 1940 Act or any rule, regulation or order thereunder, suspended the redemption of its shares or postponed payment therefor, the Closing Date shall be postponed until the first business day after the date when both parties have ceased such suspension or postponement; provided, however, that if such suspension shall continue for a period of 60 days beyond the Closing Date, then the other party to this Agreement shall be permitted to terminate this Agreement without liability to either party for such termination.

5.As soon as practicable after the Closing Date, the Acquired Fund shall distribute to those persons who were shareholders of the Acquired Fund on the Closing Date the Class A Shares of the Acquiring Fund received by the Acquired Fund pursuant to this Agreement in liquidation of the Acquired Fund and cancellation of the outstanding shares of the Acquired Fund.  For the purpose of the distribution by the Acquired Fund of the Class A Shares of the Acquiring Fund to its shareholders, the Acquiring Fund shall promptly cause its transfer agent to credit an appropriate number of Class A Shares of the Acquiring Fund to each shareholder of the Acquired Fund for each share that such shareholder held in the Acquired Fund, in accordance with a list (the “Shareholder List”) of its shareholders received from the Acquired Fund.  No certificates for Class A Shares of the Acquiring Fund will be issued in connection with the reorganization contemplated hereby.

The Shareholder List shall indicate, as of the Closing Date, the name and address of each shareholder of the Acquired Fund, indicating his or her share balance.  The Acquired Fund agrees to supply the Shareholder List to the Acquiring Fund on the Closing Date.

6.As soon as practicable, and in any event within one year after the closing, the Acquired Fund shall (a) effect its dissolution with the proper state authorities, terminate its registration under the 1940 Act and file a final annual report on Form N-SAR with the Securities and Exchange Commission under the 1940 Act; and (b) either pay or make provision for payment of all of its liabilities not transferred to the Acquiring Fund, if any, and taxes, if any.

7.Subsequent to the date of approval by shareholders of the Acquired Fund of the transactions contemplated by this Agreement and prior to the Closing Date, the Acquiring Fund and the Acquired Fund shall coordinate as to their respective portfolios so that, after the closing, the Acquiring Fund will be in compliance with all of its investment policies and restrictions.  At the time of delivery of its portfolio securities for examination as provided in Section 8, the Acquired Fund shall provide to the Acquiring Fund a copy of a list setting forth the securities then owned by the Acquired Fund and the respective adjusted federal income tax basis thereof, including any additional information relevant to the characterization of such securities or distributions thereon in the hands of the Acquiring Fund.

8.Portfolio securities or written evidence acceptable to the Acquiring Fund of record ownership thereof by The Depository Trust Company or through the Federal Reserve Book Entry System or any other depository approved by the Acquired Fund pursuant to Rule 17f-4 under the 1940 Act shall be presented by the Acquired Fund to the Acquiring Fund or, at its request, to its custodian, for examination no later than five business days preceding the Closing Date, and shall be delivered, or transferred by appropriate transfer or assignment documents, by the Acquired Fund on the Closing Date to the Acquiring Fund, duly endorsed in proper form for transfer in such condition as to constitute good delivery thereof in accordance with the custom of brokers and shall be accompanied by all necessary state transfer stamps, if any, or a check for the appropriate purchase price thereof.  The cash delivered, if any, shall be in the form of certified or bank cashiers checks, by bank wire payable to the order of the Acquiring Fund, or such other method as agreed to by the Acquiring Fund and the Acquired Fund prior to the Closing date.  The number of Class A Shares of the Acquiring Fund being delivered against the securities and cash of the Acquired Fund, registered in the name of the Acquired Fund, shall be delivered to the Acquired Fund on the Closing Date.  Such Class A Shares shall thereupon be assigned by the Acquired Fund to its shareholders so that the Class A Shares of the Acquiring Fund may be distributed as provided in Section 5.

If, at the Closing Date, the Acquired Fund is unable to make delivery under this Section 8 to the Acquiring Fund of any of its portfolio securities or cash for the reason that any of such securities purchased by the Acquired Fund, or the cash proceeds of a sale of portfolio securities, prior to the Closing Date have not yet been delivered to it or the Acquired Fund’s custodian, then the delivery requirements of this Section 8 with respect to such undelivered securities or cash shall be waived and the Acquired Fund shall deliver to the Acquiring Fund by or on the Closing Date with respect to said undelivered securities or cash executed copies of an agreement or agreements of assignment in a form reasonably satisfactory to the Acquiring Fund, together with such other documents, including a due bill or due bills and brokers’ confirmation slips as may reasonably be required by the Acquiring Fund.

9.The Acquired Fund shall use its best efforts to discharge all its known liabilities, so far as may be possible, prior to the Closing Date.  The Acquiring Fund shall assume those liabilities, expenses, costs, charges and reserves reflected on a Statement of Assets and Liabilities of the Acquired Fund, prepared on behalf of the Acquired Fund, as of the Closing Date, in accordance with generally accepted accounting principles consistently applied from the prior audit period.  The Acquiring Fund shall also assume any known or disclosed liabilities incurred by or on behalf of the Acquired Fund specifically arising from or relating to the operations and/or transactions of the Acquired Fund prior to and including the Closing Date which are not reflected on the Statement of Assets and Liabilities of the Acquired Fund described herein.

10.The obligations of the Acquiring Fund hereunder shall be subject to the following conditions:

A.The Board of Trustees of the Acquired Fund shall have authorized the execution of this Agreement and the shareholders of the Acquired Fund shall have approved the transactions contemplated herein, and the Acquired Fund shall have furnished to the Acquiring Fund copies of resolutions to that effect; such shareholder approval shall have been by the vote of the holders of a majority of the outstanding voting securities of the Acquired Fund entitled to vote at a meeting for which proxies have been solicited by the Combined Proxy Statement/Prospectus (as hereinafter defined).

B.The representations and warranties of the Acquired Fund contained herein shall be true and correct at and as of the Closing Date.

C.On the Closing Date, the Acquired Fund shall have provided to the Acquiring Fund information regarding the amount of the capital loss carry-over, net operating loss, and net unrealized appreciation or depreciation, if any, with respect to the Acquired Fund as of the Closing Date.

D.A registration statement filed by the Acquiring Fund under the Securities Act of 1933 (the “1933 Act”) on Form N-14 and containing the Combined Proxy Statement/Prospectus shall have become effective under the 1933 Act.

E.The Acquiring Fund shall have received an opinion, dated the Closing Date, of Bingham McCutchen LLP, to the same effect as the opinion contemplated by Section 11C of this Agreement.

11.The obligations of the Acquired Fund hereunder shall be subject to the following conditions:

A.The shareholders of the Acquired Fund shall have approved the transactions contemplated by this Agreement.

B.The representations and warranties of the Acquiring Fund contained herein shall be true and correct at and as of the Closing Date.

C.The Acquired Fund shall have received an opinion from Bingham McCutchen LLP to the effect that, subject to the representations of the Acquired Fund herein, to be delivered on the Closing Date, for federal income tax purposes:

(a)The Acquired Fund’s transfer of all of its assets and liabilities, if any, to the Acquiring Fund solely in exchange for Class A Shares of the Acquiring Fund, followed by the Acquired Fund’s distribution of Class A Shares of the Acquiring Fund to the Acquired Fund’s shareholders as part of the liquidation of the Acquired Fund will qualify as a tax-free “reorganization” within the meaning of Section 368(a)(1)(C) of the Code and the Acquired Fund and the Acquiring Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code;

(b)No gain or loss will be recognized by the shareholders of the Acquired Fund upon the exchange of shares of the Acquired Fund for the Class A Shares of the Acquiring Fund (Section 354(a) of the Code);

(c)The Acquired Fund will not recognize gain or loss under the provisions of the Code upon the transfer of all of its assets and liabilities, if any, to the Acquiring Fund solely in exchange for Class A Shares of the Acquiring Fund (Sections 361(a) and 357(a) of the Code);

(d)The Acquiring Fund will not recognize gain or loss upon its receipt of all of the Acquired Fund’s assets and liabilities, if any, solely in exchange for Class A Shares of the Acquiring Fund (Section 1032(a) of the Code);

(e)The basis of the Class A Shares of the Acquiring Fund received by the shareholders of the Acquired Fund will be the same as the basis in the shares of the Acquired Fund surrendered in exchange therefor (Section 358(a)(1) of the Code);

(f)The holding period of the Class A Shares of the Acquiring Fund received in exchange for Acquired Fund shares by the shareholders of the Acquired Fund will include the period that the shareholders of the Acquired Fund held the Acquired Fund shares surrendered in exchange therefor, provided that such Acquired Fund shares are held by the shareholders as capital assets on the date of the exchange (Section 1223(1) of the Code);

(g)The tax basis of the Acquired Fund’s assets acquired by the Acquiring Fund will be the same as the tax basis of such assets to the Acquired Fund immediately prior to the transaction (Section 362(b) of the Code); and

(h)The holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the period during which those assets were held by the Acquired Fund (Section 1223(2) of the Code).

D.A registration statement filed by the Acquiring Fund under the 1933 Act on Form N-14, containing the Combined Proxy Statement/Prospectus shall have become effective under the 1933 Act.

12.The Acquired Fund hereby represents and warrants to the Acquiring Fund that:

(a)Its Board of Trustees has authorized the execution of this Agreement;

(b)The financial statements of the Acquired Fund as of July 31, 2009, heretofore furnished to the Acquiring Fund, present fairly the financial position, results of operations,  changes in net assets, and total liabilities of the Acquired Fund as of that date, in conformity with accounting principles generally accepted in the United States of America applied on a basis consistent with the preceding year; and from July 31, 2009, through the date hereof, there have not been, and through the Closing Date there will not be, any material adverse change in the business or financial condition of the Acquired Fund, it being agreed that a decrease in the size of the Acquired Fund due to a diminution in the value of its portfolio and/or redemption of its shares shall not be considered a material adverse change;

(c)The prospectus contained in the Acquired Fund’s registration statement under the 1940 Act and the 1933 Act, dated October 1, 2009, as amended and supplemented, is true, correct and complete, conforms to the requirements of the 1940 Act and the 1933 Act and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Acquired Fund’s registration statement, as amended, was, as of the date of the filing of the last post-effective amendment thereto, true, correct and complete, conformed to the requirements of the 1940 Act and the 1933 Act and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

(d)There is no material contingent liability of the Acquired Fund and no material legal, administrative, or other proceeding or investigation pending or, to the knowledge of the Acquired Fund, threatened against the Acquired Fund, that is not reflected in such prospectus;

(e)Except as set forth in this Agreement there are no material contracts outstanding to which the Acquired Fund is a party other than those ordinary in the conduct of its business;

(f)The Acquired Fund is a validly existing Delaware business trust;

(g)All federal and other tax returns and reports of the Acquired Fund required by law to be filed have been filed, and all federal and other taxes shown as due on such returns and reports have been paid or provision shall have been made for the payment thereof and to the best of the knowledge of the Acquired Fund no such return is currently under audit and no assessment has been asserted with respect to such returns.

(h)The Acquired Fund has elected to be treated as a regulated investment company beginning with its first taxable year and, for each fiscal year of its operations, the Acquired Fund has met the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company and the Acquired Fund intends to meet such requirements with respect to its current taxable year; the Acquired Fund is an investment company within the meaning of Section 368(a)(2)(F)(i) and (iii) of the Code and satisfies the diversification requirements of Section 368(a)(2)(F)(ii) of the Code; not more than 25 percent of the value of the Acquired Fund’s total assets is invested in the stock and securities of any one issuer (other than securities of the United States government and its agencies and instrumentalities), the stock of two or more controlled issuers in the same or similar trades or businesses or related trades or businesses, or qualified publicly traded partnerships, and not more than 50 percent of the value of the Acquired Fund’s total assets is invested in the stock and securities of five or fewer issuers;

(i)The Acquired Fund will transfer to the Acquiring Fund assets representing at least 90 percent of the fair market value of the net assets and 70 percent of the gross assets held by the Acquired Fund immediately prior to the transaction contemplated by this Agreement. In calculating these percentages, all redemptions and distributions (other than distributions required pursuant to Section 22(e) of the 1940 Act or to enable the Acquired Fund to qualify as a regulated investment company) made by the Acquired Fund immediately prior to the transfer and which are part of the plan of reorganization will be considered as assets held by the Acquired Fund immediately prior to the transfer;

(j)To the knowledge of the Acquired Fund, there is no plan or intention by the shareholders of the Acquired Fund who own five percent or more of the Fund’s shares, and, to the best of the knowledge of management of the Acquired Fund, there is no plan or intention on the part of the remaining shareholders of the Acquired Fund to sell, exchange, or otherwise dispose of a number of Class A Shares of the Acquiring Fund received in the transaction contemplated by this Agreement that would reduce the Acquired Fund’s shareholders’ ownership of Class A Shares of the Acquiring Fund to a number of Class A Shares having a value as of the Closing Date of less than 50 percent of the value of all of the formerly outstanding stock of the Acquired Fund as of the Closing Date;  there are no dissenters’ rights in the transaction, and no cash will be exchanged for stock of the Acquired Fund in lieu of fractional Class A Shares of the Acquiring Fund and shares of the Acquired Fund and Class A Shares of the Acquiring Fund held by a shareholder of the Acquired Fund and otherwise sold, redeemed, or disposed of prior or subsequent to the transaction will be considered in making this representation;

(k)The Acquired Fund will distribute the Class A Shares of the Acquiring Fund and any other property it receives in the transaction contemplated by this Agreement, and its other properties, in pursuance of this Agreement;

(l)The Acquired Fund’s liabilities assumed by the Acquiring Fund and the liabilities to which the transferred assets of the Acquired Fund are subject were incurred in the ordinary course of its business;

(m)The Acquired Fund is not under the jurisdiction of a court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code;

(n)As soon as practicable, but in no event later than 12 months following the date that all of the assets are transferred to the Acquiring Fund, the Acquired Fund will be liquidated and dissolved under state law;

(o)The fair market value of the assets of the Acquired Fund transferred to the Acquiring Fund will equal or exceed the sum of the liabilities assumed by the Acquiring Fund plus the amount of liabilities, if any, to which the transferred assets are subject;

(p)The sum of the liabilities of the Acquired Fund to be assumed by the Acquiring Fund and the expenses of the transaction do not and will not exceed twenty percent of the fair market value of the assets of the Acquired Fund on the Closing Date;

13.The Acquiring Fund hereby represents and warrants to the Acquired Fund that:

(a)Its Board of Directors has authorized the execution of this Agreement and the transactions contemplated hereby, and has furnished to the Acquired Fund copies of resolutions to that effect;

(b)The financial statements of the Acquiring Fund as of December 31, 2008, heretofore furnished to the Acquired Fund, present fairly the financial position, results of operations, and changes in net assets of the Acquiring Fund, as of that date, in conformity with accounting principles generally accepted in the United States of America applied on a basis consistent with the preceding year; and from December 31, 2008, through the date hereof, there have not been, and through the Closing Date there will not be, any material adverse changes in the business or financial condition of the Acquiring Fund, it being understood that a decrease in the size of the Acquiring Fund due to a diminution in the value of its portfolio and/or redemption of its Class A Shares shall not be considered a material or adverse change;

(c)The prospectus contained in the Acquiring Fund’s registration statement under the 1940 Act and the 1933 Act, dated March 1, 2009, as amended and supplemented, is true, correct and complete, conforms to the requirements of the 1940 Act and the 1933 Act and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  The Acquiring Fund’s registration statement, as amended, was, as of the date of the filing of the last post-effective amendment, true, correct and complete, conformed to the requirements of the 1940 Act and the 1933 Act and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

(d)There is no material contingent liability of the Acquiring Fund and no material, legal, administrative, or other proceedings or investigations pending or, to the knowledge of the Acquiring Fund, threatened against the Acquiring Fund, not reflected in such prospectus;

(e)Except as set forth in this Agreement there are no material contracts outstanding to which the Acquiring Fund is a party other than those ordinary in the conduct of its business and there are no outstanding options or rights to acquire its Class A Shares;

(f)The Acquiring Fund is a validly existing Maryland corporation and has all necessary and material federal, state and local authorizations to own all its properties and assets and to carry on its business as now being conducted; the Class A Shares of the Acquiring Fund which the Acquiring Fund issues to the Acquired Fund pursuant to this Agreement will be duly authorized, validly issued, fully-paid and non-assessable; the Class A Shares will conform to the description thereof contained in the Acquiring Fund’s registration statement, and will be duly registered under the 1933 Act and the states where registration is required; and the Acquiring Fund is duly registered under the 1940 Act and such registration has not been revoked or rescinded and is in full force and effect;

(g)The Class A Shares of the Acquiring Fund constitute voting stock for purposes of Sections 368(a)(1)(C) and 368(c) of the Code;

(h)The Acquiring Fund has elected to be treated as a regulated investment company and it intends to meet the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company with respect to its current taxable year; the Acquiring Fund is an investment company that meets the requirements of a regulated investment company as defined in Section 368(a)(2)(F)(i) of the Code; not more than 25 percent of the value of the Acquiring Fund’s total assets is invested in the stock and securities of any one issuer (other than securities of the United States government and its agencies and instrumentalities); and not more than 50 percent of the value of the Acquiring Fund’s total assets is invested in the stock and securities of five or fewer issuers;

(i)The Acquiring Fund has no plan or intention (i) to sell or dispose of any of the assets transferred by the Acquired Fund, except for dispositions made in the ordinary course of business or dispositions necessary to maintain its status as a regulated investment company or (ii) to redeem or reacquire any of the shares issued by it, except in the ordinary course of business;

(j)After consummation of the transactions contemplated by the Agreement, the Acquiring Fund will continue to operate its business in a substantially unchanged manner;

(k)Following the transactions contemplated by this Agreement, the Acquiring Fund will continue the historic business of the Acquired Fund or use a significant portion of the Acquired Fund’s historic business assets in a business; and

14.Each party hereby represents to the other that:

            (a)           No broker or finder has been employed by such party with respect to this Agreement or the transactions contemplated hereby;

            (b)           The information concerning such party in the Combined Proxy Statement/Prospectus will not, as of its date, contain any untrue statement of a material fact or omit to state a fact necessary to make the statements concerning it therein not misleading and that the financial statements concerning it will present the information shown fairly in accordance with generally accepted accounting principles consistently applied;

            (c)           This Agreement is valid, binding and enforceable against such party in accordance with the terms and that the execution, delivery and performance of this Agreement will not result in any violation of, or be in conflict with, any provision of any charter, by-laws, contract, agreement, judgment, decree or order to which it is subject or to which it is a party;

            (d)           The fair market value of the Class A Shares of the Acquiring Fund received by each shareholder of the Acquired Fund will be approximately equal to the fair market value of the shares of the Acquired Fund surrendered in the exchange; and

            (e)           There is no intercorporate indebtedness existing between such party and the Acquiring Fund that was issued, acquired, or will be settled at a discount.

15.The Acquiring Fund shall prepare and file a registration statement under the 1933 Act on Form N-14 which shall contain a combined proxy statement and prospectus contemplated by Rule 145 under the 1933 Act with respect to the transactions contemplated by this Agreement and shall be accompanied by any prospectus and/or report to shareholders of the Acquiring Fund that is required to be included with the materials mailed to shareholders with respect to such transactions (collectively the “Combined Proxy Statement/Prospectus”).   Each party shall use its best efforts to have such registration statement declared effective and to supply such information concerning itself for inclusion in the Combined Proxy Statement/Prospectus as may be necessary or desirable.

16.The obligations of each party under this Agreement shall be subject to the right of such party to abandon and terminate this Agreement without liability if the other party breaches any material provision of this Agreement or if any material legal, administrative or other proceeding shall be instituted or threatened between the date of this Agreement and the Closing Date (i) seeking to restrain or otherwise prohibit the transactions contemplated hereby and/or (ii) asserting a material liability of either party not disclosed on the date hereof, which proceeding has not been terminated or the threat thereof removed prior to the Closing Date.

17.All prior or contemporaneous agreements and representations (written or oral) are merged into this Agreement, which constitutes the entire contract between the parties hereto and may not be changed or terminated orally.

18.This Agreement may be amended, modified or supplemented in writing at any time by mutual consent of the parties hereto, notwithstanding approval hereof by the shareholders of the Acquired Fund, provided that no such amendment shall have a material adverse effect on the interests of the shareholders of the Acquired Fund after their approval hereof without their further approval.

19.At any time prior to the Closing Date, a party may waive compliance with any of the provisions made for its benefit contained herein by executing a written acknowledgement of such waiver.

20.Except as specified in the next sentence of this Section 20, the representations, warranties and covenants of the Acquiring Fund and the Acquired Fund contained in this Agreement or in any document delivered pursuant hereto or in connection herewith with respect to the reorganization of the Acquired Fund shall not survive the closing of such reorganization.  The covenants of the Acquiring Fund and the Acquired Fund to be performed after the Closing Date with respect to the reorganization of the Acquired Fund shall survive the closing of such reorganization.

21.The parties acknowledge and agree that this Agreement has been made and executed on behalf of the Acquired Fund and the Acquiring Fund and is not executed or made by the officers or Trustees of the Acquired Fund or the officers or Directors of the Acquiring Fund individually, but only as officers and Trustees/Directors under the Acquired Fund’s Declaration of Trust or the Acquiring Fund’s Articles of Incorporation and that the obligations of the Acquired Fund and the Acquiring Fund hereunder are not binding upon any of the Trustees, Directors, officers or shareholders of the Acquired Fund or the Acquiring Fund individually, but bind only the estate of the Acquiring Fund or the Acquired Fund, as appropriate.

22.This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts of laws.

23.Any notice, report, statement or demand required or permitted by any provision of this Agreement shall be in writing and shall be delivered by personal delivery, commercial delivery service or registered or certified mail, return receipt requested, or sent by telefacsimile, and addressed as follows:

To the Acquired Fund:

Endowments -- Bond Portfolio

One Market

Steuart Tower, Suite 1800

San Francisco, California 94105

Attn: Patrick F. Quan/Secretary

To the Acquiring Fund:

Bond Fund of America, Inc.

333 South Hope Street

Los Angeles, California 90071

Attn: Kimberly S. Verdick/Secretary

24.This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all taken together shall constitute one Agreement.  The rights and obligations of each party pursuant to this Agreement shall, however, not be assignable.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and attested by its officers thereunto duly authorized on the date first set forth above.

ENDOWMENTS

on behalf of the Endowments -- Bond Portfolio

By:                                                      

Name:

Title:

THE BOND FUND OF AMERICA, INC.

By:                                                      

Name:

Title:

APPENDIX C

COMPARISON OF INVESTMENT POLICIES

The following is a list of the fundamental and certain non-fundamental policies of BFA and the Fund

The Bond Fund of America

All percentage limitations stated in the following policies are considered at the time securities are purchased and are based on BFA’s net assets unless otherwise indicated. Policies involving a maximum percentage of assets will not be considered violated unless the excess occurs immediately after, and is caused by, an acquisition by BFA. In managing BFA, BFA’s investment adviser may apply more restrictive policies than those listed below.

Fundamental Policies.  BFA has adopted the following fundamental policies and investment restrictions, which may not be changed without approval by holders of a majority of its outstanding shares. Such majority is defined in the 1940 Act, as the vote of the lesser of (a) 67% or more of the voting securities present at a shareholder meeting, if the holders of more than 50% of the outstanding voting securities are present in person or by proxy, or (b) more than 50% of the outstanding voting securities.

1.   Diversification. BFA may not, with respect to 75% of the fund’s total assets, purchase the security of any issuer (other than securities issued or guaranteed by the U.S. government or its agencies or instrumentalities), if as a result, (a) more than 5% of the fund’s total assets would be invested in securities of that issuer, or (b) the fund would hold more than 10% of the outstanding voting securities of that issuer.

2.   Concentration. BFA may not concentrate its investments in a particular industry, as that term is used in the 1940 Act and as interpreted or modified by regulatory authority having jurisdiction, from time to time.

3.   Invest for Management or Control.  BFA may not invest in companies for the purpose of exercising control or management.

4.   Real Estate. BFA may not buy or sell real estate in the ordinary course of its business; however, the fund may invest in debt securities secured by real estate or interests therein or issued by companies, including real estate investment trusts, which invest in real estate or interests therein.

5.   Commodities. BFA may not buy or sell commodities or commodity contracts in the ordinary course of its business, provided, however, that this shall not prohibit the fund from purchasing or selling currencies including forward currency contracts.

6.   Illiquid Securities. BFA may not invest more than 15% of the value of its net assets in securities that are illiquid.

7.   Underwriting. BFA may not engage in the business of underwriting of securities of other issuers, except to the extent that the disposal of an investment position may technically constitute the fund an underwriter as that term is defined under the 1933 Act.

8.   Lending. BFA may not make loans in an aggregate amount in excess of 10% of the value of the fund's total assets, taken at the time any loan is made, provided, (i) that the purchase of debt securities pursuant to the fund's investment objectives and entering into repurchase agreements maturing in seven days or less shall not be deemed loans for the purposes of this restriction, and (ii) that loans of portfolio securities as described under "Loans of Portfolio Securities," in the Statement of Additional Information shall be made only in accordance with the terms and conditions therein set forth.

9.   Short Selling. BFA may not sell securities short, except to the extent that the fund contemporaneously owns or has the right to acquire at no additional cost securities identical to those sold short. Notwithstanding this restriction, the fund has no current intention (at least during the next 12 months) to sell securities short to the extent the fund contemporaneously owns or has the right to acquire at no additional cost securities identical to those sold short.

10.   Purchasing Securities at Margin. BFA may not purchase securities at margin.

11.   Borrowing. BFA may not borrow money except from banks for temporary or emergency purposes, not in excess of 5% of the value of the fund's total assets.

Non-fundamental Policies.  BFA has adopted the following non-fundamental investment policies, which may be changed by action of the Board of Directors without shareholder approval:

1.   BFA may not issue senior securities, except as permitted by the 1940 Act.

2.   BFA may not invest in securities of other investment companies, except as permitted by the 1940 Act.

3.   BFA may not acquire securities of open-end investment companies or unit investment trusts registered under the 1940 Act in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.

Comparison of the Fund’s Investment Policies and BFA’s Policies

	Fundamental Policies of Endowments -- Bond Portfolio	Bond Fund of America Policy	Discussion of BFA’s policy
1.	The Fund may not invest in a security if, as a result of such investment, more than 25% of its total assets would be invested in the securities of issuers in any particular industry, except that the restriction does not apply to securities issued or guaranteed by the U.S. government or its agencies or instrumentalities (or repurchase agreements with respect thereto).	See fundamental policy 2 above.	BFA’s policy is substantially the same as the Fund’s policy.
2.	The Fund may not make loans, but this limitation does not apply (i) to purchases of debt securities, loan participations, or the entry into of repurchase agreements, or (ii) to loans of portfolio securities if, as a result, no more than 33 1/3% of a fund’s total assets would be on loan to third parties.	See fundamental policy 8 above.	BFA’s policy is more restrictive than required by law.
3.	The Fund may not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (this shall not prevent the fund from investing in securities or other instruments backed by real estate, or the securities of companies engaged in the real estate business).	See fundamental policy 4 above.	BFA’s policy is substantially the same as the Fund’s policy.
4.	The Fund may not purchase or sell commodities or commodities contracts. This restriction shall not prohibit the Fund, subject to restrictions described in the Fund’s prospectus and statement of additional information, from purchasing, selling or entering into futures contracts options on futures contracts, foreign currency forward contracts, foreign currency options, or any interest rate, securities-related or foreign currency-related hedging instrument, including swap agreements and other derivative instruments, subject to compliance with applicable provisions of the federal securities and commodities laws.	See fundamental policy 5 above.	BFA’s policy is substantially the same as the Fund’s policy.
5.	The Fund may not issue senior securities, except as permitted under the Investment Company Act of 1940, as amended.	See non-fundamental policy 1 above.	BFA’s policy is substantially the same as the Fund’s policy.
6.	The Fund may not borrow money, except temporarily for extraordinary or emergency purposes, in an amount not exceeding 5% of its total assets at the time of such borrowing.	See fundamental policy 11 above.	BFA’s policy is substantially the same as the Fund’s policy.
7.	The Fund may not, with respect to 75% of its total assets, invest more than 5% of the value of its total assets in the securities of any one issuer, or acquire more than 10% of the voting securities of any one issuer. These limitations do not apply to securities issued or guaranteed by the U.S. government, its agencies or instrumentalities.	See fundamental policy 1 above.	BFA’s policy is substantially the same as the Fund’s policy.
	Non-Fundamental Policies of Endowments -- Bond Portfolio	Bond Fund of America Policy	Discussion of BFA’s policy
1.	The Fund may not invest in other companies for the purpose of exercising control or management.	See fundamental policy 3 above.	BFA’s policy is substantially the same as the Fund’s policy.
2.	The Fund may not purchase puts or calls.	n/a	The Fund’s policy is not required by law.
3.	The Fund may not invest in securities of other investment companies, except as permitted by the Investment Company Act of 1940, as amended.	See non-fundamental policy 2 above.	BFA’s policy is substantially the same as the Fund’s policy.
4.	The Fund may not invest more than 15% of its total assets in securities that are not readily marketable.	n/a	Although not a stated policy of BFA, funds are generally restricted by law from investing more than 15% of assets in illiquid securities.

APPENDIX D

SUMMARY COMPARISON OF GOVERNING DOCUMENTS AND

DELAWARE AND MARYLAND STATE LAW

The following is only a discussion of certain principal differences between the governing documents for Endowments -- Bond Portfolio (the “Fund”), a series of Endowments, the business trust being reorganized (the “Trust”), and The Bond Fund of America, Inc., the acquiring Maryland corporation (“BFA”), and is not a complete description of the Trust’s or BFA’s governing documents. Further information about the Trust’s and BFA’s current organizational structure is contained in the Trust’s or BFA’s prospectus and governing documents, respectively, and in relevant state law.

Please note that shareholders of BFA are currently considering a proposal to reorganize BFA as a Delaware statutory trust. If such reorganization is approved BFA’s organizational structure will differ from the structure described below. Please see BFA’s prospectus and joint proxy statement for more details on the transaction. Both documents can be accessed by visiting americanfunds.com.

Organization and Capital Structure

The Trust is a Delaware business trust (a “DBT”). A DBT is an unincorporated association organized under the Delaware Statutory Trust Act (the “Delaware Statute”). The Trust’s operations are governed by its Trust Instrument (the “Trust Instrument”) and its By-Laws (the “Trust By-Laws”), and its business and affairs are managed under the supervision of its Board of Trustees.  The Fund’s shares of beneficial interest have a par value of $0.01 and the Trust Instrument authorizes the issuance of an unlimited number of shares by the board of Trustees. These shares will have the rights, powers and duties set forth in the Trust Instrument or as specified in resolutions of the Trust’s Board of Trustees.

BFA is a Maryland corporation. A Maryland corporation is an entity organized under the Maryland General Corporation Law (the “Maryland Statute”).  BFA’s operations are governed by its Articles of Incorporation (the “Articles”) and its By-Laws (the “BFA By-Laws”), as they may have been amended from time to time. The business and affairs of BFA are managed under the supervision of its Board of Directors.  The shares of common stock issued by BFA have a par value of $0.001.  The Articles authorize the issuance of 5,000,000,000 shares of common stock and authorize the shares be divided into separate and distinct series or classes.  These series and classes have the rights, powers and duties set forth in the Articles or as specified in resolutions of the Fund’s Board of Directors.

Governing Law

The Delaware Statute allows for a trust to be governed by its governing documents, but also provides specified default provisions.  Moreover, to the extent provisions in the Trust Instrument and Trust By-Laws are addressed by rules and principles established under Delaware corporation law and the laws governing other Delaware business entities (such as limited partnerships and limited liability companies), the Delaware courts may look to such other laws to help interpret provisions of the Trust Instrument and Trust By-Laws.

The Maryland Statute is a corporate statute with stringent requirements imposed upon corporations organized in that state. Under the Maryland Statute, certain fund transactions, such as mergers, certain reorganizations and liquidations, are subject to mandatory shareholder votes. The Maryland Statute also has certain record date, notice, quorum and adjournment provisions.

Meetings of Shareholders and Voting Rights

Neither the Trust Instrument nor the Trust By-Laws require the Fund to hold an annual shareholders’ meeting. Rather, the Board of Trustees decides whether and when shareholder meetings will be held.  The Trust By-Laws provide that notice of any shareholders’ meeting shall be mailed to shareholders at least 10 days and not more than 60 days before such meeting and that any shareholders’ meeting may be adjourned to a later date without further notice.  The Trust By-Laws also provide that the Board of Trustees may fix a record date for a shareholders’ meeting that is not more than 60 days prior to such meeting.

The Trust Instrument provides that one third of the outstanding shares entitled to vote shall constitute a quorum at a shareholders’ meeting. The Trust Instrument provides that shareholders are entitled to one vote for each whole share that they own, and a proportionate fractional vote for each fractional share that they hold. With respect to any matter that affects only the interests of some but not all series of the Trust, or where otherwise required by the 1940 Act, only the shareholders of the affected series shall be entitled to vote on the matter. When a quorum is present at a meeting, a majority of the shares voted shall decide any questions and a plurality of votes shall elect a trustee, except when a larger vote is required by any provision of the Trust’s governing documents or by applicable law.  The Trust Instrument provides that shareholders shall have the power to vote on: (1) the election and removal of trustees; (2) any investment advisory contract and; (3) such additional matters relating to the Fund as may be required by law or the Trust Instrument or the Trust Bylaws or any registration of the Trust with the SEC or the state or as the Trustees may consider necessary or desirable. There is no cumulative voting in the election of trustees under the Trust Instrument.  The Trust Instrument also provides that shareholders shall be entitled to vote on the termination or reorganization of the Trust or any of its series. The quorum requirement for a shareholder meeting regarding a termination or reorganization of the Trust or its series is a majority of shares entitled to vote on the matter. A termination or reorganization of the Trust or its series shall be approved by the vote of the lesser of (a) 67% or more of the voting securities present at a shareholder meeting, if the holders of more than 50% of the outstanding voting securities are present in person or by proxy, or (b) more than 50% of the outstanding voting securities.

Neither the Maryland Statute, the Articles nor the BFA By-Laws require BFA to hold an annual shareholders’ meeting. The BFA By-Laws provide that a shareholders’ meeting must be held when certain actions are required to be taken by shareholders under the 1940 Act, or at other times as may be determined by BFA’s Board of Directors.

The BFA By-Laws provide that, except when a larger quorum is required by applicable law, the holders of a majority of the stock of BFA entitled to vote at a shareholders’ meeting shall constitute a quorum. Each shareholder is entitled to one vote for each full share of stock that they hold, and a proportionate fractional vote for each fractional share of stock that they hold. The Articles also provide that shareholders of a particular series or class shall have exclusive voting rights with respect to any matter submitted to a vote of shareholders that affects only the holders of that series or class, in accordance with applicable law.

The BFA By-Laws provide that, in addition to those matters upon which shareholders are entitled to vote under relevant law, shareholders have the power to vote on any matter submitted to a vote of shareholders by the Board of Directors. Subject to any legal requirements for a different vote, in all matters other than the election of directors, shareholders may approve a proposal by a majority of votes cast. Directors are elected by a plurality of votes cast.

Liability of Shareholders

Consistent with the Delaware Act, the Trust Instrument provides that no Trust shareholder, as such, shall be subject to any personal liability whatsoever to any person in connection with the property, acts, obligations or affairs of the Trust.

BFA’s Articles provide that shareholders shall not be liable for and their property shall not be subject to claim, levy or other encumbrance on account of the debts and liabilities of BFA. The Maryland Statute provides that a shareholder of a Maryland corporation generally is not obligated to the Maryland corporation or its creditors with respect to the stock, except to the extent that the consideration for the stock has not been paid.

Liability among Series

The Delaware Statute does not contain statutory provisions addressing series or class liability with respect to multi-series or multi-class investment companies. The Trust Instrument provides that the assets and liabilities of a particular series shall be separate from any other series. The Trust Instrument requires that all persons extending credit to, contracting with, or having any claim against a particular series of a Fund shall look only to the assets of that particular series for payment of the credit, contract or claim.

BFA’s Articles provide that the assets belonging to each particular class or series of BFA shall be charged with the liabilities of that class or series.  The Articles also provide for the allocation of liabilities among the series or classes of stock, as applicable, by the Board of Directors if such liabilities are not readily identifiable as pertaining to a particular series. The Maryland Statute provides that, in the case of a Maryland corporation registered as an investment company under the 1940 Act that has established multiple series or classes of stock, liabilities of a particular series or class are only enforceable against the assets of that series or class, and not against the assets of the corporation generally or any other series or class of stock.

Dividends and Distributions

The Trust Instrument provides that the shareholders of any series or class of the Trust shall be entitled to receive dividends and distributions when, if and as declared by the Board of Trustees.

The Articles provide that dividends and distributions may be paid to shareholders of each series or class, as applicable, in such amounts as may be declared from time to time by the Board of Directors of BFA.

For BFA and the Trust, dividends and distributions may be paid in cash or in kind, and the respective Boards may retain such amounts as they may deem necessary or desirable for the conduct of BFA’s or the Trust’s affairs.

Election of Trustees; Terms; Removal

Under the Trust Instrument, each trustee of the Trust shall hold office during the existence of the Trust and until its termination unless the trustee dies, resigns, is removed, retires or is otherwise incapacitated. Under the Trust Instrument, any trustee may be removed, by the vote of two-thirds of the shares of the Trust at any meeting of the shareholders of the Trust or by action of two-thirds of the number of trustees of the Trust prior to such removal, specifying the date when such removal shall become effective.

The BFA By-Laws provide that each director of BFA shall serve until their resignation, death, disability, or until their successors are elected and qualify. The Articles provide that directors may be removed with or without cause by a vote of the Board of Directors in accordance with the By-Laws and the Maryland Statute.

There is no cumulative voting for the election of directors of BFA or trustees of the Trust. The governing instruments for the BFA and the Trust provide a mechanism for the respective Boards to fill vacancies.

Liability of Trustees and Officers; Indemnification

The Trust Instrument provides that a trustee when acting in such capacity shall not be personally liable to any person other than the Trust or a beneficial owner for any act, omission or obligation of the Trust or any trustee. It further provides that a trustee shall not be liable for any act or omission or any conduct whatsoever in his or her capacity as trustee, except by reason of his or her willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

The Trust Instrument requires the Trust to indemnify, to the fullest extent permitted under the Trust Instrument and applicable law, each of its trustees and officers, and provides that it may indemnify its employees and agents, against all liabilities and expenses actually and reasonably incurred in connection with any proceeding arising out of or in connection with his or her service to the Trust. It provides that there shall be no indemnification for any action, suit or other proceeding brought by reason of a person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

The Maryland Statute provides that a director of a Maryland corporation who performs his or her duties in accordance with certain standards of conduct is generally immune from liability. The standards of conduct set forth in the Maryland Statute provide that a director shall perform his or her duties: (1) in good faith; (2) in a manner he or she reasonably believes to be in the best interests the corporation; and (3) with the care that an ordinarily prudent person in a like position would use under similar circumstances.

BFA’s Articles specifically provide that nothing in the Articles or in the BFA By-Laws shall be deemed to protect any director or officer of BFA against any liability to BFA or to its security holders to which he would otherwise be subject by reason of willful malfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

BFA’s Articles and BFA’s By-Laws provide that BFA shall indemnify its directors, officers and representatives to the extent permitted by law. The Maryland Statute authorizes indemnification of directors and officers of a Maryland corporation with regard to any threatened, pending or completed legal action, suit or proceeding. Under the Maryland Statute, indemnification is mandatory if a director or officer has been successful on the merits or otherwise in the defense of any proceeding covered by the Maryland Statute. Mandatory indemnification covers all reasonable expenses incurred. Under the Maryland Statute, indemnification is permissive unless it is established that: (1) the act or omission of the director or officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; (2) the director or officer actually received an improper personal benefit in money, property or services; or (3) in the case of a criminal proceeding, the director or officer had reasonable cause to believe his or her conduct was unlawful. However, if the proceeding was a derivative action, no indemnification will be made if the individual is adjudged to be liable to the corporation unless approved by a court, in which case indemnification is limited to expenses.

Preemptive, Dissenter’s and Other Rights

The Trust Instrument provides that no shareholder shall have any preemptive or other right to subscribe to any additional shares or other securities issued by the Trust or the trustees or any series thereof. Shareholders shall have no right to demand payment for their shares or any other rights of dissenting shareholders in a transaction that normally gives rise to such rights.

No shareholder of BFA will be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of securities of BFA.

Amendments to Organizational Documents

The Trust Instrument may be amended or restated at any time the Trust’s Board of Trustees. Shareholders have the right to vote on any amendment that would affect their right to vote, to change the amendment provisions of the Trust Instrument that is required by law or the Trust’s registration statement and on any amendment submitted to them by the Trustees.  The Trust’s By-Laws may be amended, restated or repealed or new By-Laws may be adopted by a vote of the majority of the shares outstanding and entitled to vote or by a vote of the majority of the Trust’s Board of Trustees, provided a shareholder vote is not required by law.

The Articles may be amended at any time by a vote of a majority of BFA’s Board of Directors and, if legally required, by approval of the amendment by shareholders. BFA’s By-Laws may be amended, or new by-laws may be adopted, by a vote of the majority of the Board of Directors. BFA’s By-Laws also provide that they may be amended by a vote of the majority of the shares of stock of BFA present and voting at a meeting of the shareholders of BFA.

Inspection Rights

The trustees of the Trust shall from time to time determine whether, and to what extent, and at what time and places, and under what conditions and regulations the accounts and books of the Trust shall be open for inspection of the shareholders. No shareholder shall have any right of inspecting any account or book or document of the Trust except as conferred by law or authorized by the Trustees or by resolution of the shareholders.

A shareholder of a Maryland Corporation may, during normal business hours, inspect and copy the by-laws, minutes, annual reports and certain other corporate documents on file at the corporation’s principal office. In addition, the Maryland Statute provides that any person who has held at least five percent (5%) of any class of a corporation’s stock for at least six (6) months is entitled to request certain other documents relating to the corporation’s affairs. The corporation shall prepare and make such information available within twenty (20) days after a qualifying shareholder request is made.

Dissolution and Termination

Under the Trust Instrument, the Trust’s the Board of Trustees may, subject to a vote of the majority of the Trust’s shareholders, or a majority of the shareholders of any series affected by the matter, sell, convey, or convert into money all or substantially all of the assets of the Trust or a series thereof. The Trust Instrument provides that upon making reasonable provision for the payment of all liabilities the Trustees shall distribute the remaining proceeds or assets of each series ratably among shareholders of the series. The Trust Instrument further provides that upon completion of the distribution of remaining proceeds or assets the Trust or series shall terminate and the Trustees and the Trust shall be discharged of any and all further liabilities and duties and the right, title and interest of all parties with respect to the Trust or series shall be cancelled and discharged.

The Articles provide that BFA shall have perpetual existence. Under the Maryland Statute, the board of directors of a Maryland corporation may dissolve the corporation by resolution of a majority of the board of directors that declares that the dissolution is advisable. A vote of a majority of all votes entitled to be cast on the proposed dissolution is required to approve the dissolution. In addition, the Maryland Statute provides that shareholders of a corporation entitled to cast at least twenty-five percent (25%) of all the votes that may be cast in the election of directors may petition a court of equity for an involuntary dissolution of the corporation on certain enumerated grounds set forth in the Maryland Statute (including, among other things, failure of the shareholders to elect directors).

Derivative Actions

Neither the Trust Instrument nor the Trust’s By-Laws contain specific provisions with regard to derivative actions. Under the Delaware Statute, a shareholder may bring a derivative action if trustees with authority to do so have refused to bring the action or if a demand upon the trustees to bring the action is not likely to succeed. The Delaware Statute provides that a shareholder may bring a derivative action only if the shareholder is a shareholder at the time the action is brought and (1) was a shareholder at the time of the transaction complained about, or (2) acquired the status of shareholder by operation of law or the trust’s governing instrument from a person who was a shareholder at the time of the transaction.  Under the Delaware Statute, a shareholder’s right to bring a derivative action may also be subject to additional standards and restrictions set forth in the trust’s governing instrument.

Neither the Articles nor BFA’s By-Laws contain specific provisions with regard to derivative actions. Maryland courts recognize derivative actions even in the absence of a specific statute or court rule. Under Maryland law, in order to bring a derivative action, a stockholder (or his predecessor if he became a stockholder by operation of law) must be a stockholder: (1) at the time of the acts or omissions complained about; (2) at the time the action is brought and (3) until the completion of the litigation. A derivative action may be brought by a stockholder if a demand upon the board of directors to bring the action is improperly refused or if a request upon the board of directors would be futile.

PART B

STATEMENT OF ADDITIONAL INFORMATION

RELATING TO THE ACQUISITION OF ASSETS OF ENDOWMENTS -- BOND PORTFOLIO

BY AND IN EXCHANGE FOR CLASS A SHARES OF COMMON STOCK OF

THE BOND FUND OF AMERICA, INC.

333 South Hope Street

Los Angeles, California 90071

800/421-0180

This Statement of Additional Information, relating specifically to the proposed acquisition of all of the assets of Endowments -- Bond Portfolio (the “Fund”) by The Bond Fund of America, Inc. (“BFA”), consists of this cover page and the following described documents, each of which is incorporated by reference herein:

The Statement of Additional Information of Endowments dated October 1, 2009;

The Statement of Additional Information of BFA dated March 1, 2009, as supplemented to date; and

The Annual Report of Endowments for the year ended July 31, 2009, and the Semi-Annual Report of Endowments for the six months ended January 31, 2009.

This Statement of Additional Information is not a prospectus.  A Combined Proxy Statement/Prospectus dated December 2, 2009, relating to the above-referenced transaction has been filed with the Securities and Exchange Commission and may be obtained, without charge, by writing to the secretary of the Fund at One Market, Steuart Tower San Francisco, California 94120-7650 or the secretary of BFA at 333 South Hope Street, Los Angeles, California 90071or by calling American Funds Service Company, toll free, at 1-800-421-0180.  This Statement of Additional Information relates to, and should be read in conjunction with, such Combined Proxy Statement/Prospectus, and has been incorporated by reference into the Combined Proxy Statement/Prospectus.

The date of this Statement of Additional Information is December 2, 2009.

[logo – American Funds®]

Bond Fund of AmericaSM

Investment portfolio

June 30, 2009

 unaudited

Bonds & notes — 93.82%	Principal amount (000)			Value (000)
CORPORATE BONDS & NOTES — 33.74%
FINANCIALS — 9.92%
Diversified financials — 2.84%
Countrywide Home Loans, Inc., Series M, 4.125% 2009	$	23,575		$	23,653
Countrywide Financial Corp., Series A, 4.50% 2010		15,540			15,388
Countrywide Financial Corp. 6.25% 2010	$	A7,700			6,086
Countrywide Financial Corp., Series B, 1.426% 20121	$	30,000			27,000
Countrywide Financial Corp., Series B, 5.80% 2012		88,973			89,587
Bank of America Corp., Series L, 7.375% 2014		2,000			2,068
Bank of America Corp. 5.75% 2017		10,000			8,919
Bank of America Corp. 6.10% 2017		14,443			12,746
Bank of America Corp. 5.65% 2018		23,810			21,075
Merrill Lynch & Co., Inc. 6.875% 2018		10,000			9,270
Bank of America Corp. 7.625% 2019		17,520			17,628
Fleet Capital Trust II 7.92% 2026		6,340			5,209
BankAmerica Capital II, Series 2, 8.00% 2026		4,425			3,680
MBNA Capital A, Series A, 8.278% 2026		7,500			6,332
NB Capital Trust IV 8.25% 2027		7,612			6,405
CIT Group Inc. 6.875% 2009		15,000			14,351
CIT Group Inc. 4.25% 2010		33,000			29,631
CIT Group Inc. 1.353% 20111		32,500			22,118
CIT Group Inc. 1.17% 20121		6,080			3,590
CIT Group Inc. 5.40% 2012		10,550			7,179
CIT Group Inc. 7.625% 20122		18,275			12,975
CIT Group Inc. 7.75% 2012		2,455			1,712
CIT Group Inc. 5.40% 2013		9,330			5,787
CIT Group Inc. 5.00% 2014		1,260			749
CIT Group Inc. 5.125% 2014		3,095			1,826
CIT Group Inc. 5.65% 2017		4,089			2,310
CIT Group Inc. 12.00% 20183		19,999			9,404
CIT Group Inc. 5.80% 2036		1,574			847
CIT Group Inc. 6.10% 20671		22,375			8,497
JPMorgan Chase & Co. 4.891% 20151		49,025			42,663
JPMorgan Chase Bank NA 5.875% 2016		25,730			24,833
JPMorgan Chase Bank NA 6.00% 2017		22,580			22,013
JPMorgan Chase Capital XXV, Series Y, 6.80% 2037		14,878			12,832
JPMorgan Chase Capital XX, Series T, 6.55% 20661		15,962			12,722
Capital One Financial Corp. 0.93% 20091		30,000			29,892
Capital One Financial Corp. 5.70% 2011		12,000			12,059
Capital One Financial Corp. 7.375% 2014		21,000			21,677
Capital One Financial Corp. 6.15% 2016		10,000			8,863
Capital One Capital III 7.686% 20361		50,065			35,797
International Lease Finance Corp., Series O, 4.55% 2009		8,125			7,882
International Lease Finance Corp. 5.00% 2012		13,500			10,448
International Lease Finance Corp., Series R, 5.40% 2012		10,000			7,806
International Lease Finance Corp., Series R, 5.625% 2013		20,000			15,122
International Lease Finance Corp., Series R, 6.375% 2013		2,000			1,523
International Lease Finance Corp., Series R, 6.625% 2013		25,500			19,645
International Lease Finance Corp., Series R, 5.65% 2014		16,135			11,704
Goldman Sachs Group, Inc. 6.25% 2017		4,555			4,514
Goldman Sachs Group, Inc. 5.95% 2018		3,540			3,439
Goldman Sachs Group, Inc. 6.15% 2018		13,750			13,409
Goldman Sachs Group, Inc. 7.50% 2019		42,280			45,286
Citigroup Inc. 6.125% 2017		25,825			22,678
Citigroup Inc. 6.125% 2018		2,875			2,519
Citigroup Capital XXI 8.30% 20771		41,325			32,299
SLM Corp., Series A, 4.50% 2010		38,000			35,919
SLM Corp., Series A, 1.322% 20111		8,700			7,053
SLM Corp., Series A, 5.40% 2011		5,000			4,499
SLM Corp., Series A, 5.375% 2013		3,000			2,508
SLM Corp., Series A, 1.392% 20141		6,900			4,802
General Motors Acceptance Corp. 7.25% 20113		7,179			6,641
General Motors Acceptance Corp. 6.625% 20123		1,899			1,605
General Motors Acceptance Corp. 6.875% 20123		7,782			6,576
General Motors Acceptance Corp. 7.00% 20123		16,383			14,057
General Motors Acceptance Corp. 7.50% 20133		10,426			8,184
General Motors Acceptance Corp. 2.868% 20141,3		3,070			2,153
General Motors Acceptance Corp. 6.75% 20143		1,535			1,220
General Motors Acceptance Corp. 8.00% 20183		9,577			6,177
Morgan Stanley 6.00% 2014		28,400			28,784
Morgan Stanley, Series F, 5.95% 2017		10,400			9,996
Morgan Stanley 10.09% 2017	BRL3,000				1,281
American Express Co. 6.15% 2017	$	19,185			17,722
American Express Co. 8.15% 2038		4,600			4,877
American Express Co. 6.80% 20661		6,321			4,557
Lehman Brothers Holdings Inc., Series I, 3.018% 20121,4		3,300			503
Lehman Brothers Holdings Inc., Series G, 4.80% 20144		10,395			1,585
Lehman Brothers Holdings Inc., Series I, 6.20% 20144		42,650			6,504
Lehman Brothers Holdings Inc., Series H, 5.50% 20164		765			117
Lehman Brothers Holdings Inc., Series I, 6.875% 20184		81,508			13,449
Lazard Group LLC 7.125% 2015		19,385			17,830
Lazard Group LLC 6.85% 2017		1,775			1,633
Northern Trust Corp. 5.50% 2013		5,450			5,783
Northern Trust Corp. 4.625% 2014		8,475			8,718
Northern Trust Corp. 5.85% 20175		3,750			3,905
Charles Schwab Corp., Series A, 6.375% 2017		12,490			12,997
Schwab Capital Trust I 7.50% 20371		4,485			3,749
ING Bank NV 5.50% 2012	€3,750				5,370
ING Groep NV 5.775% (undated)1	$	15,500			9,078
iStar Financial, Inc. 6.00% 2010		3,805			2,626
iStar Financial, Inc. 8.625% 2013		5,000			2,602
Capmark Financial Group Inc. 7.875% 2012		9,410			2,446
Capmark Financial Group Inc. 8.30% 2017		6,090			1,437
Bank of New York Mellon Corp., Series G, 4.95% 2012		3,500			3,704
Credit Suisse Group AG 5.50% 2014		3,000			3,120
E*TRADE Financial Corp. 7.875% 2015		2,770			2,202
Advanta Capital Trust I, Series B, 8.99% 2026		12,500			2,094
					1,077,710
Banks — 2.79%
Independence Community Bank Corp. 4.90% 2010		12,000			11,724
Sovereign Bancorp, Inc. 2.738% 20131		3,000			2,266
Santander Issuances, SA Unipersonal 0.969% 20161,3		21,500			17,976
Santander Issuances, SA Unipersonal 5.805% 20161,3		76,100			61,239
Sovereign Bancorp, Inc. 8.75% 2018		70,920			69,963
Santander Perpetual, SA Unipersonal 6.671% (undated)1,3		21,800			16,156
Abbey National PLC 7.50% (undated)1	£	3,270			3,997
Bayerische Hypo- und Vereinsbank AG 6.00% 2014	€2,155				3,018
UniCredito Italiano SpA 5.584% 20171,3	$	60,690			52,908
UniCredito Italiano SpA 6.00% 20173		67,825			60,845
HVB Funding Trust I 8.741% 20313		5,555			3,111
HVB Funding Trust III 9.00% 20313		16,038			8,981
PNC Funding Corp. 1.239% 20141		28,000			25,300
PNC Funding Corp. 5.40% 2014		10,000			10,114
PNC Bank NA 6.875% 2018		5,200			5,149
PNC Funding Corp. 6.70% 2019		15,000			15,499
PNC Funding Corp., Series II, 6.113% (undated)1,3		18,300			9,513
National City Preferred Capital Trust I 12.00% (undated)1		55,000			57,475
Resona Bank, Ltd. 3.75% 20151	€9,740				12,976
Resona Bank, Ltd 4.125% (undated)1		5,735			5,954
Resona Bank, Ltd. 5.85% (undated)1,3	$	90,833			68,669
Scotland International Finance No. 2 BV 4.25% 20133		7,744			6,442
HBOS PLC 6.75% 20183		63,135			47,733
HBOS PLC 6.00% 20333		5,465			3,273
HBOS Capital Funding LP 6.071% (undated)1,3		15,075			5,499
Lloyds Banking Group PLC 6.657% preference shares (undated)1,3		15,991			5,765
Fifth Third Bancorp 8.25% 2038		30,250			23,209
Fifth Third Capital Trust IV 6.50% 20671		67,680			41,268
Standard Chartered PLC 5.50% 20143		4,000			4,087
Standard Chartered Bank 6.40% 20173		52,710			47,703
Standard Chartered Bank 5.375% (undated)1	£	150			180
HSBC Finance Corp. 5.70% 2011	$	15,000			15,144
HSBC Finance Corp. 0.979% 20121		20,000			17,608
HSBC Finance Corp. 1.457% 20121		15,000			13,268
Royal Bank of Scotland Group PLC 5.00% 2013		2,605			2,148
Royal Bank of Scotland Group PLC 5.00% 2014		11,352			9,085
Royal Bank of Scotland Group PLC 5.05% 2015		10,638			8,348
Royal Bank of Scotland PLC 9.625% 2015	£	200			327
Royal Bank of Scotland PLC 6.934% 2018	€12,780				15,092
Royal Bank of Scotland PLC 5.00% (undated)1	£	200			199
Wells Fargo Bank, National Assn. 4.75% 2015	$	19,035			18,071
Wells Fargo & Co. 5.625% 2017		8,500			8,381
Wells Fargo Bank, National Assn. 5.95% 2036		7,000			6,284
Wells Fargo Capital XIII 7.70% (undated)1		600			498
Wells Fargo & Co. 7.98% (undated)1		1,625			1,351
Société Générale 5.75% 20163		36,515			33,621
Paribas, New York Branch 6.95% 2013		11,550			12,038
BNP Paribas 4.80% 20153		305			244
BNP Paribas 5.125% 20153		12,070			11,301
BNP Paribas 5.75% 2022	£	415			663
SunTrust Banks, Inc. 5.25% 2012	$	1,885			1,922
SunTrust Banks, Inc. 6.00% 2017		940			852
SunTrust Banks, Inc. 7.25% 2018		21,200			20,868
Korea Development Bank 5.30% 2013		13,635			13,439
Korea Development Bank 8.00% 2014		9,115			9,879
United Overseas Bank Ltd. 5.375% 20191,3		22,250			21,252
UnionBanCal Corp. 5.25% 2013		2,040			1,886
Union Bank of California, NA 5.95% 2016		17,415			16,133
Silicon Valley Bank 5.70% 2012		18,000			16,759
HSBK (Europe) BV 7.75% 2013		9,700			7,178
HSBK (Europe) BV 7.75% 20133		305			226
HSBK (Europe) BV 7.25% 20173		10,460			6,067
Zions Bancorporation 5.50% 2015		9,063			6,532
Zions Bancorporation 6.00% 2015		8,442			6,043
DBS Bank Ltd. 1.704% 20211,3		12,500			9,719
Banco Santander-Chile 5.375% 20143		9,035			8,605
Northern Rock PLC 5.60% (undated)1,3		13,815			2,832
Northern Rock PLC 6.594% (undated)1,3		27,465			5,630
Barclays Bank PLC 6.05% 20173		4,600			3,995
Barclays Bank PLC 6.375% (undated)1	£	240			294
Barclays Bank PLC 7.70% (undated)1,3	$	2,000			1,666
Sumitomo Mitsui Banking Corp. 8.00% 2012		3,500			3,794
Bergen Bank 1.938% (undated)1		5,000			2,824
Credit Agricole SA 6.637% (undated)1,3		4,535			2,744
Allied Irish Banks, PLC 5.625% 20301	£	250			222
Allied Irish Banks Ltd. 1.563% (undated)1	$	7,000			2,095
Christiana Bank Og Kreditkasse 1.625% (undated)1		4,000			1,880
Norinchukin Finance (Cayman) Ltd. 5.625% 20161	£	205			319
Skandinaviska Enskilda Banken AB 5.00% (undated)1		78			93
Commerzbank AG 6.625% 2019		70			87
					1,057,498
Insurance — 2.41%
Liberty Mutual Group Inc. 6.50% 20353	$	37,810			23,036
Liberty Mutual Group Inc. 7.50% 20363		37,485			25,890
Liberty Mutual Group Inc., Series A, 7.80% 20871,3		20,488			11,494
Liberty Mutual Group Inc., Series C, 10.75% 20881,3		88,940			64,144
ZFS Finance (USA) Trust II 6.45% 20651,3		29,500			22,715
ZFS Finance (USA) Trust V 6.50% 20671,3		87,675			64,880
Prudential Financial, Inc., Series D, 5.10% 2011		3,375			3,351
Prudential Holdings, LLC, Series C, 8.695% 20233,6		57,035			54,683
Prudential Financial, Inc. 8.875% 20681		15,000			12,672
Metropolitan Life Global Funding I, 5.125% 20133		18,310			18,639
MetLife Capital Trust IV 7.875% 20671,3		5,000			4,060
MetLife Capital Trust X 9.25% 20681,3		35,550			31,712
Lincoln National Corp. 5.65% 2012		19,250			18,698
Lincoln National Corp. 7.00% 20661		53,178			34,034
ACE INA Holdings Inc. 5.875% 2014		18,775			19,409
ACE INA Holdings Inc. 5.70% 2017		4,000			3,989
ACE INA Holdings Inc. 5.80% 2018		7,000			6,986
ACE Capital Trust II 9.70% 2030		12,423			11,336
ACE INA Holdings Inc. 6.70% 2036		5,980			5,939
CNA Financial Corp. 5.85% 2014		11,500			9,244
CNA Financial Corp. 6.50% 2016		24,625			19,981
CNA Financial Corp. 7.25% 2023		24,145			17,335
Catlin Insurance Ltd. 7.249% (undated)1,3		70,755			39,671
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		17,500			18,110
Allstate Corp., Series B, 6.125% 20671		28,300			21,084
Monumental Global Funding 5.50% 20133		16,270			15,711
Monumental Global Funding III 5.25% 20143		21,500			20,299
AEGON NV 6.125% 2031	£	1,730			2,115
American General Finance Corp., Series I, 5.85% 2013	$	27,500			15,787
American General Finance Corp., Series I, 5.40% 2015		20,000			10,784
American General Finance Corp., Series J, 6.90% 2017		20,000			10,844
Chubb Corp. 5.75% 2018		6,500			6,754
Chubb Corp. 6.50% 2038		19,850			21,592
Chubb Corp. 6.375% 20671		7,150			5,728
Hartford Financial Services Group, Inc. 5.25% 2011		5,625			5,439
Hartford Financial Services Group, Inc. 6.30% 2018		24,000			19,547
Hartford Financial Services Group, Inc. 8.125% 20681		10,000			7,010
New York Life Global Funding 5.25% 20123		15,300			16,213
New York Life Global Funding 4.65% 20133		9,170			9,309
Nationwide Mutual Insurance 5.81% 20241,3		19,085			11,219
Nationwide Mutual Insurance Co. 8.25% 20313		15,675			12,602
Nationwide Mutual Insurance Co. 6.60% 20343		2,000			1,205
Nationwide Financial Services, Inc. 6.75% 20671		40,430			23,937
Principal Life Insurance Co. 5.30% 2013		18,000			17,974
Principal Life Global Funding I 4.40% 20103		16,600			16,484
AXA SA 6.463% (undated)1,3		25,000			15,774
Protective Life Insurance Co., Series 2005-C, 4.85% 2010		15,000			14,770
Assurant, Inc. 5.625% 2014		16,000			14,285
MassMutual Global Funding II, Series 2002-1, 3.50% 20103		10,000			9,856
Jackson National Life Global 5.375% 20133		10,000			9,634
United Energy Distribution Pty Ltd., AMBAC insured, 4.70% 20113		10,000			9,606
Genworth Global Funding Trust, Series 2007-C, 5.25% 2012		10,000			9,409
Loews Corp. 6.00% 2035		8,000			6,815
Assured Guaranty US Holdings Inc., Series A, 6.40% 20661		7,425			3,791
TIAA Global Markets 4.95% 20133		3,275			3,372
UnumProvident Finance Co. PLC 6.85% 20153		2,839			2,343
					913,300
Real estate — 1.58%
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 4.375% 20103		44,950			44,010
Westfield Group 5.40% 20123		30,035			28,843
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20143		35,860			32,297
Westfield Group 7.50% 20143		12,500			12,407
Westfield Group 5.70% 20163		19,240			16,683
WT Finance (Australia) Pty Ltd., Westfield Europe Finance PLC, and WEA Finance LLC 5.50% 2017	£	3,780			5,130
Westfield Group 7.125% 20183	$	38,060			35,380
Kimco Realty Corp., Series C, 4.82% 2011		7,500			7,280
Kimco Realty Corp. 6.00% 2012		20,570			19,498
Kimco Realty Corp., Series C, 4.82% 2014		12,000			10,203
Kimco Realty Corp., Series C, 4.904% 2015		6,335			5,387
Kimco Realty Corp., Series C, 5.783% 2016		19,500			16,530
Kimco Realty Corp. 5.70% 2017		28,450			23,623
PLD International Finance LLC 4.375% 2011	€7,700				10,062
ProLogis 5.625% 2015	$	13,035			10,348
ProLogis 5.625% 2016		745			573
ProLogis 5.75% 2016		27,620			21,799
ProLogis 6.625% 2018		48,130			37,957
Simon Property Group, LP 5.60% 2011		8,810			8,915
Simon Property Group, LP 5.00% 2012		10,000			9,975
Simon Property Group, LP 5.75% 2012		4,000			4,067
Simon Property Group, LP 5.75% 2015		3,250			2,997
Simon Property Group, LP 5.25% 2016		3,610			3,211
Simon Property Group, LP 6.10% 2016		4,750			4,439
Simon Property Group, LP 5.875% 2017		17,000			15,632
Simon Property Group, LP 6.125% 2018		23,950			22,315
Simon Property Group, LP 10.35% 2019		4,495			5,115
Hospitality Properties Trust 6.85% 2012		2,000			1,799
Hospitality Properties Trust 6.75% 2013		17,845			15,710
Hospitality Properties Trust 5.125% 2015		6,665			5,295
Hospitality Properties Trust 6.30% 2016		26,223			21,030
Hospitality Properties Trust 5.625% 2017		8,100			6,055
Hospitality Properties Trust 6.70% 2018		33,515			25,705
Brandywine Operating Partnership, LP 5.75% 2012		27,110			24,526
Brandywine Operating Partnership, LP 5.40% 2014		3,000			2,332
Rouse Co. 3.625% 20094		5,200			3,302
Rouse Co. 7.20% 20124		17,475			11,184
Rouse Co. 5.375% 20134		7,250			4,604
Rouse Co. 6.75% 20133,4		3,750			2,381
ERP Operating LP 5.25% 2014		2,000			1,901
ERP Operating LP 6.584% 2015		13,040			12,939
ERP Operating LP 5.75% 2017		1,530			1,429
ERP Operating LP 7.125% 2017		5,000			5,054
Developers Diversified Realty Corp. 5.375% 2012		5,782			3,911
Developers Diversified Realty Corp. 5.50% 2015		17,500			11,173
Realogy Corp., Letter of Credit, 3.37% 20131,6,7		241			175
Realogy Corp., Term Loan B, 4.177% 20131,6,7		861			626
Realogy Corp. 10.50% 2014		17,985			7,868
Realogy Corp. 11.75% 20141,8		2,774			888
Realogy Corp. 12.375% 2015		2,000			570
Weingarten Realty Investors, Series A, 4.857% 2014		6,080			4,853
Host Marriott, LP, Series M, 7.00% 2012		2,675			2,595
Host Hotels & Resorts, LP, Series S, 6.875% 2014		300			271
Host Hotels & Resorts LP 9.00% 20173		1,800			1,723
Federal Realty Investment Trust 4.50% 2011		3,500			3,313
Plum Creek Timberlands, LP 5.875% 2015		1,500			1,270
					599,158
Automobiles & components — 0.30%
Ford Motor Credit Co. 7.375% 2009		26,725			26,498
Ford Motor Credit Co. 7.875% 2010		10,000			9,501
Ford Motor Credit Co. 8.625% 2010		425			399
Ford Motor Credit Co. 9.75% 20101		5,000			4,791
Ford Motor Credit Co. 5.879% 20111		20,275			17,614
Ford Motor Credit Co. 7.25% 2011		24,000			20,769
Ford Motor Credit Co. 7.375% 2011		2,200			1,992
Ford Motor Credit Co. 3.889% 20121		8,825			6,839
Ford Motor Credit Co. 7.80% 2012		900			775
Ford Motor Credit Co. 8.00% 2016		2,000			1,531
American Honda Finance Corp. 5.125% 20103		21,850			21,566
					112,275
CONSUMER DISCRETIONARY — 4.48%
Media — 2.89%
Comcast Cable Communications, Inc. 6.75% 2011		520			550
Tele-Communications, Inc. 9.80% 2012		17,500			19,711
Comcast Cable Communications, Inc. 7.125% 2013		14,625			16,101
Tele-Communications, Inc. 7.875% 2013		7,500			8,541
Comcast Corp. 5.85% 2015		29,025			30,119
Comcast Corp. 6.50% 2015		9,000			9,557
Comcast Corp. 6.30% 2017		24,500			25,972
Comcast Corp. 5.875% 2018		45,765			46,469
Comcast Corp. 5.65% 2035		4,745			4,360
Comcast Corp. 6.45% 2037		7,250			7,168
Comcast Corp. 6.95% 2037		15,520			16,233
Comcast Corp. 6.40% 2038		11,800			11,589
Time Warner Inc. 1.15% 20091		8,510			8,490
Time Warner Inc. 5.50% 2011		1,675			1,731
AOL Time Warner Inc. 6.75% 2011		3,815			3,994
AOL Time Warner Inc. 6.875% 2012		22,500			24,085
Time Warner Inc. 5.875% 2016		56,140			55,408
Time Warner Companies, Inc. 7.25% 2017		1,600			1,650
Time Warner Companies, Inc. 7.57% 2024		12,340			12,107
AOL Time Warner Inc. 7.625% 2031		31,935			31,127
Time Warner Inc. 6.50% 2036		45,485			39,949
Time Warner Cable Inc. 5.40% 2012		8,000			8,274
Time Warner Cable Inc. 6.20% 2013		4,500			4,746
Time Warner Cable Inc. 7.50% 2014		22,860			25,208
Time Warner Cable Inc. 8.25% 2014		40,000			44,879
Time Warner Cable Inc. 6.75% 2018		60,500			63,121
Time Warner Cable Inc. 8.25% 2019		21,560			24,504
Time Warner Cable Inc. 8.75% 2019		3,950			4,609
News America Holdings Inc. 8.00% 2016		1,000			1,066
News America Inc. 7.25% 2018		2,250			2,274
News America Holdings Inc. 8.25% 2018		15,290			16,682
News America Inc. 6.90% 20193		54,975			57,386
News America Inc. 6.65% 2037		38,900			35,096
News America Inc. 7.85% 20393		3,500			3,741
Thomson Reuters Corp. 6.50% 2018		74,120			77,270
Cox Communications, Inc. 7.875% 2009		1,000			1,006
Cox Communications, Inc. 4.625% 2010		900			904
Cox Communications, Inc. 7.125% 2012		7,000			7,530
Cox Communications, Inc. 5.45% 2014		17,045			16,940
Cox Communications, Inc. 9.375% 20193		26,205			31,606
Cox Communications, Inc. 8.375% 20393		6,555			7,330
CCH II, LLC and CCH II Capital Corp. 10.25% 2010		10,000			10,600
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 20123		10,150			9,820
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013		13,325			12,725
Charter Communications Operating, LLC, Term Loan B, 4.25% 20141,6,7		12,017			10,860
Charter Communications Operating, LLC, Term Loan B, 7.25% 20141,6,7		1,975			1,947
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.375% 20143		1,575			1,516
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 10.875% 20143		15,375			15,990
CCH I, LLC and CCH I Capital Corp. 11.00% 20154		950			119
Univision Communications Inc. 7.85% 2011		7,055			6,984
Univision Communications, Inc., First Lien Term Loan B, 2.56% 20141,6,7		11,205			8,428
Univision Communications Inc. 12.00% 20143		4,555			4,498
Univision Communications Inc. 10.50% 20151,3,8		35,720			20,986
NTL Cable PLC 8.75% 2014		10,725			10,511
NTL Cable PLC 8.75% 2014	€1,000				1,318
NTL Cable PLC 9.50% 2016	$	15,200			15,048
Warner Music Group 0%/9.50% 20149		125			99
Warner Music Group 7.375% 2014		4,725			4,022
Warner Music Group 9.50% 20163		13,175			13,175
AMC Entertainment Inc. 8.00% 2014		8,125			6,967
AMC Entertainment Inc., Series B, 11.00% 2016		2,500			2,431
AMC Entertainment Inc. 8.75% 20193		5,000			4,725
Quebecor Media Inc. 7.75% 2016		8,950			8,156
Quebecor Media Inc. 7.75% 2016		5,670			5,167
TL Acquisitions, Inc., Term Loan B, 2.81% 20141,6,7		5,586			4,700
Thomson Learning 10.50% 20153		9,450			7,702
CBS Corp. 8.875% 2019		12,400			12,105
Viacom Inc. 5.75% 2011		2,500			2,561
Viacom Inc. 6.25% 2016		7,500			7,399
CSC Holdings, Inc. 8.50% 20143		3,825			3,811
CSC Holdings, Inc. 8.625% 20193		3,700			3,645
Kabel Deutschland GmbH 10.625% 2014		7,150			7,409
American Media Operation 9.00% 20133,8		1,149			577
American Media Operation 14.00% 20131,3,8		16,136			6,495
LBI Media, Inc. 8.50% 20173		11,390			6,051
Regal Cinemas Corp., Series B, 9.375% 2012		6,125			5,964
Cinemark USA, Inc., Term Loan B, 2.21% 20131,6,7		3,331			3,153
Cinemark USA, Inc. 8.625% 20193		2,000			1,985
WPP Finance (UK) 8.00% 2014		5,000			5,083
UPC Holding BV 9.875% 20183		5,000			4,781
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014		4,300			3,698
Mediacom LLC and Mediacom Capital Corp. 9.50% 2013		450			431
Mediacom Broadband LLC and Mediacom Broadband Corp. 8.50% 2015		3,520			3,186
Local T.V. Finance LLC, Term Loan B, 2.31% 20131,6,7		994			631
Local T.V. Finance LLC 10.00% 20151,3,8		16,868			2,952
Fox Acquisition LLC, Term Loan B, 7.25% 20151,6,7		847			617
Fox Acquisition LLC 13.375% 20163		6,165			2,820
Liberty Media Corp. 8.25% 2030		3,550			2,463
Radio One, Inc. 6.375% 2013		7,380			2,260
Dex Media West LLC, Dex Media West Finance Co., Series B, 8.50% 20104		3,000			2,175
Dex Media, Inc., Series B, 8.00% 20134		525			81
Walt Disney Co. 5.625% 2016		2,000			2,152
Vidéotron Ltée 6.875% 2014		1,000			930
Vidéotron Ltée 6.375% 2015		1,000			901
WDAC Intermediate Corp. 8.375% 20143		2,425			534
WDAC Intermediate Corp. 8.50% 2014	€500				193
Carmike Cinemas, Inc., Delayed Draw, Term Loan, 5.19% 20121,6,7	$	412			382
Young Broadcasting Inc. 10.00% 20114		13,317			33
					1,095,035
Retailing — 0.78%
Macy’s Retail Holdings, Inc. 8.875% 2015		25,770			24,966
Federated Retail Holdings, Inc. 5.90% 2016		71,875			58,639
Federated Retail Holdings, Inc. 6.375% 2037		7,700			5,248
Staples, Inc. 7.75% 2011		16,265			17,207
Staples, Inc. 9.75% 2014		27,970			31,269
Nordstrom, Inc. 6.75% 2014		29,360			30,552
Michaels Stores, Inc., Term Loan B, 2.625% 20131,6,7		8,258			6,586
Michaels Stores, Inc. 10.00% 2014		16,125			13,626
Michaels Stores, Inc. 0%/13.00% 2016 (9)		1,110			461
Toys "R" Us, Inc. 7.625% 2011		13,115			12,197
Toys "R" Us-Delaware, Inc., Term Loan B, 4.565% 20121,6,7		7,970			7,376
Dollar General Corp., Term Loan B2, 3.06% 20141,6,7		1,000			943
Dollar General Corp. 10.625% 2015		6,550			7,107
Dollar General Corp. 11.875% 20171,8		9,000			9,765
J.C. Penney Co., Inc. 9.00% 2012		3,495			3,562
J.C. Penney Corp., Inc. 5.75% 2018		11,500			10,110
Lowe’s Companies, Inc. 8.25% 2010		8,450			8,979
Lowe’s Companies, Inc. 6.50% 2029		700			717
Sally Holdings LLC and Sally Capital Inc. 9.25% 2014		7,200			7,200
Sally Holdings LLC and Sally Capital Inc. 10.50% 2016		1,050			1,045
Kohl’s Corp. 7.25% 2029		3,452			3,549
Kohl’s Corp. 6.00% 2033		3,713			3,333
Edcon (Proprietary) Ltd. 4.527% 20141	€6,500				5,333
Edcon (Proprietary) Ltd. 4.527% 20141		500			410
Target Corp. 6.50% 2037	$	5,390			5,470
Neiman Marcus Group, Inc. 9.75% 20151,8		9,120			5,426
Marks and Spencer Group PLC 6.25% 20173		6,000			4,991
Home Depot, Inc. 5.875% 2036		5,000			4,425
Bon-Ton Department Stores, Inc. 10.25% 2014		10,000			4,400
Burlington Coat Factory Warehouse Corp. 11.125% 2014		2,700			2,160
					297,052
Consumer services — 0.39%
MGM MIRAGE 8.50% 2010		6,850			6,251
MGM MIRAGE 6.75% 2012		1,050			751
MGM MIRAGE 6.75% 2013		3,350			2,253
MGM MIRAGE 13.00% 20133		5,150			5,665
MGM MIRAGE 5.875% 2014		6,575			4,257
MGM MIRAGE 10.375% 20143		3,025			3,154
MGM MIRAGE 6.625% 2015		3,600			2,367
MGM MIRAGE 11.125% 20173		4,375			4,659
Marriott International, Inc., Series J, 5.625% 2013		8,305			8,206
Marriott International, Inc., Series I, 6.375% 2017		13,750			13,085
Mohegan Tribal Gaming Authority 6.375% 2009		12,700			12,414
Mohegan Tribal Gaming Authority 8.00% 2012		3,675			2,811
Mohegan Tribal Gaming Authority 7.125% 2014		5,250			3,596
Seminole Tribe of Florida 5.798% 20133,6		9,865			8,928
Seminole Tribe of Florida 7.804% 20203,6		9,370			7,353
Boyd Gaming Corp. 7.75% 2012		2,550			2,384
Boyd Gaming Corp. 6.75% 2014		8,925			7,274
Boyd Gaming Corp. 7.125% 2016		4,000			2,985
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 20122		12,025			10,952
Royal Caribbean Cruises Ltd. 8.75% 2011		2,465			2,367
Royal Caribbean Cruises Ltd. 11.875% 2015		6,025			5,935
ERAC USA Finance Co. 7.00% 20373		10,000			7,974
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014		8,415			7,447
Education Management LLC and Education Management Finance Corp. 8.75% 2014		4,800			4,680
Pinnacle Entertainment, Inc. 7.50% 2015		4,755			4,089
Seneca Gaming Corp. 7.25% 2012		3,025			2,632
Seneca Gaming Corp., Series B, 7.25% 2012		1,175			1,022
Wendy’s/Arby’s Group Inc. 10.00% 20163		1,100			1,058
					146,549
Automobiles & components — 0.26%
DaimlerChrysler North America Holding Corp. 7.20% 2009		5,000			5,023
DaimlerChrysler North America Holding Corp., Series E, 5.75% 2011		14,925			15,237
DaimlerChrysler North America Holding Corp. 5.875% 2011		9,400			9,560
DaimlerChrysler North America Holding Corp. 7.75% 2011		14,930			15,565
DaimlerChrysler North America Holding Corp. 7.30% 2012		1,455			1,508
DaimlerChrysler North America Holding Corp. 6.50% 2013		18,775			19,103
Allison Transmission Holdings, Inc., Term Loan B, 3.07% 20141,6,7		5,772			4,630
Allison Transmission Holdings, Inc. 11.00% 20153		750			596
Allison Transmission Holdings, Inc. 12.00% 20151,3,8		11,700			8,248
Tenneco Automotive Inc., Series B, 10.25% 2013		2,572			2,450
Tenneco Automotive Inc. 8.625% 2014		3,025			2,193
Tenneco Inc. 8.125% 2015		3,250			2,584
Ford Motor Co. 9.50% 2011		2,000			1,570
FCE Bank PLC 7.125% 2013	€4,500				5,175
General Motors Corp. 7.20% 20114	$	3,975			517
General Motors Corp. 7.125% 20134		3,595			458
General Motors Corp. 8.80% 20214		10,542			1,318
Goodyear Tire & Rubber Co. 5.01% 20091		1,150			1,144
TRW Automotive Inc. 7.00% 20143		1,500			1,088
Visteon Corp. 8.25% 20104		2,912			102
Visteon Corp. 12.25% 20163,4		7,517			301
Cooper-Standard Automotive Inc. 7.00% 20124		425			85
Cooper-Standard Automotive Inc. 8.375% 20144		2,200			143
Delphi Automotive Systems Corp. 6.55% 20064		500			3
Delphi Automotive Systems Corp. 6.50% 20094		6,000			38
Delphi Corp. 6.50% 20134		7,020			105
Delphi Automotive Systems Corp. 7.125% 20294		1,350			8
					98,752
Consumer durables & apparel — 0.16%
Fortune Brands, Inc. 6.375% 2014		20,000			19,907
Hanesbrands Inc., Series B, 4.593% 20141		11,105			8,995
Standard Pacific Corp. 7.75% 2013		6,890			4,995
Standard Pacific Corp. 6.25% 2014		775			550
Standard Pacific Corp. 7.00% 2015		4,340			3,125
Meritage Corp. 7.00% 2014		1,850			1,526
Meritage Homes Corp. 6.25% 2015		5,275			4,167
Meritage Corp. 7.731% 20172,3		4,000			2,665
Beazer Homes USA, Inc. 8.625% 2011		4,625			3,168
Beazer Homes USA, Inc. 8.125% 2016		4,490			2,178
Sealy Mattress Co. 8.25% 2014		4,200			3,476
Sealy Mattress Co. 10.875% 20163		500			526
KB Home 6.25% 2015		3,170			2,726
Jarden Corp. 8.00% 2016		2,375			2,274
					60,278
TELECOMMUNICATION SERVICES — 3.49%
Verizon Communications Inc. 3.75% 20113		111,950			114,293
ALLTEL Corp. 7.00% 2012		18,299			19,778
Verizon Global Funding Corp. 7.375% 2012		11,835			13,249
Verizon Communications Inc. 5.25% 2013		14,500			15,230
Verizon Communications Inc. 5.55% 20143		14,710			15,632
Verizon Communications Inc. 5.50% 2017		11,495			11,533
Verizon Communications Inc. 5.50% 2018		8,540			8,496
Verizon Communications Inc. 6.10% 2018		24,000			24,660
Verizon Communications Inc. 8.50% 20183		16,000			19,154
Verizon Communications Inc. 8.75% 2018		34,000			40,339
Verizon Communications Inc. 6.35% 2019		14,500			15,112
Verizon Global Funding Corp. 7.75% 2030		9,501			10,640
Telecom Italia Capital SA 4.875% 2010		1,260			1,273
Olivetti Finance NV 7.25% 2012	€8,830				13,314
Telecom Italia Capital SA, Series B, 5.25% 2013	$	5,480			5,379
Telecom Italia Capital SA 4.95% 2014		9,867			9,457
Telecom Italia Capital SA 5.25% 2015		77,500			74,911
Telecom Italia Capital SA 6.999% 2018		9,900			10,032
Telecom Italia Capital SA 7.175% 2019		41,500			42,143
Telecom Italia SpA 7.75% 2033	€8,270				11,981
Telicom Italia Capital SA 6.00% 2034	$	3,000			2,541
Telecom Italia Capital SA 7.20% 2036		2,000			1,945
Telecom Italia Capital SA 7.721% 2038		32,500			33,193
AT&T Corp. 7.30% 20111		4,734			5,194
AT&T Wireless Services, Inc. 7.875% 2011		15,355			16,566
SBC Communications Inc. 5.875% 2012		20,337			21,842
AT&T Wireless Services, Inc. 8.125% 2012		12,630			14,149
AT&T Inc. 4.95% 2013		17,000			17,694
SBC Communications Inc. 5.10% 2014		4,745			4,935
SBC Communications Inc. 5.625% 2016		45,200			46,582
AT&T Inc. 5.50% 2018		5,910			5,911
AT&T Inc. 5.60% 2018		17,580			17,706
AT&T Inc. 5.80% 2019		11,550			11,748
SBC Communications Inc. 6.45% 2034		11,175			11,054
AT&T Inc. 6.55% 2039		13,425			13,445
Sprint Nextel Corp. 1.001% 20101		1,865			1,759
Nextel Communications, Inc., Series E, 6.875% 2013		66,830			55,636
Nextel Communications, Inc., Series F, 5.95% 2014		51,963			41,181
Nextel Communications, Inc., Series D, 7.375% 2015		48,155			38,644
France Télécom 7.75% 20111		32,000			34,623
France Télécom 7.25% 2013	€4,800				7,623
France Télécom 4.375% 2014	$	19,010			19,179
France Télécom 5.375% 2019		12,690			12,806
Vodafone Group PLC 7.75% 2010		20,000			20,679
Vodafone Group PLC 5.625% 2017		16,080			16,357
Vodafone Group PLC 5.45% 2019		25,000			24,630
Vodafone Group PLC 6.15% 2037		6,000			5,922
American Tower Corp. 7.125% 2012		14,850			15,017
American Tower Corp. 7.00% 2017		16,550			16,095
American Tower Corp. 7.25% 20193		4,875			4,741
Telefónica Emisiones, SAU 4.949% 2015		13,150			13,382
Telefónica Emisiones, SAU 6.421% 2016		5,750			6,157
Telefónica Emisiones, SAU 5.877% 2019		12,010			12,406
Deutsche Telekom International Finance BV 5.875% 2013		4,000			4,200
Deutsche Telekom International Finance BV 4.875% 2014		16,250			16,373
Deutsche Telekom International Finance BV 6.75% 2018		10,000			10,631
Qwest Capital Funding, Inc. 7.90% 2010		1,400			1,407
Qwest Capital Funding, Inc. 7.25% 2011		16,450			16,039
Qwest Communications International Inc. 7.25% 2011		6,000			5,850
Qwest Corp. 7.875% 2011		1,000			1,005
MetroPCS Wireless, Inc. 9.25% 2014		11,950			11,935
MetroPCS Wireless, Inc. 9.25% 20143		10,925			10,870
Cricket Communications, Inc. 9.375% 2014		12,185			12,063
Cricket Communications, Inc. 7.75% 20163		10,050			9,723
British Telecommunications PLC 5.15% 2013		5,000			4,987
British Telecommunications PLC 5.95% 2018		17,472			15,772
Centennial Communications Corp. 6.958% 20131		6,500			6,500
Centennial Communications Corp. 10.00% 2013		2,750			2,915
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013		900			933
Centennial Communications Corp., Centennial Cellular Operating Co. LLC and Centennial
Puerto Rico Operations Corp. 8.125% 20141		9,300			9,556
PCCW-HKT Capital Ltd. 8.00% 20111,3		15,000			15,804
PCCW-HKT Capital No. 3 Ltd. 5.25% 20153		2,750			2,471
Crown Castle International Corp. 9.00% 2015		8,275			8,461
Crown Castle International Corp. 7.75% 20173		9,675			9,481
Koninklijke KPN NV 8.00% 2010		6,550			6,875
Koninklijke KPN NV 4.75% 2017	€3,500				4,890
Koninklijke KPN NV 8.375% 2030	$	5,200			5,960
Digicel Group Ltd. 12.00% 20143		12,025			12,205
Digicel Group Ltd. 8.875% 20153		5,500			4,593
Digicel Group Ltd. 8.875% 2015		400			334
Windstream Corp. 8.125% 2013		10,650			10,357
Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp. 7.75% 2015		2,850			2,795
Windstream Corp. 8.625% 2016		3,300			3,176
Singapore Telecommunications Ltd. 6.375% 2011		3,475			3,773
Singapore Telecommunications Ltd. 6.375% 20113		2,050			2,226
Singapore Telecommunications Ltd. 7.375% 20313		3,800			4,506
Rogers Wireless Inc. 7.25% 2012		713			767
Rogers Wireless Inc. 7.50% 2015		6,300			6,861
SK Telecom Co., Ltd. 4.25% 20113		6,000			5,979
Intelsat Jackson Holding Co., Series B, 8.875% 20153		1,950			1,891
Intelsat, Ltd. 8.875% 2015		775			752
Intelsat Jackson Holding Co. 9.50% 20163		2,100			2,121
NTELOS Inc., Term Loan B, 2.56% 20111,6,7		4,788			4,682
Orascom Telecom 7.875% 20143		3,275			2,784
Cincinnati Bell Inc. 7.25% 2013		2,800			2,576
Millicom International Cellular SA 10.00% 2013		2,430			2,476
América Móvil, SAB de CV 8.46% 2036	MXN27,000				1,519
Hawaiian Telcom Communications, Inc. 9.75% 20134	$	7,715			116
Hawaiian Telcom Communications, Inc. 8.765% 20131,4		3,605			54
Hawaiian Telcom Communications, Inc., Term Loan C, 4.75% 20141,6,7,8		2,130			1,286
Hawaiian Telcom Communications, Inc., Series B, 12.50% 20154		3,050			—
Nordic Telephone Co. Holding ApS 8.875% 20163		1,000			970
Level 3 Financing, Inc. 9.25% 2014		1,000			825
Citizens Communications Co. 7.875% 2027		775			624
Trilogy International Partners LLC, Term Loan B, 4.098% 20121,6,7		275			187
					1,323,084
ENERGY — 3.39%
Enbridge Energy Partners, LP, Series B, 6.50% 2018		45,455			44,865
Enbridge Energy Partners, LP 9.875% 2019		28,255			32,810
Enbridge Energy Partners, LP, Series B, 7.50% 2038		30,700			30,919
Enbridge Energy Partners, LP 8.05% 20771		67,100			49,049
Kinder Morgan Energy Partners LP 6.75% 2011		5,500			5,767
Kinder Morgan Energy Partners LP 5.85% 2012		6,500			6,781
Kinder Morgan Energy Partners LP 5.00% 2013		14,279			14,064
Kinder Morgan Energy Partners LP 5.125% 2014		34,052			33,907
Kinder Morgan Energy Partners LP 5.625% 2015		14,100			14,268
Kinder Morgan Energy Partners LP 6.00% 2017		22,375			22,231
Kinder Morgan Energy Partners LP 9.00% 2019		9,865			11,239
Kinder Morgan Energy Partners LP 6.85% 2020		44,045			45,231
TransCanada PipeLines Ltd. 6.50% 2018		35,000			38,144
TransCanada PipeLines Ltd. 7.125% 2019		9,400			10,628
TransCanada PipeLines Ltd. 6.20% 2037		1,250			1,284
TransCanada PipeLines Ltd. 7.25% 2038		2,145			2,447
TransCanada PipeLines Ltd. 7.625% 2039		2,175			2,547
TransCanada PipeLines Ltd. 6.35% 20671		85,555			59,544
Gaz Capital SA, Series 13, 6.605% 2018	€8,200				9,430
Gaz Capital SA 6.51% 20223	$	82,475			62,062
Gaz Capital SA 7.288% 20373		16,150			12,193
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20093,6		5,436			5,408
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20096		300			298
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20143,6		15,570			16,370
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20146		1,000			1,051
Ras Laffan Liquefied Natural Gas III 5.832% 20166		2,000			1,957
Ras Laffan Liquefied Natural Gas II 5.298% 20203,6		45,970			42,126
Ras Laffan Liquefied Natural Gas II 5.298% 20206		2,000			1,833
Ras Laffan Liquefied Natural Gas III 5.838% 20273,6		15,000			12,601
Ras Laffan Liquefied Natural Gas III 6.332% 20276		2,000			1,726
Williams Companies, Inc. 3.208% 20101,3		7,500			7,099
Williams Companies, Inc. 6.375% 20103		1,500			1,500
Williams Companies, Inc. 7.125% 2011		500			510
Transcontinental Gas Pipe Line Corp. 6.40% 2016		10,000			10,277
Williams Companies, Inc. 8.75% 20203		3,000			3,133
Williams Companies, Inc. 7.875% 2021		37,370			36,880
Transcontinental Gas Pipe Line Corp. 7.25% 2026		1,750			1,778
Williams Companies, Inc. 8.75% 2032		18,916			19,057
Rockies Express Pipeline LLC 4.50% 20091,3		20,000			20,003
Rockies Express Pipeline LLC 6.25% 20133		6,940			6,992
Rockies Express Pipeline LLC 6.85% 20183		32,150			34,044
Enbridge Inc. 5.80% 2014		9,200			9,587
Enbridge Inc. 4.90% 2015		3,250			3,111
Enbridge Inc. 5.60% 2017		42,080			41,311
Enterprise Products Operating LP, Series B, 4.625% 2009		9,500			9,529
Enterprise Products Operating LP 4.95% 2010		8,750			8,881
Enterprise Products Operating LP 7.50% 2011		5,000			5,243
Enterprise Products Operating LLC 5.65% 2013		17,850			18,303
Enterprise Products Operating LP 7.034% 20681		9,345			6,902
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20143,6		36,030			32,607
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20146		4,657			4,214
Husky Energy Inc. 5.90% 2014		555			581
Husky Energy Inc. 6.20% 2017		16,415			16,681
Husky Energy Inc. 7.25% 2019		15,830			17,328
Chevron Corp. 3.95% 2014		4,400			4,535
Chevron Corp. 4.95% 2019		27,830			28,812
Shell International Finance B.V. 4.00% 2014		18,830			19,356
Shell International Finance B.V. 6.375% 2038		11,250			12,296
Phillips Petroleum Co. 8.75% 2010		4,000			4,271
Polar Tankers, Inc. 5.951% 20373,6		27,355			25,428
Pemex Finance Ltd. 8.875% 20106		9,600			9,909
Pemex Finance Ltd., Series 1999-2, Class A-3, 10.61% 20172,6		11,700			13,209
Pemex Project Funding Master Trust 5.75% 2018		3,150			2,914
Pemex Project Funding Master Trust 6.625% 2035		3,500			3,170
Energy Transfer Partners, LP 5.95% 2015		3,465			3,495
Energy Transfer Partners, LP 9.00% 2019		16,340			18,691
Energy Transfer Partners, LP 9.70% 2019		4,030			4,634
Devon Energy Corp. 6.30% 2019		10,080			10,791
Devon Financing Corp. ULC 7.875% 2031		10,195			12,039
StatoilHydro ASA 3.875% 2014		7,000			7,107
StatoilHydro ASA 5.25% 2019		15,230			15,703
Apache Corp. 6.00% 2013		2,420			2,636
Apache Corp. 5.625% 2017		7,200			7,565
Apache Corp. 6.90% 2018		7,145			8,195
Qatar Petroleum 5.579% 20113,6		17,069			17,355
XTO Energy Inc. 6.25% 2017		15,750			16,600
BP Capital Markets PLC 3.625% 20143		16,000			15,975
Canadian Natural Resources Ltd. 5.70% 2017		14,000			14,179
Petroplus Finance Ltd. 6.75% 20143		6,200			5,363
Petroplus Finance Ltd. 7.00% 20173		10,175			8,496
Sunoco, Inc. 4.875% 2014		14,830			13,830
Marathon Oil Corp. 5.90% 2018		10,000			10,043
Gulfstream Natural Gas 5.56% 20153		3,500			3,332
Gulfstream Natural Gas 6.19% 20253		7,235			6,420
Delek & Avner-Yam Tethys Ltd. 5.326% 20133,6		9,092			9,043
Petroleum Export Ltd., Class A-1, MBIA insured, 4.623% 20103,6		7,667			7,522
Petroleum Export Ltd., Class A-2, XLCA insured, 4.633% 20103,6		1,444			1,417
Williams Partners L.P. and Williams Partners Finance Corp. 7.50% 2011		5,725			5,742
Williams Partners L.P. and Williams Partners Finance Corp. 7.25% 2017		3,475			3,175
Nakilat Inc., Series A, 6.067% 20333,6		10,800			8,817
Drummond Co., Inc. 7.375% 20163		8,900			6,541
TEPPCO Partners LP 7.00% 20671		4,055			3,052
PETRONAS Capital Ltd. 7.00% 20123		2,250			2,487
					1,282,476
UTILITIES — 3.25%
National Rural Utilities Cooperative Finance Corp. 5.50% 2013		46,600			49,270
National Rural Utilities Cooperative Finance Corp. 5.45% 2017		2,880			2,954
National Rural Utilities Cooperative Finance Corp. 5.45% 2018		5,500			5,614
National Rural Utilities Cooperative Finance Corp., Collateral Trust Bonds, 10.375% 2018		57,125			71,738
MidAmerican Energy Holdings Co. 5.875% 2012		15,000			15,987
MidAmerican Energy Co. 5.125% 2013		7,500			7,792
PacifiCorp, First Mortgage Bonds, 5.45% 2013		2,875			3,059
MidAmerican Energy Co. 4.65% 2014		5,000			5,204
MidAmerican Energy Co. 5.95% 2017		3,000			3,239
MidAmerican Energy Co. 5.30% 2018		5,000			5,195
PacifiCorp., First Mortgage Bonds, 5.65% 2018		3,800			4,050
MidAmerican Energy Holdings Co. 5.75% 2018		47,700			49,703
MidAmerican Energy Holdings Co. 6.125% 2036		13,750			13,636
E.ON International Finance BV 5.80% 20183		74,575			77,722
Ohio Edison Co. 6.40% 2016		13,750			14,064
Jersey Central Power & Light Co. 5.65% 2017		3,000			2,944
Cleveland Electric Illuminating Co. 5.70% 2017		8,640			8,431
Pennsylvania Electric Co. 6.05% 2017		5,165			5,036
Cleveland Electric Illuminating Co. 8.875% 2018		24,600			29,712
Jersey Central Power & Light Co. 7.35% 2019		1,700			1,872
Toledo Edison Co. 7.25% 2020		10,000			11,155
Ohio Edison Co. 6.875% 2036		2,315			2,340
Edison Mission Energy 7.50% 2013		5,625			5,062
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2009-B, 4.15% 2014		3,500			3,560
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2005-A, 5.00% 2016		4,000			4,101
Edison Mission Energy 7.75% 2016		7,125			5,842
Midwest Generation, LLC, Series B, 8.56% 20166		17,347			17,000
Edison Mission Energy 7.00% 2017		7,175			5,543
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2008-B, 5.50% 2018		1,000			1,063
Edison Mission Energy 7.20% 2019		15,450			11,587
Homer City Funding LLC 8.734% 20266		13,609			12,180
Edison Mission Energy 7.625% 2027		1,900			1,226
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2006-E, 5.55% 2037		3,500			3,516
Consumers Energy Co., First Mortgage Bonds, Series P, 5.50% 2016		2,500			2,530
Consumers Energy Co. First Mortgage Bonds 5.15% 2017		5,000			4,924
Consumers Energy Co. 5.65% 2018		18,325			18,591
Consumers Energy Co., First Mortgage Bonds, 6.125% 2019		30,575			32,049
Consumers Energy Co., First Mortgage Bonds, 6.70% 2019		2,380			2,595
Abu Dhabi National Energy Co. PJSC (TAQA) 5.62% 20123		3,060			3,101
Abu Dhabi National Energy Co. PJSC (TAQA) 5.875% 20163		34,975			32,805
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20173		12,000			11,397
Abu Dhabi National Energy Co. PJSC (TAQA) 6.50% 20363		14,500			12,362
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc., First Mortgage Bonds, 5.125% 2013		5,000			5,297
Progress Energy, Inc. 6.05% 2014		2,100			2,210
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc. 5.25% 2015		6,000			6,302
Progress Energy Florida, Inc., First Mortgage Bonds, 5.65% 2018		3,150			3,367
Progress Energy, Inc. 7.05% 2019		32,900			36,568
Israel Electric Corp. Ltd. 7.25% 20193		39,800			39,380
Israel Electric Corp. Ltd. 8.10% 20963		6,250			5,540
NGG Finance PLC 6.125% 2011	€3,480				5,150
National Grid PLC 6.30% 2016	$	37,605			38,690
National Grid Co. PLC 5.875% 2024	£	170			272
Cilcorp Inc. 8.70% 2009	$	1,000			985
AmerenEnergy Generating Co., Series D, 8.35% 2010		1,500			1,549
Union Electric Co. 4.65% 2013		3,000			2,962
Ameren Corp. 8.875% 2014		15,000			15,497
Union Electric Co. 5.40% 2016		5,750			5,566
Cilcorp Inc. 9.375% 2029		12,265			15,147
Veolia Environnement 5.25% 2013		18,235			18,866
Veolia Environnement 6.00% 2018		4,945			5,049
Veolia Environnement 6.125% 2033	€13,640				17,443
PSEG Power LLC 7.75% 2011	$	16,410			17,571
Public Service Electric and Gas Co., Series E, 5.30% 2018		12,690			13,284
PSEG Power LLC 8.625% 2031		7,350			8,685
Energy East Corp. 6.75% 2012		7,155			7,676
Scottish Power PLC 5.375% 2015		31,415			30,263
Nevada Power Co., General and Refunding Mortgage Notes, Series I, 6.50% 2012		700			731
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series Q, 5.45% 2013		4,275			4,389
Sierra Pacific Resources 8.625% 2014		900			891
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015		2,550			2,615
Nevada Power Co., General and Refunding Mortgage Notes, Series M, 5.95% 2016		5,975			6,041
Nevada Power Co., General and Refunding Mortgage Notes, Series S, 6.50% 2018		10,025			10,392
Nevada Power Co., General and Refunding Mortgage Notes, Series V, 7.125% 2019		2,500			2,676
Oncor Electric Delivery Co. LLC 6.80% 2018		25,000			26,761
Northern States Power Co., First Mortgage Bonds, 5.25% 2018		13,500			14,075
Public Service Co. of Colorado 5.80% 2018		6,300			6,809
Public Service Co. of Colorado 5.125% 2019		4,350			4,479
Intergen Power 9.00% 20173		23,450			22,336
Ohio Power Co., Series H, 4.85% 2014		5,965			5,921
Ohio Power Co., Series K, 6.00% 2016		15,000			15,299
Southern California Gas Co., First Mortgage Bonds, Series II, 4.375% 2011		5,000			5,151
San Diego Gas & Electric Co., Series CCC, 5.30% 2015		10,000			10,384
San Diego Gas & Electric Co., Series DDD, 6.00% 2026		5,000			5,251
Texas Competitive Electric Holdings Co. LLC, Term Loan B2, 3.821% 20141,6,7		4,506			3,233
Texas Competitive Electric Holdings Co. LLC, Series A, 10.25% 2015		12,215			7,665
Texas Competitive Electric Holdings Co. LLC, Series B, 10.25% 2015		10,925			6,855
Texas Competitive Electric Holdings Co. LLC 11.25% 20161,8		5,545			2,579
Virginia Electric and Power Co., Series 2003-A, 4.75% 2013		6,000			6,144
Virginia Electric and Power Co., Series B, 5.95% 2017		10,000			10,752
Virginia Electric and Power Co., Series A, 6.00% 2037		1,250			1,295
Pacific Gas and Electric Co., First Mortgage Bonds, 4.20% 2011		2,000			2,065
Pacific Gas and Electric Co. 6.25% 2013		1,550			1,704
PG&E Corp. 5.75% 2014		2,000			2,133
Pacific Gas and Electric Co. 8.25% 2018		4,000			4,890
Pacific Gas and Electric Co., First Mortgage Bonds, 6.05% 2034		4,000			4,163
Commonwealth Edison Co., First Mortgage Bonds, Series 105, 5.40% 2011		9,000			9,419
Commonwealth Edison Co., First Mortgage Bonds, Series 106, 6.15% 2017		5,000			5,203
Electricité de France SA 5.50% 20143		2,000			2,155
Electricité de France SA 6.50% 20193		11,000			12,069
AES Corp. 9.375% 2010		129			131
AES Corp. 8.75% 20133		624			636
AES Corp. 7.75% 2015		10,500			9,818
AES Corp. 8.00% 2020		1,925			1,737
CenterPoint Energy Houston Electric, LLC, General Mortgage Bonds, Series U, 7.00% 2014		9,900			10,698
Old Dominion Electric Cooperative, Series 2003-A, 5.676% 20286		11,250			10,457
Duke Energy Corp., First and Refunding Mortgage Bonds, 4.50% 2010		4,500			4,560
Duke Energy Corp., First and Refunding Mortgage Bonds, 5.30% 2015		5,000			5,244
Anglian Water Services Financing PLC 4.625% 2013	€6,120				8,673
Anglian Water Services Financing PLC, Class A, 5.25% 2015	£	395			658
Empresa Nacional de Electricidad SA 8.35% 2013	$	5,000			5,608
Empresa Nacional de Electricidad SA 8.625% 2015		3,000			3,477
Alabama Power Co., Series R, 4.70% 2010		2,250			2,332
Alabama Power Co., Series 2007-D, 4.85% 2012		1,550			1,643
Alabama Power Co., Series 2008-B, 5.80% 2013		4,000			4,338
SP PowerAssets Ltd. 5.00% 20133		8,000			8,294
ENEL SpA 5.625% 2027	€5,760				7,793
NRG Energy, Inc. 7.25% 2014	$	4,200			4,085
NRG Energy, Inc. 7.375% 2016		3,700			3,510
Kern River Funding Corp. 4.893% 20183,6		7,686			7,317
Florida Power & Light Co. 4.85% 2013		5,000			5,202
Korea East-West Power Co., Ltd. 4.875% 20113		5,000			5,015
Enersis SA 7.375% 2014		3,000			3,215
Connecticut Light & Power Co., First and Refunding Mortgage Bonds, Series 2008A, 5.65% 2018		2,500			2,646
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20183,6		2,667			2,492
RWE Aktiengesellschaft and RWE Finance BV 6.375% 2013	£	290			510
Kelda Group PLC 6.625% 2031		165			268
					1,231,952
INDUSTRIALS — 3.12%
Transportation — 1.86%
Continental Airlines, Inc., Series 2001-1, Class A-2, 6.503% 20116	$	14,050			13,225
Continental Airlines, Inc., Series 1999-2, Class A-2, 7.056% 20116		10,000			9,938
Continental Airlines, Inc. 8.75% 2011		6,300			3,969
Continental Airlines, Inc., Series 2000-2, Class A-2, 7.487% 20126		12,500			11,984
Continental Airlines, Inc., Series 2006-1, Class G, FGIC insured, 1.006% 20151,6		1,100			746
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20162,6		27,654			24,335
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20176		158			119
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20186		1,473			1,079
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20186		1,499			1,132
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20192,6		17,234			14,132
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20196		36,415			31,613
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20196		3,351			2,580
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20202,6		21,436			19,828
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20206		12,448			9,149
Continental Airlines, Inc., Series 2003-ERJ3, Class A, 7.875% 20206		8,547			5,214
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20212,6		281			247
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20216		9,006			7,340
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20222,6		14,115			11,856
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20226		10,130			6,730
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20226		13,303			10,967
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20222,6		13,264			11,142
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20226		1,403			1,024
Delta Air Lines, Inc., Series 2000-1, Class A-2, 7.57% 20126		400			387
Northwest Airlines, Inc., Term Loan B, 4.10% 20131,6,7		2,759			2,193
Delta Air Lines, Inc., Series 2001-1, Class A-2, 7.111% 20136		1,000			944
Delta Air Lines, Inc., Series 2002-1, Class C, 7.779% 20132,6		2,244			2,065
Delta Air Lines, Inc., Second Lien Term Loan B, 3.568% 20141,6,7		4,900			3,376
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20146		53,658			47,300
Delta Air Lines, Inc., Series 1992-A2, 9.20% 20144,6		4,760			4,522
Northwest Airlines, Inc., Term Loan A, 2.35% 20181,6,7		66,221			49,997
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20246		37,194			29,198
CSX Corp. 5.75% 2013		8,335			8,553
CSX Corp. 6.25% 2015		15,000			15,526
CSX Corp. 6.25% 2018		10,000			10,102
CSX Corp. 7.375% 2019		15,000			16,319
CSX Corp. 6.15% 2037		26,585			24,796
CSX Corp. 7.45% 2038		13,050			14,174
AMR Corp., Series B, 10.45% 2011		150			74
American Airlines, Inc., Series 2001-1, Class A-2, 6.817% 20126		3,750			3,113
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 20126		11,848			11,273
American Airlines, Inc., Series 2001-2, Class B, 8.608% 20126		18,165			14,714
AMR Corp. 9.00% 2012		5,800			2,900
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20136		38,010			35,872
American Airlines, Inc., Series 1991-C2, 9.73% 20146		6,410			3,013
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20196		8,058			4,271
Union Pacific Corp. 5.125% 2014		8,430			8,578
Union Pacific Corp. 5.75% 2017		20,750			20,951
Union Pacific Corp. 5.70% 2018		4,000			4,015
Union Pacific Railroad Co. Pass Through Trust, Series 2001-1, 6.63% 20226		7,015			7,182
Union Pacific Corp. 6.15% 2037		10,930			10,130
Norfolk Southern Corp. 5.75% 20163		3,390			3,516
Norfolk Southern Corp. 5.75% 2018		21,050			21,559
Norfolk Southern Corp. 5.90% 2019		14,000			14,536
Norfolk Southern Corp. 7.05% 2037		8,690			9,615
United Air Lines, Inc., Series 2001-1, Class A-2, 6.201% 20106		394			389
United Air Lines, Inc., Series 2000-2, Class B, 7.811% 20114,6		7,335			8,728
United Air Lines, Inc., Series 2000-2, Class A-2, 7.186% 20126		174			170
United Air Lines, Inc., Term Loan B, 2.313% 20141,6,7		8,418			4,938
United Air Lines, Inc., Series 2001-1, Class A-1, 6.071% 20146		66			65
United Air Lines, Inc., Series 2001-1, Class A-3, 6.602% 20156		205			203
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20213,6		894			469
United Air Lines, Inc., Series 2007-1, Class A, 6.636% 20246		27,163			21,034
Canadian National Railway Co. 5.55% 2018		16,500			17,267
Canadian National Railway Co. 6.375% 2037		8,000			8,793
Burlington Northern Santa Fe Corp. 6.15% 2037		10,890			10,911
BNSF Funding Trust I 6.613% 20551		15,000			11,896
TFM, SA de CV 9.375% 2012		3,800			3,629
Kansas City Southern Railway Co. 13.00% 2013		1,375			1,482
Kansas City Southern Railway Co. 8.00% 2015		2,000			1,870
RailAmerica Inc. 9.25% 20173		4,000			3,880
Southern Capital Corp. Pass Through Trust, Series 2002-1, Class G, MBIA insured, 5.70% 20233,6		4,263			2,186
Navios Maritime Holdings Inc. 9.50% 2014		1,980			1,661
CEVA Group PLC 10.00% 20143		500			342
					703,026
Capital goods — 0.99%
BAE Systems Holdings Inc. 4.75% 20103,6		10,350			10,393
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 20113,6		30,410			29,984
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20133,6		29,189			29,254
BAE Systems Holdings Inc. 4.95% 20143		16,125			16,225
General Electric Capital Corp. 6.25% 2017	£	400			645
General Electric Capital Corp., Series A, 1.256% 20181	$	9,000			6,704
General Electric Capital Corp., Series A, 1.396% 20261		36,200			23,964
General Electric Capital Corp. 5.625% 2031	£	85			113
General Electric Capital Corp. 5.875% 2038	$	4,500			3,572
Hutchison Whampoa International Ltd. 7.00% 20113		24,300			25,864
Hutchison Whampoa International Ltd. 6.50% 20133		7,200			7,736
Northrop Grumman Systems Corp. 7.125% 2011		8,000			8,590
Northrop Grumman Corp. 7.75% 2016		13,420			15,391
Northrop Grumman Systems Corp. 7.75% 2031		3,000			3,765
Koninklijke Philips Electronics NV 5.75% 2018		20,000			20,194
Caterpillar Financial Services Corp. 4.30% 2010		2,400			2,462
Caterpillar Financial Services Corp., Series F, 5.125% 2011		500			525
Caterpillar Financial Services Corp., Series F, 4.85% 2012		210			220
Caterpillar Financial Services Corp., Series F, 4.90% 2013		10,500			10,470
Caterpillar Financial Services Corp., Series F, 5.50% 2016		4,050			4,012
Caterpillar Financial Services Corp., Series F, 7.15% 2019		1,850			1,984
Ashtead Group PLC 8.625% 20153		4,675			4,009
Ashtead Capital, Inc. 9.00% 20163		14,125			12,042
Raytheon Co. 6.40% 2018		9,500			10,532
Raytheon Co. 6.75% 2018		4,030			4,521
DynCorp International and DIV Capital Corp., Series B, 9.50% 2013		15,493			14,951
US Investigations Services, Inc., Term Loan B, 3.359% 20151,6,7		5,408			4,820
US Investigations Services, Inc. 10.50% 20153		7,005			5,744
US Investigations Services, Inc. 11.75% 20163		5,445			4,220
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B1, 4.26% 20141,6,7		2,460			1,944
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B2, 4.79% 20141,6,7		2,413			1,906
DAE Aviation Holdings, Inc. 11.25% 20153		17,285			10,112
John Deere Capital Corp. 5.40% 2011		3,500			3,645
John Deere Capital Corp., Series D, 4.50% 2013		3,000			3,063
John Deere Capital Corp. 5.10% 2013		1,100			1,144
John Deere Capital Corp., Series D, 5.50% 2017		3,650			3,690
John Deere Capital Corp., Series D, 5.75% 2018		2,000			2,044
Lockheed Martin Corp. 4.121% 2013		6,000			6,125
Lockheed Martin Corp., Series B, 6.15% 2036		6,000			6,427
Honeywell International Inc. 5.00% 2019		8,725			8,909
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 2.31% 20141,6,7		3,437			2,363
Hawker Beechcraft Acquisition Co., LLC, Letter of Credit, 2.598% 20141,6,7		196			135
Hawker Beechcraft Acquisition Co., LLC 8.50% 2015		1,325			689
Hawker Beechcraft Acquisition Co., LLC 9.625% 20151,8		11,125			4,728
Hawker Beechcraft Acquisition Co., LLC 9.75% 2017		570			242
B/E Aerospace 8.50% 2018		6,920			6,539
NTK Holdings Inc. 0%/10.75% 20146,9		15,118			1,285
THL Buildco, Inc. 8.50% 2014		11,450			3,320
Atlas Copco AB 5.60% 20173		4,525			4,358
United Rentals (North America), Inc., Series B, 6.50% 2012		3,000			2,925
RBS Global, Inc. and Rexnord LLC 9.50% 2014		2,625			2,257
RBS Global, Inc. and Rexnord LLC 8.875% 2016		850			608
RSC Holdings III, LLC, Second Lien Term Loan B, 4.67% 20131,6,7		2,838			2,182
Atrium Companies, Inc., Term Loan B, 11.75% 20121,6,7,8		4,802			1,945
Atrium Companies, Inc. 15.00% 20123,8		4,040			101
Alion Science and Technology Corp. 10.25% 2015		3,690			1,494
H&E Equipment Services, Inc. 8.375% 2016		1,750			1,413
TransDigm Inc. 7.75% 2014		1,325			1,265
Esco Corp. 4.504% 20131,3		325			255
Esco Corp. 8.625% 20133		1,100			957
Esterline Technologies Corp. 6.625% 2017		1,050			965
Tyco International Ltd. 6.875% 2021		1,000			947
Sequa Corp., Term Loan B, 4.08% 20141,6,7		874			679
RSC Equipment Rental, Inc. and RSC Holdings III, LLC 9.50% 2014		400			323
					373,890
Commercial & professional services — 0.27%
Nielsen Finance LLC, Term Loan B, 2.321% 20131,6,7		3,798			3,439
Nielsen Finance LLC and Nielsen Finance Co. 10.00% 2014		25,325			24,090
Nielsen Finance LLC and Nielsen Finance Co. 11.625% 20143		1,650			1,646
Nielsen Finance LLC and Nielsen Finance Co. 0%/12.50% 20169		35,125			22,743
Nielsen Finance LLC and Nielsen Finance Co. 11.50% 20163		19,480			19,042
ARAMARK Corp., Term Loan B, 2.473% 20141,6,7		4,158			3,847
ARAMARK Corp., Letter of Credit, 4.721% 20141,6,7		264			244
ARAMARK Corp. 4.528% 20151		3,450			2,820
ARAMARK Corp. 8.50% 2015		9,450			9,214
Allied Waste North America, Inc., Series B, 6.50% 2010		500			509
Allied Waste North America, Inc., Series B, 5.75% 2011		2,500			2,520
Allied Waste North America, Inc., Series B, 6.125% 2014		3,500			3,539
Allied Waste North America, Inc., Series B, 7.375% 2014		4,750			4,850
Allied Waste North America, Inc. 6.875% 2017		1,000			991
Iron Mountain Inc. 7.75% 2015		2,425			2,340
FTI Consulting, Inc. 7.625% 2013		2,300			2,248
					104,082
HEALTH CARE — 2.88%
Pharmaceuticals, biotechnology & life sciences — 1.72%
Roche Holdings Inc. 5.00% 20143		36,900			38,853
Roche Holdings Inc. 6.00% 20193		78,000			83,444
Roche Holdings Inc. 7.00% 20393		26,060			30,122
Pfizer Inc. 4.45% 2012		6,000			6,299
Pfizer Inc. 5.35% 2015		5,000			5,380
Pfizer Inc. 6.20% 2019		67,770			74,251
Pfizer Inc. 7.20% 2039		8,000			9,531
GlaxoSmithKline Capital Inc. 4.85% 2013		20,000			20,939
GlaxoSmithKline Capital Inc. 5.65% 2018		24,400			25,890
GlaxoSmithKline Capital Inc. 6.375% 2038		33,650			36,718
Schering-Plough Corp. 5.55% 20131		14,559			15,654
Schering-Plough Corp. 5.375% 2014	€11,630				17,128
Schering-Plough Corp. 6.00% 2017	$	47,240			50,393
Biogen Idec Inc. 6.00% 2013		36,525			37,408
Biogen Idec Inc. 6.875% 2018		27,000			27,400
Abbott Laboratories 5.125% 2019		35,560			36,684
Abbott Laboratories 6.00% 2039		6,040			6,401
Bayer AG 5.00% (undated)1	€23,085				27,390
Novartis Capital Corp. 4.125% 2014	$	13,375			13,782
Novartis Securities Investment Ltd. 5.125% 2019		12,530			12,843
Merck & Co., Inc. 4.00% 2015		5,000			5,095
Merck & Co., Inc. 5.00% 2019		15,380			15,603
Elan Finance PLC and Elan Finance Corp. 4.883% 20111		430			378
Elan Finance PLC and Elan Finance Corp. 7.75% 2011		3,125			2,906
Elan Finance PLC and Elan Finance Corp. 4.793% 20131		5,135			4,031
Elan Finance PLC and Elan Finance Corp. 8.875% 2013		10,910			10,037
Wyeth 5.50% 2016		15,000			15,723
AstraZeneca PLC 5.40% 2012		12,000			13,027
Warner Chilcott Corp. 8.75% 2015		5,150			5,150
Amgen Inc. 4.00% 2009		4,000			4,055
					652,515
Health care equipment & services — 1.16%
Cardinal Health, Inc. 6.75% 2011		13,625			14,349
Cardinal Health, Inc. 5.50% 2013		7,587			7,542
Cardinal Health, Inc. 4.00% 2015		5,500			4,796
Cardinal Health, Inc. 5.80% 2016		12,500			12,117
Cardinal Health, Inc. 5.85% 2017		23,365			21,892
Allegiance Corp. 7.00% 2026		9,635			8,411
Coventry Health Care, Inc. 5.875% 2012		1,000			957
Coventry Health Care, Inc. 6.30% 2014		54,670			48,264
Coventry Health Care, Inc. 6.125% 2015		3,110			2,702
Coventry Health Care, Inc. 5.95% 2017		12,430			9,759
Express Scripts Inc. 5.25% 2012		17,105			17,684
Express Scripts Inc. 6.25% 2014		23,133			24,503
Express Scripts Inc. 7.25% 2019		4,493			4,963
Hospira, Inc. 1.078% 20101		12,000			11,895
Hospira, Inc. 5.90% 2014		4,510			4,679
Hospira, Inc. 6.05% 2017		30,675			30,003
Tenet Healthcare Corp. 7.375% 2013		5,895			5,335
Tenet Healthcare Corp. 9.25% 2015		7,170			6,596
Tenet Healthcare Corp. 8.875% 20193		30,080			30,381
UnitedHealth Group Inc. 0.789% 20101		6,255			6,198
UnitedHealth Group Inc. 5.25% 2011		2,463			2,543
UnitedHealth Group 6.00% 2017		24,920			24,061
HealthSouth Corp. 7.218% 20141		12,600			11,560
HealthSouth Corp. 10.75% 2016		10,980			11,090
Humana Inc. 6.45% 2016		22,962			20,232
Aetna Inc. 5.75% 2011		17,500			18,304
HCA Inc., Term Loan B, 2.848% 20131,6,7		10,348			9,372
HCA Inc. 9.125% 2014		295			293
HCA Inc. 9.25% 2016		530			523
HCA Inc. 9.625% 20161,8		557			553
HCA Inc. 8.50% 20193		2,870			2,827
Bausch & Lomb Inc. 9.875% 2015		13,625			13,080
VWR Funding, Inc. 10.25% 20151,8		16,179			12,862
PTS Acquisition Corp. 9.50% 20151,8		16,365			8,612
Surgical Care Affiliates, Inc. 9.625% 20151,3,8		3,575			2,770
Surgical Care Affiliates, Inc. 10.00% 20173		7,845			5,491
WellPoint, Inc. 5.00% 2011		1,000			1,026
WellPoint, Inc. 5.25% 2016		6,455			6,124
Team Finance LLC and Health Finance Corp. 11.25% 2013		3,525			3,622
Symbion Inc. 11.75% 20151,8		5,215			3,468
Boston Scientific Corp. 5.45% 2014		1,565			1,448
Boston Scientific Corp. 5.125% 2017		1,190			1,017
Boston Scientific Corp. 7.00% 2035		920			750
Viant Holdings Inc. 10.125% 20173		2,929			2,314
United Surgical Partners International Inc. 9.25% 20171,8		820			672
CHS/Community Health Systems, Inc. 8.875% 2015		45			44
					437,684
CONSUMER STAPLES — 1.42%
Food & staples retailing — 0.94%
Kroger Co. 5.00% 2013		8,750			8,959
Kroger Co. 7.50% 2014		8,455			9,470
Kroger Co. 6.40% 2017		58,325			61,933
CVS Caremark Corp. 0.968% 20101		5,000			4,966
CVS Caremark Corp. 6.60% 2019		10,880			11,646
CVS Corp. 5.789% 20263,6		14,347			12,255
CVS Corp. 6.036% 20283,6		34,086			29,202
CVS Caremark Corp. 6.943% 20303,6		24,009			21,781
Tesco PLC 5.50% 20173		21,325			21,759
Tesco PLC 5.50% 2033	£	265			413
Tesco PLC 6.15% 20373	$	20,000			20,300
Delhaize Group 5.875% 2014		6,850			7,040
Delhaize Group 6.50% 2017		26,205			26,801
SUPERVALU INC. 7.50% 2012		365			363
Albertson’s, Inc. 7.25% 2013		3,950			3,812
SUPERVALU INC. 7.50% 2014		830			801
SUPERVALU INC. 8.00% 2016		18,525			18,062
Albertson’s, Inc. 8.00% 2031		4,700			4,054
Safeway Inc. 6.25% 2014		3,725			4,002
Safeway Inc. 6.35% 2017		20,000			21,169
Stater Bros. Holdings Inc. 8.125% 2012		9,160			9,068
Stater Bros. Holdings Inc. 7.75% 2015		12,025			11,604
Wal-Mart Stores, Inc. 5.375% 2017		4,500			4,794
Wal-Mart Stores, Inc. 5.80% 2018		12,800			13,967
Duane Reade Inc. 5.129% 20101		4,992			4,655
Duane Reade Inc. 9.75% 2011		7,695			6,579
Vitamin Shoppe Industries Inc. 8.383% 20121		7,490			7,209
Walgreen Co. 4.875% 2013		5,000			5,310
Costco Wholesale Corp. 5.30% 2012		3,000			3,226
Ingles Markets Inc. 8.875% 20173		2,550			2,518
					357,718
Food, beverage & tobacco — 0.47%
Anheuser-Busch InBev NV 7.20% 20143		25,000			26,904
Anheuser-Busch InBev NV 8.625% 2017	€2,500				4,107
Anheuser-Busch InBev NV 6.875% 20193	$	7,740			8,041
Anheuser-Busch InBev NV 7.75% 20193		16,367			17,930
Altria Group, Inc. 9.70% 2018		7,925			9,100
Altria Group, Inc. 9.25% 2019		27,800		��	31,269
Tyson Foods, Inc. 10.50% 20143		4,750			5,177
Tyson Foods, Inc. 7.85% 20161		20,430			19,802
H.J. Heinz Co. 15.59% 20111,3		10,000			12,514
Constellation Brands, Inc. 8.375% 2014		2,075			2,091
Constellation Brands, Inc. 7.25% 2017		9,945			9,249
Coca-Cola Co. 4.875% 2019		7,500			7,721
British American Tobacco International Finance PLC 9.50% 20183		6,000			7,063
Smithfield Foods, Inc., Series B, 8.00% 2009		500			502
Smithfield Foods, Inc., Series B, 7.75% 2013		150			124
Smithfield Foods, Inc. 10.00% 20143		2,175			2,159
Smithfield Foods, Inc. 7.75% 2017		3,825			2,802
Dole Food Co., Inc. 8.875% 2011		4,920			4,822
Cott Beverages Inc. 8.00% 2011		4,950			4,628
Diageo Capital PLC 5.75% 2017		1,437			1,502
Pilgrim’s Pride Corp. 7.625% 20154		700			613
					178,120
Household & personal products — 0.01%
Elizabeth Arden, Inc. 7.75% 2014		2,625			2,284
MATERIALS — 0.93%
Rohm and Haas Co. 5.60% 2013		460			455
Dow Chemical Co. 7.60% 2014		27,250			28,096
Dow Chemical Co. 5.70% 2018		1,700			1,505
Dow Chemical Co. 8.55% 2019		40,300			40,438
Dow Chemical Co. 9.40% 2039		1,350			1,393
International Paper Co. 7.40% 2014		33,610			33,491
International Paper Co. 7.95% 2018		26,750			25,847
International Paper Co. 9.375% 2019		4,150			4,237
Rio Tinto Finance (USA) Ltd. 5.875% 2013		35,500			35,754
Rio Tinto Finance (USA) Ltd. 8.95% 2014		7,465			8,304
Rio Tinto Finance (USA) Ltd. 9.00% 2019		11,000			12,247
BHP Billiton Finance (USA) Ltd. 5.50% 2014		16,295			17,499
BHP Billiton Finance (USA) Ltd. 6.50% 2019		7,500			8,344
ArcelorMittal 6.125% 2018		29,425			25,789
Freeport-McMoRan Copper & Gold Inc. 6.875% 2014		800			821
Freeport-McMoRan Copper & Gold Inc. 8.25% 2015		6,690			6,765
Freeport-McMoRan Copper & Gold Inc. 8.375% 2017		10,230			10,321
Nalco Co. 7.75% 2011		1,336			1,343
Nalco Co. 8.875% 2013		5,335			5,468
Nalco Co. 9.00% 2013	€315				444
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 9.00% 2014	$	2,254			2,220
Nalco Co., Term Loan B, 6.50% 20161,6,7		740			743
Nalco Co. 8.25% 20173		1,135			1,146
UPM-Kymmene Corp. 5.625% 20143		11,220			8,874
Stora Enso Oyj 6.404% 20163		4,500			3,334
Stora Enso Oyj 7.25% 20363		5,690			3,392
Plastipak Holdings, Inc. 8.50% 20153		7,165			6,457
Commercial Metals Co. 6.50% 2017		7,000			6,071
Georgia Gulf Corp. 9.50% 20144		15,380			4,691
Praxair, Inc. 4.375% 2014		1,850			1,918
Praxair, Inc. 4.625% 2015		2,500			2,586
Weyerhaeuser Co. 7.375% 2032		2,500			2,000
Weyerhaeuser Co. 6.875% 2033		2,500			1,708
Lubrizol Corp. 8.875% 2019		3,000			3,491
Arbermarle Corp. 5.10% 2015		3,656			3,206
Rockwood Specialties Group, Inc. 7.50% 2014		2,320			2,192
Rockwood Specialties Group, Inc. 7.625% 2014	€500				659
Graphic Packaging International, Inc. 8.50% 2011	$	1,035			1,030
Graphic Packaging International, Inc. 9.50% 20173		1,820			1,802
Metals USA Holdings Corp. 8.208% 20121,8		2,570			1,551
Metals USA, Inc. 11.125% 2015		1,200			992
Jefferson Smurfit Corp. (U.S.) 8.25% 20124		3,140			1,193
Stone Container Corp. 8.375% 20124		620			240
Jefferson Smurfit Corp. (U.S.) 7.50% 20134		1,005			379
Smurfit-Stone Container Enterprises, Inc. 8.00% 20174		815			306
E.I. du Pont de Nemours and Co. 5.25% 2016		2,000			2,085
Owens-Brockway Glass Container Inc. 7.375% 20163		2,030			1,979
ICI Wilmington, Inc. 5.625% 2013		2,000			1,942
FMG Finance Pty Ltd. 10.625% 20163		2,000			1,930
Georgia-Pacific Corp. 8.125% 2011		1,500			1,508
Georgia-Pacific LLC 8.25% 20163		300			293
Yara International ASA 7.875% 20193		1,675			1,749
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014		3,195			1,701
Domtar Corp. 5.375% 2013		725			605
Domtar Corp. 7.125% 2015		1,270			1,067
Potash Corp. of Saskatchewan Inc. 5.875% 2036		1,600			1,518
C10 Capital (SPV) Ltd. 6.722% (undated)1,3		2,700			1,384
Associated Materials Inc. 9.75% 2012		1,425			1,254
AEP Industries Inc. 7.875% 2013		1,270			1,154
Airgas, Inc. 6.25% 2014		550			521
Airgas, Inc. 7.125% 20183		250			235
Smurfit Capital Funding PLC 7.50% 2025		800			576
Rock-Tenn Co. 9.25% 20163		515			527
Neenah Paper, Inc. 7.375% 2014		620			402
					353,172
INFORMATION TECHNOLOGY — 0.86%
Semiconductors & semiconductor equipment — 0.34%
KLA-Tencor Corp. 6.90% 2018		56,300			50,698
NXP BV and NXP Funding LLC 3.881% 20131		10,045			4,056
NXP BV and NXP Funding LLC 4.185% 20131	€6,075				3,280
NXP BV and NXP Funding LLC 7.875% 2014	$	25,085			11,539
NXP BV and NXP Funding LLC 8.625% 2015	€10,050				5,003
NXP BV and NXP Funding LLC 9.50% 2015	$	33,170			11,858
National Semiconductor Corp. 6.15% 2012		3,700			3,614
National Semiconductor Corp. 6.60% 2017		27,500			24,088
Freescale Semiconductor, Inc., Term Loan B, 2.07% 20131,6,7		2,930			2,150
Freescale Semiconductor, Inc. 8.875% 2014		1,350			689
Freescale Semiconductor, Inc., Term Loan B, 12.50% 20146,7		16,681			14,554
Freescale Semiconductor, Inc. 10.125% 2016		1,642			567
					132,096
Technology hardware & equipment — 0.33%
Electronic Data Systems Corp., Series B, 6.00% 20131		31,625			34,555
Electronic Data Systems Corp. 7.45% 2029		4,520			5,472
Jabil Circuit, Inc. 5.875% 2010		4,750			4,679
Jabil Circuit, Inc. 8.25% 2018		35,725			32,331
Sanmina-SCI Corp. 3.379% 20101,3		1,601			1,545
Sanmina-SCI Corp. 6.75% 2013		15,675			12,226
Sanmina-SCI Corp. 3.379% 20141,3		4,371			3,606
Sanmina-SCI Corp. 8.125% 2016		12,490			9,165
Hughes Communications, Inc. 9.50% 2014		12,425			12,177
Celestica Inc. 7.875% 2011		5,700			5,729
Sensata Technologies BV 8.00% 20141		4,975			2,469
					123,954
Software & services — 0.19%
First Data Corp., Term Loan B2, 3.065% 20141,6,7		15,491			11,717
First Data Corp. 9.875% 20153		9,975			7,132
First Data Corp. 9.875% 2015		1,975			1,412
Oracle Corp. 3.75% 2014		16,500			16,500
SunGard Data Systems Inc. 9.125% 2013		15,613			14,833
Ceridian Corp. 11.25% 2015		13,050			10,978
Serena Software, Inc. 10.375% 2016		11,262			9,010
					71,582
Total corporate bonds & notes					12,785,242
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 27.52%
U.S. Treasury 2.00% 2010		124,125			125,439
U.S. Treasury 2.00% 2010		30,000			30,523
U.S. Treasury 0.875% 2011		20,000			19,929
U.S. Treasury 1.125% 2011		112,705			112,160
U.S. Treasury 1.75% 2011		652,130			659,134
U.S. Treasury 2.375% 20112,10		25,511			26,298
U.S. Treasury 4.50% 2011		44,225			46,890
U.S. Treasury 4.625% 2011		290,400			313,972
U.S. Treasury 4.875% 2011		20,000			21,385
U.S. Treasury 5.125% 2011		20,000			21,577
U.S. Treasury 4.25% 2012		50,050			54,015
U.S. Treasury 4.875% 2012		83,825			91,451
U.S. Treasury 2.00% 2013		249,840			246,220
U.S. Treasury 1.875% 20132,10		11,609			11,921
U.S. Treasury 2.75% 2013		132,160			134,633
U.S. Treasury 2.75% 2013		50,000			51,441
U.S. Treasury 3.125% 2013		50,000			51,808
U.S. Treasury 3.375% 2013		142,760			149,630
U.S. Treasury 3.50% 2013		50,805			53,536
U.S. Treasury 3.625% 2013		45,000			47,615
U.S. Treasury 4.25% 2013		604,036			653,301
U.S. Treasury 1.75% 2014		550,090			534,682
U.S. Treasury 1.75% 2014		20,000			19,347
U.S. Treasury 1.875% 2014		185,975			181,188
U.S. Treasury 1.875% 2014		100,000			97,051
U.S. Treasury 2.25% 2014		282,500			278,748
U.S. Treasury 2.00% 20142,10		11,312			11,581
U.S. Treasury 4.00% 2014		66,000			70,654
U.S. Treasury 4.25% 2014		161,875			174,364
U.S. Treasury 4.25% 2015		134,000			143,684
U.S. Treasury 11.25% 2015		133,500			192,631
U.S. Treasury 2.375% 2016		267,400			254,864
U.S. Treasury 2.625% 2016		349,000			337,507
U.S. Treasury 2.625% 2016		50,000			48,535
U.S. Treasury 3.25% 2016		209,280			210,163
U.S. Treasury 5.125% 2016		56,500			63,382
U.S. Treasury 7.50% 2016		15,250			19,471
U.S. Treasury 2.375% 20172,10		10,573			11,047
U.S. Treasury 4.50% 2017		228,250			246,384
U.S. Treasury 4.625% 2017		180,925			196,912
U.S. Treasury 8.875% 2017		63,425			87,769
U.S. Treasury 3.50% 2018		658,870			662,270
U.S. Treasury 3.75% 2018		605,075			615,615
U.S. Treasury 3.875% 2018		171,505			176,763
U.S. Treasury 4.00% 2018		22,000			22,824
U.S. Treasury 2.75% 2019		717,085			671,708
U.S. Treasury 3.125% 2019		363,090			351,148
U.S. Treasury 8.125% 2019		10,000			13,722
U.S. Treasury 8.50% 2020		31,900			44,889
U.S. Treasury 7.875% 2021		13,750			18,681
U.S. Treasury 8.00% 2021		47,550			65,656
U.S. Treasury 8.125% 2021		19,750			27,360
U.S. Treasury 7.125% 2023		25,000			32,695
U.S. Treasury 7.50% 2024		18,575			25,558
U.S. Treasury 6.875% 2025		93,610			122,702
U.S. Treasury 6.00% 2026		78,000			94,124
U.S. Treasury 6.125% 2027		18,475			22,785
U.S. Treasury 4.50% 2036		260,960			269,115
U.S. Treasury 4.375% 2038		106,895			108,047
U.S. Treasury 4.50% 2038		3,000			3,099
U.S. Treasury 3.50% 2039		6,500			5,624
U.S. Treasury 4.25% 2039		10,500			10,397
U.S. Treasury Principal Strip 0% 2039		29,000			7,890
Fannie Mae 1.75% 2011		143,210			144,530
Fannie Mae 6.125% 2012		10,000			11,165
Fannie Mae 4.625% 2013		6,250			6,341
Fannie Mae 2.50% 2014		49,910			48,989
Fannie Mae 2.75% 2014		43,340			43,209
Fannie Mae 5.375% 2017		17,000			18,885
Freddie Mac 3.125% 2010		73,990			75,205
Freddie Mac 5.25% 2011		20,000			21,604
Freddie Mac 1.75% 2012		60,000			59,717
Freddie Mac 2.50% 2014		47,000			46,216
Freddie Mac 5.50% 2016		30,000			33,522
Federal Home Loan Bank 4.50% 2012		50,000			53,874
Federal Home Loan Bank 3.625% 2013		58,000			60,025
Federal Home Loan Bank 5.375% 2016		25,000			27,652
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 1.625% 2011		8,250			8,322
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 1.80% 2011		9,665			9,758
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.125% 2012		40,000			39,769
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.25% 2012		29,250			29,517
CoBank ACB 7.875% 20183		22,115			21,215
CoBank ACB 1.229% 20221,3		46,470			19,743
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		20,000			19,921
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		10,000			9,959
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.125% 2012		11,000			11,054
United States Government Agency-Guaranteed (FDIC insured), Goldman Sachs Group, Inc. 3.25% 2012		25,000			25,867
United States Government Agency-Guaranteed (FDIC insured), State Street Corp. 2.15% 2012		20,000			20,081
United States Government Agency-Guaranteed (FDIC insured), GMAC LLC 2.20% 2012		20,000			19,927
United States Government Agency-Guaranteed (FDIC insured), Bank of America Corp. 2.375% 2012		17,500			17,673
Federal Agricultural Mortgage Corp. 4.875% 20113		10,000			10,623
United States Government Agency-Guaranteed (FDIC insured), John Deere Capital Corp. 2.875% 2012		10,000			10,241
United States Government Agency-Guaranteed (FDIC insured), Sovereign Bancorp, Inc. 2.75% 2012		7,500			7,551
United States Government-Guaranteed Certificates of Participation, Overseas Private Investment Corp.,
Series 2000-044-A, 3.74% 20156		6,490			6,799
United States Agency for International Development, Republic of Egypt 4.45% 2015		5,000			5,130
Federal Farm Credit Banks, Consolidated Systemwide Designated Bonds, 2.625% 2014		5,000			4,904
Private Export Funding Corp., Series W, 5.00% 2016		3,400			3,684
					10,428,186
MORTGAGE-BACKED OBLIGATIONS — 23.93%
FEDERAL AGENCY MORTGAGE-BACKED OBLIGATIONS6 — 16.86%
Fannie Mae 7.00% 2009		—			—
Fannie Mae 7.50% 2009		12			12
Fannie Mae 8.50% 2009		—			—
Fannie Mae 9.50% 2009		1			1
Fannie Mae 7.00% 2010		—			1
Fannie Mae 4.89% 2012		25,000			26,252
Fannie Mae 7.00% 2016		129			137
Fannie Mae 11.50% 2016		233			264
Fannie Mae, Series 2002-15, Class PG, 6.00% 2017		6,467			6,905
Fannie Mae 5.50% 2018		17			18
Fannie Mae 9.00% 2018		22			24
Fannie Mae 10.00% 2018		211			241
Fannie Mae 4.00% 2019		27,761			28,399
Fannie Mae 4.50% 2019		18,249			18,943
Fannie Mae 4.50% 2019		17,760			18,435
Fannie Mae 5.50% 2019		176			186
Fannie Mae 5.50% 2019		74			78
Fannie Mae 12.00% 2019		258			289
Fannie Mae 4.50% 2020		4,497			4,652
Fannie Mae 5.50% 2020		14,590			15,433
Fannie Mae 5.50% 2020		1,633			1,726
Fannie Mae 11.00% 2020		106			121
Fannie Mae 11.235% 20201		242			277
Fannie Mae 4.50% 2021		74,794			77,380
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		21,595			22,248
Fannie Mae 5.00% 2022		18,781			19,479
Fannie Mae 5.50% 2022		17,114			17,954
Fannie Mae 5.50% 2022		16,819			17,644
Fannie Mae 9.00% 2022		32			35
Fannie Mae 4.50% 2023		25,000			25,556
Fannie Mae 4.50% 2023		18,758			19,172
Fannie Mae 4.50% 2023		18,246			18,649
Fannie Mae 5.00% 2023		17,655			18,299
Fannie Mae 5.00% 2023		14,414			14,939
Fannie Mae 5.00% 2023		12,479			12,934
Fannie Mae 5.00% 2023		11,902			12,336
Fannie Mae 5.00% 2023		10,902			11,299
Fannie Mae 5.00% 2023		10,138			10,507
Fannie Mae 5.00% 2023		7,449			7,730
Fannie Mae 5.50% 2023		44,646			46,823
Fannie Mae 5.50% 2023		37,147			39,022
Fannie Mae 5.50% 2023		15,744			16,507
Fannie Mae 5.50% 2023		10,556			11,067
Fannie Mae 6.00% 2023		4,351			4,618
Fannie Mae 7.50% 2023		62			68
Fannie Mae 4.00% 2024		210,420			210,836
Fannie Mae 4.00% 2024		165,832			166,117
Fannie Mae 4.00% 2024		138,853			139,092
Fannie Mae 4.00% 2024		79,334			79,491
Fannie Mae 4.00% 2024		50,567			50,667
Fannie Mae 4.00% 2024		50,000			50,099
Fannie Mae 4.00% 2024		48,776			48,872
Fannie Mae 4.00% 2024		46,038			46,129
Fannie Mae 4.00% 2024		45,484			45,574
Fannie Mae 4.00% 2024		42,455			42,539
Fannie Mae 4.00% 2024		37,733			37,807
Fannie Mae 4.00% 2024		34,785			34,854
Fannie Mae 4.00% 2024		33,849			33,920
Fannie Mae 4.00% 2024		33,166			33,232
Fannie Mae 4.00% 2024		29,630			29,689
Fannie Mae 4.00% 2024		24,894			24,943
Fannie Mae 4.00% 2024		24,885			24,934
Fannie Mae 4.00% 2024		24,225			24,273
Fannie Mae 4.00% 2024		21,237			21,279
Fannie Mae 4.00% 2024		15,513			15,540
Fannie Mae 4.00% 2024		11,903			11,927
Fannie Mae 4.00% 2024		8,418			8,435
Fannie Mae 4.00% 2024		8,048			8,064
Fannie Mae 4.50% 2024		55,912			57,129
Fannie Mae 4.50% 2024		50,000			51,088
Fannie Mae 4.50% 2024		48,246			49,314
Fannie Mae 4.50% 2024		43,678			44,628
Fannie Mae 4.50% 2024		25,000			25,556
Fannie Mae 4.50% 2024		14,834			15,163
Fannie Mae 5.50% 2024		44,322			46,496
Fannie Mae 5.50% 2024		29,388			30,824
Fannie Mae 6.00% 2024		11,682			12,285
Fannie Mae, Series 2001-4, Class GA, 10.095% 20251		454			514
Fannie Mae, Series 2001-4, Class NA, 11.844% 20251		1,869			2,100
Fannie Mae 5.393% 20261		494			516
Fannie Mae 6.00% 2026		27,408			28,823
Fannie Mae 5.50% 2027		21,567			22,377
Fannie Mae 8.50% 2027		8			9
Fannie Mae 6.00% 2028		8,755			9,180
Fannie Mae 6.00% 2028		8,201			8,599
Fannie Mae, Series 1998-W5, Class B3, 6.50% 2028		1,931			1,468
Fannie Mae 6.50% 2029		178			189
Fannie Mae, Series 2002-W7, Class A-5, 7.50% 2029		631			682
Fannie Mae 7.50% 2029		46			50
Fannie Mae 7.50% 2029		42			46
Fannie Mae 7.50% 2030		137			150
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031		5,230			5,568
Fannie Mae 7.50% 2031		351			384
Fannie Mae 7.50% 2031		35			38
Fannie Mae, Series 2001-20, Class E, 9.626% 20311		76			86
Fannie Mae, Series 2001-20, Class C, 12.01% 20311		75			86
Fannie Mae 6.50% 2032		587			626
Fannie Mae 5.50% 2033		29,081			30,169
Fannie Mae 6.50% 2034		876			932
Fannie Mae 4.567% 20351		10,560			10,941
Fannie Mae 5.50% 2035		37,478			38,861
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035		6,023			6,285
Fannie Mae 6.50% 2035		9,669			10,374
Fannie Mae, Series 2006-51, Class PO, principal only, 0% 2036		8,533			7,390
Fannie Mae, Series 2006-32, Class OA, principal only, 0% 2036		7,799			5,865
Fannie Mae, Series 2006-96, Class OP, principal only, 0% 2036		1,797			1,429
Fannie Mae 5.00% 2036		118,249			120,781
Fannie Mae, Series 2006-101, Class PC, 5.50% 2036		7,500			7,755
Fannie Mae 6.00% 2036		32,399			34,015
Fannie Mae 6.00% 2036		23,327			24,454
Fannie Mae, Series 2006-106, Class HG, 6.00% 2036		19,944			20,978
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036		17,821			18,727
Fannie Mae 6.00% 2036		10,963			11,495
Fannie Mae 6.00% 2036		7,359			7,722
Fannie Mae 6.50% 2036		24,489			26,128
Fannie Mae 6.50% 2036		8,375			8,991
Fannie Mae 6.50% 2036		5,230			5,580
Fannie Mae 6.50% 2036		4,702			4,998
Fannie Mae 7.00% 2036		3,863			4,182
Fannie Mae 7.00% 2036		1,731			1,881
Fannie Mae 7.00% 2036		1,694			1,842
Fannie Mae 7.00% 2036		1,183			1,281
Fannie Mae 7.50% 2036		1,716			1,858
Fannie Mae 7.50% 2036		911			986
Fannie Mae 8.00% 2036		2,295			2,402
Fannie Mae 5.274% 20371		1,771			1,843
Fannie Mae 5.46% 20371		17,010			17,844
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037		29,136			30,882
Fannie Mae 5.51% 20371		25,152			26,433
Fannie Mae 5.603% 20371		38,373			40,326
Fannie Mae 5.617% 20371		11,634			12,225
Fannie Mae 5.715% 20371		18,905			19,868
Fannie Mae 5.771% 20371		21,362			22,450
Fannie Mae 5.971% 20371		31,597			32,999
Fannie Mae 6.00% 2037		120,194			125,812
Fannie Mae 6.00% 2037		84,188			88,176
Fannie Mae 6.00% 2037		49,332			51,669
Fannie Mae 6.00% 2037		45,551			47,709
Fannie Mae 6.00% 2037		40,748			42,666
Fannie Mae 6.00% 2037		36,167			37,881
Fannie Mae 6.00% 2037		22,561			23,623
Fannie Mae 6.00% 2037		12,724			13,327
Fannie Mae 6.00% 2037		12,309			12,848
Fannie Mae 6.00% 2037		12,115			12,689
Fannie Mae 6.00% 2037		8,935			9,353
Fannie Mae 6.00% 2037		8,174			8,532
Fannie Mae 6.00% 2037		7,184			7,522
Fannie Mae 6.00% 2037		4,403			4,587
Fannie Mae, Series 2007-24, Class P, 6.00% 2037		4,086			4,299
Fannie Mae 6.00% 2037		3,695			3,880
Fannie Mae 6.089% 20371		20,143			21,169
Fannie Mae 6.405% 20371		10,933			11,490
Fannie Mae 6.50% 2037		35,475			37,837
Fannie Mae 6.50% 2037		32,380			34,536
Fannie Mae 6.50% 2037		26,942			28,736
Fannie Mae 6.50% 2037		26,124			27,766
Fannie Mae 6.50% 2037		24,586			26,085
Fannie Mae 6.50% 2037		19,705			20,943
Fannie Mae 6.50% 2037		14,417			15,323
Fannie Mae 6.50% 2037		9,341			9,928
Fannie Mae 6.50% 2037		9,066			9,618
Fannie Mae 6.50% 2037		1,456			1,553
Fannie Mae 6.666% 20371		13,648			14,343
Fannie Mae 6.815% 20371		1,280			1,345
Fannie Mae 7.00% 2037		43,323			47,115
Fannie Mae 7.00% 2037		34,388			37,226
Fannie Mae 7.00% 2037		13,209			14,299
Fannie Mae 7.00% 2037		12,705			13,754
Fannie Mae 7.00% 2037		10,901			11,801
Fannie Mae 7.00% 2037		10,889			11,670
Fannie Mae 7.00% 2037		8,069			8,735
Fannie Mae 7.00% 2037		7,149			7,739
Fannie Mae 7.00% 2037		6,464			6,998
Fannie Mae 7.00% 2037		4,988			5,400
Fannie Mae 7.00% 2037		4,219			4,567
Fannie Mae 7.00% 2037		3,744			4,053
Fannie Mae 7.00% 2037		2,325			2,517
Fannie Mae 7.00% 2037		1,787			1,943
Fannie Mae 7.00% 2037		1,676			1,814
Fannie Mae 7.00% 2037		1,657			1,803
Fannie Mae 7.00% 2037		1,603			1,735
Fannie Mae 7.00% 2037		1,095			1,186
Fannie Mae 7.00% 2037		826			898
Fannie Mae 7.00% 2037		748			814
Fannie Mae 7.50% 2037		7,091			7,718
Fannie Mae 7.50% 2037		4,051			4,386
Fannie Mae 7.50% 2037		3,893			4,216
Fannie Mae 7.50% 2037		3,205			3,435
Fannie Mae 7.50% 2037		3,004			3,253
Fannie Mae 7.50% 2037		2,085			2,257
Fannie Mae 7.50% 2037		2,076			2,248
Fannie Mae 7.50% 2037		2,034			2,202
Fannie Mae 7.50% 2037		1,781			1,928
Fannie Mae 7.50% 2037		1,528			1,654
Fannie Mae 7.50% 2037		1,375			1,489
Fannie Mae 7.50% 2037		1,327			1,437
Fannie Mae 7.50% 2037		1,244			1,347
Fannie Mae 7.50% 2037		1,070			1,158
Fannie Mae 7.50% 2037		1,003			1,086
Fannie Mae 7.50% 2037		941			1,019
Fannie Mae 7.50% 2037		859			931
Fannie Mae 7.50% 2037		587			640
Fannie Mae 7.50% 2037		571			618
Fannie Mae 7.50% 2037		494			535
Fannie Mae 8.00% 2037		2,885			3,131
Fannie Mae 8.00% 2037		2,140			2,239
Fannie Mae 8.00% 2037		1,770			1,965
Fannie Mae 8.00% 2037		1,758			1,839
Fannie Mae 8.00% 2037		1,147			1,201
Fannie Mae 4.999% 20381		15,938			16,664
Fannie Mae 5.00% 2038		17,894			18,244
Fannie Mae 5.00% 2038		8,973			9,149
Fannie Mae 5.32% 20381		13,114			13,723
Fannie Mae 5.50% 2038		53,882			55,753
Fannie Mae 5.50% 2038		44,382			45,930
Fannie Mae 5.50% 2038		44,153			45,645
Fannie Mae 5.50% 2038		37,359			38,657
Fannie Mae 5.50% 2038		22,595			23,415
Fannie Mae 5.50% 2038		18,905			19,594
Fannie Mae 5.50% 2038		13,329			13,792
Fannie Mae 5.50% 2038		3,394			3,518
Fannie Mae 5.554% 20381		2,617			2,740
Fannie Mae 5.677% 20381		19,209			20,188
Fannie Mae 5.737% 20381		29,045			30,525
Fannie Mae 6.00% 2038		40,720			42,650
Fannie Mae 6.00% 2038		26,844			28,103
Fannie Mae 6.00% 2038		26,696			27,948
Fannie Mae 6.00% 2038		22,583			23,710
Fannie Mae 6.00% 2038		19,152			20,050
Fannie Mae 6.00% 2038		18,457			19,323
Fannie Mae 6.00% 2038		11,191			11,716
Fannie Mae 7.00% 2038		23,784			25,747
Fannie Mae 4.50% 2034		25,000			24,953
Fannie Mae 5.00% 2039		97,774			99,710
Fannie Mae 5.00% 2039		50,000			50,914
Fannie Mae 5.125% 20391		27,589			28,761
Fannie Mae 6.00% 2039		10,380			10,867
Fannie Mae 6.50% 2039		60,170			64,090
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041		5,837			6,249
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041		1,845			1,984
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2041		3,490			3,774
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042		4,024			4,355
Fannie Mae 6.00% 2047		1,099			1,148
Fannie Mae 6.50% 2047		1,382			1,451
Fannie Mae 6.50% 2047		1,350			1,418
Fannie Mae 6.50% 2047		852			907
Fannie Mae 7.00% 2047		7,039			7,620
Fannie Mae 7.00% 2047		497			538
Fannie Mae 7.50% 2047		1,740			1,884
Fannie Mae 7.50% 2047		706			764
Fannie Mae 7.50% 2047		608			658
Freddie Mac 8.50% 2009		1			1
Freddie Mac 8.50% 2010		7			7
Freddie Mac 6.00% 2017		356			380
Freddie Mac, Series 2310, Class A, 10.428% 20171		271			304
Freddie Mac 11.00% 2018		42			48
Freddie Mac, Series 2890, Class KT, 4.50% 2019		2,500			2,485
Freddie Mac 5.50% 2019		8,036			8,496
Freddie Mac 8.50% 2020		116			127
Freddie Mac 8.50% 2020		40			44
Freddie Mac, Series 41, Class F, 10.00% 2020		85			85
Freddie Mac, Series 178, Class Z, 9.25% 2021		67			71
Freddie Mac, Series 2626, Class NG, 3.50% 2023		1,665			1,677
Freddie Mac, Series 2922, Class EL, 4.50% 2023		34,250			35,310
Freddie Mac 5.00% 2023		37,211			38,535
Freddie Mac 5.00% 2023		36,483			37,793
Freddie Mac 5.00% 2023		13,061			13,530
Freddie Mac 5.00% 2023		3,909			4,049
Freddie Mac 5.00% 2023		2,224			2,304
Freddie Mac 5.00% 2023		221			229
Freddie Mac, Series 1617, Class PM, 6.50% 2023		1,804			1,949
Freddie Mac 4.00% 2024		53,828			53,895
Freddie Mac 4.00% 2024		18,923			18,948
Freddie Mac 4.50% 2024		7,379			7,538
Freddie Mac 6.00% 2026		26,095			27,424
Freddie Mac 6.00% 2026		20,127			21,152
Freddie Mac 8.00% 2026		87			96
Freddie Mac 5.50% 2027		13,117			13,608
Freddie Mac 6.00% 2027		148,398			155,951
Freddie Mac 8.50% 2027		19			21
Freddie Mac, Series 2153, Class GG, 6.00% 2029		3,144			3,316
Freddie Mac, Series 2122, Class QM, 6.25% 2029		5,629			5,904
Freddie Mac 4.629% 20351		13,314			13,828
Freddie Mac, Series 3061, Class PN, 5.50% 2035		43,560			45,973
Freddie Mac 6.50% 20352		333			347
Freddie Mac, Series 3136, Class OP, principal only, 0% 2036		7,589			6,459
Freddie Mac, Series 3147, Class OD, principal only, 0% 2036		5,289			4,609
Freddie Mac, Series 3149, Class MO, principal only, 0% 2036		5,360			4,446
Freddie Mac, Series 3149, Class AO, principal only, 0% 2036		4,697			3,896
Freddie Mac, Series 3257, Class PA, 5.50% 2036		48,091			50,281
Freddie Mac 5.588% 20361		4,596			4,799
Freddie Mac 5.866% 20361		19,510			20,428
Freddie Mac, Series 3233, Class PA, 6.00% 2036		38,735			40,843
Freddie Mac, Series 3156, Class NG, 6.00% 2036		12,281			13,061
Freddie Mac, Series 3286, Class JN, 5.50% 2037		61,901			64,378
Freddie Mac, Series 3318, Class JT, 5.50% 2037		34,541			35,915
Freddie Mac 5.50% 2037		29,285			30,282
Freddie Mac, Series 3312, Class PA, 5.50% 2037		26,206			27,255
Freddie Mac 5.50% 2037		24,966			25,816
Freddie Mac 5.52% 20371		31,634			32,805
Freddie Mac 5.606% 20371		15,509			16,253
Freddie Mac 5.89% 20371		5,668			5,963
Freddie Mac 5.941% 20371		33,026			34,500
Freddie Mac 5.95% 20371		9,710			10,183
Freddie Mac 5.973% 20371		27,172			28,527
Freddie Mac, Series 3271, Class OA, 6.00% 2037		16,186			17,238
Freddie Mac 6.00% 2037		2,737			2,862
Freddie Mac 6.011% 20371		2,212			2,334
Freddie Mac 6.222% 20371		16,284			17,078
Freddie Mac 6.247% 20371		14,956			15,712
Freddie Mac 6.265% 20371		3,331			3,501
Freddie Mac 6.50% 2037		36,082			38,404
Freddie Mac 6.50% 2037		1,000			1,064
Freddie Mac 7.00% 2037		2,214			2,389
Freddie Mac 7.00% 2037		2,183			2,355
Freddie Mac 7.00% 2037		1,936			2,088
Freddie Mac 7.00% 20372		936			984
Freddie Mac 7.00% 20372		902			947
Freddie Mac 7.00% 20372		367			386
Freddie Mac 7.50% 2037		21,928			23,598
Freddie Mac 4.745% 20381		4,627			4,790
Freddie Mac 4.811% 20381		13,787			14,219
Freddie Mac 4.933% 20381		19,065			19,772
Freddie Mac 5.00% 2038		8,780			8,942
Freddie Mac 5.044% 20381		14,883			15,318
Freddie Mac 5.058% 20381		9,638			9,973
Freddie Mac 5.142% 20381		1,958			2,036
Freddie Mac 5.179% 20381		39,913			41,566
Freddie Mac 5.311% 20381		15,946			16,600
Freddie Mac 5.50% 2038		23,659			24,456
Freddie Mac 5.585% 20381		32,428			33,967
Freddie Mac 6.00% 2038		126,842			132,625
Freddie Mac 6.50% 2038		18,220			19,392
Freddie Mac 6.50% 2038		18,000			19,153
Freddie Mac 5.00% 2039		60,125			61,149
Freddie Mac 6.50% 2047		2,725			2,894
Freddie Mac 6.50% 2047		1,094			1,161
Freddie Mac 7.00% 2047		846			913
Freddie Mac 7.00% 2047		703			759
Government National Mortgage Assn. 7.50% 2009		1			1
Government National Mortgage Assn. 9.50% 2009		5			5
Government National Mortgage Assn. 9.50% 2009		—			—
Government National Mortgage Assn. 9.00% 2016		72			80
Government National Mortgage Assn. 9.00% 2017		18			20
Government National Mortgage Assn. 9.50% 2019		157			178
Government National Mortgage Assn. 8.50% 2020		26			29
Government National Mortgage Assn. 8.50% 2020		8			9
Government National Mortgage Assn. 9.50% 2020		58			66
Government National Mortgage Assn. 8.50% 2021		151			168
Government National Mortgage Assn. 8.50% 2021		99			110
Government National Mortgage Assn. 8.50% 2021		31			35
Government National Mortgage Assn. 8.50% 2021		31			34
Government National Mortgage Assn. 10.00% 2021		832			945
Government National Mortgage Assn. 9.00% 2022		4			4
Government National Mortgage Assn. 8.50% 2023		23			26
Government National Mortgage Assn. 8.50% 2024		11			12
Government National Mortgage Assn. 8.50% 2024		7			8
Government National Mortgage Assn. 8.50% 2027		28			32
Government National Mortgage Assn. 8.50% 2028		23			26
Government National Mortgage Assn. 8.50% 2029		27			31
Government National Mortgage Assn., Series 2005-58, Class NO, principal only, 0% 2035		4,699			3,693
Government National Mortgage Assn. 6.00% 2038		142,725			148,958
Government National Mortgage Assn. 6.50% 2038		23,913			25,401
Government National Mortgage Assn. 4.50% 2039		25,000			24,944
Government National Mortgage Assn., Series 2003, Class A, 5.612% 20582		10,364			10,720
					6,388,476
COMMERCIAL MORTGAGE-BACKED SECURITIES6 — 4.19%
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034		1,203			1,222
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-4, 6.505% 2034		438			448
CS First Boston Mortgage Securities Corp., Series 2001-CK3, Class A-4, 6.53% 2034		2,475			2,540
CS First Boston Mortgage Securities Corp., Series 2002-CP5, Class A-1, 4.106% 2035		539			536
CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035		42,754			43,852
CS First Boston Mortgage Securities Corp., Series 2002-CKP1, Class F, 7.067% 20351,3		1,500			957
CS First Boston Mortgage Securities Corp., Series 2002-CKS4, Class G, 6.006% 20361,3		500			304
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036		29,505			30,226
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-2, 4.183% 2037		14,601			14,424
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-3, 4.499% 2037		12,900			11,905
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-2, 4.512% 2037		1,690			1,674
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 2037		20,000			19,160
CS First Boston Mortgage Securities Corp., Series 2005-C2, Class A-MFX, 4.877% 2037		10,000			5,587
CS First Boston Mortgage Securities Corp., Series 2004-C1, Class E, 5.015% 20373		8,240			2,762
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		2,500			2,464
CS First Boston Mortgage Securities Corp., Series 2003-C3, Class F, 4.518% 20383		2,000			771
CS First Boston Mortgage Securities Corp., Series 2005-C4, Class A-2, 5.017% 2038		12,200			12,184
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-AB, 5.10% 20381		12,000			11,306
CS First Boston Mortgage Securities Corp., Series 2004-C4, Class A-4, 4.283% 2039		20,600			19,703
CS First Boston Mortgage Securities Corp., Series 2006-C1, Class A-3, 5.711% 20391		10,000			8,624
CS First Boston Mortgage Securities Corp., Series 2006-C2, Class A-3, 5.658% 20391		7,305			5,242
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20401		42,000			33,731
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-M, 5.23% 20401		5,000			3,109
CS First Boston Mortgage Securities Corp., Series 1999-C1, Class D, 8.267% 20411		850			845
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2001-CIBC1, Class A-3, 6.26% 2033		3,655			3,728
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C2, Class F, 6.192% 20341,3		2,500			1,460
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C3, Class A-1, 4.20% 2035		621			621
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-CBX, Class A-5, 4.654% 2037		2,500			2,315
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.316% 20371		61,300			57,003
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class E, 6.135% 20373		400			284
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039		5,713			5,387
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-3, 4.545% 2042		21,050			19,416
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class A-2, 4.575% 2042		20,058			19,881
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-3A1, 4.871% 2042		25,000			23,748
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP3, Class A-4A, 4.936% 20421		1,655			1,409
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A-2, 5.198% 2044		10,080			9,764
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CIBC14, Class A-4, 5.481% 20441		21,259			17,513
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 5.875% 20451		29,000			24,321
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046		26,339			25,793
Fannie Mae, Series 2000-T5, Class B, 7.30% 2010		57,100			59,650
Fannie Mae, Series 2001-T6B, 6.088% 2011		48,000			51,072
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		46,225			47,876
SBA CMBS Trust, Series 2005-1, Class A, 5.369% 20352,3		33,000			31,680
SBA CMBS Trust, Series 2005-1, Class B, 5.565% 20352,3		3,300			3,118
SBA CMBS Trust, Series 2005-1, Class E, 6.706% 20352,3		7,460			6,938
SBA CMBS Trust, Series 2006-1A, Class A, 5.314% 20362,3		48,500			45,347
SBA CMBS Trust, Series 2006-1A, Class B, 5.451% 20362,3		14,180			12,904
SBA CMBS Trust, Series 2006-1A, Class D, 5.852% 20362,3		12,329			11,971
SBA CMBS Trust, Series 2006-1A, Class E, 6.174% 20362,3		4,025			3,582
SBA CMBS Trust, Series 2006-1A, Class F, 6.709% 20362,3		375			334
SBA CMBS Trust, Series 2006-1A, Class G, 6.904% 20362,3		1,375			1,210
SBA CMBS Trust, Series 2006-1A, Class H, 7.389% 20362,3		4,040			3,555
SBA CMBS Trust, Series 2006-1A, Class J, 7.825% 20362,3		2,375			2,090
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20373		18,500			17,193
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20373		10,000			8,794
American Tower Trust I, Series 2007-1A, Class C, 5.615% 20373		10,000			8,494
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20373		36,415			30,205
American Tower Trust I, Series 2007-1A, Class E, 6.249% 20373		11,375			8,753
American Tower Trust I, Series 2007-1A, Class F, 6.639% 20372,3		13,470			11,382
Crown Castle Towers LLC, Series 2005-1, Class C, 5.074% 20353		43,000			42,140
Crown Castle Towers LLC, Series 2006-1, Class E, 6.065% 20362,3		31,000			30,380
Crown Castle Towers LLC, Series 2006-1, Class F, 6.650% 20362,3		10,350			10,143
Crown Castle Towers LLC, Series 2006-1, Class G, 6.795% 20362,3		1,400			1,372
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A-3, 4.608% 2035		2,296			2,273
Wachovia Bank Commercial Mortgage Trust, Series 2004-C14, Class A-2, 4.368% 2041		1,211			1,198
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A-PB, 4.807% 2042		3,000			2,801
Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class A-7, 5.118% 20421		4,650			3,929
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-2, 5.242% 2044		17,000			16,254
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-4, 5.44% 20441		15,350			13,171
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-PB, 5.445% 20441		8,038			7,199
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045		16,750			15,076
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036		44,880			45,686
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-3, 4.561% 2041		9,975			9,241
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-AB, 4.673% 2041		2,000			1,928
Banc of America Commercial Mortgage Inc., Series 2004-4, Class B, 4.985% 2042		1,000			381
Banc of America Commercial Mortgage Inc., Series 2005-3, Class A-2, 4.501% 2043		1,260			1,214
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-4, 5.115% 20451		2,500			2,141
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-WF2, Class X, interest only, 0.564% 20311		56,024			1,554
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1, Class X, interest only, 0.888% 20311,3		35,752			783
Bear Stearns Commercial Mortgage Securities Inc., Series 2000-WF2, Class A-2, 7.32% 2032		15,633			16,017
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035		7,814			7,760
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class D, 6.94% 20353		3,000			2,574
Bear Stearns Commercial Mortgage Securities Inc., Series 2004-PWR6, Class A-4, 4.521% 2041		10,000			9,609
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-3, 4.868% 2042		20,825			17,560
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP6, Class A-4, 5.475% 20431		51,820			41,471
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP7, Class A-M, 6.065% 20451		7,645			4,590
Structured Products Asset Return Certificates Trust, Series 2001-CF1, Class A, 6.36% 20332		42,936			43,456
Commercial Mortgage Trust, Series 2000-C1, Class A-2, 7.416% 2033		2,215			2,235
Commercial Mortgage Trust, Series 2004-LB3A, Class A-4, 5.234% 2037		10,956			10,545
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		20,000			18,529
Commercial Mortgage Trust, Series 2004-LNB2, Class A-3, 4.221% 2039		8,729			8,696
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1, Class F, 7.222% 2029		1,299			1,309
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034		28,569			29,450
GMAC Commercial Mortgage Securities, Inc., Series 2003-C1, Class F, 4.718% 20361,3		1,000			396
GMAC Commercial Mortgage Securities, Inc., Series 2003-C1, Class G, 4.817% 20361,3		1,000			394
GMAC Commercial Mortgage Securities, Inc., Series 2004-C3, Class A-3, 4.207% 2041		7,743			7,722
GE Commercial Mortgage Corp., Series 2004-C3, Class B, 5.31% 20391		8,000			3,217
GE Commercial Mortgage Corp., Series 2004-C2, Class B, 4.983% 2040		19,193			7,917
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.336% 20441		33,700			27,716
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20263		40,324			37,854
Greenwich Capital Commercial Funding Corp., Series 2003-C1, Class A-2, 3.285% 2035		1,974			1,921
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-2, 5.117% 2037		13,045			12,751
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-5, 5.224% 20371		11,000			8,919
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 20371		15,000			12,732
Merrill Lynch Mortgage Trust, Series 2005-CKI1, Class AM, 5.415% 20371		4,620			2,910
Merrill Lynch Mortgage Trust, Series 2005-CIP1, Class A-3-A, 4.949% 20381		8,500			7,745
Merrill Lynch Mortgage Trust, Series 2006-C1, Class A-3, 5.66% 20391		3,050			2,676
Merrill Lynch Mortgage Trust, Series 2004-BPC1, Class A-5, 4.855% 20411		6,805			5,875
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class A-4, 4.747% 20431		5,065			4,309
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class AM, 4.805% 20431		6,300			3,934
Merrill Lynch Mortgage Trust, Series 2006-C2, Class A-4, 5.742% 20431		10,250			8,430
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% (undated)1		41,210			29,327
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class A-2, 6.592% 2033		18,011			18,414
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035		7,233			7,371
Salomon Brothers Commercial Mortgage Trust, Series 2001-C2, Class A-3, 6.499% 2036		2,287			2,366
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-1, 6.079% 2033		45			45
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-2, 6.531% 2033		18,090			18,628
GE Capital Commercial Mortgage Corp., Series 2002-3, Class A-2, 4.996% 2037		2,500			2,454
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-1, 5.56% 2038		910			935
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-2, 6.07% 2038		2,500			2,516
LB-UBS Commercial Mortgage Trust, Series 2000-C3, Class A-2, 7.95% 2025		12,433			12,636
LB-UBS Commercial Mortgage Trust, Series 2002-C1, Class A-3, 6.226% 2026		1,840			1,855
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-2, 5.103% 2030		3,468			3,377
LB-UBS Commercial Mortgage Trust, Series 2005-C5, Class A-M, 5.017% 20401		10,000			6,620
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class A-2, 7.439% 2031		1,016			1,014
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class B, 7.619% 2031		17,125			17,095
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class C, 7.625% 2031		5,000			4,998
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A-3, 5.725% (undated)1		15,800			13,374
COBALT CMBS Commerical Mortgage Trust, Series 2006-C1, Class A-2, 5.174% 2048		14,000			12,598
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048		10,000			8,199
Morgan Stanley Dean Witter Capital I Trust, Series 2000-LIFE2, Class A-2, 7.20% 2033		4,046			4,160
Morgan Stanley Dean Witter Capital I Trust, Series 2001-TOP5, Class A-3, 6.16% 2035		260			260
Morgan Stanley Dean Witter Capital I Trust, Series 2003-TOP9, Class A-1, 3.98% 2036		3,289			3,243
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.378% 20421		7,875			7,226
Hilton Hotel Pool Trust, Series 2000-HLTA, Class F, 7.75% 20153		5,000			5,381
GS Mortgage Securities Corp. II, Series 1998-C1, Class E, 7.45% 20301		5,004			4,991
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032		3,953			4,065
Bank of America, NA and First Union National Bank Commercial Mortgage Trust, Series 2001-3, Class A-1, 4.89% 2037		934			935
First Union National Bank Commercial Mortgage Trust, Series 2001-C4, Class A-1, 5.673% 2033		467			471
					1,587,004
COLLATERALIZED MORTGAGE-BACKED OBLIGATIONS (PRIVATELY ORIGINATED)6 — 2.30%
Countrywide Alternative Loan Trust, Series 2004-14T2, Class A-2, 5.50% 2034		13,679			10,694
Countrywide Alternative Loan Trust, Series 2005-46CB, Class A-8, 5.50% 2035		34,945			28,235
Countrywide Alternative Loan Trust, Series 2005-49CB, Class A-1, 5.50% 2035		17,224			15,028
Countrywide Alternative Loan Trust, Series 2005-40CB, Class A-1, 5.50% 2035		15,705			10,201
Countrywide Alternative Loan Trust, Series 2005-J13, Class 2-A-4, 5.50% 2035		8,060			4,143
Countrywide Alternative Loan Trust, Series 2005-J11, Class 1-A-12, 5.50% 2035		8,000			3,673
Countrywide Alternative Loan Trust, Series 2005-J11, Class 1-A-16, 5.50% 2035		4,618			1,962
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 5-A-1, 5.75% 2035		2,306			1,717
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035		10,853			7,774
Countrywide Alternative Loan Trust, Series 2005-9CB, Class 2-A-1, 6.00% 2035		5,633			3,922
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 6-A-1, 6.00% 2035		921			628
Countrywide Alternative Loan Trust, Series 2007-14T2, Class A-4, 0.664% 20371		23,003			8,003
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-AR11, Class A, 4.435% 20341		20,931			17,653
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR12, Class 1-A4, 6.052% 20361		2,358			1,505
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY3, Class 4-A1, 5.33% 20371		6,953			4,691
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 2-A1, 5.805% 20371		31,834			16,289
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY5, Class 3-A1, 5.809% 20371		45,396			30,657
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 4-A2, 5.855% 20371		40,297			21,086
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-22, Class 5-A-1, 5.998% 20351		3,197			1,854
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-8, Class 3-AF, 0.694% 20361		14,078			8,342
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 6-A, 5.902% 20361		55,125			30,526
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-2, Class 5-A-1, 6.00% 20361		6,286			3,091
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-6, Class 3-A-1, 5.838% 20371		19,668			9,782
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-12, Class 2-A1, 5.883% 20371		20,290			10,217
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-8, Class 2-A3, 5.951% 20371		31,899			18,337
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-9, Class 2-A1, 5.949% 20471		10,402			5,430
Wells Fargo Alternative Loan Trust, Series 2007-PA1, Class A-1, 0.634% 20371		54,069			21,572
Wells Fargo Alternative Loan Trust, Series 2007-PA4, Class III-A-1, 6.064% 20371		25,353			11,508
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class III-A-1, 6.25% 2037		72,730			37,556
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class IV-A-1, 6.50% 2037		24,451			12,623
Bear Stearns ARM Trust, Series 2004-3, Class II-A, 3.914% 20341		8,458			6,490
Bear Stearns ARM Trust, Series 2005-6, Class I-A-1, 4.575% 20351		30,193			18,057
Bear Stearns ARM Trust, Series 2005-10, Class A-3, 4.65% 20351		51,800			28,090
Bear Stearns ARM Trust, Series 2007-2, Class I-A-1, 5.00% 20461		809			391
IndyMac IMSC Mortgage Loan Trust, Series 2007-F2, Class 2-A-1, 6.50% 2037		40,223			19,946
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 2-A-1, 6.50% 2037		23,895			13,198
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 3-A-1, 7.00% 2037		36,439			19,558
Residential Accredit Loans, Inc., Series 2004-QS16, Class 1-A-1, 5.50% 2034		6,317			4,567
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034		27,843			22,745
Residential Accredit Loans, Inc., Series 2005-QA12, Class CB-I, 5.485% 20351		4,207			1,772
Residential Accredit Loans, Inc., Series 2005-QS15, Class II-A, 6.00% 2035		13,771			8,702
Residential Accredit Loans, Inc., Series 2006-QA1, Class A-II-1, 5.939% 20361		13,475			6,064
Residential Accredit Loans, Inc., Series 2007-QS11, Class A-1, 7.00% 2037		6,821			3,480
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032		377			340
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032		46			39
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033		2,900			2,715
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033		47			39
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034		6,748			5,580
CS First Boston Mortgage Securities Corp., Series 2005-5, Class IV-A-1, 6.25% 2035		4,938			3,363
CS First Boston Mortgage Securities Corp., Series 2006-7, Class 8-A-6, 0.944% 20361		12,929			4,794
CS First Boston Mortgage Securities Corp., Series 2006-7, Class 6-A-3, 5.50% 2036		25,112			16,826
CS First Boston Mortgage Securities Corp., Series 2006-2, Class 5-A-6, 6.00% 2036		5,170			3,274
CHL Mortgage Pass-Through Trust, Series 2004-HYB6, Class A-3, 5.055% 20341		2,747			1,482
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.519% 20351		23,245			14,359
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 1-A-1, 5.921% 20471		8,055			5,048
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 6.069% 20471		2,449			1,278
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR19, Class A-6, 5.627% 20361		10,000			5,153
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR15, Class A-1, 5.659% 20361		24,616			16,491
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 5.645% 20361		20,770			11,566
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class 3-A-1, 6.106% 20361		19,567			9,772
Citigroup Mortgage Loan Trust, Inc., Series 2005-8, Class I-A4A, 5.557% 20351		28,160			16,927
Citigroup Mortgage Loan Trust, Inc., Series 2007-AR5, Class 1-A2A, 5.604% 20371		6,706			3,634
Thornburg Mortgage Securities Trust, Series 2006-5, Class A-1, 0.434% 20461		21,239			19,057
Residential Asset Securitization Trust, Series 2005-A7, Class A-5, 5.50% 2035		5,338			3,029
Residential Asset Securitization Trust, Series 2005-A8CB, Class A-11, 6.00% 2035		13,849			9,305
Residential Asset Securitization Trust, Series 2006-A8, Class 1-A-2, 0.614% 20361		10,032			4,760
Residential Asset Securitization Trust, Series 2006-A8, Class 3-A-11, 6.00% 2036		3,853			1,689
MASTR Alternative Loan Trust, Series 2003-2, Class 6-A-1, 6.00% 2033		540			468
MASTR Alternative Loan Trust, Series 2004-2, Class 2-A-1, 6.00% 2034		1,036			930
MASTR Alternative Loan Trust, Series 2005-1, Class 1-A-1, 5.50% 2035		12,622			9,214
MASTR Alternative Loan Trust, Series 2005-3, Class 1-A-1, 5.50% 2035		3,268			2,492
MASTR Alternative Loan Trust, Series 2005-3, Class 2-A-1, 6.00% 2035		3,929			3,128
MASTR Alternative Loan Trust, Series 2005-3, Class 3-A-1, 6.50% 2035		396			284
American Home Mortgage Assets Trust, Series 2007-3, Class II-2A-1, 6.25% 20371		31,651			15,757
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 4-A, 5.675% 20341		5,192			4,331
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 3-A, 6.00% 2034		2,150			2,046
Morgan Stanley Mortgage Loan Trust, Series 2005-6AR, Class 3-A-1, 5.354% 20351		18,372			8,478
J.P. Morgan Alternative Loan Trust, Series 2006-A1, Class 2-A-1, 5.80% 20361		17,184			8,770
J.P. Morgan Alternative Loan Trust, Series 2006-A2, Class 5-A-1, 6.259% 20361		12,495			5,957
Lehman Mortgage Trust, Series 2005-2, Class 5-A1, 1.214% 20351		29,952			14,700
GSR Mortgage Loan Trust, Series 2005-AR1, Class 2-A-1, 4.916% 20351		8,895			6,147
GSR Mortgage Loan Trust, Series 2006-2F, Class 3A-4, 6.00% 2036		11,543			7,594
J.P. Morgan Mortgage Trust, Series 2006-A3, Class 3-A-3, 5.731% 20361		4,000			2,355
J.P. Morgan Mortgage Trust, Series 2006-A7, Class 2-A-4, 5.791% 20371		21,750			11,373
Banc of America Funding Trust, Series 2005-H, Class 9-A-1, 5.897% 20351		22,294			10,692
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.874% 20361		23,350			9,803
Adjustable Rate Mortgage Trust, Series 2006-1, Class 3-A-3, 5.866% 20361		17,548			7,945
BCAP LLC Trust, Series 2006-AA2, Class A-1, 0.484% 20371		20,558			7,855
Banc of America Alternative Loan Trust, Series 2005-6, Class 2-CB-2, 6.00% 2035		12,342			7,799
GSAA Home Equity Trust, Series 2007-10, Class A-1A, 6.00% 2037		13,323			7,620
Washington Mutual Mortgage, WMALT Series 2005-1, Class 6-A-1, 6.50% 2035		1,139			782
Washington Mutual Mortgage, WMALT Series 2006-2, Class 1-A-3, 6.00% 2036		12,000			5,780
GMAC Mortgage Loan Trust, Series 2006-AR1, Class 2-A-1, 5.632% 20361		9,170			6,374
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.75% 20351,3		8,142			6,170
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.346% 20271,3		4,204			3,017
Structured Asset Securities Corp., Series 1998-RF1, Class A, 8.56% 20271,3		1,594			1,400
Structured Asset Securities Corp., Series 1999-RF1, Class A, 7.735% 20281,3		1,022			971
TBW Mortgage-backed Trust, Series 2007-2, Class A-4-B, 0.734% 20371		22,000			4,950
Banc of America Mortgage Securities Trust, Series 2003-I, Class 3-A-1, 4.527% 20331		5,483			4,589
CitiMortgage Alternative Loan Trust, Series 2006-A1, Class IA-3, 5.75% 2036		10,000			4,177
Sequoia Mortgage Trust, Series 2007-1, Class 4-A1, 5.751% 20461		5,410			3,047
Harborview Mortgage Loan Trust, Series 2006-6, Class 1A, 4.957% 20361		3,097			1,375
Ocwen Residential MBS Corp., Series 1998-R1, Class AWAC, 1.121% 20401,3		1,513			946
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 2027		265			249
GS Mortgage Securities Corp., Series 1998-2, Class M, 7.75% 20273		376			249
					872,093
OTHER MORTGAGE-BACKED SECURITIES6 — 0.58%
Nykredit 4.00% 2035	DKr290,062				50,622
Nykredit 5.00% 2038		169,620			31,469
Bank of America 5.50% 20123	$	34,750			34,209
Nationwide Building Society, Series 2007-2, 5.50% 20123		34,750			32,865
Deutsche Genossenschaftsbank-Hypothekenbank AG 5.25% 2009	€19,447				27,388
Northern Rock PLC 5.625% 20173	$	20,000			16,148
Dexia Municipal Agency 3.50% 2009	€10,076				14,189
Swedish Government 4.00% 2012	SKr42,000				5,614
Stadshypotek AB 6.00% 2012		39,000			5,531
					218,035
Total mortgage-backed obligations					9,065,608
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S.— 4.04%
German Government 3.75% 2013	€35,000				51,740
German Government 3.75% 2017		20,360			29,701
German Government, Series 8, 4.25% 2018		127,690			192,684
United Kingdom 4.75% 2015	£	21,408			38,761
United Kingdom 4.50% 2019		58,910			103,185
United Kingdom 4.75% 2038		28,630			49,786
United Mexican States Government Global 6.375% 2013	$	5,150			5,588
United Mexican States Government Global 5.875% 2014		3,000			3,152
United Mexican States Government, Series MI10, 9.50% 2014	MXN295,000				24,448
United Mexican States Government, Series M10, 8.00% 2015		132,500			10,173
United Mexican States Government, Series M10, 7.25% 2016		435,000			31,730
United Mexican States Government, Series M10, 7.75% 2017		5,630			41,798
United Mexican States Government Global 5.95% 2019	$	9,990			10,140
United Mexican States Government, Series M20, 10.00% 2024	MXN334,800				28,831
United Mexican States Government Global 6.75% 2034	$	2,495			2,529
United Mexican States Government, Series M30, 10.00% 2036	MXN138,000				11,570
United Mexican States Government Global 6.05% 2040	$	11,280			10,304
Japanese Government 1.30% 2011	¥	50			1
Japanese Government 1.50% 2018		4,989,850			52,867
Japanese Government 2.40% 2038		2,680,350			29,192
Belgium (Kingdom of), Series 49, 4.00% 2017	€42,000				60,196
Netherlands Government Eurobond 4.00% 2018		41,200			59,113
French Government O.A.T. Eurobond 4.00% 2018		37,745			54,529
French Government O.A.T. Eurobond 4.75% 2035		2,890			4,282
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014	$	44,750			57,280
New South Wales Treasury Corp., Series 14, 5.50% 2014	$	A35,400			28,178
New South Wales Treasury Corp., Series 19, 6.00% 2019		33,350			26,215
Israeli Government 7.50% 20142	ILS72,880				21,424
Israeli Government 6.50% 20162		27,375			7,707
Israeli Government 5.125% 2019	$	25,150			25,070
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 2.50% 20123		7,250			7,210
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 3.625% 20143		45,000			45,260
Sweden Government Agency-Guaranteed, Swedbank AB 2.80% 20123		9,000			9,001
Sweden Government Agency-Guaranteed, Swedbank AB 2.90% 20133		35,000			34,741
France Government Agency-Guaranteed, Société Finance 2.25% 20123		21,815			21,686
France Government Agency-Guaranteed, Société Finance 3.375% 20143		16,450			16,484
South Korean Government 4.00% 2010	KRW6,200,000				4,923
South Korean Government 5.25% 2010		2,900,000			2,329
South Korean Government 4.25% 2014		4,630,000			3,570
South Korean Government 5.75% 2014	$	21,000			21,563
South Korean Government 5.25% 2015	KRW2,600,000				2,068
Finland (Republic of) 3.875% 2017	€23,230				33,325
United Kingdom Government Agency-Guaranteed, Lloyds TSB Group PLC 2.80% 20123	$	23,000			23,248
European Investment Bank 4.75% 2012	£	790			1,366
European Investment Bank 3.125% 2014	$	11,500			11,537
European Investment Bank 4.875% 2017		9,000			9,486
European Investment Bank 5.00% 2039	£	395			700
Polish Government 5.25% 2013	PLN70,000				21,879
Italian Government 4.25% 2013	€14,100				20,701
Queensland Treasury Corp., Series 15, 6.00% 2015	$	A18,380			14,803
KfW 6.25% 2012		9,750			8,065
KfW 5.00% 2015	NKr35,000				5,618
KfW International Finance Inc. 5.50% 2015	£	275			494
Brazilian Treasury Bill 6.00% 20102,10	BRL 1,508				788
Brazil (Federal Republic of) 10.00% 20172		15,000			6,640
Brazil (Federal Republic of) Global 8.00% 20186	$	644			725
Brazil (Federal Republic of) Global 8.875% 2024		1,375			1,715
Brazil (Federal Republic of) Global 12.25% 2030		425			698
Brazil (Federal Republic of) Global 7.125% 2037		750			818
Brazil (Federal Republic of) Global 11.00% 2040		2,110			2,756
Swedish Government 5.50% 2012	SKr78,000				11,193
Nordic Investment Bank, Series C, 5.00% 2017	$	9,000			9,555
Banque Centrale de Tunisie 4.75% 2011	€3,000				4,312
Banque Centrale de Tunisie 7.375% 2012	$	4,500			4,838
New Zealand Government Agency-Guaranteed, Westpac Securities Co. 2.50% 20123		8,250			8,223
Corporación Andina de Fomento 6.875% 2012		5,895			6,223
Corporación Andina de Fomento 5.125% 2015		2,000			1,943
Russian Federation 7.50% 20306		8,054			7,964
Russian Federation 7.50% 20303,6		139			138
Netherlands Government Agency-Guaranteed, ING Bank NV 3.90% 20143		7,000			7,164
Panama (Republic of) Global 7.125% 2026		690			718
Panama (Republic of) Global 8.875% 2027		250			303
Panama (Republic of) Global 9.375% 2029		340			428
Panama (Republic of) Global 6.70% 20366		5,748			5,604
Australia Government Agency-Guaranteed, National Australia Bank 5.75% 2013	$	A8,750			7,042
Colombia (Republic of) Global 8.25% 2014	$	3,250			3,770
Colombia (Republic of) Global 12.00% 2015	COP2,765,000				1,483
Colombia (Republic of) Global 9.85% 2027		840,000			399
Colombia (Republic of) Global 7.375% 2037	$	1,000			1,025
South Africa (Republic of) 6.875% 2019		6,365			6,572
Asian Development Bank 2.75% 2014		6,150			6,049
Australia Government Agency-Guaranteed, Macquarie Bank Ltd. 5.00% 2014	$	A7,250			5,575
State of Qatar 9.75% 2030	$	4,220			5,528
Turkey (Republic of) 15.00% 2010	TRY5,250				3,517
Turkey (Republic of) 8.00% 2034	$	1,250			1,314
Peru (Republic of) 8.375% 2016		2,920			3,380
El Salvador (Republic of) 7.65% 20353		3,450			2,915
Uruguay (Republic of) 7.625% 20366		1,250			1,209
Dominican Republic 9.50% 20113,6		1,172			1,166
Guatemala (Republic of) 10.25% 20113		1,000			1,093
Argentina (Republic of) 5.83% 20332,6,8,10	ARS 4,574				466
Argentina (Republic of) GDP-Linked 2035		18,225			207
Argentina (Republic of) 0.63% 20382,6,10		16,477			293
Ireland Government Agency-Guaranteed, Anglo Irish Bank Corp. plc 1.535% 20161	€1,400				706
Venezuela (Republic of) Global 8.50% 2014	$	245			175
Venezuela (Republic of) 7.65% 2025		985			529
LCR Finance PLC 5.10% 2051	£	165			303
					1,529,693
ASSET-BACKED OBLIGATIONS6 — 3.93%
AmeriCredit Automobile Receivables Trust, Series 2005-C-F, Class A-4, FSA insured, 4.63% 2012	$	9,326			9,473
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-3-A, FSA insured, 5.49% 2012		9,222			9,357
AmeriCredit Automobile Receivables Trust, Series 2007-A-X, Class A-4, XLCA insured, 0.358% 20131		125,000			105,064
AmeriCredit Automobile Receivables Trust, Series 2006-B-G, Class A-4, FGIC insured, 5.21% 2013		28,269			27,297
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014		4,572			4,107
CPS Auto Receivables Trust, Series 2005-B, Class A-2, FSA insured, 4.36% 20123		6,451			6,357
CPS Auto Receivables Trust, Series 2005-D, Class A-2, FSA insured, 5.06% 20123		3,678			3,731
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20123		6,823			6,616
CPS Auto Receivables Trust, Series 2006-B, Class A-4, MBIA insured, 5.81% 20123		25,069			25,185
CPS Auto Receivables Trust, Series 2007-A, Class A-4, MBIA insured, 5.05% 20133		15,100			14,329
CPS Auto Receivables Trust, Series 2006-C, Class A-4, XLCA insured, 5.14% 20133		26,009			22,347
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 20143		20,000			19,631
CPS Auto Receivables Trust, Series 2007-C, Class A-4, FSA insured, 5.92% 20143		18,950			17,678
Drive Auto Receivables Trust, Series 2005-3, Class A-4, FSA insured, 5.09% 20133		11,652			11,944
Drive Auto Receivables Trust, Series 2006-1, Class A-4, FSA insured, 5.54% 20133		55,132			55,197
Drive Auto Receivables Trust, Series 2006-2, Class A-3, MBIA insured, 5.33% 20143		15,886			15,877
ARG Funding Corp., Series 2005-1, Class A-3, MBIA insured, 4.29% 20113		50,200			45,148
ARG Funding Corp., Series 2005-2, Class A-4, AMBAC insured, 4.84% 20113		30,000			28,561
Washington Mutual Master Note Trust, Series 2007-B1, Class B-1, 4.95% 20143		4,000			4,027
Washington Mutual Master Note Trust, Series 2007-A4A, Class A-4, 5.20% 20143		30,055			31,206
Washington Mutual Master Note Trust, Series 2006-A2A, Class A, 0.369% 20151,3		31,000			30,267
GS Auto Loan Trust, Series 2006-1, Class A-4, 5.38% 2014		57,000			58,562
GS Auto Loan Trust, Series 2006-1, Class A-4, 5.60% 2014		6,859			6,623
Honda Auto Receivables Owner Trust, Series 2006-3, Class A-4, 5.11% 2012		35,160			35,992
Honda Auto Receivables Owner Trust, Series 2006-2, Class A-4, 5.28% 2012		23,798			24,322
Green Tree Financial Corp., Series 1996-10, Class A-6, 7.30% 2028		1,584			1,510
Green Tree Financial Corp., Series 1997-6, Class A-7, 7.14% 2029		4,724			4,285
Green Tree Recreational, Equipment & Consumer Trust, Series 1997-D, 7.25% 2029		1,658			735
Conseco Finance Home Equity Loan Trust, Series 2002-B, Class M-1, 2.069% 20331		838			321
Green Tree Financial Corp., Series 2008-MH1, Class A-3, 8.97% 20383		43,139			40,204
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-3, FSA insured, 5.17% 2011		2,241			2,251
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-4, FSA insured, 5.18% 2013		27,800			26,530
Long Beach Acceptance Auto Receivables Trust, Series 2007-A, Class A-4, FSA insured, 5.025% 2014		15,500			15,283
Nissan Auto Lease Trust, Series 2008-A, Class A-3a, 5.14% 2011		40,250			41,303
CarMax Auto Owner Trust, Series 2007-2, Class A-3, 5.23% 2011		9,828			9,997
CarMax Auto Owner Trust, Series 2008-2, Class A-3a, 4.99% 2012		8,200			8,420
CarMax Auto Owner Trust, Series 2007-2, Class A-4, 5.27% 2012		20,000			20,582
Prestige Auto Receivables Trust, Series 2005-1A, Class A-2, FSA insured, 4.37% 20123		2,351			2,371
Prestige Auto Receivables Trust, Series 2006-1A, Class A-2, FSA insured, 5.25% 20133		6,836			6,935
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 20143		30,000			29,389
Capital One Auto Finance Trust, Series 2006-A, Class A-4, AMBAC insured, 0.329% 20121		3,236			3,172
Capital One Auto Finance Trust, Series 2006-C, Class A-4, FGIC insured, 0.349% 20131		25,000			22,610
Capital One Auto Finance Trust, Series 2007-B, Class A-4, MBIA insured, 0.349% 20141		12,425			10,996
Santander Drive Auto Receivables Trust, Series 2007-1, Class A-4, FGIC insured, 0.369% 20141		39,261			35,997
Triad Automobile Receivables Trust, Series 2006-C, Class A-3, AMBAC insured, 5.26% 2011		6,020			6,026
Triad Automobile Receivables Trust, Series 2005-A, Class A-4, AMBAC insured, 4.22% 2012		9,343			9,292
Triad Automobile Receivables Trust, Series 2007-A, Class A-3, FSA insured, 5.28% 2012		5,854			5,902
Triad Automobile Receivables Trust, Series 2006-C, Class A-4, AMBAC insured, 5.31% 2013		10,000			9,528
USAA Auto Owner Trust, Series 2007-1, Class A-4, 5.55% 2013		26,000			27,198
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class A-4, 6.57% 2024		7,660			6,926
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024		6,711			6,583
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-4, 7.905% 2026		1,611			1,627
Vanderbilt Mortgage and Finance, Inc., Series 1997-C, Class II-A-1, 0.528% 20271		544			450
Vanderbilt Mortgage and Finance, Inc., Series 2000-D, Class A-4, 7.715% 2027		1,808			1,740
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-5, 8.195% 2030		6,889			6,882
Vanderbilt Mortgage and Finance, Inc., Series 2001-C, Class M-1, 6.76% 2032		910			618
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class M-1, 7.82% 2032		2,299			1,749
MBNA Credit Card Master Note Trust, Series 2001-C, Class C, 7.10% 20133		15,000			14,871
MBNA Credit Card Master Note Trust, Series 2002-1, Class C, 6.80% 2014		3,435			3,344
MBNA Credit Card Master Note Trust, Series 2006-1, Class C, 0.739% 20151		10,000			7,889
PECO Energy Transition Trust, Series 2001-A, Class A-1, 6.52% 2010		5,000			5,215
PECO Energy Transition Trust, Series 2000-A, Class A-4, 7.65% 2010		17,994			18,200
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A-5, FGIC insured, 5.753% 20272		15,140			6,207
CWHEQ Home Equity Loan Trust, Series 2006-S6, Class A-6, AMBAC insured, 5.657% 20341		14,652			4,885
CWHEQ Home Equity Loan Trust, Series 2006-S4, Class A-6, AMBAC insured, 5.834% 20341		9,119			3,535
CWHEQ Home Equity Loan Trust, Series 2007-S1, Class A-6, MBIA insured, 5.693% 20361		31,535			8,692
RAMP Trust, Series 2004-RS9, Class A-I-4, AMBAC insured, 4.767% 2032		4,747			3,431
RAMP Trust, Series 2004-RS10, Class A-I-6, 4.55% 2034		23,006			17,848
Hyundai Auto Receivables Trust, Series 2006-A, Class A-4, 5.26% 2012		19,917			20,219
Vega ContainerVessel PLC, Series 2006-1, Class A, XLCA insured, 5.562% 20213		39,492			19,580
CWHEQ Revolving Home Equity Loan Trust, Series 2006-I, Class 2-A, FSA insured, 0.459% 20371		22,109			13,174
CWHEQ Revolving Home Equity Loan Trust, Series 2007-C, Class A, FGIC insured, 0.469% 20371		14,598			3,532
CWHEQ Revolving Home Equity Loan Trust, Series 2007-B, Class A, FSA insured, 0.469% 20371		4,810			2,214
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015		18,000			18,570
AEP Texas Central Transitioning Funding II LLC, Secured Transition Bonds, Series A, Class A-3, 5.09% 2017		16,720			17,484
Susquehanna Auto Lease Trust, Series 2007-1, Class A-3, 5.25% 20103		16,680			16,689
Spirit Master Funding LLC, Net-Lease Mortgage Notes, Series 2005-1, Class A-1, AMBAC insured, 5.05% 20232,3		24,484			15,914
UPFC Auto Receivables Trust, Series 2005-A, Class A-3, AMBAC insured, 4.34% 2010		794			794
UPFC Auto Receivables Trust, Series 2005-B, Class A-3, XLCA insured, 4.98% 2011		3,178			3,173
UPFC Auto Receivables Trust, Series 2007-A, Class A-3, MBIA insured, 5.53% 2013		11,373			11,582
Advanta Business Card Master Trust, Series 2006-A5, Class A, 5.10% 2012		17,669			15,536
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class B-1, 7.30% 2021		6,197			5,511
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-4, 6.57% 2027		8,290			7,390
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-5, 7.12% 2032		3,000			2,526
Wachovia Auto Loan Owner Trust, Series 2006-1, Class A-4, 5.08% 20123		10,000			10,186
Wachovia Auto Loan Owner Trust, Series 2006-1, Class B, 5.15% 20123		5,000			4,700
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class A-3, 5.825% 20361,3		8,387			3,533
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-3, 6.282% 20361,3		3,935			1,020
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-5, 6.831% 20361,3		4,725			967
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-6, 7.00% 20361,3		1,816			325
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB4, Class A-2B, 5.723% 20371		3,061			1,141
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB2, Class A-2A, 5.891% 20371		9,847			7,859
Drivetime Auto Owner Trust, Series 2007-A, XLCA insured, 5.603% 20131,3		15,372			14,360
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-2, Class A-6, AMBAC insured, 5.08% 20113		14,500			14,157
Residential Funding Mortgage Securities II, Inc., Series 2005-HI1, Class A-4, FGIC insured, 4.70% 2034		3,903			3,541
Residential Funding Mortgage Securities II, Inc., Series 2005-HS1, Class A-1-2, FGIC insured, 4.66% 20351		9,870			8,333
Residential Funding Mortgage Securities II, Inc., Series 2006-HSA3, Class A, FSA insured, 0.444% 20361		2,481			1,639
Franklin Auto Trust, Series 2006-1, Class A-4, 5.03% 2014		10,950			11,161
Franklin Auto Trust, Series 2006-1, Class B, 5.14% 2014		2,000			1,749
Morgan Stanley ABS Capital I Inc., Series 2004-NC3, Class M-1, 1.109% 20341		18,822			9,478
Morgan Stanley ABS Capital I Inc., Series 2004-HE9, Class M-5, 1.364% 20341		2,794			970
GMAC Mortgage Loan Trust, Series 2006-HE3, Class A-5, FGIC insured, 5.809% 20361		5,000			1,454
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-2, FGIC insured, 6.054% 20371		10,000			3,703
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-3, FGIC insured, 6.193% 20371		20,000			4,248
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-3, 4.35% 2014		2,309			1,492
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-4, 5.27% 2018		1,184			795
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-5, 5.873% 2022		3,888			2,677
Lehman ABS Manufactured Housing Contract Trust, Series 2002-A, Class A, 0.794% 20331		4,937			3,663
Capital One Multi-asset Execution Trust, Series 2005-1, Class C, 0.719% 20131		9,000			8,491
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031		10,950			8,216
AmeriCredit Prime Automobile Receivables Trust, Series 2007-2-M, Class A-4-A, MBIA insured, 5.35% 2016		10,073			7,926
J.P. Morgan Mortgage Acquisition Trust, Series 2007-CH1, Class AF-3, 5.532% 20361		15,000			7,817
New Century Home Equity Loan Trust, Series 2004-A, Class A-II-5, FGIC insured, 5.25% 2034		9,913			7,720
Ford Credit Auto Owner Trust, Series 2006-B, Class B, 5.43% 2012		7,333			6,909
Conseco Finance Securitizations Corp., Series 2002-2, Class A-2, 6.03% 2033		8,265			6,905
Citibank Credit Card Issuance Trust, Series 2008, Class C6, 6.30% 2014		7,000			6,627
CNL Funding, Series 2000-AA, Class A-2, MBIA insured, 8.044% 20173		10,589			6,491
First Horizon ABS Trust, Series 2006-HE2, Class A, FSA insured, 0.444% 20261		741			317
First Horizon ABS Trust, Series 2007-HE1, Class A, FSA insured, 0.444% 20291		11,432			5,738
SACO I Trust, Series 2005-5, Class I-A, 0.554% 20351		4,549			3,116
SACO I Trust, Series 2006-10, Class A, 0.464% 20361		10,234			1,118
SACO I Trust, Series 2006-5, Class II-A-3, 0.494% 20361		6,705			148
SACO I Trust, Series 2006-4, Class A-3, 0.524% 20361		5,187			662
UCFC Manufactured Housing Contract, Series 1996-2, Class A, MBIA insured, 7.135% 2028		5,108			4,764
Consumers Funding LLC, Series 2001-1, Class A-5, 5.43% 2015		4,140			4,378
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1, FGIC insured, 4.67% 20173		5,149			4,010
Capital Auto Receivables Asset Trust, Series 2006-SN1, Class C, 5.77% 20103		3,700			3,692
Structured Asset Securities Corp., Series 2005-S7, Class A2, 0.614% 20351,3		9,792			2,373
Structured Asset Securities Corp., Series 2006-S2, Class A-1, 0.384% 20361		609			567
Morgan Stanley Mortgage Loan Trust, Series 2006-4SL, Class A-1, 0.464% 20361		20,692			2,925
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-1, 5.73% 2035		2,328			1,610
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-2, 6.51% 2035		1,864			1,276
Home Equity Asset Trust, Series 2004-7, Class M-1, 0.934% 20351		6,500			2,749
First Investors Auto Owner Trust, Series 2006-A, Class A-4, MBIA insured, 5.00% 20133		2,500			2,480
SLM Student Loan Trust, Series 2003-10, Class A-4, 5.15% 20393	£	1,160			1,765
CWABS Revolving Home Equity Loan Trust, Series 2004-P, Class 2-A, MBIA insured, 0.639% 20341	$	5,668			1,742
CS First Boston Mortgage Securities Corp., Series 2007-3, Class 1-A-3B, 5.846% 20371		8,477			1,712
ACLC Business Loan Receivables Trust, Series 2002-1, Class A-2, 7.462% 20223		1,725			1,428
CSAB Mortgage-backed Trust, Series 2007-1, Class 1-A-3B, 5.908% 20371		5,757			1,417
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-2, AMBAC insured, 4.42% 20351,2,3		1,379			1,255
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series 2007-H1, Class A-1, FSA insured, 0.474% 20371		2,124			1,235
Chase Auto Owner Trust, Series 2006-B, Class B, 5.24% 2014		676			666
Home Equity Mortgage Trust, Series 2006-2, Class 1A-1, 5.367% 20361		1,681			285
Home Equity Mortgage Trust, Series 2006-5, Class A-1, 5.50% 20371		2,166			280
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series SPMD 2001-A, Class AF-6, 6.537% 2030		636			362
Irwin Home Equity, Series 2006-2, Class 2-A3, FGIC insured, 6.40% 20361,3		2,000			345
Merrill Lynch Mortgage Investors Trust, Series 2007-SL1, Class A-1, 0.614% 20371		7,250			205
Option One Mortgage Loan Trust, Series 2002-1, Class M-1, 1.439% 20321		202			81
					1,489,269
MUNICIPALS — 0.66%
California Various Purpose General Obligation Bonds 7.50% 2034		25,000			23,054
California Various Purpose General Obligation Bonds 6.00% 2038		20,000			19,808
State of California, Los Angeles Unified School District (County of Los Angeles), General Obligation Bonds, Election of 2002,
Series 2009-D, 5.20% 2029		8,665			8,703
State of California, Los Angeles Unified School District (County of Los Angeles), General Obligation Bonds, Election of 2002,
Series 2009-D, 5.00% 2034		4,530			4,345
State of California, Los Angeles Unified School District (County of Los Angeles), General Obligation Bonds, Election of 2004,
Series 2009-I, 5.00% 2029		20,000			19,616
State of New York, Long Island Power Authority, Electric System General Revenue Bonds, Series 2009-A, 5.75% 2039		24,330			25,465
State of New York, Metropolitan Transportation Authority, Dedicated Tax Fund Bonds (Federally Taxable-Issuer
Subsidy-Build America Bonds), Series 2009-C, 7.336% 2039		19,500			23,275
State of Arizona, Salt River Project Agricultural Improvement and Power District, Salt River Project Electric System
Revenue Bonds, Series 2009-A, 5.00% 2034		10,000			10,053
State of Arizona, Salt River Project Agricultural Improvement and Power District, Salt River Project Electric System
Revenue Bonds, Series 2009-A, 5.00% 2039		7,445			7,451
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds,
Series 2002-A, Class A, 6.72% 2025		19,910			16,103
State of Illinois, City of Chicago, General Obligation Bonds, Project and Refunding, Series 2008-C, 5.00% 2034		15,750			15,274
State of Illinois, Regional Transportation Authority of Cook, DuPage, Kane, Lake, McHenry and Will Counties,
General Obligation Bonds, Series 2003-A, FGIC-National insured, 6.00% 2033		12,120			13,628
State of Indiana, Health and Educational Facility Financing Authority, Hospital Revenue Refunding Bonds
(Clarian Health Obligated Group), Series 2006-B, 5.00% 2033		13,860			11,795
District of Columbia, Income Tax Secured Revenue Refunding Bonds, Series 2009-B, 5.25% 2034		10,000			10,291
State of California, Regents of the University of California, General Revenue Bonds, 5.25% 2039		10,000			10,192
State of Texas, City of San Antonio, Electric and Gas Systems Revenue Refunding Bonds, New Series 2009-A, 5.00% 2034		10,000			9,972
State of Wisconsin, General Fund Annual Appropriation Bonds, Series 2009-A, 5.75% 2033		6,000			6,237
State of Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue Bonds, Series 2007, 5.50% 2023		6,000			5,167
State of California, City of Los Angeles, Department of Water and Power, Power System Revenue Bonds,
Series 2007-A, Subseries A-1, AMBAC insured, 5.00% 2037		5,300			5,152
California Maritime Infrastructure Authority, Taxable Lease Revenue Bonds (San Diego Unified Port District-South Bay
Plant Acquisition), Series 1999, 6.63% 20093		2,433			2,438
State of Louisiana, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds,
Series 2001-A, Class A, 6.36% 2025		2,317			1,985
					250,004
Total bonds & notes (cost: $37,343,711,000)					35,548,002
	Shares or
Convertible securities ­— 0.11%	principal amount
FINANCIALS — 0.07%
PNC Financial Services Group, Inc. 4.00% convertible notes 2011	$	25,000,000			24,688
Citigroup Inc., Series J-1, 7.00% noncumulative convertible preferred2		50,000			2,056
Equity Residential 3.85% convertible notes 2026	$	1,000,000			954
Boston Properties, Inc. 2.875% convertible notes 2037		1,000,000			881
Fannie Mae, Series 2004-1, 5.375% convertible preferred		400			400
					28,979
INFORMATION TECHNOLOGY — 0.04%
Linear Technology Corp., Series A, 3.00% convertible notes 2027	$	11,500,000			9,574
Advanced Micro Devices, Inc. 6.00% convertible notes 2015	$	770,000			365
Advanced Micro Devices, Inc. 5.75% convertible notes 2012	$	6,950,000			4,309
					14,248
Total convertible securities (cost: $77,535,000)					43,227
Preferred securities — 1.84%	Shares
					��
FINANCIALS — 1.84%
JPMorgan Chase & Co., Series I, 7.90%1		114,250,000			100,258
BNP Paribas 7.195%1,3		78,000,000			57,078
BNP Paribas Capital Trust 9.003% noncumulative trust1,3		17,180,000			14,534
SMFG Preferred Capital USD 1 Ltd. 6.078%1,3		63,147,000			50,787
SMFG Preferred Capital USD 3 Ltd. 9.50%1,3		8,998,000			8,818
HSBC Capital Funding LP, Series 2, 10.176% noncumulative step-up1,3		29,550,000			31,096
HSBC Capital Funding LP, Series 1, 9.547% noncumulative step-up1,3		30,000,000			27,983
HSBC Bank Capital Funding (Sterling 1) LP 5.844% noncumulative1		185,000			218
Barclays Bank PLC 7.434%1,3		75,945,000			50,953
Barclays Bank PLC 6.86%1,3		625,000			376
Santander Finance Preferred S.A., Unipersonal, Series 4, 6.80%		1,597,900			30,919
Santander Finance Preferred S.A., Unipersonal, 6.50%		910,000			16,437
AXA SA, Series B, 6.379%1,3		48,770,000			31,289
QBE Capital Funding II LP 6.797%1,3		36,055,000			26,709
Banco Bilbao Vizcaya Argentaria, SA, 5.919%1		43,685,000			25,809
PNC Preferred Funding Trust I 6.517%1,3		45,000,000			24,293
PNC Preferred Funding Trust III 8.70%1,3		1,500,000			1,233
Standard Chartered PLC 6.409%1,3		38,200,000			25,437
Citigroup Inc., Series E, 8.40%1		32,250,000			24,230
Resona Preferred Global Securities (Cayman) Ltd. 7.191%1,3		32,800,000			23,970
Société Générale 5.922%1,3		21,685,000			13,463
Weingarten Realty Investors, Series D, 6.75%		495,420			8,199
Weingarten Realty Investors, Series E, 6.95% cumulative redeemable depositary shares		250,000			4,165
ILFC E-Capital Trust II 6.25%1,3		19,460,000			7,492
ILFC E-Capital Trust I 5.90%1,3		11,750,000			4,524
Commerzbank Capital Funding Trust I, Class B, 5.012% noncumulative1		21,850,000			10,265
Commerzbank Capital Funding Trust II, Class B, 5.905% noncumulative1		300,000			141
Royal Bank of Scotland Group PLC 6.625%1		4,700,000			5,636
Royal Bank of Scotland Group PLC, Series U, 7.64%1		9,800,000			3,973
ING Capital Funding Trust III 8.439% noncumulative1		14,880,000			9,377
Fannie Mae, Series O, 7.00%1,3		4,825,230			8,686
Fannie Mae, Series R, 7.625%		382,800			445
Freddie Mac, Series Z, 8.375%11		2,663,885			3,097
Freddie Mac, Series V, 5.57%11		3,356,231			3,096
Freddie Mac, Series W, 5.66%11		1,548,000			1,537
Freddie Mac, Series F, 5.00%11		294,375			412
Freddie Mac, Series U, 5.90%11		496,600			397
Freddie Mac, Series Y, 6.55%11		374,269			307
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative1,3		19,650,000			8,050
XL Capital Ltd., Series E, 6.50%1		16,250,000			7,972
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual capital securities3		300,000			6,685
General Motors Corp. 9.00%3		9,155			3,938
Lloyds TSB Group PLC 6.267%1,3		5,765,000			1,962
HBOS Capital Funding LP, Series A, 6.461% noncumulative1		3,200,000			1,894
BAC Capital Trust XIII 1.029%1		8,075,000			3,614
CBG Florida REIT Corp., Series A, Class A, 7.114%1,3		18,000,000			2,829
Wells Fargo Capital XV 9.75%1		825,000			799
IndyMac Bancorp, Inc., Series A, 8.50% noncumulative3,11		434,000			4
					695,386
U.S. GOVERNMENT AGENCY SECURITIES — 0.00%
US AgBank 6.11%1,3		5,000,000			1,844
Total preferred securities (cost: $1,211,882,000)					697,230
Common stocks — 0.04%
CONSUMER DISCRETIONARY — 0.02%
Ford Motor Co.11		875,023			5,311
Time Warner Cable Inc.11		36,558			1,158
Adelphia Recovery Trust, Series Arahova11		1,943,006			486
Adelphia Recovery Trust, Series ACC-111		3,366,231			67
Adelphia Recovery Trust, Series ACC-6B2,11		5,056,500			25
American Media Operations, Inc.2,3,11		295,801			3
					7,050
INDUSTRIALS — 0.01%
Delta Air Lines, Inc.11		626,265			3,626
UAL Corp.11		10,069			32
					3,658
INFORMATION TECHNOLOGY — 0.01%
ZiLOG, Inc.11,12		879,000			2,092
HEALTH CARE — 0.00%
Clarent Hospital Corp.2,11,12		331,291			17
TELECOMMUNICATION SERVICES — 0.00%
XO Holdings, Inc.11		7,614			2
Total common stocks (cost: $49,539,000)					12,819
				Value
Warrants — 0.00%	Shares				(000	)
TELECOMMUNICATION SERVICES — 0.00%
XO Holdings, Inc., Series A, warrants, expire 201011		15,233		$	—
XO Holdings, Inc., Series C, warrants, expire 20102,11		11,424			—
XO Holdings, Inc., Series B, warrants, expire 201011		11,424			—
GT Group Telecom Inc., warrants, expire 20102,3,11		2,750			—
					—
INDUSTRIALS — 0.00%
Atrium Corp., warrants, expire 20182,3,11		1,885			—
Total warrants (cost: $143,000)					—
	Principal amount
Short-term securities — 4.43%		(000	)
Federal Home Loan Bank 0.16%–0.44% due 7/1–12/2/2009	$	512,450			512,236
U.S. Treasury Bills 0.19%–0.355% due 7/2–9/24/2009		216,600			216,559
Abbott Laboratories 0.20%–0.23% due 7/1–9/29/20093		141,526			141,477
Park Avenue Receivables Co., LLC 0.26% due 7/13/20093		60,100			60,094
Jupiter Securitization Co., LLC 0.25% due 7/14/20093		50,000			49,995
Merck & Co. Inc. 0.20%–0.25% due 7/17–7/28/2009		104,400			104,388
Procter & Gamble International Funding S.C.A. 0.18%–0.20% due 7/13–8/24/20093		95,900			95,886
NetJets Inc. 0.21% due 8/5/20093		95,000			94,980
Pfizer Inc 0.22%–0.25% due 7/9–9/3/20093		75,400			75,384
General Electric Capital Corp., FDIC insured, 0.24%–0.50% due 7/21–8/25/2009		70,000			69,987
Private Export Funding Corp. 0.22%–0.26% due 8/13–9/25/20093		69,300			69,277
Coca-Cola Co. 0.30% due 7/10-7/22/20093		49,950			49,947
E.I. duPont de Nemours and Co. 0.22% due 7/28/20093		35,000			34,994
United Technologies Corp. 0.19% due 7/23/20093		25,000			24,997
Federal Farm Credit Banks 0.17% due 7/31/2009		25,000			24,995
Yale University 0.40% due 7/17/2009		25,000			24,993
Campbell Soup Co. 0.20% due 7/30/20093		13,432			13,430
Freddie Mac 0.17%–0.20% due 8/10–9/28/2009		10,100			10,096
Medtronic Inc. 0.20% due 7/7/20093		5,950			5,950
Fannie Mae 0.17% due 7/23/2009		250			250
Total short-term securities (cost: $1,679,870,000)					1,679,915
Total investment securities (cost: $40,362,680,000)					37,981,193
Other assets less liabilities					(90,587	)
Net assets				$	37,890,606

1  Coupon rate may change periodically.

2  Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities was $479,894,000, which represented 1.27% of the net assets of the fund.

3  Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $5,422,332,000, which represented 14.31% of the net assets of the fund.

4 Scheduled interest and/or principal payment was not received.

5  Purchased in a transaction exempt from registration under the Securities Act of 1933. This security (acquired 11/6/2007 at a cost of $3,749,000) maybe subject to legal or contractual restrictions on resale.

6 Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

7 Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $182,986,000, which represented

.48% of the net assets of the fund.

8 Payment in kind; the issuer has the option of paying additional securities in lieu of cash.

9 Step bond; coupon rate will increase at a later date.

10Index-linked bond whose principal amount moves with a government retail price index.

11Security did not produce income during the last 12 months.

12Represents an affiliated company as defined under the Investment Company Act of 1940.

Key to abbreviations and symbols
ARS = Argentine pesos	€ = Euros	MXN = Mexican pesos
A$ = Australian dollars	£ = British pounds	NKr = Norwegian kroner
BRL = Brazilian reais	ILS = Israeli shekels	PLN = Polish zloty
COP = Colombian pesos	¥ = Japanese yen	SKr = Swedish kronor
DKr = Danish kroner	KRW = South Korean won	TRY = New Turkish liras

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from your financial professional and should be read carefully before investing.

MFGEFP-908-0809O-S21436

Summary investment portfolio, June 30, 2009

unaudited

The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings.  For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.

[begin pie chart]

Industry sector diversification (percent of net assets)
Corporate bonds & notes	33.74	%
Bonds & notes of U.S. government & government agencies	27.52
Mortgage-backed obligations	23.93
Bonds & notes of governments & government agencies outside the U.S.	4.04
Asset-backed obligations	3.93
Preferred securities	1.84
Municipals	0.66
Convertible securities	0.11
Common stocks & warrants	0.04
Short-term securities & other assets less liabilities	4.19

[end pie chart]

Portfolio quality summary (percent of net assets)*
U.S. government obligations†	25.6	%
Federal agencies	18.8
AAA	9.8
AA	4.5
A	12.9
BBB	17.0
BB	2.8
B	2.4
CCC or less	2.0
Short-term securities & other assets less liabilities	4.2
Bond ratings are generally issued by independent rating agencies and are designed to provide an indication of an issuer's creditworthiness. Please see the fund's most recent statement of additional information for details.
* Bond ratings reflect those of a credit rating agency; if ratings are not available, they are assigned by the fund's investment analysts.
† These securities are guaranteed by the full faith and credit of the United States government.

	Principal						Percent
	amount			Value			of net
Bonds & notes - 93.82%		(000	)		(000	)	assets
Corporate bonds & notes - 33.74%
Financials - 9.92%
Other securities				$	3,759,941			9.92	%
Consumer discretionary - 4.48%
Other securities					1,697,666			4.48
Telecommunication services - 3.49%
Verizon Communications Inc. 3.75% 2011 (1)	$	111,950			114,293			.30
Other securities					1,208,791			3.19
					1,323,084			3.49
Energy - 3.39%
Other securities					1,282,476			3.39
Utilities - 3.25%
Other securities					1,231,952			3.25
Industrials - 3.12%
Other securities					1,180,998			3.12
Health care - 2.88%
Other securities					1,090,199			2.88
Other corporate bonds & notes - 3.21%
Other securities					1,218,926			3.21
Total corporate bonds & notes					12,785,242			33.74
Bonds & notes of U.S. government & government agencies - 27.52%
U.S. Treasury:
2.00% 2010		124,125			125,439
1.125% 2011		112,705			112,160
1.75% 2011		652,130			659,134
4.625% 2011		290,400			313,972
2.00% 2013		249,840			246,220
2.75% 2013		132,160			134,633
3.375% 2013		142,760			149,630
4.25% 2013		604,036			653,301
1.75% 2014		550,090			534,682
1.875% 2014		185,975			181,188
1.875% 2014		100,000			97,051
2.25% 2014		282,500			278,748
4.25% 2014		161,875			174,364
4.25% 2015		134,000			143,684
11.25% 2015		133,500			192,631
2.375% 2016		267,400			254,864
2.625% 2016		349,000			337,507
3.25% 2016		209,280			210,163
4.50% 2017		228,250			246,384
4.625% 2017		180,925			196,912
3.50% 2018		658,870			662,270
3.75% 2018		605,075			615,615
3.875% 2018		171,505			176,763
2.75% 2019		717,085			671,708
3.125% 2019		363,090			351,148
6.875% 2025		93,610			122,702
4.50% 2036		260,960			269,115
4.375% 2038		106,895			108,047
0%-8.875% 2010-2039 (2)  (3)		1,122,830			1,255,479			25.01
Fannie Mae:
1.75% 2011		143,210			144,530
2.50%-6.125% 2012-2017		126,500			128,589			.72
Freddie Mac 1.75%-5.50% 2010-2016		230,990			236,264			.62
Federal Home Loan Bank 3.625%-5.375% 2012-2016		133,000			141,551			.37
Other securities					301,738			.80
					10,428,186			27.52
Mortgage-backed obligations - 23.93%
Federal agency mortgage-backed obligations (4) - 16.86%
Fannie Mae:
4.00% 2024		210,420			210,836
4.00% 2024		165,832			166,117
4.00% 2024		138,853			139,092
5.00% 2036		118,249			120,781
6.00% 2037		120,194			125,812
5.00% 2039		97,774			99,710
0%-12.01% 2009-2047 (5)		3,637,533			3,773,844			12.24
Freddie Mac:
6.00% 2027		148,398			155,951
6.00% 2038		126,842			132,625
0%-11.00% 2009-2047   (3)  (5)		1,203,321			1,248,173			4.05
Government National Mortgage Assn. 6.00% 2038		142,725			148,958			.39
Other securities					66,577			.18
					6,388,476			16.86
Commercial mortgage-backed securities (4) - 4.19%
Fannie Mae 4.491%-7.30% 2010-2012		151,325			158,598			.42
Other securities					1,428,406			3.77
					1,587,004			4.19
Collateralized mortgage-backed obligations (privately originated) - 2.30%
Other securities					872,093			2.30
Other mortgage-backed securities - 0.58%
Other securities					218,035			.58
Total mortgage-backed obligations					9,065,608			23.93
Bonds & notes of governments & government agencies outside the U.S. - 4.04%
German Government, Series 8, 4.25% 2018	€	127,690			192,684			.51
United Kingdom 4.50% 2019	£	58,910			103,185			.27
Other securities					1,233,824			3.26
					1,529,693			4.04
Asset-backed obligations (4) - 3.93%
AmeriCredit Automobile Receivables Trust, Series 2007-A-X, Class A-4, XLCA insured, 0.358% 2013 (5)	$	125,000			105,064			.28
Other securities					1,384,205			3.65
					1,489,269			3.93
Municipals - 0.66%
Other securities					250,004			.66
Total bonds & notes (cost: $37,343,711,000)					35,548,002			93.82
							Percent
				Value			of net
Convertible securities - 0.11%	Shares				(000	)	assets
Other - 0.11%
Fannie Mae, Series 2004-1, 5.375% convertible preferred		400			400			.00
Other securities					42,827			.11
Total convertible securities (cost: $77,535,000)					43,227			.11
							Percent
				Value			of net
Preferred securities - 1.84%	Shares				(000	)	assets
Financials - 1.84%
JPMorgan Chase & Co., Series I, 7.90% (5)		114,250,000			100,258			.26
Fannie Mae, Series O, 7.00% (1) (5)		4,825,230			8,686
Fannie Mae, Series R, 7.625%		382,800			445			.02
Freddie Mac, Series Z, 8.375% (6)		2,663,885			3,097
Freddie Mac, Series V, 5.57% (6)		3,356,231			3,096
Freddie Mac, Series W, 5.66% (6)		1,548,000			1,537
Freddie Mac, Series F, 5.00% (6)		294,375			412
Freddie Mac, Series U, 5.90% (6)		496,600			397
Freddie Mac, Series Y, 6.55% (6)		374,269			307			.02
Other securities					577,151			1.54
					695,386			1.84
U.S. government agency securities - 0.00%
Other securities					1,844			.00
Total preferred securities (cost: $1,211,882,000)					697,230			1.84
							Percent
				Value			of net
Common stocks - 0.04%					(000	)	assets
Other - 0.04%
Other securities					12,819			.04
Total common stocks (cost: $49,539,000)					12,819			.04
							Percent
				Value			of net
Warrants - 0.00%					(000	)	assets
Other - 0.00%
Other securities					-			.00
Total warrants (cost: $143,000)					-			.00
	Principal						Percent
	amount			Value			of net
Short-term securities - 4.43%		(000	)		(000	)	assets
Federal Home Loan Bank 0.16%-0.44% due 7/1-12/2/2009	$	512,450			512,236			1.35
U.S. Treasury Bills 0.19%-0.355% due 7/2-9/24/2009		216,600			216,559			.57
Abbott Laboratories 0.20%-0.23% due 7/1-9/29/2009 (1)		141,526			141,477			.37
Park Avenue Receivables Co., LLC 0.26% due 7/13/2009 (1)		60,100			60,094
Jupiter Securitization Co., LLC 0.25% due 7/14/2009 (1)		50,000			49,995			.29
Merck & Co. Inc. 0.20%-0.25% due 7/17-7/28/2009		104,400			104,388			.28
Procter & Gamble International Funding S.C.A. 0.18%-0.20% due 7/13-8/24/2009 (1)		95,900			95,886			.25
NetJets Inc. 0.21% due 8/5/2009 (1)		95,000			94,980			.25
Freddie Mac 0.17%-0.20% due 8/10-9/28/2009		10,100			10,096			.03
Fannie Mae 0.17% due 7/23/2009		250			250			.00
Other securities					393,954			1.04
Total short-term securities (cost: $1,679,870,000)					1,679,915			4.43
Total investment securities (cost: $40,362,680,000)					37,981,193			100.24
Other assets less liabilities					(90,587	)		(.24	)
Net assets				$	37,890,606			100.00	%

"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. One of these securities (with aggregate value of $3,905,000, which represented .01% of the net assets of the fund) may be subject to legal or contractual restrictions on resale.

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The value of the fund's holdings in affiliated companies is included in "Other securities" under their respective industry sectors in the preceding summary investment portfolio.  Further details on these holdings and related transactions during the six months ended June 30, 2009, appear below.

	Beginning shares		Additions		Reductions		Ending shares		Dividend income (000	)		Value of affiliates at 6/30/09 (000	)
ZiLOG, Inc. (6)		879,000		-		-		879,000	-		$	2,092
Clarent Hospital Corp. (3)  (6)		331,291		-		-		331,291	-			17
									-		$	2,109

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

(1) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to

qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $5,422,332,000, which represented 14.31% of the net assets of the fund.

(2) Index-linked bond whose principal amount moves with a government retail price index.

(3) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Other securities,"

was $479,894,000, which represented 1.27% of the net assets of the fund.

(4) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

(5) Coupon rate may change periodically.

(6) Security did not produce income during the last 12 months.

Key to symbols

€ = Euros

£ = British pounds

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities			unaudited
at June 30, 2009	(dollars in thousands)
Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $40,346,836)	$	37,979,084
Affiliated issuers (cost: $15,844)		2,109	$	37,981,193
Cash				8,849
Unrealized appreciation on open forward currency contracts				447
Receivables for:
Sales of investments		142,024
Sales of fund's shares		112,372
Closed forward currency contracts		757
Dividends and interest		392,426		647,579
				38,638,068
Liabilities:
Unrealized depreciation on open forward currency contracts				66,417
Payables for:
Purchases of investments		535,568
Repurchases of fund's shares		81,440
Dividends on fund's shares		21,790
Closed forward currency contracts		17,776
Investment advisory services		7,157
Services provided by affiliates		15,952
Directors' deferred compensation		307
Other		1,055		681,045
Net assets at June 30, 2009			$	37,890,606
Net assets consist of:
Capital paid in on shares of capital stock			$	43,960,472
Distributions in excess of net investment income				(57,012	)
Accumulated net realized loss				(3,566,648	)
Net unrealized depreciation				(2,446,206	)
Net assets at June 30, 2009			$	37,890,606

(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 5,000,000 shares, $.001 par value (3,380,732 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	25,722,349		2,295,038	$	11.21
Class B		1,282,761		114,452		11.21
Class C		2,901,289		258,863		11.21
Class F-1		3,099,181		276,520		11.21
Class F-2		607,844		54,234		11.21
Class 529-A		653,404		58,299		11.21
Class 529-B		80,861		7,215		11.21
Class 529-C		317,600		28,337		11.21
Class 529-E		35,578		3,174		11.21
Class 529-F-1		32,391		2,890		11.21
Class R-1		98,092		8,752		11.21
Class R-2		705,616		62,958		11.21
Class R-3		1,027,649		91,690		11.21
Class R-4		758,933		67,715		11.21
Class R-5		443,758		39,594		11.21
Class R-6		123,300		11,001		11.21
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Classes A and 529-A, for which the maximum offering prices per share were $11.65 each.
See Notes to Financial Statements

Statement of operations				unaudited
for the six months ended June 30, 2009	(dollars in thousands)
Investment income:
Income:
Interest	$	1,033,379
Dividends		7,070		$	1,040,449
Fees and expenses*:
Investment advisory services		42,374
Distribution services		60,125
Transfer agent services		17,724
Administrative services		9,161
Reports to shareholders		1,432
Registration statement and prospectus		1,432
Directors' compensation		258
Auditing and legal		111
Custodian		303
State and local taxes		264
Other		1,658			134,842
Net investment income					905,607
Netrealized loss andunrealized appreciation on investments,
forward currency contracts and currency:
Net realized (loss) gain on:
Investments (net of non-U.S. taxes of $55)		(1,805,862	)
Forward currency contracts		15,993
Currency transactions		(8,477	)		(1,798,346	)
Net unrealized appreciation (depreciation) on:
Investments		3,372,524
Forward currency contracts		(28,126	)
Currency translations		2,675			3,347,073
Net realized loss and unrealized appreciation
on investments, forward currency contracts and currency					1,548,727
Net increase in net assets resulting from operations				$	2,454,334
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
See Notes to Financial Statements
Statements of changes in net assets		(dollars in thousands)
	Six months			Year ended
	ended June 30,			December 31,
		2009*		2008
Operations:
Net investment income	$	905,607		$	2,017,552
Net realized loss on investments, forward currency contracts and currency transactions		(1,798,346	)		(1,215,405	)
Net unrealized appreciation (depreciation) on investments, forward currency contracts and currency translations		3,347,073			(5,526,626	)
Net increase (decrease) in net assets resulting from operations		2,454,334			(4,724,479	)
Dividends paid or accrued to shareholders from net investment income		(920,031	)		(2,153,748	)
Net capital share transactions		4,168,292			3,247,995
Total increase (decrease) in net assets		5,702,595			(3,630,232	)
Net assets:
Beginning of period		32,188,011			35,818,243
End of period (including distributions in excess of
net investment income: $(57,012) and $(42,588), respectively)	$	37,890,606		$	32,188,011
*Unaudited.
See Notes to Financial Statements

Notes to financial statements                    

                                                                                                 unaudited

1.   Organization and significant accounting policies

Organization – The Bond Fund of America, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks as high a level of current income as is consistent with preservation of capital through a diversified portfolio of bonds and other fixed-income obligations.

The fund has 16 share classes consisting of five retail share classes, five 529 college savings plan share classes and six retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The six retirement plan share classes (R-1, R-2, R-3, R-4, R-5 and R-6) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Classes A and 529-A	Up to 3.75%	None (except 1% for certain redemptions within one year of purchase without an initial sales charge)	None
Classes B and 529-B*	None	Declines from 5% to 0% for redemptions within six years of purchase	Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years
Class C	None	1% for redemptions within one year of purchase	Class C converts to Class F-1 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Classes F-1, F-2 and 529-F-1	None	None	None
Classes R-1, R-2, R-3, R-4,  R-5 and R-6	None	None	None

*Effective April 21, 2009, Class B and 529-B shares of the fund are no longer available for purchase.

On May 1, 2009, the fund made an additional retirement plan share class (Class R-6) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). Refer to the fund’s retirement plan prospectus for more details.

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds.Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:

Net asset value – The fund generally determines its net asset value as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades.Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from one or more independent pricing vendors when such prices are available. However, where the investment adviser deems it appropriate to do so, such securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Vendors base bond prices on, among other things, valuation matrices that incorporate dealer-supplied valuations, proprietary pricing models and evaluations of the yield curve as of approximately 3:00 p.m. New York time. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. Forward currency contracts are valued at the mean of representative quoted bid and asked prices.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under guidelines adopted by authority of the fund's board of directors. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.

Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Class allocations – Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.

Dividends and distributions to shareholders – Dividends paid to shareholders are declared daily from net investment income and are paid to shareholders monthly. Distributions paid to shareholders are recorded on the ex-dividend date.

Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.

Loan transactions – The fund may enter into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder's portion of a loan. The loan is often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the sale of the investment. The loan's interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal. Risks may arise due to the delayed settlement date of the loan transaction and the ability of the agent and/or borrower to meet the obligations of the loan.

2.   Risk factors

Investing in the fund may involve certain risks including, but not limited to, those described below.

The values of, and the income generated by, most debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the values of debt securities in the fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, "call" or refinance a security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities. Debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Lower quality or longer maturity debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality or shorter maturity debt securities. The fund's investment adviser attempts to reduce these risks through diversification of the portfolio and ongoing credit analysis, as well as by monitoring economic and legislative developments, but there can be no assurance that it will be successful at doing so.

Many types of debt securities, including mortgage-related securities, are subject to prepayment risk. For example, when interest rates fall, homeowners are more likely to refinance their home mortgages and "prepay" their principal earlier than expected. The fund must then reinvest the prepaid principal in new securities when interest rates on new mortgage investments are falling, thus reducing the fund’s income.

A security backed by the U.S. Treasury or the full faith and credit of the U.S. government is guaranteed only as to the timely payment of interest and principal when held to maturity. Accordingly, the current market prices for these securities will fluctuate with changes in interest rates.

The fund may also invest in debt securities and mortgage-backed securities issued by federal agencies and instrumentalities that are not backed by the full faith and credit of the U.S. government. These securities are neither issued nor guaranteed by the U.S. Treasury.

Although all securities in the fund's portfolio may be adversely affected by currency fluctuations or global economic, political or social instability, securities issued by entities based outside the U.S. may be affected to a greater extent.

 3. Taxation and distributions                                                                                     

Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

As of and during the period ended June 30, 2009, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2005, by state tax authorities for tax years before 2004 and by tax authorities outside the U.S. for tax years before 2004.

Non-U.S. taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Realized and unrealized gains on securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on realized and unrealized gains to provide for potential non-U.S. taxes payable on these securities.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; cost of investments sold; paydowns on fixed-income securities; and net capital losses. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2008, the components of distributable earnings on a tax basis were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	39,042
Post-October currency loss deferrals (realized during the period November 1, 2008, through December 31, 2008)*					(113,391	)
Capital loss carryforwards†:
Expiring 2010	$	(125,233	)
Expiring 2011		(243,982	)
Expiring 2014		(69,196	)
Expiring 2016		(959,389	)		(1,397,800	)
Post-October capital loss deferrals (realized during the period November 1, 2008, through December 31, 2008)*					(330,710	)
*These deferrals are considered incurred in the subsequent year.
†The capital loss carryforwards will be used to offset any capital gains realized by the fund in the current year or in subsequent years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.

As of June 30, 2009, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Gross unrealized appreciation on investment securities	$	679,628
Gross unrealized depreciation on investment securities		(3,184,460	)
Net unrealized depreciation on investment securities		(2,504,832	)
Cost of investment securities		40,486,025

Ordinary income distributions paid or accrued to shareholders from net investment income and currency gains were as follows (dollars in thousands):

Share class	Six months ended June 30, 2009		Year ended December 31, 2008
Class A	$	643,265	$	1,505,354
Class B		29,338		77,235
Class C		59,371		136,921
Class F-1		75,701		183,086
Class F-2*		6,284		1,971
Class 529-A		15,910		34,549
Class 529-B		1,726		4,096
Class 529-C		6,447		14,236
Class 529-E		805		1,715
Class 529-F-1		809		1,624
Class R-1		2,153		4,662
Class R-2		14,810		35,404
Class R-3		24,857		59,775
Class R-4		19,518		47,010
Class R-5		18,040		46,110
Class R-6†		997		-
Total	$	920,031	$	2,153,748
*Class F-2 was offered beginning August 1, 2008.
†Class R-6 was offered beginning May 1, 2009.

4. Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company® ("AFS"), the fund’s transfer agent, and American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares.

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.30% on the first $60 million of daily net assets and decreasing to 0.11% on such assets in excess of $36 billion. The agreement also provides for monthly fees, accrued daily, based on a declining series of rates beginning with 2.25% on the first $8,333,333 of the fund's monthly gross income and decreasing to 1.75% on such income in excess of $41,666,667. For the six months ended June 30, 2009, the investment advisory services fee was $42,374,000, which was equivalent to an annualized rate of 0.248% of average daily net assets.

Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:

Distribution services – The fund has adopted plans of distribution for all share classes, except Classes F-2, R-5 and R-6. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted on the following page. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans.All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of June 30, 2009, unreimbursed expenses subject to reimbursement totaled $4,772,000 for Class A. There were no unreimbursed expenses subject to reimbursement for Class 529-A.

Share class	Currently approved limits	Plan limits
Class A	0.25%	0.25%
Class 529-A	0.25	0.50
Classes B and 529-B	1.00	1.00
Classes C, 529-C and R-1	1.00	1.00
Class R-2	0.75	1.00
Classes 529-E and R-3	0.50	0.75
Classes F-1, 529-F-1 and R-4	0.25	0.50

Transfer agent services –The fund hasa transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.

Administrative services – The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Classes A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan.The quarterly fee is based on a declining series of annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described on the previous page for the six months ended June 30, 2009, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
			CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$29,253	$16,859	Not applicable	Not applicable	Not applicable
Class B	6,182	865	Not applicable	Not applicable	Not applicable
Class C	12,683	Included in administrative services	$1,904	$339	Not applicable
Class F-1	3,406		1,862	172	Not applicable
Class F-2	Not applicable		149	14	Not applicable
Class 529-A	629		309	61	$292
Class 529-B	372		39	14	37
Class 529-C	1,390		147	43	139
Class 529-E	78		16	3	14
Class 529-F-1	-		15	3	16
Class R-1	452		60	24	Not applicable
Class R-2	2,409		482	1,130	Not applicable
Class R-3	2,384		696	339	Not applicable
Class R-4	887		513	13	Not applicable
Class R-5	Not applicable		299	7	Not applicable
Class R-6*	Not applicable		10	- †	Not applicable
Total	$60,125	$17,724	$6,501	$2,162	$498

*Class R-6 was offered beginning May 1, 2009.

†Amount less than one thousand.

Directors’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMCmay elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $258,000, shown on the accompanying financial statements, includes $232,000 in current fees (either paid in cash or deferred) and a net increase of $26,000 in the value of the deferred amounts.

Affiliated officers and directors – Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.

5. Disclosure of fair value measurements

The fund classifies its assets and liabilities into three levels based on the method used to value the assets or liabilities.Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high-quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of June 30, 2009 (dollars in thousands):

Investment securities:	Level 1		Level 2			Level 3		Total
Bonds & notes:
Corporate bonds & notes	$	-	$	12,688,020		$	97,222	$	12,785,242
Bonds & notes of U.S. government & government agencies		-		10,428,186			-		10,428,186
Mortgage-backed obligations		-		8,835,426			230,182		9,065,608
Bonds & notes of governments & government agencies outside the U.S.		-		1,529,693			-		1,529,693
Asset-backed obligations		-		1,472,100			17,169		1,489,269
Municipals		-		250,004			-		250,004
Convertible securities		-		43,227			-		43,227
Preferred securities		44,399		652,831			-		697,230
Common stocks		12,774		-			45		12,819
Short-term securities		-		1,679,915			-		1,679,915
Total	$	57,173	$	37,579,402		$	344,618	$	37,981,193
	Level 1		Level 2			Level 3		Total
Forward currency contracts (*)		-	$	(65,970	)		-	$	(65,970	)

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the six months ended June 30, 2009 (dollars in thousands):
	Beginning value at 1/1/2009		Net purchases and sales			Net realized gain (†)		Net unrealized appreciation(†)		Net transfers out of Level 3			Ending value at 6/30/2009
Investment securities	$	523,921	$	(64,756	)	$	2,059	$	4,975	$	(121,581	)	$	344,618
Net unrealized appreciation during the period on Level 3 investment securities held at June 30, 2009  (dollars in thousands) (†):													$	2,488
(*) Forward currency contracts are not included in the investment portfolio.
(†) Net realized gain and unrealized appreciation are included in the related amounts on investments in the statement of operations.

6. Capital share transactions

Capital share transactions in the fund were as follows (dollars and shares in thousands):

Share class	Sales(1)				Reinvestments  of dividends				Repurchases(1)						Net increase  (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Six months ended June 30, 2009
Class A	$	5,363,352		499,765	$	570,629		53,013	$	(3,248,390	)		(301,990	)	$	2,685,591			250,788
Class B		190,542		17,822		25,731		2,390		(213,544	)		(19,862	)		2,729			350
Class C		817,462		76,102		50,965		4,735		(359,360	)		(33,406	)		509,067			47,431
Class F-1		1,039,716		96,272		64,611		6,003		(780,768	)		(72,418	)		323,559			29,857
Class F-2		537,510		49,095		4,542		420		(47,851	)		(4,452	)		494,201			45,063
Class 529-A		107,272		9,982		15,456		1,435		(42,933	)		(3,995	)		79,795			7,422
Class 529-B		9,080		849		1,681		156		(4,654	)		(433	)		6,107			572
Class 529-C		63,485		5,901		6,266		582		(23,112	)		(2,152	)		46,639			4,331
Class 529-E		6,610		616		782		73		(1,960	)		(183	)		5,432			506
Class 529-F-1		7,498		695		783		73		(3,057	)		(285	)		5,224			483
Class R-1		25,852		2,404		2,054		191		(21,283	)		(1,979	)		6,623			616
Class R-2		160,181		14,906		14,354		1,334		(113,224	)		(10,543	)		61,311			5,697
Class R-3		211,005		19,623		24,093		2,239		(188,555	)		(17,508	)		46,543			4,354
Class R-4		151,371		14,055		18,957		1,762		(148,342	)		(13,801	)		21,986			2,016
Class R-5		182,922		16,955		15,706		1,464		(443,942	)		(40,873	)		(245,314	)		(22,454	)
Class R-6(2)		117,956		10,925		918		83		(75	)		(7	)		118,799			11,001
Total net increase
(decrease)	$	8,991,814		835,967	$	817,528		75,953	$	(5,641,050	)		(523,887	)	$	4,168,292			388,033
Year ended December 31, 2008
Class A	$	6,852,721		563,129	$	1,370,285		116,136	$	(6,431,432	)		(541,018	)	$	1,791,574			138,247
Class B		304,429		24,965		68,497		5,813		(397,075	)		(33,311	)		(24,149	)		(2,533	)
Class C		922,097		75,445		120,888		10,276		(809,514	)		(68,089	)		233,471			17,632
Class F-1		1,692,529		139,793		157,443		13,367		(1,572,023	)		(133,348	)		277,949			19,812
Class F-2(3)		125,467		11,218		1,582		147		(23,803	)		(2,194	)		103,246			9,171
Class 529-A		160,968		13,215		34,433		2,929		(70,702	)		(5,954	)		124,699			10,190
Class 529-B		13,620		1,118		4,082		348		(8,590	)		(725	)		9,112			741
Class 529-C		92,811		7,615		14,184		1,211		(44,239	)		(3,731	)		62,756			5,095
Class 529-E		8,810		727		1,709		146		(3,943	)		(331	)		6,576			542
Class 529-F-1		11,194		927		1,615		138		(4,241	)		(366	)		8,568			699
Class R-1		54,856		4,492		4,534		388		(26,516	)		(2,206	)		32,874			2,674
Class R-2		295,996		24,167		35,134		2,992		(235,150	)		(19,523	)		95,980			7,636
Class R-3		512,079		41,561		59,475		5,056		(382,379	)		(31,909	)		189,175			14,708
Class R-4		382,804		31,033		46,848		3,980		(265,125	)		(22,311	)		164,527			12,702
Class R-5		371,353		30,448		42,060		3,567		(241,776	)		(20,583	)		171,637			13,432
Total net increase
(decrease)	$	11,801,734		969,853	$	1,962,769		166,494	$	(10,516,508	)		(885,599	)	$	3,247,995			250,748
(1) Includes exchanges between share classes of the fund.
(2)Class R-6 was offered beginning May 1, 2009.
(3)Class F-2 was offered beginning August 1, 2008.

7. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $10,617,555,000 and $12,182,724,000, respectively, during the six months ended June 30, 2009.

8. Forward currency contracts

The fund may enter into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund enters into these contracts to manage its exposure to changes in exchange rates. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates.

On a daily basis, the fund values forward currency contracts based on the applicable exchange rate and records unrealized appreciation or depreciation for open forward currency contracts in the statement of assets and liabilities. The fund records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency. Closed forward currency contracts that have not reached their expiration date are included in the respective receivables or payables for closed forward currency contracts in the statement of assets and liabilities. Net realized gains or losses from closed forward currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in the statement of operations.As of June 30, 2009, the fund had open forward currency contracts to purchase or sell currencies as follows (amounts in thousands):

		Contract amount				Unrealized (depreciation) appreciation at June 30, 2009
	Settlement  date	Receive		Deliver
Purchases:
Euros	7/27/2009	€	3,876	$	5,461	$	(25	)
						$	(25	)
Sales:
Australian dollars	7/20/2009	$	20,073	$	A25,100	$	(128	)
Australian dollars	7/30/2009	$	36,588	$	A52,440		(5,582	)
Australian dollars	8/28/2009	$	26,139	$	A37,540		(3,987	)
British pounds	7/23/2009	$	53,088	£	36,290		(6,593	)
British pounds	7/23/2009	$	29,804	£	20,380		(3,712	)
British pounds	7/28/2009	$	44,810	£	30,650		(5,596	)
British pounds	8/3/2009	$	50,885	£	30,720		364
Danish kroner	7/24/2009	$	50,551	DKr291,110			(4,258	)
Euros	7/8/2009	$	2,297	€	1,650		(18	)
Euros	7/16/2009	$	56	€	40		-
Euros	7/23/2009	$	83,826	€	75,845		(8,127	)
Euros	7/23/2009	$	43,237	€	35,050		(3,731	)
Euros	7/27/2009	$	594	€	425		(2	)
Euros	7/28/2009	$	158,222	€	122,085		(13,018	)
Euros	7/30/2009	$	116,055	€	89,540		(9,536	)
Euros	7/31/2009	$	352	€	250		1
Japanese yen	7/16/2009	$	62,286	¥	6,115,250		(1,195	)
Polish zloty	7/17/2009	$	20,741	PLN68,000			(637	)
South Korean won	7/17/2009	$	12,340	KRW15,610,000			82
Swedish kronor	7/17/2009	$	21,098	SKr165,000			(272	)
						$	(65,945	)
Forward currency contracts - net						$	(65,970.00	)
(*)Amount less than one thousand.

9. Subsequent events

As of August 7, 2009, the date the financial statements were available to be issued, no subsequent events or transactions had occurred that would have materially impacted the financial statements as presented.

Financial highlights(1)

				Income (loss) from investment operations(2)
		Net asset value, beginning of period		Net investment income		Net gains (losses) on securities (both realized and unrealized)			Total from investment operations			Dividends (from net investment income)			Net asset value, end of period		Total return(3)(4)			Net assets, end of period (in millions)		Ratio of expenses to average net assets before reimbursements/ waivers			Ratio of expenses to average net assets after reimbursements/ waivers(4)			Ratio of net income to average net assets(4)
Class A:	Six months ended 6/30/2009(5)	$	10.76	$	.29	$	.45		$	.74		$	(.29	)	$	11.21		7.06	%	$	25,722		.67	%(6)		.67	%(6)		5.41	%(6)
	Year ended 12/31/2008		13.06		.70		(2.25	)		(1.55	)		(.75	)		10.76		(12.24	)		21,987		.65			.63			5.76
	Year ended 12/31/2007		13.32		.69		(.25	)		.44			(.70	)		13.06		3.37			24,898		.63			.61			5.22
	Year ended 12/31/2006		13.22		.67		.09			.76			(.66	)		13.32		5.88			20,670		.65			.62			5.07
	Year ended 12/31/2005		13.65		.62		(.36	)		.26			(.69	)		13.22		1.94			17,738		.65			.62			4.60
	Year ended 12/31/2004		13.51		.61		.16			.77			(.63	)		13.65		5.85			15,822		.65			.65			4.54
													��
Class B:	Six months ended 6/30/2009(5)		10.76		.25		.45			.70			(.25	)		11.21		6.66			1,283		1.42	(6)		1.42	(6)		4.69	(6)
	Year ended 12/31/2008		13.06		.61		(2.25	)		(1.64	)		(.66	)		10.76		(12.88	)		1,227		1.40			1.37			5.02
	Year ended 12/31/2007		13.32		.59		(.25	)		.34			(.60	)		13.06		2.61			1,524		1.38			1.35			4.48
	Year ended 12/31/2006		13.22		.57		.09			.66			(.56	)		13.32		5.09			1,458		1.40			1.37			4.33
	Year ended 12/31/2005		13.65		.52		(.36	)		.16			(.59	)		13.22		1.19			1,415		1.38			1.36			3.87
	Year ended 12/31/2004		13.51		.51		.16			.67			(.53	)		13.65		5.07			1,394		1.39			1.38			3.80
Class C:	Six months ended 6/30/2009(5)		10.76		.25		.45			.70			(.25	)		11.21		6.63			2,901		1.46	(6)		1.46	(6)		4.61	(6)
	Year ended 12/31/2008		13.06		.60		(2.25	)		(1.65	)		(.65	)		10.76		(12.92	)		2,274		1.44			1.41			4.98
	Year ended 12/31/2007		13.32		.59		(.25	)		.34			(.60	)		13.06		2.56			2,532		1.42			1.40			4.43
	Year ended 12/31/2006		13.22		.56		.09			.65			(.55	)		13.32		5.04			1,847		1.45			1.42			4.27
	Year ended 12/31/2005		13.65		.51		(.36	)		.15			(.58	)		13.22		1.12			1,429		1.44			1.42			3.81
	Year ended 12/31/2004		13.51		.50		.16			.66			(.52	)		13.65		4.99			1,123		1.46			1.45			3.71
Class F-1:	Six months ended 6/30/2009(5)		10.76		.29		.45			.74			(.29	)		11.21		7.07			3,099		.67	(6)		.67	(6)		5.40	(6)
	Year ended 12/31/2008		13.06		.70		(2.25	)		(1.55	)		(.75	)		10.76		(12.23	)		2,653		.64			.62			5.78
	Year ended 12/31/2007		13.32		.69		(.25	)		.44			(.70	)		13.06		3.38			2,963		.62			.60			5.22
	Year ended 12/31/2006		13.22		.67		.09			.76			(.66	)		13.32		5.90			1,611		.63			.60			5.07
	Year ended 12/31/2005		13.65		.62		(.36	)		.26			(.69	)		13.22		1.92			803		.65			.63			4.60
	Year ended 12/31/2004		13.51		.60		.16			.76			(.62	)		13.65		5.80			487		.70			.69			4.46
Class F-2:	Six months ended 6/30/2009(5)		10.76		.30		.45			.75			(.30	)		11.21		7.20			608		.42	(6)		.42	(6)		5.51	(6)
	Period from 8/4/2008 to 12/31/2008		12.31		.29		(1.47	)		(1.18	)		(.37	)		10.76		(9.62	)		99		.18			.17			2.69
Class 529-A:	Six months ended 6/30/2009(5)		10.76		.29		.45			.74			(.29	)		11.21		7.04			653		.72	(6)		.72	(6)		5.36	(6)
	Year ended 12/31/2008		13.06		.69		(2.25	)		(1.56	)		(.74	)		10.76		(12.28	)		547		.69			.67			5.74
	Year ended 12/31/2007		13.32		.68		(.25	)		.43			(.69	)		13.06		3.31			532		.69			.67			5.17
	Year ended 12/31/2006		13.22		.66		.09			.75			(.65	)		13.32		5.85			388		.68			.66			5.05
	Year ended 12/31/2005		13.65		.61		(.36	)		.25			(.68	)		13.22		1.88			273		.69			.67			4.57
	Year ended 12/31/2004		13.51		.60		.16			.76			(.62	)		13.65		5.80			187		.70			.70			4.48
Class 529-B:	Six months ended 6/30/2009(5)		10.76		.25		.45			.70			(.25	)		11.21		6.60			81		1.52	(6)		1.52	(6)		4.57	(6)
	Year ended 12/31/2008		13.06		.60		(2.25	)		(1.65	)		(.65	)		10.76		(12.98	)		71		1.51			1.48			4.92
	Year ended 12/31/2007		13.32		.58		(.25	)		.33			(.59	)		13.06		2.49			77		1.50			1.47			4.36
	Year ended 12/31/2006		13.22		.55		.09			.64			(.54	)		13.32		4.97			69		1.53			1.50			4.20
	Year ended 12/31/2005		13.65		.50		(.36	)		.14			(.57	)		13.22		1.02			58		1.54			1.52			3.71
	Year ended 12/31/2004		13.51		.48		.16			.64			(.50	)		13.65		4.86			49		1.59			1.58			3.60
Class 529-C:	Six months ended 6/30/2009(5)		10.76		.25		.45			.70			(.25	)		11.21		6.60			318		1.52	(6)		1.52	(6)		4.56	(6)
	Year ended 12/31/2008		13.06		.60		(2.25	)		(1.65	)		(.65	)		10.76		(12.97	)		258		1.50			1.47			4.94
	Year ended 12/31/2007		13.32		.58		(.25	)		.33			(.59	)		13.06		2.50			247		1.49			1.46			4.37
	Year ended 12/31/2006		13.22		.55		.09			.64			(.54	)		13.32		4.99			170		1.51			1.49			4.22
	Year ended 12/31/2005		13.65		.50		(.36	)		.14			(.57	)		13.22		1.03			121		1.53			1.51			3.74
	Year ended 12/31/2004		13.51		.48		.16			.64			(.50	)		13.65		4.88			86		1.57			1.57			3.61
Class 529-E:	Six months ended 6/30/2009(5)	$	10.76	$	.28	$	.45		$	.73		$	(.28	)	$	11.21		6.88	%	$	36		1.01	%(6)		1.01	%(6)		5.07	%(6)
	Year ended 12/31/2008		13.06		.66		(2.25	)		(1.59	)		(.71	)		10.76		(12.53	)		29		.99			.96			5.45
	Year ended 12/31/2007		13.32		.65		(.25	)		.40			(.66	)		13.06		3.02			28		.98			.96			4.88
	Year ended 12/31/2006		13.22		.62		.09			.71			(.61	)		13.32		5.53			21		.99			.97			4.74
	Year ended 12/31/2005		13.65		.57		(.36	)		.21			(.64	)		13.22		1.56			15		1.01			.99			4.25
	Year ended 12/31/2004		13.51		.55		.16			.71			(.57	)		13.65		5.43			11		1.05			1.05			4.13
Class 529-F-1:	Six months ended 6/30/2009(5)		10.76		.30		.45			.75			(.30	)		11.21		7.15			32		.51	(6)		.51	(6)		5.57	(6)
	Year ended 12/31/2008		13.06		.72		(2.25	)		(1.53	)		(.77	)		10.76		(12.10	)		26		.49			.46			5.96
	Year ended 12/31/2007		13.32		.71		(.25	)		.46			(.72	)		13.06		3.53			22		.48			.46			5.38
	Year ended 12/31/2006		13.22		.69		.09			.78			(.68	)		13.32		6.05			14		.49			.46			5.25
	Year ended 12/31/2005		13.65		.62		(.36	)		.26			(.69	)		13.22		1.98			7		.58			.56			4.69
	Year ended 12/31/2004		13.51		.59		.16			.75			(.61	)		13.65		5.69			4		.80			.80			4.36
Class R-1:	Six months ended 6/30/2009(5)		10.76		.25		.45			.70			(.25	)		11.21		6.64			98		1.44	(6)		1.44	(6)		4.64	(6)
	Year ended 12/31/2008		13.06		.60		(2.25	)		(1.65	)		(.65	)		10.76		(12.92	)		88		1.44			1.42			5.01
	Year ended 12/31/2007		13.32		.58		(.25	)		.33			(.59	)		13.06		2.54			71		1.44			1.42			4.44
	Year ended 12/31/2006		13.22		.56		.09			.65			(.55	)		13.32		5.05			29		1.49			1.42			4.28
	Year ended 12/31/2005		13.65		.51		(.36	)		.15			(.58	)		13.22		1.11			18		1.51			1.43			3.82
	Year ended 12/31/2004		13.51		.50		.16			.66			(.52	)		13.65		4.98			11		1.55			1.47			3.70
Class R-2:	Six months ended 6/30/2009(5)		10.76		.25		.45			.70			(.25	)		11.21		6.59			706		1.53	(6)		1.53	(6)		4.57	(6)
	Year ended 12/31/2008		13.06		.59		(2.25	)		(1.66	)		(.64	)		10.76		(12.99	)		616		1.53			1.50			4.90
	Year ended 12/31/2007		13.32		.59		(.25	)		.34			(.60	)		13.06		2.56			648		1.51			1.40			4.44
	Year ended 12/31/2006		13.22		.56		.09			.65			(.55	)		13.32		5.06			500		1.67			1.41			4.30
	Year ended 12/31/2005		13.65		.51		(.36	)		.15			(.58	)		13.22		1.14			352		1.74			1.41			3.84
	Year ended 12/31/2004		13.51		.50		.16			.66			(.52	)		13.65		5.02			238		1.85			1.43			3.73
Class R-3:	Six months ended 6/30/2009(5)		10.76		.28		.45			.73			(.28	)		11.21		6.89			1,028		.99	(6)		.99	(6)		5.11	(6)
	Year ended 12/31/2008		13.06		.66		(2.25	)		(1.59	)		(.71	)		10.76		(12.52	)		939		.98			.95			5.45
	Year ended 12/31/2007		13.32		.65		(.25	)		.40			(.66	)		13.06		3.02			949		.98			.95			4.89
	Year ended 12/31/2006		13.22		.62		.09			.71			(.61	)		13.32		5.49			570		1.02			.99			4.71
	Year ended 12/31/2005		13.65		.56		(.36	)		.20			(.63	)		13.22		1.53			361		1.05			1.02			4.23
	Year ended 12/31/2004		13.51		.55		.16			.71			(.57	)		13.65		5.42			213		1.06			1.05			4.12
Class R-4:	Six months ended 6/30/2009(5)		10.76		.29		.45			.74			(.29	)		11.21		7.06			759		.67	(6)		.67	(6)		5.43	(6)
	Year ended 12/31/2008		13.06		.70		(2.25	)		(1.55	)		(.75	)		10.76		(12.25	)		707		.67			.64			5.77
	Year ended 12/31/2007		13.32		.69		(.25	)		.44			(.70	)		13.06		3.35			692		.66			.64			5.22
	Year ended 12/31/2006		13.22		.66		.09			.75			(.65	)		13.32		5.86			325		.67			.65			5.06
	Year ended 12/31/2005		13.65		.61		(.36	)		.25			(.68	)		13.22		1.91			182		.67			.65			4.61
	Year ended 12/31/2004		13.51		.60		.16			.76			(.62	)		13.65		5.81			77		.68			.68			4.48
Class R-5:	Six months ended 6/30/2009(5)		10.76		.31		.45			.76			(.31	)		11.21		7.23			444		.37	(6)		.37	(6)		5.77	(6)
	Year ended 12/31/2008		13.06		.73		(2.25	)		(1.52	)		(.78	)		10.76		(12.00	)		667		.37			.34			6.06
	Year ended 12/31/2007		13.32		.73		(.25	)		.48			(.74	)		13.06		3.65			635		.36			.34			5.50
	Year ended 12/31/2006		13.22		.70		.09			.79			(.69	)		13.32		6.17			336		.37			.35			5.36
	Year ended 12/31/2005		13.65		.66		(.36	)		.30			(.73	)		13.22		2.21			204		.37			.35			4.91
	Year ended 12/31/2004		13.51		.65		.16			.81			(.67	)		13.65		6.14			127		.37			.37			4.81
Class R-6:	Period from 5/1/2009 to 6/30/2009(5)		10.78		.09		.43			.52			(.09	)		11.21		4.88			123		.05			.05			.86

	Six months ended June 30,			Year ended December 31
	2009(5)			2008			2007			2006			2005			2004
Portfolio turnover rate for all classes of shares		47	%		57	%		58	%		53	%		50	%		45	%

(1)Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.

(2)Based on average shares outstanding.

(3)Total returns exclude any applicable sales charges, including contingent deferred sales charges.

(4)This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.

(5)Unaudited.

(6)Annualized.

See Notes to Financial Statements

[logo – American Funds®]

Bond Fund of AmericaSM

Investment portfolio

December 31, 2008

Bonds & notes — 91.17%	Principal amount (000)			Value (000)
CORPORATE BONDS & NOTES — 36.67%
FINANCIALS — 12.77%
Banks — 3.86%
Santander Issuances, SA Unipersonal 1.885% 20161,2	$	21,500		$	15,657
Santander Issuances, SA Unipersonal 5.805% 20161,2		76,100			68,501
Abbey National PLC 7.95% 2029		23,255			20,303
Santander Perpetual, SA Unipersonal 6.671% (undated)1,2		16,000			10,191
Abbey National PLC 7.50% (undated)1	£	3,270			3,957
Bayerische Hypo- und Vereinsbank AG 6.00% 2014	€	2,155			2,856
UniCredito Italiano SpA 5.584% 20171,2	$	60,690			53,104
UniCredito Italiano SpA 6.00% 20172		67,825			56,645
HVB Funding Trust I 8.741% 20312		5,555			1,608
HVB Funding Trust III 9.00% 20312		8,506			2,462
Household Finance Corp. 6.75% 2011		23,750			23,660
HSBC Finance Corp. 2.346% 20121		20,000			15,228
HSBC Finance Corp. 4.853% 20121		15,000			11,550
HSBC Finance Corp. 5.00% 2015		27,195			24,172
HSBC Holdings PLC 6.50% 2037		24,435			24,897
Midland Bank 2.063% Eurodollar note (undated)1		15,000			8,025
Sovereign Bancorp, Inc. 2.461% 20091		20,700			20,112
Independence Community Bank Corp. 4.90% 2010		12,000			10,767
Sovereign Bancorp, Inc. 4.903% 20131		6,500			4,638
Sovereign Bancorp, Inc. 8.75% 2018		75,350			69,228
Resona Bank, Ltd. 3.75% 20151	€	9,740			11,693
Resona Bank, Ltd. 5.85% (undated)1,2	$	102,333			58,084
Fifth Third Bancorp 8.25% 2038		30,250			25,052
Fifth Third Capital Trust IV 6.50% 20671		82,615			41,337
TuranAlem Finance BV 7.75% 20132		11,000			4,455
TuranAlem Finance BV 8.00% 2014		12,460			5,171
TuranAlem Finance BV 8.00% 20142		5,000			2,075
TuranAlem Finance BV 8.50% 20152		23,335			10,151
TuranAlem Finance BV 8.50% 2015		11,310			4,920
TuranAlem Finance BV 8.25% 20372		59,045			25,685
TuranAlem Finance BV, Series 8, 8.25% 2037		6,000			2,610
Royal Bank of Scotland PLC 9.625% 2015	£	200			324
Royal Bank of Scotland Group PLC 4.70% 2018	$	635			465
Royal Bank of Scotland PLC 5.00% (undated)1	£	200			254
Royal Bank of Scotland Group PLC 6.99% (undated)1,2	$	74,990			34,120
Royal Bank of Scotland Group PLC, Series U, 7.64% (undated)1		29,500			11,763
HBOS PLC 6.75% 20182		47,850			42,183
HBOS PLC 6.00% 20332		5,465			3,743
Wachovia Bank NA 4.80% 2014		3,750			3,497
Wachovia Bank NA 6.60% 2038		37,000			40,277
PNC Funding Corp. 3.62% 20141		30,000			24,221
PNC Bank NA 6.875% 2018		5,200			5,542
PNC Funding Corp., Series II, 6.113% (undated)1,2		23,300			9,628
National City Preferred Capital Trust I 12.00% (undated)1		39,500			37,327
Standard Chartered Bank 6.40% 20172		42,410			35,329
Standard Chartered Bank 5.375% (undated)1	£	150			136
Société Générale 5.75% 20162	$	36,515			33,500
Development Bank of Singapore Ltd. 7.875% 20092		20,000			20,365
DBS Bank Ltd. 5.16% 20211,2		12,500			9,026
HSBK (Europe) BV 7.75% 2013		10,855			7,761
HSBK (Europe) BV 7.75% 20132		305			218
HSBK (Europe) BV 7.25% 20172		39,245			21,389
Kazkommerts International BV 7.00% 20092		5,500			4,757
Kazkommerts International BV 8.50% 2013		5,000			2,925
Kazkommerts International BV 7.875% 20142		9,200			5,106
Kazkommerts International BV 8.00% 20152		15,500			7,362
Kazkommerts International BV 8.00% 2015		600			285
Kazkommerts International BV, Series 4, 7.50% 2016		10,000			3,800
SunTrust Banks, Inc. 7.25% 2018		21,200			22,322
Wells Fargo Bank, National Assn. 4.75% 2015		15,370			15,578
Wells Fargo & Co. 5.625% 2017		4,820			5,037
United Overseas Bank Ltd. 5.375% 20191,2		22,250			18,673
Northern Rock PLC 5.60% (undated)1,2		13,815			5,319
Northern Rock PLC 6.594% (undated)1,2		27,465			10,574
UnionBanCal Corp. 5.25% 2013		2,000			1,705
Union Bank of California, NA 5.95% 2016		17,415			13,997
Silicon Valley Bank 5.70% 2012		18,000			15,638
Canadian Imperial Bank of Commerce 3.25% Eurodollar note 20851,3		25,000			12,152
Skandinaviska Enskilda Banken AB 5.00% (undated)1	£	265			339
Skandinaviska Enskilda Banken AB 7.50% (undated)1	$	12,500			11,551
Korea Development Bank 5.30% 2013		12,135			11,213
BNP Paribas 5.125% 20152		11,315			10,143
BNP Paribas 5.75% 2022	£	415			594
AB Spintab 6.00% 2009	SKr73,000				9,360
Banco Santander-Chile 5.375% 20142	$	9,035			8,354
Sumitomo Mitsui Banking Corp. 8.00% 2012		3,500			3,596
Sumitomo Mitsui Banking Corp. 5.625% (undated)1,2		5,970			4,427
Chohung Bank 4.50% 20141,2		8,000			6,918
Zions Bancorporation 5.50% 2015		9,625			6,816
Credit Agricole SA 6.637% (undated)1,2		12,220			5,804
Banco Mercantil del Norte, SA 6.135% 20161,2		8,530			5,507
Bank of Nova Scotia 3.25% 20851		10,000			4,693
Industrial Bank of Korea 4.00% 20141,2		5,000			4,599
Lloyds Bank, Series 2, 2.375% (undated)1		8,000			4,090
Shinsei Bank, Ltd. 3.75% 20161	€	6,865			3,959
Shinsei Bank, Ltd. 5.625% (undated)1	£	195			94
KeyBank NA 5.50% 2012	$	3,750			3,499
Allied Irish Banks, PLC 5.625% 20301	£	250			245
Allied Irish Banks Ltd. 3.875% (undated)1	$	7,000			2,999
Bergen Bank 3.25% (undated)1		5,000			2,600
National Bank of Canada 3.313% 20871		5,000			2,338
Christiana Bank Og Kreditkasse 2.783% (undated)1		4,000			2,060
Norinchukin Finance (Cayman) Ltd. 5.625% 20161	£	205			268
Barclays Bank PLC 6.375% (undated)1		240			258
Commerzbank AG 6.625% 2019		70			93
Downey Financial Corp. 6.50% 2014	$	10,720			50
					1,241,559
Diversified financials — 3.83%
Countrywide Home Loans, Inc., Series M, 4.125% 2009	$	54,575		$	53,944
Countrywide Home Loans, Inc., Series K, 5.625% 2009		10,375			10,331
Countrywide Financial Corp., Series A, 4.50% 2010		15,540			15,274
Countrywide Financial Corp. 6.25% 2010	$	A7,700			5,450
Bank of America Corp. 7.125% 2011	$	1,750			1,768
Countrywide Financial Corp., Series B, 2.946% 20121		30,000			25,950
Countrywide Financial Corp., Series B, 5.80% 2012		152,003			148,263
MBNA Corp., Series F, 7.50% 2012		1,800			1,854
MBNA Capital A, Series A, 8.278% 2026		7,500			6,238
MBNA Global Capital Funding, Series B, 3.993% 20271		33,000			19,757
Bank of America Corp. 6.50% 2037		20,240			20,758
JPMorgan Chase & Co. 4.891% 20151		55,000			55,285
JPMorgan Chase Bank NA 5.875% 2016		25,730			25,708
JPMorgan Chase Bank NA 6.00% 2017		22,580			22,814
JPMorgan Chase Capital XV, Series O, 5.875% 2035		2,242			1,740
JPMorgan Chase Capital XXV, Series Y, 6.80% 2037		7,088			6,550
JPMorgan Chase Capital XX, Series T, 6.55% 2066		22,275			18,883
JPMorgan Chase Capital XXII, Series V, 6.45% 20871		11,735			9,644
CIT Group Inc. 2.303% 20091		1,732			1,691
CIT Group Inc. 6.875% 2009		15,000			14,405
CIT Group Inc. 4.25% 2010		33,000			30,261
CIT Group Inc. 3.796% 20111		32,500			26,706
CIT Group Inc. 2.425% 20121		6,080			4,775
CIT Group Inc. 7.625% 2012		18,275			15,440
CIT Group Inc. 7.75% 2012		2,455			1,943
CIT Group Inc. 5.40% 2013		21,140			15,979
CIT Group Inc. 5.125% 2014		2,700			1,929
CIT Group Inc. 5.65% 2017		4,089			2,847
CIT Group Inc. 12.00% 20182,3		8,713			6,796
CIT Group Inc. 5.80% 2036		1,574			1,041
CIT Group Inc. 6.10% 20671		36,265			11,211
Citigroup Inc. 4.125% 2010		26,000			25,628
Citigroup Inc. 6.50% 2013		17,000			17,171
Citigroup Capital XXI 8.30% 20771		93,630			72,374
GMAC LLC 3.399% 20091		500			478
General Motors Acceptance Corp. 5.85% 2009		8,790			8,733
General Motors Acceptance Corp. 7.50% 20132,3		10,426			7,090
General Motors Acceptance Corp. 8.00% 20182,3		9,577			4,645
General Motors Acceptance Corp. 7.25% 20112,3		13,727			12,354
General Motors Acceptance Corp. 6.625% 20122,3		1,899			1,519
General Motors Acceptance Corp. 6.875% 20122,3		7,782			6,226
General Motors Acceptance Corp. 7.00% 20122,3		20,383			16,510
General Motors Acceptance Corp. 4.403% 20141,2,3		3,070			1,965
General Motors Acceptance Corp. 6.75% 20142,3		1,535			1,121
Capital One Financial Corp. 2.469% 20091		30,000			28,581
Capital One Financial Corp. 5.70% 2011		12,000			11,197
Capital One Financial Corp. 6.15% 2016		10,000			7,047
Capital One Capital III 7.686% 20361		46,825			19,901
International Lease Finance Corp., Series O, 4.55% 2009		8,125			7,329
International Lease Finance Corp. 5.00% 2012		13,500			9,310
International Lease Finance Corp., Series R, 5.40% 2012		10,000			6,987
International Lease Finance Corp., Series R, 5.625% 2013		20,000			13,368
International Lease Finance Corp., Series R, 6.375% 2013		2,000			1,360
International Lease Finance Corp., Series R, 6.625% 2013		25,500			17,198
International Lease Finance Corp., Series R, 5.65% 2014		16,135			10,551
SLM Corp., Series A, 4.50% 2010		38,000			32,991
SLM Corp., Series A, 5.40% 2011		13,700			10,369
SLM Corp., Series A, 5.125% 2012		10,000			7,489
SLM Corp., Series A, 5.375% 2013		3,000			2,201
SLM Corp., Series A, 3.835% 20141		6,900			4,662
ORIX Corp. 5.48% 2011		68,155			51,266
Goldman Sachs Group, Inc. 6.25% 2017		10,000			9,712
Goldman Sachs Group, Inc. 6.15% 2018		26,060			25,086
Goldman Sachs Group, Inc. 6.75% 2037		3,210			2,613
American Express Co. 6.15% 2017		19,715			19,038
American Express Co. 8.15% 2038		4,600			5,291
American Express Co. 6.80% 20661		14,176			7,347
Charles Schwab Corp., Series A, 6.375% 2017		15,490			14,358
Schwab Capital Trust I 7.50% 20371		28,820			14,437
Morgan Stanley Dean Witter & Co. 6.75% 2011		10,000			9,844
Morgan Stanley, Series F, 5.95% 2017		15,000			12,470
Morgan Stanley 10.09% 2017	BRL3,000				756
Lazard Group LLC 7.125% 2015	$	29,385			18,682
Lazard Group LLC 6.85% 2017		1,775			1,132
Capmark Financial Group Inc. 3.038% 20101		835			426
Capmark Financial Group Inc. 5.875% 2012		35,070			11,965
Capmark Financial Group Inc. 6.30% 2017		13,162			3,624
Lehman Brothers Holdings Inc. 5.00% 20104	£	235			29
Lehman Brothers Holdings Inc., Series I, 3.018% 20121,4	$	3,300			314
Lehman Brothers Holdings Inc., Series G, 4.80% 20144		10,395			1,040
Lehman Brothers Holdings Inc., Series I, 6.20% 20144		42,650			4,265
Lehman Brothers Holdings Inc., Series H, 5.50% 20164		765			77
Lehman Brothers Holdings Inc., Series I, 6.875% 20184		81,508			8,151
iStar Financial, Inc. 5.375% 2010		7,000			3,221
iStar Financial, Inc. 6.00% 2010		3,805			1,599
iStar Financial, Inc., Series B, 5.125% 2011		4,320			1,513
iStar Financial, Inc. 6.50% 2013		10,120			3,038
iStar Financial, Inc. 8.625% 2013		5,000			1,551
iStar Financial, Inc., Series B, 5.70% 2014		1,300			403
iStar Financial, Inc. 6.05% 2015		4,152			1,226
ING Bank NV 5.50% 2012	€	3,750			5,120
ING Groep NV 5.775% (undated)1	$	15,500			6,646
Merrill Lynch & Co., Inc. 6.875% 2018		10,000			10,478
Northern Trust Corp. 5.50% 2013		5,450			5,602
Northern Trust Co. 5.85% 20175		3,750			3,840
E*TRADE Financial Corp. 8.00% 2011		11,450			5,267
E*TRADE Financial Corp. 7.375% 2013		1,150			420
E*TRADE Financial Corp. 7.875% 2015		9,720			3,548
Bank of New York Mellon Corp., Series G, 4.95% 2012		3,500			3,557
Advanta Capital Trust I, Series B, 8.99% 2026		12,500			1,562
					1,232,104
Insurance — 3.20%
Metropolitan Life Global Funding I, 5.125% 20132		18,310			17,076
MetLife, Inc. 5.50% 2014		5,224			4,825
MetLife, Inc. 5.00% 2015		2,000			1,876
MetLife Capital Trust IV 7.875% 20671,2		22,600			14,207
MetLife Capital Trust X 9.25% 20681,2		111,050			77,611
Liberty Mutual Group Inc. 6.50% 20352		37,810			21,728
Liberty Mutual Group Inc. 7.50% 20362		37,485			22,871
Liberty Mutual Group Inc., Series A, 7.80% 20872		25,033			11,250
Liberty Mutual Group Inc., Series C, 10.75% 20881,2		93,940			51,734
American General Finance Corp., Series J, 2.429% 20111		30,000			11,522
American General Finance Corp., Series I, 5.85% 2013		27,500			10,453
American General Finance Corp., Series I, 5.40% 2015		20,000			7,480
American General Finance Corp., Series J, 6.50% 2017		1,750			722
American General Finance Corp., Series J, 6.90% 2017		61,625			26,703
American International Group, Inc., Series G, 5.85% 2018		4,100			2,752
American International Group, Inc. 5.00% 2023	£	400			284
American International Group, Inc. 8.175% 20581,2	$	26,155			10,187
American International Group, Inc., Series A-1, 6.25% 20871		4,190			1,569
Prudential Financial, Inc., Series D, 5.10% 2011		3,375			3,021
Prudential Holdings, LLC, Series C, 8.695% 20232,6		57,035			55,076
Prudential Financial, Inc. 8.875% 20681		20,000			12,938
Hartford Financial Services Group, Inc. 5.25% 2011		5,625			4,855
Hartford Financial Services Group, Inc. 4.625% 2013		2,000			1,520
Hartford Financial Services Group, Inc. 6.30% 2018		38,250			29,051
Glen Meadow Pass-Through Trust 6.505% 20671,2		21,201			8,527
Hartford Financial Services Group, Inc. 8.125% 20681		31,250			16,474
Lincoln National Corp. 5.65% 2012		20,745			17,109
Lincoln National Corp. 7.00% 20661		90,738			38,152
Chubb Corp. 5.75% 2018		18,800			18,083
Chubb Corp. 6.50% 2038		19,850			19,010
Chubb Corp. 6.375% 20671		25,595			15,896
ACE INA Holdings Inc. 5.875% 2014		18,775			17,497
ACE INA Holdings Inc. 5.70% 2017		4,000			3,592
ACE INA Holdings Inc. 5.80% 2018		7,000			6,311
ACE Capital Trust II 9.70% 2030		12,423			9,552
ACE INA Holdings Inc. 6.70% 2036		5,980			5,255
Monumental Global Funding 5.50% 20132		18,760			17,715
Monumental Global Funding III 5.25% 20142		23,000			22,069
AEGON NV 6.125% 2031	£	1,730			1,854
CNA Financial Corp. 5.85% 2014	$	11,500			8,413
CNA Financial Corp. 6.50% 2016		24,625			17,462
CNA Financial Corp. 7.25% 2023		24,145			15,101
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		17,500			17,243
Allstate Corp., Series B, 6.125% 20671		32,665			18,998
Allstate Corp., Series A, 6.50% 20671		7,710			4,345
New York Life Global Funding 5.25% 20122		30,300			29,748
New York Life Global Funding 4.65% 20132		9,170			8,870
ZFS Finance (USA) Trust II 6.45% 20651,2		29,500			13,794
ZFS Finance (USA) Trust V 6.50% 20671,2		60,175			24,702
Catlin Insurance Ltd. 7.249% (undated)1,2		88,800			35,357
Nationwide Financial Services, Inc. 6.75% 20671		69,985			31,430
Nationwide Mutual Insurance 5.81% 20241,2,3		19,085			9,459
Nationwide Mutual Insurance Co. 8.25% 20312		15,675			9,923
Nationwide Mutual Insurance Co. 7.875% 20332		5,480			3,238
Nationwide Mutual Insurance Co. 6.60% 20342		2,000			1,002
Principal Life Insurance Co. 5.30% 2013		23,000			21,565
John Hancock Global Funding II, Series 2004-A, 3.50% 20092		18,000			17,979
Principal Life Global Funding I 4.40% 20102		16,600			16,295
AXA SA 6.463% (undated)1,2		35,000			15,310
Assurant, Inc. 5.625% 2014		19,420			14,774
Protective Life Insurance Co., Series 2005-C, 4.85% 2010		15,000			14,012
United Energy Distribution Pty Ltd., AMBAC insured, 4.70% 20112		10,000			10,508
MassMutual Global Funding II, Series 2002-1, 3.50% 20102		10,000			9,759
Jackson National Life Global 5.375% 20132		10,000			9,046
Genworth Global Funding Trust, Series 2007-C, 5.25% 2012		10,000			7,120
Genworth Financial, Inc. 6.15% 20661		15,135			1,435
Loews Corp. 6.00% 2035		8,000			6,255
Berkshire Hathaway Finance Corp. 5.00% 2013		5,125			5,219
XL Capital Finance (Europe) PLC 6.50% 2012		6,455			4,035
Twin Reefs Asset Trust (XLFA), Series B, 2.825% 20791,2,4		5,500			62
TIAA Global Markets 4.95% 20132		3,275			3,249
UnumProvident Corp. 5.859% 2009		1,000			954
UnumProvident Finance Co. PLC 6.85% 20152		1,425			1,167
Ambac Financial Group, Inc. 6.15% 20871		17,800			1,781
Assured Guaranty US Holdings Inc., Series A, 6.40% 20661		7,425			1,113
					1,029,130
Real estate — 1.64%
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 4.375% 20102		44,950			36,398
Westfield Group 5.40% 20122		50,000			38,376
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20142		41,600			29,028
Westfield Group 5.70% 20162		21,195			14,177
WT Finance (Australia) Pty Ltd., Westfield Europe Finance PLC, and WEA Finance LLC 5.50% 2017	£	3,780			3,881
Westfield Group 7.125% 20182	$	58,000			41,207
Simon Property Group, LP 5.60% 2011		8,810			7,368
Simon Property Group, LP 5.00% 2012		16,000			12,650
Simon Property Group, LP 5.75% 2012		4,000			3,200
Simon Property Group, LP 5.75% 2015		8,250			5,396
Simon Property Group, LP 5.25% 2016		3,610			2,310
Simon Property Group, LP 6.10% 2016		4,750			3,039
Simon Property Group, LP 5.875% 2017		19,250			12,874
Simon Property Group, LP 6.125% 2018		36,075			24,415
Kimco Realty Corp., Series C, 4.82% 2011		7,500			6,420
Kimco Realty Corp. 6.00% 2012		17,500			13,549
Kimco Realty Corp., Series C, 4.82% 2014		12,000			8,551
Kimco Realty Corp., Series C, 4.904% 2015		3,000			1,851
Kimco Realty Corp., Series C, 5.783% 2016		19,500			12,389
Kimco Realty Corp. 5.70% 2017		33,450			21,063
PLD International Finance LLC 4.375% 2011	€	5,400			3,606
ProLogis 5.625% 2015	$	13,035			6,495
ProLogis 5.75% 2016		27,245			13,604
ProLogis 6.625% 2018		74,080			35,482
Hospitality Properties Trust 6.85% 2012		6,000			3,890
Hospitality Properties Trust 6.75% 2013		17,845			11,054
Hospitality Properties Trust 5.125% 2015		12,970			6,561
Hospitality Properties Trust 6.30% 2016		24,600			11,348
Hospitality Properties Trust 5.625% 2017		7,535			3,479
Hospitality Properties Trust 6.70% 2018		33,515			15,610
ERP Operating LP 4.75% 2009		2,225			2,186
ERP Operating LP 6.625% 2012		5,000			4,111
ERP Operating LP 5.25% 2014		2,000			1,338
ERP Operating LP 6.584% 2015		13,040			8,724
ERP Operating LP 5.75% 2017		7,865			5,437
ERP Operating LP 7.125% 2017		12,375			8,995
Developers Diversified Realty Corp. 3.875% 2009		19,500			19,061
Developers Diversified Realty Corp. 5.375% 2012		5,782			2,427
Developers Diversified Realty Corp. 5.50% 2015		19,500			8,200
Brandywine Operating Partnership, LP 5.75% 2012		27,110			20,339
Brandywine Operating Partnership, LP 5.40% 2014		3,000			1,860
Rouse Co. 3.625% 2009		5,200			2,184
Rouse Co. 7.20% 2012		17,475			6,029
Rouse Co. 5.375% 2013		7,250			2,320
Rouse Co. 6.75% 20132		3,750			1,369
Post Apartment Homes, LP 7.70% 2010		1,400			1,240
Post Apartment Homes, LP 5.125% 2011		7,720			6,144
Realogy Corp., Letter of Credit, 5.05% 20131,6,7		243			153
Realogy Corp., Term Loan B, 5.706% 20131,6,7		866			548
Realogy Corp. 10.50% 2014		17,985			3,192
Realogy Corp. 11.75% 20148		2,620			315
Realogy Corp. 12.375% 2015		2,700			378
Weingarten Realty Investors, Series A, 4.857% 2014		6,080			4,109
Host Marriott, LP, Series M, 7.00% 2012		4,380			3,734
Host Hotels & Resorts, LP, Series S, 6.875% 2014		300			233
Federal Realty Investment Trust 4.50% 2011		3,500			2,944
Plum Creek Timberlands, LP 5.875% 2015		1,500			1,227
Agile Property Holdings Ltd. 9.00% 2013		780			430
					528,498
Automobiles & components — 0.24%
Ford Motor Credit Co. 3.225% 20091,2		1,000			955
Ford Motor Credit Co. 7.375% 2009		1,725			1,515
Ford Motor Credit Co. 7.875% 2010		10,000			8,004
Ford Motor Credit Co. 8.625% 2010		425			322
Ford Motor Credit Co. 9.75% 20101		5,000			4,001
Ford Motor Credit Co. 7.246% 20111		20,275			13,407
Ford Motor Credit Co. 7.25% 2011		24,000			17,542
Ford Motor Credit Co. 7.375% 2011		2,200			1,674
Ford Motor Credit Co. 7.569% 20121		8,825			5,747
Ford Motor Credit Co. 7.80% 2012		400			281
Ford Motor Credit Co. 8.00% 2016		2,000			1,305
American Honda Finance Corp. 5.125% 20102		21,850			21,558
					76,311
CONSUMER DISCRETIONARY — 4.48%
Media — 2.80%
Time Warner Inc. 2.405% 20091		23,500			22,624
Time Warner Inc. 5.50% 2011		1,000			940
AOL Time Warner Inc. 6.75% 2011		3,000			2,931
AOL Time Warner Inc. 6.875% 2012		22,500			21,631
Time Warner Inc. 5.875% 2016		36,140			32,448
Time Warner Companies, Inc. 7.25% 2017		1,600			1,471
Time Warner Companies, Inc. 7.57% 2024		12,340			11,919
AOL Time Warner Inc. 7.625% 2031		31,935			31,469
Time Warner Inc. 6.50% 2036		85,485			77,735
Comcast Cable Communications, Inc. 6.75% 2011		9,000			9,039
Tele-Communications, Inc. 9.80% 2012		17,500			18,461
Comcast Cable Communications, Inc. 7.125% 2013		14,625			14,381
Tele-Communications, Inc. 7.875% 2013		7,500			7,719
Comcast Corp. 5.85% 2015		29,025			27,493
Comcast Corp. 6.50% 2015		5,000			4,921
Comcast Corp. 6.30% 2017		36,090			35,192
Comcast Corp. 5.70% 2018		54,085			50,811
Comcast Corp. 5.65% 2035		4,745			4,232
Comcast Corp. 6.45% 2037		7,250			7,238
Comcast Corp. 6.95% 2037		15,520			16,396
Time Warner Cable Inc. 5.40% 2012		8,000			7,476
Time Warner Cable Inc. 6.20% 2013		4,500			4,261
Time Warner Cable Inc. 8.25% 2014		40,000			40,620
Time Warner Cable Inc. 6.75% 2018		62,040			59,835
Time Warner Cable Inc. 8.75% 2019		3,950			4,302
Thomson Reuters Corp. 6.50% 2018		74,120			67,516
News America Holdings Inc. 8.00% 2016		1,000			1,053
News America Inc. 7.25% 2018		2,250			2,192
News America Holdings Inc. 8.25% 2018		15,290			15,695
News America Inc. 6.65% 2037		37,900			37,631
Cox Communications, Inc. 7.875% 2009		1,000			983
Cox Communications, Inc. 4.625% 2010		900			871
Cox Communications, Inc. 7.125% 2012		7,000			6,704
Cox Communications, Inc. 5.45% 2014		12,750			11,164
Cox Communications, Inc. 9.375% 20192		30,500			31,964
CCH II, LLC and CCH II Capital Corp. 10.25% 2010		10,000			4,650
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 20122		10,150			8,374
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013		13,325			8,461
Charter Communications Operating, LLC, Term Loan B, 5.47% 20141,6,7		12,078			8,942
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.375% 20142		1,575			1,213
Charter Communications Operating, LLC, Term Loan B, 8.50% 20141,6,7		1,985			1,576
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 10.875% 20142		15,375			12,377
CCH I, LLC and CCH I Capital Corp. 11.00% 2015		11,734			2,112
Viacom Inc. 5.75% 2011		2,500			2,272
Viacom Inc. 6.25% 2016		20,000			16,601
Univision Communications, Inc., Second Lien Term Loan B, 2.961% 20091,6,7		4,571			3,222
Univision Communications Inc. 7.85% 2011		6,725			3,564
Univision Communications, Inc., First Lien Term Loan B, 2.711% 20141,6,7		8,955			3,751
Univision Communications Inc. 9.75% 20152,8		35,620			4,631
McGraw-Hill Companies, Inc. 5.90% 2017		13,200			11,132
CanWest Media Inc., Series B, 8.00% 2012		20,936			9,317
CanWest MediaWorks Inc. 9.25% 20152		3,325			1,280
Quebecor Media Inc. 7.75% 2016		8,950			6,086
Quebecor Media Inc. 7.75% 2016		5,670			3,856
Cinemark USA, Inc., Term Loan B, 2.95% 20131,6,7		3,348			2,451
Cinemark, Inc. 0%/9.75% 20149		8,750			7,120
AMC Entertainment Inc., Series B, 8.625% 2012		3,000			2,415
AMC Entertainment Inc. 8.00% 2014		8,125			5,038
AMC Entertainment Inc., Series B, 11.00% 2016		2,500			1,759
NTL Cable PLC 8.75% 2014		9,725			7,342
NTL Cable PLC 8.75% 2014	€	1,000			1,003
TL Acquisitions, Inc., Term Loan B, 2.96% 20141,6,7	$	5,614			3,689
Thomson Learning 0%/13.25% 20152,9		1,840			543
Thomson Learning 10.50% 20152		9,450			3,922
Kabel Deutschland GmbH 10.625% 2014		7,150			6,399
CSC Holdings, Inc., Series B, 8.125% 2009		3,000			2,992
Cablevision Systems Corp., Series B, 8.00% 2012		3,635			3,253
American Media Operations, Inc., Series B, 10.25% 20094		20,459			4,169
American Media Operations, Inc., Series B, 10.25% 20092,4		716			146
American Media Operations, Inc. 8.875% 2011		7,060			1,456
American Media Operations, Inc. 8.875% 20112		257			53
iesy Repository GmbH 10.375% 20152		7,375			5,817
Regal Cinemas Corp., Series B, 9.375% 20123		6,125			5,681
LBI Media, Inc. 8.50% 20172,3		11,390			3,986
Local T.V. Finance LLC 9.25% 20152,8		16,065			3,615
Warner Music Group 7.375% 2014		5,050			2,980
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014		4,300			2,967
Fox Acquisition LLC 13.375% 20162		6,165			2,651
Radio One, Inc. 6.375% 2013		7,380			2,528
Walt Disney Co. 5.625% 2016		2,000			2,078
Liberty Media Corp. 8.25% 2030		3,550			2,054
Mediacom Broadband LLC and Mediacom Broadband Corp. 8.50% 2015		2,970			1,949
Dex Media West LLC, Dex Media West Finance Co., Series B, 8.50% 2010		3,000			1,830
Dex Media, Inc., Series B, 8.00% 2013		525			100
Vidéotron Ltée 6.875% 2014		1,000			890
Vidéotron Ltée 6.375% 2015		1,000			790
WDAC Intermediate Corp. 8.375% 20142		2,425			703
WDAC Intermediate Corp. 8.50% 2014	€	500			195
Carmike Cinemas, Inc., Delayed Draw, Term Loan, 5.33% 20121,6,7	$	414			296
Young Broadcasting Inc. 10.00% 2011		13,317			200
					899,795
Retailing — 0.77%
Federated Retail Holdings, Inc. 5.35% 2012		10,365			7,704
Macy’s Retail Holdings, Inc. 7.875% 2015		52,175			37,623
Federated Retail Holdings, Inc. 5.90% 2016		102,390			62,248
Federated Retail Holdings, Inc. 6.375% 2037		7,700			4,345
Target Corp. 6.00% 2018		10,000			9,699
Target Corp. 6.50% 2037		47,390			40,813
Target Corp. 7.00% 2038		3,385			3,146
J.C. Penney Co., Inc. 8.00% 2010		5,185			5,035
J.C. Penney Co., Inc. 9.00% 2012		995			884
J.C. Penney Corp., Inc. 5.75% 2018		10,000			6,649
Michaels Stores, Inc., Term Loan B, 2.75% 20131,6,7		8,300			4,510
Michaels Stores, Inc. 10.00% 2014		15,725			7,234
Michaels Stores, Inc. 0%/13.00% 20169		3,875			717
Toys "R" Us, Inc. 7.625% 2011		17,180			8,504
Toys "R" Us-Delaware, Inc., Term Loan B, 4.831% 20121,6,7		7,970			3,866
Dollar General Corp., Term Loan B2, 3.211% 20141,6,7		1,000			741
Dollar General Corp. 10.625% 2015		5,650			5,424
Dollar General Corp. 11.875% 20171,8		6,875			5,912
Lowe’s Companies, Inc. 8.25% 2010		8,450			8,781
Sally Holdings LLC and Sally Capital Inc. 9.25% 2014		7,200			6,228
Kohl’s Corp. 7.375% 2011		875			859
Kohl’s Corp. 7.25% 2029		2,730			2,048
Kohl’s Corp. 6.00% 2033		315			203
Kohl’s Corp. 6.875% 2037		3,245			2,313
Marks and Spencer Group PLC 6.25% 20172		6,000			4,630
Edcon (Proprietary) Ltd. 6.579% 20141	€	6,500			3,668
Neiman Marcus Group, Inc. 9.00% 20158	$	5,120			2,278
Bon-Ton Department Stores, Inc. 10.25% 2014		12,350			1,544
Burlington Coat Factory Warehouse Corp. 11.125% 2014		2,700			823
					248,429
Consumer services — 0.47%
Marriott International, Inc., Series J, 5.625% 2013		13,250			10,079
Marriott International, Inc., Series I, 6.375% 2017		15,750			10,999
MGM MIRAGE 6.00% 2009		1,975			1,896
MGM MIRAGE 8.50% 2010		6,850			5,788
MGM MIRAGE 6.75% 2012		1,050			740
MGM MIRAGE 6.75% 2013		3,350			2,261
MGM MIRAGE 13.00% 20132		2,800			2,681
MGM MIRAGE 5.875% 2014		6,575			4,241
MGM MIRAGE 6.625% 2015		3,600			2,214
Seminole Tribe of Florida 5.798% 20132,6		9,865			9,037
Seminole Tribe of Florida 7.804% 20202,6		9,370			8,900
Mohegan Tribal Gaming Authority 6.375% 2009		14,410			13,618
Mohegan Tribal Gaming Authority 8.00% 2012		750			461
Mohegan Tribal Gaming Authority 7.125% 2014		5,250			2,678
President & Fellows of Harvard University 6.00% 20192		15,000			16,279
Boyd Gaming Corp. 7.75% 2012		2,550			2,308
Boyd Gaming Corp. 6.75% 2014		8,925			5,667
Boyd Gaming Corp. 7.125% 2016		3,500			2,083
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014		12,415			9,435
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 2012		12,025			7,756
Wyndham Worldwide Corp. 6.00% 2016		16,421			6,627
Harrah’s Operating Co., Inc. 5.625% 2015		16,373			2,865
Harrah’s Operating Co., Inc. 6.50% 2016		8,303			1,328
Harrah’s Operating Co., Inc. 10.00% 20182		4,988			1,846
ERAC USA Finance Co. 7.00% 20372		10,000			5,519
Pinnacle Entertainment, Inc. 7.50% 2015		7,025			4,110
Education Management LLC and Education Management Finance Corp. 8.75% 2014		3,475			2,658
Education Management LLC and Education Management Finance Corp. 10.25% 2016		1,440			1,051
Seneca Gaming Corp. 7.25% 2012		2,500			2,025
Seneca Gaming Corp., Series B, 7.25% 2012		1,000			810
Gaylord Entertainment Co. 8.00% 2013		2,100			1,460
Gaylord Entertainment Co. 6.75% 2014		650			406
Royal Caribbean Cruises Ltd. 8.75% 2011		2,325			1,802
					151,628
Automobiles & components — 0.31%
DaimlerChrysler North America Holding Corp. 7.20% 2009		5,000			4,852
DaimlerChrysler North America Holding Corp., Series E, 5.75% 2011		3,825			3,232
DaimlerChrysler North America Holding Corp. 5.875% 2011		8,000			6,979
DaimlerChrysler North America Holding Corp. 7.75% 2011		14,000			12,674
DaimlerChrysler North America Holding Corp. 6.50% 2013		16,610			12,969
Ford Capital BV 9.50% 2010		6,266			2,757
Ford Motor Co., Term Loan B, 5.00% 20131,6,7		49,699			20,390
FCE Bank PLC 7.125% 2013	€	4,000			2,871
Ford Motor Co. 6.50% 2018	$	4,988			1,222
Ford Motor Co. 8.875% 2022		1,495			366
Ford Motor Co. 7.45% 2031		500			143
Allison Transmission Holdings, Inc., Term Loan B, 4.64% 20141,6,7		5,843			3,348
Allison Transmission Holdings, Inc. 11.00% 20152		750			371
Allison Transmission Holdings, Inc. 11.25% 20151,2,8		17,825			7,130
General Motors Corp. 7.20% 2011		11,540			2,452
General Motors Corp. 7.125% 2013		3,595			674
General Motors Corp. 7.25% 2013	€	700			200
General Motors Corp. 8.80% 2021	$	26,530			4,510
Tenneco Automotive Inc., Series B, 10.25% 2013		2,572			1,608
Tenneco Automotive Inc. 8.625% 2014		7,410			2,853
Tenneco Inc. 8.125% 2015		3,250			1,511
Visteon Corp. 8.25% 2010		2,912			917
Visteon Corp. 12.25% 20162		7,517			1,842
Goodyear Tire & Rubber Co. 6.318% 20091		1,150			1,052
TRW Automotive Inc. 7.00% 20142		1,500			802
Cooper-Standard Automotive Inc. 7.00% 2012		425			130
Cooper-Standard Automotive Inc. 8.375% 2014		2,200			396
Delphi Automotive Systems Corp. 6.50% 20094		6,000			120
Delphi Corp. 6.50% 20134		7,020			105
Delphi Automotive Systems Corp. 6.55% 20064		500			10
Delphi Automotive Systems Corp. 7.125% 20294		1,350			27
					98,513
Consumer durables & apparel — 0.13%
Standard Pacific Corp. 5.125% 2009		1,000			960
Standard Pacific Corp. 6.875% 2011		605			451
Standard Pacific Corp. 7.75% 2013		6,890			3,858
Standard Pacific Corp. 6.25% 2014		775			418
Standard Pacific Corp. 7.00% 2015		4,340			2,278
K. Hovnanian Enterprises, Inc. 8.875% 2012		7,060			2,083
K. Hovnanian Enterprises, Inc. 7.75% 2013		2,125			478
K. Hovnanian Enterprises, Inc. 6.375% 2014		2,290			630
K. Hovnanian Enterprises, Inc. 6.50% 2014		6,875			1,891
K. Hovnanian Enterprises, Inc. 6.25% 2015		2,775			735
K. Hovnanian Enterprises, Inc. 6.25% 2016		915			247
K. Hovnanian Enterprises, Inc. 7.50% 2016		2,330			594
K. Hovnanian Enterprises, Inc. 8.625% 2017		5,070			1,293
Hanesbrands Inc., Series B, 5.698% 20141		10,105			7,175
Meritage Corp. 7.00% 2014		1,850			1,064
Meritage Homes Corp. 6.25% 2015		6,500			3,477
Meritage Corp. 7.731% 20172,3		4,500			1,793
Beazer Homes USA, Inc. 8.625% 2011		4,625			2,474
Beazer Homes USA, Inc. 8.125% 2016		5,940			1,812
Sealy Mattress Co. 8.25% 2014		5,825			3,466
KB Home 5.875% 2015		1,320			799
KB Home 6.25% 2015		3,170			1,949
Toll Brothers, Inc. 4.95% 2014		1,640			1,236
					41,161
UTILITIES — 3.53%
National Rural Utilities Cooperative Finance Corp. 5.50% 2013		56,600			54,914
National Rural Utilities Cooperative Finance Corp. 5.45% 2017		4,880			4,376
National Rural Utilities Cooperative Finance Corp. 5.45% 2018		3,500			3,113
National Rural Utilities Cooperative Finance Corp., Collateral Trust Bonds, 10.375% 2018		62,500			73,268
National Rural Utilities Cooperative Finance Corp. 8.00% 2032		7,300			7,214
MidAmerican Energy Holdings Co. 5.875% 2012		15,000			14,975
MidAmerican Energy Co. 5.125% 2013		7,500			7,420
PacifiCorp, First Mortgage Bonds, 5.45% 2013		2,875			2,944
MidAmerican Energy Co. 4.65% 2014		5,000			4,763
MidAmerican Energy Co. 5.95% 2017		3,000			3,096
MidAmerican Energy Co. 5.30% 2018		10,000			9,874
PacifiCorp., First Mortgage Bonds, 5.65% 2018		3,800			3,877
MidAmerican Energy Holdings Co. 5.75% 2018		47,700			46,611
MidAmerican Energy Holdings Co. 6.125% 2036		13,750			12,826
E.ON International Finance BV 5.80% 20182		74,575			69,848
Abu Dhabi National Energy Co. PJSC (TAQA) 5.62% 20122		3,060			2,781
Abu Dhabi National Energy Co. PJSC (TAQA) 5.875% 20162		56,985			46,695
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20172		12,000			9,896
Abu Dhabi National Energy Co. PJSC (TAQA) 6.50% 20362		14,500			10,386
Edison Mission Energy 7.50% 2013		625			575
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2005-A, 5.00% 2016		4,000			4,053
Edison Mission Energy 7.75% 2016		7,125			6,377
Midwest Generation, LLC, Series B, 8.56% 20166		17,347			16,567
Edison Mission Energy 7.00% 2017		7,175			6,278
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2008-B, 5.50% 2018		1,000			1,047
Edison Mission Energy 7.20% 2019		15,450			12,746
Homer City Funding LLC 8.734% 20266		13,668			12,642
Edison Mission Energy 7.625% 2027		1,900			1,482
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2006-E, 5.55% 2037		3,500			3,700
Ohio Edison Co. 6.40% 2016		13,750			12,362
Jersey Central Power & Light Co. 5.65% 2017		3,000			2,759
Cleveland Electric Illuminating Co. 5.70% 2017		8,640			7,016
Pennsylvania Electric Co. 6.05% 2017		5,165			4,641
Cleveland Electric Illuminating Co. 8.875% 2018		24,600			26,789
Ohio Edison Co. 6.875% 2036		2,315			2,107
Israel Electric Corp. Ltd. 7.95% 20112		10,000			10,515
Israel Electric Corp. Ltd. 7.25% 20192		39,800			37,184
Israel Electric Corp. Ltd. 8.10% 20962		6,250			5,495
Consumers Energy Co., First Mortgage Bonds, Series P, 5.50% 2016		2,500			2,406
Consumers Energy Co. First Mortgage Bonds 5.15% 2017		5,000			4,692
Consumers Energy Co. 5.65% 2018		18,325			17,629
Consumers Energy Co., First Mortgage Bonds, 6.125% 2019		27,575			27,366
PSEG Power LLC 3.75% 2009		6,825			6,808
PSEG Power LLC 7.75% 2011		16,410			16,400
Public Service Electric and Gas Co., Series E, 5.30% 2018		12,690			12,348
PSEG Power LLC 8.625% 2031		7,350			7,505
Veolia Environnement 5.25% 2013		18,235			16,927
Veolia Environnement 6.00% 2018		4,945			4,391
Veolia Environnement 6.125% 2033	€	13,640			16,700
NGG Finance PLC 6.125% 2011		3,480			4,876
National Grid PLC 6.30% 2016	$	37,605			32,815
National Grid Co. PLC 5.875% 2024	£	170			227
Energy East Corp. 6.75% 2012	$	7,155			7,176
Scottish Power PLC 5.375% 2015		31,415			28,261
Commonwealth Edison Co., First Mortgage Bonds, Series 105, 5.40% 2011		9,000			8,768
Exelon Generation Co., LLC 6.95% 2011		13,665			13,272
PECO Energy Co., First and Refunding Mortgage Bonds, 4.75% 2012		3,900			3,799
Commonwealth Edison Co., First Mortgage Bonds, Series 106, 6.15% 2017		5,000			4,657
Ohio Power Co., Series J, 5.30% 2010		8,000			7,939
Ohio Power Co., Series H, 4.85% 2014		5,965			5,666
Ohio Power Co., Series K, 6.00% 2016		15,000			14,373
Oncor Electric Delivery Co. 6.80% 20182		25,000			24,016
Nevada Power Co., General and Refunding Mortgage Notes, Series I, 6.50% 2012		700			673
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series Q, 5.45% 2013		4,275			4,110
Sierra Pacific Resources 8.625% 2014		900			816
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015		2,550			2,454
Nevada Power Co., General and Refunding Mortgage Notes, Series M, 5.95% 2016		5,975			5,735
Nevada Power Co., General and Refunding Mortgage Notes, Series S, 6.50% 2018		10,025			9,766
Texas Competitive Electric Holdings Co. LLC, Term Loan B2, 5.368% 20141,6,7		4,529			3,152
Texas Competitive Electric Holdings Co. LLC 10.50% 20152		12,215			8,734
Texas Competitive Electric Holdings Co. LLC, Series B, 10.50% 20152		10,925			7,811
Texas Competitive Electric Holdings Co. LLC 11.25% 20162,8		5,250			2,651
Cilcorp Inc. 8.70% 2009		1,000			925
AmerenEnergy Generating Co., Series D, 8.35% 2010		1,500			1,548
Union Electric Co. 4.65% 2013		3,000			2,740
Union Electric Co. 5.40% 2016		5,750			4,989
Cilcorp Inc. 9.375% 2029		12,265			10,977
Southern California Gas Co., First Mortgage Bonds, Series II, 4.375% 2011		5,000			5,052
San Diego Gas & Electric Co., Series CCC, 5.30% 2015		10,000			10,274
San Diego Gas & Electric Co., Series DDD, 6.00% 2026		5,000			5,328
Northern States Power Co., First Mortgage Bonds, 5.25% 2018		13,500			13,475
Public Service Co. of Colorado 5.80% 2018		6,300			6,546
Intergen Power 9.00% 20172		23,450			19,346
Virginia Electric and Power Co., Series 2003-A, 4.75% 2013		6,000			5,776
Virginia Electric and Power Co., Series B, 5.95% 2017		10,000			10,083
Virginia Electric and Power Co., Series A, 6.00% 2037		1,250			1,215
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc., First Mortgage Bonds, 5.125% 2013		5,000			5,021
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc. 5.25% 2015		6,000			6,096
Progress Energy Florida, Inc., First Mortgage Bonds, 5.65% 2018		3,150			3,272
Empresa Nacional de Electricidad SA, Series B, 8.50% 2009		4,455			4,531
Empresa Nacional de Electricidad SA 8.35% 2013		5,000			5,290
Empresa Nacional de Electricidad SA 8.625% 2015		3,000			3,253
Pacific Gas and Electric Co., First Mortgage Bonds, 4.20% 2011		2,000			1,977
Pacific Gas and Electric Co. 6.25% 2013		1,550			1,605
Pacific Gas and Electric Co. 8.25% 2018		4,000			4,814
Pacific Gas and Electric Co., First Mortgage Bonds, 6.05% 2034		4,000			4,262
AES Corp. 9.50% 2009		927			925
AES Corp. 9.375% 2010		129			123
AES Corp. 8.75% 20132		624			602
AES Corp. 7.75% 2015		10,500			8,872
AES Corp. 8.00% 20202		1,925			1,502
Old Dominion Electric Cooperative, Series 2003-A, 5.676% 20286		11,250			10,227
Duke Energy Corp., First and Refunding Mortgage Bonds, 4.50% 2010		4,500			4,495
Duke Energy Corp., First and Refunding Mortgage Bonds, 5.30% 2015		5,000			5,222
Anglian Water Services Financing PLC 4.625% 2013	€	6,120			8,170
Anglian Water Services Financing PLC, Class A, 5.25% 2015	£	395			567
Florida Power & Light Co. 4.85% 2013	$	5,000			4,969
FPL Energy National Wind, LLC 5.608% 20242,6		4,041			3,212
SP PowerAssets Ltd. 5.00% 20132		8,000			8,024
Alabama Power Co., Series R, 4.70% 2010		2,250			2,265
Alabama Power Co., Series 2007-D, 4.85% 2012		1,550			1,551
Alabama Power Co., Series 2008-B, 5.80% 2013		4,000			4,167
NRG Energy, Inc. 7.25% 2014		4,200			3,938
NRG Energy, Inc. 7.375% 2016		3,700			3,450
ENEL SpA 5.625% 2027	€	5,760			6,883
Kern River Funding Corp. 4.893% 20182,6	$	8,008			6,302
Korea East-West Power Co., Ltd. 4.875% 20112		5,000			4,782
Enersis SA 7.375% 2014		3,000			3,131
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20182,6		2,905			2,787
Connecticut Light & Power Co., First and Refunding Mortgage Bonds, Series 2008A, 5.65% 2018		2,500			2,568
RWE Aktiengesellschaft and RWE Finance BV 6.375% 2013	£	290			442
Kelda Group PLC 6.625% 2031		165			234
					1,135,936
TELECOMMUNICATION SERVICES — 3.52%
AT&T Corp. 7.30% 20111		4,734			4,922
AT&T Wireless Services, Inc. 7.875% 2011		15,355			15,904
SBC Communications Inc. 5.875% 2012		20,337			20,767
AT&T Wireless Services, Inc. 8.125% 2012		12,630			13,554
AT&T Inc. 4.95% 2013		17,000			17,109
AT&T Inc. 6.70% 2013		15,520			16,458
SBC Communications Inc. 5.10% 2014		10,245			10,083
SBC Communications Inc. 5.625% 2016		45,200			45,471
AT&T Inc. 5.50% 2018		9,945			10,068
AT&T Inc. 5.60% 2018		21,540			21,971
SBC Communications Inc. 6.45% 2034		11,175			11,733
AT&T Inc. 6.30% 2038		31,500			33,413
AT&T Inc. 6.40% 2038		13,950			14,994
Verizon Global Funding Corp. 7.375% 2012		11,835			12,391
Verizon Communications Inc. 5.25% 2013		14,500			14,569
Verizon Communications Inc. 5.50% 2017		21,495			20,836
Verizon Communications Inc. 5.50% 2018		15,540			14,973
Verizon Communications Inc. 6.10% 2018		36,180			36,113
Verizon Communications Inc. 8.50% 20182		16,400			19,249
Verizon Communications Inc. 8.75% 2018		36,000			42,308
Verizon Global Funding Corp. 7.75% 2030		9,501			10,565
Telecom Italia Capital SA 4.00% 2010		1,140			1,049
Telecom Italia Capital SA 4.875% 2010		1,260			1,141
Olivetti Finance NV 7.25% 2012	€	8,830			12,007
Telecom Italia Capital SA, Series B, 5.25% 2013	$	10,100			7,709
Telecom Italia Capital SA 5.25% 2015		69,000			52,596
Telecom Italia Capital SA 6.999% 2018		21,400			17,389
Telecom Italia SpA 7.75% 2033	€	8,270			10,030
Telecom Italia Capital SA 7.20% 2036	$	5,290			4,084
Telecom Italia Capital SA 7.721% 2038		64,000			52,693
Sprint Capital Corp. 6.375% 2009		21,230			21,099
Sprint Nextel Corp. 1.866% 20101		7,115			5,963
Nextel Communications, Inc., Series E, 6.875% 2013		93,707			39,846
Nextel Communications, Inc., Series F, 5.95% 2014		56,559			23,776
Nextel Communications, Inc., Series D, 7.375% 2015		49,375			20,747
Sprint Nextel Corp. 6.00% 2016		14,500			10,237
Sprint Capital Corp. 6.90% 2019		14,678			10,439
Sprint Capital Corp. 8.75% 2032		37,840			25,590
British Telecommunications PLC 5.15% 2013		50,035			47,706
British Telecommunications PLC 5.95% 2018		27,617			24,066
Vodafone Group PLC 7.75% 2010		20,000			20,446
Vodafone Group PLC 5.625% 2017		16,080			15,176
Vodafone Group PLC 6.15% 2037		6,000			5,950
France Télécom 7.75% 20111		32,000			33,690
France Télécom 7.25% 2013	€	4,800			7,165
ALLTEL Corp. 7.00% 2012	$	18,299			18,299
ALLTEL Corp., Term Loan B3, 3.939% 20151,6,7		10,087			10,008
ALLTEL Corp., Term Loan B2, 4.371% 20151,6,7		3,566			3,521
American Tower Corp. 7.125% 2012		14,850			14,702
American Tower Corp. 7.00% 20172,3		16,550			15,888
Centennial Communications Corp. 9.633% 20131		9,500			9,263
Centennial Communications Corp. 10.00% 2013		2,750			2,860
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013		900			914
Centennial Communications Corp., Centennial Cellular Operating Co. LLC and Centennial Puerto Rico
Operations Corp. 8.125% 20141		9,300			9,486
Qwest Capital Funding, Inc. 7.90% 2010		950			869
Qwest Capital Funding, Inc. 7.25% 2011		15,650			13,224
Qwest Communications International Inc. 7.25% 2011		6,000			5,250
Qwest Capital Funding, Inc. 7.625% 2021		500			335
U S WEST Capital Funding, Inc. 6.875% 2028		1,940			1,174
Windstream Corp. 8.125% 2013		16,650			15,401
Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp. 7.75% 2015		2,850			2,382
Windstream Corp. 8.625% 2016		3,300			2,937
Embarq Corp. 6.738% 2013		20,000			16,915
Embarq Corp. 7.995% 2036		5,000			3,382
PCCW-HKT Capital Ltd. 8.00% 20111,2		15,000			14,673
PCCW-HKT Capital No. 3 Ltd. 5.25% 20152		6,800			5,023
Koninklijke KPN NV 8.00% 2010		6,550			6,613
Koninklijke KPN NV 4.75% 2017	€	3,500			4,356
Koninklijke KPN NV 8.375% 2030	$	5,200			5,889
MetroPCS Wireless, Inc. 9.25% 2014		11,950			10,755
Cricket Communications, Inc. 9.375% 2014		11,335			10,258
Singapore Telecommunications Ltd. 6.375% 2011		3,475			3,654
Singapore Telecommunications Ltd. 6.375% 20112		2,050			2,155
Singapore Telecommunications Ltd. 7.375% 20312		3,800			4,303
Rogers Wireless Inc. 7.25% 2012		713			697
Rogers Wireless Inc. 7.50% 2015		6,300			6,245
Cincinnati Bell Inc. 7.25% 2013		6,800			6,018
SK Telecom Co., Ltd. 4.25% 20112		6,000			5,643
NTELOS Inc., Term Loan B, 2.72% 20111,6,7		4,813			4,075
Deutsche Telekom International Finance BV 5.875% 2013		4,000			3,960
Digicel Group Ltd. 8.875% 20152		5,400			3,537
Digicel Group Ltd. 8.875% 2015		200			131
Millicom International Cellular SA 10.00% 2013		2,430			2,199
Intelsat, Ltd. 6.50% 2013		3,500			1,977
Orascom Telecom 7.875% 20142		3,275			1,752
Hawaiian Telcom Communications, Inc. 8.765% 20131,4		3,605			207
Hawaiian Telcom Communications, Inc. 9.75% 20134		7,715			617
Hawaiian Telcom Communications, Inc., Term Loan C, 4.75% 20141,6,7		2,114			826
Hawaiian Telcom Communications, Inc., Series B, 12.50% 20154		3,050			31
América Móvil, SAB de CV 8.46% 2036	MXN27,000				1,360
Nordic Telephone Co. Holding ApS 8.875% 20162	$	1,000			705
Citizens Communications Co. 7.875% 2027		1,125			658
Level 3 Financing, Inc. 9.25% 2014		1,000			585
Trilogy International Partners LLC, Term Loan B, 4.959% 20121,6,7		275			111
					1,133,868
INDUSTRIALS — 3.52%
Transportation — 2.00%
Continental Airlines, Inc., Series 2001-1, Class A-2, 6.503% 20116		14,050			10,889
Continental Airlines, Inc., Series 1999-2, Class A-2, 7.056% 20116		10,000			9,600
Continental Airlines, Inc. 8.75% 2011		6,300			3,733
Continental Airlines, Inc., Series 2000-2, Class A-2, 7.487% 20126		12,500			11,250
Continental Airlines, Inc., Series 2006-1, Class G, FGIC insured, 2.567% 20151,6		1,100			664
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20166		29,170			20,127
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20176		162			122
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20186		2,030			1,421
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20186		1,871			1,273
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20196		18,052			13,178
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20196		37,632			30,106
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20196		3,437			2,131
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20206		22,064			17,651
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20206		13,077			9,710
Continental Airlines, Inc., Series 2003-ERJ3, Class A, 7.875% 20206		8,665			4,852
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20216		281			216
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20216		9,006			7,003
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20226		14,115			10,586
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20226		10,130			5,363
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20226		13,656			10,652
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20226		13,692			10,953
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20226		1,447			854
Delta Air Lines, Inc., Series 2000-1, Class A-2, 7.57% 20126		400			336
Northwest Airlines, Inc., Term Loan B, 4.96% 20131,3,6,7		2,991			2,409
Delta Air Lines, Inc., Series 2002-1, Class C, 7.779% 20136		2,618			2,265
Delta Air Lines, Inc., Second Lien Term Loan B, 5.149% 20141,6,7		4,925			2,458
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20146		53,658			38,848
Delta Air Lines, Inc., Series 1992-A2, 9.20% 20144,6		4,760			4,213
Northwest Airlines, Inc., Term Loan A, 3.21% 20181,6,7		68,137			50,421
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20246		40,693			25,637
CSX Corp. 5.75% 2013		8,335			7,839
CSX Corp. 6.25% 2015		15,000			14,743
CSX Corp. 6.25% 2018		10,000			9,213
CSX Corp. 6.15% 2037		26,585			21,336
CSX Corp. 7.45% 2038		35,550			33,903
American Airlines, Inc., Series 1999-1, Class A-1, 6.855% 20106		1,943			1,906
AMR Corp., Series B, 10.45% 2011		150			73
American Airlines, Inc., Series 2001-1, Class A-2, 6.817% 20126		3,750			2,662
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 20126		12,367			10,991
American Airlines, Inc., Series 2001-2, Class B, 8.608% 20126		18,165			12,579
AMR Corp. 9.00% 2012		5,800			2,994
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20136		38,010			30,646
American Airlines, Inc., Series 1991-C2, 9.73% 20146		6,410			3,173
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20196		8,721			3,576
Union Pacific Corp. 5.75% 2017		20,750			19,709
Union Pacific Corp. 5.70% 2018		4,000			3,858
Union Pacific Railroad Co. Pass Through Trust, Series 2001-1, 6.63% 20226		7,015			7,129
Union Pacific Corp. 6.15% 2037		13,930			12,953
Norfolk Southern Corp. 5.75% 2018		21,050			20,519
Norfolk Southern Corp. 7.05% 2037		12,690			13,312
United Air Lines, Inc., Series 2001-1, Class A-2, 6.201% 20106		2,925			2,731
United Air Lines, Inc., Series 2000-2, Class B, 7.811% 20114,6		7,335			8,086
United Air Lines, Inc., Series 2000-2, Class A-2, 7.186% 20126		304			279
United Air Lines, Inc., Term Loan B, 2.50% 20141,6,7		6,699			3,155
United Air Lines, Inc., Series 2001-1, Class A-1, 6.071% 20146		493			446
United Air Lines, Inc., Series 2001-1, Class A-3, 6.602% 20156		1,516			1,417
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20212,6		909			493
United Air Lines, Inc., Series 2007-1, Class A, 6.636% 20246		27,759			16,430
Canadian National Railway Co. 5.55% 2018		16,500			16,505
Canadian National Railway Co. 6.375% 2037		8,000			8,806
Burlington Northern and Santa Fe Railway Co. Pass Through Trust, Series 1996-B, 6.96% 20096		184			185
Burlington Northern Santa Fe Corp. 6.15% 2037		14,090			13,019
BNSF Funding Trust I 6.613% 20551		15,000			9,470
Kansas City Southern Railway Co. 7.50% 2009		2,500			2,519
TFM, SA de CV 9.375% 2012		3,800			3,496
Kansas City Southern Railway Co. 8.00% 2015		2,000			1,590
Southern Capital Corp. Pass Through Trust, Series 2002-1, Class G, MBIA insured, 5.70% 20232,6		4,514			4,526
Navios Maritime Holdings Inc. 9.50% 2014		8,030			4,514
AIR 2 US, Series A, 8.027% 20202,6		4,710			3,532
CEVA Group PLC 10.00% 20142		500			373
					643,607
Capital goods — 1.33%
Hutchison Whampoa International Ltd. 7.00% 20112		24,300			25,106
Hutchison Whampoa International Ltd. 6.50% 20132		59,200			58,161
BAE Systems Holding Inc. 4.75% 20102,6		10,350			10,293
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 20112,3,6		33,838			29,478
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20132,6		32,418			31,018
General Electric Capital Corp. 6.25% 2017	£	400			555
General Electric Capital Corp., Series A, 2.776% 20181	$	9,000			5,468
General Electric Capital Corp., Series A, 3.239% 20261		77,000			40,704
General Electric Capital Corp. 5.625% 2031	£	85			97
General Electric Capital Corp., Series A, 2.629% 20361	$	12,000			7,717
Koninklijke Philips Electronics NV 5.75% 2018		20,000			18,459
Koninklijke Philips Electronics NV 6.875% 2038		32,150			30,609
Caterpillar Inc. 4.50% 2009		1,190			1,187
Caterpillar Financial Services Corp. 4.30% 2010		2,400			2,360
Caterpillar Financial Services Corp., Series F, 5.125% 2011		500			486
Caterpillar Financial Services Corp., Series F, 4.85% 2012		210			199
Caterpillar Financial Services Corp., Series F, 4.90% 2013		10,500			9,851
Caterpillar Financial Services Corp., Series F, 5.50% 2016		4,050			3,860
Caterpillar Financial Services Corp., Series F, 5.85% 2017		2,000			1,961
Caterpillar Inc. 7.90% 2018		1,900			2,191
Caterpillar Inc. 6.05% 2036		2,000			1,954
DynCorp International and DIV Capital Corp. 9.50% 20132		9,295			8,191
DynCorp International and DIV Capital Corp., Series B, 9.50% 2013		6,198			5,400
John Deere Capital Corp. 5.40% 2011		3,500			3,503
John Deere Capital Corp., Series D, 4.50% 2013		3,000			2,874
John Deere Capital Corp. 5.10% 2013		1,100			1,083
John Deere Capital Corp., Series D, 5.50% 2017		3,650			3,488
John Deere Capital Corp., Series D, 5.75% 2018		2,000			1,950
US Investigations Services, Inc., Term Loan B, 4.275% 20151,6,7		5,435			3,954
US Investigations Services, Inc. 10.50% 20152		7,005			5,149
US Investigations Services, Inc. 11.75% 20162		5,445			3,458
Lockheed Martin Corp. 4.121% 2013		6,000			5,854
Lockheed Martin Corp., Series B, 6.15% 2036		6,000			6,528
Northrop Grumman Systems Corp. 7.125% 2011		8,000			8,322
Northrop Grumman Systems Corp. 7.75% 2031		3,000			3,674
Raytheon Co. 6.40% 2018		9,500			10,303
Ashtead Group PLC 8.625% 20152		4,675			2,478
Ashtead Capital, Inc. 9.00% 20162		14,125			7,345
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B1, 5.80% 20141,6,7		2,460			1,292
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B2, 7.17% 20141,6,7		2,425			1,273
DAE Aviation Holdings, Inc. 11.25% 20152		17,285			7,173
Embraer Overseas Ltd 6.375% 2017		10,825			7,794
NTK Holdings Inc. 0%/10.75% 20146,9		15,118			3,326
THL Buildco, Inc. 8.50% 2014		11,450			2,691
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 2.461% 20141,6,7		1,055			554
Hawker Beechcraft Acquisition Co., LLC, Letter of Credit, 3.459% 20141,6,7		62			33
Hawker Beechcraft Acquisition Co., LLC 8.50% 2015		1,325			550
Hawker Beechcraft Acquisition Co., LLC 8.875% 20158		11,125			3,838
Hawker Beechcraft Acquisition Co., LLC 9.75% 2017		570			157
DRS Technologies, Inc. 6.875% 2013		2,135			2,126
DRS Technologies, Inc. 6.625% 2016		475			477
DRS Technologies, Inc. 7.625% 2018		2,500			2,513
United Rentals (North America), Inc., Series B, 6.50% 2012		6,250			4,969
Atlas Copco AB 5.60% 20172		4,525			4,258
B/E Aerospace 8.50% 2018		4,370			3,944
Atrium Companies, Inc., Term Loan B, 12.50% 20121,6,7,8		4,709			2,943
Atrium Companies, Inc. 15.00% 20122,8		3,666			495
RBS Global, Inc. and Rexnord LLC 9.50% 2014		2,625			1,969
RBS Global, Inc. and Rexnord LLC 8.875% 2016		850			501
Tyco International Group SA 6.125% 2009		500			499
Tyco International Ltd. 7.00% 2019		600			494
Tyco International Ltd. 6.875% 2021		1,000			775
Alion Science and Technology Corp. 10.25% 2015		3,690			1,684
RSC Holdings III, LLC, Second Lien Term Loan B, 7.71% 20131,6,7		2,838			1,524
TransDigm Inc. 7.75% 2014		1,325			1,093
Esco Corp. 5.871% 20131,2		325			210
Esco Corp. 8.625% 20132		1,100			775
H&E Equipment Services, Inc. 8.375% 2016		1,750			936
Esterline Technologies Corp. 6.625% 2017		1,050			898
RSC Equipment Rental, Inc. and RSC Holdings III, LLC 9.50% 2014		900			499
Sequa Corp., Term Loan B, 4.69% 20141,6,7		875			494
					428,025
Commercial & professional services — 0.19%
Nielsen Finance LLC, Term Loan B, 4.388% 20131,6,7		6,531			4,441
Nielsen Finance LLC and Nielsen Finance Co. 10.00% 2014		23,825			19,179
Nielsen Finance LLC and Nielsen Finance Co. 0%/12.50% 20169		31,300			11,503
ARAMARK Corp., Term Loan B, 3.334% 20141,6,7		4,158			3,467
ARAMARK Corp., Letter of Credit, 4.494% 20141,6,7		264			220
ARAMARK Corp. 6.693% 20151		2,650			2,014
ARAMARK Corp. 8.50% 2015		6,525			5,938
Allied Waste North America, Inc., Series B, 6.50% 2010		500			483
Allied Waste North America, Inc., Series B, 5.75% 2011		2,500			2,345
Allied Waste North America, Inc., Series B, 6.125% 2014		3,500			3,171
Allied Waste North America, Inc., Series B, 7.375% 2014		4,750			4,494
Allied Waste North America, Inc. 6.875% 2017		1,000			931
FTI Consulting, Inc. 7.625% 2013		2,300			2,004
					60,190
ENERGY — 3.48%
Enterprise Products Operating LP, Series B, 4.625% 2009		9,500			9,203
Enterprise Products Operating LP 4.95% 2010		8,750			8,383
Enterprise Products Operating LP 7.50% 2011		10,250			10,072
Enterprise Products Operating LLC 5.65% 2013		24,095			21,870
Enterprise Products Operating LP, Series B 6.375% 2013		17,000			15,764
Enterprise Products Partners LP 5.60% 2014		1,855			1,576
Enterprise Products Operating LLC 9.75% 2014		5,975			6,090
Enterprise Products Operating LLC 6.30% 2017		30,000			25,431
Enterprise Products Operating LLC 6.50% 2019		31,350			26,421
Enterprise Products Operating LP 8.375% 20661		9,605			5,289
Enterprise Products Operating LP 7.034% 20681		29,115			13,702
Enbridge Energy Partners, LP, Series B, 6.50% 2018		45,455			37,466
Enbridge Energy Partners, LP 9.875% 2019		25,000			25,200
Enbridge Energy Partners, LP, Series B, 7.50% 2038		28,700			22,452
Enbridge Energy Partners, LP 8.05% 20771		67,100			32,705
TransCanada PipeLines Ltd. 6.50% 2018		51,250			50,368
TransCanada PipeLines Ltd. 6.20% 2037		4,000			3,485
TransCanada PipeLines Ltd. 7.25% 2038		5,645			5,636
TransCanada PipeLines Ltd. 6.35% 20671		88,815			39,750
Williams Companies, Inc. 5.883% 20101,2		7,500			6,617
Williams Companies, Inc. 6.375% 20102		1,500			1,399
Williams Companies, Inc. 7.125% 2011		500			460
Transcontinental Gas Pipe Line Corp. 6.40% 2016		10,000			9,142
Williams Companies, Inc. 7.875% 2021		78,897			60,464
Transcontinental Gas Pipe Line Corp. 7.25% 2026		1,750			1,601
Williams Companies, Inc. 8.75% 2032		19,891			14,849
Kinder Morgan Energy Partners LP 6.75% 2011		5,500			5,352
Kinder Morgan Energy Partners LP 5.85% 2012		6,500			5,957
Kinder Morgan Energy Partners LP 5.00% 2013		14,279			12,465
Kinder Morgan Energy Partners LP 5.125% 2014		34,052			29,702
Kinder Morgan Energy Partners LP 6.00% 2017		30,250			26,303
Kinder Morgan Energy Partners LP 9.00% 2019		4,150			4,337
Gaz Capital SA 7.343% 2013		500			408
Gaz Capital SA 5.875% 2015	€	5,125			4,481
Gaz Capital SA, Series 13, 6.605% 2018		8,200			6,598
Gaz Capital SA 8.146% 2018	$	2,560			1,818
Gaz Capital SA 6.51% 20222		92,010			54,976
Gaz Capital SA 7.288% 20372		24,400			14,518
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20092,6		10,763			10,148
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20096		594			560
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20142,6		15,570			14,091
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20146		1,000			905
Ras Laffan Liquefied Natural Gas II 5.298% 20202,6		45,970			32,817
Ras Laffan Liquefied Natural Gas III 5.838% 20272,3,6		15,000			10,275
Rockies Express Pipeline LLC 5.10% 20091,2		20,000			20,014
Rockies Express Pipeline LLC 6.25% 20132		6,940			6,839
Rockies Express Pipeline LLC 6.85% 20182		37,675			34,835
Enbridge Inc. 5.80% 2014		9,200			8,078
Enbridge Inc. 4.90% 2015		3,250			2,778
Enbridge Inc. 5.60% 2017		42,080			35,783
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20142,6		51,458			39,365
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20146		5,679			4,345
Marathon Oil Corp. 6.00% 2017		23,200			19,814
Marathon Oil Corp. 5.90% 2018		12,645			10,578
Marathon Oil Corp. 6.60% 2037		10,000			7,581
Pemex Finance Ltd. 8.875% 20106		12,800			13,171
Pemex Finance Ltd., Series 1999-2, Class A-3, 10.61% 20173,6		11,700			13,106
Pemex Project Funding Master Trust 5.75% 20182		3,150			2,796
Pemex Project Funding Master Trust 6.625% 20352		3,500			2,980
Phillips Petroleum Co. 8.75% 2010		4,000			4,217
Polar Tankers, Inc. 5.951% 20372,6		27,355			23,584
Qatar Petroleum 5.579% 20112,6		21,335			19,953
Husky Energy Inc. 6.20% 2017		21,000			18,801
XTO Energy Inc. 6.25% 2017		15,750			15,149
Petroleum Export Ltd., Class A-1, MBIA insured, 4.623% 20102,6		11,500			11,322
Petroleum Export Ltd., Class A-2, XLCA insured, 4.633% 20102,6		2,167			2,133
Sunoco, Inc. 4.875% 2014		14,830			12,489
Canadian Natural Resources Ltd. 5.70% 2017		14,000			12,229
Southern Natural Gas Co. 5.90% 20172		11,840			9,442
El Paso Natural Gas Co. 5.95% 2017		3,000			2,399
Devon Financing Corp. ULC 7.875% 2031		10,195			11,257
Nakilat Inc., Series A, 6.067% 20332,6		14,000			10,466
Delek & Avner-Yam Tethys Ltd. 5.326% 20132,6		10,338			10,434
Gulfstream Natural Gas 5.56% 20152		3,500			2,939
Gulfstream Natural Gas 6.19% 20252		7,235			5,407
Williams Partners L.P. and Williams Partners Finance Corp. 7.50% 2011		5,725			4,926
Williams Partners L.P. and Williams Partners Finance Corp. 7.25% 2017		3,475			2,749
Petroplus Finance Ltd. 6.75% 20142		4,750			3,040
Petroplus Finance Ltd. 7.00% 20172		7,500			4,613
Apache Corp. 5.625% 2017		7,200			7,260
Drummond Co., Inc. 7.375% 20162		9,800			4,802
Energy Transfer Partners, LP 5.95% 2015		3,465			2,980
PETRONAS Capital Ltd. 7.00% 20122		2,250			2,388
TEPPCO Partners LP 7.00% 20671		4,275			2,294
					1,120,442
HEALTH CARE — 2.38%
Health care equipment & services — 1.32%
UnitedHealth Group Inc. 1.705% 20101		8,250			7,436
UnitedHealth Group Inc. 5.25% 2011		2,463			2,317
UnitedHealth Group Inc. 4.875% 2013		7,100			6,622
UnitedHealth Group Inc. 5.375% 2016		24,250			21,402
UnitedHealth Group 6.00% 2017		24,920			22,475
UnitedHealth Group Inc. 5.80% 2036		7,884			6,024
Hospira, Inc. 4.95% 2009		7,391			7,394
Hospira, Inc. 1.948% 20101		26,500			25,860
Hospira, Inc. 5.90% 2014		4,510			3,993
Hospira, Inc. 6.05% 2017		30,675			24,953
Coventry Health Care, Inc. 5.875% 2012		1,000			735
Coventry Health Care, Inc. 6.30% 2014		62,750			38,437
Coventry Health Care, Inc. 6.125% 2015		160			95
Coventry Health Care, Inc. 5.95% 2017		12,430			6,489
Cardinal Health, Inc. 4.323% 20091		3,500			3,321
Cardinal Health, Inc. 6.75% 2011		13,625			13,565
Cardinal Health, Inc. 5.80% 2016		10,000			9,061
Cardinal Health, Inc. 5.85% 2017		12,000			10,838
Allegiance Corp. 7.00% 2026		9,260			8,449
Tenet Healthcare Corp. 7.375% 2013		5,895			4,230
Tenet Healthcare Corp. 9.875% 2014		28,095			22,757
Tenet Healthcare Corp. 9.25% 2015		8,170			6,618
Humana Inc. 6.45% 2016		27,012			21,386
Humana Inc. 6.30% 2018		11,670			8,757
Humana Inc. 7.20% 2018		3,743			3,015
WellPoint, Inc. 5.00% 2011		12,500			11,820
WellPoint, Inc. 5.25% 2016		6,455			5,723
WellPoint, Inc. 5.875% 2017		8,300			7,566
WellPoint, Inc. 6.375% 20373		7,500			6,694
HealthSouth Corp. 8.323% 20141		12,600			10,143
HealthSouth Corp. 10.75% 2016		13,105			12,089
Aetna Inc. 5.75% 2011		17,500			17,104
HCA Inc., Term Loan B, 3.709% 20131,6,7		14,012			11,061
HCA Inc. 9.125% 2014		295			274
HCA Inc. 9.25% 2016		530			488
HCA Inc. 10.375% 20168		1,530			1,197
Bausch & Lomb Inc. 9.875% 20152		13,625			10,287
VWR Funding, Inc. 10.25% 20151,8		15,675			9,954
Universal Health Services, Inc. 7.125% 2016		7,440			6,431
PTS Acquisition Corp. 9.50% 20158		16,115			6,204
Surgical Care Affiliates, Inc. 8.875% 20152,8		3,325			2,045
Surgical Care Affiliates, Inc. 10.00% 20172		7,845			4,119
Health Management Associates Inc., Term Loan B, 3.209% 20141,6,7		7,243			4,554
Team Finance LLC and Health Finance Corp. 11.25% 2013		3,525			2,785
Boston Scientific Corp. 5.45% 2014		1,115			953
Boston Scientific Corp. 5.125% 2017		1,190			904
Boston Scientific Corp. 7.00% 2035		920			685
Symbion Inc. 11.75% 20158		3,745			1,985
Viant Holdings Inc. 10.125% 20172		2,929			981
Universal Hospital Services, Inc. 5.943% 20151		1,290			793
AMR HoldCo, Inc. and EmCare HoldCo, Inc. 10.00% 2015		175			164
CHS/Community Health Systems, Inc. 8.875% 2015		45			42
					423,274
Pharmaceuticals, biotechnology & life sciences — 1.06%
GlaxoSmithKline Capital Inc. 4.85% 2013		24,000			24,097
GlaxoSmithKline Capital Inc. 5.65% 2018		41,127			43,276
GlaxoSmithKline Capital Inc. 6.375% 2038		33,650			38,153
Schering-Plough Corp. 5.55% 20131		27,559			27,790
Schering-Plough Corp. 5.375% 2014	€	6,120			7,971
Schering-Plough Corp. 6.00% 2017	$	49,164			48,749
Biogen Idec Inc. 6.00% 2013		36,525			36,159
Biogen Idec Inc. 6.875% 2018		27,000			26,425
AstraZeneca PLC 5.40% 2012		12,000			12,684
AstraZeneca PLC 5.40% 2014		6,000			6,279
AstraZeneca PLC 6.45% 2037		8,000			9,125
Bayer AG 5.00% (undated)1	€	23,085			24,034
Wyeth 5.50% 2016	$	15,000			15,297
Elan Finance PLC and Elan Finance Corp. 7.75% 2011		3,125			1,859
Elan Finance PLC and Elan Finance Corp. 6.328% 20131		5,135			2,439
Elan Finance PLC and Elan Finance Corp. 8.875% 2013		10,910			5,728
Warner Chilcott Corp. 8.75% 2015		5,150			4,609
Amgen Inc. 4.00% 2009		4,000			3,998
Mylan Inc., Term Loan B, 4.75% 20141,6,7		4,141			3,531
					342,203
CONSUMER STAPLES — 1.06%
Food & staples retailing — 0.79%
Kroger Co. 5.00% 2013		8,750			8,432
Kroger Co. 7.50% 2014		8,455			8,897
Kroger Co. 6.40% 2017		58,325			58,915
CVS Caremark Corp. 2.503% 20101		5,000			4,602
CVS Corp. 7.77% 20122,6		697			707
CVS Corp. 5.789% 20262,3,6		14,610			8,567
CVS Corp. 6.036% 20282,3,6		34,037			19,143
CVS Caremark Corp. 6.943% 20302,6		24,430			15,394
Tesco PLC 5.50% 20172		21,325			19,802
Tesco PLC 5.50% 2033	£	265			337
Tesco PLC 6.15% 20372	$	20,000			17,719
Delhaize Group 6.50% 2017		26,205			23,831
Safeway Inc. 6.25% 2014		2,725			2,742
Safeway Inc. 6.35% 2017		20,000			19,806
Stater Bros. Holdings Inc. 8.125% 2012		9,160			8,336
Stater Bros. Holdings Inc. 7.75% 2015		9,400			7,943
SUPERVALU INC., Term Loan B, 2.689% 20121,6,7		2,239			1,798
SUPERVALU INC. 7.50% 2012		365			323
Albertson’s, Inc. 7.25% 2013		3,950			3,358
SUPERVALU INC. 7.50% 2014		830			685
Albertson’s, Inc. 8.00% 2031		4,475			2,707
Duane Reade Inc. 6.496% 20101		4,992			3,669
Duane Reade Inc. 9.75% 2011		7,695			4,117
Vitamin Shoppe Industries Inc. 9.649% 20121		7,490			5,318
Walgreen Co. 4.875% 2013		5,000			5,155
Costco Wholesale Corp. 5.30% 2012		3,000			3,133
					255,436
Food, beverage & tobacco — 0.26%
Tyson Foods, Inc. 7.85% 20161		36,905			27,494
Altria Group, Inc. 9.70% 2018		2,925			3,167
Altria Group, Inc. 9.95% 2038		12,500			13,645
Constellation Brands, Inc. 8.375% 2014		2,075			1,982
Constellation Brands, Inc. 7.25% 2017		9,945			9,448
H.J. Heinz Co. 15.59% 20111,2		10,000			11,189
Dole Food Co., Inc. 7.25% 2010		2,175			1,528
Dole Food Co., Inc. 8.875% 2011		7,915			4,986
Smithfield Foods, Inc., Series B, 8.00% 2009		1,500			1,433
Smithfield Foods, Inc., Series B, 7.75% 2013		150			97
Smithfield Foods, Inc. 7.75% 2017		3,100			1,782
JBS SA 10.50% 2016		4,370			3,081
Cott Beverages Inc. 8.00% 2011		4,950			3,044
Diageo Capital PLC 5.75% 2017		1,437			1,393
Pilgrim’s Pride Corp. 7.625% 20154		1,100			302
Pilgrim’s Pride Corp. 8.375% 20174		1,050			68
					84,639
Household & personal products — 0.01%
Elizabeth Arden, Inc. 7.75% 2014		2,905			1,903
Yankee Candle Co., Inc., Series B, 8.50% 2015		4,025			1,897
					3,800
MATERIALS — 1.04%
International Paper Co. 7.40% 2014		40,990			33,635
International Paper Co. 7.95% 2018		35,605			28,184
ArcelorMittal 6.125% 2018		52,900			36,282
Stora Enso Oyj 6.404% 20162		22,800			15,073
Stora Enso Oyj 7.25% 20362		36,290			19,159
C5 Capital (SPV) Ltd. 6.196% (undated)1,2		15,000			6,910
C8 Capital (SPV) Ltd. 6.64% (undated)1,2		23,905			12,143
C10 Capital (SPV) Ltd. 6.722% (undated)1,2		13,295			6,337
Rio Tinto Finance (USA) Ltd. 5.875% 2013		31,500			25,114
Rohm and Haas Co. 5.60% 2013		950			918
Rohm and Haas Co. 6.00% 2017		25,850			23,564
UPM-Kymmene Corp. 5.625% 20142		34,190			22,169
UPM-Kymmene Corp. 6.625% 2017	£	235			270
Freeport-McMoRan Copper & Gold Inc. 6.875% 2014	$	800			721
Freeport-McMoRan Copper & Gold Inc. 8.25% 2015		16,580			14,109
Freeport-McMoRan Copper & Gold Inc. 8.375% 2017		2,230			1,831
Nalco Co. 7.75% 2011		4,760			4,593
Nalco Co. 8.875% 2013		4,350			3,698
Nalco Co. 9.00% 2013	€	1,000			1,024
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 0%/9.00% 20149		2,254			1,634
E.I. du Pont de Nemours and Co. 4.125% 2010		2,000			2,017
E.I. du Pont de Nemours and Co. 5.00% 2013		6,355			6,418
E.I. du Pont de Nemours and Co. 5.25% 2016		2,000			1,991
Building Materials Corp. of America 7.75% 2014		9,950			6,318
Commercial Metals Co. 6.50% 2017		7,000			5,319
Plastipak Holdings, Inc. 8.50% 20152		7,690			5,191
Georgia Gulf Corp. 9.50% 2014		15,380			4,691
Georgia-Pacific Corp. 8.125% 2011		4,025			3,804
Weyerhaeuser Co. 7.375% 2032		2,500			1,627
Weyerhaeuser Co. 6.875% 2033		2,500			1,664
Arbermarle Corp. 5.10% 2015		3,656			3,238
Jefferson Smurfit Corp. (U.S.) 8.25% 2012		10,775			1,886
Stone Container Corp. 8.375% 2012		1,000			170
Jefferson Smurfit Corp. (U.S.) 7.50% 2013		1,250			225
Smurfit-Stone Container Enterprises, Inc. 8.00% 2017		4,225			824
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014		5,494			3,104
Associated Materials Inc. 9.75% 2012		3,450			2,734
AMH Holdings, Inc. 0%/11.25% 20149		375			210
Praxair, Inc. 4.625% 2015		2,500			2,520
Rockwood Specialties Group, Inc. 7.50% 2014		2,320			1,798
Rockwood Specialties Group, Inc. 7.625% 2014	€	500			488
Owens-Illinois, Inc. 7.50% 2010	$	2,250			2,239
Graphic Packaging International, Inc. 8.50% 2011		2,375			1,995
ICI Wilmington, Inc. 5.625% 2013		2,000			1,930
NewPage Corp., Series B, 10.00% 2012		3,500			1,557
NewPage Corp., Series A, 12.00% 2013		980			284
Metals USA Holdings Corp. 10.883% 20121,8		3,410			972
Metals USA, Inc. 11.125% 2015		1,200			714
Domtar Corp. 5.375% 2013		725			453
Domtar Corp. 7.125% 2015		1,810			1,186
Vale Overseas Ltd. 6.25% 2017		1,500			1,418
Potash Corp. of Saskatchewan Inc. 5.875% 2036		1,600			1,414
FMG Finance Pty Ltd. 10.625% 20162		2,000			1,170
AEP Industries Inc. 7.875% 2013		1,985			1,131
Dow Chemical Co. 5.70% 2018		1,000			890
Momentive Performance Materials Inc. 9.75% 2014		2,000			860
Airgas, Inc. 6.25% 2014		550			470
Airgas, Inc. 7.125% 20182		250			214
Neenah Paper, Inc. 7.375% 2014		1,140			621
Abitibi-Consolidated Inc. 7.75% 2011		505			48
Abitibi-Consolidated Co. of Canada 6.00% 2013		975			83
Abitibi-Consolidated Co. of Canada 8.375% 2015		5,000			425
					333,679
INFORMATION TECHNOLOGY — 0.89%
Semiconductors & semiconductor equipment — 0.34%
KLA-Tencor Corp. 6.90% 2018		56,300			42,648
NXP BV and NXP Funding LLC 7.503% 20131		9,320			3,134
NXP BV and NXP Funding LLC 8.068% 20131	€	6,075			2,116
NXP BV and NXP Funding LLC 7.875% 2014	$	24,285			9,593
NXP BV and NXP Funding LLC 8.625% 2015	€	10,050			2,591
NXP BV and NXP Funding LLC 9.50% 2015	$	31,070			5,981
Freescale Semiconductor, Inc., Term Loan B, 3.931% 20131,6,7		2,585			1,543
Freescale Semiconductor, Inc. 5.871% 20141		2,500			863
Freescale Semiconductor, Inc. 8.875% 2014		7,300			3,249
Freescale Semiconductor, Inc. 9.875% 20141,8		45,275			10,640
Freescale Semiconductor, Inc. 10.125% 2016		11,625			4,824
National Semiconductor Corp. 6.15% 2012		3,700			3,316
National Semiconductor Corp. 6.60% 2017		24,500			17,365
MagnaChip Semiconductor SA and MagnaChip Semiconductor Finance Co. 8.00% 20144		2,250			22
					107,885
Technology hardware & equipment — 0.33%
Electronic Data Systems Corp., Series B, 6.00% 20131		31,625			32,803
Electronic Data Systems Corp. 7.45% 2029		4,520			4,910
Jabil Circuit, Inc. 5.875% 2010		4,750			4,370
Jabil Circuit, Inc. 8.25% 2018		39,725			25,424
Cisco Systems, Inc. 5.25% 2011		10,000			10,387
Hughes Communications, Inc. 9.50% 2014		12,425			10,157
Sanmina-SCI Corp. 4.746% 20101,2		866			801
Sanmina-SCI Corp. 6.75% 2013		6,275			2,730
Sanmina-SCI Corp. 4.746% 20141,2		3,750			2,044
Sanmina-SCI Corp. 8.125% 2016		10,350			4,088
Celestica Inc. 7.875% 2011		5,700			5,216
Sensata Technologies BV 8.00% 20141		8,575			3,902
Nortel Networks Ltd. 9.003% 20111		3,500			892
					107,724
Software & services — 0.22%
Oracle Corp. 5.75% 2018		3,150			3,301
Oracle Corp. 6.50% 2038		30,000			33,143
SunGard Data Systems Inc. 9.125% 2013		12,975			11,288
First Data Corp., Term Loan B2, 3.211% 20141,6,7		14,567			9,425
First Data Corp. 9.875% 20152		1,500			915
Ceridian Corp. 11.25% 20152		13,050			6,965
Serena Software, Inc. 10.375% 2016		11,262			5,772
Exodus Communications, Inc. 11.625% 20103,4		1,128			—
					70,809
Total corporate bonds & notes					11,798,645
MORTGAGE-BACKED OBLIGATIONS — 26.27%
FEDERAL AGENCY MORTGAGE-BACKED OBLIGATIONS6 — 14.83%
Fannie Mae 7.00% 2009		2			2
Fannie Mae 7.50% 2009		31			31
Fannie Mae 7.50% 2009		11			11
Fannie Mae 7.50% 2009		2			2
Fannie Mae 7.50% 2009		2			2
Fannie Mae 7.50% 2009		1			1
Fannie Mae 7.50% 2009		—			—
Fannie Mae 8.50% 2009		3			3
Fannie Mae 9.50% 2009		4			4
Fannie Mae 7.00% 2010		3			3
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		46,225			48,746
Fannie Mae 4.89% 2012		25,000			26,221
Fannie Mae 7.00% 2016		144			150
Fannie Mae 11.50% 2016		290			325
Fannie Mae, Series 2002-15, Class PG, 6.00% 2017		7,406			7,647
Fannie Mae 5.50% 2018		422			436
Fannie Mae 9.00% 2018		23			25
Fannie Mae 10.00% 2018		226			254
Fannie Mae 4.50% 2019		19,702			20,236
Fannie Mae 4.50% 2019		19,341			19,866
Fannie Mae 5.50% 2019		4,375			4,528
Fannie Mae 5.50% 2019		1,794			1,854
Fannie Mae 12.00% 2019		299			338
Fannie Mae 4.50% 2020		5,028			5,158
Fannie Mae 5.50% 2020		16,090			16,649
Fannie Mae 5.50% 2020		1,797			1,858
Fannie Mae 11.00% 2020		120			134
Fannie Mae 11.23% 20201		279			323
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		25,693			26,046
Fannie Mae 5.50% 2022		41,339			42,672
Fannie Mae 9.00% 2022		39			42
Fannie Mae 5.50% 2023		63,938			65,999
Fannie Mae 5.50% 2023		40,820			42,135
Fannie Mae 5.50% 2023		31,241			32,248
Fannie Mae 6.00% 2023		4,949			5,151
Fannie Mae 7.50% 2023		79			83
Fannie Mae: 5.50% 2024		38,000			39,149
Fannie Mae 6.00% 2024		12,923			13,361
Fannie Mae, Series 2001-4, Class GA, 10.156% 20251		515			579
Fannie Mae, Series 2001-4, Class NA, 11.873% 20251		2,236			2,473
Fannie Mae 6.00% 2026		29,752			30,761
Fannie Mae 6.123% 20261		503			511
Fannie Mae 5.50% 2027		25,492			26,179
Fannie Mae 6.50% 2027		27,823			28,952
Fannie Mae 6.50% 2027		23,957			24,929
Fannie Mae 6.50% 2027		19,996			20,807
Fannie Mae 8.50% 2027		8			9
Fannie Mae 6.00% 2028		10,716			11,052
Fannie Mae, Series 1998-W5, Class B3, 6.50% 2028		2,026			1,573
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2028		3,792			3,997
Fannie Mae 6.50% 2029		191			201
Fannie Mae, Series 2002-W7, Class A-5, 7.50% 2029		671			708
Fannie Mae 7.50% 2029		68			71
Fannie Mae 7.50% 2029		46			48
Fannie Mae 7.50% 2030		144			152
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031		5,600			5,835
Fannie Mae 7.50% 2031		366			385
Fannie Mae 7.50% 2031		40			42
Fannie Mae, Series 2001-20, Class E, 9.625% 20311		85			95
Fannie Mae, Series 2001-20, Class C, 12.049% 20311		88			100
Fannie Mae 6.50% 2032		593			616
Fannie Mae 5.50% 2033		32,551			33,481
Fannie Mae 6.50% 2034		882			915
Fannie Mae 4.569% 20351		12,120			12,228
Fannie Mae 5.50% 2035		41,779			42,939
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035		6,511			6,679
Fannie Mae 6.50% 2035		10,480			10,945
Fannie Mae, Series 2006-51, Class PO, principal only, 0% 20363		9,137			7,190
Fannie Mae, Series 2006-32, Class OA, principal only, 0% 2036		8,257			6,833
Fannie Mae, Series 2006-96, Class OP, principal only, 0% 2036		1,924			1,557
Fannie Mae 5.00% 2036		130,319			133,328
Fannie Mae 5.00% 2036		54,683			55,946
Fannie Mae, Series 2006-101, Class PC, 5.50% 2036		8,188			8,306
Fannie Mae 6.00% 2036		40,473			41,746
Fannie Mae 6.00% 2036		30,511			31,471
Fannie Mae, Series 2006-106, Class HG, 6.00% 2036		21,428			22,095
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036		19,187			19,792
Fannie Mae 6.00% 2036		11,906			12,280
Fannie Mae 6.50% 2036		9,136			9,544
Fannie Mae 6.50% 2036		5,050			5,163
Fannie Mae 7.00% 2036		4,146			4,266
Fannie Mae 7.00% 2036		1,862			1,955
Fannie Mae 7.00% 2036		1,741			1,827
Fannie Mae 7.00% 2036		1,183			1,218
Fannie Mae 7.50% 2036		1,722			1,773
Fannie Mae 7.50% 2036		911			937
Fannie Mae 8.00% 2036		2,835			2,930
Fannie Mae 5.498% 20371		45,616			46,677
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037		30,898			32,084
Fannie Mae 5.632% 20371		12,371			12,644
Fannie Mae 5.755% 20371		19,821			20,276
Fannie Mae 5.783% 20371		23,048			23,622
Fannie Mae 5.994% 20371		36,593			37,574
Fannie Mae 6.00% 2037		56,329			58,100
Fannie Mae 6.00% 2037		13,645			13,801
Fannie Mae 6.00% 2037		8,538			8,636
Fannie Mae 6.00% 20373		4,871			4,887
Fannie Mae, Series 2007-24, Class P, 6.00% 2037		4,395			4,544
Fannie Mae 6.00% 2037		4,130			4,260
Fannie Mae 6.018% 20371		38,194			39,156
Fannie Mae 6.122% 20371		21,511			22,129
Fannie Mae 6.423% 20371		12,606			12,995
Fannie Mae 6.50% 2037		28,096			29,254
Fannie Mae 6.50% 2037		27,461			28,078
Fannie Mae 6.50% 20373		26,683			27,025
Fannie Mae 6.50% 2037		21,320			22,185
Fannie Mae 6.50% 2037		21,357			21,837
Fannie Mae 6.50% 2037		15,414			15,760
Fannie Mae 6.50% 2037		14,436			15,022
Fannie Mae 6.50% 2037		13,482			14,030
Fannie Mae 6.50% 2037		13,281			13,820
Fannie Mae 6.50% 2037		11,567			12,036
Fannie Mae 6.50% 2037		10,289			10,520
Fannie Mae 6.50% 20373		9,774			9,889
Fannie Mae 6.50% 2037		9,137			9,508
Fannie Mae 6.50% 2037		8,244			8,579
Fannie Mae 6.50% 2037		1,457			1,516
Fannie Mae 6.50% 2037		1,313			1,366
Fannie Mae 6.714% 20371		15,483			15,967
Fannie Mae 6.78% 20371		1,517			1,564
Fannie Mae 7.00% 2037		75,110			78,778
Fannie Mae 7.00% 2037		36,991			38,058
Fannie Mae 7.00% 2037		23,041			24,166
Fannie Mae 7.00% 2037		14,275			14,687
Fannie Mae 7.00% 2037		14,148			14,555
Fannie Mae 7.00% 2037		12,479			12,839
Fannie Mae 7.00% 2037		12,283			12,637
Fannie Mae 7.00% 20373		11,931			12,110
Fannie Mae 7.00% 2037		10,242			10,743
Fannie Mae 7.00% 2037		9,075			9,337
Fannie Mae 7.00% 2037		7,534			7,751
Fannie Mae 7.00% 2037		6,949			7,150
Fannie Mae 7.00% 2037		6,464			6,651
Fannie Mae 7.00% 2037		5,527			5,687
Fannie Mae 7.00% 2037		5,011			5,155
Fannie Mae 7.00% 2037		3,963			4,077
Fannie Mae 7.00% 2037		2,462			2,533
Fannie Mae 7.00% 2037		1,796			1,886
Fannie Mae 7.00% 2037		1,774			1,864
Fannie Mae 7.00% 2037		1,676			1,724
Fannie Mae 7.00% 2037		1,604			1,650
Fannie Mae 7.00% 2037		1,135			1,190
Fannie Mae 7.00% 2037		1,095			1,127
Fannie Mae 7.00% 2037		829			870
Fannie Mae 7.50% 2037		7,956			8,349
Fannie Mae 7.50% 2037		4,051			4,170
Fannie Mae 7.50% 20373		4,018			4,069
Fannie Mae 7.50% 2037		3,904			4,018
Fannie Mae 7.50% 2037		3,433			3,534
Fannie Mae 7.50% 2037		2,294			2,361
Fannie Mae 7.50% 2037		2,270			2,337
Fannie Mae 7.50% 2037		2,085			2,146
Fannie Mae 7.50% 2037		1,976			2,034
Fannie Mae 7.50% 2037		1,953			2,010
Fannie Mae 7.50% 2037		1,564			1,610
Fannie Mae 7.50% 2037		1,528			1,573
Fannie Mae 7.50% 2037		1,327			1,366
Fannie Mae 7.50% 2037		1,081			1,113
Fannie Mae 7.50% 2037		1,070			1,101
Fannie Mae 7.50% 2037		1,003			1,032
Fannie Mae 7.50% 2037		860			885
Fannie Mae 7.50% 2037		631			663
Fannie Mae 7.50% 2037		607			624
Fannie Mae 7.50% 2037		571			588
Fannie Mae 8.00% 2037		3,298			3,408
Fannie Mae 8.00% 2037		3,055			3,163
Fannie Mae 8.00% 2037		2,337			2,415
Fannie Mae 8.00% 2037		1,895			1,996
Fannie Mae 8.00% 2037		1,147			1,186
Fannie Mae 5.00% 2038		68,233			69,786
Fannie Mae 5.00% 2038		19,908			20,361
Fannie Mae 5.00% 2038		19,887			20,340
Fannie Mae 5.322% 20381		13,832			14,111
Fannie Mae 5.50% 2038		56,630			58,158
Fannie Mae 5.50% 2038		41,133			42,243
Fannie Mae 5.50% 2038		24,517			25,187
Fannie Mae 5.50% 2038		20,905			21,470
Fannie Mae 5.50% 2038		14,988			15,392
Fannie Mae 5.50% 2038		3,880			3,987
Fannie Mae 5.553% 20381		2,985			3,038
Fannie Mae 5.744% 20381		30,976			31,810
Fannie Mae 6.00% 2038		24,950			25,762
Fannie Mae 6.00% 2038		20,389			21,031
Fannie Mae 7.00% 2038		26,239			26,995
Fannie Mae 7.00% 2038		18,498			19,401
Fannie Mae 6.00% 2039		68,500			70,571
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041		6,151			6,476
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041		1,967			2,050
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042		4,255			4,487
Fannie Mae 6.00% 2047		1,102			1,109
Fannie Mae 6.50% 2047		1,382			1,415
Fannie Mae 6.50% 2047		1,350			1,383
Fannie Mae 6.50% 2047		854			870
Fannie Mae 7.00% 2047		7,197			7,377
Fannie Mae 7.00% 2047		523			536
Fannie Mae 7.50% 2047		1,743			1,788
Fannie Mae 7.50% 2047		1,026			1,052
Fannie Mae 7.50% 2047		1,010			1,035
Freddie Mac 8.50% 2009		10			10
Freddie Mac 8.50% 2010		16			16
Freddie Mac 6.00% 2017		411			428
Freddie Mac, Series 2310, Class A, 10.543% 20171		356			392
Freddie Mac 11.00% 2018		52			58
Freddie Mac, Series 2890, Class KT, 4.50% 2019		2,500			2,440
Freddie Mac 5.50% 2019		9,152			9,473
Freddie Mac 8.50% 2020		129			137
Freddie Mac 8.50% 2020		45			48
Freddie Mac, Series 41, Class F, 10.00% 2020		94			95
Freddie Mac, Series 178, Class Z, 9.25% 20213		72			75
Freddie Mac, Series 2626, Class NG, 3.50% 2023		1,895			1,837
Freddie Mac, Series 2922, Class EL, 4.50% 2023		39,649			40,213
Freddie Mac 5.00% 2023		44,639			45,943
Freddie Mac 5.00% 2023		43,135			44,395
Freddie Mac 5.00% 2023		14,310			14,728
Freddie Mac 5.00% 2023		4,727			4,865
Freddie Mac 5.00% 2023		2,584			2,660
Freddie Mac 5.00% 2023		256			264
Freddie Mac 5.50% 2023		41,002			42,337
Freddie Mac 5.50% 2023		11,718			12,100
Freddie Mac 5.50% 2023		10,459			10,800
Freddie Mac 5.50% 2023		9,097			9,393
Freddie Mac 5.50% 2023		3,663			3,782
Freddie Mac 5.50% 2023		2,847			2,940
Freddie Mac 5.50% 2023		938			968
Freddie Mac, Series 1617, Class PM, 6.50% 2023		2,040			2,130
Freddie Mac 6.00% 2026		31,700			32,773
Freddie Mac 6.00% 2026		24,217			25,037
Freddie Mac 8.00% 2026		91			96
Freddie Mac 5.50% 2027		15,773			16,198
Freddie Mac 6.00% 2027		179,349			185,423
Freddie Mac 8.50% 2027		22			23
Freddie Mac, Series 2153, Class GG, 6.00% 2029		3,628			3,768
Freddie Mac, Series 2122, Class QM, 6.25% 2029		6,220			6,429
Freddie Mac 4.635% 20351		14,814			14,961
Freddie Mac, Series 3061, Class PN, 5.50% 2035		47,136			48,607
Freddie Mac 6.50% 20353		336			335
Freddie Mac, Series 3136, Class OP, principal only, 0% 2036		8,091			6,853
Freddie Mac, Series 3149, Class MO, principal only, 0% 2036		5,796			4,951
Freddie Mac, Series 3147, Class OD, principal only, 0% 2036		5,722			4,899
Freddie Mac, Series 3149, Class AO, principal only, 0% 2036		5,080			4,340
Freddie Mac 5.00% 2036		59,652			60,906
Freddie Mac, Series 3257, Class PA, 5.50% 2036		50,765			52,313
Freddie Mac 5.602% 20361		4,959			5,063
Freddie Mac 5.862% 20361		21,805			22,328
Freddie Mac, Series 3233, Class PA, 6.00% 2036		41,067			42,523
Freddie Mac, Series 3156, Class NG, 6.00% 2036		13,174			13,615
Freddie Mac, Series 3286, Class JN, 5.50% 2037		65,506			67,040
Freddie Mac, Series 3318, Class JT, 5.50% 2037		36,337			37,188
Freddie Mac 5.50% 2037		35,152			36,021
Freddie Mac 5.50% 2037		30,721			31,481
Freddie Mac, Series 3312, Class PA, 5.50% 2037		27,671			28,281
Freddie Mac 5.631% 20371		17,166			17,526
Freddie Mac 5.668% 20371		7,994			8,144
Freddie Mac 5.979% 20371		28,398			29,080
Freddie Mac, Series 3271, Class OA, 6.00% 2037		17,404			18,040
Freddie Mac 6.00% 2037		3,311			3,415
Freddie Mac 6.032% 20371		21,892			22,534
Freddie Mac 6.049% 20371		13,218			13,520
Freddie Mac 6.207% 20371		18,303			18,492
Freddie Mac 6.258% 20371		30,730			31,494
Freddie Mac 6.267% 20371		3,776			3,873
Freddie Mac 7.00% 2037		23,395			23,891
Freddie Mac 7.00% 2037		2,566			2,620
Freddie Mac 7.00% 2037		2,364			2,414
Freddie Mac 7.00% 2037		1,936			1,977
Freddie Mac 7.00% 20373		941			937
Freddie Mac 7.00% 20373		906			902
Freddie Mac 7.00% 20373		794			790
Freddie Mac 7.50% 2037		25,682			26,241
Freddie Mac 4.816% 20381		14,851			14,965
Freddie Mac 5.00% 2038		69,767			71,211
Freddie Mac 5.00% 2038		53,493			54,600
Freddie Mac 5.00% 2038		45,187			46,123
Freddie Mac 5.00% 2038		39,716			40,538
Freddie Mac 5.00% 2038		33,256			34,027
Freddie Mac 5.00% 2038		22,409			22,873
Freddie Mac 5.00% 2038		22,167			22,626
Freddie Mac 5.00% 2038		9,937			10,143
Freddie Mac 5.054% 20381		9,964			10,065
Freddie Mac 5.132% 20381		1,997			2,023
Freddie Mac 5.50% 2038		66,970			68,626
Freddie Mac 5.50% 2038		49,419			50,642
Freddie Mac 5.50% 2038		35,623			36,504
Freddie Mac 5.50% 2038		29,975			30,716
Freddie Mac 5.50% 2038		24,850			24,843
Freddie Mac 5.608% 20381		35,634			36,423
Freddie Mac 6.00% 2038		207,595			214,124
Freddie Mac 6.50% 2047		2,732			2,783
Freddie Mac 6.50% 2047		1,097			1,117
Freddie Mac 7.00% 2047		1,009			1,027
Freddie Mac 7.00% 2047		705			717
Government National Mortgage Assn. 6.50% 2009		1			1
Government National Mortgage Assn. 7.50% 2009		6			6
Government National Mortgage Assn. 7.50% 2009		3			3
Government National Mortgage Assn. 7.50% 2009		2			2
Government National Mortgage Assn. 7.50% 2009		1			1
Government National Mortgage Assn. 7.50% 2009		1			1
Government National Mortgage Assn. 7.50% 2009		1			1
Government National Mortgage Assn. 7.50% 2009		—			—
Government National Mortgage Assn. 9.00% 2009		4			4
Government National Mortgage Assn. 9.50% 2009		49			49
Government National Mortgage Assn. 9.50% 20093		4			4
Government National Mortgage Assn. 9.00% 2016		76			83
Government National Mortgage Assn. 9.00% 2017		20			22
Government National Mortgage Assn. 9.50% 2019		162			183
Government National Mortgage Assn. 8.50% 2020		27			30
Government National Mortgage Assn. 8.50% 2020		9			9
Government National Mortgage Assn. 9.50% 2020		66			75
Government National Mortgage Assn. 10.00% 2020		506			581
Government National Mortgage Assn. 8.50% 2021		161			177
Government National Mortgage Assn. 8.50% 2021		104			114
Government National Mortgage Assn. 8.50% 2021		33			36
Government National Mortgage Assn. 8.50% 2021		32			35
Government National Mortgage Assn. 10.00% 2021		919			1,037
Government National Mortgage Assn. 9.00% 2022		23			26
Government National Mortgage Assn. 8.50% 2023		24			26
Government National Mortgage Assn. 8.50% 2024		14			15
Government National Mortgage Assn. 8.50% 2024		7			7
Government National Mortgage Assn. 8.50% 2027		29			32
Government National Mortgage Assn. 8.50% 2028		23			25
Government National Mortgage Assn. 8.50% 2029		27			30
Government National Mortgage Assn., Series 2005-58, Class NO, principal only, 0% 2035		5,060			4,041
Government National Mortgage Assn. 6.00% 2038		175,944			181,896
Government National Mortgage Assn. 6.50% 2038		30,936			32,269
Government National Mortgage Assn., Series 2003, Class A, 5.612% 20583		10,515			10,725
					4,770,781
COMMERCIAL MORTGAGE-BACKED SECURITIES6 — 5.60%
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2001-CIBC1, Class A-3, 6.26% 2033		3,744			3,614
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C2, Class F, 5.981% 20341,2		2,500			1,230
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C3, Class A-1, 4.20% 2035		681			654
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-CBX, Class A-5, 4.654% 2037		2,500			1,957
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC11, Class A-2, 5.016% 2037		11,232			10,611
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.317% 20371		61,300			50,773
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class E, 6.135% 20372		400			228
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039		6,076			5,574
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-3, 4.545% 2042		21,050			17,171
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class A-2, 4.575% 2042		20,058			17,721
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-2, 4.79% 2042		9,692			8,859
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-3A1, 4.871% 2042		25,000			21,267
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP3, Class A-4A, 4.936% 20421		1,655			1,305
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A-2, 5.198% 2044		10,080			9,045
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CIBC14, Class A-4, 5.481% 20441		21,259			16,134
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 5.875% 20451		29,000			22,842
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046		91,455			86,337
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034		1,215			1,126
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-4, 6.505% 2034		446			433
CS First Boston Mortgage Securities Corp., Series 2001-CK3, Class A-4, 6.53% 2034		2,475			2,422
CS First Boston Mortgage Securities Corp., Series 2002-CP5, Class A-1, 4.106% 2035		594			553
CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035		43,386			42,026
CS First Boston Mortgage Securities Corp., Series 2002-CKP1, Class F, 7.067% 20351,2		1,500			973
CS First Boston Mortgage Securities Corp., Series 2002-CKS4, Class G, 6.006% 20361,2		500			257
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036		30,004			28,232
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-2, 4.183% 2037		15,423			14,751
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-3, 4.499% 2037		12,900			10,559
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-2, 4.512% 2037		1,690			1,559
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 20373		20,000			16,904
CS First Boston Mortgage Securities Corp., Series 2005-C2, Class A-MFX, 4.877% 2037		10,000			5,970
CS First Boston Mortgage Securities Corp., Series 2004-C1, Class E, 5.015% 20372		8,240			2,818
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		13,000			12,397
CS First Boston Mortgage Securities Corp., Series 2003-C3, Class F, 4.518% 20382		2,000			902
CS First Boston Mortgage Securities Corp., Series 2005-C1, Class A-3, 4.813% 2038		20,710			16,833
CS First Boston Mortgage Securities Corp., Series 2005-C4, Class A-2, 5.017% 2038		12,200			11,004
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-AB, 5.10% 20381		12,000			10,294
CS First Boston Mortgage Securities Corp., Series 2004-C4, Class A-4, 4.283% 2039		20,600			16,975
CS First Boston Mortgage Securities Corp., Series 2006-C1, Class A-3, 5.552% 20391		14,750			11,005
CS First Boston Mortgage Securities Corp., Series 2006-C2, Class A-3, 5.658% 20391		7,305			5,969
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20401		42,000			32,775
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-M, 5.23% 20401		5,000			2,919
CS First Boston Mortgage Securities Corp., Series 1999-C1, Class D, 7.946% 20411		850			827
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-WF2, Class X, interest only, 0.369% 20311		139,452			1,443
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1, Class X, interest only, 1.119% 20311,2		65,643			711
Bear Stearns Commercial Mortgage Securities Inc., Series 2000-WF2, Class A-2, 7.32% 2032		16,338			16,285
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035		9,941			9,651
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class D, 6.94% 20352		3,000			2,939
Bear Stearns Commercial Mortgage Securities Inc., Series 2004-PWR6, Class A-4, 4.521% 2041		10,000			8,054
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-2, 4.735% 2042		64,000			58,093
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-3, 4.868% 2042		38,825			30,752
Fannie Mae, Series 2000-T5, Class B, 7.30% 2010		57,100			60,839
Fannie Mae, Series 2001-T6B, 6.088% 2011		48,000			51,780
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A-3, 4.608% 2035		2,431			2,223
Wachovia Bank Commercial Mortgage Trust, Series 2004-C14, Class A-2, 4.368% 2041		1,530			1,457
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-2, 4.782% 2042		21,443			20,147
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A-PB, 4.807% 2042		3,000			2,597
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-4, 5.083% 20421		35,000			28,458
Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class A-7, 5.118% 20421		4,650			3,714
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-2, 5.242% 2044		17,000			15,098
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-4, 5.265% 20441		15,350			12,343
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-PB, 5.27% 20441		8,038			6,827
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045		16,750			13,851
SBA CMBS Trust, Series 2005-1, Class A, 5.369% 20352,3		33,000			26,400
SBA CMBS Trust, Series 2005-1, Class B, 5.565% 20352,3		3,300			2,376
SBA CMBS Trust, Series 2005-1, Class E, 6.706% 20352,3		7,460			4,476
SBA CMBS Trust, Series 2006-1A, Class A, 5.314% 20362,3		48,500			38,800
SBA CMBS Trust, Series 2006-1A, Class B, 5.451% 20362,3		14,180			10,919
SBA CMBS Trust, Series 2006-1A, Class D, 5.852% 20362		12,329			8,754
SBA CMBS Trust, Series 2006-1A, Class E, 6.174% 20362		4,025			2,777
SBA CMBS Trust, Series 2006-1A, Class F, 6.709% 20362,3		375			255
SBA CMBS Trust, Series 2006-1A, Class G, 6.904% 20362,3		3,375			2,261
SBA CMBS Trust, Series 2006-1A, Class H, 7.389% 20362,3		5,040			3,326
SBA CMBS Trust, Series 2006-1A, Class J, 7.825% 20362,3		2,375			1,544
Crown Castle Towers LLC, Series 2005-1, Class A-FX, 4.643% 20352		36,000			30,600
Crown Castle Towers LLC, Series 2005-1, Class C, 5.074% 20352		43,000			30,324
Crown Castle Towers LLC, Series 2006-1, Class E, 6.065% 20362,3		31,000			18,395
Crown Castle Towers LLC, Series 2006-1, Class F, 6.650% 20362,3		10,350			5,922
Crown Castle Towers LLC, Series 2006-1, Class G, 6.795% 20362,3		1,400			762
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20372		33,100			27,188
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20372,3		10,000			7,581
American Tower Trust I, Series 2007-1A, Class C, 5.615% 20372		10,000			6,712
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20372,3		36,415			21,849
American Tower Trust I, Series 2007-1A, Class E, 6.249% 20372,3		11,375			6,260
American Tower Trust I, Series 2007-1A, Class F, 6.639% 20372,3		13,470			7,039
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036		48,616			47,768
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-3, 4.561% 2041		9,975			8,206
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-AB, 4.673% 2041		2,000			1,780
Banc of America Commercial Mortgage Inc., Series 2004-4, Class B, 4.985% 2042		1,000			388
Banc of America Commercial Mortgage Inc., Series 2005-1, Class A-4, 4.988% 20421		15,360			12,792
Banc of America Commercial Mortgage Inc., Series 2005-3, Class A-2, 4.501% 2043		1,260			1,074
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-4, 5.115% 20451		2,500			1,989
Structured Products Asset Return Certificates Trust, Series 2001-CF1, Class A, 6.36% 20333		47,208			44,920
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP6, Class A-4, 5.475% 20431		51,820			40,464
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP7, Class A-M, 5.875% 20451		7,645			3,962
GE Commercial Mortgage Corp., Series 2004-C3, Class B, 5.115% 20391		8,000			3,994
GE Commercial Mortgage Corp., Series 2004-C2, Class B, 4.983% 2040		19,193			9,690
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.338% 20441		33,700			25,166
Commercial Mortgage Trust, Series 2000-C1, Class A-2, 7.416% 2033		2,552			2,553
Commercial Mortgage Trust, Series 2004-LB3A, Class A-4, 5.234% 2037		10,956			9,617
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		20,000			17,248
Commercial Mortgage Trust, Series 2004-LNB2, Class A-3, 4.221% 2039		9,955			9,313
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1, Class F, 7.222% 2029		1,647			1,636
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034		29,031			28,005
GMAC Commercial Mortgage Securities, Inc., Series 2003-C1, Class F, 4.718% 20361,2		1,000			472
GMAC Commercial Mortgage Securities, Inc., Series 2003-C1, Class G, 4.817% 20361,2		1,000			460
GMAC Commercial Mortgage Securities, Inc., Series 2004-C3, Class A-3, 4.207% 2041		8,000			7,770
Tower Ventures, LLC, Series 2006-1, Class A-2, 5.45% 20362,3		22,500			19,290
Tower Ventures, LLC, Series 2006-1, Class C, 5.707% 20362		3,670			2,752
Tower Ventures, LLC, Series 2006-1, Class D, 6.052% 20362,3		10,000			7,000
Tower Ventures, LLC, Series 2006-1, Class E, 6.495% 20362,3		4,730			3,216
Tower Ventures, LLC, Series 2006-1, Class F, 7.036% 20362,3		8,730			5,762
Greenwich Capital Commercial Funding Corp., Series 2003-C1, Class A-2, 3.285% 2035		2,107			1,937
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-2, 5.117% 2037		13,045			11,664
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-5, 5.224% 20371		11,000			8,816
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 20371		15,000			13,592
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20262		40,324			35,402
Merrill Lynch Mortgage Trust, Series 2005-CKI1, Class AM, 5.242% 20371		4,620			2,769
Merrill Lynch Mortgage Trust, Series 2005-CIP1, Class A-3-A, 4.949% 20381		8,500			6,712
Merrill Lynch Mortgage Trust, Series 2006-C1, Class A-3, 5.657% 20391		3,050			2,336
Merrill Lynch Mortgage Trust, Series 2004-BPC1, Class A-5, 4.855% 20411		6,805			5,115
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class A-4, 4.747% 20431		5,065			3,996
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class AM, 4.805% 20431		6,300			3,725
Merrill Lynch Mortgage Trust, Series 2006-C2, Class A-4, 5.742% 20431		10,250			8,275
GS Mortgage Securities Corp. II, Series 1998-C1, Class E, 7.19% 20301		31,076			30,964
GS Mortgage Securities Corp. II, Series 1998-C1, Class D, 15.51% 20301		733			731
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% 20491		41,210			30,242
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class A-2, 6.592% 2033		19,248			18,912
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035		7,372			7,218
Salomon Brothers Commercial Mortgage Trust, Series 2001-C2, Class A-3, 6.499% 2036		2,335			2,211
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class A-2, 7.439% 2031		4,327			4,318
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class B, 7.619% 2031		17,125			17,108
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class C, 7.625% 2031		5,000			4,996
LB-UBS Commercial Mortgage Trust, Series 2000-C3, Class A-2, 7.95% 2025		13,978			14,046
LB-UBS Commercial Mortgage Trust, Series 2002-C1, Class A-3, 6.226% 2026		2,230			2,214
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-2, 5.103% 2030		3,468			3,088
LB-UBS Commercial Mortgage Trust, Series 2005-C5, Class A-M, 5.017% 20401		10,000			5,892
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-1, 6.079% 2033		73			72
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-2, 6.531% 2033		18,090			17,706
GE Capital Commercial Mortgage Corp., Series 2002-3, Class A-2, 4.996% 2037		2,500			2,176
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-1, 5.56% 2038		1,026			1,001
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-2, 6.07% 2038		2,500			2,341
Prudential Securities Secured Financing Corp., Series 1999-NRF1, Class C, 6.746% 2031		18,000			17,946
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A-3, 5.724% 20491		15,800			12,439
COBALT CMBS Commerical Mortgage Trust, Series 2006-C1, Class A-2, 5.174% 2048		14,000			11,292
Morgan Stanley Dean Witter Capital I Trust, Series 2000-LIFE2, Class A-2, 7.20% 2033		4,447			4,151
Morgan Stanley Dean Witter Capital I Trust, Series 2001-TOP5, Class A-3, 6.16% 2035		1,788			1,778
Morgan Stanley Dean Witter Capital I Trust, Series 2003-TOP9, Class A-1, 3.98% 2036		3,600			3,372
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048		10,000			7,617
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.208% 20421		7,875			6,461
Hilton Hotel Pool Trust, Series 2000-HLTA, Class F, 7.75% 20152		5,000			5,250
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032		4,872			4,773
Bank of America, NA and First Union National Bank Commercial Mortgage Trust, Series 2001-3, Class A-1, 4.89% 2037		2,761			2,721
First Union National Bank Commercial Mortgage Trust, Series 2001-C4, Class A-1, 5.673% 2033		665			657
Morgan Stanley Capital I, Inc., Series 1999-FNV1, Class A-2, 6.53% 2031		359			358
DLJ Commercial Mortgage Corp., Series 1999-CG1, Class A-1B, 6.46% 2032		51			51
					1,803,315
COLLATERALIZED MORTGAGE-BACKED OBLIGATIONS (PRIVATELY ORIGINATED)6 — 5.19%
Countrywide Alternative Loan Trust, Series 2004-5CB, Class 2-A-1, 5.00% 2019		6,724			5,701
Countrywide Alternative Loan Trust, Series 2006-J3, Class 2-A-1, 4.75% 2020		10,229			7,404
Countrywide Alternative Loan Trust, Series 2005-J8, Class 2-A-1, 5.00% 2020		13,092			10,184
Countrywide Alternative Loan Trust, Series 2004-14T2, Class A-2, 5.50% 2034		16,472			11,801
Countrywide Alternative Loan Trust, Series 2005-46CB, Class A-8, 5.50% 2035		41,327			30,872
Countrywide Alternative Loan Trust, Series 2005-54CB, Class 1-A-7, 5.50% 2035		31,331			27,644
Countrywide Alternative Loan Trust, Series 2005-49CB, Class A-1, 5.50% 2035		21,232			17,143
Countrywide Alternative Loan Trust, Series 2005-40CB, Class A-1, 5.50% 2035		16,716			12,347
Countrywide Alternative Loan Trust, Series 2005-21CB, Class A-9, 5.50% 2035		9,064			7,387
Countrywide Alternative Loan Trust, Series 2005-J13, Class 2-A-4, 5.50% 2035		8,060			3,944
Countrywide Alternative Loan Trust, Series 2005-J11, Class 1-A-12, 5.50% 2035		8,000			3,536
Countrywide Alternative Loan Trust, Series 2005-J11, Class 1-A-16, 5.50% 2035		4,618			1,816
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 5-A-1, 5.75% 2035		2,358			1,993
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035		11,454			8,945
Countrywide Alternative Loan Trust, Series 2005-9CB, Class 2-A-1, 6.00% 2035		5,877			4,004
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 6-A-1, 6.00% 2035		943			610
Countrywide Alternative Loan Trust, Series 2006-36T2, Class 1-A-10, 0.791% 20361		41,771			20,985
Countrywide Alternative Loan Trust, Series 2006-18CB, Class A-7, 0.821% 20361		88,592			49,408
Countrywide Alternative Loan Trust, Series 2006-24CB, Class A-1, 6.00% 2036		15,209			12,897
Countrywide Alternative Loan Trust, Series 2007-14T2, Class A-4, 0.821% 20371,3		23,741			9,971
Countrywide Alternative Loan Trust, Series 2007-5CB, Class 1-A-19, 0.921% 20371,3		81,198			36,539
Countrywide Alternative Loan Trust, Series 2007-21CB, Class 2-A-3, 0.971% 20371		31,879			13,565
Countrywide Alternative Loan Trust, Series 2007-24, Class A-10, 7.00% 2037		12,785			6,727
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 4-A-1, 5.93% 20471		41,948			19,996
CS First Boston Mortgage Securities Corp., Series 2003-23, Class II-A-8, 4.50% 2018		10,880			9,866
CS First Boston Mortgage Securities Corp., Series 2003-27, Class VI-A-1, 5.00% 2018		7,759			6,984
CS First Boston Mortgage Securities Corp., Series 2003-23, Class VII-A-1, 5.00% 2018		3,786			3,324
CS First Boston Mortgage Securities Corp., Series 2004-6, Class II-A-1, 4.75% 2019		16,548			15,199
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032		423			322
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032		50			30
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033		3,234			2,116
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033		1,011			906
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034		7,286			5,074
CS First Boston Mortgage Securities Corp., Series 2005-10, Class III-A-3, 5.50% 2035		11,000			3,848
CS First Boston Mortgage Securities Corp., Series 2005-5, Class IV-A-1, 6.25% 2035		5,219			3,369
CS First Boston Mortgage Securities Corp., Series 2006-2R, Class A-PO, principal only, 0% 20362		27,785			21,184
CS First Boston Mortgage Securities Corp., Series 2006-7, Class 8-A-6, 1.101% 20361		13,377			3,499
CS First Boston Mortgage Securities Corp., Series 2006-7, Class 6-A-3, 5.50% 2036		27,123			16,090
CS First Boston Mortgage Securities Corp., Series 2006-2, Class 5-A-6, 6.00% 2036		23,412			18,285
CS First Boston Mortgage Securities Corp., Series 2006-4, Class 2-A-1, 6.50% 2036		19,612			8,518
Residential Accredit Loans, Inc., Series 2003-QS16, Class A-1, 5.00% 2018		12,673			12,642
Residential Accredit Loans, Inc., Series 2004-QS16, Class 1-A-1, 5.50% 2034		7,885			5,595
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034		30,340			17,490
Residential Accredit Loans, Inc., Series 2004-QS12, Class M-1, 6.00% 2034		2,344			1,402
Residential Accredit Loans, Inc., Series 2005-QS4, Class A-3, 5.50% 2035		25,500			19,112
Residential Accredit Loans, Inc., Series 2005-QS9, Class A-6, 5.50% 2035		1,000			464
Residential Accredit Loans, Inc., Series 2005-QS5, Class A-5, 5.75% 2035		3,000			2,127
Residential Accredit Loans, Inc., Series 2005-QA12, Class CB-I, 5.868% 20351		4,592			2,124
Residential Accredit Loans, Inc., Series 2005-QS15, Class II-A, 6.00% 2035		14,920			8,600
Residential Accredit Loans, Inc., Series 2006-QA1, Class A-II-1, 5.95% 20361		14,452			6,819
Residential Accredit Loans, Inc., Series 2007-QS9, Class A-33, 6.50% 2037		48,855			25,419
Residential Accredit Loans, Inc., Series 2007-QS7, Class II-A-1, 6.75% 2037		11,367			7,121
Residential Accredit Loans, Inc., Series 2007-QS11, Class A-1, 7.00% 20373		7,196			3,886
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR7, Class A-7, 3.848% 20331		11,838			9,553
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR6, Class A-1, 3.955% 20331		5,471			4,456
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR8, Class A, 4.281% 20331		3,409			2,547
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-AR11, Class A, 4.536% 20341		23,591			15,920
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR12, Class 1-A4, 6.062% 20361		2,457			1,595
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY3, Class 4-A1, 5.347% 20371		7,420			4,302
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY5, Class 3-A1, 5.826% 20371,3		47,879			29,206
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 2-A1, 5.859% 20371		33,659			17,032
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 4-A2, 5.869% 20371		42,008			21,759
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-22, Class 5-A-1, 6.001% 20351		3,371			1,935
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-8, Class 3-AF, 0.851% 20361		15,060			7,557
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 6-A, 5.923% 20361		66,586			33,531
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-2, Class 5-A-1, 6.00% 20361		6,543			3,054
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-7, Class 1-A1, 0.771% 20371		8,860			4,086
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-6, Class 3-A-1, 5.884% 20371		36,918			18,983
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-12, Class 2-A1, 5.929% 20371		21,242			10,154
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-8, Class 2-A3, 5.979% 20371		42,809			21,427
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-9, Class 2-A1, 5.981% 20471		11,020			5,614
Wells Fargo Alternative Loan Trust, Series 2007-PA1, Class A-1, 0.791% 20371,3		57,064			25,679
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class II-A-4, 6.00% 20373		2,500			1,200
Wells Fargo Alternative Loan Trust, Series 2007-PA4, Class III-A-1, 6.077% 20371		26,435			11,493
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class III-A-1, 6.25% 2037		75,649			40,893
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class IV-A-1, 6.50% 2037		25,503			11,214
IndyMac IMSC Mortgage Loan Trust, Series 2007-F2, Class 1-A-2, 6.00% 2037		10,069			5,007
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 2-A-1, 6.50% 2037		48,387			26,127
IndyMac IMSC Mortgage Loan Trust, Series 2007-F2, Class 2-A-1, 6.50% 20373		42,041			21,021
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 3-A-1, 7.00% 2037		63,907			34,914
Bear Stearns ARM Trust, Series 2003-6, Class I-A-2, 4.981% 20331		9,457			6,271
Bear Stearns ARM Trust, Series 2003-3, Class III-A-1, 5.131% 20331		3,641			2,685
Bear Stearns ARM Trust, Series 2003-3, Class II-A-2, 6.011% 20331		1,747			1,306
Bear Stearns ARM Trust, Series 2004-3, Class II-A, 4.221% 20341		9,687			6,086
Bear Stearns ARM Trust, Series 2003-9, Class III-A-2, 4.955% 20341		1,796			1,192
Bear Stearns ARM Trust, Series 2005-10, Class A-3, 4.65% 20351		51,800			30,047
Bear Stearns ARM Trust, Series 2005-6, Class I-A-1, 4.87% 20351		31,946			16,993
Bear Stearns ARM Trust, Series 2007-2, Class I-A-1, 5.00% 20461		866			446
Lehman Mortgage Trust, Series 2005-1, Class 6-A1, 5.00% 2020		29,092			25,024
Lehman Mortgage Trust, Series 2005-2, Class 5-A1, 1.371% 20351		31,870			12,931
Lehman Mortgage Trust, Series 2006-7, Class 2-A1, 0.921% 20361,3		12,359			5,314
Lehman Mortgage Trust, Series 2007-8, Class 3-A1, 7.25% 2037		29,015			19,516
GSR Mortgage Loan Trust, Series 2004-2F, Class XIIIA-1, 5.00% 2019		4,598			4,185
GSR Mortgage Loan Trust, Series 2004-15F, Class 5A-1, 5.50% 2020		30,860			28,151
GSR Mortgage Loan Trust, Series 2005-AR1, Class 2-A-1, 4.911% 20351		9,840			5,783
GSR Mortgage Loan Trust, Series 2006-2F, Class 3A-4, 6.00% 2036		11,543			9,076
CHL Mortgage Pass-Through Trust, Series 2003-27, Class A-1, 4.672% 20331		2,664			2,047
CHL Mortgage Pass-Through Trust, Series 2003-HYB3, Class 4-A-1, 4.91% 20331		1,355			916
CHL Mortgage Pass-Through Trust, Series 2004-22, Class A-2, 4.622% 20341		6,797			4,269
CHL Mortgage Pass-Through Trust, Series 2004-HYB6, Class A-3, 5.08% 20341		2,962			1,570
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.563% 20351		24,302			13,689
CHL Mortgage Pass-Through Trust, Series 2007-2, Class A-16, 6.00% 2037		20,000			10,648
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 1-A-1, 5.93% 20471		8,727			4,579
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 6.086% 20471		17,595			9,360
ChaseFlex Trust, Series 2007-M1, Class 2-AV2, 0.701% 20371		71,622			44,598
Wells Fargo Mortgage-backed Securities Trust, Series 2003-11, Class II-A-1, 4.75% 2018		9,415			8,554
Wells Fargo Mortgage-backed Securities Trust, Series 2004-2, Class A-1, 5.00% 2019		5,044			4,591
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR19, Class A-6, 5.629% 20361		10,000			5,565
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR15, Class A-1, 5.665% 20361		26,187			18,397
Wells Fargo Mortgage-backed Securities Trust, Series 2007-10, Class I-A-1, 6.00% 2037		5,728			3,795
Citigroup Mortgage Loan Trust, Inc., Series 2003-UST1, Class A-3, 5.00% 2018		11,799			10,739
Citigroup Mortgage Loan Trust, Inc., Series 2005-8, Class I-A4A, 5.572% 20351,3		29,791			16,197
Citigroup Mortgage Loan Trust, Inc., Series 2007-AR5, Class 1-A2A, 5.607% 20371		7,036			3,916
Residential Asset Securitization Trust, Series 2004-A6, Class A-1, 5.00% 2019		9,015			7,014
Residential Asset Securitization Trust, Series 2005-A7, Class A-5, 5.50% 2035		5,338			2,074
Residential Asset Securitization Trust, Series 2005-A8CB, Class A-11, 6.00% 2035		14,669			9,409
Residential Asset Securitization Trust, Series 2006-A8, Class 1-A-2, 0.771% 20361		10,696			5,732
Residential Asset Securitization Trust, Series 2006-A8, Class 3-A-11, 6.00% 2036		3,853			1,580
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 4-A, 5.68% 20341		5,407			5,012
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 3-A, 6.00% 2034		2,319			1,858
Morgan Stanley Mortgage Loan Trust, Series 2005-6AR, Class 3-A-1, 5.562% 20351		20,515			9,479
Morgan Stanley Mortgage Loan Trust, Series 2006-2, Class 5-A-3, 5.50% 2036		19,140			7,771
CitiMortgage Alternative Loan Trust, Series 2006-A1, Class IA-3, 5.75% 2036		10,000			5,342
CitiMortgage Alternative Loan Trust, Series 2006-A7, Class IA-1, 6.00% 2036		15,000			9,317
CitiMortgage Alternative Loan Trust, Series 2007-A3, Class IA-1, 6.00% 2037		15,000			8,153
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 5.762% 20361		25,227			12,400
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class 3-A-1, 6.253% 20361		20,459			9,632
Banc of America Funding Trust, Series 2005-H, Class 9-A-1, 5.938% 20351		23,457			11,401
Banc of America Funding Trust, Series 2007-1, Class T-A-5, 6.09% 20371		13,249			9,380
TBW Mortgage-Backed Trust, Series 2006-1, Class 6-A-1, 6.50% 2036		16,530			7,519
TBW Mortgage-backed Trust, Series 2007-2, Class A-4-B, 0.891% 20371		22,000			12,651
MASTR Alternative Loan Trust, Series 2004-10, Class 2-A-1, 5.50% 2019		4,193			3,569
MASTR Alternative Loan Trust, Series 2003-2, Class 6-A-1, 6.00% 2033		551			441
MASTR Alternative Loan Trust, Series 2004-2, Class 2-A-1, 6.00% 2034		1,065			800
MASTR Alternative Loan Trust, Series 2005-1, Class 1-A-1, 5.50% 2035		13,433			9,569
MASTR Alternative Loan Trust, Series 2005-3, Class 1-A-1, 5.50% 2035		3,379			2,368
MASTR Alternative Loan Trust, Series 2005-3, Class 2-A-1, 6.00% 2035		4,231			2,882
MASTR Alternative Loan Trust, Series 2005-3, Class 3-A-1, 6.50% 2035		414			286
SunTrust Alternative Loan Trust, Series 2005-1F, Class 3-A-1, 6.50% 2035		24,349			12,524
SunTrust Alternative Loan Trust, Series 2005-1F, Class 4-A-1, 6.50% 2035		15,556			6,368
Thornburg Mortgage Securities Trust, Series 2006-5, Class A-1, 0.591% 20461		23,548			18,730
Bear Stearns Asset-backed Securities I Trust, Series 2005-AC8, Class A-4, 5.50% 2035		10,212			8,313
Bear Stearns Asset-backed Securities I Trust, Series 2006-AC2, Class II-1A-1, 6.00% 2036		13,433			8,291
American Home Mortgage Assets Trust, Series 2007-3, Class II-2A-1, 6.25% 20371		32,622			14,741
J.P. Morgan Alternative Loan Trust, Series 2006-A1, Class 2-A-1, 5.802% 20361		17,602			8,396
J.P. Morgan Alternative Loan Trust, Series 2006-A2, Class 5-A-1, 6.296% 20361		12,799			6,095
Structured Asset Securities Corp., Series 2003-20, Class 2-A-4, 4.50% 2018		4,317			3,929
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.461% 20271,2		4,544			4,538
Structured Asset Securities Corp., Series 1998-RF1, Class A, 8.641% 20271,2		1,681			1,680
Structured Asset Securities Corp., Series 1999-RF1, Class A, 7.805% 20281,2		1,085			1,148
Structured Asset Securities Corp., Series 2003-17A, Class 3-A-1, 6.629% 20331		457			368
Structured Asset Securities Corp., Series 2005-6, Class 5-A-9, 5.00% 2035		2,180			1,720
Adjustable Rate Mortgage Trust, Series 2006-1, Class 3-A-3, 5.882% 20361		18,562			12,676
J.P. Morgan Mortgage Trust, Series 2006-A3, Class 3-A-3, 5.734% 20361		4,000			2,004
J.P. Morgan Mortgage Trust, Series 2006-A7, Class 2-A-4, 5.793% 20371		21,750			9,976
Banc of America Mortgage Securities Trust, Series 2003-I, Class 3-A-1, 4.528% 20331		6,605			4,736
Banc of America Mortgage Securities Trust, Series 2003-F, Class 2-A-1, 4.67% 20331		8,749			6,363
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.903% 20361		24,421			10,917
CSAB Mortgage-backed Trust, Series 2007-1, Class 4-A-8, 7.00% 2037		21,115			9,957
BCAP LLC Trust, Series 2006-AA2, Class A-1, 0.641% 20371		21,756			8,929
First Horizon Alternative Mortgage Securities Trust, Series 2005-FA8, Class I-A-14, 5.50% 2035		9,249			7,585
Banc of America Alternative Loan Trust, Series 2005-6, Class 2-CB-2, 6.00% 2035		12,779			7,367
GSAA Home Equity Trust, Series 2007-10, Class A-1A, 6.00% 2037		13,700			7,144
First Horizon Mortgage Pass-Through Trust, Series 2003-5, Class II-A-2, 5.00% 2018		8,117			6,961
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.75% 20351,2		8,500			6,779
GMAC Mortgage Loan Trust, Series 2006-AR1, Class 2-A-1, 5.63% 20361		10,142			6,354
Residential Funding Mortgage Securities I, Inc., Series 2006-S11, Class A-4, 6.00% 2036		7,393			5,539
Washington Mutual Mortgage, WMALT Series 2005-1, Class 6-A-1, 6.50% 2035		1,148			793
Washington Mutual Mortgage, WMALT Series 2006-2, Class 1-A-3, 6.00% 2036		12,000			3,994
Sequoia Mortgage Trust, Series 2007-1, Class 4-A1, 5.782% 20461		5,807			3,795
Banc of America Mortgage Securities, Inc., Series 2003-G, Class 2-A-1, 4.842% 20331		3,408			2,891
Merrill Lynch Mortgage Investors, Inc., Series 2003-A4, Class II-A, 4.694% 20331		3,705			2,580
Harborview Mortgage Loan Trust, Series 2006-6, Class 1A, 5.447% 20361		3,469			1,648
Ocwen Residential MBS Corp., Series 1998-R1, Class AWAC, 1.329% 20401,2		1,542			1,150
American Home Mortgage Investment Trust, Series 2004-1, Class III-A, 3.28% 2044		903			688
GS Mortgage Securities Corp., Series 1998-2, Class M, 7.75% 20272		407			289
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 2027		269			268
					1,669,392
OTHER MORTGAGE-BACKED SECURITIES6 — 0.65%
Nykredit 4.00% 2035	Dkr293,352				50,613
Nykredit 5.00% 2038		171,033			30,982
Bank of America 5.50% 20122	$	34,750			35,817
Nationwide Building Society, Series 2007-2, 5.50% 20122		34,750			32,198
Deutsche Genossenschaftsbank-Hypothekenbank AG 5.25% 2009	€	19,447			27,509
Northern Rock PLC 5.625% 20172	$	20,000			20,037
Dexia Municipal Agency 3.50% 2009	€	10,076			14,094
					211,250
Total mortgage-backed obligations					8,454,738
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 14.05%
U.S. Treasury 3.875% 2009		55,925			56,688
U.S. Treasury 3.875% 20093,10		4,062			4,032
U.S. Treasury 6.00% 2009		74,600			77,195
U.S. Treasury 2.00% 2010		118,250			120,400
U.S. Treasury 2.00% 2010		10,000			10,253
U.S. Treasury 5.75% 2010		13,015			14,136
U.S. Treasury 1.75% 2011		50,240			51,384
U.S. Treasury 2.375% 20113,10		6,249			6,099
U.S. Treasury 4.50% 2011		53,740			58,121
U.S. Treasury 4.625% 2011		413,000			457,397
U.S. Treasury 4.25% 2012		50,050			55,909
U.S. Treasury 4.875% 2012		180,225			201,760
U.S. Treasury 0.625% 20133,10		3,946			3,792
U.S. Treasury 2.00% 2013		93,880			96,326
U.S. Treasury 1.875% 20133,10		11,796			11,110
U.S. Treasury 2.75% 2013		132,160			140,539
U.S. Treasury 3.50% 2013		102,410			112,195
U.S. Treasury 3.625% 2013		20,000			21,986
U.S. Treasury 4.25% 2013		655,786			745,983
U.S. Treasury 2.00% 20143,10		11,493			10,850
U.S. Treasury 2.00% 20143,10		13,601			12,855
U.S. Treasury 4.00% 2014		48,975			55,533
U.S. Treasury 4.25% 2014		33,550			38,831
U.S. Treasury Principal Strip 0% 2014		29,255			26,185
U.S. Treasury Principal Strip 0% 2014		500			461
U.S. Treasury 1.875% 20153,10		4,984			4,689
U.S. Treasury 4.25% 2015		5,000			5,809
U.S. Treasury 11.25% 2015		133,500			202,827
U.S. Treasury 2.375% 20173,10		5,586			5,522
U.S. Treasury 4.50% 2017		113,250			132,923
U.S. Treasury 4.625% 2017		5,000			5,915
U.S. Treasury 8.875% 2017		49,250			73,334
U.S. Treasury 1.375% 20183,10		14,693			13,715
U.S. Treasury 3.50% 2018		176,245			195,156
U.S. Treasury 3.75% 2018		143,745			162,735
U.S. Treasury 3.875% 2018		79,225			90,363
U.S. Treasury 4.00% 2018		8,000			9,240
U.S. Treasury 8.125% 2019		10,000			14,784
U.S. Treasury 8.00% 2021		25,525			38,734
U.S. Treasury 7.125% 2023		25,000			36,297
U.S. Treasury 7.50% 2024		13,575			21,790
U.S. Treasury 6.875% 2025		93,610			142,404
U.S. Treasury 6.00% 2026		78,000			108,932
U.S. Treasury 6.125% 2027		26,175			37,557
U.S. Treasury 4.50% 2036		150,210			199,709
U.S. Treasury Principal Strip 0% 2036		26,430			12,974
U.S. Treasury Principal Strip 0% 2037		81,778			39,760
U.S. Treasury 4.375% 20383		66,290			90,641
U.S. Treasury Principal Strip 0% 2038		95,530			46,127
Fannie Mae 6.077% 20091		575			575
Fannie Mae 2.875% 2010		134,695			138,520
Fannie Mae 5.25% 2012		15,000			15,418
Fannie Mae 6.125% 2012		10,000			11,329
Freddie Mac 3.125% 2010		73,990			75,798
Freddie Mac 5.25% 2011		20,000			21,785
Freddie Mac 5.50% 2016		20,000			23,286
CoBank ACB 7.875% 20182		22,115			22,377
CoBank ACB 2.596% 20221,2		46,470			32,765
Federal Home Loan Bank 2.25% 2009		43,515			43,911
Federal Home Loan Bank 3.625% 2013		10,000			10,500
Federal Agricultural Mortgage Corp. 4.875% 20112		10,000			10,658
United States Government Agency-Guaranteed (FDIC insured), John Deere Capital Corp. 2.875% 2012		10,000			10,294
United States Government Agency-Guaranteed (FDIC insured), Sovereign Bancorp, Inc. 2.75% 2012		7,500			7,704
United States Government-Guaranteed Certificates of Participation, Overseas Private Investment Corp.,
Series 2000-044-A, 3.74% 20156	7,150				7,591
United States Agency for International Development, Republic of Egypt 4.45% 2015		5,000			5,533
Private Export Funding Corp., Series W, 5.00% 2016		3,400			3,763
					4,523,764
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S.— 7.33%
German Government 3.75% 2013	€	79,815			117,884
German Government 4.25% 2014		121,020			184,052
German Government, Series 6, 4.00% 2016		72,120			108,331
German Government, Series 8, 4.25% 2018		168,686			259,926
German Government 6.25% 2030		11,120			20,750
Japanese Government 1.80% 2010	¥	487,350			5,453
Japanese Government 1.30% 2011		7,643,050			85,948
Japanese Government 1.50% 2014		3,150,950			36,166
Japanese Government 1.70% 2016		3,754,600			44,046
Japanese Government 1.70% 2017		10,704,850			125,106
Japanese Government 2.30% 2035		3,629,700			44,059
Japanese Government 2.40% 2038		5,383,900			67,230
Israeli Government 6.00% 20103	ILS405,580				112,275
Israeli Government 7.50% 20143		132,880			41,383
Israeli Government 6.50% 20163		27,375			8,191
Israeli Government 5.50% 20173		318,800			88,992
United Kingdom 4.75% 2015	£	21,408			34,502
United Kingdom 5.00% 2018		55,620			93,660
United Kingdom 4.75% 2038		25,205			43,555
Swedish Government 5.00% 2009	SKr422,380				53,943
Swedish Government 5.25% 2011		311,885			42,966
Belgium (Kingdom of), Series 49, 4.00% 2017	€	42,000			59,704
Belgium (Kingdom of), Series 52, 4.00% 2018		15,150			21,457
United Mexican States Government Global 10.375% 2009	$	9,700			9,773
United Mexican States Government Global 6.375% 2013		5,150			5,433
United Mexican States Government, Series MI10, 9.50% 2014	MXN162,500				12,693
United Mexican States Government, Series M10, 7.75% 2017		180,000			12,887
United Mexican States Government, Series M20, 10.00% 2024		334,800			27,919
United Mexican States Government Global 6.75% 2034	$	8,570			9,084
French Government O.A.T. Eurobond 4.00% 2018	€	37,745			55,255
French Government O.A.T. Eurobond Strip Principal 0% 2019		14,000			13,309
French Government O.A.T. Eurobond 4.75% 2035		2,890			4,645
Canadian Government 4.25% 20263,10	$	C68,193			72,021
Singapore (Republic of) 3.125% 2011	$	S46,070			33,529
Singapore (Republic of) 3.75% 2016		43,800			34,616
Netherlands Government Eurobond 4.00% 2018	€	41,200			59,483
New South Wales Treasury Corp., Series 14, 5.50% 2014	$	A35,400			25,990
New South Wales Treasury Corp., Series 19, 6.00% 2019		33,350			25,922
Kingdom of Denmark 5.00% 2013	DKr233,215				47,419
Polish Government 5.25% 2017	PLN110,040				36,861
Spanish Government 3.80% 2017	€	23,833			33,404
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014	$	24,750			30,994
Italian Government 4.25% 2013	€	14,100			20,059
Queensland Treasury Corp., Series 15, 6.00% 2015	$	A18,380			13,931
Russian Federation 7.50% 20306	$	13,122			11,515
Russian Federation 7.50% 20302,6		142			125
Brazilian Treasury Bill 6.00% 20103,10	BRL9,465				4,041
Brazil (Federal Republic of) Global 8.00% 20186	$	644			724
Brazil (Federal Republic of) Global 8.875% 2024		1,375			1,712
Brazil (Federal Republic of) Global 12.25% 2030		425			678
Brazil (Federal Republic of) Global 7.125% 2037	��	750			855
Brazil (Federal Republic of) Global 11.00% 2040		2,110			2,764
Banque Centrale de Tunisie 4.75% 2011	€	3,000			3,888
Banque Centrale de Tunisie 7.375% 2012	$	4,500			4,432
Corporación Andina de Fomento 6.875% 2012		5,895			5,711
Corporación Andina de Fomento 5.125% 2015		2,000			1,690
Panama (Republic of) Global 7.125% 2026		690			654
Panama (Republic of) Global 8.875% 2027		250			274
Panama (Republic of) Global 9.375% 2029		340			376
Panama (Republic of) Global 6.70% 20366		5,748			5,202
Colombia (Republic of) Global 8.25% 2014		3,250			3,518
Colombia (Republic of) Global 12.00% 2015	COP2,765,000				1,360
Colombia (Republic of) Global 9.85% 2027		840,000			374
Colombia (Republic of) Global 7.375% 2037	$	1,000			985
State of Qatar 9.75% 2030		4,220			5,212
Turkey (Republic of) 12.375% 2009		500			514
Turkey (Republic of) 15.00% 2010	TRY5,250				3,421
Turkey (Republic of) 8.00% 2034	$	1,250			1,169
Peru (Republic of) 8.375% 2016		2,920			3,161
El Salvador (Republic of) 7.65% 20352		4,450			2,848
European Investment Bank 4.75% 2012	£	790			1,210
European Investment Bank 5.00% 2039		395			676
Argentina (Republic of) 5.83% 20333,6,8,10	ARS 8,834				804
Argentina (Republic of) GDP-Linked 2035		18,225			219
Argentina (Republic of) 0.63% 20383,6,10		9,052			237
Dominican Republic 9.50% 20112,6	$	1,406			1,188
Egypt (Arab Republic of) Treasury Bill 0% 2009	EGP6,125				1,080
Uruguay (Republic of) 7.625% 20366	$	1,250			1,056
Guatemala (Republic of) 10.25% 20112		1,000			1,025
Venezuela (Republic of) Global 8.50% 2014		245			129
Venezuela (Republic of) 7.65% 2025		985			389
KfW International Finance Inc. 5.50% 2015	£	275			446
LCR Finance PLC 5.10% 2051		165			303
					2,360,771
ASSET-BACKED OBLIGATIONS6 — 6.62%
AmeriCredit Automobile Receivables Trust, Series 2005-C-F, Class A-4, FSA insured, 4.63% 2012	$	12,662			11,755
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-3-A, FSA insured, 5.49% 2012		12,000			11,158
AmeriCredit Automobile Receivables Trust, Series 2007-A-X, Class A-4, XLCA insured, 1.916% 20131		125,000			93,113
AmeriCredit Automobile Receivables Trust, Series 2006-B-G, Class A-4, FGIC insured, 5.21% 2013		28,269			21,882
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-B, MBIA insured, 1.956% 20141		10,000			5,884
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014		4,572			3,145
CSAB Mortgage-backed Trust, Series 2006-3, Class A-2, 0.631% 20361		36,600			31,688
CSAB Mortgage-backed Trust, Series 2006-4, Class A-2-B, 0.631% 20361		15,500			11,284
CSAB Mortgage-backed Trust, Series 2006-2, Class A-2, 0.641% 20361		40,500			35,514
CSAB Mortgage-backed Trust, Series 2006-4, Class A-3, 0.691% 20361		26,000			9,417
CSAB Mortgage-backed Trust, Series 2006-3, Class A-3-B, 0.701% 20361		27,626			10,225
CSAB Mortgage-backed Trust, Series 2006-1, Class A-3, 0.711% 20361		11,589			6,973
CSAB Mortgage-backed Trust, Series 2006-2, Class A-6-A, 5.72% 20361		25,000			13,518
CSAB Mortgage-backed Trust, Series 2006-4, Class A-4, FSA insured, 5.873% 20361		18,000			7,883
CSAB Mortgage-backed Trust, Series 2007-1, Class 1-A-3B, 5.908% 20371		5,757			1,488
CSAB Mortgage-backed Trust, Series 2007-1, Class 1-A-4, 5.95% 20371,3		13,334			5,334
Drive Auto Receivables Trust, Series 2006-2, Class A-2, MBIA insured, 5.30% 20112		280			277
Drive Auto Receivables Trust, Series 2005-2, Class A-3, MBIA insured, 4.26% 20122,3		36,077			33,902
Drive Auto Receivables Trust, Series 2005-3, Class A-4, FSA insured, 5.09% 20132,3		16,011			14,610
Drive Auto Receivables Trust, Series 2006-1, Class A-4, FSA insured, 5.54% 20132		67,000			59,735
Drive Auto Receivables Trust, Series 2006-2, Class A-3, MBIA insured, 5.33% 20142		20,000			17,191
CPS Auto Receivables Trust, Series 2004-A, Class A-2, FSA insured, 3.87% 20102		981			925
CPS Auto Receivables Trust, Series 2004-D, Class A-2, XLCA insured, 3.86% 20112		3,404			3,043
CPS Auto Receivables Trust, Series 2006-C, Class A-3, XLCA insured, 5.14% 20112		7,569			7,432
CPS Auto Receivables Trust, Series 2005-B, Class A-2, FSA insured, 4.36% 20122		9,259			8,878
CPS Auto Receivables Trust, Series 2005-D, Class A-2, FSA insured, 5.06% 20122,3		5,015			4,358
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20122		8,944			8,181
CPS Auto Receivables Trust, Series 2006-B, Class A-4, MBIA insured, 5.81% 20122		31,000			25,841
CPS Auto Receivables Trust, Series 2007-A, Class A-4, MBIA insured, 5.05% 20132		15,100			11,140
CPS Auto Receivables Trust, Series 2006-C, Class A-4, XLCA insured, 5.14% 20132		26,200			21,585
CPS Auto Receivables Trust, Series 2007-TFC, Class A-2, XLCA insured, 5.25% 20132,3		252			202
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 20142		20,000			16,041
CPS Auto Receivables Trust, Series 2007-C, Class A-4, FSA insured, 5.92% 20142		18,950			12,643
Capital One Auto Finance Trust, Series 2006-A, Class A-4, AMBAC insured, 1.205% 20121		4,000			3,361
Capital One Auto Finance Trust, Series 2005-C, Class A-4-B, FGIC insured, 1.235% 20121		87,981			81,368
Capital One Auto Finance Trust, Series 2006-C, Class A-4, FGIC insured, 1.225% 20131		25,000			17,504
Capital One Auto Finance Trust, Series 2007-B, Class A-4, MBIA insured, 1.225% 20141		12,425			8,514
Chase Issuance Trust, Series 2007-A9, Class A, 1.225% 20141		77,310			63,319
Chase Issuance Trust, Series 2006-4, Class C, 1.485% 20141		8,000			3,671
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015		18,000			15,955
Washington Mutual Master Note Trust, Series 2006-A3A, Class A-3, 1.225% 20131,2		12,890			11,297
Washington Mutual Master Note Trust, Series 2007-B1, Class B-1, 4.95% 20142		4,000			2,376
Washington Mutual Master Note Trust, Series 2007-A4A, Class A-4, 5.20% 20142		35,055			25,667
Washington Mutual Master Note Trust, Series 2006-A2A, Class A, 1.245% 20151,2		42,000			29,206
GS Auto Loan Trust, Series 2006-1, Class A-4, 5.38% 2014		57,000			53,907
GS Auto Loan Trust, Series 2006-1, Class A-4, 5.60% 2014		9,953			9,090
ARG Funding Corp., Series 2005-1, Class A-3, MBIA insured, 4.29% 20112		55,200			40,762
ARG Funding Corp., Series 2005-2, Class A-4, AMBAC insured, 4.84% 20112		30,000			21,900
Honda Auto Receivables Owner Trust, Series 2006-3, Class A-4, 5.11% 2012		35,160			32,605
Honda Auto Receivables Owner Trust, Series 2006-2, Class A-4, 5.28% 2012		24,250			23,797
Santander Drive Auto Receivables Trust, Series 2007-1, Class A-4, FGIC insured, 1.245% 20141		71,000			52,219
Green Tree Financial Corp., Series 1996-10, Class A-6, 7.30% 2028		1,866			1,666
Green Tree Financial Corp., Series 1997-6, Class A-7, 7.14% 2029		5,169			4,188
Green Tree Recreational, Equipment & Consumer Trust, Series 1997-D, 7.25% 2029		1,916			781
Conseco Finance Home Equity Loan Trust, Series 2002-B, Class M-1, 3.173% 20331		901			736
Green Tree Financial Corp., Series 2008-MH1, Class A-3, 8.97% 20382,3		46,575			36,329
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-3, FSA insured, 5.17% 2011		5,104			5,094
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-4, FSA insured, 5.18% 2013		27,800			23,903
Long Beach Acceptance Auto Receivables Trust, Series 2007-A, Class A-4, FSA insured, 5.025% 2014		15,500			11,928
Triad Automobile Receivables Trust, Series 2006-C, Class A-3, AMBAC insured, 5.26% 2011		11,928			11,805
Triad Automobile Receivables Trust, Series 2005-A, Class A-4, AMBAC insured, 4.22% 2012		13,573			13,169
Triad Automobile Receivables Trust, Series 2007-A, Class A-3, FSA insured, 5.28% 2012		7,630			7,153
Triad Automobile Receivables Trust, Series 2006-C, Class A-4, AMBAC insured, 5.31% 2013		10,000			7,736
Vega ContainerVessel PLC, Series 2006-1, Class A, XLCA insured, 5.562% 20212		41,748			37,916
Nissan Auto Lease Trust, Series 2008-A, Class A-3a, 5.14% 2011		40,250			36,049
Prestige Auto Receivables Trust, Series 2005-1A, Class A-2, FSA insured, 4.37% 20122		3,372			3,123
Prestige Auto Receivables Trust, Series 2006-1A, Class A-2, FSA insured, 5.25% 20132		8,740			7,960
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 20142		30,000			23,977
Residential Funding Mortgage Securities II, Inc., Series 2005-HI1, Class A-4, FGIC insured, 4.70% 2034		6,671			3,231
Residential Funding Mortgage Securities II, Inc., Series 2005-HS1, Class A-1-2, FGIC insured, 4.66% 20351		12,500			11,299
Residential Funding Mortgage Securities II, Inc., Series 2006-HSA3, Class A, FSA insured, 0.601% 20361		3,092			2,066
Residential Funding Mortgage Securities II, Inc., Series 2007-HSA2, Class A-1F, MBIA insured, 8.47% 20371		17,722			17,029
Drivetime Auto Owner Trust, Series 2006-A, Class A-3, XLCA insured, 5.501% 20111,2		13,286			12,605
Drivetime Auto Owner Trust, Series 2007-A, XLCA insured, 5.603% 20131,2		20,000			18,662
Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB4, Class AF-4, 5.028% 20351		3,388			3,002
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class A-3, 5.825% 20361,2,3		8,387			3,187
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-3, 6.282% 20361,2		3,935			1,414
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-5, 6.831% 20361,2		4,725			1,219
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-6, 7.00% 20361,2		1,816			373
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB3, Class A-2, 5.588% 20371		8,000			3,366
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB1, Class AF-2, 5.721% 20371		11,305			3,957
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB4, Class A-2B, 5.723% 20371		3,061			1,916
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB2, Class A-2A, 5.891% 20371		12,719			11,821
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A-5, FGIC insured, 5.753% 2027		15,750			5,430
CWHEQ Home Equity Loan Trust, Series 2006-S6, Class A-6, AMBAC insured, 5.657% 2034		15,050			4,155
CWHEQ Home Equity Loan Trust, Series 2006-S4, Class A-6, AMBAC insured, 5.834% 20341		9,548			5,124
CWHEQ Home Equity Loan Trust, Series 2007-S1, Class A-6, MBIA insured, 5.693% 20361		33,951			14,646
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class A-4, 6.57% 2024		7,660			7,359
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024		7,901			7,711
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-4, 7.905% 2026		1,812			1,826
Vanderbilt Mortgage and Finance, Inc., Series 1997-C, Class II-A-1, 2.086% 20271		616			532
Vanderbilt Mortgage and Finance, Inc., Series 2000-D, Class A-4, 7.715% 2027		2,024			1,945
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-5, 8.195% 2030		6,889			6,980
Vanderbilt Mortgage and Finance, Inc., Series 2001-C, Class M-1, 6.76% 2032		982			732
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class M-1, 7.82% 2032		2,436			1,999
J.P. Morgan Alternative Loan Trust, Series 2006-S3, Class A-6, 6.12% 20361		44,663			27,956
Susquehanna Auto Lease Trust, Series 2007-1, Class A-3, 5.25% 20102		27,179			27,022
CWHEQ Revolving Home Equity Loan Trust, Series 2006-I, Class 2-A, FSA insured, 1.335% 20371		27,327			18,209
CWHEQ Revolving Home Equity Loan Trust, Series 2007-C, Class A, FGIC insured, 1.345% 20371		17,429			5,566
CWHEQ Revolving Home Equity Loan Trust, Series 2007-B, Class A, FSA insured, 1.345% 20371		5,753			2,760
Morgan Stanley Structured Trust I, Series 2007-1, Class A-3, 0.701% 20371		47,595			26,090
Capital One Master Trust, Series 2002-1A, Class B, 1.795% 20111		1,000			995
Capital One Multi-asset Execution Trust, Series 2005-1, Class C, 1.595% 20131		9,000			6,237
Capital One Multi-asset Execution Trust, Series 2008-5, Class A, 4.85% 2014		19,500			18,122
Hyundai Auto Receivables Trust, Series 2006-A, Class A-4, 5.26% 2012		25,000			24,882
CarMax Auto Owner Trust, Series 2007-2, Class A-3, 5.23% 2011		14,383			13,675
CarMax Auto Owner Trust, Series 2007-2, Class A-4, 5.27% 2012		12,000			11,115
USAA Auto Owner Trust, Series 2007-1, Class A-4, 5.55% 2013		26,000			23,753
RAMP Trust, Series 2004-RS9, Class A-I-4, AMBAC insured, 4.767% 2032		5,553			4,091
RAMP Trust, Series 2004-RS10, Class A-I-6, 4.55% 2034		24,266			18,677
WFS Financial Owner Trust, Series 2005-1, Class A-4, 3.87% 2012		22,679			22,586
Citibank Credit Card Issuance Trust, Class 2004-A7, 2.243% 20131		19,200			16,200
Citibank Credit Card Issuance Trust, Series 2008, Class C6, 6.30% 20143		7,000			4,211
MBNA Credit Card Master Note Trust, Series 2003-1, Class C, 2.895% 20121		5,540			3,757
MBNA Credit Card Master Note Trust, Series 2001-C, Class C, 7.10% 20132		15,000			10,310
MBNA Credit Card Master Note Trust, Series 2002-1, Class C, 6.80% 2014		3,435			1,828
MBNA Credit Card Master Note Trust, Series 2006-1, Class C, 1.615% 20151		10,000			3,702
PECO Energy Transition Trust, Series 2000-A, Class A-4, 7.65% 2010		17,994			18,405
Spirit Master Funding LLC, Net-Lease Mortgage Notes, Series 2005-1, Class A-1, AMBAC insured, 5.05% 20232,3		25,262			17,936
UPFC Auto Receivables Trust, Series 2005-A, Class A-3, AMBAC insured, 4.34% 2010		1,646			1,581
UPFC Auto Receivables Trust, Series 2005-B, Class A-3, XLCA insured, 4.98% 2011		5,427			5,232
UPFC Auto Receivables Trust, Series 2007-A, Class A-3, MBIA insured, 5.53% 2013		13,275			11,041
Advanta Business Card Master Trust, Series 2006-A5, Class A, 5.10% 2012		20,000			16,000
Advanta Business Card Master Trust, Series 2005-A2, Class A-2, 0.638% 20131		2,000			1,600
J.P. Morgan Mortgage Acquisition Trust, Series 2006-CW1, Class A-4, 0.621% 20361		10,000			6,417
J.P. Morgan Mortgage Acquisition Trust, Series 2007-CH1, Class AF-3, 5.532% 20361		15,000			10,306
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class B-1, 7.30% 2021		7,126			5,925
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-4, 6.57% 2027		8,290			7,501
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-5, 7.12% 2032		3,000			2,471
GMAC Mortgage Loan Trust, Series 2006-HE3, Class A-5, FGIC insured, 5.809% 20361		5,000			1,873
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-2, FGIC insured, 6.054% 20371		10,000			5,552
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-3, FGIC insured, 6.193% 20371		35,000			8,460
AEP Texas Central Transitioning Funding II LLC, Secured Transition Bonds, Series A, Class A-3, 5.09% 2015		16,720			15,753
Morgan Stanley ABS Capital I Inc., Series 2004-NC3, Class M-1, 1.266% 20341		18,822			10,324
Morgan Stanley ABS Capital I Inc., Series 2004-HE9, Class M-5, 1.521% 20341,3		6,447			4,384
Option One Mortgage Loan Trust, Series 2002-1, Class M-1, 1.596% 20321		355			219
Option One Mortgage Loan Trust, Series 2006-3, Class II-A-2, 0.571% 20371		16,275			13,414
Wachovia Auto Loan Owner Trust, Series 2006-1, Class A-4, 5.08% 20122		10,000			9,177
Wachovia Auto Loan Owner Trust, Series 2006-1, Class B, 5.15% 20122		5,000			4,071
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-2, Class A-6, AMBAC insured, 5.08% 20112		14,500			12,199
Merrill Lynch Mortgage Investors, Inc., Series 2006-RM1, Class A-2B, 5.45% 20371		20,741			12,091
Citicorp Residential Mortgage Trust, Series 2006-2, Class A-4, 5.775% 20361		10,000			8,028
Carrington Mortgage Loan Trust, Series 2006-NC5, Class A-5, 0.531% 20371		5,572			3,982
Franklin Auto Trust, Series 2006-1, Class A-4, 5.03% 2014		10,950			10,021
Franklin Auto Trust, Series 2006-1, Class B, 5.14% 2014		2,000			1,568
GSAA Home Equity Trust, Series 2006-6, Class AF-6, 6.004% 20361		20,000			11,228
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031		11,969			9,826
Bear Stearns Asset-backed Securities I Trust, Series 2005-CL1, Class A-1, 0.971% 20341,3		13,339			9,707
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-3, 4.35% 2014		2,475			1,587
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-4, 5.27% 2018		1,269			846
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-5, 5.873% 2022		4,167			2,848
Lehman ABS Manufactured Housing Contract Trust, Series 2002-A, Class A, 1.645% 20331		5,241			3,937
SACO I Trust, Series 2005-5, Class I-A, 0.711% 20351		5,789			3,959
SACO I Trust, Series 2006-10, Class A, 0.621% 20361		13,494			3,065
SACO I Trust, Series 2006-5, Class II-A-3, 0.651% 20361		7,500			652
SACO I Trust, Series 2006-4, Class A-3, 0.681% 20361		5,409			1,493
MASTR Asset-backed Securities Trust, Series 2006-AB1, Class A-4, 5.719% 20361		11,500			8,878
CNL Funding, Series 2000-AA, Class A-2, MBIA insured, 8.044% 20172		11,641			8,638
Structured Asset Securities Corp., Series 2005-S7, Class A2, 0.771% 20351,2		11,744			6,550
Structured Asset Securities Corp., Series 2006-S2, Class A-1, 0.541% 20361		1,431			1,374
Home Equity Mortgage Trust, Series 2006-2, Class 1A-1, 5.367% 20361		1,773			587
Home Equity Mortgage Trust, Series 2006-4, Class A-1, 5.67% 20361		17,438			3,793
Home Equity Mortgage Trust, Series 2006-5, Class A-1, 5.50% 20371		14,839			3,483
New Century Home Equity Loan Trust, Series 2004-A, Class A-II-5, FGIC insured, 5.25% 2034		11,000			7,816
First Horizon ABS Trust, Series 2006-HE2, Class A, FSA insured, 0.601% 20261		767			457
First Horizon ABS Trust, Series 2007-HE1, Class A, FSA insured, 0.601% 20291		11,761			6,449
AmeriCredit Prime Automobile Receivables Trust, Series 2007-2-M, Class A-4-A, MBIA insured, 5.35% 2016		10,073			6,533
Conseco Finance Securitizations Corp., Series 2002-2, Class A-2, 6.03% 2033		8,965			6,505
CWABS, Inc., Series 2005-11, Class AF-2, 4.657% 20361		6,066			5,972
Ford Credit Auto Owner Trust, Series 2006-B, Class B, 5.43% 2012		7,333			5,706
Morgan Stanley ABS Capital I Inc. Trust, Series 2006-HE4, Class A-3, 0.621% 20361		10,000			5,383
Securitized Asset-backed Receivables LLC Trust, Series 2006-HE2, Class A-2C, 0.621% 20361,3		18,000			5,310
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1, FGIC insured, 4.67% 20172		6,270			5,238
UCFC Manufactured Housing Contract, Series 1996-2, Class A, MBIA insured, 7.135% 2028		5,503			5,202
Merrill Lynch Mortgage Investors Trust, Series 2007-SL1, Class A-1, 0.771% 20371		22,232			5,074
Morgan Stanley Mortgage Loan Trust, Series 2006-4SL, Class A-1, 0.621% 20361,3		21,876			4,375
Discover Card Master Trust I, Series 1996-4, Class B, 1.745% 20131		7,000			4,243
Consumers Funding LLC, Series 2001-1, Class A-5, 5.43% 2015		4,140			4,141
First Investors Auto Owner Trust, Series 2005-A, Class A-2, MBIA insured, 4.23% 20122		2,028			1,904
First Investors Auto Owner Trust, Series 2006-A, Class A-4, MBIA insured, 5.00% 20132		2,500			2,092
RAAC Mortgage Loan Asset-backed Trust, Series 2004-SP3, Class A-I-5, 4.89% 2032		4,772			3,929
MBNA Master Credit Card Trust II, Series 1999-B, Class B, 6.20% 2011		3,750			3,663
Discover Card Execution Note Trust, Series 2008-3, Class A, 5.10% 2013		4,000			3,640
Home Equity Asset Trust, Series 2004-7, Class M-1, 1.091% 20351		6,500			3,607
Capital Auto Receivables Asset Trust, Series 2006-SN1, Class C, 5.77% 20102		3,700			3,518
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-1, 5.73% 2035		2,477			1,771
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-2, 6.51% 2035		1,983			1,406
CS First Boston Mortgage Securities Corp., Series 2007-3, Class 1-A-3B, 5.846% 20371		8,477			2,292
Bear Stearns Mortgage Funding Trust, Series 2007-SL1, Class I-A, 0.631% 20371		13,956			2,147
ACE Securities Corp. Home Equity Loan Trust, Series 2007-ASAP2, Class A-2C, 0.691% 20371		5,307			2,107
CWABS Revolving Home Equity Loan Trust, Series 2004-P, Class 2-A, MBIA insured, 1.515% 20341		6,161			2,107
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-2, AMBAC insured, 4.42% 20351,2,3		2,004			1,862
ACLC Business Loan Receivables Trust, Series 2002-1, Class A-2, 7.462% 20222,3		2,239			1,747
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series 2007-H1, Class A-1, FSA insured, 0.631% 20371		2,515			1,693
SLM Student Loan Trust, Series 2003-10, Class A-4, 5.15% 20392	£	1,160			1,638
PG&E Energy Recovery Funding LLC, Series 2005-1, Class A-2, 3.87% 2011	$	1,164			1,166
Chase Auto Owner Trust, Series 2006-B, Class B, 5.24% 2014		1,013			938
Irwin Home Equity, Series 2006-2, Class 2-A3, FGIC insured, 6.40% 20361,2		2,000			845
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series SPMD 2001-A, Class AF-6, 6.537% 2030		636			546
					2,132,610
MUNICIPALS — 0.23%
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds,
Series 2002-A, Class A, 6.72% 2025		23,180			17,218
State of Illinois, Finance Authority, Revenue Bonds (University of Chicago), Series 2008-B, 6.25% 2038		15,000			16,111
State of Massachusetts, Health and Educational Facilities Authority, Revenue Bonds (Harvard University Issue),
Series 2009-A, 5.50% 2036		15,000			15,602
State of Louisiana, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds,
Series 2001-A, Class A, 6.36% 2025		9,145			7,829
State of Louisiana, Citizens Property Insurance Corp., Assessment Revenue Bonds,
Series 2006-C-3, CIFG insured, 13.00% 20251		7,325			7,325
State of Wisconsin, Badger Tobacco Asset Securitization Corp., Tobacco Settlement Asset-backed Bonds, 6.125% 2027		8,150			7,210
California Maritime Infrastructure Authority, Taxable Lease Revenue Bonds (San Diego Unified Port District-
South Bay Plant Acquisition), Series 1999, 6.63% 20092		2,433			2,437
					73,732
Total bonds & notes (cost: $34,084,387,000)					29,344,260
	Shares or
Convertible securities — 0.29%	principal amount
FINANCIALS — 0.22%
Bank of America Corp., Series L, 7.25% convertible preferred		70,000			45,500
PNC Financial Services Group, Inc. 4.00% convertible notes 2011	$	25,000,000			22,406
Citigroup Inc., Series J, 7.00% noncumulative convertible preferred depositary shares3,5		50,000			1,469
Equity Residential 3.85% convertible notes 2026	$	1,000,000			843
Boston Properties, Inc. 2.875% convertible notes 2037	$	1,000,000			795
Fannie Mae, Series 2004-1, 5.375% convertible preferred3		400			220
					71,233
CONSUMER DISCRETIONARY — 0.04%
Amazon.com, Inc. 6.875% PEACS convertible notes 2010	¤9,005,000				12,454
				Value
	Principal amount				(000	)
INFORMATION TECHNOLOGY — 0.03%
Linear Technology Corp., Series A, 3.00% convertible notes 2027	$	11,500,000		$	8,381
Advanced Micro Devices, Inc. 6.00% convertible notes 2015	$	770,000			223
Advanced Micro Devices, Inc. 5.75% convertible notes 2012	$	6,950,000			2,424
					11,028
Total convertible securities (cost: $152,844,000)					94,715
Preferred securities — 3.18%	Shares
FINANCIALS — 3.17%
SMFG Preferred Capital USD 1 Ltd. 6.078%1,2		116,569,000			79,224
SMFG Preferred Capital USD 3 Ltd. 9.50%1,2		32,700,000			30,124
SMFG Preferred Capital USD 2 Ltd. 8.75% noncumulative2		19,300,000			16,233
JPMorgan Chase & Co., Series I, 7.90%1		138,220,000			115,279
Bank of America Corp., Series K, 8.00% noncumulative1		70,115,000			50,505
Bank of America Corp., Series M, 8.125% noncumulative1		54,210,000			40,617
Bank of America Corp., Series E, 0% depositary shares		1,384,800			16,206
HSBC Capital Funding LP, Series 1, 9.547% noncumulative step-up1,2		71,250,000			56,469
HSBC Capital Funding LP, Series 2, 10.176% noncumulative step-up1,2		29,550,000			24,125
HSBC Capital Funding LP 8.03% noncumulative1		20,000,000			23,583
HSBC Bank Capital Funding (Sterling 1) LP 5.844% noncumulative1		185,000			185
Citigroup Inc., Series E, 8.40%1		93,300,000			61,722
BNP Paribas 7.195%1,2		73,700,000			46,955
BNP Paribas Capital Trust 9.003% noncumulative trust1,2		15,000,000			9,189
Santander Finance Preferred S.A., Unipersonal, Series 4, 6.80%		1,600,000			30,400
Santander Finance Preferred S.A., Unipersonal, 6.50%		910,000			16,892
Standard Chartered PLC 6.409%1,2		90,200,000			33,264
Standard Chartered Capital Trust I 8.16%1		10,000,000			11,156
Standard Chartered PLC 7.014% noncumulative redeemable preference shares1,2		5,000,000			2,242
Barclays Bank PLC 7.434%1,2		70,910,000			35,897
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual capital securities2		1,670,000			32,826
AXA SA, Series B, 6.379%1,2		53,770,000			24,095
ILFC E-Capital Trust II 6.25%1,2		42,460,000			17,751
ILFC E-Capital Trust I 5.90%1,2		13,699,000			4,392
XL Capital Ltd., Series C, 6.102%2,3,11		1,502,720			11,291
XL Capital Ltd., Series E, 6.50%1		44,200,000			10,175
QBE Capital Funding II LP 6.797%1,2		36,055,000			20,399
PNC Preferred Funding Trust I 6.517%1,2		46,000,000			19,934
Banco Bilbao Vizcaya Argentaria, SA, 5.919%1		48,005,000			19,130
Société Générale 5.922%1,2		35,170,000			16,462
Resona Preferred Global Securities (Cayman) Ltd. 7.191%1,2		32,800,000			15,631
RBS Capital Trust IV 2.259% noncumulative trust1		24,685,000			9,283
Royal Bank of Scotland Group PLC 6.625%1		4,700,000			5,349
Chuo Mitsui Trust and Banking Co., Ltd. 5.506%1,2		20,220,000			13,931
Aspen Insurance Holdings Ltd. 7.401% noncumulative1		1,035,500			12,847
DBS Capital Funding Corp., Series A, 7.657% noncumulative guaranteed preference shares1,2		11,250,000			11,232
Weingarten Realty Investors, Series D, 6.75% 2008		495,420			7,134
Weingarten Realty Investors, Series E, 6.95% cumulative redeemable depositary shares		250,000			3,688
HBOS PLC 6.657%1,2		18,500,000			7,185
HBOS Capital Funding LP, Series A, 6.461% noncumulative1		3,200,000			2,891
Lloyds TSB Group PLC 6.267%1,2		23,640,000			8,720
ING Capital Funding Trust III 8.439% noncumulative1		14,880,000			7,492
Commerzbank Capital Funding Trust I, Class B, 5.012% noncumulative1		15,500,000			7,236
Commerzbank Capital Funding Trust II, Class B, 5.905% noncumulative1		300,000			205
Mizuho Capital Investment (EUR) 1 Ltd. 5.02%1		4,650,000			4,363
Mizuho Capital Investment (USD) 1 Ltd. 6.686% noncumulative1,2		4,000,000			2,665
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative1,2		28,500,000			5,949
Fannie Mae, Series O, 7.00%1,2		4,485,673			4,626
Fannie Mae, Series S, 8.25% noncumulative		375,300			324
Fannie Mae, Series R, 7.625%		382,800		��	284
Freddie Mac, Series V, 5.57%		3,356,231			1,284
Freddie Mac, Series Z, 8.375%		2,663,885			1,179
Freddie Mac, Series W, 5.66%		1,548,000			871
Freddie Mac, Series F, 5.00%		294,375			159
Freddie Mac, Series U, 5.90%		496,600			154
Freddie Mac, Series Y, 6.55%		374,269			108
CBG Florida REIT Corp., Series A, Class A, 7.114%1,2		18,000,000			2,936
General Motors Corp. 9.00%2,3,11		10,437			1,566
IndyMac Bancorp, Inc., Series A, 8.50% noncumulative2		434,000			4
Lehman Brothers Holdings E-Capital Trust I 3.589%1,4		3,084,000			—
					1,019,478
U.S. GOVERNMENT AGENCY SECURITIES — 0.01%
US AgBank 6.11%1,2		5,000,000			3,217
Total preferred securities (cost: $1,949,073,000)					1,022,695
Common stocks — 0.08%
INDUSTRIALS — 0.05%
DigitalGlobe Inc.3,5,11		3,984,039			9,960
Delta Air Lines, Inc.11		615,301			7,052
UAL Corp.11		10,069			111
					17,123
CONSUMER DISCRETIONARY — 0.02%
Ford Motor Co.11		1,042,804			2,388
Time Warner Cable Inc., Class A11		109,676			2,353
Adelphia Recovery Trust, Series Arahova11		1,943,006			262
Adelphia Recovery Trust, Series ACC-6B3,11		5,056,500			50
Adelphia Recovery Trust, Series ACC-111		3,366,231			34
					5,087
INFORMATION TECHNOLOGY — 0.01%
ZiLOG, Inc.11,12		879,000			2,549
HEALTH CARE — 0.00%
Clarent Hospital Corp.3,11,12		331,291			3
XO Holdings, Inc.11		7,614			1
Total common stocks (cost: $55,394,000)					24,763
Warrants — 0.00%
TELECOMMUNICATION SERVICES — 0.00%
XO Holdings, Inc., Series A, warrants, expire 201011		15,233			—
XO Holdings, Inc., Series B, warrants, expire 201011		11,424			—
XO Holdings, Inc., Series C, warrants, expire 201011		11,424			—
GT Group Telecom Inc., warrants, expire 20102,3,11		2,750			—
					—
INDUSTRIALS — 0.00%
Atrium Corp., warrants, expire 20182,3,11		1,885			—
Total warrants (cost: $143,000)					—
	Principal amount
Short-term securities — 4.41%		(000	)
Federal Home Loan Bank 0.20%–3.30% due 1/2–6/26/2009	$	219,600			219,447
Fannie Mae 0.25%–2.10% due 2/3–4/15/2009		145,167			145,058
Freddie Mac 0.45%–2.40% due 3/2–7/7/2009		131,600			131,411
Hewlett-Packard Co. 2.20% due 2/3–2/4/20092		110,000			109,874
U.S. Treasury Bills 1.09%–1.95% due 2/5–4/16/2009		106,700			106,678
International Bank for Reconstruction and Development 0.22%–2.10% due 1/20–3/11/2009		104,900			104,846
Procter & Gamble International Funding S.C.A. 0.12%–1.00% due 2/26–5/28/20092		96,500			96,453
Wal-Mart Stores Inc. 0.25% due 6/16/20092		78,100			78,009
Bank of America Corp. 3.75% due 3/9/2009		50,000			49,894
Enterprise Funding Co. LLC 1.40%–2.25% due 1/7–2/2/20092		24,692			24,661
Chevron Funding Corp. 0.25% due 2/5/2009		50,000			49,987
General Electric Capital Corp., FDIC insured, 0.85% due 2/4/2009		50,000			49,959
Coca-Cola Co. 2.05% due 2/2/20092		50,000			49,947
Eli Lilly and Co. 1.35%–1.40% due 1/15–2/25/20092		40,519			40,504
Medtronic Inc. 1.00% due 3/9/20092		40,000			39,917
Emerson Electric Co. 0.40%–1.10% due 2/25–3/30/20092		36,900			36,884
Harvard University 0.90% due 2/11/2009		30,000			29,973
Eaton Corp. 1.75% due 2/11/20092		25,000			24,949
Yale University 2.37% due 2/12/2009		16,500			16,466
John Deere Capital Corp. 2.50% due 1/15/20092		15,600			15,590
Total short-term securities (cost: $1,419,110,000)					1,420,507
Total investment securities (cost: $37,660,951,000)					31,906,940
Other assets less liabilities					281,071
Net assets				$	32,188,011

1  Coupon rate may change periodically.

2  Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $4,944,277,000, which represented 15.36% of the net assets of the fund.

3  Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities was $1,343,327,000, which represented 4.17% of the net assets of the fund.

4 Scheduled interest and/or principal payment was not received.

5  Purchased in a transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on these holdings appear below.

	Acquisition date(s)	Cost (000)		Value (000)		Percent of net assets
DigitalGlobe Inc.	4/14/1999–7/31/2003	$	3,250	$	9,960		.03	%
Northern Trust Co. 5.85% 2017	11/6/2007		3,749		3,840		.01
Citigroup Inc., Series J, 7.00%, noncumulative convertible
preferred depositary shares	1/15/2008		2,500		1,469		.00
Total restricted securities		$	9,499	$	15,269		.04	%

6Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

7 Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $189,726,000, which represented .59% of the net assets of the fund.

8Payment in kind; the issuer has the option of paying additional securities in lieu of cash.

9Step bond; coupon rate will increase at a later date.

10Index-linked bond whose principal amount moves with a government retail price index.

11Security did not produce income during the last 12 months.

12Represents an affiliated company as defined under the Investment Company Act of 1940.

Key to abbreviations and symbols
ARS = Argentine pesos	EGP = Egyptian pounds	PLN = Polish zloty
A$ = Australian dollars	€ = Euros	SKr = Swedish kronor
BRL = Brazilian reais	£ = British pounds	S$ = Singapore dollars
C$ = Canadian dollars	ILS = Israeli shekels	TRY = New Turkish liras
COP = Colombian pesos	¥ = Japanese yen
DKr = Danish kroner	MXN = Mexican pesos

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from your financial professional and should be read carefully before investing.

MFGEFP-908-0209O-S15816

Summary investment portfolio, December 31, 2008

The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings.  For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.

[begin pie chart]

Portfolio by type of security (percent of net assets)
Corporate bonds & notes	36.67	%
Mortgage-backed obligations	26.27
Bonds & notes of U.S. government & government agencies	14.05
Bonds & notes of governments & government agencies outside the U.S.	7.33
Asset-backed obligations	6.62
Preferred securities	3.18
Convertible securities	0.29
Municipals	0.23
Common stocks & warrants	0.08
Short-term securities & other assets less liabilities	5.28

[end pie chart]

Portfolio quality summary (percent of net assets)*
U.S. government obligations†	13.4	%
Federal agencies	15.5
AAA	17.3
AA	8.5
A	16.0
BBB	17.7
Ba/BB or below	6.2
Equity-related securities	0.1
Short-term securities & other assets less liabilities	5.3
* Bond ratings reflect those of a credit rating agency; if ratings are not available, they are assigned by the fund's investment analysts. The ratings are not covered by the Report of Independent Registered Public Accounting Firm.
† These securities are guaranteed by the full faith and credit of the United States government.

	Principal						Percent
	amount			Value			of net
Bonds & notes - 91.17%		(000	)		(000	)	assets
Corporate bonds & notes - 36.67%
Financials - 12.77%
Countrywide Financial Corp.:
Series B, 5.80% 2012	$	152,003		$	148,263
6.25% 2010	$	A 7,700			5,450
2.946%-4.50% 2010-2012 (1)	$	45,540			41,224
Countrywide Home Loans, Inc. 4.125%-5.625% 2009		64,950			64,275
Bank of America Corp. 6.50%-7.125% 2011-2037		21,990			22,526
MBNA Global Capital Funding, Series B, 3.993% 2027 (1)		33,000			19,757
MBNA Capital A, Series A, 8.278% 2026		7,500			6,238
MBNA Corp., Series F, 7.50% 2012		1,800			1,854			.96	%
MetLife Capital Trust X 9.25% 2068 (1) (2)		111,050			77,611			.24
Other securities					3,720,404			11.57
					4,107,602			12.77
Consumer discretionary - 4.48%
Time Warner Inc. 6.50% 2036		85,485			77,735			.24
Other securities					1,361,791			4.24
					1,439,526			4.48
Utilities - 3.53%
Other securities					1,135,936			3.53
Telecommunication services - 3.52%
Other securities					1,133,868			3.52
Industrials - 3.52%
Other securities					1,131,822			3.52
Energy - 3.48%
Other securities					1,120,442			3.48
Health care - 2.38%
Other securities					765,477			2.38
Other corporate bonds & notes - 2.99%
Other securities					963,972			2.99
Total corporate bonds & notes					11,798,645			36.67
Mortgage-backed obligations - 26.27%
Federal agency mortgage-backed obligations (3) - 14.83%
Fannie Mae:
5.00% 2036		130,319			133,328
7.00% 2037		75,110			78,778
0%-12.049% 2009-2047 (1)  (4)		2,237,037			2,300,544			7.81
Freddie Mac:
6.00% 2027		179,349			185,423
6.00% 2038		207,595			214,124
0%-11.00% 2009-2047 (1)  (4)		1,592,765			1,627,038			6.30
Government National Mortgage Assn. 6.00% 2038		175,944			181,896			.57
Other securities					49,650			.15
					4,770,781			14.83
Commercial mortgage-backed securities (3) - 5.60%
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046		91,455			86,337			.27
CS First Boston Mortgage Securities Corp. 4.106%-7.946% 2034-2041 (1) (2) (4)		298,788			250,483			.78
Fannie Mae 6.088%-7.30% 2010-2011		105,100			112,619			.35
Other securities					1,353,876			4.20
					1,803,315			5.60
Collateralized mortgage-backed obligations (privately originated) (3) - 5.19%
Countrywide Alternative Loan Trust 0.791%-7.00% 2019-2047 (1) (4)		544,620			325,419			1.01
CS First Boston Mortgage Securities Corp. 0%-7.50% 2018-2036 (1) (2)		178,505			118,614			.37
Other securities					1,225,359			3.81
					1,669,392			5.19
Other mortgage-backed securities (3) - 0.65%
Bank of America 5.50% 2012 (2)		34,750			35,817			.11
Other securities					175,433			.54
					211,250			.65
Total mortgage-backed obligations					8,454,738			26.27
Bonds & notes of U.S. government & government agencies - 14.05%
U.S. Treasury:
6.00% 2009		74,600			77,195
2.00% 2010		118,250			120,400
4.625% 2011		413,000			457,397
4.875% 2012		180,225			201,760
2.00% 2013		93,880			96,326
2.75% 2013		132,160			140,539
3.50% 2013		102,410			112,195
4.25% 2013		655,786			745,983
11.25% 2015		133,500			202,827
4.50% 2017		113,250			132,923
3.50% 2018		176,245			195,156
3.75% 2018		143,745			162,735
3.875% 2018		79,225			90,363
6.875% 2025		93,610			142,404
6.00% 2026		78,000			108,932
4.50% 2036		150,210			199,709
4.375% 2038 (4)		66,290			90,641
0%-8.875% 2009-2038  (4)  (5)		812,923			804,472			12.68
Fannie Mae:
2.875% 2010		134,695			138,520
5.25%-6.125% 2009-2012 (1)		25,575			27,322			.52
Freddie Mac:
3.125% 2010		73,990			75,798
5.25%-5.50% 2011-2016		40,000			45,071			.38
Other securities					155,096			.47
					4,523,764			14.05
Bonds & notes of governments & government agencies outside the U.S. - 7.33%
German Government:
3.75% 2013	€	79,815			117,884
4.25% 2014		121,020			184,052
Series 6, 4.00% 2016		72,120			108,331
Series 8, 4.25% 2018		168,686			259,926
6.25% 2030		11,120			20,750			2.15
Japanese Government:
1.30% 2011	¥	7,643,050			85,948
1.70% 2017		10,704,850			125,106
1.50%-2.40% 2010-2038		16,406,500			196,954			1.27
Israeli Government:
6.00% 2010 (4)	ILS 405,580				112,275
5.50% 2017 (4)		318,800			88,992			.63
United Kingdom 5.00% 2018	£	55,620			93,660			.29
Other securities					966,893			2.99
					2,360,771			7.33
Asset-backed obligations (3) - 6.62%
AmeriCredit Automobile Receivables Trust, Series 2007-A-X, Class A-4, XLCA insured, 1.916% 2013 (1)	$	125,000			93,113			.29
Capital One Auto Finance Trust, Series 2005-C, Class A-4-B, FGIC insured, 1.235% 2012 (1)		87,981			81,368			.25
CS First Boston Mortgage Securities Corp., Series 2007-3, Class 1-A-3B, 5.846% 2037 (1)		8,477			2,292			.01
Other securities					1,955,837			6.07
					2,132,610			6.62
Municipals - 0.23%
Other securities					73,732			.23
Total bonds & notes (cost: $34,084,387,000)					29,344,260			91.17
							Percent
				Value			of net
Convertible securities - 0.29%	Shares				(000	)	assets
Other - 0.29%
Bank of America Corp., Series L, 7.25% convertible preferred		70,000			45,500			.14
Fannie Mae, Series 2004-1, 5.375% convertible preferred (4)		400			220			.00
Other securities					48,995			.15
Total convertible securities (cost: $152,844,000)					94,715			.29
							Percent
				Value			of net
Preferred securities - 3.18%	Shares				(000	)	assets
Financials - 3.17%
JPMorgan Chase & Co., Series I, 7.90% (1)		138,220,000			115,279			.36
Bank of America Corp.:
Series K, 8.00% noncumulative (1)		70,115,000			50,505
Series M, 8.125% noncumulative (1)		54,210,000			40,617
Series E, 0% depositary shares		1,384,800			16,206			.33
SMFG Preferred Capital USD 1 Ltd. 6.078% (1) (2)		116,569,000			79,224			.25
Fannie Mae:
Series O, 7.00% (1) (2)		4,485,673			4,626
Series S, 8.25% noncumulative		375,300			324
Series R, 7.625%		382,800			284			.02
Freddie Mac:
Series V, 5.57%		3,356,231			1,284
Series Z, 8.375%		2,663,885			1,179
Series W, 5.66%		1,548,000			871
Series F, 5.00%		294,375			159
Series U, 5.90%		496,600			154
Series Y, 6.55%		374,269			108			.01
Other securities					708,658			2.20
					1,019,478			3.17
U.S. government agency securities - 0.01%
Other securities					3,217			.01
Total preferred securities (cost: $1,949,073,000)					1,022,695			3.18
							Percent
				Value			of net
Common stocks - 0.08%					(000	)	assets
Other - 0.08%
Other securities					24,763			.08
Total common stocks (cost: $55,394,000)					24,763			.08
							Percent
				Value			of net
Warrants - 0.00%					(000	)	assets
Other - 0.00%
Other securities					-			.00
Total warrants (cost: $143,000)					-			.00
	Principal						Percent
	amount			Value			of net
Short-term securities - 4.41%		(000	)		(000	)	assets
Federal Home Loan Bank 0.20%-3.30% due 1/2-6/26/2009	$	219,600			219,447			.68
Fannie Mae 0.25%-2.10% due 2/3-4/15/2009		145,167			145,058			.45
Freddie Mac 0.45%-2.40% due 3/2-7/7/2009		131,600			131,411			.41
Hewlett-Packard Co. 2.20% due 2/3-2/4/2009 (2)		110,000			109,874			.34
U.S. Treasury Bills 1.09%-1.95% due 2/5-4/16/2009		106,700			106,678			.33
International Bank for Reconstruction and Development 0.22%-2.10% due 1/20-3/11/2009		104,900			104,846			.33
Procter & Gamble International Funding S.C.A. 0.12%-1.00% due 2/26-5/28/2009 (2)		96,500			96,453			.30
Wal-Mart Stores Inc. 0.25% due 6/16/2009 (2)		78,100			78,009			.24
Bank of America Corp. 3.75% due 3/9/2009		50,000			49,894
Enterprise Funding Co. LLC 1.40%-2.25% due 1/7-2/2/2009 (2)		24,692			24,661			.23
Other securities					354,176			1.10
Total short-term securities (cost: $1,419,110,000)					1,420,507			4.41
Total investment securities (cost: $37,660,951,000)					31,906,940			99.13
Other assets less liabilities					281,071			.87
Net assets				$	32,188,011			100.00	%

"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. Some of these securities (with aggregate value of $15,269,000, which represented .04% of the net assets of the fund) may be subject to legal or contractual restrictions on resale.

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the

fund's holdings in that company represent 5% or more of the outstanding voting shares of that company.

The value of the fund's holdings in affiliated companies is included in "Other securities"

under their respective industry sectors in the preceding summary investment portfolio. Further details on these

holdings and related transactions during the year ended December 31, 2008, appear below.

	Beginning shares		Additions		Reductions		Ending shares		Dividend income (000)		Value of affiliates at 12/31/08 (000)
ZiLOG, Inc. (6)		879,000		-		-		879,000		-	$	2,549
Clarent Hospital Corp.  (4)  (6)		331,291		-		-		331,291		-		3
										-	$	2,552

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

(1) Coupon rate may change periodically.

(2) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $4,944,277,000, which represented 15.36% of the net assets of the fund.

(3) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

(4) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Other securities," was $1,343,327,000, which represented 4.17% of the net assets of the fund.

(5) Index-linked bond whose principal amount moves with a government retail price index.

(6) Security did not produce income during the last 12 months.

Key to abbreviation and symbols

A$ = Australian dollars

€ = Euros

£ = British pounds

ILS = Israeli shekels

¥ = Japanese yen

The industry classifications shown in the summary investment portfolio were obtained from sources believed to be reliable and are not covered by the Report of Independent Registered Public Accounting Firm.

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities
at December 31, 2008	(dollars in thousands)
Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $37,645,108)	$	31,904,388
Affiliated issuers (cost: $15,843)		2,552	$	31,906,940
Cash				44,453
Unrealized gain on forward currency contracts				5,746
Receivables for:
Sales of investments		54,493
Sales of fund's shares		153,374
Dividends and interest		405,015		612,882
				32,570,021
Liabilities:
Unrealized loss on forward currency contracts				43,590
Payables for:
Purchases of investments		186,740
Repurchases of fund's shares		130,586
Investment advisory services		6,373
Services provided by affiliates		13,899
Directors' deferred compensation		331
Other		491		338,420
Net assets at December 31, 2008			$	32,188,011
Net assets consist of:
Capital paid in on shares of capital stock			$	39,792,180
Distributions in excess of net investment income				(42,588	)
Accumulated net realized loss				(1,768,302	)
Net unrealized depreciation				(5,793,279	)
Net assets at December 31, 2008			$	32,188,011

(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 5,000,000 shares, $.001par value (2,992,699 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	21,986,979		2,044,250	$	10.76
Class B		1,227,225		114,102		10.76
Class C		2,274,063		211,432		10.76
Class F-1		2,652,992		246,663		10.76
Class F-2		98,649		9,171		10.76
Class 529-A		547,204		50,877		10.76
Class 529-B		71,447		6,643		10.76
Class 529-C		258,191		24,006		10.76
Class 529-E		28,693		2,668		10.76
Class 529-F-1		25,882		2,407		10.76
Class R-1		87,504		8,136		10.76
Class R-2		615,855		57,261		10.76
Class R-3		939,346		87,336		10.76
Class R-4		706,627		65,699		10.76
Class R-5		667,354		62,048		10.76
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Classes A and 529-A, for which the maximum offering prices per share were $11.18 each.
See Notes to Financial Statements

Statement of operations
for the year ended December 31, 2008	(dollars in thousands)
Investment income:
Income:
Interest (net of non-U.S. taxes of $552)	$	2,243,986
Dividends		39,414		$	2,283,400
Fees and expenses*:
Investment advisory services		90,043
Distribution services		126,152
Transfer agent services		33,537
Administrative services		17,440
Reports to shareholders		1,412
Registration statement and prospectus		1,604
Postage, stationery and supplies		2,848
Directors' compensation		116
Auditing and legal		195
Custodian		1,236
State and local taxes		261
Other		8
Total fees and expenses before waiver		274,852
Less investment advisory services waiver		9,004
Total fees and expenses after waiver					265,848
Net investment income					2,017,552
Netrealized loss andunrealized depreciation on investments and currency:
Net realized (loss) gain on:
Investments		(1,287,316	)
Currency transactions		71,911			(1,215,405	)
Net unrealized depreciation on:
Investments		(5,483,400	)
Currency translations		(43,226	)		(5,526,626	)
Net realized loss and unrealized depreciation on investments and currency					(6,742,031	)
Net decrease in net assets resulting from operations				$	(4,724,479	)
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
See Notes to Financial Statements
Statements of changes in net assets		(dollars in thousands)
	Year ended December 31
	2008			2007
Operations:
Net investment income	$	2,017,552		$	1,643,458
Net realized (loss) gain on investments and currency transactions		(1,215,405	)		114,344
Net unrealized depreciation on investments and currency translations		(5,526,626	)		(731,832	)
Net (decrease) increase in net assets resulting from operations		(4,724,479	)		1,025,970
Dividends paid to shareholders from net investment income		(2,153,748	)		(1,685,415	)
Net capital share transactions		3,247,995			8,469,888
Total (decrease) increase in net assets		(3,630,232	)		7,810,443
Net assets:
Beginning of year		35,818,243			28,007,800
End of year (including distributions in excess of  and undistributed net investment income: $(42,588) and $27,903, respectively)	$	32,188,011		$	35,818,243
See Notes to Financial Statements

Notes to financial statements

1.   Organization and significant accounting policies

Organization – The Bond Fund of America, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks as high a level of current income as is consistent with preservation of capital through a diversified portfolio of bonds and other fixed-income obligations.

The fund offers 15 share classes consisting of five retail share classes, five 529 college savings plan share classes and five retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Classes A and 529-A	Up to 3.75%	None (except 1% for certain redemptions within one year of purchase without an initial sales charge)	None
Classes B and 529-B	None	Declines from 5% to 0% for redemptions within six years of purchase	Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years
Class C	None	1% for redemptions within one year of purchase	Class C converts to Class F-1 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Classes F-1, F-2 and 529-F-1	None	None	None
Classes R-1, R-2, R-3, R-4 and R-5	None	None	None

On August 1, 2008, the fund made an additional retail share class (Class F-2) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). In addition, Class F shares were renamed Class F-1 and Class 529-F shares were renamed Class 529-F-1. Refer to the fund’s prospectus for more details.

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds.Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:

Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. Forward currency contracts are valued at the mean of representative quoted bid and asked prices.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of directors. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions.

Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Class allocations – Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.

Dividends and distributions to shareholders – Dividends paid to shareholders are declared daily from net investment income and are paid to shareholders monthly. Distributions paid to shareholders are recorded on the ex-dividend date.

Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.

Forward currency contracts – The fund may enter into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund enters into these contracts to manage its exposure to changes in exchange rates arising from investments denominated in currencies other than U.S. dollars. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates. Due to these risks, the fund could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the fund values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The fund records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency. Closed forward currency contracts that have not reached their expiration date are included in the respective receivables for sales or payables for purchases of investment securities in the statement of assets and liabilities.

Loan transactions – The fund may enter into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder's portion of a loan. The loan is often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the sale of the investment. The loan's interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal. Risks may arise due to the delayed settlement date of the loan transaction and the ability of the agent and/or borrower to meet the obligations of the loan.

2.   Risk factors

Investing in the fund may involve certain risks including, but not limited to, those described below.

The values of, and the income generated by, most debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the values of debt securities in the fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, "call" or refinance a security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities. Debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Lower quality or longer maturity debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality or shorter maturity debt securities. The fund's investment adviser attempts to reduce these risks through diversification of the portfolio and ongoing credit analysis, as well as by monitoring economic and legislative developments, but there can be no assurance that it will be successful at doing so.

Many types of debt securities, including mortgage-related securities, are subject to prepayment risk. For example, when interest rates fall, homeowners are more likely to refinance their home mortgages and "prepay" their principal earlier than expected. The fund must then reinvest the prepaid principal in new securities when interest rates on new mortgage investments are falling, thus reducing the fund’s income.

A security backed by the U.S. Treasury or the full faith and credit of the U.S. government is guaranteed only as to the timely payment of interest and principal when held to maturity. Accordingly, the current market prices for these securities will fluctuate with changes in interest rates.

The fund may also invest in debt securities and mortgage-backed securities issued by federal agencies and instrumentalities that are not backed by the full faith and credit of the U.S. government. These securities are neither issued nor guaranteed by the U.S. Treasury. Although all securities in the fund's portfolio may be adversely affected by currency fluctuations or global economic, political or social instability, securities issued by entities based outside the United States may be affected to a greater extent.

3. Taxation and distributions                                                                                     

Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

As of and during the period ended December 31, 2008, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2005, by state tax authorities for tax years before 2004 and by tax authorities outside the U.S. for tax years before 2004.

Non-U.S. taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Realized and unrealized gains on securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on realized and unrealized gains to provide for potential non-U.S. taxes payable on these securities.For the year ended December 31, 2008, non-U.S. taxes paid on realized gains were $32,000. As of December 31, 2008, there was no liability for non-U.S. taxes based on unrealized gains.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in securities outside the U.S.; cost of investments sold; paydowns on fixed-income securities; net capital losses; and income on certain investments.The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

During the year ended December 31, 2008, the fund reclassified $65,801,000 from accumulated net realized loss to distributions in excess of net investment income and $96,000 from distributions in excess of net investment income to capital paid in on shares of capital stock to align financial reporting with tax reporting.

As of December 31, 2008, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	39,042
Post-October currency loss deferrals (realized during the period November 1, 2008, through December 31, 2008)*					(113,391	)
Capital loss carryforwards†:
Expiring 2010	$	(125,233	)
Expiring 2011		(243,982	)
Expiring 2014		(69,196	)
Expiring 2016		(959,389	)		(1,397,800	)
Post-October capital loss deferrals (realized during the period November 1, 2008, through December 31, 2008)*					(330,710	)
Gross unrealized appreciation on investment securities					906,914
Gross unrealized depreciation on investment securities					(6,711,868	)
Net unrealized depreciation on investment securities					(5,804,954	)
Cost of investment securities					37,711,894
*These deferrals are considered incurred in the subsequent year.
†The capital loss carryforwards will be used to offset any capital gains realized by the fund in future years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.

Ordinary income distributions paid to shareholders from net investment income and currency gains were as follows (dollars in thousands):

	Year ended December 31
Share class	2008		2007
Class A	$	1,505,354	$	1,227,002
Class B		77,235		68,347
Class C		136,921		101,185
Class F-1		183,086		127,436
Class F-2*		1,971		-
Class 529-A		34,549		24,467
Class 529-B		4,096		3,260
Class 529-C		14,236		9,501
Class 529-E		1,715		1,231
Class 529-F-1		1,624		1,020
Class R-1		4,662		2,340
Class R-2		35,404		26,648
Class R-3		59,775		39,139
Class R-4		47,010		26,924
Class R-5		46,110		26,915
Total	$	2,153,748	$	1,685,415
* Class F-2 was offered beginning August 1, 2008.

4. Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company® ("AFS"), the fund’s transfer agent, and American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares.

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.30% on the first $60 million of daily net assets and decreasing to 0.11% on such assets in excess of $36 billion. The agreement also provides for monthly fees, accrued daily, based on a declining series of rates beginning with 2.25% on the first $8,333,333 of the fund's monthly gross income and decreasing to 1.75% on such income in excess of $41,666,667. CRMC waived a portion of its investment advisory services fee from September 1, 2004, through December 31, 2008. During the year ended December 31, 2008, total investment advisory services fees waived by CRMC were $9,004,000. As a result, the fee shown on the accompanying financial statements of $90,043,000, which was equivalent to an annualized rate of 0.252%, was reduced to $81,039,000, or 0.227% of average daily net assets.

Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:

Distribution services – The fund has adopted plans of distribution for all share classes, except Classes F-2 and R-5. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans.All share classes except Classes F-2 and R-5 may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of December 31, 2008, unreimbursed expenses subject to reimbursement totaled $4,453,000 for Class A. There were no unreimbursed expenses subject to reimbursement for Class 529-A.

Share class	Currently approved limits	Plan limits
Class A	0.25%	0.25%
Class 529-A	0.25	0.50
Classes B and 529-B	1.00	1.00
Classes C, 529-C and R-1	1.00	1.00
Class R-2	0.75	1.00
Classes 529-E and R-3	0.50	0.75
Classes F-1, 529-F-1 and R-4	0.25	0.50

Transfer agent services –The fund has a transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.

Administrative services – The fund hasan administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Classes A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan.The quarterly fee is based on a declining series of annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described on the previous page for the year ended December 31, 2008, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
			CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$61,314	$31,795	Not applicable	Not applicable	Not applicable
Class B	14,378	1,742	Not applicable	Not applicable	Not applicable
Class C	25,500	Included in administrative services	$3,551	$594	Not applicable
Class F-1	7,441		3,327	373	Not applicable
Class F-2 *	Not applicable		28	4	Not applicable
Class 529-A	1,158		523	106	$ 559
Class 529-B	766		73	28	77
Class 529-C	2,635		246	75	264
Class 529-E	145		27	5	29
Class 529-F-1	-		23	5	25
Class R-1	838		97	55	Not applicable
Class R-2	4,994		999	2,394	Not applicable
Class R-3	5,083		1,464	663	Not applicable
Class R-4	1,900		1,077	46	Not applicable
Class R-5	Not applicable		679	24	Not applicable
Total	$126,152	$33,537	$12,114	$4,372	$954

* Class F-2 was offered beginning August 1, 2008.

Directors’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMCmay elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $116,000, shown on the accompanying financial statements, includes $292,000 in current fees (either paid in cash or deferred) and a net decrease of $176,000 in the value of the deferred amounts.

Affiliated officers and directors – Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.

 5. Disclosure of fair value measurements

The fund adopted the Statement of Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements, on January 1, 2008. FAS 157 requires the fund to classify its assets and liabilities into three levels based on the method used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of December 31, 2008 (dollars in thousands):

	Investment securities		Forward currency contracts
Level 1 – Quoted prices	$	105,352
Level 2 – Other significant observable inputs		31,277,667	$	(37,844	) (*)
Level 3 – Significant unobservable inputs		523,921
Total	$	31,906,940

(*) Net unrealized depreciation on forward currency contracts is not included in the summary investment portfolio.

The following table reconciles the valuation of the fund’s Level 3 investment securities and related transactions during the year ended December 31, 2008 (dollars in thousands):

Beginning value at 1/1/2008	$	529,372
Net purchases		12,654
Net realized loss (†)		(706	)
Net unrealized depreciation (†)		(30,055	)
Net transfers into Level 3		12,656
Ending value at 12/31/2008	$	523,921

Net unrealized depreciation during the period on Level 3 investment securities held at 12/31/2008 (†) $ (9,519 )

(†) Net realized loss and net unrealized depreciation are included in the related amounts on investments in the statement of operations.

6. Capital share transactions

Capital share transactions in the fund were as follows (dollars and shares in thousands):

	Sales(*)				Reinvestments of dividends				Repurchases(*)						Net increase (decrease)
Share class	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended December 31, 2008
Class A	$	6,852,721		563,129	$	1,370,285		116,136	$	(6,431,432	)		(541,018	)	$	1,791,574			138,247
Class B		304,429		24,965		68,497		5,813		(397,075	)		(33,311	)		(24,149	)		(2,533	)
Class C		922,097		75,445		120,888		10,276		(809,514	)		(68,089	)		233,471			17,632
Class F-1		1,692,529		139,793		157,443		13,367		(1,572,023	)		(133,348	)		277,949			19,812
Class F-2†		125,467		11,218		1,582		147		(23,803	)		(2,194	)		103,246			9,171
Class 529-A		160,968		13,215		34,433		2,929		(70,702	)		(5,954	)		124,699			10,190
Class 529-B		13,620		1,118		4,082		348		(8,590	)		(725	)		9,112			741
Class 529-C		92,811		7,615		14,184		1,211		(44,239	)		(3,731	)		62,756			5,095
Class 529-E		8,810		727		1,709		146		(3,943	)		(331	)		6,576			542
Class 529-F-1		11,194		927		1,615		138		(4,241	)		(366	)		8,568			699
Class R-1		54,856		4,492		4,534		388		(26,516	)		(2,206	)		32,874			2,674
Class R-2		295,996		24,167		35,134		2,992		(235,150	)		(19,523	)		95,980			7,636
Class R-3		512,079		41,561		59,475		5,056		(382,379	)		(31,909	)		189,175			14,708
Class R-4		382,804		31,033		46,848		3,980		(265,125	)		(22,311	)		164,527			12,702
Class R-5		371,353		30,448		42,060		3,567		(241,776	)		(20,583	)		171,637			13,432
Total net increase
(decrease)	$	11,801,734		969,853	$	1,962,769		166,494	$	(10,516,508	)		(885,599	)	$	3,247,995			250,748
Year ended December 31, 2007
Class A	$	7,454,214		561,931	$	1,094,271		82,834	$	(3,855,437	)		(291,100	)	$	4,693,048			353,665
Class B		264,610		19,942		58,649		4,439		(228,934	)		(17,270	)		94,325			7,111
Class C		1,036,755		78,152		88,010		6,667		(393,914	)		(29,739	)		730,851			55,080
Class F-1		1,824,172		137,537		106,373		8,060		(525,612	)		(39,715	)		1,404,933			105,882
Class 529-A		168,258		12,695		24,423		1,849		(39,488	)		(2,987	)		153,193			11,557
Class 529-B		12,825		967		3,252		246		(6,116	)		(462	)		9,961			751
Class 529-C		95,996		7,242		9,482		719		(23,745	)		(1,797	)		81,733			6,164
Class 529-E		8,587		648		1,228		93		(2,540	)		(192	)		7,275			549
Class 529-F-1		9,475		715		1,016		77		(2,310	)		(175	)		8,181			617
Class R-1		54,425		4,109		2,280		173		(13,406	)		(1,012	)		43,299			3,270
Class R-2		305,834		23,063		26,477		2,005		(171,711	)		(12,960	)		160,600			12,108
Class R-3		597,983		45,096		38,966		2,952		(241,796	)		(18,240	)		395,153			29,808
Class R-4		462,027		34,956		26,857		2,036		(111,187	)		(8,393	)		377,697			28,599
Class R-5		368,202		27,804		23,822		1,805		(82,385	)		(6,223	)		309,639			23,386
Total net increase
(decrease)	$	12,663,363		954,857	$	1,505,106		113,955	$	(5,698,581	)		(430,265	)	$	8,469,888			638,547
(*) Includes exchanges between share classes of the fund.
(†) Class F-2 was offered beginning August 1, 2008.

7. Forward currency contracts

As of December 31, 2008, the fund had open forward currency contracts to purchase or sell currencies as follows (amounts in thousands):

	Contract amount				U.S. valuation at December 31, 2008
							Unrealized
							(depreciation)
	Receive		Deliver		Amount		appreciation
Purchases:
Euros
expiring 2/27/2009	€	3,876	$	5,537	$	5,391	$	(146	)
Sales:
Australian dollars
expiring 1/22 to 1/27/2009	$	59,679	$	A89,980		63,816		(4,137	)
British pounds
expiring 1/7 to 2/10/2009		189,859	£	127,370		185,136		4,723
Euros
expiring 1/7 to 1/29/2009		774,459	€	579,655		807,059		(32,600	)
Israeli shekels
expiring 1/8 to 1/16/2009		85,001	ILS 339,045			89,619		(4,618	)
Japanese yen
expiring 1/15 to 1/29/2009		142,942	¥	13,073,684		143,909		(967	)
Polish zloty
expiring 1/26/2009		29,600	PLN88,000			29,699		(99	)
						1,319,238		(37,698	)
Forward currency contracts - net							$	(37,844	)

8. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $16,225,234,000 and $13,396,294,000, respectively, during the year ended December 31, 2008.

 Financial highlights (1)

		(Loss) income from investment operations(2)
	Net asset value, beginning of period	Net investment income		Net (losses) gains on securities (both realized and unrealized)	Total from investment operations	Dividends (from net investment income)	Net asset value, end of period	Total return (3) (4)	Net assets, end of period (in millions)	Ratio of expenses to average net assets before reimbursements /waivers	Ratio of expenses to average net assets after reimbursements /waivers (4)	Ratio of net income to average net assets (4)
Class A:
Year ended 12/31/2008	$13.06	$.70	$	(2.25)	$(1.55)	$(.75)	$10.76	(12.24)%	$21,987	.65%	.63%	5.76%
Year ended 12/31/2007	13.32	.69		(.25)	.44	(.70)	13.06	3.37	24,898	.63	.61	5.22
Year ended 12/31/2006	13.22	.67		.09	.76	(.66)	13.32	5.88	20,670	.65	.62	5.07
Year ended 12/31/2005	13.65	.62		(.36)	.26	(.69)	13.22	1.94	17,738	.65	.62	4.60
Year ended 12/31/2004	13.51	.61		.16	.77	(.63)	13.65	5.85	15,822	.65	.65	4.54
Class B:
Year ended 12/31/2008	13.06	.61		(2.25)	(1.64)	(.66)	10.76	(12.88)	1,227	1.40	1.37	5.02
Year ended 12/31/2007	13.32	.59		(.25)	.34	(.60)	13.06	2.61	1,524	1.38	1.35	4.48
Year ended 12/31/2006	13.22	.57		.09	.66	(.56)	13.32	5.09	1,458	1.40	1.37	4.33
Year ended 12/31/2005	13.65	.52		(.36)	.16	(.59)	13.22	1.19	1,415	1.38	1.36	3.87
Year ended 12/31/2004	13.51	.51		.16	.67	(.53)	13.65	5.07	1,394	1.39	1.38	3.80
Class C:
Year ended 12/31/2008	13.06	.60		(2.25)	(1.65)	(.65)	10.76	(12.92)	2,274	1.44	1.41	4.98
Year ended 12/31/2007	13.32	.59		(.25)	.34	(.60)	13.06	2.56	2,532	1.42	1.40	4.43
Year ended 12/31/2006	13.22	.56		.09	.65	(.55)	13.32	5.04	1,847	1.45	1.42	4.27
Year ended 12/31/2005	13.65	.51		(.36)	.15	(.58)	13.22	1.12	1,429	1.44	1.42	3.81
Year ended 12/31/2004	13.51	.50		.16	.66	(.52)	13.65	4.99	1,123	1.46	1.45	3.71
Class F-1:
Year ended 12/31/2008	13.06	.70		(2.25)	(1.55)	(.75)	10.76	(12.23)	2,653	.64	.62	5.78
Year ended 12/31/2007	13.32	.69		(.25)	.44	(.70)	13.06	3.38	2,963	.62	.60	5.22
Year ended 12/31/2006	13.22	.67		.09	.76	(.66)	13.32	5.90	1,611	.63	.60	5.07
Year ended 12/31/2005	13.65	.62		(.36)	.26	(.69)	13.22	1.92	803	.65	.63	4.60
Year ended 12/31/2004	13.51	.60		.16	.76	(.62)	13.65	5.80	487	.70	.69	4.46
Class F-2:
Period from 8/4/2008 to 12/31/2008	12.31	.29		(1.47)	(1.18)	(.37)	10.76	(9.62)	99	.18	.17	2.69
Class 529-A:
Year ended 12/31/2008	13.06	.69		(2.25)	(1.56)	(.74)	10.76	(12.28)	547	.69	.67	5.74
Year ended 12/31/2007	13.32	.68		(.25)	.43	(.69)	13.06	3.31	532	.69	.67	5.17
Year ended 12/31/2006	13.22	.66		.09	.75	(.65)	13.32	5.85	388	.68	.66	5.05
Year ended 12/31/2005	13.65	.61		(.36)	.25	(.68)	13.22	1.88	273	.69	.67	4.57
Year ended 12/31/2004	13.51	.60		.16	.76	(.62)	13.65	5.80	187	.70	.70	4.48
Class 529-B:
Year ended 12/31/2008	13.06	.60		(2.25)	(1.65)	(.65)	10.76	(12.98)	71	1.51	1.48	4.92
Year ended 12/31/2007	13.32	.58		(.25)	.33	(.59)	13.06	2.49	77	1.50	1.47	4.36
Year ended 12/31/2006	13.22	.55		.09	.64	(.54)	13.32	4.97	69	1.53	1.50	4.20
Year ended 12/31/2005	13.65	.50		(.36)	.14	(.57)	13.22	1.02	58	1.54	1.52	3.71
Year ended 12/31/2004	13.51	.48		.16	.64	(.50)	13.65	4.86	49	1.59	1.58	3.60
Class 529-C:
Year ended 12/31/2008	13.06	.60		(2.25)	(1.65)	(.65)	10.76	(12.97)	258	1.50	1.47	4.94
Year ended 12/31/2007	13.32	.58		(.25)	.33	(.59)	13.06	2.50	247	1.49	1.46	4.37
Year ended 12/31/2006	13.22	.55		.09	.64	(.54)	13.32	4.99	170	1.51	1.49	4.22
Year ended 12/31/2005	13.65	.50		(.36)	.14	(.57)	13.22	1.03	121	1.53	1.51	3.74
Year ended 12/31/2004	13.51	.48		.16	.64	(.50)	13.65	4.88	86	1.57	1.57	3.61
Class 529-E:
Year ended 12/31/2008	13.06	.66		(2.25)	(1.59)	(.71)	10.76	(12.53)	29	.99	.96	5.45
Year ended 12/31/2007	13.32	.65		(.25)	.40	(.66)	13.06	3.02	28	.98	.96	4.88
Year ended 12/31/2006	13.22	.62		.09	.71	(.61)	13.32	5.53	21	.99	.97	4.74
Year ended 12/31/2005	13.65	.57		(.36)	.21	(.64)	13.22	1.56	15	1.01	.99	4.25
Year ended 12/31/2004	13.51	.55		.16	.71	(.57)	13.65	5.43	11	1.05	1.05	4.13
Class 529-F-1:
Year ended 12/31/2008	$13.06	$.72	$	(2.25)	$(1.53)	$(.77)	$10.76	(12.10)%	$26	.49%	.46%	5.96%
Year ended 12/31/2007	13.32	.71		(.25)	.46	(.72)	13.06	3.53	22	.48	.46	5.38
Year ended 12/31/2006	13.22	.69		.09	.78	(.68)	13.32	6.05	14	.49	.46	5.25
Year ended 12/31/2005	13.65	.62		(.36)	.26	(.69)	13.22	1.98	7	.58	.56	4.69
Year ended 12/31/2004	13.51	.59		.16	.75	(.61)	13.65	5.69	4	.80	.80	4.36
Class R-1:
Year ended 12/31/2008	13.06	.60		(2.25)	(1.65)	(.65)	10.76	(12.92)	88	1.44	1.42	5.01
Year ended 12/31/2007	13.32	.58		(.25)	.33	(.59)	13.06	2.54	71	1.44	1.42	4.44
Year ended 12/31/2006	13.22	.56		.09	.65	(.55)	13.32	5.05	29	1.49	1.42	4.28
Year ended 12/31/2005	13.65	.51		(.36)	.15	(.58)	13.22	1.11	18	1.51	1.43	3.82
Year ended 12/31/2004	13.51	.50		.16	.66	(.52)	13.65	4.98	11	1.55	1.47	3.70
Class R-2:
Year ended 12/31/2008	13.06	.59		(2.25)	(1.66)	(.64)	10.76	(12.99)	616	1.53	1.50	4.90
Year ended 12/31/2007	13.32	.59		(.25)	.34	(.60)	13.06	2.56	648	1.51	1.40	4.44
Year ended 12/31/2006	13.22	.56		.09	.65	(.55)	13.32	5.06	500	1.67	1.41	4.30
Year ended 12/31/2005	13.65	.51		(.36)	.15	(.58)	13.22	1.14	352	1.74	1.41	3.84
Year ended 12/31/2004	13.51	.50		.16	.66	(.52)	13.65	5.02	238	1.85	1.43	3.73
Class R-3:
Year ended 12/31/2008	13.06	.66		(2.25)	(1.59)	(.71)	10.76	(12.52)	939	.98	.95	5.45
Year ended 12/31/2007	13.32	.65		(.25)	.40	(.66)	13.06	3.02	949	.98	.95	4.89
Year ended 12/31/2006	13.22	.62		.09	.71	(.61)	13.32	5.49	570	1.02	.99	4.71
Year ended 12/31/2005	13.65	.56		(.36)	.20	(.63)	13.22	1.53	361	1.05	1.02	4.23
Year ended 12/31/2004	13.51	.55		.16	.71	(.57)	13.65	5.42	213	1.06	1.05	4.12
Class R-4:
Year ended 12/31/2008	13.06	.70		(2.25)	(1.55)	(.75)	10.76	(12.25)	707	.67	.64	5.77
Year ended 12/31/2007	13.32	.69		(.25)	.44	(.70)	13.06	3.35	692	.66	.64	5.22
Year ended 12/31/2006	13.22	.66		.09	.75	(.65)	13.32	5.86	325	.67	.65	5.06
Year ended 12/31/2005	13.65	.61		(.36)	.25	(.68)	13.22	1.91	182	.67	.65	4.61
Year ended 12/31/2004	13.51	.60		.16	.76	(.62)	13.65	5.81	77	.68	.68	4.48
Class R-5:
Year ended 12/31/2008	13.06	.73		(2.25)	(1.52)	(.78)	10.76	(12.00)	667	.37	.34	6.06
Year ended 12/31/2007	13.32	.73		(.25)	.48	(.74)	13.06	3.65	635	.36	.34	5.50
Year ended 12/31/2006	13.22	.70		.09	.79	(.69)	13.32	6.17	336	.37	.35	5.36
Year ended 12/31/2005	13.65	.66		(.36)	.30	(.73)	13.22	2.21	204	.37	.35	4.91
Year ended 12/31/2004	13.51	.65		.16	.81	(.67)	13.65	6.14	127	.37	.37	4.81

	Year ended December 31
	2008			2007			2006			2005			2004
Portfolio turnover rate for all classes of shares		57	%		58	%		53	%		50	%		45	%

(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.

(2) Based on average shares outstanding.

(3) Total returns exclude any applicable sales charges, including contingent deferred sales charges.

(4) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.

See Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of The Bond Fund of America, Inc.:

We have audited the accompanying statement of assets and liabilities, including the summary investment portfolio, of The Bond Fund of America, Inc. (the “Fund”), as of December 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Bond Fund of America, Inc. as of December 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Costa Mesa, California

February 10, 2009

Tax information      

                                                                                                                          unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended December 31, 2008:

Qualified dividend income	$	129,480,000
Corporate dividends received deduction	$	41,849,000
U.S. government income that may be exempt from state taxation	$	122,910,000

Individual shareholders should refer to their Form 1099 or other tax information, which was mailed in January 2009, to determine the calendar year amounts to be included on their 2008 tax returns. Shareholders should consult their tax advisers.

PART C

OTHER INFORMATION

Item 15. Indemnification

The Registrant is a joint-insured party under Investment Adviser/Mutual Fund Errors and Omissions Policies, which insure its officers and directors against certain liabilities. However, in no event will Registrant maintain insurance to indemnify any such person for any act for which Registrant itself is not permitted to indemnify the individual.

Subsection (b) of Section 2-418 of the General Corporation Law of Maryland empowers a corporation to indemnify any person who was or is party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against reasonable expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually incurred by him in connection with such action, suit or proceeding unless it is proved that: (i) the act or omission of the person was material to the cause of action adjudicated in the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the person actually received an improper personal benefit of money, property or services; or (iii) with respect to any criminal action or proceeding, the person had reasonable cause to believe his act or omission was unlawful.

Indemnification under subsection (b) of Section 2-418 may not be made by a corporation unless authorized for a specific proceeding after a determination has been made that indemnification is permissible in the circumstances because the party to be indemnified has met the standard of conduct set forth in subsection (b). This determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding, or, if such quorum cannot be obtained, then by a majority vote of a committee of the Board consisting solely of two or more directors not, at the time, parties to such proceeding and who were duly designated to act in the matter by a majority vote of the full Board in which the designated directors who are parties may participate; (ii) by special legal counsel selected by the Board of Directors of a committee of the Board by vote as set forth in subparagraph (i), or, if the requisite quorum of the full Board cannot be obtained therefore and the committee cannot be established, by a majority vote of the full Board in which any director who is a party may participate; or (iii) by the stockholders (except that shares held by any party to the specific proceeding may not be voted). A court of appropriate jurisdiction may also order indemnification if the court determines that a person seeking indemnification is entitled to reimbursement under subsection (b).

Section 2-418 further provides that indemnification provided for by Section 2-418 shall not be deemed exclusive of any rights to which the indemnified party may be entitled; that the scope of indemnification extends to directors, officers, employees or agents of a constituent corporation absorbed in a consolidation or merger and persons serving in that capacity at the request of the constituent corporation for another; and empowers the corporation to purchase and maintain insurance on behalf of a director, officer, employee or agent of the corporation against any liability asserted against or incurred by such person in any such capacity or arising out of such person's status as such whether or not the corporation would have the power to indemnify such person against such liabilities under Section 2-418.

Article VI of the Registrant's Articles of Incorporation and Article 5 of the Registrant’s By-Laws as well as the indemnification agreements that the Registrant has entered into with each of its directors who is not an “interested person” of the Registrant (as defined under the Investment Company Act of 1940, as amended), provide in effect that the Registrant will indemnify its officers and directors against any liability or expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the Registrant, to the fullest extent permitted by applicable law, subject to certain conditions. In accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940, as amended, and their respective terms, these provisions do not protect any person against any liability to the Registrant or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Registrant will comply with the indemnification requirements contained in the Investment Company Act of 1940, as amended, and Release Nos. 7221 (June 9, 1972) and 11330 (September 4, 1980).

Item 16. Exhibits

(1) Articles of Incorporation of the Registrant – Incorporated herein by reference from Post- Effective Amendment No. 41 filed 2/28/97; No. 46 filed 3/9/00; No. 47 filed 3/9/01; No. 48 filed 2/15/02; No. 54 filed 2/28/07, No. 56 filed 7/1/08, No. 58 filed 4/8/09.

(2) By-laws of the Registrant.

(3) Not applicable.

(4) Agreement and Plan of Reorganization and Liquidation – Filed herewith as Appendix B to the Combined Proxy Statement/Prospectus.

(5) Instruments defining the rights of shareholders are incorporated herein by reference from the Registrant’s Articles of Incorporation and By-laws.

(6) Amended Investment Advisory and Service Agreement dated 11/1/07 - Incorporated herein by reference from Post- Effective Amendment No. 55 filed 2/29/08.

(7) Underwriting Contracts – Form ofSelling Group Agreement – Incorporated herein by reference from Post- Effective Amendment No. 49 filed 5/13/02; Form of Selling Group Agreement effective 11/1/06 – Incorporated herein by reference from Post- Effective Amendment No. 54 filed 2/28/07; Form of Amendment to Selling Group Agreement effective 2/1/07 – Incorporated herein by reference from Post- Effective Amendment No. 54 filed 2/28/07; Form of Amendment to Selling Group Agreement effective 10/1/08 Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/09; Form of Amendment to Selling Group Agreement effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/09; Form of Bank Selling Group Agreement – Incorporated herein by reference from Post- Effective Amendment No. 49 filed 5/13/02;  Form of Amendment to Bank/Trust Company Selling Group Agreement effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment  No. 58 filed 4/8/09; Form of Omnibus addendum to the Selling Group Agreement – Incorporated herein by reference from Post- Effective Amendment No. 49 filed 5/13/02; Form of Institutional Selling Group Agreement – Incorporated herein by reference from Post- Effective Amendment No. 52 filed 2/25/05; Form of Amendment to Institutional Selling Group Agreement effective 2/1/07 – Incorporated herein by reference from Post- Effective Amendment No. 55 filed 2/29/08; Form of Amendment to Institutional Selling Group Agreement effective 10/1/08 – Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/09; Form of Amendment to Institutional Selling Group Agreement effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/09; Form of Class F Share Participation Agreement – Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/09; Form of Amendment to Class F Share Participation Agreement effective 8/1/08 – Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/0); Form of Amendment to Class F Share Participation Agreement effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/0);Form of Bank/Trust Company Participation Agreement for Class F Shares – Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/09; Form of Amendment to Bank/Trust Company Participation Agreement for Class F Shares effective 8/1/08 – Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/09; Form of Amendment to Bank/Trust Company Participation Agreement for Class F Shares effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/09); and Form of Amended and Restated Principal Underwriting Agreement effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/09).

(8) Bonus or Profit Sharing Contracts – Form of Deferred Compensation Plan as amended 1/1/08 – Incorporated herein by reference from Post- Effective Amendment No. 55 filed 2/29/08.

(9) Custodian Agreements – Form of Global Custody Agreement dated 12/21/06 – Incorporated herein by reference from Post- Effective Amendment No. 54 filed 2/28/07.

(10) Forms of Plans of Distribution– Class A, B, C, F-1, 529-A, 529-B, 529-C, 529-E, 529-F and R-1, R-2, R-3 and R-4 – Incorporated herein by reference from Post- Effective Amendment No. 55 filed 2/29/08; Forms of Amendment to Plan of Distribution – Class F-1 and Class 529-F-1 dated 6/16/08 Incorporated herein by reference from Post- Effective Amendment No. 56 filed 7/1/08; Form of Amended and Restated Multiple Class Plan effective 5/1/09 – Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/09.

(11) Opinion of Bingham McCutchen LLP – To be provided by amendment.

(12) Opinion of Bingham McCutchen LLP regarding tax matters – To be provided by amendment.

(13) Other Material Contracts - Amended Shareholder Services Agreement dated of 4/1/03 - Incorporated herein by reference from Post- Effective Amendment No. 51 filed on 2/27/04; and Form of Indemnification Agreement dated 7/1/04 – Incorporated herein by reference from Post- Effective Amendment No. 52 filed 2/25/05; Form of Amendment to Shareholder Services Agreement dated 11/1/06 – Incorporated herein by reference from Post- Effective Amendment No. 54 filed 2/28/07; Form of Amendment of Amended Shareholder Services Agreement dated 11/1/08 – Incorporated herein by reference from Post- Effective Amendment No. 57 filed 2/27/09); and Form of Amended and Restated Administrative Services Agreement effective 5/1/09 Incorporated herein by reference from Post- Effective Amendment No. 58 filed 4/8/09.

(14) Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm – to be provided by amendment.

(15) Not applicable.

(16) Powers of Attorney.

(17) Code of Ethics for The Capital Group Companies and Code of Ethics for the Registrant.

Item 17.  Undertakings

(1) The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933 [17 CFR 230.145c], the reoffering prospectus will contain the information called for by the applicable registration form for the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

(2) The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to the be initial bona fide offering of them.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form N-14 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City and County of Los Angeles, and State of California on the 14th day of October, 2009.

THE BOND FUND OF AMERICA

By: /s/ Paul G. Haaga, Jr.

(Paul G. Haaga, Jr., Vice Chairman of the Board)

Pursuant to the requirements of the Securities Act of 1933, this registration statement on Form N-14 has been signed below on October 14, 2009, by the following persons in the capacities indicated.

	Signature	Title
(1)	Principal Executive Officer:
	/s/ Abner D. Goldstine	President/PEO and Director
	(Abner D. Goldstine)
(2)	Principal Financial Officer and Principal Accounting Officer:
	/s/ Ari M. Vinocor	Treasurer
	(Ari M. Vinocor)
(3)	Directors:
	Richard G. Capen, Jr.*	Director
	H. Frederick Christie*	Director
	James G. Ellis*	Director
	Martin Fenton*	Chairman of the Board (Independent and Non-Executive)
	Leonard R. Fuller*	Director
	/s/ Abner D. Goldstine	President/PEO and Director
	(Abner D. Goldstine)
	/s/ Paul G. Haaga, Jr.	Vice Chairman and Director
	(Paul G. Haaga, Jr.)
	R. Clark Hooper*	Director
	Laurel B. Mitchell*	Director
	Richard G. Newman*	Director
	Frank M. Sanchez*	Director
	Steadman Upham*	Director

* Powers of attorney are incorporated by reference herein as Exhibit 16.

POWER OF ATTORNEY

I, Richard G. Capen, Jr., the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   The New Economy Fund  (File No. 002-83848, File No. 811-03735)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton David A. Pritchett Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Richard G. Capen

Richard G. Capen, Jr., Board member

POWER OF ATTORNEY

I, H. Frederick Christie, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Jeffrey P. Regal Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ H. Frederick Christie

H. Frederick Christie, Board member

POWER OF ATTORNEY

I, James G. Ellis, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 15th day of June, 2009.

     (City, State)

/s/ James G. Ellis

James G. Ellis, Board member

POWER OF ATTORNEY

I, Martin Fenton, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor Brian D. Bullard Karl C. Grauman M. Susan Gupton David A. Pritchett Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Martin Fenton

Martin Fenton, Board member

POWER OF ATTORNEY

I, Leonard R. Fuller, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor Brian D. Bullard M. Susan Gupton David A. Pritchett Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Leonard R. Fuller

Leonard R. Fuller, Board member

POWER OF ATTORNEY

I, R. Clark Hooper, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   The New Economy Fund  (File No. 002-83848, File No. 811-03735)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton David A. Pritchett Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ R. Clark Hooper

R. Clark Hooper, Board member

POWER OF ATTORNEY

I, Laurel B. Mitchell, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 15th day of June, 2009.

     (City, State)

/s/ Laurel B. Mitchell

Laurel B. Mitchell, Board member

POWER OF ATTORNEY

I, Richard G. Newman, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Richard G. Newman

Richard G. Newman, Board member

POWER OF ATTORNEY

I, Frank M. Sanchez, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Frank M. Sanchez

Frank M. Sanchez, Board member

POWER OF ATTORNEY

I, Steadman Upham, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Jeffrey P. Regal Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 15th day of June, 2009.

     (City, State)

/s/ Steadman Upham

Steadman Upham, Board member