Bond Fund Of America N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

Certified Shareholder Report of

Registered Management Investment Companies

Investment Company Act File Number: 811-02444

The Bond Fund of America, Inc.

(Exact Name of Registrant as Specified in Charter)

333 South Hope Street

Los Angeles, California 90071

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (213) 486-9200

Date of fiscal year end: December 31

Date of reporting period: December 31, 2009

Kimberly S. Verdick

Capital Research and Management Company

333 South Hope Street

Los Angeles, California 90071

(Name and Address of Agent for Service)

Copies to:

Michael Glazer

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, California 90071

(Counsel for the Registrant)

ITEM 1 – Reports to Stockholders

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The right choice for the long term®

The Bond Fund of America

Bonds for the long run

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Annual report for the year ended December 31, 2009

The Bond Fund of AmericaSM 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.

This fund is one of the 30 American Funds. American Funds is one of the nation’s largest mutual fund families. For nearly 80 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 3.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.

Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended December 31, 2009:

Class A shares	1 year			5 years			10 years
Reflecting 3.75% maximum sales charge		10.59	%		1.61	%		4.50	%

The total annual fund operating expense ratio was 0.65% for Class A shares as of December 31, 2009.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 25 and 26 for details.

The fund’s 30-day yield for Class A shares as of January 31, 2010, calculated in accordance with the Securities and Exchange Commission formula, was 3.79%. The fund’s distribution rate for Class A shares as of that date was 4.25%. Both reflect the 3.75% maximum sales charge. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ.

Results for other share classes can be found on page 32.

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Bond ratings, which typically range from AAA (highest) to D (lowest), are generally issued by independent rating agencies and are designed to provide an indication of an issuer’s creditworthiness. See the fund’s most recent statement of additional information for details. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in bonds of issuers outside the U.S. may be subject to additional risks. They include currency fluctuations; political and social instability; differing securities regulations and accounting standards; higher transaction costs; possible changes in taxation; and illiquidity. See the prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.

Fellow shareholders:

2009 saw a reversal of the trends that darkened the bond market in 2008. As a result, most nongovernment sectors of the market rallied steadily, with some of the best returns being recorded by lower rated, higher risk bonds.

The Bond Fund of America, boosted by the rally, produced a total return of 14.9% for the year ended December 31, 2009. Fund results far exceeded those of its primary benchmark, the unmanaged Barclays Capital U.S. Aggregate Index, which returned 5.9%. However, the fund’s results fell short of its peer-group measure, the Lipper Corporate Debt A-Rated Bond Funds Average, which returned 15.2%.

Income remains a vital component of the fund’s total return. For 2009, the fund paid monthly dividends totaling 52.2 cents a share. This represents an income return of nearly 5.0% for those who reinvested dividends. Those who took dividends in cash recorded an income return of about 4.9%. Importantly for our shareholders, the fund’s income return continued to surpass that of its Lipper peer-group average for the 25th consecutive year.

Bond market overview

To put 2009 in perspective, we should first refresh our memories of 2008. The bond market nearly froze up in late 2008, as problem mortgages encumbered financial institutions and pushed some to extinction. Investors increasingly shunned most debt obligations except government bonds, which rallied sharply from a flight to safety and a decline in the federal funds rate to historic lows. As the financial crisis grew and the economy plunged deeper into recession, the division in the market widened: Government debt soared, while most other sectors of the market sagged.

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Results at a glance
For periods ended December 31, 2009, with all distributions reinvested
	Total returns			Average annual total returns
										Lifetime
	1 year			5 years			10 years			(since 5/28/74)
The Bond Fund of America
(Class A shares)		14.91	%		2.38	%		4.90	%		8.45	%
Barclays Capital U.S. Aggregate Index1		5.93			4.97			6.33			8.43
Lipper Corporate Debt A-Rated Bond Funds Average2		15.18			3.52			5.48			8.24
1 The unmanaged Barclays Capital U.S. Aggregate Index began on January 1, 1976. From May 28, 1974, through December 31, 1975, the Barclays Capital U.S. Government/Credit Index was used.
2 Source: Lipper. Lipper averages do not include the effect of sales charges.

[End Sidebar]

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In this report
	Special feature
6	Bonds for the long run
	In this article, we’ll take a closer look at the concept of bonds’ relative stability by taking a longer view of the bond market, its basic components and its fluctuations. In the process, we’ll discuss how and why bond funds should be a part of every investor’s long-term investment strategy.
	Contents
1	Letter to shareholders
4	The value of a long-term perspective
11	Summary investment portfolio
15	Financial statements
33	Board of directors and other officers

[End Sidebar]

[Begin Sidebar]

Treasury yield curves

As shown, rising yields pushed most Treasury prices lower in 2009.

[begin line chart]

	December 31, 2009		December 31, 2008
3 Mo		0.06		0.09
6 Mo		0.20		0.27
1 Yr		0.45		0.35
2 Yr		1.14		0.77
3 Yr		1.68		0.97
5 Yr		2.68		1.55
10 Yr		3.84		2.22
30 Yr		4.64		2.68

[end line chart]

Source: Bloomberg

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In response, the government and the Federal Reserve enacted extraordinary measures to stimulate the economy and foster liquidity in the financial markets. With implicit government support, the weaker sectors of the market began to stabilize during the first quarter of 2009. Though trading remained sketchy at first, buyers began to return to the market in search of higher yields than those offered by Treasuries.

By the second quarter of 2009, some of the most battered sectors of 2008 were rallying, producing large gains. These mainly included credit-sensitive areas of the market such as corporate bonds, high-yield debt, commercial mortgage-backed securities and mortgage-related debt in the asset-backed sector.

By the second half of 2009, the economy was showing signs of stabilizing, albeit at lower levels. Despite rising unemployment, there were glimpses of hope in corporate earnings and signs of strength in international economies with key ties to the United States. With prospects of a sustainable recovery emerging, the rally in credit-sensitive bonds continued throughout the second half, though at a more measured pace.

If 2008 and 2009 were studies in contrasts and extremes, so were the returns of those two years. High-yield bonds (those rated below investment grade) recorded some of the worst results in 2008 yet produced returns in excess of 50% in 2009. In contrast, Treasuries, which rallied 13.7% in 2008, fell 3.6% in 2009 as measured by Barclays Capital. Overall, bonds with the greatest measure of credit risk generally posted the highest returns last year. As for high-quality bonds, not all fell from favor. Government mortgage-backed securities, for example, delivered positive results in both years, providing a striking exception to the reversal in market momentum.

A look at the portfolio

During the past year, the portfolio counselors of The Bond Fund of America took advantage of the bond market rally to bolster the credit quality of the portfolio and to lower the fund’s exposure to higher risk securities as prices increased. These adjustments were primarily intended to lessen the overall volatility of the portfolio, should the market encounter hurdles in the months ahead in the face of developing uncertainties. These include the likely withdrawal of government initiatives to support the market, ongoing difficulties in the commercial real estate market and potential setbacks to the fledgling recovery taking place in the economy.

Adjustments to the portfolio include an increased weighting in U.S. government bonds (mainly Treasuries and federal agencies), which grew to 28.9% by year-end from 14.1% at the start of the year. Additionally, portfolio counselors took advantage of rising prices to reduce exposure to asset-backed securities, commercial mortgage-backed obligations and privately originated mortgage-backed bonds. On the other hand, they modestly increased holdings of federally supported mortgage-backed securities. This left the fund’s total mortgage exposure down only slightly for the year.

Corporate bonds have long been a core component of the fund’s portfolio and remained its largest sector exposure. As these bonds rallied during the first half of the year, portfolio counselors trimmed its exposure, primarily by reducing bank and financial obligations. During the second half of the year, counselors increased the fund’s weightings in consumer discretionary debt and energy bonds. Overall, corporate bonds ended the year with a 34.5% weighting in the portfolio, down marginally from the start of the year. Over the past two years, however, the reduction has been more significant; corporates totaled about 44.3% of portfolio holdings in mid-2008.

Despite these adjustments, The Bond Fund of America has maintained a broad exposure to the market, as can be seen in the charts atop the summary portfolio on page 11. Overall, the fund ended the year with more than 2,100 individual holdings, a 23% increase in net assets and more than 2.3 million shareholders.

Looking ahead

The recovery in the bond market over the past year has been truly impressive. In most respects, the market has returned to normal: It readily accommodates the daily fluctuations that move bond prices, and trading activity has increased significantly. This is the good news for 2010, and we do not expect a return to the troubles of 2008.

The year ahead, however, holds new uncertainties, as we mentioned earlier in the letter. While we have confidence that the market will contend with these issues in an orderly fashion as they unfold, we have also tempered our expectations for returns in the coming year. Though we continue to find longer term opportunities for our shareholders, we do not expect 2010 to deliver the outsized gains of last year.

In this environment, we believe that caution is the better part of prudency, and we have positioned the fund’s portfolio accordingly. We continue to rely heavily on the efforts of our analysts, traders, economists and market professionals to drive our investment decisions, and we are ever mindful of the importance this fund has for so many of our shareholders who view it as a pillar of stability and reliability in their overall portfolio. Accordingly, we invite you to read our feature article, “Bonds for the long run,” which begins on page 6 and takes a closer look at the relative stability bonds offer.

We thank you for this opportunity to help you achieve your financial goals, and we look forward to reporting to you again in six months.

Cordially,

/s/ Paul G. Haaga, Jr.

Paul G. Haaga, Jr.

Vice Chairman of the Board

/s/ John H. Smet

John H. Smet

President

February 5, 2010

For current information about the fund, visit americanfunds.com.

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We take this opportunity to thank Abner Goldstine for his many years of leadership and service as president of The Bond Fund of America. Beginning this year, John Smet has assumed the responsibilities of president. Abner has been with the fund since its inception in 1974. John has been with the fund for 20 years.

[End Sidebar]

The value of a long-term perspective

How a $10,000 investment has grown over the fund’s lifetime

Fund results shown are for Class A shares and reflect deduction of the maximum sales charge of 3.75% on the $10,000 ­investment.1 Thus, the net amount invested was $9,625.2 Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.

There have always been reasons not to invest. You will find, however, that despite occasional stumbles, financial markets have tended to reward investors over the long term.

Dividends, particularly when reinvested, have accounted for virtually all of the fund’s overall results. The table beneath the chart details the fund’s annual dividends and the cumulative value of the original investment.

Average annual total returns based on a $1,000 investment
(for periods ended December 31, 2009)*
	1 year			5 years			10 years
Class A shares		10.59	%		1.61	%		4.50	%
*Assumes reinvestment of all distributions and payment of the maximum 3.75% sales charge.

The total annual fund operating expense ratio was 0.65% for Class A shares as of the most recent fiscal year-end.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 25 and 26 for details.

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Year ended Dec 31	BFA with  dividends  reinvested4		Barclays Capital U.S. Aggregate Index3		Consumer Price Index (inflation)5
5/28/74	$	9,625	$	10,000	$	10,000
1974		9,988		10,318		10,679
1975		11,254		11,587		11,420
1976		13,293		13,395		11,975
1977		13,977		13,802		12,778
1978		14,261		13,994		13,930
1979		14,710		14,264		15,782
1980		15,230		14,650		17,757
1981		16,242		15,565		19,342
1982		21,586		20,643		20,082
1983		23,628		22,368		20,844
1984		26,450		25,756		21,667
1985		33,488		31,449		22,490
1986		38,568		36,250		22,737
1987		39,324		37,248		23,745
1988		43,533		40,186		24,794
1989		47,942		46,025		25,947
1990		49,509		50,149		27,531
1991		59,927		58,174		28,374
1992		66,722		62,480		29,198
1993		76,155		68,571		30,000
1994		72,335		66,572		30,802
1995		85,536		78,870		31,584
1996		91,274		81,733		32,634
1997		99,709		89,624		33,189
1998		104,863		97,409		33,724
1999		107,265		96,609		34,630
2000		113,906		107,841		35,802
2001		122,051		116,946		36,358
2002		129,514		128,939		37,222
2003		145,335		134,231		37,922
2004		153,837		140,055		39,156
2005		156,815		143,457		40,494
2006		166,032		149,674		41,523
2007		171,635		160,101		43,217
2008		150,619		168,491		43,257
2009		173,071		178,483		44,434

[end mountain chart]

Year ended
December 31		1974	6	1975	1976		1977	1978		1979		1980	1981
Total value
Dividends reinvested	$	418		907	1,020		1,126	1,211		1,401		1,724	2,118
Value at year-end	$	9,988		11,254	13,293		13,977	14,261		14,710		15,230	16,242
BFA’s total return		(0.1	)%	12.7	18.1		5.1	2.0		3.1		3.5	6.6
Year ended
December 31		1982		1983	1984		1985	1986		1987		1988	1989
Total value
Dividends reinvested		2,434		2,556	2,869		3,227	3,604		3,787		3,953	4,471
Value at year-end		21,586		23,628	26,450		33,488	38,568		39,324		43,533	47,942
BFA’s total return		32.9		9.5	11.9		26.6	15.2		2.0		10.7	10.1
Year ended
December 31		1990		1991	1992		1993	1994		1995		1996	1997
Total value
Dividends reinvested		4,699		4,909	5,275		5,325	5,733		6,178		6,473	6,704
Value at year-end		49,509		59,927	66,722		76,155	72,335		85,536		91,274	99,709
BFA’s total return		3.3		21.0	11.3		14.1	(5.0	)	18.2		6.7	9.2
Year ended
December 31		1998		1999	2000		2001	2002		2003		2004	2005
Total value
Dividends reinvested		7,007		7,398	8,190		8,228	8,189		7,370		6,913	7,924
Value at year-end		104,863		107,265	113,906		122,051	129,514		145,335		153,837	156,815
BFA’s total return		5.2		2.3	6.2		7.2	6.1		12.2		5.8	1.9
Year ended
December 31		2006		2007	2008		2009			Average
										annual
Total value										total return
Dividends reinvested		7,949		8,950	10,094		7,469			for fund’s
Value at year-end		166,032		171,635	150,619		173,071			lifetime:
BFA’s total return		5.9		3.4	(12.2	)	14.9			8.34	%4

1As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $100,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares.

2The maximum initial sales charge was 8.5% prior to December 15, 1986, when it became 4.75% until January 9, 2000.

3From May 28, 1974, through December 31, 1975, the Barclays Capital U.S. Government/Credit Index was used because the Barclays Capital U.S. Aggregate Index did not yet exist. Since January 1, 1976, the Barclays Capital U.S. Aggregate Index has been used. These indexes are unmanaged and their results do not reflect the effect of sales charges, commissions or expenses.

4Includes reinvested dividends of $177,805 and reinvested capital gain distributions of $4,573.

5Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.

6For the period ended May 28, 1974 (when fund operations began), through December 31, 1974.

The results shown are before taxes on fund distribution and sale of fund shares.

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Bonds for the long run

In our 2007 annual report, we addressed some of the lessons learned from difficult markets. One lesson was that sharp downturns in the bond market have often been followed by robust rebounds. We’ve seen ample evidence of this last year.

In late 2008, most bond sectors (except Treasuries) declined significantly during the darkest days of the financial crisis. In 2009, many of those same bonds retraced lost ground.

The 2009 bond rally also coincided with renewed investor interest in fixed-income securities. For much of the year, investors put far more money into bond funds than into stock funds, as measured by the Investment Company Institute, the trade organization for the mutual fund industry. This rotation into bonds occurred even as stock prices also rebounded strongly from multi-year lows.

Why the preference for bonds? No doubt some investors were chasing after expected short-term gains. More likely, in our view, many more were seeking the relative stability that bonds tend to provide, particularly in light of the extreme volatility that occurred in the stock market over the past two years.

In this article, we’ll take a closer look at the concept of bonds’ relative stability by taking a longer view of the bond market, its basic components and its fluctuations. In the process, we’ll discuss how and why bond funds should be a part of every investor’s long-term investment strategy.

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The perspective of a decade

The past decade has been an extraordinary period for U.S. stocks and bonds alike. Two major declines bookended the decade for stocks, with the most recent selloff being the most severe since the 1930s. Large portions of the bond market also withstood a major downturn in 2008, while Treasuries rallied and interest rates tumbled to historic lows. Nonetheless, the interim losses recorded by most of the nongovernment portions of the bond market were smaller than those of the stock market. Moreover, bond market returns for the decade just ended bested those of the stock market, as measured by their primary indexes: The Barclays Capital U.S. Aggregate Index (a benchmark for this fund) posted a cumulative return of 84.7% for the 10 years ended December 31, 2009, while Standard & Poor’s 500 Composite Index declined 9.1%.

Was this an anomaly? Yes and no. Over much longer periods of time, stocks have generally provided higher returns than bonds; but there are exceptions — other 10-year periods when bonds produced better results. During the 1970s, for example, there were several 10-year rolling periods when bond returns outpaced those of stocks. The quandary for investors is that no one can predict with certainty which asset class will produce the best results for the next 10 years. History offers insights, but its guidance is murky because markets and the forces that drive markets are constantly evolving.

To address this uncertainty, prudent investors must understand the differences between stocks and bonds, then carefully evaluate their tolerance for investment risk. With that knowledge, a financial adviser can help investors devise a strategy to achieve their long-term investment goals — a strategy that combines both stocks and bonds that are appropriate to the investor’s risk tolerance and time horizon.

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[Begin Sidebar]

Stocks + bonds = balance

Historically, bonds have helped buoy investment portfolios during stock market declines. We had ample evidence of this twice during the past decade. It is not unusual for stocks and bonds to move in different directions, but the main reason for incorporating bonds into an overall investment plan is that bonds tend to be less volatile than stocks. As this chart suggests, an investor who put equal amounts of money into stocks and bonds at the start of the decade would have done far better by the end of the decade than one who invested only in stocks.

[begin line chart]

	Stocks		Bonds		Stocks + Bonds
12/31/1999		10,000		10,000		10,000
3/31/2000		10,229		10,221		10,225
6/30/2000		9,957		10,399		10,178
9/30/2000		9,861		10,712		10,286
12/31/2000		9,090		11,163		10,126
3/31/2001		8,013		11,501		9,757
6/30/2001		8,481		11,566		10,024
9/30/2001		7,237		12,100		9,668
12/31/2001		8,010		12,105		10,058
3/31/2002		8,032		12,116		10,074
6/30/2002		6,957		12,564		9,760
9/30/2002		5,756		13,140		9,448
12/31/2002		6,241		13,347		9,794
3/31/2003		6,044		13,532		9,788
6/30/2003		6,974		13,871		10,422
9/30/2003		7,159		13,851		10,505
12/31/2003		8,030		13,894		10,962
3/31/2004		8,166		14,264		11,215
6/30/2004		8,306		13,915		11,111
9/30/2004		8,151		14,360		11,255
12/31/2004		8,903		14,497		11,700
3/31/2005		8,712		14,428		11,570
6/30/2005		8,831		14,862		11,846
9/30/2005		9,149		14,761		11,955
12/31/2005		9,340		14,849		12,094
3/31/2006		9,733		14,753		12,243
6/30/2006		9,592		14,742		12,167
9/30/2006		10,135		15,303		12,719
12/31/2006		10,814		15,493		13,153
3/31/2007		10,883		15,726		13,304
6/30/2007		11,566		15,644		13,605
9/30/2007		11,800		16,089		13,945
12/31/2007		11,407		16,572		13,990
3/31/2008		10,330		16,931		13,631
6/30/2008		10,049		16,759		13,404
9/30/2008		9,209		16,677		12,943
12/31/2008		7,188		17,440		12,314
3/31/2009		6,398		17,461		11,930
6/30/2009		7,417		17,772		12,594
9/30/2009		8,573		18,437		13,505
12/31/2009		9,090		18,475		13,783

[end line chart]

Assumes a hypothetical $10,000 investment on January 1, 2000, with all distributions reinvested. Stocks are represented by Standard & Poor’s 500 Composite Index. Bonds are represented by Barclays Capital U.S. Aggregate Index. The stocks & bonds portfolio consists of $5,000 invested in stocks and $5,000 invested in bonds at the beginning of the period. The indexes are unmanaged, and the portfolio was not rebalanced after the initial investment.

[End Sidebar]

Distinct securities

The fundamental distinction between stocks and bonds is that the former involves an ownership stake in a company, while the latter is a loan to a company or entity. As such, stocks represent an investment in the ability of a company to thrive over time, while bonds are an investment in the ability of a company or entity to make good on its debt. Thus, stockholders primarily seek capital appreciation (growth of principal), and bondholders primarily seek timely interest payments and the return of their principal (the loan) at maturity. The steady stream of interest payments exerts a moderating influence on bond returns during difficult markets.

Another important distinction is how these securities are treated in the capital structure, the building blocks of a company’s funding. Stocks and bonds are both integral parts of the funding structure, but bonds have seniority. In a worst-case scenario, for example, stockholders are typically wiped out if a company files for bankruptcy, while bondholders may have access to the company’s assets or may assume ownership of the company itself. In other words, bondholders often have a greater downside protection than do stockholders.

These basic distinctions point to underlying differences between the two asset classes, which influence their behavior under changing market conditions. Stocks, by virtue of their greater upside and downside potential, are historically more volatile than bonds. To be sure, both securities involve degrees of investment risk, but bonds are generally perceived to be less volatile over time than stocks. As a result, bond returns — particularly those with investment-grade ratings — are typically more moderate than stocks; but moderation can serve a vital function in a broader investment portfolio, as many have recently learned.

A question of allocation

The question for most investors is really not one of stocks or bonds. Rather, it is a question of determining the right mix of the two asset classes to best serve their investment goals. A financial adviser is the preferred resource for determining the optimum mix, based on the investor’s goals, ability to accept risk and the need for current income. Once an allocation to bonds has been determined, the question becomes which bonds?

Diversification among types of bonds can help smooth out returns and provide a steadier stream of income. Recent history provides an example. For decades, U.S. Treasuries have been the gold standard for investors, the universal safe haven during periods of market distress. During the worst days of the financial crisis, Treasuries rallied while most other sectors of the bond market sank. Indeed, for 2008, Treasuries returned 13.7%. In 2009, however, Treasuries gave up some of those gains, declining 3.6%. In contrast, corporate bonds fell 4.9% in 2008 but gained 18.7% in 2009. These variations point to the need for diversification within the bond portfolio because each sector of the market can respond differently to changing market conditions.

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[Begin Sidebar]

Bond market sector returns

This table shows the total return for major sectors of the bond market for 2008 and 2009. It also shows the average annual total return for each of these sectors for the past decade. While returns often fluctuate from year to year, as we have recently seen, they have tended to smooth out over time, as shown in the 10-year average annual total returns.

Sector	2008			2009			10-year average*
U.S. Treasuries		13.74	%		–3.57	%		6.15	%
U.S. Agencies		9.26			1.53			6.22
U.S. Corporates		–4.94			18.68			6.58
U.S. Mortgage-backed securities		8.34			5.89			6.46
U.S. Commercial mortgage-backed securities		–20.52			28.45			6.01
U.S. Asset-backed securities		–12.72			24.72			5.35
Global bonds		4.79			6.93			6.49
U.S. High Yield		–26.16			58.21			6.72
*Average annual total returns through 12/31/09

Source: Barclays Capital

[End Sidebar]

The relative stability of bonds becomes more apparent when investors take a longer view of the market and returns, as shown in the chart above. Since it is rare that all sectors of the market do equally well or poorly, financial advisers frequently recommend that investors diversify holdings, just as they would in a stock portfolio.

The Bond Fund of America aims to do just that by offering a broad selection of bonds culled from the various sectors of the market. The fund also strives to provide layers of diversity by investing in bonds of varying credit quality and across the spectrum of maturities available. This mix, however, is neither arbitrary nor fully inclusive. The fund is purposefully weighted in investment-grade bonds (those rated BBB or higher), and each holding is carefully selected for its potential to contribute to results based on the terms of the issue, prospects of the issuer and the outlook for market conditions. Yet with this approach, investors gain access to a wide variety of bonds that are actively managed to help shareholders meet their investment needs.

Management matters

A professionally managed bond portfolio like The Bond Fund of America offers advantages rarely available to the average investor. These include access to areas of the bond market that are restricted to institutions or high net worth individuals and a more broadly diversified portfolio.

The latter is especially important for investors seeking an element of stability from their bond holdings. Not only does the broader array of securities help to smooth out returns over time, but it affords professional managers the means necessary to make adjustments in response to changing market conditions without having to substantially alter the portfolio. These adjustments may entail increasing or reducing exposure to a sector or industry, altering the mix of credit quality in the fund, and/or extending or shortening the maturity structure of the portfolio.

As important as these modifications may be to preserving stability, it is even more important to know when and to what degree changes should be made. In this regard, the seasoned professional typically has an edge over amateur investors. The more expansive the pool of holdings, the greater the number of “tools” that becomes available to the manager seeking to steady a portfolio. To this end, The Bond Fund of America, with more than 2,100 individual holdings as of December 2009, affords greater flexibility to address changing markets than most individual investors could amass on their own.

[close-up photo of a suspension bridges' cables]

Income paces returns

Finally, bond managers and investors need to pay close attention to income. The interest payments a bond makes — or the dividends, in the case of bond funds — are a vital component of the total return. This income can boost total returns when bond prices are rising and can soften the effects of declining prices. For bond fund investors, income reinvested can contribute meaningfully to growth of principal over time; when the time comes, that same income can become a key source of funds for living in retirement.

The portfolio counselors of The Bond Fund of America recognize the importance of income and seek to provide a high level of current income for our shareholders. This is no small feat, given that interest rates reached multi-decade lows in the past year. In fact, rates have declined by more than half over the life of this fund, as measured by the 10-year Treasury. Nonetheless, The Bond Fund of America has consistently provided its shareholders with a competitive income return, exceeding its Lipper peer-group average in 33 of its 36 fiscal years.

The chart on pages 4 and 5 maps the importance of income for fund results and for our shareholders. It shows that the growth of a $10,000 investment over the life of the fund with dividends reinvested totaled about $173,000 at the end of 2009. Despite several difficult market periods along the way, the overall trend has been higher, reflecting the power of compounding through reinvestment. What may not be readily apparent is that all of the growth came from income reinvested.

An ancient fable tells us that slow and steady wins the race. In many respects, bonds resemble the fabled tortoise. They seldom provide the highest or lowest results in a given year. Yet over time, patient investors may enjoy the benefits of the regular income and steady results they have historically provided. n

Summary investment portfolio, December 31, 2009

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

[begin pie chart]

Portfolio by type of security (percent of net assets)
Corporate bonds & notes	34.47
Bonds & notes of U.S. government & government agencies	28.92
Mortgage-backed obligations	23.78
Bonds & notes of governments & government agencies outside the U.S.	5.91
Asset-backed obligations	2.73
Preferred securities	1.49
Municipals	0.38
Convertible securities	0.05
Common stocks & warrants	0.04
Short-term securities & other assets less liabilities	2.23

[end pie chart]

Portfolio quality summary (percent of net assets)*
U.S. government obligations†	27.5	%
Federal agencies	19.2
AAA	8.2
AA	4.9
A	12.5
BBB	17.0
BB or below	8.5
Short-term securities & other assets less liabilities	2.2
* 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 - 96.19%		(000	)		(000	)	assets
Corporate bonds & notes - 34.47%
Financials - 9.65%
Other securities				$	3,821,574			9.65	%
Consumer discretionary - 4.55%
Other securities					1,803,090			4.55
Energy - 3.65%
Other securities					1,443,937			3.65
Industrials - 3.46%
Other securities					1,370,021			3.46
Telecommunication services - 3.34%
Verizon Communications Inc. 3.75% 2011	$	111,950			115,478			.29
Other securities					1,205,086			3.05
					1,320,564			3.34
Utilities - 3.08%
Other securities					1,220,331			3.08
Health care - 2.73%
Other securities					1,079,145			2.73
Other corporate bonds & notes - 4.01%
Other securities					1,588,568			4.01
Total corporate bonds & notes					13,647,230			34.47
Bonds & notes of U.S. government & government agencies - 28.92%
U.S. Treasury:
1.00% 2011		129,450			129,660
1.125% 2011		262,675			262,793
1.125% 2011		146,100			146,705
1.75% 2011		177,959			180,221
4.625% 2011		133,500			142,657
1.50% 2012		125,815			126,026
4.25% 2012		100,000			107,328
2.00% 2013		220,540			219,402
2.75% 2013		132,160			135,377
3.375% 2013		175,260			183,995
3.625% 2013		105,400			111,621
4.25% 2013		654,036			705,953
1.75% 2014		461,170			452,505
1.875% 2014		158,400			155,813
1.875% 2014		100,000			97,961
2.25% 2014		111,500			110,760
2.00% 2014  (1)  (2)		144,514			153,177
2.625% 2014		204,800			205,871
4.00% 2015		241,630			256,874
4.125% 2015		155,380			165,716
4.25% 2015		154,000			164,876
11.25% 2015		133,500			188,423
2.375% 2016		237,400			227,180
2.625% 2016		389,250			377,269
3.00% 2016		232,585			228,787
3.25% 2016		130,915			131,478
3.25% 2016		100,750			100,946
4.50% 2017		153,250			163,893
4.625% 2017		92,375			99,786
3.50% 2018		749,735			743,730
3.75% 2018		610,825			610,898
3.875% 2018		107,500			109,179
3.125% 2019		797,090			754,964
3.375% 2019		105,600			101,590
3.625% 2019		148,220			145,748
6.875% 2025		93,610			118,877
4.50% 2036		286,367			282,249
4.375% 2038		129,610			124,506
0%-8.875% 2010-2039 (1)  (2)		1,568,394			1,656,040			26.22
Freddie Mac 1.75%-5.50% 2010-2016		240,990			246,197			.62
Fannie Mae 1.00%-6.125% 2011-2017		124,750			128,743			.32
Federal Home Loan Bank 3.625% 2013		93,000			97,288			.25
Other securities					598,391			1.51
					11,451,453			28.92
Mortgage-backed obligations - 23.78%
Federal agency mortgage-backed obligations (3) - 17.76%
Fannie Mae:
4.00% 2024		129,874			130,894
4.50% 2024		130,431			134,405
5.00% 2036		107,693			110,726
6.00% 2037		108,684			115,307
5.50% 2038		293,956			308,088
6.50% 2038		160,956			172,575
0%-11.829% 2012-2047 (4)		4,262,562			4,450,586			13.70
Freddie Mac:
6.00% 2027		125,933			134,418
6.00% 2038		106,249			112,778
0%-10.00% 2019-2047 (4)		1,139,450			1,192,123			3.63
Other securities					169,265			.43
					7,031,165			17.76
Commercial mortgage-backed securities (3) - 3.88%
Fannie Mae 4.491%-7.30% 2010-2012		151,325			156,904			.40
Other securities					1,378,962			3.48
					1,535,866			3.88
Other mortgage-backed securities - 2.14%
Other securities					845,671			2.14
Total mortgage-backed obligations					9,412,702			23.78
Bonds & notes of governments & government agencies outside the U.S. - 5.91%
Other securities					2,341,492			5.91
Asset-backed obligations - 2.73%
Other securities					1,080,143			2.73
Municipals - 0.38%
Other securities					151,283			.38
Total bonds & notes (cost: $37,738,120,000)					38,084,303			96.19
							Percent
				Value			of net
Convertible securities - 0.05%					(000	)	assets
Other - 0.05%
Other securities					19,319			.05
Total convertible securities (cost: $15,432,000)					19,319			.05
							Percent
				Value			of net
Preferred securities - 1.49%					(000	)	assets
Other - 1.49%
Other securities					588,636			1.49
Total preferred securities (cost: $596,665,000)					588,636			1.49
							Percent
				Value			of net
Common stocks - 0.04%					(000	)	assets
Other - 0.04%
Other securities					15,574			.04
Total common stocks (cost: $32,598,000)					15,574			.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 - 1.30%		(000	)		(000	)	assets
U.S. Treasury Bills 0.18%-0.325% due 6/17-10/21/2010	$	152,200			151,874			.38
Straight-A Funding LLC 0.14%-0.18% due 1/26-3/18/2010 (5)		119,300			119,277			.30
Fannie Mae 0.43% due 12/3/2010		33,700			33,564			.09
Freddie Mac 0.215% due 1/27/2010		8,600			8,599			.02
Other securities					203,455			.51
Total short-term securities (cost: $516,834,000)					516,769			1.30
Total investment securities (cost: $38,899,792,000)					39,224,601			99.07
Other assets less liabilities					369,553			.93
Net assets				$	39,594,154			100.00	%

"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. One of these securities (with a value of $7,045,000, which represented .02% 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 summary investment portfolio. Further details on these holdings and related transactions during the year ended December 31, 2009, appear below.

	Beginning shares		Additions		Reductions		Ending shares		Dividend income (000	)		Value of affiliate at 12/31/09 (000	)
Clarent Hospital Corp. Liquidating Trust (1) (6)		331,291		-		-		331,291	-		$	17
ZiLOG, Inc. (6) (7)		879,000		-		404,000		475,000	-			-
									-		$	17

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) 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 $579,205,000, which represented 1.46% of the net assets of the fund.

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

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

(4) Coupon rate may change periodically.

(5) 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 $5,187,968,000, which represented 13.10% of the net assets of the fund.

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

(7) Unaffiliated issuer at 12/31/2009.

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities
at December 31, 2009	(dollars in thousands)
Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $38,897,691)	$	39,224,584
Affiliated issuer (cost: $2,101)		17	$	39,224,601
Cash				2,144
Unrealized appreciation on open forward currency contracts				20,729
Receivables for:
Sales of investments		21,154
Sales of fund's shares		68,618
Closed forward currency contracts		6,027
Interest		404,172		499,971
				39,747,445
Liabilities:
Unrealized depreciation on open forward currency contracts				378
Payables for:
Purchases of investments		9,942
Repurchases of fund's shares		109,726
Closed forward currency contracts		5,252
Investment advisory services		7,485
Services provided by affiliates		16,620
Directors' deferred compensation		413
Other		3,475		152,913
Net assets at December 31, 2009			$	39,594,154
Net assets consist of:
Capital paid in on shares of capital stock			$	43,657,543
Undistributed net investment income				9,590
Accumulated net realized loss				(4,417,802	)
Net unrealized appreciation				344,823
Net assets at December 31, 2009			$	39,594,154

	(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 5,000,000 shares, $.001 par value (3,354,571 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	27,348,991		2,317,113	$	11.80
Class B		1,211,612		102,653		11.80
Class C		3,188,886		270,175		11.80
Class F-1		2,328,872		197,311		11.80
Class F-2		737,081		62,448		11.80
Class 529-A		758,472		64,261		11.80
Class 529-B		86,587		7,336		11.80
Class 529-C		369,647		31,318		11.80
Class 529-E		40,317		3,416		11.80
Class 529-F-1		44,576		3,777		11.80
Class R-1		102,752		8,706		11.80
Class R-2		794,717		67,331		11.80
Class R-3		1,090,827		92,419		11.80
Class R-4		787,941		66,757		11.80
Class R-5		451,114		38,220		11.80
Class R-6		251,762		21,330		11.80
(*) 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 $12.26 each.
See Notes to Financial Statements

Statement of operations
for the year ended December 31, 2009				(dollars in thousands)
Investment income:
Income:
Interest (net of non-U.S. taxes of $6)	$	1,980,096
Dividends		10,190		$	1,990,286
Fees and expenses*:
Investment advisory services		86,265
Distribution services		129,634
Transfer agent services		35,226
Administrative services		19,313
Reports to shareholders		2,209
Registration statement and prospectus		6,881
Directors' compensation		558
Auditing and legal		212
Custodian		645
State and local taxes		264
Other		1,742			282,949
Net investment income					1,707,337
Net realized loss and unrealized appreciation
on investments, forward currency contracts and currency:
Net realized loss on:
Investments (net of non-U.S. taxes of $55; also includes $5,965 net loss from affiliate)		(2,533,486	)
Forward currency contracts		(96,337	)
Currency transactions		(9,097	)		(2,638,920	)
Net unrealized appreciation on:
Investments		6,078,820
Forward currency contracts		58,195
Currency translations		1,087			6,138,102
Net realized loss and unrealized appreciation
on investments, forward currency contracts and currency					3,499,182
Net increase in net assets resulting from operations				$	5,206,519
(*) 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
		2009			2008
Operations:
Net investment income	$	1,707,337		$	2,017,552
Net realized loss on investments, forward currency contracts and currency transactions		(2,638,920	)		(1,215,405	)
Net unrealized appreciation (depreciation) on investments, forward currency contracts and currency translations		6,138,102			(5,526,626	)
Net increase (decrease) in net assets resulting from operations		5,206,519			(4,724,479	)
Dividends paid to shareholders from net investment income		(1,665,583	)		(2,153,748	)
Net capital share transactions		3,865,207			3,247,995
Total increase (decrease) in net assets		7,406,143			(3,630,232	)
Net assets:
Beginning of year		32,188,011			35,818,243
End of year (including undistributed and distributions in excess of
net investment income: $9,590 and $(42,588), respectively)	$	39,594,154		$	32,188,011
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.

On November 24, 2009, shareholders approved a proposal to reorganize the fund from a Maryland corporation to a Delaware statutory trust. The reorganization may be completed in 2010 or early 2011; however, the fund reserves the right to delay the implementation. Shareholders also approved amendments to the fund’s Investment Advisory and Service Agreement and amendments to and elimination of certain fundamental investment policies of the fund.

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 not 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 on the previous page 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 recognizedon 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.

2. Risk factors

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

The fund is subject to risks, including the possibility that the fund's income and the value of its portfolio holdings may fluctuate in response to economic, political or social events in the U.S. or abroad.

The prices of, and the income generated by, most debt securities held by the fund may be affected by changing interest rates, by changes in the effective maturities and credit ratings of these securities, as well as by events specifically involving the issuers of those securities. For example, the prices 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 may be subject to greater price fluctuations than higher quality or shorter maturity debt securities.

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 values 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 December 31, 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 2006, by state tax authorities for tax years before 2005 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 different 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; net capital losses; amortization of premiums 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, 2009, the fund reclassified $156,000 from undistributed net investment income to capital paid in on shares of capital stock and $10,580,000 from accumulated net realized loss to undistributed net investment income to align financial reporting with tax reporting.

As of December 31, 2009, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	49,754
Capital loss carryforwards*:
Expiring 2010	$	(125,233	)
Expiring 2011		(243,982	)
Expiring 2014		(69,196	)
Expiring 2016		(959,389	)
Expiring 2017		(2,930,992	)		(4,328,792	)
Gross unrealized appreciation on investment securities					1,209,369
Gross unrealized depreciation on investment securities					(991,071	)
Net unrealized appreciation on investment securities					218,298
Cost of investment securities					39,006,303
*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	2009		2008
Class A	$	1,171,526	$	1,505,354
Class B		49,620		77,235
Class C		108,139		136,921
Class F-1		126,279		183,086
Class F-2*		20,625		1,971
Class 529-A		29,648		34,549
Class 529-B		3,028		4,096
Class 529-C		11,797		14,236
Class 529-E		1,491		1,715
Class 529-F-1		1,600		1,624
Class R-1		3,811		4,662
Class R-2		26,641		35,404
Class R-3		44,173		59,775
Class R-4		34,735		47,010
Class R-5		27,537		46,110
Class R-6†		4,933		-
Total	$	1,665,583	$	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 Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares, and American Funds Service Company® ("AFS"), the fund’s transfer agent.

Investment advisory services - The Investment Advisory and Service Agreement with CRMC providesfor 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 year ended December 31, 2009, the investment advisory services fee was $86,265,000, which was equivalent to an annualized rate of 0.234% 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 December 31, 2009, unreimbursed expenses subject to reimbursement totaled $2,443,000 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 as 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 above for the year ended December 31, 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	$63,349	$33,634	Not applicable	Not applicable	Not applicable
Class B	12,578	1,592	Not applicable	Not applicable	Not applicable
Class C	28,416	Included in administrative services	$4,265	$720	Not applicable
Class F-1	6,588		3,457	325	Not applicable
Class F-2	Not applicable		582	40	Not applicable
Class 529-A	1,364		650	127	$651
Class 529-B	798		80	29	80
Class 529-C	3,139		314	91	315
Class 529-E	175		35	7	35
Class 529-F-1	-		34	7	34
Class R-1	980		128	53	Not applicable
Class R-2	5,292		1,052	2,313	Not applicable
Class R-3	5,080		1,472	710	Not applicable
Class R-4	1,875		1,081	32	Not applicable
Class R-5	Not applicable		523	14	Not applicable
Class R-6*	Not applicable		57	- †	Not applicable
Total	$129,634	$35,226	$13,730	$4,468	$1,115

* 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 CRMC may 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 $558,000, shown on the accompanying financial statements, includes $468,000 in current fees (either paid in cash or deferred) and a net increase of $90,000 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 December 31, 2009 (dollars in thousands):

Investment securities:	Level 1		Level 2		Level 3		Total
Bonds & notes:
Corporate bonds & notes	$	-	$	13,646,270	$	960	$	13,647,230
Bonds & notes of U.S. government & government agencies		-		11,451,453		-		11,451,453
Mortgage-backed obligations		-		9,401,879		10,823		9,412,702
Bonds & notes of governments & government agencies outside the U.S.		-		2,341,492		-		2,341,492
Asset-backed obligations		-		1,064,750		15,393		1,080,143
Municipals		-		151,283		-		151,283
Convertible securities		-		19,319		-		19,319
Preferred securities		16,144		572,492		-		588,636
Common stocks		15,529		-		45		15,574
Short-term securities		-		516,769		-		516,769
Total	$	31,673	$	39,165,707	$	27,221	$	39,224,601
	Level 1		Level 2		Level 3		Total
Forward currency contracts (*)		-	$	20,351		-	$	20,351

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the year ended December 31, 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 12/31/2009
Investment securities	$	523,921	$	(145,353	)	$	2,109	$	6,750	$	(360,206	)	$	27,221
Net unrealized appreciation during the period on Level 3 investment securities held at December 31, 2009 (dollars in thousands) (†):													$	1,024
(*) 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 and distributions				Repurchases(1)						Net increase (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended December 31, 2009
Class A	$	8,658,161		782,590	$	1,064,353		95,240	$	(6,787,523	)		(604,967	)	$	2,934,991			272,863
Class B		258,257		23,640		44,500		3,996		(437,963	)		(39,085	)		(135,206	)		(11,449	)
Class C		1,306,870		118,167		94,973		8,498		(762,734	)		(67,922	)		639,109			58,743
Class F-1		1,658,840		150,099		109,818		9,879		(2,355,758	)		(209,330	)		(587,100	)		(49,352	)
Class F-2		723,216		65,057		15,631		1,368		(149,439	)		(13,148	)		589,408			53,277
Class 529-A		219,770		19,609		29,524		2,638		(99,735	)		(8,863	)		149,559			13,384
Class 529-B		15,490		1,398		3,016		270		(10,965	)		(975	)		7,541			693
Class 529-C		130,705		11,657		11,741		1,050		(60,952	)		(5,395	)		81,494			7,312
Class 529-E		13,309		1,189		1,484		133		(6,541	)		(574	)		8,252			748
Class 529-F-1		21,956		1,931		1,590		141		(7,963	)		(702	)		15,583			1,370
Class R-1		49,412		4,420		3,722		334		(47,225	)		(4,184	)		5,909			570
Class R-2		315,716		28,235		26,421		2,366		(229,867	)		(20,531	)		112,270			10,070
Class R-3		411,155		36,770		43,747		3,920		(399,873	)		(35,607	)		55,029			5,083
Class R-4		289,937		25,938		34,544		3,095		(313,682	)		(27,975	)		10,799			1,058
Class R-5		281,846		25,451		25,360		2,289		(568,691	)		(51,568	)		(261,485	)		(23,828	)
Class R-6(2)		237,322		21,177		4,926		425		(3,194	)		(272	)		239,054			21,330
Total net increase
(decrease)	$	14,591,962		1,317,328	$	1,515,350		135,642	$	(12,242,105	)		(1,091,098	)	$	3,865,207			361,872
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 $20,116,691,000 and $22,144,502,000, respectively, during the year ended December 31, 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 December 31, 2009, the fund had open forward currency contracts to sell currencies as follows (amounts in thousands):

	Settlement	Contract amount				Unrealized  (depreciation) appreciation at December 31, 2009
	date	Receive		Deliver
Sales:
Australian dollars	2/5/2010	$	41,831	$	A47,100	$	(332	)
Australian dollars	2/8/2010	$	70,789	$	A78,610		440
British pounds	1/7/2010	$	13,944	£	8,335		463
Danish kroner	1/29/2010	$	17,456	DKr87,715			573
Danish kroner	2/4/2010	$	57,581	DKr291,110			1,553
Euros	1/6/2010	$	20,141	€	13,500		801
Euros	1/7/2010	$	375	€	250		17
Euros	1/22/2010	$	109,451	€	71,350		4,236
Euros	1/26/2010	$	2,258	€	1,500		106
Euros	1/26/2010	$	57,355	€	38,085		2,593
Euros	1/27/2010	$	46,344	€	30,875		2,112
Euros	1/27/2010	$	41,946	€	28,370		1,302
Euros	1/28/2010	$	17,323	€	11,740		504
Euros	1/28/2010	$	34,962	€	23,535		1,246
Euros	1/28/2010	$	17,274	€	11,695		519
Euros	1/29/2010	$	52,573	€	35,570		1,615
Euros	2/8/2010	$	28,450	€	18,860		1,432
Euros	2/8/2010	$	35,514	€	23,940		1,217
Israeli shekels	1/6/2010	$	6,552	ILS25,000			(46	)
Forward currency contracts - net						$	20,351

9. Subsequent events

As of February 5, 2010, 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:
Year ended 12/31/2009	$	10.76	$	.53	$	1.03		$	1.56		$	(.52	)	$	11.80		14.91	%	$	27,349		.65	%		.65	%		4.74	%
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
Class B:
Year ended 12/31/2009		10.76		.45		1.03			1.48			(.44	)		11.80		14.06			1,212		1.40			1.40			4.05
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
Class C:
Year ended 12/31/2009		10.76		.44		1.03			1.47			(.43	)		11.80		14.00			3,189		1.44			1.44			3.91
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
Class F-1:
Year ended 12/31/2009		10.76		.53		1.03			1.56			(.52	)		11.80		14.91			2,329		.65			.65			4.80
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
Class F-2:
Year ended 12/31/2009		10.76		.56		1.03			1.59			(.55	)		11.80		15.19			737		.39			.39			4.66
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 12/31/2009		10.76		.53		1.03			1.56			(.52	)		11.80		14.86			758		.70			.70			4.67
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
Class 529-B:
Year ended 12/31/2009		10.76		.44		1.03			1.47			(.43	)		11.80		13.94			86		1.50			1.50			3.89
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
Class 529-C:
Year ended 12/31/2009		10.76		.44		1.03			1.47			(.43	)		11.80		13.95			370		1.49			1.49			3.87
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
Class 529-E:
Year ended 12/31/2009		10.76		.49		1.03			1.52			(.48	)		11.80		14.52			40		.99			.99			4.38
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
Class 529-F-1:
Year ended 12/31/2009	$	10.76	$	.55	$	1.03		$	1.58		$	(.54	)	$	11.80		15.09	%	$	44		.49	%		.49	%		4.84	%
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
Class R-1:
Year ended 12/31/2009		10.76		.44		1.03			1.47			(.43	)		11.80		14.02			103		1.43			1.43			3.96
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
Class R-2:
Year ended 12/31/2009		10.76		.44		1.03			1.47			(.43	)		11.80		13.95			795		1.49			1.49			3.89
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
Class R-3:
Year ended 12/31/2009		10.76		.50		1.03			1.53			(.49	)		11.80		14.54			1,091		.97			.97			4.43
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
Class R-4:
Year ended 12/31/2009		10.76		.53		1.03			1.56			(.52	)		11.80		14.90			788		.66			.66			4.75
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
Class R-5:
Year ended 12/31/2009		10.76		.56		1.03			1.59			(.55	)		11.80		15.24			451		.37			.37			5.20
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
Class R-6:
Period from 5/1/2009 to 12/31/2009		10.78		.35		1.01			1.36			(.34	)		11.80		12.75			252		.31	(5)		.31	(5)		4.59	(5)

	Year ended December 31
	2009			2008			2007			2006			2005
Portfolio turnover rate for all classes of shares		84	%		57	%		58	%		53	%		50	%

(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)Annualized.

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, 2009, 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, 2009, 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, 2009, 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 5, 2010

Expense example        

                                                                                                                                         &# 160;   unaudited

As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2009, through December 31, 2009).

Actual expenses:

The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes:

The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Notes:

There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually), that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.

Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning account value 7/1/2009		Ending account value 12/31/2009		Expenses paid during period*		Annualized expense ratio
Class A -- actual return	$	1,000.00	$	1,073.29	$	3.29		.63	%
Class A -- assumed 5% return		1,000.00		1,022.03		3.21		.63
Class B -- actual return		1,000.00		1,069.47		7.15		1.37
Class B -- assumed 5% return		1,000.00		1,018.30		6.97		1.37
Class C -- actual return		1,000.00		1,069.16		7.46		1.43
Class C -- assumed 5% return		1,000.00		1,018.00		7.27		1.43
Class F-1 -- actual return		1,000.00		1,073.29		3.29		.63
Class F-1 -- assumed 5% return		1,000.00		1,022.03		3.21		.63
Class F-2 -- actual return		1,000.00		1,074.57		1.99		.38
Class F-2 -- assumed 5% return		1,000.00		1,023.29		1.94		.38
Class 529-A -- actual return		1,000.00		1,073.07		3.55		.68
Class 529-A -- assumed 5% return		1,000.00		1,021.78		3.47		.68
Class 529-B -- actual return		1,000.00		1,068.88		7.77		1.49
Class 529-B -- assumed 5% return		1,000.00		1,017.69		7.58		1.49
Class 529-C -- actual return		1,000.00		1,068.91		7.72		1.48
Class 529-C -- assumed 5% return		1,000.00		1,017.74		7.53		1.48
Class 529-E -- actual return		1,000.00		1,071.53		5.06		.97
Class 529-E -- assumed 5% return		1,000.00		1,020.32		4.94		.97
Class 529-F-1 -- actual return		1,000.00		1,074.12		2.46		.47
Class 529-F-1 -- assumed 5% return		1,000.00		1,022.84		2.40		.47
Class R-1 -- actual return		1,000.00		1,069.20		7.41		1.42
Class R-1 -- assumed 5% return		1,000.00		1,018.05		7.22		1.42
Class R-2 -- actual return		1,000.00		1,069.02		7.61		1.46
Class R-2 -- assumed 5% return		1,000.00		1,017.85		7.43		1.46
Class R-3 -- actual return		1,000.00		1,017.61		5.01		.96
Class R-3 -- assumed 5% return		1,000.00		1,020.37		4.89		.96
Class R-4 -- actual return		1,000.00		1,073.19		3.40		.65
Class R-4 -- assumed 5% return		1,000.00		1,021.93		3.31		.65
Class R-5 -- actual return		1,000.00		1,074.72		1.83		.35
Class R-5 -- assumed 5% return		1,000.00		1,023.44		1.79		.35
Class R-6 -- actual return		1,000.00		1,074.98		1.57		.30
Class R-6 -- assumed 5% return		1,000.00		1,023.69		1.53		.30

*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period).

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, 2009:

Qualified dividend income	$68,623,000
Corporate dividends received deduction	$15,160,000
U.S. government income that may be exempt from state taxation	$207,203,000

Individual shareholders should refer to their Form 1099 or other tax information, which was mailed in January 2010, to determine the calendar year amounts to be included on their 2009 tax returns. Shareholders should consult their tax advisers.

Approval of Investment Advisory and Service Agreement

The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through October 31, 2010. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the fund and its shareholders.

In reaching this decision, the board and the committee took into account information furnished to them throughout the year, as well as information prepared specifically in connection with their review of the agreement and were advised by their independent counsel. They considered the factors discussed below, among others, but did not identify any single issue or particular piece of information that, in isolation, was the controlling factor.

1. Nature, extent and quality of services

The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of its organization; and the ongoing evolution of CRMC’s organizational structure designed to maintain and strengthen these qualities. The board and the committee considered, among other things, the impact of current market conditions on the fund and CRMC. The board and the committee also considered the nature, extent and quality of administrative, compliance and shareholder services provided by CRMC to the fund under the agreement and other agreements as well as the benefits to fund shareholders from investing in a fund that is part of a large family of funds. The board and the committee concluded that the nature, extent and quality of the services provided by CRMC have benefited and should continue to benefit the fund and its shareholders.  

2. Investment results

The board and the committee considered the investment results of the fund in light of its objective of providing as high a level of current income as is consistent with the preservation of capital. They compared the fund’s total returns with those of other relevant funds (including the other funds that are the basis of the Lipper index for the category in which the fund is included) and market data such as relevant market indices, in each case as available at the time of the related meetings. In addition to the information reviewed by the board and the committee, this report, including the letter to shareholders and related disclosures, contains certain information about the fund’s investment results. The board and the committee concluded that although the fund’s net asset value per share had declined during the one-year period ended December 31, 2008, its long-term results have been satisfactory and that CRMC’s record in managing the fund indicated that its continued management should benefit the fund and its shareholders.

3. Advisory fees and total expenses

The board and the committee compared the advisory fees and total expense levels of the fund to those of other relevant funds. They observed that the fund’s advisory fees and expenses remain significantly below those of most other relevant funds. The board and the committee also noted the breakpoint discounts in the fund’s advisory fee structure that reduce the level of fees charged by CRMC to the fund as fund assets increase. In addition, they reviewed information regarding the advisory fees paid by institutional clients of an affiliate of CRMC with investment mandates similar to those of the fund. They noted that, although the fees paid by those clients generally were lower than those paid by the fund, the differences appropriately reflected the significant investment, operational and regulatory differences between advising mutual funds and institutional clients. The board and the committee concluded that the fund’s cost structure was fair and reasonable in relation to the services provided and that the shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund.

4. Ancillary benefits

The board and the committee considered a variety of other benefits received by CRMC and its affiliates as a result of CRMC’s relationship with the fund and the other American Funds, including fees for administrative services provided to certain share classes; fees paid to CRMC’s affiliated transfer agent; sales charges and distribution fees received and retained by the fund’s principal underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC’s institutional management affiliates. The board and the committee reviewed CRMC’s portfolio trading practices, noting that while CRMC receives the benefit of research provided by broker-dealers executing portfolio transactions on behalf of the fund, it does not obtain third-party research or other services in return for allocating brokerage to such broker-dealers. The board and the committee took these ancillary benefits into account in evaluating the reasonableness of the advisory fees and other amounts paid to CRMC by the fund.

5. Adviser financial information

The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments and attract and retain qualified personnel. They noted information previously received regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability to the reported results of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure and the termination of CRMC’s 10% advisory fee waiver effective December 31, 2008. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.

Other share class results

unaudited

Classes B, C, F and 529

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.

Average annual total returns for periods ended December 31, 2009:
	1 year			5 years			Life of class
Class B shares1 — first sold 3/15/00
Reflecting applicable contingent deferred sales charge
(CDSC), maximum of 5%, payable only if shares
are sold within six years of purchase		9.06	%		1.31	%		4.24	%
Not reflecting CDSC		14.06			1.63			4.24
Class C shares — first sold 3/15/01
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase		13.00			1.58			3.62
Not reflecting CDSC		14.00			1.58			3.62
Class F-1 shares2 first sold 3/15/01
Not reflecting annual asset-based fee charged
by sponsoring firm		14.91			2.39			4.42
Class F-2 shares2 — first sold 8/4/08
Not reflecting annual asset-based fee charged
by sponsoring firm		15.19			—			2.90
Class 529-A shares3 — first sold 2/15/02
Reflecting 3.75% maximum sales charge		10.54			1.56			3.89
Not reflecting maximum sales charge		14.86			2.34			4.40
Class 529-B shares1,3 — first sold 2/15/02
Reflecting applicable CDSC, maximum of 5%, payable
only if shares are sold within six years of purchase		8.94			1.18			3.52
Not reflecting CDSC		13.94			1.51			3.52
Class 529-C shares3 — first sold 2/19/02
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase		12.95			1.52			3.56
Not reflecting CDSC		13.95			1.52			3.56
Class 529-E shares2,3 — first sold 3/7/02		14.52			2.03			4.11
Class 529-F-1 shares2,3 — first sold 9/26/02
Not reflecting annual asset-based fee charged
by sponsoring firm		15.09			2.52			4.79
1 These shares are not available for purchase.
2 These shares are sold without any initial or contingent deferred sales charge.
3 Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 25 and 26 for details that include expense ratios for all share classes.

For information regarding the differences among the various share classes, refer to the fund’s prospectus.

Board of directors and other officers

“Independent” directors
	Year first
	elected a
	director of
Name and age	the fund1	Principal occupation(s) during past five years
Lee A. Ault III,4 73	2010	Private investor and corporate director; former
		Chairman of the Board, In-Q-Tel, Inc. (technology
		venture company funded principally by the Central
		Intelligence Agency); former Chairman of the Board,
		President and CEO, Telecredit, Inc. (payment
		services)
William H. Baribault,4 64	2010	Chairman of the Board and CEO, Oakwood
		Enterprises (private investment and consulting);
		former Chairman of the Board, President and CEO,
		Professional Business Bank (financial services for
		small businesses); former President and CEO, Henry
		Company (building products)
Ambassador	1999	Corporate director and author; former U.S.
Richard G. Capen, Jr., 75		Ambassador to Spain; former Vice Chairman, Knight-
		Ridder, Inc. (communications company); former
		Chairman and Publisher, The Miami Herald
James G. Ellis, 63	2006	Dean and Professor of Marketing, Marshall School of
		Business, University of Southern California
Martin Fenton, 74	1989	Chairman of the Board, Senior Resource Group LLC
Chairman of the Board		(development and management of senior living
(Independent and Non-Executive)		communities)
Leonard R. Fuller, 63	1994	President and CEO, Fuller Consulting (financial
		management consulting firm)
W. Scott Hedrick,4 64	2010	Founding General Partner, InterWest Partners
		(a venture capital firm); Visiting Lecturer, Stanford
		Graduate School of Business
R. Clark Hooper, 63	2005	Private investor; former President, Dumbarton Group
		LLC (securities industry consulting); former Executive
		Vice President — Policy and Oversight, NASD
Merit E. Janow,4 51	2010	Professor, Columbia University, School of
		International and Public Affairs; former Member,
		World Trade Organization Appellate Body
Laurel B. Mitchell, Ph.D., 54	2009	Director, Accounting Program, University of Redlands
Richard G. Newman, 75	1991	Chairman of the Board, AECOM Technology
		Corporation (engineering, consulting and professional
		technical services)
Frank M. Sanchez, 66	1999	Principal, The Sanchez Family Corporation dba
		McDonald’s Restaurants (McDonald’s licensee)
Margaret Spellings,4 52	2010	President and CEO, Margaret Spellings & Company;
		former United States Secretary of Education, United
		States Department of Education — Federal
		Government Agency; former Assistant to the
		President for Domestic Policy, The White House —
		Federal Government, Executive Branch — Domestic
		Policy
Steadman Upham, Ph.D., 60	2007	President and Professor of Anthropology, The
		University of Tulsa; former President and Professor of
		Archaeology, Claremont Graduate University
“Independent” directors
	Number of
	portfolios
	in fund
	complex2
	overseen by
Name and age	director	Other directorships3 held by director
Lee A. Ault III,4 73	38	Anworth Mortgage Asset Corporation;
		Office Depot, Inc.
William H. Baribault,4 64	38	None
Ambassador	12	Carnival Corporation
Richard G. Capen, Jr., 75
James G. Ellis, 63	41	Quiksilver, Inc.
Martin Fenton, 74	41	None
Chairman of the Board
(Independent and Non-Executive)
Leonard R. Fuller, 63	41	None
W. Scott Hedrick,4 64	38	Office Depot, Inc.; Hot Topic, Inc.
R. Clark Hooper, 63	44	JPMorgan Value Opportunities Fund, Inc.;
		The Swiss Helvetia Fund, Inc.
Merit E. Janow,4 51	41	The NASDAQ Stock Market LLC;
		Trimble Navigation Limited
Laurel B. Mitchell, Ph.D., 54	38	None
Richard G. Newman, 75	13	Sempra Energy; SouthWest Water Company
Frank M. Sanchez, 66	38	None
Margaret Spellings,4 52	38	None
Steadman Upham, Ph.D., 60	41	None

H. Frederick Christie, a director of the fund since 1974, retired from the board in December 2009. The directors thank Mr. Christie for his dedication and service to the fund.

See page 34 for footnotes

“Interested” directors5
	Year first
	elected a
	director or	Principal occupation(s) during past five years and
Name, age and	officer of	positions held with affiliated entities or the
position with fund	the fund1	principal underwriter of the fund
Paul G. Haaga, Jr., 61	1985	Vice Chairman of the Board, Capital Research and
Vice Chairman of the Board		Management Company; Senior Vice President — Fixed Income, Capital Research and Management Company
Abner D. Goldstine, 80	1974	Senior Vice President — Fixed Income, Capital Research and Management Company; Director, Capital Research and Management Company
“Interested” directors5
	Number of
	portfolios
	in fund
	complex2
Name, age and	overseen by
position with fund	director	Other directorships3 held by director
Paul G. Haaga, Jr., 61	12	None
Vice Chairman of the Board
Abner D. Goldstine, 80	2	None

The fund’s statement of additional information includes additional information about fund directors and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all directors and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Secretary.

Other officers5
	Year first
	elected	Principal occupation(s) during past five years
Name, age and	an officer	and positions held with affiliated entities or the
position with fund	of the fund1	principal underwriter of the fund
John H. Smet, 53	1994	Senior Vice President — Fixed Income, Capital
President		Research and Management Company; Director, The Capital Group Companies, Inc.6
David C. Barclay, 53	1997	Senior Vice President — Fixed Income, Capital
Senior Vice President		Research and Management Company
Mark R. Macdonald, 50	2001	Senior Vice President — Fixed Income, Capital
Senior Vice President		Research and Management Company; Director, Capital Research and Management Company
Mark H. Dalzell, 55	2009	Senior Vice President — Fixed Income, Capital
Vice President		Research and Management Company
Kristine M. Nishiyama, 39	2003	Vice President and Senior Counsel — Fund Business
Vice President		Management Group, Capital Research and Management Company; Vice President and Counsel, Capital Bank and Trust Company6
Kimberly S. Verdick, 45	1994	Vice President — Fund Business Management
Secretary		Group, Capital Research and Management Company
Ari M. Vinocor, 35	2007	Vice President — Fund Business Management
Treasurer		Group, Capital Research and Management Company
Courtney R. Taylor, 35	2006	Assistant Vice President — Fund Business
Assistant Secretary		Management Group, Capital Research and Management Company
M. Susan Gupton, 36	2008	Vice President — Fund Business Management
Assistant Treasurer		Group, Capital Research and Management Company

1Directors and officers of the fund serve until their resignation, removal or retirement.

2Capital Research and Management Company manages the American Funds, consisting of 30 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which is composed of 16 funds and serves as the underlying investment vehicle for certain variable insurance contracts; American Funds Target Date Retirement Series,® Inc., which is composed of 10 funds and is available through tax-deferred retirement plans and IRAs; and Endowments, which is available to certain nonprofit organizations.

3This includes all directorships (other than those in the American Funds or other funds managed by Capital Research and Management Company) that are held by each director as a director of a public company or a registered investment company.

4Lee A. Ault III, William H. Baribault, W. Scott Hedrick, Merit E. Janow and Margaret Spellings were newly elected to the board by the fund’s shareholders effective January 1, 2010.

5“Interested persons” within the meaning of the 1940 Act, as amended, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter).

6Company affiliated with Capital Research and Management Company.

Results of meeting of shareholders held November 24, 2009

Shares outstanding (all classes) on record date (August 28, 2009):	3,352,817,701
Total shares voting on November 24, 2009:	2,277,316,281	(67.9% of shares outstanding)

Election of board members
Director*	Votes for		Percent of shares voting for			Votes withheld		Percent of shares withheld
Lee A. Ault III		2,223,203,351		97.6	%		54,112,930		2.4	%
William H. Baribault		2,223,657,466		97.6			53,658,815		2.4
James G. Ellis		2,223,456,594		97.6			53,859,687		2.4
Martin Fenton		2,223,572,135		97.6			53,744,146		2.4
Leonard R. Fuller		2,223,656,562		97.6			53,659,719		2.4
Abner D. Goldstine		2,223,497,119		97.6			53,819,162		2.4
Paul G. Haaga, Jr.		2,223,719,967		97.6			53,596,314		2.4
W. Scott Hedrick		2,223,520,619		97.6			53,795,662		2.4
R. Clark Hooper		2,223,516,285		97.6			53,799,996		2.4
Merit E. Janow		2,223,538,024		97.6			53,778,257		2.4
Laurel B. Mitchell		2,223,770,323		97.6			53,545,958		2.4
Frank M. Sanchez		2,223,617,942		97.6			53,698,339		2.4
Margaret Spellings		2,223,539,072		97.6			53,777,209		2.4
Steadman Upham		2,223,399,953		97.6			53,916,328		2.4

	Votes for		Percent of outstanding  shares  voting for			Votes against		Percent of outstanding  shares  voting  against			Votes  abstaining			Percent of outstanding  shares  abstaining
To approve an Agreement and Plan of Reorganization		1,743,127,805		52.0	%		40,389,406		1.2	%		493,799,070	†		14.7	%
To update the fund’s fundamental investment policies regarding:
Borrowing		1,739,465,968		76.3	%		44,525,011		2.0	%		493,325,302	†		21.7	%
Issuance of senior securities		1,739,226,048		76.4			43,896,892		1.9			494,193,341	†		21.7
Underwriting		1,740,522,056		76.4			41,608,264		1.9			495,185,961	†		21.7
Investments in real estate or commodities		1,736,320,724		76.2			46,957,703		2.1			494,037,854	†		21.7
Lending		1,735,476,734		76.2			47,449,382		2.1			494,390,165	†		21.7
Industry concentration		1,740,948,461		76.5			41,063,213		1.8			495,304,607	†		21.7
Elimination of certain policies		1,733,752,487		76.1			45,947,360		2.0			497,616,434	†		21.9
To approve a policy allowing CRMC to appoint subsidiary advisers for the fund’s day-to-day investment management without additional shareholder approval		1,725,354,587		75.8			55,431,138		2.4			496,530,556	†		21.8
To approve amendments to the fund’s Investment Advisory and Service Agreement with CRMC		1,731,229,554		76.0			47,161,016		2.1			498,925,711	†		21.9
To approve a form of Subsidiary Agreement and appointment of one or more subsidiary advisers for the fund		1,727,630,453		75.8			51,845,704		2.3			497,840,124	†		21.9
To consider a shareholder proposal regarding genocide-free investing		189,693,538		10.4			1,554,347,742		84.9			86,653,151			4.7

(broker non-votes = 446,621,850)

*Richard G. Capen, Jr. and Richard G. Newman did not stand for election at the Meeting of Shareholders because they plan to retire in December 2010.

†Includes broker non-votes.

Offices of the fund and of the investment adviser

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071-1406

6455 Irvine Center Drive

Irvine, CA 92618

Custodian of assets

JPMorgan Chase Bank

270 Park Avenue

New York, NY 10017-2070

Transfer agent for shareholder accounts

American Funds Service Company

(Please write to the address near you.)

P.O. Box 6007

Indianapolis, IN 46206-6007

P.O. Box 2280

Norfolk, VA 23501-2280

Counsel

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, CA 90071-3106

Independent registered public accounting firm

Deloitte & Touche LLP

695 Town Center Drive

Suite 1200

Costa Mesa, CA 92626-7188

Principal underwriter

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, CA 90071-1406

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s summary prospectus and prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.

“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.

A complete December 31, 2009, portfolio of The Bond Fund of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

The Bond Fund of America files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at 800/SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.

This report is for the information of shareholders of The Bond Fund of America, but it also may be used as sales literature when preceded or accompanied by the current summary prospectus or prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after March 31, 2010, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

[logo - American Funds®]

The right choice for the long term®

What makes American Funds different?

For nearly 80 years, we have followed a consistent philosophy to benefit our investors. Our 30 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.

Our unique combination of strengths includes these five factors:

•A long-term, value-oriented approach

We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term.

•An extensive global research effort

Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets.

•The multiple portfolio counselor system

Our unique approach to portfolio management, developed 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives.

•Experienced investment professionals

American Funds portfolio counselors have an average of 25 years of investment experience, providing a depth of knowledge and broad perspective that few organizations have.

•A commitment to low management fees

The American Funds provide exceptional value for shareholders, with management fees that are among the lowest in the mutual fund industry.

American Funds span a range of investment objectives

•Growth funds

Emphasis on long-term growth through stocks

AMCAP Fund®

EuroPacific Growth Fund®

The Growth Fund of America®

The New Economy Fund®

New Perspective Fund®

New World Fund®

SMALLCAP World Fund®

•Growth-and-income funds

Emphasis on long-term growth and dividends through stocks

American Mutual Fund®

Capital World Growth and Income FundSM

Fundamental InvestorsSM

International Growth and Income FundSM

The Investment Company of America®

Washington Mutual Investors FundSM

•Equity-income funds

Emphasis on above-average income and growth through stocks and/or bonds

Capital Income Builder®

The Income Fund of America®

•Balanced fund

Emphasis on long-term growth and current income through stocks and bonds

American Balanced Fund®

•Bond funds

Emphasis on current income through bonds

American High-Income TrustSM

>The Bond Fund of AmericaSM

Capital World Bond Fund®

Intermediate Bond Fund of America®

Short-Term Bond Fund of AmericaSM

U.S. Government Securities FundSM

•Tax-exempt bond funds

Emphasis on tax-exempt current income through municipal bonds

American Funds Short-Term Tax-Exempt Bond FundSM

American High-Income Municipal Bond Fund®

Limited Term Tax-Exempt Bond Fund of AmericaSM

The Tax-Exempt Bond Fund of America®

State-specific tax-exempt funds

The Tax-Exempt Fund of California®

The Tax-Exempt Fund of Maryland®

The Tax-Exempt Fund of Virginia®

•Money market fund

American Funds Money Market FundSM

•American Funds Target Date Retirement Series®

The Capital Group Companies

American FundsCapital Research and ManagementCapital InternationalCapital GuardianCapital Bank and Trust

Lit. No. MFGEAR-908-0210P

Litho in USA BG/N/8053-S20664

Printed on paper containing 10% post-consumer waste

Printed with inks containing soy and/or vegetable oil

ITEM 2 – Code of Ethics

The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer.  The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics.  Such request can be made to American Funds Service Company at 800/421-0180 or to the Secretary of the Registrant, 333 South Hope Street, Los Angeles, California 90071.

ITEM 3 – Audit Committee Financial Expert

The Registrant’s board has determined that Leonard R. Fuller, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members.  There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such.  Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.

ITEM 4 – Principal Accountant Fees and Services

Registrant:
	a)  Audit Fees:
		2008	$120,000
		2009	$157,000
	b)  Audit-Related Fees:
		2008	$12,000
		2009	$9,000
		The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants.
	c)  Tax Fees:
		2008	$7,000
		2009	$7,000
		The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns.
	d)  All Other Fees:
		2008	None
		2009	None
Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below):
	a)  Audit Fees:
		Not Applicable
	b)  Audit-Related Fees:
		2008	$1,070,000
		2009	$1,029,000
		The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants.
	c)  Tax Fees:
		2008	$8,000
		2009	None
		The tax fees consist of consulting services relating to the Registrant’s investments.
	d)  All Other Fees:
		2008	None
		2009	$2,000
		The other fees consist of subscription services related to an accounting research tool.

All audit and permissible non-audit services that the Registrant’s audit committee considers compatible with maintaining the independent registered public accounting firm’s independence are required to be pre-approved by the committee.  The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services.  Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser and affiliates.

Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were $1,389,000 for fiscal year 2008 and $1,477,000 for fiscal year 2009. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.

ITEM 5 – Audit Committee of Listed Registrants

Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.

ITEM 6 – Schedule of Investments

[logo – American Funds ®]

Bond Fund of AmericaSM

Investment portfolio

December 31, 2009

Bonds & notes — 96.19%	Principal amount (000)			Value (000)
CORPORATE BONDS & NOTES — 34.47%
FINANCIALS — 9.65%
Banks — 3.18%
Sovereign Bancorp, Inc. 1.991% 20131	$	8,270		$	8,097
Abbey National Treasury Services PLC 3.875% 20142		39,880			40,066
Santander Issuances, SA Unipersonal 5.805% 20161,2		73,600			72,959
Santander Issuances, SA Unipersonal 5.911% 20162		10,000			10,233
Sovereign Bancorp, Inc. 8.75% 2018		70,605			81,556
Santander Issuances, SA Unipersonal 6.50% 20191,2		29,500			30,630
Bayerische Hypo- und Vereinsbank AG 6.00% 2014	€	2,155			3,306
UniCredito Italiano SpA 5.584% 20171,2	$	60,690			57,851
UniCredito Italiano SpA 6.00% 20172		70,025			69,510
HVB Funding Trust I 8.741% 20312		10,634			9,358
HVB Funding Trust III 9.00% 20312		16,038			14,113
Scotland International Finance No. 2 BV 4.25% 20132		7,744			7,196
HBOS PLC 6.75% 20182		95,927			89,149
HBOS PLC 4.375% 20191	€	2,850			3,441
HBOS PLC 6.00% 20332	$	5,875			4,449
Standard Chartered PLC 5.50% 20142		6,000			6,417
Standard Chartered Bank 6.40% 20172		75,380			78,070
Barclays Bank PLC 2.50% 2013		27,970			27,958
Barclays Bank PLC 5.20% 2014		32,215			34,182
Barclays Bank PLC 6.05% 20172		17,202			17,534
Royal Bank of Scotland Group PLC 4.875% 20142		38,240			38,803
Royal Bank of Scotland Group PLC 5.00% 2014		6,665			5,896
Royal Bank of Scotland Group PLC 5.05% 2015		10,370			9,005
Royal Bank of Scotland Group PLC 4.70% 2018		3,485			2,717
Royal Bank of Scotland PLC 6.934% 2018	€	12,590			16,782
Société Générale 5.75% 20162	$	60,535			61,427
Fifth Third Bancorp 8.25% 2038		30,250			28,837
Fifth Third Capital Trust IV 6.50% 20671		43,660			32,090
PNC Funding Corp. 5.40% 2014		10,000			10,705
PNC Bank NA 6.875% 2018		5,200			5,528
PNC Funding Corp. 6.70% 2019		15,000			16,815
PNC Funding Corp., Series II, 6.113% (undated)1,2		18,300			12,904
HSBC Finance Corp. 5.70% 2011		10,000			10,451
HSBC Finance Corp. 0.604% 20121		20,000			19,257
HSBC Finance Corp. 0.634% 20121		15,000			14,474
Paribas, New York Branch 6.95% 2013		11,550			12,809
BNP Paribas 4.80% 20152		19,546			20,414
BNP Paribas 5.125% 20152		5,677			6,028
Wells Fargo Bank, National Assn. 4.75% 2015		28,785			29,385
Wells Fargo & Co. 5.625% 2017		8,500			8,855
Korea Development Bank 5.30% 2013		13,635			14,262
Korea Development Bank 8.00% 2014		15,365			17,525
Union Bank of California, NA 5.95% 2016		28,831			28,674
Allied Irish Banks, PLC 12.50% 2019	€	16,139			24,030
Allied Irish Banks, PLC 5.625% 20301	£	250			245
Allied Irish Banks Ltd. 0.813% (undated)1	$	7,000			2,560
Resona Bank, Ltd. 5.85% (undated)1,2		30,603			26,743
United Overseas Bank Ltd. 5.375% 20191,2		22,250			22,971
SunTrust Banks, Inc. 5.25% 2012		1,885			1,957
SunTrust Banks, Inc. 5.45% 2017		8,484			8,081
SunTrust Banks, Inc. 6.00% 2017		11,516			11,433
Nordea Bank 3.70% 20142		21,250			21,232
Silicon Valley Bank 5.70% 2012		18,000			18,250
Westpac Banking Corp. 4.875% 2019		10,500			10,384
Banco Santander-Chile 5.375% 20142		9,035			9,505
Zions Bancorporation 6.00% 2015		8,442			5,978
Bergen Bank 0.938% (undated)1		5,000			2,715
Northern Rock PLC 5.60% (undated)1,2		6,815			895
Northern Rock PLC 6.594% (undated)1,2		11,800			1,549
HSBK (Europe) BV 7.75% 20132		305			302
HSBK (Europe) BV 7.25% 20172		460			423
Development Bank of Singapore Ltd. 7.125% 20112		400			425
Norinchukin Finance (Cayman) Ltd. 5.625% 20161	£	205			332
Commerzbank AG 6.625% 2019		70			109
					1,259,837
Diversified financials — 2.22%
Countrywide Financial Corp., Series A, 4.50% 2010	$	15,540			15,801
Countrywide Financial Corp. 6.25% 2010	$	A7,700			6,888
Countrywide Financial Corp., Series B, 0.715% 20121	$	24,250			23,714
Countrywide Financial Corp., Series B, 5.80% 2012		71,863			76,327
Bank of America Corp., Series L, 7.375% 2014		2,000			2,272
Bank of America Corp. 0.534% 20161		13,575			12,106
Bank of America Corp. 5.75% 2017		34,705			35,595
BankAmerica Capital II, Series 2, 8.00% 2026		395			390
Goldman Sachs Group, Inc. 3.625% 2012		15,825			16,315
Goldman Sachs Group, Inc. 6.25% 2017		4,805			5,161
Goldman Sachs Group, Inc. 5.95% 2018		16,192			17,126
Goldman Sachs Group, Inc. 6.15% 2018		46,788			50,168
Goldman Sachs Group, Inc. 7.50% 2019		8,295			9,720
Citigroup Inc. 6.01% 2015		27,700			28,315
Citigroup Inc. 6.125% 2017		30,325			30,614
Citigroup Inc. 6.125% 2018		19,125			19,260
Citigroup Inc. 8.125% 2039		9,750			11,037
JPMorgan Chase & Co. 4.891% 20151		44,025			44,123
JPMorgan Chase Bank NA 5.875% 2016		25,730			27,035
JPMorgan Chase & Co. 6.30% 2019		13,400			14,767
Morgan Stanley 6.00% 2014		10,225			11,004
Morgan Stanley, Series F, 6.00% 2015		28,425			30,313
Morgan Stanley, Series F, 5.625% 2019		41,400			41,780
Capital One Financial Corp. 6.25% 2013		1,600			1,734
Capital One Financial Corp. 7.375% 2014		5,900			6,686
Capital One Financial Corp. 5.50% 2015		12,223			12,817
Capital One Financial Corp. 6.15% 2016		10,000			10,059
Capital One Financial Corp. 5.25% 2017		1,009			993
Capital One Capital III 7.686% 20361		42,565			38,947
CIT Group Inc., Term Loan 2A, 9.50% 20121,3,4		12,000			12,330
CIT Group Inc., Term Loan, 13.00% 20121,3,4		17,000			17,633
CIT Group Inc., Series A, 7.00% 2013		4,969			4,670
CIT Group Inc., Series A, 7.00% 2014		7,143			6,652
CIT Group Inc., Series A, 7.00% 2015		11,663			10,497
CIT Group Inc., Series A, 7.00% 2016		10,421			9,223
CIT Group Inc., Series A, 7.00% 2017		6,190			5,401
SLM Corp., Series A, 4.50% 2010		38,000			37,869
SLM Corp., Series A, 0.512% 20111		8,700			8,148
SLM Corp., Series A, 5.40% 2011		5,000			4,998
SLM Corp., Series A, 5.375% 2013		3,000			2,832
SLM Corp., Series A, 0.582% 20141		1,900			1,467
American Express Co. 6.15% 2017		19,185			20,081
American Express Co. 8.15% 2038		4,600			5,773
American Express Co. 6.80% 20661		6,321			5,720
Lazard Group LLC 7.125% 2015		20,177			20,970
Lazard Group LLC 6.85% 2017		3,000			3,023
General Motors Acceptance Corp. 6.625% 20122		1,899			1,880
General Motors Acceptance Corp. 6.875% 20122		7,218			7,146
General Motors Acceptance Corp. 2.456% 20141,2		3,070			2,475
General Motors Acceptance Corp. 6.75% 20142		1,535			1,474
General Motors Acceptance Corp. 8.00% 20182		9,577			8,523
International Lease Finance Corp. 5.00% 2012		13,500			11,327
International Lease Finance Corp., Series R, 5.40% 2012		10,000			8,700
Northern Trust Corp. 5.50% 2013		5,450			5,967
Northern Trust Corp. 4.625% 2014		8,475			9,040
Northern Trust Corp. 5.85% 20172		3,750			3,963
Lehman Brothers Holdings Inc., Series I, 3.018% 20121,5		3,300			660
Lehman Brothers Holdings Inc., Series G, 4.80% 20145		10,395			2,079
Lehman Brothers Holdings Inc., Series I, 6.20% 20145		9,965			1,993
Lehman Brothers Holdings Inc., Series H, 5.50% 20165		765			153
Lehman Brothers Holdings Inc., Series I, 6.875% 20185		41,753			8,872
Charles Schwab Corp., Series A, 6.375% 2017		4,000			4,338
Schwab Capital Trust I 7.50% 20371		3,755			3,650
ING Bank NV 5.50% 2012	€	3,750			5,560
Credit Suisse Group AG 5.50% 2014	$	5,000			5,431
Export-Import Bank of Korea 5.875% 2015		4,400			4,732
Bank of New York Mellon Corp., Series G, 4.95% 2012		3,500			3,772
					880,089
Real estate — 2.22%
PLD International Finance LLC 4.375% 2011	€	7,700			11,201
ProLogis 5.50% 2012	$	4,640			4,700
ProLogis 7.625% 2014		45,425			47,548
ProLogis 5.625% 2015		13,035			12,410
ProLogis 5.625% 2016		15,130			13,962
ProLogis 5.75% 2016		27,620			25,975
ProLogis 6.625% 2018		55,205			52,437
ProLogis 7.375% 2019		32,550			32,163
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 4.375% 20102		44,950			46,196
Westfield Group 5.40% 20122		28,400			30,146
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20142		35,860			37,035
Westfield Group 7.50% 20142		12,500			14,080
Westfield Group 5.75% 20152		32,000			33,783
Westfield Group 5.70% 20162		19,240			19,814
Westfield Group 7.125% 20182		9,060			9,921
Kimco Realty Corp., Series C, 4.82% 2011		7,500			7,534
Kimco Realty Corp. 6.00% 2012		20,570			21,710
Pan Pacific Retail Properties, Inc. 6.125% 2013		1,605			1,681
Kimco Realty Corp., Series C, 4.82% 2014		19,000			18,635
Kimco Realty Corp., Series C, 4.904% 2015		10,765			10,563
Kimco Realty Corp., Series C, 5.783% 2016		19,500			19,277
Kimco Realty Corp. 5.70% 2017		28,450			27,446
Kimco Realty Corp. 6.875% 2019		4,000			4,075
Simon Property Group, LP 5.60% 2011		8,810			9,198
Simon Property Group, LP 5.00% 2012		10,000			10,341
Simon Property Group, LP 5.75% 2012		9,000			9,460
Simon Property Group, LP 6.75% 2014		11,195			11,942
Simon Property Group, LP 5.75% 2015		3,250			3,318
Simon Property Group, LP 5.25% 2016		3,610			3,516
Simon Property Group, LP 6.10% 2016		4,750			4,854
Simon Property Group, LP 5.875% 2017		17,000			17,048
Simon Property Group, LP 6.125% 2018		23,950			24,373
Simon Property Group, LP 10.35% 2019		11,495			14,461
Hospitality Properties Trust 6.75% 2013		14,745			14,964
Hospitality Properties Trust 7.875% 2014		3,895			4,025
Hospitality Properties Trust 5.125% 2015		6,665			6,022
Hospitality Properties Trust 6.30% 2016		26,718			24,743
Hospitality Properties Trust 5.625% 2017		5,695			4,938
Hospitality Properties Trust 6.70% 2018		36,650			33,588
Rouse Co. 3.625% 20095		5,200			5,089
Rouse Co. 7.20% 20125		17,475			18,065
Rouse Co. 5.375% 20135		7,250			7,005
Rouse Co. 6.75% 20132,5		3,750			3,755
Brandywine Operating Partnership, LP 5.75% 2012		27,110			27,648
Brandywine Operating Partnership, LP 5.40% 2014		3,000			2,806
Developers Diversified Realty Corp. 5.375% 2012		5,782			5,438
Developers Diversified Realty Corp. 5.50% 2015		13,773			12,146
Developers Diversified Realty Corp. 9.625% 2016		11,850			12,385
Boston Properties, Inc. 5.875% 2019		29,250			29,396
ERP Operating LP 5.25% 2014		2,000			2,036
ERP Operating LP 6.584% 2015		13,040			13,873
ERP Operating LP 5.75% 2017		1,530			1,532
ERP Operating LP 7.125% 2017		5,000			5,371
Realogy Corp., Letter of Credit, 3.271% 20131,3,4		1,876			1,673
Realogy Corp., Term Loan B, 3.287% 20131,3,4		6,933			6,184
Realogy Corp., Term Loan DD, 3.287% 20131,3,4		2,715			2,421
Realogy Corp., Second Lien Term Loan A, 13.50% 20173,4		2,500			2,656
Host Marriott, LP, Series M, 7.00% 2012		2,675			2,732
Host Marriott, LP, Series K, 7.125% 2013		925			945
Host Hotels & Resorts, LP, Series S, 6.875% 2014		300			303
Host Hotels & Resorts, LP, Series Q, 6.75% 2016		4,075			4,075
Host Hotels & Resorts LP 9.00% 20172		1,800			1,955
Weingarten Realty Investors, Series A, 4.857% 2014		6,080			5,610
Federal Realty Investment Trust 4.50% 2011		3,500			3,523
					877,705
Insurance — 1.91%
Liberty Mutual Group Inc. 5.75% 20142		10,435			10,295
Liberty Mutual Group Inc. 6.70% 20162		11,250			11,084
Liberty Mutual Group Inc. 6.50% 20352		45,810			36,885
Liberty Mutual Group Inc. 7.50% 20362		39,485			36,249
Liberty Mutual Group Inc., Series C, 10.75% 20881,2		18,000			19,260
Prudential Holdings, LLC, Series C, 8.695% 20232,3		57,035			61,181
Prudential Financial, Inc. 8.875% 20681		12,500			13,245
CNA Financial Corp. 5.85% 2014		11,500			11,347
CNA Financial Corp. 6.50% 2016		24,625			24,238
CNA Financial Corp. 7.35% 2019		5,770			5,787
CNA Financial Corp. 7.25% 2023		24,145			22,769
ACE INA Holdings Inc. 5.875% 2014		20,445			22,196
ACE INA Holdings Inc. 5.70% 2017		4,000			4,251
ACE INA Holdings Inc. 5.80% 2018		7,000			7,461
ACE Capital Trust II 9.70% 2030		12,423			13,984
ACE INA Holdings Inc. 6.70% 2036		5,980			6,777
Metropolitan Life Global Funding I, 5.125% 20132		18,310			19,412
MetLife Capital Trust IV 7.875% 20671,2		450			452
MetLife Capital Trust X 9.25% 20681,2		23,050			26,277
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		17,500			18,695
Allstate Corp., Series B, 6.125% 20671		28,300			24,763
ZFS Finance (USA) Trust II 6.45% 20651,2		29,500			26,550
ZFS Finance (USA) Trust V 6.50% 20671,2		17,571			15,199
Monumental Global Funding 5.50% 20132		16,270			16,753
Monumental Global Funding III 5.25% 20142		21,500			21,955
AEGON NV 6.125% 2031	£	1,730			2,578
Nationwide Financial Services, Inc. 6.75% 20671	$	37,620			29,409
Lincoln National Corp. 5.65% 2012		11,250			11,650
Lincoln National Corp. 7.00% 20661		18,000			15,120
Catlin Insurance Ltd. 7.249% (undated)1,2		35,375			26,177
New York Life Global Funding 5.25% 20122		15,300			16,419
New York Life Global Funding 4.65% 20132		9,170			9,639
AXA SA 8.60% 2030		2,315			2,697
AXA SA 6.463% (undated)1,2		25,000			19,625
Principal Life Insurance Co. 5.30% 2013		18,000			19,021
Principal Life Global Funding I 4.40% 20102		16,600			16,940
Assurant, Inc. 5.625% 2014		16,000			16,420
Nationwide Mutual Insurance Co. 5.81% 20241,2		18,835			14,895
RSA Insurance Group PLC 9.375% 20391	£	3,765			7,170
RSA Insurance Group PLC 8.50% (undated)1		2,429			4,125
Chubb Corp. 6.50% 2038	$	3,350			3,702
Chubb Corp. 6.375% 20671		7,150			6,721
United Energy Distribution Pty Ltd., AMBAC insured, 4.70% 20112		10,000			10,246
Jackson National Life Global 5.375% 20132		10,000			10,163
Genworth Global Funding Trust, Series 2007-C, 5.25% 2012		10,000			10,101
MassMutual Global Funding II, Series 2002-1, 3.50% 20102		10,000			10,033
Loews Corp. 6.00% 2035		8,000			7,684
UnumProvident Finance Co. PLC 6.85% 20152		2,839			2,893
Unum Group 7.125% 2016		1,845			1,914
TIAA Global Markets 4.95% 20132		3,275			3,504
					755,911
Automobiles & components — 0.12%
Ford Motor Credit Co. 7.875% 2010		7,000			7,107
Ford Motor Credit Co. 9.75% 20101		5,000			5,160
Ford Motor Credit Co. 5.504% 20111		10,275			10,185
Ford Motor Credit Co. 7.375% 2011		2,200			2,245
Ford Motor Credit Co. 3.034% 20121		825			768
American Honda Finance Corp. 5.125% 20102		21,850			22,567
					48,032
CONSUMER DISCRETIONARY — 4.55%
Media — 2.90%
Comcast Corp. 5.50% 2011		10,301			10,783
Comcast Cable Communications, Inc. 6.75% 2011		520			549
Tele-Communications, Inc. 9.80% 2012		17,500			19,816
Comcast Corp. 5.30% 2014		4,000			4,273
Comcast Corp. 5.85% 2015		34,275			37,709
Comcast Corp. 6.50% 2015		4,000			4,486
Comcast Corp. 6.30% 2017		20,500			22,467
Comcast Corp. 5.875% 2018		66,125			70,311
Comcast Corp. 5.65% 2035		4,745			4,450
Comcast Corp. 6.45% 2037		8,500			8,793
Comcast Corp. 6.95% 2037		15,520			16,969
Comcast Corp. 6.40% 2038		11,800			12,183
Time Warner Inc. 5.50% 2011		5,185			5,507
AOL Time Warner Inc. 6.75% 2011		3,815			4,043
AOL Time Warner Inc. 6.875% 2012		25,000			27,383
Time Warner Inc. 5.875% 2016		40,670			43,966
Time Warner Companies, Inc. 7.25% 2017		1,600			1,795
Time Warner Companies, Inc. 7.57% 2024		12,340			13,430
AOL Time Warner Inc. 7.625% 2031		31,935			37,201
Time Warner Inc. 6.50% 2036		30,660			32,117
Time Warner Cable Inc. 5.40% 2012		8,000			8,552
Time Warner Cable Inc. 6.20% 2013		17,460			19,194
Time Warner Cable Inc. 7.50% 2014		21,675			24,996
Time Warner Cable Inc. 8.25% 2014		25,000			29,245
Time Warner Cable Inc. 3.50% 2015		5,000			4,945
Time Warner Cable Inc. 6.75% 2018		47,990			52,806
Time Warner Cable Inc. 8.25% 2019		7,185			8,572
Time Warner Cable Inc. 8.75% 2019		150			183
Time Warner Cable Inc. 5.00% 2020		10,000			9,716
News America Holdings Inc. 8.00% 2016		1,000			1,179
News America Holdings Inc. 8.25% 2018		2,000			2,364
News America Inc. 6.90% 2019		41,125			46,418
News America Inc. 6.65% 2037		38,900			41,224
News America Inc. 6.90% 20392		1,050			1,149
News America Inc. 7.85% 2039		1,500			1,760
NTL Cable PLC 8.75% 2014		2,213			2,296
NTL Cable PLC 8.75% 2014	€	210			315
NTL Cable PLC 9.125% 2016	$	18,795			19,899
NTL Cable PLC 9.50% 2016		25,750			27,778
Virgin Media Finance 8.375% 20192		15,475			15,997
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 20122		10,150			10,480
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013		14,075			14,515
Charter Communications Operating, LLC, Term Loan B, 4.24% 20141,3,4		11,956			11,230
Charter Communications Operating, LLC, Term Loan B, 7.25% 20141,3,4		1,965			2,009
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.375% 20142		1,575			1,626
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 10.875% 20142		15,375			17,297
Charter Communications, Inc. 13.50% 20162		7,334			8,599
Thomson Reuters Corp. 6.50% 2018		57,865			65,511
Univision Communications, Inc., First Lien Term Loan B, 2.501% 20141,3,4		24,205			21,089
Univision Communications Inc. 12.00% 20142		4,555			5,039
Univision Communications Inc. 10.50% 20151,2,6		37,595			33,131
Cox Communications, Inc. 4.625% 2010		900			901
Cox Communications, Inc. 7.125% 2012		7,000			7,781
Cox Communications, Inc. 5.45% 2014		17,045			18,281
Cox Communications, Inc. 9.375% 20192		7,225			9,157
CSC Holdings, Inc. 8.50% 20142		5,950			6,366
CSC Holdings, Inc. 8.50% 20152		12,900			13,803
CSC Holdings, Inc. 8.625% 20192		3,700			4,001
Mediacom Broadband LLC and Mediacom Broadband Corp. 8.50% 2015		13,520			13,723
Mediacom LLC and Mediacom Capital Corp. 9.125% 20192		8,325			8,533
Warner Music Group 7.375% 2014		4,725			4,589
Warner Music Group 9.50% 20162		13,175			14,180
AMC Entertainment Inc. 8.00% 2014		8,125			7,800
AMC Entertainment Inc., Series B, 11.00% 2016		2,500			2,625
AMC Entertainment Inc. 8.75% 2019		7,775			7,969
TL Acquisitions, Inc., Term Loan B, 2.75% 20141,3,4		8,094			7,382
Thomson Learning 10.50% 20152		11,450			11,006
Quebecor Media Inc. 7.75% 2016		8,950			8,972
Quebecor Media Inc. 7.75% 2016		5,670			5,684
Clear Channel Worldwide, Series B, 9.25% 20172		11,525			11,928
American Media Operation 9.00% 20132,6		1,200			774
American Media Operation 14.00% 20131,2,6		17,265			11,136
Grupo Televisa, SAB de CV 6.625% 20402		10,200			10,138
UPC Holding BV 9.875% 20182		8,500			9,010
Regal Cinemas Corp., Series B, 9.375% 2012		6,125			6,163
Regal Cinemas Corp. 8.625% 2019		2,000			2,090
UPC Germany GmbH 8.125% 20172		1,100			1,118
UPC Germany GmbH 9.625% 2019	€	2,250			3,267
Liberty Media Corp. 8.25% 2030	$	3,550			3,270
Kabel Deutschland GmbH 10.625% 2014		7,150			7,508
Discovery Communications Inc. 5.625% 2019		6,500			6,724
LBI Media, Inc. 8.50% 20172		8,015			6,693
Fox Acquisition LLC, Term Loan B, 7.50% 20151,3,4		843			787
Fox Acquisition LLC 13.375% 20162		6,165			4,809
Radio One, Inc. 6.375% 2013		7,380			5,452
Cinemark USA, Inc., Term Loan B, 2.04% 20131,3,4		3,314			3,164
Cinemark USA, Inc. 8.625% 20192		2,000			2,090
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014		4,300			4,311
Local T.V. Finance LLC, Term Loan B, 2.26% 20131,3,4		989			834
Local T.V. Finance LLC 10.00% 20151,2,6		5,562			2,420
Walt Disney Co. 5.625% 2016		2,000			2,163
Vidéotron Ltée 6.875% 2014		1,000			1,010
Vidéotron Ltée 6.375% 2015		1,000			983
Carmike Cinemas, Inc., Delayed Draw, Term Loan DD, 4.24% 20121,3,4		410			400
Young Broadcasting Inc. 10.00% 20115		13,317			47
					1,148,387
Retailing — 0.89%
Macy’s Retail Holdings, Inc. 8.875% 20151		20,770			23,003
Federated Retail Holdings, Inc. 5.90% 2016		40,875			40,057
Staples, Inc. 7.75% 2011		16,265			17,484
Staples, Inc. 9.75% 2014		28,470			34,719
Nordstrom, Inc. 6.75% 2014		35,860			40,087
Nordstrom, Inc. 6.25% 2018		3,000			3,253
Nordstrom, Inc. 6.95% 2028		1,000			1,091
Toys "R" Us, Inc. 7.625% 2011		13,115			13,394
Toys "R" Us-Delaware, Inc., Term Loan B, 4.481% 20121,3,4		7,970			7,809
Toys "R" Us, Inc. 8.50% 20172		5,225			5,343
Michaels Stores, Inc., Term Loan B1, 2.563% 20131,3,4		6,136			5,589
Michaels Stores, Inc. 10.00% 2014		16,125			16,770
Michaels Stores, Inc. 0%/13.00% 20167		1,110			921
Michaels Stores, Inc., Term Loan B2, 4.813% 20161,3,4		2,079			1,969
Lowe’s Companies, Inc. 8.25% 2010		8,450			8,722
Lowe’s Companies, Inc. 6.875% 2028		4,800			5,410
Lowe’s Companies, Inc. 5.50% 2035		140			138
Lowe’s Companies, Inc. 5.80% 2036		5,500			5,624
Lowe’s Companies, Inc. 6.65% 2037		390			446
J.C. Penney Co., Inc. 9.00% 2012		3,495			3,958
J.C. Penney Corp., Inc. 5.75% 2018		11,500			11,399
Dollar General Corp., Term Loan B2, 2.981% 20141,3,4		995			957
Dollar General Corp. 10.625% 2015		5,459			6,073
Dollar General Corp. 11.875% 20171,6		6,179			7,168
Neiman Marcus Group, Inc. 9.00% 20151,6		13,297			13,064
Neiman Marcus Group, Inc. 10.375% 2015		425			419
Home Depot, Inc. 5.875% 2036		11,000			10,653
Sally Holdings LLC and Sally Capital Inc. 9.25% 2014		8,550			8,913
Sally Holdings LLC and Sally Capital Inc. 10.50% 2016		1,050			1,134
Kohl’s Corp. 6.25% 2017		2,000			2,217
Kohl’s Corp. 6.00% 2033		3,878			3,944
Kohl’s Corp. 6.875% 2037		3,287			3,740
Marks and Spencer Group PLC 6.25% 20172		8,500			8,743
Marks and Spencer Group PLC 7.125% 20372		850			866
Target Corp. 7.00% 2038		7,500			8,780
Burlington Coat Factory Warehouse Corp. 11.125% 2014		6,500			6,744
Edcon (Proprietary) Ltd. 3.964% 20141	€	6,500			6,034
Edcon (Proprietary) Ltd. 3.964% 20141		500			464
Bon-Ton Department Stores, Inc. 10.25% 2014	$	7,000			6,492
TJX Companies, Inc. 6.95% 2019		5,000			5,789
Vitamin Shoppe Industries Inc. 7.773% 20121		4,797			4,833
					354,213
Consumer services — 0.39%
MGM MIRAGE 8.50% 2010		6,850			6,850
MGM MIRAGE 6.75% 2012		1,050			942
MGM MIRAGE 6.75% 2013		3,350			2,906
MGM MIRAGE 13.00% 2013		5,150			5,935
MGM MIRAGE 5.875% 2014		6,575			5,301
MGM MIRAGE 10.375% 20142		3,025			3,297
MGM MIRAGE 6.625% 2015		3,600			2,817
MGM MIRAGE 11.125% 20172		4,375			4,867
Boyd Gaming Corp. 7.75% 2012		2,550			2,591
Boyd Gaming Corp. 6.75% 2014		8,925			8,088
Boyd Gaming Corp. 7.125% 2016		9,000			7,875
Seminole Tribe of Florida 5.798% 20132,3		8,210			7,905
Seminole Tribe of Florida 7.804% 20202,3		8,870			7,758
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014		15,415			14,972
Marriott International, Inc., Series I, 6.375% 2017		13,750			14,125
Mohegan Tribal Gaming Authority 8.00% 2012		6,375			5,459
Mohegan Tribal Gaming Authority 7.125% 2014		6,750			4,632
Mohegan Tribal Gaming Authority 6.875% 2015		1,800			1,179
Royal Caribbean Cruises Ltd. 8.75% 2011		2,465			2,591
Royal Caribbean Cruises Ltd. 11.875% 2015		7,075			8,216
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 2012		12,025			10,702
ERAC USA Finance Co. 7.00% 20372		10,000			9,818
Norwegian Cruise Lines 11.75% 20162		6,150			6,104
Education Management LLC and Education Management Finance Corp. 8.75% 2014		4,800			4,980
Seneca Gaming Corp. 7.25% 2012		3,025			2,965
Seneca Gaming Corp., Series B, 7.25% 2012		1,175			1,152
Wendy’s/Arby’s Restaurants, LLC 10.00% 2016		1,100			1,204
					155,231
Automobiles & components — 0.26%
DaimlerChrysler North America Holding Corp., Series E, 5.75% 2011		14,925			15,684
DaimlerChrysler North America Holding Corp. 5.875% 2011		9,400			9,831
DaimlerChrysler North America Holding Corp. 7.75% 2011		14,930			15,877
DaimlerChrysler North America Holding Corp. 7.30% 2012		7,455			8,108
DaimlerChrysler North America Holding Corp. 6.50% 2013		18,775			20,599
Allison Transmission Holdings, Inc., Term Loan B, 3.00% 20141,3,4		5,741			5,300
Allison Transmission Holdings, Inc. 11.00% 20152		3,300			3,482
Allison Transmission Holdings, Inc. 11.25% 20151,2,6		12,402			13,022
Ford Motor Co. 9.50% 2011		2,000			2,060
FCE Bank PLC 7.125% 2013	€	2,000			2,793
Tenneco Automotive Inc. 8.625% 2014	$	3,025			3,067
Tenneco Inc. 8.125% 2015		750			762
TRW Automotive Inc. 7.00% 20142		1,500			1,478
Cooper-Standard Automotive Inc. 7.00% 20125		425			405
Cooper-Standard Automotive Inc. 8.375% 20145		2,200			572
					103,040
Consumer durables & apparel — 0.11%
Fortune Brands, Inc. 6.375% 2014		20,000			21,440
Hanesbrands Inc., Series B, 3.831% 20141		11,105			10,564
Hanesbrands Inc. 8.00% 2016		3,100			3,174
KB Home 6.25% 2015		3,170			2,972
Jarden Corp. 8.00% 2016		2,375			2,464
Standard Pacific Corp. 7.00% 2015		1,005			879
Sealy Mattress Co. 10.875% 20162		650			726
					42,219
ENERGY — 3.65%
Enbridge Energy Partners, LP 5.875% 2016		7,000			7,285
Enbridge Energy Partners, LP, Series B, 6.50% 2018		45,455			48,695
Enbridge Energy Partners, LP 9.875% 2019		28,255			35,835
Enbridge Energy Partners, LP, Series B, 7.50% 2038		33,700			38,483
Enbridge Energy Partners, LP 8.05% 20771		64,600			60,140
Kinder Morgan Energy Partners LP 6.75% 2011		5,500			5,818
Kinder Morgan Energy Partners LP 5.85% 2012		6,500			7,000
Kinder Morgan Energy Partners LP 5.00% 2013		14,279			15,004
Kinder Morgan Energy Partners LP 5.125% 2014		34,052			35,780
Kinder Morgan Energy Partners LP 5.625% 2015		14,100			15,180
Kinder Morgan Energy Partners LP 6.00% 2017		22,375			23,526
Kinder Morgan Energy Partners LP 9.00% 2019		9,865			12,159
Kinder Morgan Energy Partners LP 6.85% 2020		55,935			62,162
Williams Companies, Inc. 6.375% 20102		1,500			1,527
Williams Companies, Inc. 7.125% 2011		500			535
Transcontinental Gas Pipe Line Corp. 6.40% 2016		10,000			10,923
Williams Companies, Inc. 7.625% 2019		17,995			20,207
Williams Companies, Inc. 8.75% 2020		16,060			19,192
Williams Companies, Inc. 7.875% 2021		46,605			53,562
Williams Companies, Inc. 8.75% 2032		18,916			22,697
Gaz Capital SA, Series 13, 6.605% 2018	€	8,200			12,011
Gaz Capital SA 6.51% 20222	$	72,475			66,677
Gaz Capital SA 7.288% 20372		15,250			14,144
TransCanada PipeLines Ltd. 6.50% 2018		7,500			8,380
TransCanada PipeLines Ltd. 7.125% 2019		10,790			12,637
TransCanada PipeLines Ltd. 6.35% 20671		70,555			66,294
StatoilHydro ASA 2.90% 2014		15,360			15,313
StatoilHydro ASA 3.875% 2014		7,000			7,282
StatoilHydro ASA 5.125% 20142		14,570			15,834
StatoilHydro ASA 5.25% 2019		20,230			21,482
Rockies Express Pipeline LLC 6.25% 20132		14,500			15,855
Rockies Express Pipeline LLC 6.85% 20182		39,650			43,893
Enbridge Inc. 5.80% 2014		9,200			9,977
Enbridge Inc. 4.90% 2015		3,250			3,367
Enbridge Inc. 5.60% 2017		42,080			43,806
Shell International Finance 1.30% 2011		17,000			17,051
Shell International Finance B.V. 4.00% 2014		22,000			22,980
Shell International Finance 4.30% 2019		13,275			13,141
BP Capital Markets PLC 3.625% 20142		16,000			16,384
BP Capital Markets PLC 3.875% 2015		34,965			35,966
Devon Energy Corp. 5.625% 2014		18,000			19,463
Devon Energy Corp. 6.30% 2019		24,385			27,199
Devon Financing Corp. ULC 7.875% 2031		3,000			3,770
Petrobras International 5.75% 2020		25,890			26,467
Petrobras International 6.875% 2040		22,780			23,523
Ras Laffan Liquefied Natural Gas III 5.50% 20142		330			347
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20143		900			979
Ras Laffan Liquefied Natural Gas III 5.832% 20163		2,000			2,120
Ras Laffan Liquefied Natural Gas III 6.75% 20192		3,500			3,804
Ras Laffan Liquefied Natural Gas II 5.298% 20202,3		24,470			24,710
Ras Laffan Liquefied Natural Gas III 5.838% 20272,3		10,000			10,003
Ras Laffan Liquefied Natural Gas III 6.332% 20273		2,000			2,034
Husky Energy Inc. 6.25% 2012		2,510			2,713
Husky Energy Inc. 5.90% 2014		2,490			2,717
Husky Energy Inc. 6.20% 2017		16,415			17,704
Husky Energy Inc. 7.25% 2019		15,830			18,326
Husky Energy Inc. 6.80% 2037		2,000			2,126
Chevron Corp. 3.95% 2014		4,400			4,598
Chevron Corp. 4.95% 2019		33,330			35,174
Enterprise Products Operating LP 4.95% 2010		8,750			8,870
Enterprise Products Operating LP 7.50% 2011		5,000			5,299
Enterprise Products Operating LLC 5.65% 2013		17,850			19,033
Enterprise Products Operating LLC 7.00% 20671		1,770			1,571
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20142,3		25,613			25,741
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20143		4,234			4,255
Phillips Petroleum Co. 8.75% 2010		4,000			4,134
Polar Tankers, Inc. 5.951% 20372,3		24,355			23,727
Pemex Finance Ltd. 8.875% 20103		6,400			6,621
Pemex Finance Ltd., Series 1999-2, Class A-3, 10.61% 20173,8		11,700			14,099
Pemex Project Funding Master Trust 5.75% 2018		3,150			3,201
Pemex Project Funding Master Trust 6.625% 2035		3,500			3,337
Petroplus Finance Ltd. 6.75% 20142		6,500			6,143
Petroplus Finance Ltd. 7.00% 20172		17,675			15,996
Petroplus Finance Ltd. 9.375% 20192		3,650			3,650
Sunoco, Inc. 4.875% 2014		9,730			9,816
Sunoco, Inc. 9.625% 2015		8,750			10,424
Apache Corp. 6.00% 2013		2,420			2,680
Apache Corp. 5.625% 2017		7,200			7,686
Apache Corp. 6.90% 2018		7,145			8,386
Williams Partners L.P. and Williams Partners Finance Corp. 7.50% 2011		5,725			5,856
Williams Partners L.P. and Williams Partners Finance Corp. 7.25% 2017		10,975			11,102
Gulfstream Natural Gas 5.56% 20152		3,500			3,666
Gulfstream Natural Gas 6.19% 20252		7,235			7,038
Canadian Natural Resources Ltd. 5.70% 2017		10,000			10,700
Total Capital 3.125% 2015		10,800			10,670
Qatar Petroleum 5.579% 20112,3		10,302			10,592
Petroleum Export Ltd., Class A-1, MBIA insured, 4.623% 20102,3		3,833			3,776
Petroleum Export Ltd., Class A-2, XLCA insured, 4.633% 20102,3		722			711
General Maritime Corp. 12.00% 20172		3,400			3,557
Continental Resources 8.25% 20192		3,000			3,165
PETRONAS Capital Ltd. 7.00% 20122		2,250			2,474
					1,443,937
INDUSTRIALS — 3.46%
Transportation — 1.90%
Continental Airlines, Inc., Series 2001-1, Class A-2, 6.503% 20113		14,050			13,953
Continental Airlines, Inc. 8.75% 2011		300			292
Continental Airlines, Inc., Series 2000-2, Class A-2, 7.487% 20123		12,500			12,578
Continental Airlines, Inc., Series 2006-1, Class G, FGIC insured, 0.607% 20151,3		1,100			878
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20163		27,421			26,247
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20173		155			137
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20183		1,473			1,348
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20183		249			237
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20193		16,629			15,943
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20193		35,863			35,437
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20193		792			725
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20203		17,718			17,519
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20203		11,850			10,843
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20213		278			264
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20213		3,568			3,408
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20223		12,906			12,092
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20223		10,130			9,218
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20223		12,951			12,619
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20223		12,917			12,780
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20223		1,390			1,286
Delta Air Lines, Inc., Series 2000-1, Class A-2, 7.57% 20123		400			405
Northwest Airlines, Inc., Term Loan B, 3.76% 20131,3,4		2,526			2,053
Delta Air Lines, Inc., Series 2001-1, Class A-2, 7.111% 20133		1,000			1,012
Delta Air Lines, Inc., Second Lien Term Loan B, 3.534% 20141,3,4		2,885			2,424
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20143		42,180			40,387
Delta Air Lines, Inc., Series 1992-A2, 9.20% 20143,5		4,611			1,522
Northwest Airlines, Inc., Term Loan A, 2.01% 20181,3,4		64,235			50,745
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20243		23,914			21,284
Burlington Northern Santa Fe Corp. 4.30% 2013		2,640			2,777
Burlington Northern Santa Fe Corp. 7.00% 2014		5,000			5,680
Burlington Northern Santa Fe Corp. 5.75% 2018		10,035			10,677
Burlington Northern Santa Fe Corp. 4.70% 2019		39,300			39,009
Burlington Northern Santa Fe Corp. 6.15% 2037		10,890			11,493
BNSF Funding Trust I 6.613% 20551		15,000			14,436
CSX Corp. 5.50% 2013		2,900			3,118
CSX Corp. 5.75% 2013		8,335			9,023
CSX Corp. 6.25% 2015		10,000			11,027
CSX Corp. 6.25% 2018		10,000			10,786
CSX Corp. 7.375% 2019		16,500			18,882
CSX Corp. 6.15% 2037		26,585			27,025
Norfolk Southern Corp. 6.75% 2011		991			1,047
Norfolk Southern Corp. 5.75% 2016		6,740			7,180
Norfolk Southern Corp. 5.75% 2018		21,050			22,304
Norfolk Southern Corp. 5.90% 2019		14,000			14,976
Norfolk Southern Corp. 7.05% 2037		23,225			27,480
AMR Corp., Series B, 10.45% 2011		150			134
American Airlines, Inc., Series 2001-1, Class A-2, 6.817% 20123		3,750			3,619
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 20123		7,434			7,425
American Airlines, Inc., Series 2001-2, Class B, 8.608% 20123		18,165			17,302
AMR Corp. 9.00% 2012		1,300			1,079
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20133		38,010			38,162
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20193		1,827			1,434
Union Pacific Corp. 3.625% 2010		4,820			4,879
Union Pacific Corp. 5.125% 2014		8,430			8,987
Union Pacific Corp. 5.75% 2017		22,965			24,269
Union Pacific Corp. 5.70% 2018		4,000			4,197
Union Pacific Railroad Co. Pass Through Trust, Series 2001-1, 6.63% 20223		6,703			7,548
Union Pacific Corp. 6.15% 2037		10,930			11,320
United Air Lines, Inc., Series 2000-2, Class B, 7.811% 20113,5		7,335			9,957
United Air Lines, Inc., Series 2000-2, Class A-2, 7.186% 20123		40			40
United Air Lines, Inc., Term Loan B, 2.313% 20141,3,4		8,358			6,620
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20212,3		879			622
United Air Lines, Inc., Series 2007-1, Class A, 6.636% 20243		26,557			22,839
Canadian National Railway Co. 5.55% 2018		16,500			17,614
Canadian National Railway Co. 6.375% 2037		3,100			3,462
Kansas City Southern Railway Co. 13.00% 2013		3,375			3,932
Kansas City Southern Railway Co. 8.00% 2015		4,250			4,425
RailAmerica, Inc. 9.25% 2017		3,600			3,848
Navios Maritime Holdings Inc. 8.875% 20172		2,225			2,322
CEVA Group PLC 10.00% 20142		500			477
CEVA Group PLC, Bridge Loan, 7.984% 20151,3,4,8		1,500			960
CEVA Group PLC 11.625% 20162		300			309
					752,338
Capital goods — 1.27%
BAE Systems Holdings Inc. 4.75% 20102,3		10,350			10,509
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 20112,3		24,853			25,857
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20132,3		27,715			28,282
BAE Systems Holdings Inc. 4.95% 20142		16,125			16,807
Northrop Grumman Systems Corp. 7.125% 2011		8,000			8,471
Northrop Grumman Corp. 3.70% 2014		9,500			9,546
Northrop Grumman Corp. 7.75% 2016		13,420			15,884
Northrop Grumman Corp. 5.05% 2019		18,600			19,029
Northrop Grumman Systems Corp. 7.75% 2031		3,000			3,717
Volvo Treasury AB 5.95% 20152		48,905			50,522
Lockheed Martin Corp. 4.121% 2013		6,000			6,273
Lockheed Martin Corp. 4.25% 2019		34,810			33,668
Lockheed Martin Corp., Series B, 6.15% 2036		6,000			6,371
Hutchison Whampoa International Ltd. 7.00% 20112		24,300			25,662
Hutchison Whampoa International Ltd. 6.50% 20132		7,200			7,831
Raytheon Co. 6.40% 2018		9,500			10,817
Raytheon Co. 6.75% 2018		4,030			4,620
Raytheon Co. 4.40% 2020		10,970			10,827
General Electric Capital Corp., Series A, 6.00% 2019		10,000			10,399
General Electric Capital Corp., Series A, 0.658% 20261		15,200			12,878
Koninklijke Philips Electronics NV 5.75% 2018		20,000			21,316
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B2, 4.03% 20141,3,4		2,401			2,204
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B1, 4.04% 20141,3,4		2,460			2,259
DAE Aviation Holdings, Inc. 11.25% 20152		17,285			14,692
Ashtead Group PLC 8.625% 20152		4,675			4,722
Ashtead Capital, Inc. 9.00% 20162		14,125			14,213
US Investigations Services, Inc., Term Loan B, 3.253% 20151,3,4		5,380			4,835
US Investigations Services, Inc. 10.50% 20152		7,255			6,511
US Investigations Services, Inc. 11.75% 20162		5,630			4,877
DynCorp International and DIV Capital Corp., Series B, 9.50% 2013		15,493			15,764
John Deere Capital Corp. 5.40% 2011		3,500			3,742
John Deere Capital Corp., Series D, 4.50% 2013		3,000			3,152
John Deere Capital Corp. 5.10% 2013		1,100			1,170
John Deere Capital Corp., Series D, 5.50% 2017		3,650			3,875
John Deere Capital Corp., Series D, 5.75% 2018		2,000			2,172
TransDigm Inc. 7.75% 20142		10,970			11,162
TransDigm Inc. 7.75% 2014		1,325			1,348
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 2.231% 20141,3,4		3,413			2,580
Hawker Beechcraft Acquisition Co., LLC, Letter of Credit, 2.231% 20141,3,4		198			150
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 10.50% 20141,3,4		479			458
Hawker Beechcraft Acquisition Co., LLC 8.50% 2015		1,325			941
Hawker Beechcraft Acquisition Co., LLC 9.625% 20151,6		11,328			6,967
Hawker Beechcraft Acquisition Co., LLC 9.75% 2017		170			106
Caterpillar Financial Services Corp. 4.30% 2010		2,400			2,432
Caterpillar Financial Services Corp., Series F, 5.125% 2011		500			531
Caterpillar Financial Services Corp., Series F, 4.85% 2012		210			226
Caterpillar Financial Services Corp., Series F, 5.50% 2016		4,050			4,283
Caterpillar Financial Services Corp., Series F, 7.15% 2019		1,850			2,143
Honeywell International Inc. 5.00% 2019		8,725			9,092
Navistar International Corp. 8.25% 2021		7,650			7,880
B/E Aerospace 8.50% 2018		6,920			7,352
RBS Global, Inc. and Rexnord LLC 9.50% 2014		4,525			4,559
RBS Global, Inc. and Rexnord LLC 8.875% 2016		850			744
Atlas Copco AB 5.60% 20172		4,525			4,569
United Rentals (North America), Inc., Series B, 6.50% 2012		3,000			3,008
Atrium Companies, Inc., Term Loan B, 11.75% 20121,3,4,6		4,868			2,808
Atrium Companies, Inc. 15.00% 20122,6		4,343			87
Esterline Technologies Corp. 6.625% 2017		1,955			1,916
H&E Equipment Services, Inc. 8.375% 2016		1,750			1,761
Esco Corp. 4.129% 20131,2		325			298
Esco Corp. 8.625% 20132		1,100			1,100
Sequa Corp., Term Loan B, 3.89% 20141,3,4		874			783
RSC Equipment Rental, Inc. and RSC Holdings III, LLC 9.50% 2014		400			402
Alion Science and Technology Corp. 10.25% 2015		230			177
					503,337
Commercial & professional services — 0.29%
Nielsen Finance LLC, Term Loan A, 2.235% 20131,3,4		3,400			3,201
Nielsen Finance LLC and Nielsen Finance Co. 10.00% 2014		25,325			26,528
Nielsen Finance LLC and Nielsen Finance Co. 11.625% 2014		1,650			1,863
Nielsen Finance LLC and Nielsen Finance Co. 0%/12.50% 20167		35,125			32,227
Nielsen Finance LLC and Nielsen Finance Co. 11.50% 2016		19,480			21,866
ARAMARK Corp., Term Loan B, 2.126% 20141,3,4		4,017			3,810
ARAMARK Corp., Letter of Credit, 4.721% 20141,3,4		264			251
ARAMARK Corp. 3.781% 20151		3,450			3,174
ARAMARK Corp. 8.50% 2015		9,450			9,781
Allied Waste North America, Inc., Series B, 6.125% 2014		3,500			3,564
Allied Waste North America, Inc. 6.875% 2017		3,095			3,289
Iron Mountain Inc. 7.75% 2015		2,425			2,449
FTI Consulting, Inc. 7.625% 2013		2,300			2,343
					114,346
TELECOMMUNICATION SERVICES — 3.34%
Verizon Communications Inc. 3.75% 2011		111,950			115,478
ALLTEL Corp. 7.00% 2012		18,299			20,197
Verizon Global Funding Corp. 7.375% 2012		11,835			13,349
Verizon Communications Inc. 5.25% 2013		14,500			15,642
Verizon Communications Inc. 5.55% 2014		14,710			15,979
Verizon Communications Inc. 5.50% 2018		8,540			8,927
Verizon Communications Inc. 6.10% 2018		24,000			26,129
Verizon Communications Inc. 8.50% 2018		16,000			19,878
Verizon Communications Inc. 8.75% 2018		34,000			42,535
Verizon Communications Inc. 6.35% 2019		3,500			3,868
Telecom Italia Capital SA 4.875% 2010		1,260			1,290
Olivetti Finance NV 7.25% 2012	€	8,830			13,870
Telecom Italia Capital SA, Series B, 5.25% 2013	$	5,480			5,769
Telecom Italia Capital SA 4.95% 2014		9,867			10,238
Telecom Italia Capital SA 5.25% 2015		77,500			81,130
Telecom Italia Capital SA 6.999% 2018		8,400			9,257
Telecom Italia Capital SA 7.175% 2019		41,500			46,348
Telecom Italia SpA 7.75% 2033	€	8,270			14,033
Telecom Italia Capital SA 7.20% 2036	$	2,000			2,182
Telecom Italia Capital SA 7.721% 2038		24,000			27,718
AT&T Wireless Services, Inc. 7.875% 2011		15,355			16,502
SBC Communications Inc. 5.875% 2012		20,337			22,216
AT&T Wireless Services, Inc. 8.125% 2012		12,630			14,279
AT&T Inc. 4.95% 2013		20,750			22,153
Centennial Communications Corp. 6.04% 20131		6,500			6,500
Centennial Communications Corp. 10.00% 2013		2,750			2,888
SBC Communications Inc. 5.10% 2014		4,745			5,109
SBC Communications Inc. 5.625% 2016		45,200			48,621
AT&T Inc. 5.50% 2018		7,910			8,267
AT&T Inc. 5.60% 2018		6,620			6,949
AT&T Inc. 5.80% 2019		11,550			12,334
SBC Communications Inc. 6.45% 2034		11,175			11,430
AT&T Inc. 6.55% 2039		12,000			12,686
Vodafone Group PLC 7.75% 2010		20,000			20,153
Vodafone Group PLC 5.625% 2017		26,580			28,274
Vodafone Group PLC 5.45% 2019		25,000			25,935
Vodafone Group PLC 6.15% 2037		6,000			6,271
France Télécom 7.75% 20111		32,000			34,306
France Télécom 7.25% 2013	€	4,800			7,781
France Télécom 4.375% 2014		19,010			19,885
France Télécom 5.375% 2019		12,690			13,402
Sprint Nextel Corp. 0.651% 20101		1,865			1,836
Sprint Capital Corp. 7.625% 2011		500			514
Sprint Capital Corp. 8.375% 2012		900			936
Nextel Communications, Inc., Series E, 6.875% 2013		25,330			24,697
Nextel Communications, Inc., Series F, 5.95% 2014		39,045			36,654
Nextel Communications, Inc., Series D, 7.375% 2015		9,200			8,993
Cricket Communications, Inc. 9.375% 2014		30,110			30,411
Cricket Communications, Inc. 10.00% 2015		1,000			1,019
Cricket Communications, Inc. 7.75% 2016		20,225			20,276
Qwest Capital Funding, Inc. 7.90% 2010		1,400			1,435
Qwest Capital Funding, Inc. 7.25% 2011		36,450			37,179
Qwest Communications International Inc. 7.25% 2011		6,000			6,060
Qwest Corp. 7.875% 2011		1,000			1,053
Deutsche Telekom International Finance BV 5.875% 2013		4,000			4,332
Deutsche Telekom International Finance BV 4.875% 2014		16,250			17,058
Deutsche Telekom International Finance BV 6.75% 2018		10,000			11,214
MetroPCS Wireless, Inc. 9.25% 2014		14,475			14,728
MetroPCS Wireless, Inc. 9.25% 2014		13,950			14,194
Crown Castle International Corp. 9.00% 2015		15,275			16,306
Crown Castle International Corp. 7.75% 20172		9,675			10,352
American Tower Corp. 4.625% 20152		14,875			15,063
American Tower Corp. 7.00% 2017		5,950			6,619
American Tower Corp. 7.25% 20192		3,750			4,200
Windstream Corp. 8.125% 2013		18,150			18,921
Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp. 7.75% 2015		2,850			2,938
Windstream Corp. 8.625% 2016		3,300			3,374
Clearwire Communications LLC/Finance 12.00% 20152		16,900			17,238
Clearwire Communications LLC/Finance 12.00% 20152		4,500			4,590
Digicel Group Ltd. 12.00% 20142		12,025			13,543
Digicel Group Ltd. 8.875% 20152		7,150			6,971
Digicel Group Ltd. 8.875% 2015		400			390
Telefónica Emisiones, SAU 4.949% 2015		13,150			14,072
Telefónica Emisiones, SAU 6.421% 2016		5,750			6,391
Wind Acquisition SA 11.75% 20172		17,275			18,959
British Telecommunications PLC 5.95% 2018		17,472			17,786
PCCW-HKT Capital Ltd. 8.00% 20111,2		15,000			16,183
Intelsat, Ltd. 8.50% 2013		4,000			4,100
Intelsat, Ltd. 8.875% 2015		4,275			4,446
Intelsat Jackson Holding Co., Series B, 8.875% 20152		1,950			2,028
Intelsat Jackson Holding Co. 9.50% 2016		2,100			2,258
Intelsat Jackson Holding Co. 8.50% 20192		1,175			1,216
Koninklijke KPN NV 4.75% 2017	€	3,500			5,177
Koninklijke KPN NV 8.375% 2030	$	5,200			6,533
Singapore Telecommunications Ltd. 6.375% 2011		3,475			3,768
Singapore Telecommunications Ltd. 6.375% 20112		2,050			2,223
Singapore Telecommunications Ltd. 7.375% 20312		3,800			4,722
SK Telecom Co., Ltd. 4.25% 20112		6,000			6,104
SBA Telecommunications, Inc. 8.00% 20162		3,750			3,938
Orascom Telecom 7.875% 20142		3,275			2,980
Hawaiian Telcom Communications, Inc. 8.765% 20131,5		3,605			81
Hawaiian Telcom Communications, Inc. 9.75% 20135		7,715			174
Hawaiian Telcom Communications, Inc., Term Loan C, 4.75% 20141,3,4,6		2,155			1,579
Hawaiian Telcom Communications, Inc., Series B, 12.50% 20155		3,050			—
América Móvil, SAB de CV 8.46% 2036	MXN27,000				1,691
Nordic Telephone Co. Holding ApS 8.875% 20162	$	1,000			1,063
Trilogy International Partners LLC, Term Loan B, 3.751% 20121,3,4		275			240
					1,320,564
UTILITIES — 3.08%
National Rural Utilities Cooperative Finance Corp. 5.50% 2013		46,600			50,480
National Rural Utilities Cooperative Finance Corp. 5.45% 2017		2,880			3,008
National Rural Utilities Cooperative Finance Corp. 5.45% 2018		3,500			3,658
National Rural Utilities Cooperative Finance Corp. 10.375% 2018		41,425			54,977
MidAmerican Energy Holdings Co. 5.875% 2012		15,000			16,347
MidAmerican Energy Co. 5.125% 2013		7,500			7,987
PacifiCorp, First Mortgage Bonds, 5.45% 2013		2,875			3,133
MidAmerican Energy Co. 4.65% 2014		5,000			5,278
MidAmerican Energy Co. 5.95% 2017		3,000			3,232
MidAmerican Energy Co. 5.30% 2018		5,000			5,161
PacifiCorp., First Mortgage Bonds, 5.65% 2018		3,800			4,088
MidAmerican Energy Holdings Co. 5.75% 2018		47,700			50,357
MidAmerican Energy Holdings Co. 6.125% 2036		5,000			5,138
FirstEnergy Solutions Corp. 4.80% 2015		10,000			10,218
Ohio Edison Co. 6.40% 2016		13,750			14,796
Jersey Central Power & Light Co. 5.65% 2017		3,000			3,097
Pennsylvania Electric Co. 6.05% 2017		5,165			5,383
Cleveland Electric Illuminating Co. 8.875% 2018		24,600			30,420
Jersey Central Power & Light Co. 7.35% 2019		1,700			1,933
Toledo Edison Co. 7.25% 2020		10,000			11,433
Ohio Edison Co. 6.875% 2036		2,315			2,481
E.ON International Finance BV 5.80% 20182		70,425			75,762
Edison Mission Energy 7.50% 2013		5,000			4,725
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2009-B, 4.15% 2014		3,500			3,664
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2005-A, 5.00% 2016		4,000			4,176
Edison Mission Energy 7.75% 2016		6,025			5,151
Midwest Generation, LLC, Series B, 8.56% 20163		17,347			17,521
Edison Mission Energy 7.00% 2017		6,825			5,426
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2008-B, 5.50% 2018		1,000			1,069
Edison Mission Energy 7.20% 2019		15,450			11,781
Homer City Funding LLC 8.734% 20263		13,550			13,143
Edison Mission Energy 7.625% 2027		6,900			4,709
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2006-E, 5.55% 2037		3,500			3,492
Energy East Corp. 6.75% 2012		7,155			7,825
Iberdrola Finance Ireland 3.80% 20142		26,475			26,623
Scottish Power PLC 5.375% 2015		31,415			33,393
Consumers Energy Co., First Mortgage Bonds, Series P, 5.50% 2016		2,500			2,629
Consumers Energy Co., First Mortgage Bonds, 5.15% 2017		5,000			5,190
Consumers Energy Co. 5.65% 2018		18,325			19,197
Consumers Energy Co., First Mortgage Bonds, 6.125% 2019		30,575			33,157
Consumers Energy Co., First Mortgage Bonds, 6.70% 2019		2,380			2,688
Niagara Mohawk Power 3.553% 20142		15,565			15,534
National Grid PLC 6.30% 2016		37,605			40,953
National Grid Co. PLC 5.875% 2024	£	170			278
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc., First Mortgage Bonds, 5.125% 2013	$	5,000			5,356
Progress Energy, Inc. 6.05% 2014		2,100			2,301
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc. 5.25% 2015		6,000			6,570
Progress Energy Florida, Inc., First Mortgage Bonds, 5.65% 2018		3,150			3,386
Progress Energy, Inc. 7.05% 2019		32,900			36,870
Veolia Environnement 5.25% 2013		18,235			19,300
Veolia Environnement 6.00% 2018		11,445			12,105
Veolia Environnement 6.125% 2033	€	13,640			21,267
Israel Electric Corp. Ltd. 7.25% 20192	$	29,800			32,327
Israel Electric Corp. 7.25% 2019		4,375			4,746
Israel Electric Corp. Ltd. 8.10% 20962		6,250			6,476
Enel Finance International 3.875% 20142		32,890			33,326
ENEL SpA 5.625% 2027	€	5,760			8,786
Texas Competitive Electric Holdings Co. LLC, Term Loan B2, 3.735% 20141,3,4	$	14,432			11,758
Texas Competitive Electric Holdings Co. LLC, Series A, 10.25% 2015		12,215			9,955
Texas Competitive Electric Holdings Co. LLC, Series B, 10.25% 2015		9,505			7,747
Nevada Power Co., General and Refunding Mortgage Notes, Series I, 6.50% 2012		700			751
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series Q, 5.45% 2013		4,275			4,563
Sierra Pacific Resources 8.625% 2014		900			937
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015		2,550			2,740
Nevada Power Co., General and Refunding Mortgage Notes, Series M, 5.95% 2016		5,975			6,339
Nevada Power Co., General and Refunding Mortgage Notes, Series S, 6.50% 2018		10,025			10,781
Nevada Power Co., General and Refunding Mortgage Notes, Series V, 7.125% 2019		2,500			2,796
Abu Dhabi National Energy Co. PJSC (TAQA) 5.62% 20122		3,060			3,120
Abu Dhabi National Energy Co. PJSC (TAQA) 5.875% 20162		1,475			1,425
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20172		12,000			11,450
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 2017		2,700			2,576
Abu Dhabi National Energy Co. PJSC (TAQA) 6.50% 20362		11,110			10,153
AES Corp. 9.375% 2010		129			134
AES Corp. 8.75% 20132		624			643
AES Corp. 7.75% 2015		11,575			11,807
AES Corp. 8.00% 2017		10,000			10,313
AES Corp. 8.00% 2020		3,350			3,425
PSEG Power LLC 7.75% 2011		16,410			17,565
Public Service Electric and Gas Co., Series E, 5.30% 2018		4,990			5,247
PSEG Power LLC 8.625% 2031		2,360			3,059
Intergen Power 9.00% 20172		23,450			24,564
Ohio Power Co., Series H, 4.85% 2014		5,965			6,238
Ohio Power Co., Series K, 6.00% 2016		15,000			15,924
Southern California Gas Co., First Mortgage Bonds, Series II, 4.375% 2011		5,000			5,147
San Diego Gas & Electric Co., Series CCC, 5.30% 2015		10,000			10,963
San Diego Gas & Electric Co., Series DDD, 6.00% 2026		5,000			5,287
Virginia Electric and Power Co., Series 2003-A, 4.75% 2013		6,000			6,282
Virginia Electric and Power Co., Series B, 5.95% 2017		10,000			10,853
Virginia Electric and Power Co., Series A, 6.00% 2037		1,250			1,299
AmerenEnergy Generating Co., Series D, 8.35% 2010		1,500			1,554
Union Electric Co. 4.65% 2013		3,000			3,081
Ameren Corp. 8.875% 2014		7,000			7,870
Union Electric Co. 5.40% 2016		5,750			5,924
Northern States Power Co., First Mortgage Bonds, 5.25% 2018		6,500			6,821
Public Service Co. of Colorado 5.80% 2018		6,300			6,845
Public Service Co. of Colorado 5.125% 2019		4,350			4,533
Electricité de France SA 5.50% 20142		1,300			1,415
Electricité de France SA 6.50% 20192		14,250			16,025
Pacific Gas and Electric Co., First Mortgage Bonds, 4.20% 2011		2,000			2,064
Pacific Gas and Electric Co. 6.25% 2013		1,550			1,727
PG&E Corp. 5.75% 2014		2,000			2,158
Pacific Gas and Electric Co. 8.25% 2018		4,000			4,892
Pacific Gas and Electric Co., First Mortgage Bonds, 6.05% 2034		4,000			4,190
CenterPoint Energy Houston Electric, LLC, General Mortgage Bonds, Series U, 7.00% 2014		9,900			11,282
Old Dominion Electric Cooperative, Series 2003-A, 5.676% 20283		10,687			10,555
NRG Energy, Inc. 7.25% 2014		4,200			4,263
NRG Energy, Inc. 7.375% 2016		5,500			5,521
NRG Energy, Inc. 7.375% 2017		700			704
Duke Energy Corp., First and Refunding Mortgage Bonds, 4.50% 2010		4,500			4,543
Duke Energy Corp., First and Refunding Mortgage Bonds, 5.30% 2015		5,000			5,459
Commonwealth Edison Co., First Mortgage Bonds, Series 105, 5.40% 2011		9,000			9,620
Empresa Nacional de Electricidad SA 8.35% 2013		5,000			5,797
Empresa Nacional de Electricidad SA 8.625% 2015		3,000			3,564
SP PowerAssets Ltd. 5.00% 20132		8,000			8,468
Alabama Power Co., Series R, 4.70% 2010		2,250			2,326
Alabama Power Co., Series 2007-D, 4.85% 2012		1,550			1,661
Alabama Power Co., Series 2008-B, 5.80% 2013		4,000			4,387
Kern River Funding Corp. 4.893% 20182,3		7,365			7,359
Florida Power & Light Co. 4.85% 2013		5,000			5,297
Korea East-West Power Co., Ltd. 4.875% 20112		5,000			5,052
Enersis SA 7.375% 2014		3,000			3,350
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20182,3		2,667			2,676
					1,220,331
HEALTH CARE — 2.73%
Pharmaceuticals, biotechnology & life sciences — 1.53%
Roche Holdings Inc. 5.00% 20142		45,250			48,597
Roche Holdings Inc. 6.00% 20192		87,750			96,939
Roche Holdings Inc. 7.00% 20392		11,060			13,445
Schering-Plough Corp. 5.30% 20131		14,559			16,015
Schering-Plough Corp. 5.375% 2014	€	13,155			20,623
Merck & Co., Inc. 4.00% 2015	$	5,000			5,221
Schering-Plough Corp. 6.00% 2017		49,240			54,778
Merck & Co., Inc. 5.00% 2019		27,380			28,514
Pfizer Inc. 4.45% 2012		11,040			11,683
Pfizer Inc. 5.35% 2015		5,000			5,471
Wyeth 5.50% 2016		15,000			16,144
Pfizer Inc. 6.20% 2019		55,870			62,217
Biogen Idec Inc. 6.00% 2013		36,525			38,821
Biogen Idec Inc. 6.875% 2018		27,000			29,107
GlaxoSmithKline Capital Inc. 4.85% 2013		20,000			21,486
GlaxoSmithKline Capital Inc. 5.65% 2018		15,000			16,206
GlaxoSmithKline Capital Inc. 6.375% 2038		15,000			16,675
Abbott Laboratories 5.125% 2019		29,150			30,546
Abbott Laboratories 6.00% 2039		6,040			6,389
Novartis Capital Corp. 4.125% 2014		13,375			14,073
Novartis Securities Investment Ltd. 5.125% 2019		12,530			13,187
Elan Finance PLC and Elan Finance Corp. 4.273% 20111		1,015			959
Elan Finance PLC and Elan Finance Corp. 4.381% 20131		5,135			4,403
Elan Finance PLC and Elan Finance Corp. 8.875% 2013		11,010			11,010
Elan Finance PLC and Elan Finance Corp. 8.75% 20162		5,850			5,616
AstraZeneca PLC 5.40% 2012		12,000			13,117
Quintiles Transnational 9.50% 20141,2,6		1,980			1,995
					603,237
Health care equipment & services — 1.20%
Cardinal Health, Inc. 5.50% 2013		14,535			15,461
Cardinal Health, Inc. 4.00% 2015		5,500			5,403
Cardinal Health, Inc. 5.80% 2016		12,509			12,600
Cardinal Health, Inc. 5.85% 2017		23,365			23,633
Allegiance Corp. 7.00% 2026		9,635			9,761
Express Scripts Inc. 5.25% 2012		17,105			18,186
Express Scripts Inc. 6.25% 2014		28,133			30,727
HCA Inc., Term Loan B1, 2.501% 20131,3,4		4,262			4,088
HCA Inc. 9.125% 2014		695			735
HCA Inc. 9.25% 2016		775			834
HCA Inc. 9.625% 20161,6		957			1,038
HCA Inc. 8.50% 20192		25,785			27,912
HCA Inc. 7.875% 20202		9,190			9,592
Coventry Health Care, Inc. 5.875% 2012		1,000			1,015
Coventry Health Care, Inc. 6.30% 2014		32,960			32,270
Coventry Health Care, Inc. 5.95% 2017		11,440			10,388
Hospira, Inc. 5.90% 2014		4,510			4,891
Hospira, Inc. 6.40% 2015		2,800			3,103
Hospira, Inc. 6.05% 2017		32,765			34,342
Tenet Healthcare Corp. 7.375% 2013		7,945			8,005
Tenet Healthcare Corp. 9.25% 2015		7,170			7,672
Tenet Healthcare Corp. 8.875% 20192		24,385			26,458
Boston Scientific Corp. 5.45% 2014		1,565			1,651
Boston Scientific Corp. 4.50% 2015		22,780			22,852
Boston Scientific Corp. 5.125% 2017		1,190			1,193
Boston Scientific Corp. 6.00% 2020		13,360			13,676
Boston Scientific Corp. 7.00% 2035		845			833
Boston Scientific Corp. 7.375% 2040		75			81
UnitedHealth Group Inc. 5.25% 2011		2,463			2,553
UnitedHealth Group Inc. 6.00% 2017		24,920			26,119
PTS Acquisition Corp. 10.25% 20151,6		23,511			21,336
Aetna Inc. 5.75% 2011		17,500			18,359
VWR Funding, Inc. 11.25% 20151,6		16,179			16,907
Bausch & Lomb Inc. 9.875% 2015		13,625			14,442
HealthSouth Corp. 10.75% 2016		10,980			11,996
Surgical Care Affiliates, Inc. 9.625% 20151,2,6		3,747			3,466
Surgical Care Affiliates, Inc. 10.00% 20172		7,845			7,257
WellPoint, Inc. 5.00% 2011		1,000			1,034
WellPoint, Inc. 5.00% 2014		810			844
WellPoint, Inc. 5.25% 2016		6,455			6,524
Humana Inc. 6.45% 2016		7,187			7,274
Team Finance LLC and Health Finance Corp. 11.25% 2013		3,525			3,701
Viant Holdings Inc. 10.125% 20172		2,929			2,929
Symbion Inc. 11.75% 20151,6		2,474			1,880
United Surgical Partners International Inc. 9.25% 20171,6		820			840
CHS/Community Health Systems, Inc. 8.875% 2015		45			47
					475,908
CONSUMER STAPLES — 1.63%
Food & staples retailing — 1.05%
CVS Caremark Corp. 0.556% 20101		5,000			5,003
CVS Corp. 6.117% 20132,3		715			756
CVS Caremark Corp. 6.60% 2019		28,973			31,760
CVS Caremark Corp. 5.789% 20262,3		14,077			13,153
CVS Caremark Corp. 6.036% 20283		22,165			21,034
CVS Caremark Corp. 6.943% 20303		23,741			23,930
CVS Caremark Corp. 6.125% 2039		3,700			3,679
Kroger Co. 5.00% 2013		18,000			19,050
Kroger Co. 7.50% 2014		9,035			10,321
Kroger Co. 6.40% 2017		56,110			61,389
Kroger Co. 6.15% 2020		3,650			3,914
Delhaize Group 5.875% 2014		6,850			7,364
Delhaize Group 6.50% 2017		26,205			28,502
Delhaize America, Inc. 9.00% 2031		6,850			8,794
Safeway Inc. 6.25% 2014		3,725			4,095
Safeway Inc. 6.35% 2017		20,000			21,922
Safeway Inc. 5.00% 2019		15,000			14,903
Safeway Inc. 7.45% 2027		2,170			2,468
SUPERVALU INC. 7.50% 2012		365			378
Albertson’s, Inc. 7.25% 2013		3,950			4,019
SUPERVALU INC. 7.50% 2014		830			844
SUPERVALU INC. 8.00% 2016		20,525			20,935
Albertson’s, Inc. 8.00% 2031		3,700			3,376
Tesco PLC 5.50% 20172		25,325			26,696
Wal-Mart Stores, Inc. 5.375% 2017		4,500			4,849
Wal-Mart Stores, Inc. 5.80% 2018		12,800			14,228
Wal-Mart Stores, Inc. 5.25% 2035		3,800			3,750
Stater Bros. Holdings Inc. 8.125% 2012		9,160			9,297
Stater Bros. Holdings Inc. 7.75% 2015		12,025			12,265
Duane Reade Inc. 11.75% 2015		12,687			13,829
Tops Markets 10.125% 20152		9,075			9,393
Walgreen Co. 4.875% 2013		5,000			5,374
Costco Wholesale Corp. 5.30% 2012		3,000			3,238
Ingles Markets, Inc. 8.875% 2017		2,550			2,665
					417,173
Food, beverage & tobacco — 0.58%
Anheuser-Busch InBev NV 7.20% 20142		25,000			28,379
Anheuser-Busch InBev NV 4.125% 20152		37,250			37,865
Anheuser-Busch InBev NV 8.625% 2017	€	2,500			4,530
Anheuser-Busch InBev NV 6.875% 20192	$	7,740			8,657
Anheuser-Busch InBev NV 7.75% 20192		18,367			21,540
Anheuser-Busch InBev NV 5.375% 20202		17,600			17,991
Altria Group, Inc. 9.70% 2018		7,925			9,812
Altria Group, Inc. 9.25% 2019		27,800			33,934
British American Tobacco International Finance PLC 9.50% 20182		13,000			16,535
Smithfield Foods, Inc., Series B, 7.75% 2013		150			146
Smithfield Foods, Inc. 10.00% 20142		8,150			8,883
Smithfield Foods, Inc. 7.75% 2017		3,825			3,548
Constellation Brands, Inc. 8.375% 2014		2,075			2,220
Constellation Brands, Inc. 7.25% 2017		9,945			10,131
Coca-Cola Co. 4.875% 2019		7,500			7,827
Tyson Foods, Inc. 10.50% 2014		4,750			5,451
Tyson Foods, Inc. 7.85% 20161		1,000			1,030
CEDC Finance Corp. 9.125% 20162		3,500			3,623
H.J Heinz Co. 7.125% 20392		2,600			2,949
Diageo Capital PLC 5.75% 2017		1,437			1,549
Cott Beverages Inc. 8.375% 20172		1,000			1,035
Dole Food Co., Inc. 8.875% 2011		104			105
					227,740
Household & personal products — 0.00%
Elizabeth Arden, Inc. 7.75% 2014		1,625			1,609
MATERIALS — 1.30%
Rio Tinto Finance (USA) Ltd. 5.875% 2013		50,500			54,535
Rio Tinto Finance (USA) Ltd. 8.95% 2014		7,465			8,954
Rio Tinto Finance (USA) Ltd. 9.00% 2019		24,420			30,957
Rio Tinto Finance (USA) Ltd. 7.125% 2028		2,000			2,270
Dow Chemical Co. 7.60% 2014		26,400			30,069
Dow Chemical Co. 5.70% 2018		1,700			1,730
Dow Chemical Co. 8.55% 2019		30,170			36,057
Dow Chemical Co. 9.40% 2039		1,350			1,790
International Paper Co. 7.40% 2014		32,610			36,357
International Paper Co. 7.95% 2018		7,400			8,549
International Paper Co. 9.375% 2019		2,470			3,041
International Paper Co. 7.50% 2021		4,330			4,861
International Paper Co. 7.30% 2039		5,465			5,816
Freeport-McMoRan Copper & Gold Inc. 3.881% 20151		10,011			9,967
Freeport-McMoRan Copper & Gold Inc. 8.25% 2015		6,350			6,929
Freeport-McMoRan Copper & Gold Inc. 8.375% 2017		30,070			32,972
BHP Billiton Finance (USA) Ltd. 5.50% 2014		18,295			20,086
BHP Billiton Finance (USA) Ltd. 6.50% 2019		7,500			8,618
Nalco Co. 8.875% 2013		5,650			5,848
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 9.00% 2014		2,254			2,310
Nalco Co., Term Loan B, 5.75% 20161,3,4		736			745
Nalco Co. 8.25% 20172		15,000			16,013
CRH America Inc. 6.95% 2012		1,590			1,723
CRH Finance BV 7.375% 20141	€	4,394			7,161
CRH America, Inc. 6.00% 2016	$	980			1,025
CRH America, Inc. 8.125% 2018		12,275			14,339
Owens-Brockway Glass Container Inc. 8.25% 2013		2,900			2,994
Owens-Brockway Glass Container Inc. 7.375% 2016		10,545			10,940
Georgia Gulf Corp. 9.00% 20172		12,975			13,170
Smurfit Kappa Acquisition 7.25% 2017	€	2,200			3,108
Smurfit Kappa Acquisition 7.75% 2019		6,570			9,310
Smurfit Capital Funding PLC 7.50% 2025	$	800			686
Reynolds Group 7.75% 20162		10,985			11,287
CEMEX Finance LLC 9.50% 20162		9,450			9,946
C5 Capital (SPV) Ltd. 6.196% (undated)1,2		100			69
C8 Capital (SPV) Ltd. 6.64% (undated)1		350			243
C10 Capital (SPV) Ltd. 6.722% (undated)1,2		950			671
C10 Capital (SPV) Ltd. 6.722% (undated)1		100			71
Georgia-Pacific Corp. 8.125% 2011		2,065			2,179
Georgia-Pacific LLC 8.25% 20162		7,800			8,307
Teck Resources Ltd. 9.75% 2014		8,000			9,270
Ball Corp. 7.125% 2016		4,990			5,140
Ball Corp. 7.375% 2019		3,480			3,593
Gerdau Holdings Inc. 7.00% 20202		7,500			7,744
Plastipak Holdings, Inc. 8.50% 20152		7,165			7,389
Holcim Ltd. 6.00% 20192		3,525			3,676
Holcim Ltd. 6.875% 20392		3,500			3,688
Lafarge 6.15% 2011		5,690			5,932
Newpage Corp. 11.375% 20142		5,195			5,273
Praxair, Inc. 4.375% 2014		1,850			1,953
Praxair, Inc. 4.625% 2015		2,500			2,662
Rockwood Specialties Group, Inc. 7.50% 2014		3,345			3,395
Rockwood Specialties Group, Inc. 7.625% 2014	€	500			718
Arbermarle Corp. 5.10% 2015	$	3,656			3,649
Graphic Packaging International, Inc. 9.50% 2017		3,415			3,637
Airgas, Inc. 7.125% 20182		3,250			3,400
Yara International ASA 7.875% 20192		2,675			3,059
Associated Materials Inc. 9.875% 20162		2,250			2,385
E.I. du Pont de Nemours and Co. 5.25% 2016		2,000			2,117
ICI Wilmington, Inc. 5.625% 2013		2,000			2,089
Stora Enso Oyj 6.404% 20162		2,000			1,798
Potash Corp. of Saskatchewan Inc. 5.875% 2036		1,600			1,580
Lubrizol Corp. 8.875% 2019		1,000			1,245
Solutia Inc. 8.75% 2017		610			638
Rock-Tenn Co. 9.25% 20162		515			562
Neenah Paper, Inc. 7.375% 2014		560			514
					512,809
INFORMATION TECHNOLOGY — 1.08%
Semiconductors & semiconductor equipment — 0.57%
NXP BV and NXP Funding LLC 3.034% 20131		17,595			14,670
NXP BV and NXP Funding LLC 3.492% 20131	€	6,075			6,875
NXP BV and NXP Funding LLC 10.00% 20139	$	6,882			7,045
NXP BV and NXP Funding LLC 7.875% 2014		25,085			22,890
NXP BV and NXP Funding LLC 8.625% 2015	€	11,375			12,139
NXP BV and NXP Funding LLC 9.50% 2015	$	20,170			17,296
Freescale Semiconductor, Inc., Term Loan B, 1.985% 20131,3,4		5,280			4,634
Freescale Semiconductor, Inc. 8.875% 2014		21,150			19,511
Freescale Semiconductor, Inc. 9.875% 20141,6		19,440			17,277
Freescale Semiconductor, Inc., Term Loan B, 12.50% 20143,4		18,575			19,156
Freescale Semiconductor, Inc. 10.125% 2016		10,792			8,741
KLA-Tencor Corp. 6.90% 2018		43,175			45,498
National Semiconductor Corp. 6.15% 2012		3,700			3,878
National Semiconductor Corp. 6.60% 2017		23,000			23,595
Advanced Micro Devices, Inc. 8.125% 20172		3,075			3,079
					226,284
Technology hardware & equipment — 0.30%
Sanmina-SCI Corp. 6.75% 2013		15,675			15,538
Sanmina-SCI Corp. 3.004% 20141,2		16,346			15,079
Sanmina-SCI Corp. 8.125% 2016		12,490			12,521
Electronic Data Systems Corp., Series B, 6.00% 20131		28,625			31,668
Electronic Data Systems Corp. 7.45% 2029		4,520			5,363
Jabil Circuit, Inc. 8.25% 2018		16,975			18,248
Cisco Systems, Inc. 2.90% 2014		10,000			9,993
Cisco Systems, Inc. 5.50% 2016		2,000			2,199
Cisco Systems, Inc. 4.95% 2019		3,500			3,594
Cisco Systems, Inc. 4.45% 2020		2,500			2,458
Sensata Technologies BV 8.00% 20141		2,475			2,438
					119,099
Software & services — 0.21%
First Data Corp., Term Loan B2, 2.999% 20141,3,4		17,402			15,507
First Data Corp. 9.875% 2015		10,975			10,289
First Data Corp. 9.875% 2015		2,975			2,789
SunGard Data Systems Inc. 9.125% 2013		19,613			20,201
Oracle Corp. 3.75% 2014		16,500			17,043
Serena Software, Inc. 10.375% 2016		11,262			10,882
Ceridian Corp. 11.25% 2015		7,450			7,143
					83,854
Total corporate bonds & notes					13,647,230
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 28.92%
U.S. Treasury 0.875% 20108,10		26,701			26,795
U.S. Treasury 2.00% 2010		30,000			30,359
U.S. Treasury 0.875% 2011		30,000			30,039
U.S. Treasury 1.00% 2011		129,450			129,660
U.S. Treasury 1.125% 2011		262,675			262,793
U.S. Treasury 1.125% 2011		146,100			146,705
U.S. Treasury 1.75% 2011		177,959			180,221
U.S. Treasury 2.375% 20118,10		25,975			26,779
U.S. Treasury 4.50% 2011		27,475			28,682
U.S. Treasury 4.625% 2011		133,500			142,657
U.S. Treasury 4.875% 2011		20,000			21,068
U.S. Treasury 4.875% 2011		10,000			10,621
U.S. Treasury 5.125% 2011		20,000			21,255
U.S. Treasury 1.375% 2012		70,525			70,026
U.S. Treasury 1.50% 2012		125,815			126,026
U.S. Treasury 1.75% 2012		50,000			50,330
U.S. Treasury 3.00% 20128,10		17,132			18,463
U.S. Treasury 4.25% 2012		100,000			107,328
U.S. Treasury 4.875% 2012		54,825			59,001
U.S. Treasury 2.00% 2013		220,540			219,402
U.S. Treasury 1.875% 20138,10		58,849			62,108
U.S. Treasury 2.75% 2013		132,160			135,377
U.S. Treasury 2.75% 2013		50,000			51,524
U.S. Treasury 3.125% 2013		50,000			51,969
U.S. Treasury 3.375% 2013		175,260			183,995
U.S. Treasury 3.50% 2013		50,805			53,547
U.S. Treasury 3.625% 2013		105,400			111,621
U.S. Treasury 3.875% 2013		75,000			79,895
U.S. Treasury 4.25% 2013		654,036			705,953
U.S. Treasury 1.75% 2014		461,170			452,505
U.S. Treasury 1.75% 2014		89,355			87,253
U.S. Treasury 1.875% 2014		158,400			155,813
U.S. Treasury 1.875% 2014		100,000			97,961
U.S. Treasury 2.25% 2014		111,500			110,760
U.S. Treasury 2.00% 20148,10		11,468			12,176
U.S. Treasury 2.00% 20148,10		144,514			153,177
U.S. Treasury 2.625% 2014		204,800			205,871
U.S. Treasury 4.00% 2014		12,800			13,690
U.S. Treasury 4.25% 2014		14,150			15,246
U.S. Treasury 1.625% 20158,10		77,776			81,041
U.S. Treasury 4.00% 2015		241,630			256,874
U.S. Treasury 4.125% 2015		155,380			165,716
U.S. Treasury 4.25% 2015		154,000			164,876
U.S. Treasury 11.25% 2015		133,500			188,423
U.S. Treasury 2.375% 2016		237,400			227,180
U.S. Treasury 2.625% 2016		389,250			377,269
U.S. Treasury 2.625% 2016		50,000			48,656
U.S. Treasury 2.75% 2016		15,000			14,443
U.S. Treasury 3.00% 2016		232,585			228,787
U.S. Treasury 3.125% 2016		86,750			85,673
U.S. Treasury 3.25% 2016		130,915			131,478
U.S. Treasury 3.25% 2016		100,750			100,946
U.S. Treasury 3.25% 2016		21,300			21,365
U.S. Treasury 5.125% 2016		56,500			63,024
U.S. Treasury 7.50% 2016		15,250			19,228
U.S. Treasury 2.375% 20178,10		10,719			11,599
U.S. Treasury 4.50% 2017		153,250			163,893
U.S. Treasury 4.625% 2017		92,375			99,786
U.S. Treasury 8.75% 2017		25,000			33,811
U.S. Treasury 8.875% 2017		67,320			91,808
U.S. Treasury 3.50% 2018		749,735			743,730
U.S. Treasury 3.75% 2018		610,825			610,898
U.S. Treasury 3.875% 2018		107,500			109,179
U.S. Treasury 4.00% 2018		50,000			51,080
U.S. Treasury 2.75% 2019		22,474			20,696
U.S. Treasury 3.125% 2019		797,090			754,964
U.S. Treasury 3.375% 2019		105,600			101,590
U.S. Treasury 3.625% 2019		148,220			145,748
U.S. Treasury 8.125% 2019		20,000			26,929
U.S. Treasury 8.50% 2020		31,900			44,226
U.S. Treasury 7.125% 2023		25,000			32,082
U.S. Treasury 7.50% 2024		18,575			24,846
U.S. Treasury 6.875% 2025		93,610			118,877
U.S. Treasury 6.00% 2026		39,000			45,648
U.S. Treasury 6.125% 2027		18,475			22,020
U.S. Treasury 6.25% 2030		8,250			10,084
U.S. Treasury 4.50% 2036		286,367			282,249
U.S. Treasury 4.375% 2038		129,610			124,506
U.S. Treasury 3.50% 2039		17,265			14,152
U.S. Treasury 4.25% 2039		14,280			13,403
U.S. Treasury 4.375% 2039		5,000			4,787
U.S. Treasury 4.50% 2039		48,500			47,424
U.S. Treasury Principal Strip 0% 2039		29,000			7,189
Federal Home Loan Bank 1.75% 2012		69,000			68,997
Federal Home Loan Bank 4.50% 2012		50,000			53,706
Federal Home Loan Bank 3.625% 2013		93,000			97,288
Federal Home Loan Bank 5.375% 2016		25,000			27,604
Freddie Mac 3.125% 2010		73,990			74,197
Freddie Mac 5.25% 2011		20,000			21,275
Freddie Mac 1.75% 2012		60,000			60,269
Freddie Mac 2.125% 2012		20,000			20,176
Freddie Mac 2.50% 2014		37,000			36,822
Freddie Mac 5.50% 2016		30,000			33,458
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.25% 2011		10,000			10,008
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 0.253% 20121		11,020			11,034
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 0.414% 20121		50,000			49,996
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		20,000			20,115
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		20,000			19,979
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		10,000			10,047
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.125% 2012		11,000			11,107
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.25% 2012		12,550			12,668
Fannie Mae 1.00% 2011		15,000			14,928
Fannie Mae 1.75% 2011		30,000			30,312
Fannie Mae 6.125% 2012		20,000			22,026
Fannie Mae 2.50% 2014		17,250			17,170
Fannie Mae 2.625% 2014		12,000			11,886
Fannie Mae 3.00% 2014		13,500			13,626
Fannie Mae 5.375% 2017		17,000			18,795
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 1.625% 2011		8,250			8,325
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 1.80% 2011		9,665			9,754
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.125% 2012		40,000			40,162
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.25% 2012		29,250			29,674
CoBank ACB 7.875% 20182		22,115			23,999
CoBank ACB 0.854% 20221,2		46,470			34,611
United States Government Agency-Guaranteed (FDIC insured), GMAC LLC 1.75% 2012		15,000			14,921
United States Government Agency-Guaranteed (FDIC insured), GMAC LLC 2.20% 2012		20,000			20,118
United States Government Agency-Guaranteed (FDIC insured), Goldman Sachs Group, Inc. 3.25% 2012		25,000			25,952
United States Government Agency-Guaranteed (FDIC insured), State Street Corp. 2.15% 2012		20,000			20,200
United States Government Agency-Guaranteed (FDIC insured), Bank of America Corp. 2.375% 2012		17,500			17,808
Federal Agricultural Mortgage Corp. 4.875% 20112		10,000			10,460
Federal Agricultural Mortgage Corp. 5.125% 20172		5,000			5,226
Federal Farm Credit Banks, Consolidated Systemwide Designated Bonds, 2.625% 2014		5,000			4,961
Federal Farm Credit Banks, Consolidated Systemwide Designated Bonds, 3.00% 2014		10,000			10,063
United States Government Agency-Guaranteed (FDIC insured), John Deere Capital Corp. 2.875% 2012		10,000			10,295
United States Government Agency-Guaranteed (FDIC insured), Sovereign Bancorp, Inc. 2.75% 2012		7,500			7,693
United States Agency for International Development, Republic of Egypt 4.45% 2015		5,000			5,286
Private Export Funding Corp., Series W, 5.00% 2016		3,400			3,622
					11,451,453
MORTGAGE-BACKED OBLIGATIONS — 23.78%
FEDERAL AGENCY MORTGAGE-BACKED OBLIGATIONS3 — 17.76%
Fannie Mae 4.89% 2012		25,000			26,262
Fannie Mae, Series 2002-15, Class PG, 6.00% 2017		5,570			5,971
Fannie Mae 4.00% 2019		25,995			26,605
Fannie Mae 4.50% 2019		16,651			17,320
Fannie Mae 4.50% 2019		15,861			16,513
Fannie Mae 5.50% 2019		153			164
Fannie Mae 5.50% 2020		12,891			13,763
Fannie Mae 5.50% 2020		1,459			1,557
Fannie Mae 11.236% 20201		209			238
Fannie Mae 4.50% 2021		65,874			68,334
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		18,005			18,650
Fannie Mae 5.50% 2022		1,746			1,850
Fannie Mae 5.50% 2022		830			879
Fannie Mae 4.50% 2023		21,690			22,363
Fannie Mae 4.50% 2023		15,678			16,161
Fannie Mae 5.00% 2023		15,426			16,141
Fannie Mae 5.00% 2023		15,137			15,838
Fannie Mae 5.00% 2023		12,920			13,518
Fannie Mae 5.00% 2023		10,967			11,475
Fannie Mae 5.00% 2023		10,412			10,894
Fannie Mae 5.00% 2023		9,461			9,899
Fannie Mae 5.00% 2023		7,733			8,091
Fannie Mae 5.00% 2023		6,924			7,260
Fannie Mae 5.50% 2023		39,455			41,853
Fannie Mae 5.50% 2023		34,295			36,444
Fannie Mae 5.50% 2023		3,962			4,195
Fannie Mae 5.50% 2023		2,567			2,720
Fannie Mae 5.50% 2023		1,993			2,111
Fannie Mae 6.00% 2023		3,841			4,115
Fannie Mae 4.00% 2024		129,874			130,894
Fannie Mae 4.00% 2024		48,418			48,787
Fannie Mae 4.00% 2024		48,216			48,583
Fannie Mae 4.00% 2024		46,495			46,849
Fannie Mae 4.00% 2024		45,706			46,054
Fannie Mae 4.00% 2024		35,836			36,109
Fannie Mae 4.00% 2024		23,693			23,874
Fannie Mae 4.00% 2024		23,666			23,846
Fannie Mae 4.00% 2024		23,486			23,671
Fannie Mae 4.00% 2024		11,436			11,523
Fannie Mae 4.50% 2024		130,431			134,405
Fannie Mae 4.50% 2024		52,153			53,724
Fannie Mae 4.50% 2024		50,580			52,121
Fannie Mae 4.50% 2024		47,569			49,018
Fannie Mae 4.50% 2024		45,962			47,347
Fannie Mae 4.50% 2024		45,772			47,167
Fannie Mae 4.50% 2024		39,446			40,648
Fannie Mae 4.50% 2024		37,899			39,040
Fannie Mae 4.50% 2024		30,567			31,488
Fannie Mae 4.50% 2024		27,750			28,586
Fannie Mae 4.50% 2024		23,675			24,410
Fannie Mae 4.50% 2024		20,130			20,736
Fannie Mae 4.50% 2024		17,570			18,100
Fannie Mae 4.50% 2024		16,469			16,965
Fannie Mae 4.50% 2024		16,071			16,555
Fannie Mae 4.50% 2024		13,537			13,945
Fannie Mae 4.50% 2024		8,624			8,884
Fannie Mae 4.50% 2024		8,349			8,601
Fannie Mae 4.50% 2024		8,217			8,465
Fannie Mae 4.50% 2024		7,868			8,105
Fannie Mae 4.50% 2024		7,353			7,575
Fannie Mae 4.50% 2024		7,328			7,549
Fannie Mae 4.50% 2024		5,854			6,031
Fannie Mae 4.50% 2024		4,909			5,057
Fannie Mae 4.50% 2024		4,399			4,531
Fannie Mae 5.00% 2024		45,206			47,300
Fannie Mae 5.50% 2024		36,155			38,353
Fannie Mae 5.50% 2024		25,371			26,905
Fannie Mae 6.00% 2024		10,400			11,086
Fannie Mae, Series 2001-4, Class GA, 10.037% 20251		394			450
Fannie Mae, Series 2001-4, Class NA, 11.829% 20251		1,530			1,725
Fannie Mae 5.123% 20261		484			504
Fannie Mae 6.00% 2026		24,792			26,428
Fannie Mae 5.50% 2027		18,182			19,177
Fannie Mae 6.00% 2028		7,254			7,705
Fannie Mae 6.00% 2028		6,889			7,343
Fannie Mae, Series 1998-W5, Class B3, 6.50% 2028		1,809			1,377
Fannie Mae, Series 2002-W7, Class A-5, 7.50% 2029		590			666
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031		4,904			5,266
Fannie Mae, Series 2001-20, Class E, 9.622% 20311		69			78
Fannie Mae 6.50% 2032		581			623
Fannie Mae 5.50% 2033		26,138			27,486
Fannie Mae 6.50% 2034		869			931
Fannie Mae 4.603% 20351		9,383			9,735
Fannie Mae 5.50% 2035		33,850			35,595
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035		5,572			5,935
Fannie Mae 6.50% 2035		8,722			9,422
Fannie Mae, Series 2006-51, Class PO, principal only, 0% 2036		7,971			6,100
Fannie Mae, Series 2006-32, Class OA, principal only, 0% 2036		7,354			6,024
Fannie Mae, Series 2006-96, Class OP, principal only, 0% 2036		1,674			1,359
Fannie Mae 5.00% 2036		107,693			110,726
Fannie Mae, Series 2006-101, Class PC, 5.50% 2036		6,833			7,201
Fannie Mae 6.00% 2036		56,074			59,570
Fannie Mae 6.00% 2036		20,804			22,147
Fannie Mae, Series 2006-106, Class HG, 6.00% 2036		18,596			19,865
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036		16,603			17,685
Fannie Mae 6.00% 2036		9,954			10,589
Fannie Mae 6.00% 2036		6,713			7,145
Fannie Mae 6.50% 2036		22,212			23,842
Fannie Mae 6.50% 2036		21,485			23,081
Fannie Mae 6.50% 2036		12,833			13,773
Fannie Mae 6.50% 2036		7,437			8,039
Fannie Mae 6.50% 2036		4,725			5,076
Fannie Mae 7.00% 2036		1,721			1,886
Fannie Mae 7.00% 2036		1,374			1,508
Fannie Mae 7.50% 2036		1,307			1,423
Fannie Mae 7.50% 2036		532			579
Fannie Mae 8.00% 2036		2,294			2,517
Fannie Mae 5.259% 20371		1,530			1,623
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037		27,360			28,958
Fannie Mae 5.506% 20371		21,831			22,998
Fannie Mae 5.61% 20371		34,976			36,878
Fannie Mae 5.616% 20371		10,667			11,243
Fannie Mae 5.684% 20371		16,677			17,582
Fannie Mae 5.785% 20371		18,115			19,166
Fannie Mae 5.967% 20371		26,879			28,432
Fannie Mae 6.00% 2037		108,684			115,307
Fannie Mae 6.00% 2037		72,294			76,725
Fannie Mae 6.00% 2037		44,206			46,915
Fannie Mae 6.00% 2037		41,387			43,949
Fannie Mae 6.00% 2037		34,684			36,809
Fannie Mae 6.00% 2037		29,194			30,973
Fannie Mae 6.00% 2037		19,884			21,103
Fannie Mae 6.00% 2037		11,478			12,189
Fannie Mae 6.00% 2037		10,773			11,379
Fannie Mae 6.00% 2037		7,568			7,994
Fannie Mae, Series 2007-24, Class P, 6.00% 2037		3,786			4,046
Fannie Mae 6.00% 2037		3,310			3,531
Fannie Mae 6.083% 20371		17,032			17,948
Fannie Mae 6.428% 20371		8,956			9,467
Fannie Mae 6.50% 2037		31,179			33,447
Fannie Mae 6.50% 2037		27,707			29,722
Fannie Mae 6.50% 2037		23,224			24,913
Fannie Mae 6.50% 2037		23,143			24,703
Fannie Mae 6.50% 2037		20,318			21,709
Fannie Mae 6.50% 2037		20,079			21,529
Fannie Mae 6.50% 2037		15,085			16,174
Fannie Mae 6.50% 2037		1,455			1,560
Fannie Mae 6.646% 20371		10,670			11,250
Fannie Mae 7.00% 2037		37,601			41,260
Fannie Mae 7.00% 2037		29,699			32,366
Fannie Mae 7.00% 2037		11,547			12,584
Fannie Mae 7.00% 2037		11,536			12,572
Fannie Mae 7.00% 2037		1,585			1,739
Fannie Mae 7.00% 2037		1,516			1,664
Fannie Mae 7.00% 2037		822			902
Fannie Mae 7.00% 2037		655			719
Fannie Mae 7.50% 2037		5,706			6,258
Fannie Mae 7.50% 2037		3,342			3,638
Fannie Mae 7.50% 2037		3,094			3,368
Fannie Mae 7.50% 2037		2,818			3,068
Fannie Mae 7.50% 2037		1,806			1,965
Fannie Mae 7.50% 2037		1,701			1,852
Fannie Mae 7.50% 2037		1,689			1,839
Fannie Mae 7.50% 2037		1,511			1,644
Fannie Mae 7.50% 2037		1,243			1,353
Fannie Mae 7.50% 2037		1,197			1,303
Fannie Mae 7.50% 2037		1,118			1,217
Fannie Mae 7.50% 2037		1,069			1,164
Fannie Mae 7.50% 2037		1,003			1,092
Fannie Mae 7.50% 2037		913			994
Fannie Mae 7.50% 2037		723			787
Fannie Mae 7.50% 2037		571			621
Fannie Mae 7.50% 2037		554			599
Fannie Mae 7.50% 2037		493			540
Fannie Mae 7.50% 2037		494			538
Fannie Mae 7.50% 2037		399			435
Fannie Mae 8.00% 2037		2,648			2,908
Fannie Mae 8.00% 2037		2,140			2,302
Fannie Mae 8.00% 2037		1,669			1,795
Fannie Mae 8.00% 2037		1,488			1,650
Fannie Mae 8.00% 2037		1,147			1,258
Fannie Mae 5.00% 2038		16,665			17,124
Fannie Mae 5.00% 2038		8,200			8,425
Fannie Mae 5.013% 20381		15,274			16,041
Fannie Mae 5.314% 20381		12,344			12,950
Fannie Mae 5.50% 2038		293,956			308,088
Fannie Mae 5.50% 2038		50,607			53,122
Fannie Mae 5.50% 2038		40,472			42,433
Fannie Mae 5.50% 2038		38,756			40,634
Fannie Mae 5.50% 2038		38,148			39,981
Fannie Mae 5.50% 2038		33,936			35,568
Fannie Mae 5.50% 2038		33,687			35,360
Fannie Mae 5.50% 2038		29,492			30,910
Fannie Mae 5.50% 2038		20,490			21,585
Fannie Mae 5.50% 2038		17,459			18,392
Fannie Mae 5.50% 2038		13,911			14,580
Fannie Mae 5.50% 2038		11,752			12,336
Fannie Mae 5.50% 2038		9,178			9,619
Fannie Mae 5.50% 2038		3,096			3,262
Fannie Mae 5.551% 20381		2,255			2,358
Fannie Mae 5.678% 20381		17,581			18,565
Fannie Mae 5.737% 20381		24,939			26,283
Fannie Mae 6.00% 2038		62,896			66,728
Fannie Mae 6.00% 2038		34,783			36,915
Fannie Mae 6.00% 2038		33,256			35,262
Fannie Mae 6.00% 2038		27,177			28,833
Fannie Mae 6.00% 2038		23,912			25,362
Fannie Mae 6.00% 2038		23,769			25,211
Fannie Mae 6.00% 2038		19,724			21,013
Fannie Mae 6.00% 2038		16,944			17,977
Fannie Mae 6.00% 2038		16,160			17,140
Fannie Mae 6.00% 2038		10,651			11,300
Fannie Mae 6.00% 2038		9,961			10,562
Fannie Mae 6.00% 2038		9,092			9,640
Fannie Mae 6.00% 2038		8,339			8,847
Fannie Mae 6.00% 2038		7,124			7,558
Fannie Mae 6.50% 2038		160,956			172,575
Fannie Mae 6.50% 2038		39,561			42,415
Fannie Mae 6.50% 2038		33,643			36,072
Fannie Mae 6.50% 2038		17,958			19,254
Fannie Mae 3.62% 20391		46,125			46,905
Fannie Mae 3.625% 20391		43,499			44,235
Fannie Mae 3.626% 20391		20,179			20,536
Fannie Mae 3.65% 20391		34,572			35,151
Fannie Mae 3.658% 20391		23,744			24,184
Fannie Mae 3.695% 20391		37,121			37,828
Fannie Mae 3.761% 20391		24,914			25,435
Fannie Mae 3.762% 20391		9,557			9,760
Fannie Mae 3.79% 20391		45,231			46,214
Fannie Mae 3.809% 20391		13,042			13,321
Fannie Mae 3.83% 20391		11,428			11,682
Fannie Mae 3.85% 20391		10,256			10,493
Fannie Mae 3.91% 20391		18,008			18,431
Fannie Mae 3.912% 20391		8,319			8,523
Fannie Mae 3.914% 20391		9,591			9,878
Fannie Mae 3.95% 20391		22,424			22,978
Fannie Mae 3.951% 20391		9,457			9,699
Fannie Mae 4.50% 2039		93,048			93,000
Fannie Mae 4.50% 2039		23,764			23,754
Fannie Mae 5.00% 2039		91,571			94,079
Fannie Mae 5.00% 2039		48,146			49,465
Fannie Mae 5.124% 20391		24,213			25,357
Fannie Mae 5.50% 2039		29,757			31,183
Fannie Mae 6.00% 2039		59,339			62,976
Fannie Mae 6.00% 2039		44,658			47,367
Fannie Mae 6.00% 2039		9,074			9,622
Fannie Mae 6.00% 2039		8,728			9,258
Fannie Mae 6.50% 2039		21,613			23,173
Fannie Mae 3.619% 20401		34,426			34,991
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041		5,508			6,121
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041		1,754			1,903
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2041		3,251			3,667
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042		3,757			4,240
Fannie Mae 6.00% 2047		1,096			1,156
Fannie Mae 6.50% 2047		1,350			1,426
Fannie Mae 6.50% 2047		1,200			1,267
Fannie Mae 6.50% 2047		665			708
Fannie Mae 7.00% 2047		6,069			6,615
Fannie Mae 7.00% 2047		472			514
Fannie Mae 7.50% 2047		1,448			1,573
Fannie Mae 7.50% 2047		704			765
Freddie Mac, Series 2890, Class KT, 4.50% 2019		2,500			2,565
Freddie Mac 5.50% 2019		7,028			7,500
Freddie Mac, Series 41, Class F, 10.00% 2020		78			79
Freddie Mac, Series 178, Class Z, 9.25% 2021		62			68
Freddie Mac, Series 2626, Class NG, 3.50% 2023		1,507			1,529
Freddie Mac, Series 2922, Class EL, 4.50% 2023		29,269			30,195
Freddie Mac 5.00% 2023		31,642			33,152
Freddie Mac 5.00% 2023		11,278			11,816
Freddie Mac 5.00% 2023		3,187			3,339
Freddie Mac 5.00% 2023		195			204
Freddie Mac, Series 1617, Class PM, 6.50% 2023		1,624			1,794
Freddie Mac 4.50% 2024		32,344			33,288
Freddie Mac 4.50% 2024		32,017			32,951
Freddie Mac 4.50% 2024		6,684			6,879
Freddie Mac 5.00% 2024		33,318			34,889
Freddie Mac 6.00% 2026		21,808			23,277
Freddie Mac 6.00% 2026		16,942			18,084
Freddie Mac 5.50% 2027		11,519			12,158
Freddie Mac 6.00% 2027		125,933			134,418
Freddie Mac, Series 2153, Class GG, 6.00% 2029		2,808			3,020
Freddie Mac, Series 2122, Class QM, 6.25% 2029		4,873			5,214
Freddie Mac 4.632% 20351		11,509			11,981
Freddie Mac, Series 3061, Class PN, 5.50% 2035		40,526			42,783
Freddie Mac, Series 3136, Class OP, principal only, 0% 2036		7,102			5,547
Freddie Mac, Series 3149, Class MO, principal only, 0% 2036		4,938			4,181
Freddie Mac, Series 3147, Class OD, principal only, 0% 2036		4,868			4,158
Freddie Mac, Series 3149, Class AO, principal only, 0% 2036		4,327			3,654
Freddie Mac, Series 3257, Class PA, 5.50% 2036		45,422			48,256
Freddie Mac, Series 3233, Class PA, 6.00% 2036		36,035			38,642
Freddie Mac, Series 3156, Class NG, 6.00% 2036		11,431			12,274
Freddie Mac, Series 3286, Class JN, 5.50% 2037		58,157			61,296
Freddie Mac, Series 3318, Class JT, 5.50% 2037		32,502			34,226
Freddie Mac 5.50% 2037		25,282			26,527
Freddie Mac, Series 3312, Class PA, 5.50% 2037		24,626			25,950
Freddie Mac 5.50% 2037		22,183			23,275
Freddie Mac 5.517% 20371		29,058			30,731
Freddie Mac 5.875% 20371		4,972			5,284
Freddie Mac 5.885% 20371		8,927			9,367
Freddie Mac 5.927% 20371		29,608			31,541
Freddie Mac 5.965% 20371		24,785			26,062
Freddie Mac, Series 3271, Class OA, 6.00% 2037		14,991			16,128
Freddie Mac 6.00% 2037		2,321			2,465
Freddie Mac 6.242% 20371		3,160			3,347
Freddie Mac 6.50% 2037		31,719			34,001
Freddie Mac 6.50% 2037		888			952
Freddie Mac 7.00% 2037		897			966
Freddie Mac 7.00% 2037		759			817
Freddie Mac 7.00% 2037		365			394
Freddie Mac 7.50% 2037		17,036			18,438
Freddie Mac 4.802% 20381		12,412			12,856
Freddie Mac 4.929% 20381		17,513			18,337
Freddie Mac 5.00% 2038		8,031			8,246
Freddie Mac 5.033% 20381		13,435			14,220
Freddie Mac 5.055% 20381		8,896			9,242
Freddie Mac 5.324% 20381		14,980			15,697
Freddie Mac 5.50% 2038		21,517			22,567
Freddie Mac 5.50% 2038		20,830			21,855
Freddie Mac 5.50% 2038		17,078			17,911
Freddie Mac 5.50% 2038		16,776			17,595
Freddie Mac 5.50% 2038		15,031			15,764
Freddie Mac 5.50% 2038		12,017			12,603
Freddie Mac 5.593% 20381		29,375			30,826
Freddie Mac 6.00% 2038		106,249			112,778
Freddie Mac 6.50% 2038		16,090			17,248
Freddie Mac 3.608% 20391		8,594			8,735
Freddie Mac 3.758% 20391		17,324			17,639
Freddie Mac 3.837% 20391		7,749			7,907
Freddie Mac 3.894% 20391		7,829			8,065
Freddie Mac 3.915% 20391		4,545			4,693
Freddie Mac 3.959% 20391		5,272			5,394
Freddie Mac 5.00% 2039		59,254			60,831
Freddie Mac 5.50% 2039		45,001			47,192
Freddie Mac 5.50% 2039		6,143			6,442
Freddie Mac 6.50% 2047		2,043			2,174
Freddie Mac 6.50% 2047		1,091			1,161
Freddie Mac 7.00% 2047		845			917
Freddie Mac 7.00% 2047		702			762
Government National Mortgage Assn. 10.00% 2021		744			849
Government National Mortgage Assn., Series 2005-58, Class NO, principal only, 0% 2035		4,380			3,404
Government National Mortgage Assn. 6.00% 2038		75,251			79,948
Government National Mortgage Assn. 5.00% 2039		71,835			74,021
Government National Mortgage Assn., Series 2003, Class A, 5.612% 2058		10,336			11,043
					7,031,165
COMMERCIAL MORTGAGE-BACKED SECURITIES3 — 3.88%
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034		1,184			1,214
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-4, 6.505% 2034		371			382
CS First Boston Mortgage Securities Corp., Series 2001-CK3, Class A-4, 6.53% 2034		2,435			2,531
CS First Boston Mortgage Securities Corp., Series 2002-CP5, Class A-1, 4.106% 2035		448			455
CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035		40,500			41,554
CS First Boston Mortgage Securities Corp., Series 2002-CKP1, Class F, 7.067% 20351,2		1,500			1,311
CS First Boston Mortgage Securities Corp., Series 2002-CKS4, Class G, 6.006% 20361,2		500			386
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036		29,056			30,268
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-2, 4.183% 2037		8,342			8,425
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-3, 4.499% 2037		12,900			12,642
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 2037		20,000			20,076
CS First Boston Mortgage Securities Corp., Series 2005-C2, Class A-MFX, 4.877% 2037		10,000			7,606
CS First Boston Mortgage Securities Corp., Series 2004-C1, Class E, 5.015% 20372		8,240			4,254
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		2,500			2,632
CS First Boston Mortgage Securities Corp., Series 2003-C3, Class F, 4.518% 20382		2,000			951
CS First Boston Mortgage Securities Corp., Series 2005-C4, Class A-2, 5.017% 2038		12,200			12,233
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-AB, 5.10% 20381		12,000			12,094
CS First Boston Mortgage Securities Corp., Series 2004-C4, Class A-4, 4.283% 2039		20,600			20,667
CS First Boston Mortgage Securities Corp., Series 2006-C1, Class A-3, 5.548% 20391		10,000			10,092
CS First Boston Mortgage Securities Corp., Series 2006-C2, Class A-3, 5.658% 20391		7,305			6,326
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20401		42,000			41,446
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2001-CIBC1, Class A-3, 6.26% 2033		3,568			3,654
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C2, Class F, 5.957% 20341,2		2,500			1,942
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C3, Class A-1, 4.20% 2035		313			318
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-CBX, Class A-5, 4.654% 2037		2,500			2,524
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.316% 20371		61,300			61,730
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class E, 6.135% 20372		400			353
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039		5,343			5,417
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-3, 4.545% 2042		21,050			20,962
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class A-2, 4.575% 2042		17,032			17,055
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-3A1, 4.871% 2042		25,000			25,090
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP3, Class A-4A, 4.936% 20421		1,655			1,572
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A-2, 5.198% 2044		10,080			10,158
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CIBC14, Class A-4, 5.481% 20441		15,130			14,359
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 5.875% 20451		34,000			32,449
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046		17,059			17,045
Fannie Mae, Series 2000-T5, Class B, 7.30% 2010		57,100			58,314
Fannie Mae, Series 2001-T6B, 6.088% 2011		48,000			50,552
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		46,225			48,038
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20372		18,500			18,686
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20372		10,000			10,283
American Tower Trust I, Series 2007-1A, Class C, 5.615% 20372		10,000			10,283
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20372		36,415			37,446
American Tower Trust I, Series 2007-1A, Class E, 6.249% 20372		11,375			11,697
American Tower Trust I, Series 2007-1A, Class F, 6.639% 20372		13,470			13,852
SBA CMBS Trust, Series 2006-1A, Class A, 5.314% 20362		48,500			48,966
SBA CMBS Trust, Series 2006-1A, Class B, 5.451% 20362		14,180			14,317
SBA CMBS Trust, Series 2006-1A, Class D, 5.852% 20362		12,329			12,466
SBA CMBS Trust, Series 2006-1A, Class E, 6.174% 20362		4,025			4,070
SBA CMBS Trust, Series 2006-1A, Class F, 6.709% 20362		375			379
SBA CMBS Trust, Series 2006-1A, Class G, 6.904% 20362		1,375			1,415
SBA CMBS Trust, Series 2006-1A, Class H, 7.389% 20362		4,040			4,159
SBA CMBS Trust, Series 2006-1A, Class J, 7.825% 20362		2,375			2,445
Crown Castle Towers LLC, Series 2005-1, Class C, 5.074% 20352		43,000			43,406
Crown Castle Towers LLC, Series 2006-1, Class E, 6.065% 20362		31,000			31,634
Crown Castle Towers LLC, Series 2006-1, Class F, 6.65% 20362		10,350			10,551
Crown Castle Towers LLC, Series 2006-1, Class G, 6.795% 20362		1,400			1,426
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036		42,146			43,548
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-3, 4.561% 2041		9,975			9,815
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-AB, 4.673% 2041		1,918			1,937
Banc of America Commercial Mortgage Inc., Series 2004-4, Class B, 4.985% 2042		1,000			544
Banc of America Commercial Mortgage Inc., Series 2005-3, Class A-2, 4.501% 2043		1,079			1,080
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-4, 5.115% 20451		2,500			2,390
Banc of America Commercial Mortgage Inc., Series 2006-4, Class A-4, 5.634% 2046		5,000			4,694
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A-3, 4.608% 2035		2,205			2,236
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A-PB, 4.807% 2042		3,000			2,944
Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class A-7, 5.118% 20421		4,650			4,500
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-2, 5.242% 2044		10,274			10,334
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-4, 5.265% 20441		15,350			15,010
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-PB, 5.27% 20441		8,038			7,916
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045		16,750			16,382
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP6, Class A-4, 5.475% 20431		51,820			49,956
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP7, Class A-M, 5.875% 20451		7,645			6,134
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-WF2, Class X, interest only, 0.612% 20311		42,257			1,493
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1, Class X, interest only, 0.656% 20311,2		35,032			858
Bear Stearns Commercial Mortgage Securities Inc., Series 2000-WF2, Class A-2, 7.32% 2032		12,986			13,243
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035		2,791			2,829
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class D, 6.94% 20352		3,000			2,773
Bear Stearns Commercial Mortgage Securities Inc., Series 2004-PWR6, Class A-4, 4.521% 2041		10,000			10,061
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-3, 4.868% 2042		20,825			20,152
GE Commercial Mortgage Corp., Series 2004-C3, Class B, 5.179% 20391		8,000			4,473
GE Commercial Mortgage Corp., Series 2004-C2, Class B, 4.983% 2040		19,193			12,651
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.336% 20441		33,700			32,207
Merrill Lynch Mortgage Trust, Series 2005-CKI1, Class AM, 5.233% 20371		4,620			3,882
Merrill Lynch Mortgage Trust, Series 2005-CIP1, Class A-3-A, 4.949% 20381		8,500			8,361
Merrill Lynch Mortgage Trust, Series 2006-C1, Class A-3, 5.656% 20391		3,050			3,057
Merrill Lynch Mortgage Trust, Series 2004-BPC1, Class A-5, 4.855% 20411		6,805			6,684
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class A-4, 4.747% 20431		5,065			4,894
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class AM, 4.805% 20431		6,300			4,920
Merrill Lynch Mortgage Trust, Series 2006-C2, Class A-4, 5.742% 20431		10,250			9,537
Commercial Mortgage Trust, Series 2000-C1, Class A-2, 7.416% 2033		1,134			1,141
Commercial Mortgage Trust, Series 2004-LB3A, Class A-4, 5.234% 2037		10,956			11,166
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		20,000			19,618
Commercial Mortgage Trust, Series 2004-LNB2, Class A-3, 4.221% 2039		8,298			8,275
Greenwich Capital Commercial Funding Corp., Series 2003-C1, Class A-2, 3.285% 2035		1,567			1,565
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-2, 5.117% 2037		13,045			13,116
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-5, 5.224% 20371		11,000			9,978
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 20371		15,000			15,177
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% (undated)1		41,210			36,516
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20262		37,992			36,067
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1, Class F, 7.222% 2029		931			948
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034		28,234			29,072
GMAC Commercial Mortgage Securities, Inc., Series 2003-C1, Class F, 4.718% 20361,2		1,000			513
GMAC Commercial Mortgage Securities, Inc., Series 2003-C1, Class G, 4.817% 20361,2		1,000			484
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class A-2, 6.592% 2033		16,084			16,368
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035		6,779			7,004
Salomon Brothers Commercial Mortgage Trust, Series 2001-C2, Class A-3, 6.499% 2036		2,254			2,346
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-1, 6.079% 2033		17			17
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-2, 6.531% 2033		18,090			18,791
GE Capital Commercial Mortgage Corp., Series 2002-3, Class A-2, 4.996% 2037		2,500			2,557
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-1, 5.56% 2038		723			739
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-2, 6.07% 2038		2,500			2,620
LB-UBS Commercial Mortgage Trust, Series 2000-C3, Class A-2, 7.95% 2025		1,944			1,947
LB-UBS Commercial Mortgage Trust, Series 2002-C1, Class A-3, 6.226% 2026		561			562
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-2, 5.103% 2030		3,468			3,490
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-4, 5.197% 20301		5,000			4,922
LB-UBS Commercial Mortgage Trust, Series 2005-C5, Class A-M, 5.017% 20401		10,000			8,288
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A-3, 5.725% (undated)1		15,800			15,163
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048		15,000			13,803
COBALT CMBS Commerical Mortgage Trust, Series 2006-C1, Class A-2, 5.174% 2048		13,563			13,674
Structured Products Asset Return Certificates Trust, Series 2001-CF1, Class A, 6.36% 20338		10,410			10,458
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.207% 20421		7,875			8,075
Morgan Stanley Dean Witter Capital I Trust, Series 2000-LIFE2, Class A-2, 7.20% 2033		3,814			3,882
Morgan Stanley Dean Witter Capital I Trust, Series 2003-TOP9, Class A-1, 3.98% 2036		2,269			2,286
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class B, 7.619% 2031		797			796
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, Series 1999-1, Class C, 7.625% 2031		5,000			5,025
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032		1,208			1,207
First Union National Bank Commercial Mortgage Trust, Series 2001-C4, Class A-1, 5.673% 2033		156			157
					1,535,866
COLLATERALIZED MORTGAGE-BACKED OBLIGATIONS (PRIVATELY ORIGINATED)3 — 1.59%
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-22, Class 5-A-1, 5.997% 20351		3,073			2,276
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-8, Class 3-AF, 0.611% 20361		13,261			8,245
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 6-A, 5.905% 20361		25,869			18,399
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-2, Class 5-A-1, 6.00% 20361		5,875			3,866
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-6, Class 3-A-1, 5.792% 20371		18,765			11,790
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-12, Class 2-A1, 5.817% 20371		18,970			12,214
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-8, Class 2-A3, 5.877% 20371		28,911			17,809
Bear Stearns ARM Trust, Series 2004-3, Class II-A, 3.899% 20341		7,594			6,240
Bear Stearns ARM Trust, Series 2005-6, Class I-A-1, 3.789% 20351		27,422			19,159
Bear Stearns ARM Trust, Series 2005-10, Class A-3, 4.462% 20351		51,800			39,679
Bear Stearns ARM Trust, Series 2007-2, Class I-A-1, 5.00% 20461		748			502
Countrywide Alternative Loan Trust, Series 2004-14T2, Class A-2, 5.50% 2034		12,021			10,362
Countrywide Alternative Loan Trust, Series 2005-49CB, Class A-1, 5.50% 2035		14,396			12,912
Countrywide Alternative Loan Trust, Series 2005-J11, Class 1-A-16, 5.50% 2035		4,618			1,940
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 5-A-1, 5.75% 2035		2,177			1,815
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035		7,652			6,674
Countrywide Alternative Loan Trust, Series 2005-9CB, Class 2-A-1, 6.00% 2035		5,434			4,025
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 6-A-1, 6.00% 2035		886			756
Countrywide Alternative Loan Trust, Series 2007-14T2, Class A-4, 0.581% 20371		21,976			9,934
Residential Accredit Loans, Inc., Series 2004-QS16, Class 1-A-1, 5.50% 2034		5,566			5,168
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034		25,546			21,970
Residential Accredit Loans, Inc., Series 2005-QA12, Class CB-I, 4.262% 20351		3,880			2,416
Residential Accredit Loans, Inc., Series 2006-QA1, Class A-II-1, 5.919% 20361		12,453			6,720
Residential Accredit Loans, Inc., Series 2007-QS11, Class A-1, 7.00% 2037		6,308			3,941
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-AR11, Class A, 2.896% 20341		18,627			16,367
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR12, Class 1-A4, 6.038% 20361		2,178			1,590
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 2-A1, 5.792% 20371		29,887			20,537
Wells Fargo Alternative Loan Trust, Series 2007-PA4, Class III-A-1, 6.054% 20371		23,925			14,184
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class III-A-1, 6.25% 2037		27,209			19,937
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032		328			325
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032		40			37
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033		2,387			2,251
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033		45			45
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034		6,296			5,736
CS First Boston Mortgage Securities Corp., Series 2005-5, Class IV-A-1, 6.25% 2035		4,797			4,370
CS First Boston Mortgage Securities Corp., Series 2006-7, Class 8-A-6, 0.861% 20361		12,567			5,354
CS First Boston Mortgage Securities Corp., Series 2006-7, Class 6-A-3, 5.50% 2036		23,566			14,122
CHL Mortgage Pass-Through Trust, Series 2004-HYB6, Class A-3, 3.619% 20341		2,491			1,946
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.492% 20351		22,251			16,881
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 1-A-1, 5.905% 20471		7,414			5,358
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 6.048% 20471		2,247			1,520
IndyMac IMSC Mortgage Loan Trust, Series 2007-F2, Class 2-A-1, 6.50% 2037		36,844			22,922
Thornburg Mortgage Securities Trust, Series 2006-5, Class A-1, 0.351% 20461		18,699			18,345
Residential Asset Securitization Trust, Series 2005-A7, Class A-5, 5.50% 2035		5,338			2,939
Residential Asset Securitization Trust, Series 2005-A8CB, Class A-11, 6.00% 2035		13,218			8,662
Residential Asset Securitization Trust, Series 2006-A8, Class 1-A-2, 0.531% 20361		8,898			4,552
Residential Asset Securitization Trust, Series 2006-A8, Class 3-A-11, 6.00% 2036		3,853			2,123
J.P. Morgan Alternative Loan Trust, Series 2006-A1, Class 2-A-1, 5.80% 20361		16,034			9,807
J.P. Morgan Alternative Loan Trust, Series 2006-A2, Class 5-A-1, 6.197% 20361		11,676			7,446
J.P. Morgan Mortgage Trust, Series 2006-A3, Class 3-A-3, 5.731% 20361		4,000			2,890
J.P. Morgan Mortgage Trust, Series 2006-A7, Class 2-A-4, 5.762% 20371		21,750			14,266
MASTR Alternative Loan Trust, Series 2003-2, Class 6-A-1, 6.00% 2033		511			481
MASTR Alternative Loan Trust, Series 2004-2, Class 2-A-1, 6.00% 2034		972			856
MASTR Alternative Loan Trust, Series 2005-1, Class 1-A-1, 5.50% 2035		11,825			9,877
MASTR Alternative Loan Trust, Series 2005-3, Class 1-A-1, 5.50% 2035		3,152			2,638
MASTR Alternative Loan Trust, Series 2005-3, Class 2-A-1, 6.00% 2035		3,651			3,031
MASTR Alternative Loan Trust, Series 2005-3, Class 3-A-1, 6.50% 2035		372			269
American Home Mortgage Assets Trust, Series 2007-3, Class II-2A-1, 6.25% 20371		29,633			17,058
GSR Mortgage Loan Trust, Series 2005-AR1, Class 2-A-1, 3.377% 20351		7,939			6,609
GSR Mortgage Loan Trust, Series 2006-2F, Class 3A-4, 6.00% 2036		11,543			9,362
Banc of America Funding Trust, Series 2005-H, Class 9-A-1, 5.867% 20351		22,014			14,622
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.774% 20361		21,394			13,128
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class 3-A-1, 5.914% 20361		18,463			11,105
Banc of America Alternative Loan Trust, Series 2005-6, Class 2-CB-2, 6.00% 2035		11,959			9,288
BCAP LLC Trust, Series 2006-AA2, Class A-1, 0.401% 20371		19,012			9,084
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 4-A, 5.669% 20341		4,988			4,955
Morgan Stanley Mortgage Loan Trust, Series 2005-6AR, Class 3-A-1, 5.194% 20351		4,771			3,190
TBW Mortgage-backed Trust, Series 2007-2, Class A-4-B, 0.651% 20371		22,000			8,034
Washington Mutual Mortgage, WMALT Series 2005-1, Class 6-A-1, 6.50% 2035		1,082			860
Washington Mutual Mortgage, WMALT Series 2006-2, Class 1-A-3, 6.00% 2036		12,000			6,561
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR19, Class A-6, 5.622% 20361		10,000			6,964
GMAC Mortgage Loan Trust, Series 2006-AR1, Class 2-A-1, 5.618% 20361		8,530			6,959
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.75% 20351,2		7,737			6,690
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.245% 20271,2		3,962			3,571
Structured Asset Securities Corp., Series 1998-RF1, Class A, 8.399% 20271,2		1,531			1,381
Structured Asset Securities Corp., Series 1999-RF1, Class A, 7.70% 20281,2		950			902
CitiMortgage Alternative Loan Trust, Series 2006-A1, Class IA-3, 5.75% 2036		10,000			4,429
Banc of America Mortgage Securities Trust, Series 2003-I, Class 3-A-1, 4.521% 20331		4,253			4,091
Sequoia Mortgage Trust, Series 2007-1, Class 4-A1, 5.719% 20461		4,771			3,997
Citigroup Mortgage Loan Trust, Inc., Series 2007-AR5, Class 1-A2A, 5.595% 20371		6,218			3,662
Harborview Mortgage Loan Trust, Series 2006-6, Class 1A, 3.76% 20361		2,897			1,786
Ocwen Residential MBS Corp., Series 1998-R1, Class AWAC, 5.42% 20401,2,8		1,459			365
GS Mortgage Securities Corp., Series 1998-2, Class M, 7.75% 20272		347			249
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 2027		228			209
					629,587
OTHER MORTGAGE-BACKED SECURITIES3 — 0.55%
Nykredit 4.00% 2035	DKr286,711				52,477
Nykredit 5.00% 2038		168,134			32,552
Nationwide Building Society, Series 2007-2, 5.50% 20122	$	34,750			37,284
Bank of America 5.50% 20122		34,750			37,095
Barclays Bank PLC 4.00% 2019	€	14,100			19,984
Northern Rock PLC 5.625% 20172	$	20,000			18,816
HBOS Treasury Services PLC 5.25% 20172		11,000			10,924
HBOS Treasury Services PLC 5.25% 2017		7,000			6,952
					216,084
Total mortgage-backed obligations					9,412,702
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S. — 5.91%
United Mexican States Government Global 6.375% 2013		5,150			5,717
United Mexican States Government Global 5.875% 2014		3,000			3,268
United Mexican States Government, Series MI10, 9.50% 2014	MXN690,300				57,323
United Mexican States Government, Series M10, 8.00% 2015		505,000			39,311
United Mexican States Government, Series M10, 7.25% 2016		435,000			32,787
United Mexican States Government 3.50% 20178,10		225,418			17,717
United Mexican States Government Global 5.95% 2019	$	31,080			33,023
United Mexican States Government, Series M20, 10.00% 2024	MXN394,800				34,674
United Mexican States Government Global 6.75% 2034	$	2,495			2,645
United Mexican States Government, Series M30, 10.00% 2036	MXN138,000				12,037
Polish Government 5.75% 2014	PLN180,696				63,390
Polish Government 5.25% 2017		255,245			84,496
Polish Government 6.375% 2019	$	59,095			64,572
South Korean Government 4.25% 2014	KRW29,650,000				24,854
South Korean Government 4.75% 2014		45,350,000			39,024
South Korean Government 5.00% 2014		7,890,000			6,824
South Korean Government 5.75% 2014	$	21,000			22,998
South Korean Government 5.25% 2015	KRW24,200,000				21,065
South Korean Government 5.50% 2017		10,100,000			8,857
South Korean Government 5.75% 2018		19,625,000			17,425
Irish Government 4.00% 2014	€	44,665			65,659
Irish Government 4.40% 2019		14,855			20,624
Irish Government 5.90% 2019		21,030			32,571
Australia Government Agency-Guaranteed, National Australia Bank 5.75% 2013	$	A11,250			10,080
Australia Government Agency-Guaranteed, National Australia Bank 0.784% 20141,2	$	25,000			25,047
Australia Government Agency-Guaranteed, National Australia Bank 3.375% 20142		50,550			50,878
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 2.50% 20122		7,250			7,315
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 2.90% 20142		22,900			22,665
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 3.625% 20142		45,000			45,872
European Investment Bank 3.125% 2014		11,500			11,645
European Investment Bank 4.25% 2014	€	35,020			53,864
European Investment Bank 4.875% 2017	$	9,000			9,659
Brazilian Treasury Bill 6.00% 20108,10	BRL 1,566				908
Brazilian Treasury Bill 6.00% 20158,10		7,418			4,131
Brazil (Federal Republic of) Global 12.50% 2016		23,400			15,242
Brazil (Federal Republic of) 10.00% 20178		48,000			23,666
Brazilian Treasury Bill 6.00% 20178,10		41,613			23,030
Brazil (Federal Republic of) Global 8.00% 20183	$	608			697
Brazil (Federal Republic of) Global 12.25% 2030		425			746
Brazil (Federal Republic of) Global 7.125% 2037		750			864
Brazil (Federal Republic of) Global 11.00% 2040		2,110			2,822
France Government Agency-Guaranteed, Société Finance 2.25% 20122		21,815			22,003
France Government Agency-Guaranteed, Société Finance 2.875% 20142		33,000			32,734
France Government Agency-Guaranteed, Société Finance 3.375% 20142		16,450			16,790
Turkey (Republic of) 15.00% 2010	TRY 5,250				3,553
Turkey (Republic of) 10.00% 20128,10		26,867			20,621
Turkey (Republic of) 16.00% 2012		9,555			7,149
Turkey (Republic of) 16.00% 2013		21,045			16,606
Turkey (Republic of) 7.50% 2017	$	5,725			6,526
Turkey (Republic of) 6.75% 2018		8,550			9,287
Turkey (Republic of) 8.00% 2034		1,250			1,450
Netherlands Government Eurobond 4.00% 2018	€	41,200			61,514
New South Wales Treasury Corp., Series 12, 6.00% 2012	$	A32,750			30,028
New South Wales Treasury Corp., Series 19, 6.00% 2019		33,350			29,474
German Government 4.25% 2014	€	18,615			28,729
German Government 3.75% 2019		7,240			10,725
German Government 6.25% 2030		8,190			14,983
German Government 4.75% 2034		3,065			4,764
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014	$	44,750			56,497
KfW 6.25% 2012	$	A13,000			11,904
KfW 5.50% 2014		35,400			31,224
KfW 5.00% 2015	NKr50,000				8,979
Greek Government 5.50% 2014	€	11,125			16,154
Greek Government 6.00% 2019		24,710			35,776
Malaysian Government 5.094% 2014	MYR90,920				28,121
Malaysian Government 3.741% 2015		63,870			18,601
Queensland Treasury Corp., Series 12, 6.50% 2012	$	A32,250			29,900
Queensland Treasury Corp., Series 15, 6.00% 2015		18,380			16,621
French Government O.A.T. Eurobond 4.00% 2014	€	30,340			46,190
Sweden Government Agency-Guaranteed, Swedbank AB 2.80% 20122	$	9,000			9,160
Sweden Government Agency-Guaranteed, Swedbank AB 2.90% 20132		35,000			35,559
Indonesia (Republic of) 11.00% 2012	IDR 4,090,000				464
Indonesia (Republic of) 12.50% 2013		8,710,000			1,028
Indonesia (Republic of) 14.275% 2013		2,110,000			265
Indonesia (Republic of) 11.25% 2014		1,260,000			146
Indonesia (Republic of) 9.50% 2015		28,000,000			3,045
Indonesia (Republic of) 10.75% 2016		136,020,000			15,553
Indonesia (Republic of) 6.875% 2018	$	2,000			2,210
Indonesia (Republic of) 6.875% 20182		1,700			1,878
Indonesia (Republic of) 11.625% 2019		10,254			14,766
Indonesia (Republic of) 7.75% 2038		4,500			5,107
Denmark Government Agency-Guaranteed, Danish Finance Co. 2.45% 20122		42,120			42,580
Japanese Government 1.30% 2011	¥	50			1
Japanese Government 1.50% 2018		2,468,700			27,433
Japanese Government 2.40% 2038		1,342,250			14,845
New Zealand Government Agency-Guaranteed, Westpac Securities Co. 2.50% 20122	$	8,250			8,301
New Zealand Government Agency-Guaranteed, Westpac Securities Co. 3.45% 20142		33,220			33,146
Colombia (Republic of) Global 11.75% 2010	COP4,100,000				2,039
Colombia (Republic of) Global 8.25% 2014	$	5,950			7,021
Colombia (Republic of) Global 12.00% 2015	COP26,904,000				16,226
Colombia (Republic of) Global 7.375% 2017	$	10,365			11,738
Colombia (Republic of) Global 9.85% 2027	COP4,950,000				2,819
Colombia (Republic of) Global 7.375% 2037	$	1,000			1,095
Russian Federation 7.50% 20303		34,601			39,186
Russian Federation 7.50% 20302,3		136			154
Finland (Republic of) 3.875% 2017	€	23,230			34,581
Venezuela (Republic of) 5.375% 2010	$	2,835			2,771
Venezuela (Republic of) 8.50% 2014		245			194
Venezuela (Republic of) 7.65% 2025		985			584
Venezuela (Republic of) 9.25% 2027		31,745			23,333
Venezuela (Republic of) 9.25% 2028		11,160			7,561
Israeli Government 6.50% 20168	ILS27,375				7,977
Israeli Government 5.50% 20178		63,060			17,306
Israeli Government 5.125% 2019	$	8,250			8,375
Treasury Corp. of Victoria 6.25% 2012	$	A32,500			29,974
Croatian Government 6.75% 20192	$	22,450			24,224
United Kingdom Government Agency-Guaranteed, Lloyds TSB Group PLC 2.80% 20122		23,000			23,430
Australia and New Zealand Government Agency-Guaranteed, Australia and New Zealand Banking Group Ltd. 3.25% 20122		21,750			22,404
Italian Government 4.25% 2013	€	14,100			21,346
Province of Ontario 1.875% 2012	$	17,250			17,090
Argentina (Republic of) 0.354% 20121,3,8		24,755			8,478
Argentina (Republic of) 7.00% 20158		9,345			7,884
Argentina (Republic of) GDP-Linked 2035	ARS 9,238				115
Argentina (Republic of) 0.63% 20383,8,10		16,963			579
Peru (Republic of) 8.375% 2016	$	9,005			10,919
Peru (Republic of) 6.55% 20373		4,200			4,389
Thai Government 5.25% 2014	THB200,000				6,452
Thai Government 3.625% 2015		290,700			8,708
Uruguay (Republic of) 5.00% 20188,10	UYU270,315				13,450
Uruguay (Republic of) 7.625% 20363	$	1,250			1,359
Panama (Republic of) Global 7.25% 2015		2,275			2,599
Panama (Republic of) Global 7.125% 2026		690			781
Panama (Republic of) Global 8.875% 2027		250			326
Panama (Republic of) Global 9.375% 2029		340			454
Panama (Republic of) Global 6.70% 20363		5,748			6,093
Nordic Investment Bank, Series C, 5.00% 2017		9,000			9,661
Corporación Andina de Fomento 6.875% 2012		5,895			6,324
Corporación Andina de Fomento 5.125% 2015		2,000			2,010
Corporación Andina de Fomento 8.125% 2019		890			1,032
Banque Centrale de Tunisie 4.75% 2011	€	3,000			4,435
Banque Centrale de Tunisie 7.375% 2012	$	4,500			4,894
South Africa (Republic of) 6.875% 2019		7,615			8,586
Australia Government Agency-Guaranteed, Macquarie Bank Ltd. 5.00% 2014	$	A9,750			8,432
Philippines (Republic of) 6.375% 2034	$	8,000			7,880
Austrian Government 2.00% 20122		7,250			7,332
Iraq (Republic of) 5.80% 20283		9,450			7,324
Netherlands Government Agency-Guaranteed, ING Bank NV 3.90% 20142		7,000			7,181
Asian Development Bank 2.75% 2014		6,150			6,153
Dominican Republic 9.50% 20112,3		938			980
Dominican Republic 9.04% 20182,3		4,481			4,879
El Salvador (Republic of) 7.65% 20352		3,450			3,415
Gabonese Republic 8.20% 2017		2,450			2,579
Guatemala (Republic of) 10.25% 20112		1,000			1,125
Ireland Government Agency-Guaranteed, Anglo Irish Bank Corp. plc 1.012% 20161	€	1,400			568
LCR Finance PLC 5.10% 2051	£	165			306
					2,341,492
ASSET-BACKED OBLIGATIONS3 — 2.73%
CPS Auto Receivables Trust, Series 2005-B, Class A-2, FSA insured, 4.36% 20122	$	4,213			4,263
CPS Auto Receivables Trust, Series 2005-D, Class A-2, FSA insured, 5.06% 20122		2,626			2,673
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20122		5,072			5,164
CPS Auto Receivables Trust, Series 2006-B, Class A-4, MBIA insured, 5.81% 20122		18,983			19,213
CPS Auto Receivables Trust, Series 2007-A, Class A-4, MBIA insured, 5.05% 20132		15,100			15,503
CPS Auto Receivables Trust, Series 2006-C, Class A-4, XLCA insured, 5.14% 20132		20,035			20,371
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 20142		20,000			20,674
CPS Auto Receivables Trust, Series 2007-C, Class A-4, FSA insured, 5.92% 20142		18,950			19,693
Washington Mutual Master Note Trust, Series 2007-B1, Class B-1, 4.95% 20142		4,000			4,019
Washington Mutual Master Note Trust, Series 2007-A4A, Class A-4, 5.20% 20142		30,055			30,716
Washington Mutual Master Note Trust, Series 2006-A2A, Class A, 0.283% 20151,2		31,000			30,655
GS Auto Loan Trust, Series 2006-1, Class A-4, 5.38% 2014		51,689			52,621
GS Auto Loan Trust, Series 2006-1, Class A-4, 5.60% 2014		4,842			4,893
Drive Auto Receivables Trust, Series 2006-1, Class A-4, FSA insured, 5.54% 20132		40,514			41,255
Drive Auto Receivables Trust, Series 2006-2, Class A-3, MBIA insured, 5.33% 20142		12,138			12,431
Honda Auto Receivables Owner Trust, Series 2006-3, Class A-4, 5.11% 2012		31,573			31,979
Honda Auto Receivables Owner Trust, Series 2006-2, Class A-4, 5.28% 2012		14,951			15,133
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-4, FSA insured, 5.18% 2013		27,750			28,292
Long Beach Acceptance Auto Receivables Trust, Series 2007-A, Class A-4, FSA insured, 5.025% 2014		15,500			15,885
AmeriCredit Automobile Receivables Trust, Series 2005-C-F, Class A-4, FSA insured, 4.63% 2012		6,517			6,538
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-3-A, FSA insured, 5.49% 2012		4,765			4,816
AmeriCredit Automobile Receivables Trust, Series 2006-B-G, Class A-4, FGIC insured, 5.21% 2013		25,224			25,922
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014		4,572			4,710
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-2, Class A-6, AMBAC insured, 5.08% 20112		14,500			14,755
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2009-2A, Class A-1, 4.26% 20142		9,000			8,977
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2009-2A, Class A-2, 5.29% 20162		17,500			17,486
Nissan Auto Lease Trust, Series 2008-A, Class A-3a, 5.14% 2011		40,250			41,179
Capital One Auto Finance Trust, Series 2006-A, Class A-4, AMBAC insured, 0.243% 20121		2,381			2,360
Capital One Auto Finance Trust, Series 2006-C, Class A-4, FGIC insured, 0.263% 20131		22,502			22,067
Capital One Auto Finance Trust, Series 2007-B, Class A-4, MBIA insured, 0.263% 20141		12,425			12,018
CarMax Auto Owner Trust, Series 2007-2, Class A-3, 5.23% 2011		5,684			5,774
CarMax Auto Owner Trust, Series 2008-2, Class A-3a, 4.99% 2012		8,200			8,535
CarMax Auto Owner Trust, Series 2007-2, Class A-4, 5.27% 2012		20,000			20,957
Prestige Auto Receivables Trust, Series 2006-1A, Class A-2, FSA insured, 5.25% 20132		5,062			5,194
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 20142		27,581			28,429
Vega ContainerVessel PLC, Series 2006-1, Class A, XLCA insured, 5.562% 20212		37,235			33,579
USAA Auto Owner Trust, Series 2007-1, Class A-4, 5.55% 2013		26,000			27,025
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class A-4, 6.57% 2024		7,502			7,555
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024		5,036			5,061
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-4, 7.905% 2026		1,388			1,415
Vanderbilt Mortgage and Finance, Inc., Series 1997-C, Class II-A-1, 0.445% 20271		479			421
Vanderbilt Mortgage and Finance, Inc., Series 2000-D, Class A-4, 7.715% 2027		1,524			1,559
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-5, 8.195% 2030		6,889			7,025
Vanderbilt Mortgage and Finance, Inc., Series 2001-C, Class M-1, 6.76% 2032		849			772
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class M-1, 7.82% 2032		2,173			2,005
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A-5, FGIC insured, 5.753% 2027		13,493			5,372
CWHEQ Home Equity Loan Trust, Series 2006-S6, Class A-6, AMBAC insured, 5.657% 20341		13,126			5,737
CWHEQ Home Equity Loan Trust, Series 2006-S4, Class A-6, AMBAC insured, 5.834% 20341		8,033			3,692
CWHEQ Home Equity Loan Trust, Series 2007-S1, Class A-6, MBIA insured, 5.693% 20361		28,309			9,287
RAMP Trust, Series 2004-RS9, Class A-I-4, AMBAC insured, 4.767% 2032		3,625			2,968
RAMP Trust, Series 2004-RS10, Class A-I-6, 4.55% 2034		21,801			20,022
CWHEQ Revolving Home Equity Loan Trust, Series 2006-I, Class 2-A, FSA insured, 0.373% 20371		18,491			13,003
CWHEQ Revolving Home Equity Loan Trust, Series 2007-C, Class A, FGIC insured, 0.383% 20371		12,512			3,633
CWHEQ Revolving Home Equity Loan Trust, Series 2007-B, Class A, FSA insured, 0.383% 20371		4,098			2,878
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015		18,000			19,114
AEP Texas Central Transitioning Funding II LLC, Secured Transition Bonds, Series A, Class A-3, 5.09% 2017		16,720			17,967
GMAC Mortgage Loan Trust, Series 2006-HE3, Class A-5, FGIC insured, 5.809% 20361		4,812			2,324
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-2, FGIC insured, 6.054% 20371		9,659			5,091
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-3, FGIC insured, 6.193% 20371		19,318			9,446
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class B-1, 7.30% 2021		5,252			5,017
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-4, 6.57% 2027		8,290			8,407
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-5, 7.12% 2032		3,000			2,990
Spirit Master Funding LLC, Net-Lease Mortgage Notes, Series 2005-1, Class A-1, AMBAC insured, 5.05% 20232,8		23,682			15,393
Triad Automobile Receivables Trust, Series 2006-C, Class A-3, AMBAC insured, 5.26% 2011		1,139			1,140
Triad Automobile Receivables Trust, Series 2007-A, Class A-3, FSA insured, 5.28% 2012		2,279			2,290
Triad Automobile Receivables Trust, Series 2006-C, Class A-4, AMBAC insured, 5.31% 2013		10,000			10,288
Hyundai Auto Receivables Trust, Series 2006-A, Class A-4, 5.26% 2012		13,432			13,494
Morgan Stanley ABS Capital I Inc., Series 2004-NC3, Class M-1, 1.026% 20341		18,822			11,986
Morgan Stanley ABS Capital I Inc., Series 2004-HE9, Class M-5, 1.281% 20341		2,678			785
Wachovia Auto Loan Owner Trust, Series 2006-1, Class A-4, 5.08% 20122		6,569			6,666
Wachovia Auto Loan Owner Trust, Series 2006-1, Class B, 5.15% 20122		5,000			5,100
Drivetime Auto Owner Trust, Series 2007-A, XLCA insured, 5.603% 20131,2		10,245			10,439
AmeriCredit Prime Automobile Receivables Trust, Series 2007-2-M, Class A-4-A, MBIA insured, 5.35% 2016		10,073			10,321
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-3, 4.35% 2014		2,138			1,906
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-4, 5.27% 2018		1,096			964
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-5, 5.873% 2022		3,600			3,219
Lehman ABS Manufactured Housing Contract Trust, Series 2002-A, Class A, 0.689% 20331		4,578			3,655
Franklin Auto Trust, Series 2006-1, Class A-4, 5.03% 2014		7,005			7,137
Franklin Auto Trust, Series 2006-1, Class B, 5.14% 2014		2,000			2,019
MBNA Credit Card Master Note Trust, Series 2006-1, Class C, 0.653% 20151		10,000			8,875
Residential Funding Mortgage Securities II, Inc., Series 2005-HI1, Class A-4, FGIC insured, 4.70% 2034		1,223			1,176
Residential Funding Mortgage Securities II, Inc., Series 2005-HS1, Class A-1-2, FGIC insured, 4.66% 20351		6,673			6,011
Residential Funding Mortgage Securities II, Inc., Series 2006-HSA3, Class A, FSA insured, 0.361% 20361		2,098			1,579
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031		9,992			8,519
UPFC Auto Receivables Trust, Series 2007-A, Class A-3, MBIA insured, 5.53% 2013		8,263			8,466
Conseco Finance Securitizations Corp., Series 2002-2, Class A-2, 6.03% 2033		7,685			7,683
Ford Credit Auto Owner Trust, Series 2006-B, Class B, 5.43% 2012		7,333			7,481
Citibank Credit Card Issuance Trust, Series 2008, Class C6, 6.30% 2014		7,000			7,234
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class A-3, 5.825% 20361,2		8,387			4,507
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-5, 6.831% 20361,2		4,725			728
Credit-Based Asset Servicing and Securitization LLC, Series 2007-MX1, Class M-6, 7.00% 20361,2		1,816			246
Credit-Based Asset Servicing and Securitization LLC, Series 2007-CB4, Class A-2B, 5.723% 20371		3,061			1,591
Green Tree Financial Corp., Series 1996-10, Class A-6, 7.30% 2028		1,312			1,343
Green Tree Financial Corp., Series 1997-6, Class A-7, 7.14% 2029		4,309			4,415
Green Tree Recreational, Equipment & Consumer Trust, Series 1997-D, 7.25% 2029		1,433			745
Conseco Finance Home Equity Loan Trust, Series 2002-B, Class M-1, 1.983% 20331		808			333
New Century Home Equity Loan Trust, Series 2004-A, Class A-II-5, FGIC insured, 5.25% 2034		7,114			6,799
CNL Funding, Series 2000-AA, Class A-2, MBIA insured, 8.044% 20172		9,873			6,569
Advanta Business Card Master Trust, Series 2006-A5, Class A, 5.10% 2012		6,588			6,391
First Horizon ABS Trust, Series 2006-HE2, Class A, FSA insured, 0.361% 20261		715			321
First Horizon ABS Trust, Series 2007-HE1, Class A, FSA insured, 0.361% 20291		11,088			5,030
PECO Energy Transition Trust, Series 2001-A, Class A-1, 6.52% 2010		5,000			5,125
UCFC Manufactured Housing Contract, Series 1996-2, Class A, MBIA insured, 7.135% 2028		4,822			4,454
Consumers Funding LLC, Series 2001-1, Class A-5, 5.43% 2015		4,140			4,427
SACO I Trust, Series 2005-5, Class I-A, 0.711% 20351		3,501			2,687
SACO I Trust, Series 2006-10, Class A, 0.381% 20361		7,291			723
SACO I Trust, Series 2006-4, Class A-3, 0.441% 20361		4,651			665
SACO I Trust, Series 2006-5, Class II-A-3, 0.717% 20361		5,379			322
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-1, 5.73% 2035		2,185			2,058
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-2, 6.51% 2035		1,750			1,636
Home Equity Asset Trust, Series 2004-7, Class M-1, 0.851% 20351		6,500			3,638
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1, FGIC insured, 4.67% 20172		4,169			3,587
Morgan Stanley Mortgage Loan Trust, Series 2006-4SL, Class A-1, 0.381% 20361		19,370			3,023
Structured Asset Securities Corp., Series 2005-S7, Class A2, 0.531% 20351,2		8,724			2,936
First Investors Auto Owner Trust, Series 2006-A, Class A-4, MBIA insured, 5.00% 20132		1,989			2,035
CWABS Revolving Home Equity Loan Trust, Series 2004-P, Class 2-A, MBIA insured, 0.553% 20341		5,307			1,782
SLM Student Loan Trust, Series 2003-10, Class A-4, 5.15% 20392	£	1,160			1,739
CS First Boston Mortgage Securities Corp., Series 2007-3, Class 1-A-3B, 5.846% 20371	$	8,477			1,730
CSAB Mortgage-backed Trust, Series 2007-1, Class 1-A-3B, 5.908% 20371		5,757			1,408
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series 2007-H1, Class A-1, FSA insured, 0.391% 20371		1,784			1,016
ACLC Business Loan Receivables Trust, Series 2002-1, Class A-2, 7.462% 20222		1,168			941
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-2, AMBAC insured, 4.42% 20351,2		876			821
Home Equity Mortgage Trust, Series 2006-2, Class 1A-1, 5.367% 20361		1,597			295
Home Equity Mortgage Trust, Series 2006-5, Class A-1, 5.50% 20371		2,106			211
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series SPMD 2001-A, Class AF-6, 6.537% 2030		636			449
Chase Auto Owner Trust, Series 2006-B, Class B, 5.24% 2014		389			394
Irwin Home Equity, Series 2006-2, Class 2-A3, FGIC insured, 6.40% 20361,2		2,000			358
Merrill Lynch Mortgage Investors Trust, Series 2007-SL1, Class A-1, 0.531% 20371		7,136			263
Option One Mortgage Loan Trust, Series 2002-1, Class M-1, 1.356% 20321		167			61
					1,080,143
MUNICIPALS — 0.38%
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			20,564
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			9,041
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			4,557
State of New York, Long Island Power Authority, Electric System General Revenue Bonds, Series 2009-A, 5.75% 2039		24,330			26,264
California Various Purpose General Obligation Bonds 7.50% 2034		6,530			6,407
California Various Purpose General Obligation Bonds 6.00% 2038		10,000			10,248
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds,
Series 2002-A, Class A, 6.72% 2025		19,787			15,825
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			14,440
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			12,688
State of Texas, City of San Antonio, Electric and Gas Systems Revenue Refunding Bonds, New Series 2009-A, 5.00% 2034		10,000			10,392
State of Wisconsin, General Fund Annual Appropriation Bonds, Series 2009-A, 5.75% 2033		6,000			6,495
State of Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue Bonds, Series 2007, 5.50% 2023		6,000			6,257
State of New York, Metropolitan Transportation Authority, Dedicated Tax Fund Bonds (Federally Taxable-Issuer
Subsidy-Build America Bonds), Series 2009-C, 7.336% 2039		5,500			6,173
State of Louisiana, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds,
Series 2001-A, Class A, 6.36% 2025		2,317			1,932
					151,283
Total bonds & notes (cost: $37,738,120,000)				$	38,084,303
	Principal amount
Convertible securities — 0.05%		(000	)
INFORMATION TECHNOLOGY — 0.04%
Linear Technology Corp., Series A, 3.00% convertible notes 2027	$	11,500			11,587
Advanced Micro Devices, Inc. 6.00% convertible notes 2015		4,380			3,964
Advanced Micro Devices, Inc. 5.75% convertible notes 2012		1,808			1,792
					17,343
FINANCIALS — 0.01%
Equity Residential 3.85% convertible notes 2026		1,000			990
Boston Properties, Inc. 2.875% convertible notes 2037		1,000			986
					1,976
Total convertible securities (cost: $15,432,000)					19,319
Preferred securities — 1.49%	Shares
FINANCIALS — 1.48%
BNP Paribas 7.195%1,2		78,000,000			72,540
BNP Paribas Capital Trust 9.003% noncumulative trust1,2		15,000,000			14,850
JPMorgan Chase & Co., Series I, 7.90%1		72,620,000			75,149
Barclays Bank PLC 7.434%1,2		71,920,000			66,526
Barclays Bank PLC 6.86%1,2		4,000,000			3,320
SMFG Preferred Capital USD 3 Ltd. 9.50%1,2		36,979,000			39,013
SMFG Preferred Capital GBP 2 Ltd. 10.231%1		3,100,000			5,665
SMFG Preferred Capital USD 2 Ltd. 8.75% noncumulative2		5,562,000			5,498
AXA SA, Series B, 6.379%1,2		48,770,000			39,504
PNC Preferred Funding Trust I 6.517%1,2		45,000,000			33,731
PNC Preferred Funding Trust III 8.70%1,2		1,400,000			1,438
QBE Capital Funding II LP 6.797%1,2		36,055,000			30,870
Banco Bilbao Vizcaya Argentaria, SA, 5.919%1		33,554,000			27,048
Resona Preferred Global Securities (Cayman) Ltd. 7.191%1,2		32,800,000			26,856
Standard Chartered PLC 6.409%1,2		33,200,000			26,387
HSBC Capital Funding LP, Series 2, 10.176% noncumulative step-up1,2		21,320,000			25,957
Banco Santander, SA, Series 10, 10.50%		797,505			22,627
Wachovia Capital Trust III 5.80%1		14,672,000			11,371
Wells Fargo & Co. 7.98%1		5,425,000			5,466
Weingarten Realty Investors, Series D, 6.75%		495,420			10,528
Weingarten Realty Investors, Series E, 6.95% cumulative redeemable depositary shares		250,000			5,350
XL Capital Ltd., Series E, 6.50%1		16,250,000			12,431
Lloyds Banking Group PLC 6.657% preference shares1,2		11,400,000			6,855
Swire Pacific Ltd. 8.84% cumulative guaranteed perpetual capital securities2		300,000			6,769
Société Générale 5.922%1,2		8,000,000			6,240
Royal Bank of Scotland Group PLC, Series U, 7.64%1		5,000,000			2,703
RBS Capital Trust II 6.425% noncumulative trust1		1,000,000			615
GMAC LLC, Series G, 7.00%2,11		403			266
					585,573
U.S. GOVERNMENT AGENCY SECURITIES  — 0.01%
US AgBank 6.11%1,2		5,000,000			3,063
				Value
Preferred securities					(000	)
Total preferred securities (cost: $596,665,000)				$	588,636
Common stocks — 0.04%	Shares
MATERIALS — 0.03%
Georgia Gulf Corp.11		759,869			13,207
INFORMATION TECHNOLOGY — 0.01%
ZiLOG, Inc.11		475,000			1,681
CONSUMER DISCRETIONARY — 0.00%
Adelphia Recovery Trust, Series Arahova11		1,943,006			350
Adelphia Recovery Trust, Series ACC-111		3,366,231			108
Adelphia Recovery Trust, Series ACC-6B8,11		5,056,500			25
Charter Communications, Inc., Class A11		5,059			179
American Media Operations, Inc.2,8,11		295,801			3
					665
HEALTH CARE — 0.00%
Clarent Hospital Corp. Liquidating Trust8,11,12		331,291			17
TELECOMMUNICATION SERVICES — 0.00%
XO Holdings, Inc.11		7,614			4
Total common stocks (cost: $32,598,000)					15,574
Warrants — 0.00%
TELECOMMUNICATION SERVICES — 0.00%
XO Holdings, Inc., Series B, warrants, expire 201011		11,424			—
XO Holdings, Inc., Series A, warrants, expire 201011		15,233			—
XO Holdings, Inc., Series C, warrants, expire 201011		11,424			—
GT Group Telecom Inc., warrants, expire 20102,8,11		2,750			—
					—
INDUSTRIALS — 0.00%
Atrium Corp., warrants, expire 20182,8,11		1,885			—
Total warrants (cost: $143,000)					—
	Principal amount			Value
Short-term securities — 1.30%		(000	)		(000	)
U.S. Treasury Bills 0.18%–0.325% due 6/17–10/21/2010	$	152,200		$	151,874
Straight-A Funding LLC 0.14%–0.18% due 1/26–3/18/20102		119,300			119,277
Bank of America Corp. 0.30% due 6/1/2010		75,000			74,902
Fannie Mae 0.43% due 12/3/2010		33,700			33,564
Private Export Funding Corp. 0.18% due 3/18/20102		29,100			29,091
General Electric Capital Corp. 0.01% due 1/4/2010		25,000			25,000
Federal Farm Credit Banks 0.20% due 6/15/2010		25,000			24,977
JPMorgan Chase & Co. 0.03% due 1/4/2010		23,400			23,400
Coca-Cola Co. 0.22%–0.25% due 1/13–5/13/20102		15,900			15,886
Walt Disney Co. 0.11% due 1/15/20102		10,200			10,199
Freddie Mac 0.215% due 1/27/2010		8,600			8,599
Total short-term securities (cost: $516,834,000)					516,769
Total investment securities (cost: $38,899,792,000)					39,224,601
Other assets less liabilities					369,553
Net assets				$	39,594,154

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 $5,187,968,000, which represented 13.10% 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  Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $255,264,000, which represented ..64% of the net assets of the fund.

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

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

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

8  Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities was $579,205,000, which represented 1.46% of the net assets of the fund.

9  Purchased in a transaction exempt from registration under the Securities Act of 1933. This security (acquired 7/17/2009 at a cost of $5,523,000) may be subject to legal or contractual restrictions on resale.

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	£ = British pounds	MYR = Malaysian ringgits
A$ = Australian dollars	IDR = Indonesian rupiah	NKr = Norwegian kroner
BRL = Brazilian reais	ILS = Israeli shekels	PLN = Polish zloty
COP = Colombian pesos	¥ = Japanese yen	THB = Thai baht
DKr = Danish kroner	KRW = South Korean won	TRY = New Turkish liras
€ = Euros	MXN = Mexican pesos	UYU = Uruguayan 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 the fund’s summary prospectus and prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.

MFGEFP-908-0210O-S21489

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO

To the Shareholders and Board of Directors of

The Bond Fund of America, Inc.:

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of The Bond Fund of America, Inc. (the “Fund”) as of December 31, 2009, and for the year then ended and have issued our report thereon dated February 5, 2010, which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR.  Our audit also included the Fund’s investment portfolio (the “Schedule”) as of December 31, 2009, appearing in Item 6 of this Form N-CSR.  This Schedule is the responsibility of the Fund’s management.  Our responsibility is to express an opinion based on our audit.  In our opinion, the Schedule referred to above, when considered in relation to the basic financial statements taken as a whole of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.

DELOITTE & TOUCHE LLP

Costa Mesa, California

February 5, 2010

ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 10 – Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of directors since the Registrant last submitted a proxy statement to its shareholders.  The procedures are as follows.  The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of directors. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.

ITEM 11 – Controls and Procedures

(a)	The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
(b)	There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12 – Exhibits

(a)(1)	The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto.
(a)(2)	The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE BOND FUND OF AMERICA, INC.

By /s/ John H. Smet

John H. Smet, President and

Principal Executive Officer

Date: February 26, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By /s/ John H. Smet

John H. Smet, President and

Principal Executive Officer

Date: February 26, 2010

By /s/ Ari M. Vinocor

Ari M. Vinocor, Treasurer and

Principal Financial Officer

Date: February 26, 2010